DIRECTOR'S REPORT Dear Shareowners, Your Directors have pleasure in presenting the Twenty Second Annual Report of your Company together with the Audited Financial Statements for the year ended March 31, 2015. RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY The gross turnover and net turnover for the year under review was Rs. 494.03 crores and Rs. 447.55 crores, respectively, and showed a growth of 6.07% and 5.75%, respectively. The net profit after tax was Rs. 2.68 crores as compared to previous year loss Rs. 19.18 crores. The remarkable reduction in loss figure is appreciation shows better result would come in future years. The Company produced 60,350 tonnes (MT) of TMT Rods in FY 2014-15, up 27% over the previous year. Its steel sales touched 66080.030 MT, increasing by 45.53% year on year. The Company took several initiatives during the last financial year that helped in achieving and consolidating growth in production and sales volumes. It commissioned new facilities to enrich product mix, leverage the export demand, diversify its inputs sourcing strategy and strengthen market penetration through branded and value added special products. The Company's sustained efforts towards back-end cost control, new product launches and efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The Company's ability to better utilise capacities and product range will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the 'Management Discussion & Analysis' which forms a part of this Annual Report. PRODUCTION & TURNOVER / SALES NEW PROJECTS AND EXPANSION Your company has emerged as a flourishing and dexterous steel enterprise because of its ability to cope with the changing steel scenario and to contribute to the growth of steel production where the country is aiming to increase the crude steel production to 300 Million tons by 2025-26 from currently 70 Million tones of production. For which your company has obtained necessary clearances from appropriate authorities. The upcoming project compositions are as enumerated below:- GREENFIELD PROJECT The process of land acquisition work for our project at Gangajal, Budhakata, Sundargarh, Odisha is in progress. Discussion with concerned authorities for allotment of land has been initiated. The environmental clearances for this proposed project has been obtained from the appropriate authorities. OUTLOOK Currently, the Steels business account for nearly 100% of its revenues. The outlook for its margins and profitability for this business depends on overall economic outlook. This company is likely to benefit most from an upturn in the business cycle, given its scale of operations and its competitive cost positions. Today, it is truly a market-driven company, making innovative changes and technological improvements, leaving no stone, unturned in fulfilling dreams of its founding fathers, tuning every activity to meet the subtle demands of its customers. MARKETING ARRANGEMENT The Company has a Well-organized Marketing Department We have around 50 % market share in Odisha and also catering to outside markets like Bangalore, Hyderabad, Ghaziabad, Raigarh, Raipur, Goa and Kanpur. We are in the process expanding our market plan in India by appointment of Dealers at other major cities across India. We also directly sell to the Customers through our Marketing staffs and agents. DIVIDEND During the year the Company was successful in reducing the losses accumulated during the past few years, however the Company does not have any surplus profits yet. Therefore your directors have expressed inability to recommend dividend for the financial year ending on 31st March, 2015. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND Your Company did not recommended any dividend therefore there were no such funds which were required to be transferred to Investor Education and Protection Fund (IEPF). TRANSFER TO RESERVE During the financial year 2014-15, the Company is maintaining a balance of Rs. 1344.12 Lacs in General Reserve, Rs. 59.23 Lacs in Capital Reserve and Rs. 493.71 Lacs in Amalgamation adjustment reserve. An amount of Rs. 68.72 Lacs is proposed to be retained in the surplus. CONSOLIDATED FINANCIAL STATEMENT As per the definition in the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments, the company does not have any investment in the Subsidiary Company, Joint Ventures Company or any other Associates Company therefore the Consolidation of Financial Statements is not applicable. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES The Company does not have any Subsidiary, Associates and Joint venture Companies there by; there are no details to be provided under [Rule 8 of the Companies (Accounts) Rules, 2014]. Read with section 129 (3) of the Companies Act, 2013.during the year under review, no company has become or ceased as subsidiary, associate or joint venture companies. FIXED DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013 Pursuant to Section 73, 74 & 76 Rule 8(5)(v) of Companies (Accounts) Rules, 2014. The details relating to deposits, covered under Chapter V of the Act are as follows:- a. accepted during the year - Rs. 4,39,35,000/- b. remained unpaid or unclaimed as at the end of the year - Rs. 2,77,602 c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved - i. at the beginning of the year - Nil ii. maximum during the year - Nil iii. at the end of the year - Nil There was No default in repayment of deposits or payment of interest thereon during the year by Company and accordingly No details to be provided by the Company in this regard. The details of deposits which are not in compliance with the requirements of Chapter V of the Act - Your Company has not accepted any deposits which are not in Compliance with the requirement of Chapter V of the Act. CHANGE IN THE NATURE OF BUSINESS, IF ANY The Company was in to Infrastructural Development, but Pursuant to Scheme of Merger of M/s. Scan Steels Limited with M/s. Clarus Infrastructure Realties Limited which was approved by the High Court of Bombay vide its order dated May 11, 2012 and High Court of Orissa vide its order dated 25th February, 2014 and the scheme of amalgamation became effective upon filing of form INC-28 with Registrar of Companies, Maharashtra on 12th August, 2014 Company is now in to Steel Manufacturing Business. Further, the consent of members for alteration in main object has been obtained through postal ballot and the results of the postal ballot has been announced on 11th August, 2015. The company is now expanding its business activities into Derivatives market . DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS. INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size and nature of its business, forms an integral part of the Company's corporate governance policies. INTERNAL CONTROL The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. Internal control systems are integral to the Company's corporate governance policy. Some of the significant features of internal control systems includes: • Documenting of policies, guidelines, authorities and approval procedures, encompassing the Company's all primary functions. • Deploying of an ERP system which covers most of its operations and is supported by a defined on-line authorization protocol. • Ensuring complete compliance with laws, regulations, standards and internal procedures and systems. • De-risking the Company's assets / resources and protecting them from any loss. • Ensuring the accounting system's integrity proper and authorised recording and reporting of all transactions. • Preparing and monitoring of annual budgets for all operating and service functions. • Ensuring the reliability of all financial and operational information. • Forming an Audit committee of the Board of Directors, comprising Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, and compliance with accounting standards and so on. • Forming a comprehensive Information Security Policy and continuous up-gradation of IT Systems. The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness. INTERNAL AUDIT The Company has a strong internal audit department reporting to the Audit Committee comprising Independent Directors who are experts in their field. The scope of work, authority and resources of Internal Audit (IA) are regularly reviewed by the Audit Committee and its work is supported by the services of M /s GRC & Associates, the Internal Auditor of the Company. The Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. Through IA function the Board obtains the assurance it requires to ensure that risks to the business are properly identified, evaluated and managed. IA also provides assurance to the Board on the effectiveness of relevant internal controls. INTERNAL FINANCIAL CONTROLS As per Section 134 (5) (e) of the Companies Act 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems and framework of internal financial controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable them to meet these responsibilities, the Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management framework and whistle blower mechanism. The Audit Committee regularly reviews the internal control system to ensure that it remains effective and aligned with the business requirements. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls. These are in turn reviewed at regular intervals. The Company has developed a framework for designing and assessing effectiveness of internal controls over financial reporting and has already laid down entity level policies and process level standard operating procedures. The entity level policies comprise anti-fraud policies (code of conduct, including conflict of interest, confidentiality and whistle-blower policy) and other policies (organization structure, roles and responsibilities, insider trading policy, HR policy, related party policy, prevention of sexual harassment policy, IT security policy, business continuity and disaster recovery plan and treasury risk management policy). The Company has also prepared Standard Operating Practices (SOP) for each of its processes of revenue to receive, procure to pay, hire to retire, finance and accounts, fixed assets, treasury, inventory, manufacturing operations, and administrative expenses. Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and During the year, such controls were tested and no reportable material weakness in the design or operation were observed and such systems were adequate and operating effectively. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis and Detail of which is furnished in the Annexure 'A' in Form AOC-2 attached with this Report. Even though approval of the Shareholders not required under the provisions of the Companies Act, 2013 for transactions which are in the ordinary course of the Company's business and are at arm's length basis, but in terms of the Securities and Exchange Board of India Circular No. CIR/ CFD/ POLICY CELL/2/2014 dated 17 April 2014 and the revised Clause 49 of the Listing Agreement, to be effective from October 1, 2014, the monetary limit of the transaction may exceed the limits as provided under Section 188 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement. Therefore, approval of the Shareholders is received by the Company in terms of Section 188 of the Companies Act, 2013 read with the applicable rules as well as the proposed Clause 49 of the Listing Agreement, at an Extra Ordinary General Meeting held on 26th March, 2015, for Purchase / Sale of Raw Material and Finished Goods, on arm's length basis, for an aggregate amount not exceeding the limit as set out in the resolution. Further, there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are subject to internal audit and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The Company has developed an Internal Guide on Related Party Transactions Manual and prescribed, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: <http://> www.scansteels.com/?page_id=2823 Your Directors draw attention of the members to Note No. 2 to the financial statement which sets out related party disclosures. ISO CERTIFICATION Your company is having a status of ISO 9001, ISO 14001 and ISO 18001 certification, which is internationally recognized for the production, quality control and Environmental as well as OHSAS respectively. CREDIT RATING CARE has reaffirmed "CARE B+ '" (Single B Plus) rating to the long term bank facilities of your Company. Fixed Deposits are also rated "CARE B+" (Single B Plus). The rating reaffirmed to the short-term bank facilities of your Company is " CARE A4 " (A Four Plus). BRANDING INITIATIVE The "SHRISTII" brand for its TMT bars are well accepted in the market in varied segments and sectors with wide customer base. INSURANCE The Assets of the company are adequately insured against the loss of fire, riot, earthquake, loss of profit etc, and other risk which is considered by management, In addition to this coverage, a statutory public liability insurance policy has been taken to cover by the company for providing against the public liability arising out of industrial accidents for employees working in plants. INDUSTRIAL RELATIONS AND PERSONNEL Your Company attaches great importance to human resource. Over a period of time, we have built and nurtured a dedicated and excellent workforce and also recruiting new people in order to meet the revival plans of the company. The processes for attracting, retaining and rewarding talent are well laid down and the systems are transparent to identify and reward performers. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities. The Company recognizes the importance and contribution of its people towards achieving the common goal. During the year under the review, industrial relations at all units of the Company continued to be cordial and peaceful. FINANCE During the year all the finance commitment were met in time. Liquidity throughout the year was quite comfortable. The company has no unpaid or unclaimed deposit at the end of the year. BANKERS AND CONSORTIUM ARRANGEMENT The Company has consortium arrangement of their bankers with State Bank of India as Lead Bank. This consortium arrangement is well defined and take care of company's term loan and working capital requirement from time to time. The consortium members meet regularly at company office quarterly and also visit company's plant from time to time. SAFETY The company has continued to scale up safety performance at all locations. Safety measures have been strengthened and employees are being trained to think on hazards / risks associated with their job. Systems have been established to make employees responsible and accountable for safety. Good safety performance is being rewarded. While Safety has been included as a corporate value, the main objective is to achieve better standard of safety in the shortest possible time. HUMAN RESOURCE DEVELOPMENT The company has been given much emphasis on Human Resources Development and thus has been well recognized in the steel industrial for sound Human Resources Management. The Company has emerged as a true national firm with cosmopolitan atmosphere. The company's HR polices and process is as well aligned to effectively suit its expanding business horizons and future manpower requirement. This has been achieved by continuously stressing upon training & development, empowerment and creating a compelling work environment and maintaining well structured reward & recognition mechanism. Company is committed to the welfare of its people and their families and to improve the quality of their life by providing the required facilities. CORPORATE SOCIAL RESPONSIBILITY Corporate Social Responsibility is the continuing commitment by the business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. As a part of its policy for corporate social responsibility, the Company is associated with charitable and social activities and thereby playing a pro-active role in the socioeconomic growth. In structuring its efforts to the various aspects of Corporate Social Responsibilities, the Company takes account guidelines and statements issued by stakeholders and other regulatory bodies. The management has adopted corporate social responsibility (CSR) well at par with its business with the objective of creating wealth in the community with focus on education, heath, water and society. Social welfare, community development, economic and environmental responsibilities are at the core of the CSR of the Company. The Corporate Social Responsibility Committee (CSR Committee) Composition and Terms of reference of which is detailed in the Corporate Governance Part of this Annual Report. has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The key philosophy of all CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability. The Company has identified six focus areas of engagement which are as under: • Rural Transformation: Creating sustainable livelihood solutions, addressing poverty, hunger and malnutrition. • Health: Affordable solutions for healthcare through improved access, awareness and health seeking behavior. • Education: Access to quality education, training and skill enhancement. • Environment: Environmental sustainability, ecological balance, conservation of natural resources. • Protection of National Heritage, Art and Culture: Protection and promotion of India's art, culture and heritage. The Company would also undertake other need based initiatives in compliance with Schedule VII to the Act. The disclosures required to be made as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this report as Annexure 'B'. The CSR Policy of the Company is available on the company's website and may be accessed at http:/ / www.scansteels.com/ ? page_id=2823 SHARE CAPITAL INCREASE IN AUTHORISED SHARE CAPITAL The Company has increased its authorized share capital from Rs. 58,00,00,000/ - (Rupees Fifty Eight Crore only) divided into 5,80,00,000 (Five Crore Eighty Lacs) equity shares of Rs. 10/- (Rupees Ten) each to Rs. 70,00,00,000/- (Rupees Seventy Crores only) divided into 7,00,00,000 (Seven Crore) equity shares of Rs. 10/- (Rupees Ten) each, through ordinary resolution passed by the members in the previous AGM held on 30th December, 2014. RE-CLASSIFICATION OF AUTHORIZED SHARE CAPITAL In order to facilitate the issue and Allotment Non-cumulative Redeemable Preference Shares (NCRPS), The company had re-classified its Authorised Share Capital from Rs. 70,00,00,000/- (Rupees Seventy Crores only) divided into 7,00,00,000 (Seven Crore) equity shares of Rs. 10/- (Rupees Ten) each to Rs. 70,00,00,000/- (Rupees Seventy Crores only) divided into 5,50,00,000 (Five Crore Fifty Lacs) equity shares of Rs. 10/- (Rupees Ten) each and 1,50,00,000 (One Crore Fifty Lacs only) Non-cumulative Redeemable Preference Share of Rs. 10/- (Rupees Ten) each, after members approval through Postal Ballot, results announced on 11th August, 2015 and accordingly, the capital Clause of Memorandum of Association of the Company is amended. ISSUED/SUBSCRIBED/PAID UP CAPITAL To meet the Working Capital requirements and long term funds for modernization & renovation of the existing plant, your Company raised funds through preferential issue of equity shares. Pursuant to Preferential Allotment Issued, Subscribed and Paid-up Share Capital of the Company shall stand Increased from Rs. 37,80,03,000/- (Rupees Thirty Seven Crore Eighty Lakhs Three Thousand Only) divided into 37,800,300 (Three Crore Seventy Eight Lakhs Three Hundred) Equity Shares of Rs. 10/- (Rupees Ten) to Rs. 44,35,23,000 (Forty Four Crore Thirty Five Lakhs Twenty Three Thousand) divided into 4,43,52,300 (Four Crore Forty Three Lakhs Fifty Two Thousand Three Hundred ) Equity Shares of Rs. 10/- (Rupees Ten). Further to this the company has also issued and allotted 1,28,49,605 Non-cumulative Redeemable Preference Shares ("NCRPS") of Rs. 10/- (Rupees Ten) each at a premium of Rs. 30/- (Rupees Thirty) per NCRPS for an aggregate amount of Rs. 51,39,84,200/- (Rupees Fifty One Crore Thirty Nine Lacs Eighty Four Thousand Two Hundred Only), at a Rate of Dividend - 1% p.a., after members approval through Postal Ballot, results announced on 11th August, 2015. Accordingly, the Company's paid-up equity share capital remained at Rs. 44,35,23,000 (Forty Four Crore Thirty Five Lakhs Twenty Three Thousand) divided into 4,43,52,300 (Four Crore Forty Three Lakhs Fifty Two Thousand Three Hundred) fully paid up Equity Shares of Rs. 10/- (Rupees Ten Only) each and the preference share capital is Rs. 12,84,96,050/- (Twelve Crore Eighty Four Lacs Ninety Six Thousand Fifty) divided into 1,28,49,605 (One crore Twenty Eight Lacs Forty Nine Thousand Six Hundred Five only) fully paid up NCRPS of Rs. 10/- (Rupees Ten) each. ALTERATION IN THE OBJECT CLAUSE OF THE COMPANY The Directors of your Company have been considering various proposals to diversify its business portfolio and growing opportunities, the company is planning to enter into certain new business ventures. The Board of Directors in its meeting held on 3rd July, 2015, proposed to carry on the business of merchant, broker, sub-broker of all type of commodities and / or goods and deal in future and option and in other derivatives in commodity exchange of India including trading in shares, derivatives, currencies and readymade garments including yarns, fabrics of wool, poplin, cotton, jute, silk, rayon, nylon and other natural, synthetics, and/ or fibrous substance etc. As mentioned in above Company has altered its object clause of the Company in order to include aforementioned New Objectives in the Main Object and said Alteration of Memorandum of Association was approved by the Members through Postal Ballot and results has been announced on 11th August, 2015 DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Rajesh Gadodia, Managing Director (DIN 00574465), retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The proposal regarding the re-appointment of the aforesaid Director is placed for your approval. The Board of Directors recommend his re-appointment. The brief resume and other information of the concerned directors, in terms of the provisions of clause 49 of the Listing Agreement with stock exchange have been detailed in the notice convening the forthcoming Annual General Meeting. Mr. R. P. Singh (DIN 03411893) has been resigned and ceased to be Director w. e. f. 28/01/2015. The Board placed on record appreciation of his service to the Company and look forward for his continuance support in future. During the years under review, the Board based on the recommendation received from the Nomination and Remuneration Committee had posposed the name of Smt. Denjani Sahu as Independent Director and The members approved the appointment of Mrs. Debjani Sahu (DIN: 02674022) as Independent woman directors of the company at the extra Ordinary General Meeting held on 26th March, 2015, who is not liable to retire by rotation. Mr. Gobinda Chandra Nayak had been appointed as, Chief Financial Officer with effect from 14th November, 2014. Mr. Prabir Das had been appointed as, Company Secretary & Compliance Officer with effect from 14th March, 2014 . Company's policy of appointment and remuneration for directors, KMP and other employees including criteria for determining qualifications, positive attributes, director's independence (read with Sections 178 (1) (3) (4) The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner. The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 'C' and is attached to this report. Further, Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees 2013 is furnished in Annexure 'D' and is attached to this report. Declaration by an Independent Director(s) As required under section 149(7) of the Companies Act, 2013, The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence and / or to qualify themselves to be appointed as Independent Directors as prescribed both under Section 149 (6) of the Companies Act' 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges and the declarations are put up on the website of the Company at the link: http: / / www.scansteels.com/?page_id=2823 Familliarisation Programme for Independent Directors. All New Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of our operations, to familiarize the new IDs with the Company's business operations. The new IDs are given an orientation on our products, group structure, Board constitution and Procedures, matters reserved for the Board, and our major risks and risk management strategy. The company familiarises the Independent Directors of the Company with their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc and related matters are put up on the website of the Company at the link: <http://> www.scansteels.com/?page_id=2823 Separate Independent Director Meeting A separate meeting of the independent directors ("Annual ID meeting") was convened on 28th March, 2015, which reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman. Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairperson of the Nomination Remuneration Committee with the Board covering performance of the Board as a whole, performance of the non-independent directors and performance of the Board Chairman. BOARD ANNUAL EVALUATION In compliance with the Section 134(3) (p) Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. The Board carried out an annual performance evaluation of its own performance, the individual Directors as well as the working of the Committees of the Board. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non- Independent Directors was carried out by Independent Directors. Details of the same are given in the Report on Corporate Governance annexed hereto. The Chairperson of the Nomination and Remuneration Committee (NRC) held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as on each of the other Directors. The Detailed Policy on Performance Evaluation of Independent Directors, Board, Committees and other individual Directors can be accessed from the website of the Company at the link: <http://> www.scansteels.com/?page_id=2823 MANAGERIAL REMUNERATION: The following disclosures have been mentioned in detailed under the heading "Corporate Governance", part of this Annual Report : — (i) all elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors; (ii) details of fixed component and performance linked incentives along with the performance criteria; (iii) service contracts, notice period, severance fees; (iv) Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable. CODE OF INDEPENDENT DIRECTORS - SCHEDULE - IV The Board has considered Code of Independent Directors as prescribed in Schedule IV of the Companies Act, 2013. The code is a guide to professional conduct for independent directors' adherence to these standards by independent directors and fulfillment of their responsibility in a professional and faithful manner will promote confidence of the investment community and regulators. The broad items for code for independent directors are: (i) Guidelines for Professional conduct. (ii) Role and Functions. (iii) Duties (iv) Manner and process of appointment. (v) Re-appointment on the basis of report of performance evaluation. (vi) Resignation or Removal. (vii) At least one Separate meeting of Independent Directors in a year without attendance of non independent directors or members of management. (viii) Evaluation mechanism of Independent Directors by entire Board of Directors. The Detailed Code of Conduct of Independent Directors of the Company and Code of Conduct for Board of Directors and Senior Management of the Company can be accessed on the website of the Company at the link: <http://www.scansteels.com/?page_id=2823> KEY MANAGERIAL PERSONNEL In compliance with the provisions of Section 203 of the Companies Act, 2013 and the requirement of Listing Agreement, the Company has appointed Mr. Rajesh Gadodia as Managing Director, Mr. Prabir Kumar Das, Company secretary & Compliance officer and Mr. Gobinda Chandra Nayak, Chief Financial Officer (CFO) of the company. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirements under section 134(3)(c) and 134(5) of the Companies Act, 2013, your directors hereby state and confirm that — a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2015 and of the profit and loss of the company for the year ended on that date; c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) The directors had prepared the annual accounts on a going concern basis; and e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. AUDITORS AND AUDITOR'S REPORT Statutory Auditors M/s. SRB & Associates, Chartered Accountant (Firm's Registration No. 310009E) of Bhubaneswar were appointed as Statutory Auditors for a period of five consecutive year in the 21st Annual General Meeting held on 30th December, 2014 and hold office till the conclusion of 26th Annual General Meeting. In terms of Section 139(1) of the Companies Act, 2013, the appointment of statutory auditors to hold the office from the conclusion of the 21st AGM until the conclusion of 26th AGM , placed for your ratification. The Company has received necessary consent and certificates under Section 139 from the above Auditors to the effect that they satisfied the criteria provided in section 141 of the Companies Act, 2013 read with Cos. (Audit &Auditors) Rules, 2014. AUDITORS' REPORT The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2015 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark. COST AUDITORS Pursuant to the provisions of Section 148 (3) of the Companies Act, 2013 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the Board has re-appointed M/s. Ray, Nayak & Associates, Partner CMA. Chaitanya Kumar Ray, Cost Accountants, having office at MIG-26, Manorama Estate, Rasulgarh, Bhubaneswar - 751010 (Odisha), as the Cost Auditors of the Company to conduct an audit of the cost records maintained by the Company for the financial year 2015-2016 on a remuneration of Rs. 30,000/- plus service tax as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification. The Cost Auditor submitted their Cost Audit Reports for the Financial year 2014-2015 to the Board and The report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITORS AND AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. D P Associates, a Practicing Company Secretary (CP No-6828) having office at 774, Jayadev Vihar, Lane-3, Bhubaneswar - 751013 to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit carried out is annexed herewith as Annexure "E". The report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Board at its meeting held on August 31, 2015, has reappointed M/s. D P Associates, a Practicing Company Secretary (CP No-6828), as Secretarial Auditor, for conducting Secretarial Audit of the Company for FY 2015-16. AUDIT COMMITTEE. Audit Committee is constituted as per provision of Clause 49 of the Listing Agreement with the Stock Exchange read with Section 177 of the Companies Act, 2013. Composition of Audit Committee as per Section 177 (8) of Companies Act, 2013, the Prime Objective of the Committee is to monitor and provide effective supervision of the Management's financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting. Composition and Terms of reference of the Committee is explained in Detail in the Corporate Governance Part of this Annual Report. There was no recommendation as such in the Financial Year 2014-2015 from the Audit Committee which was not accepted by the Board. VIGIL MECHNISM In pursuance of Section 177(9) of the Companies Act, 2013 Vigil Mechanism has been Constituted for directors and employees to report genuine concerns and Audit committee shall oversee the vigil mechanism through the committee and provide adequate safeguards against victimization of employees and directors who availed of the vigil mechanism and have a direct access to the chairman of the audit committee in exceptional case. In case of repeated frivolous complaints being filed by the director or an employee the audit committee may take suitable action including reprimand if necessary. CONSTITUTION OF STAKEHOLDERS RELATIONSHIP COMMITTEE The Board has constituted a Stakeholders Relationship Committee According to 178 (5) of the Companies Act 2013. The SR Committee is primarily responsible to review all matters connected with the Company's transfer of securities and redressal of shareholders' / investors' / security holders' complaints. The Committee also monitors the implementation and compliance with the Company's Code of Conduct for prohibition of Insider Trading. Composition and Terms of Reference of the SR Committee is Detailed in Corporate Governance Report Part of this Annual Report. CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE Scan Steels's commitment towards excellence in Health, Safety and Environment is one of the company's core values by complying with the Laws and Regulations first, and then going beyond the mandate to keep our planet safe for future generations. Minimizing the environment impact of our operations assumes utmost priority. The company is unwavering in its policy of ''safety of persons overrides all production targets'' which drives all employees to continuously break new grounds in safety management for the benefit of the people, property, environment and the communities in which Scan Steels operates. Our dedicated measures by conducting the Risk Assessment, Identification of significant environment aspects of all manufacturing plants and signatory commitment of Responsible Care, Greatest emphasis is given to safety measures for minimizing accidents and incidents. In View of the above The Board has Constituted Corporate Social Responsibility Committee to Comply the Section 135 of the Companies Act, 2013. Composition and Terms of Reference of which is Detailed in Corporate Governance Report Part of this Annual Report. NOMINATION AND REMUNERATION COMMITTEE The Board has set up a Nomination and Remuneration Committee. This Committee is responsible for making Policy pursuant to Proviso to Section 178 (3) & (4) and / or recommending to the Board, the remuneration package Directors, KMP & other employees, including their annual increment and commission after reviewing their performance and also to decide the Criteria for determining appointment Qualifications, Positive attributes, and Independence of a Director The Details Regarding the Composition of the Committee, Meetings held and Terms Of reference etc.. is Detailed in Corporate Governance Report Part of this Annual Report. And the Detailed Nomination and Remuneration Policy is attached as Annexure 'D' to this Report. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013. The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. CORPORATE GOVERNANCE REPORT The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, Corporate Governance Report and the Managing Director's and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made part of the Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. E-VOTING FACILITY AT AGM In compliance with the provisions of the Clause - 35B of the Listing Agreement read with Section 108 of the Companies Act, 2013 and the Rule 20 of the Companies (Management and Administration) Rules, 2014, the company is pleased to provide members facility to exercise their votes for all the resolutions detailed in the Notice of the 22nd Annual Report of the company and the business may be transacted through e-voting. The company has engaged the services of Central Depository Services Limited (CDSL) as the authorized agency to provide the e-voting facility. RISK MANAGEMENT During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Risk Management Policy was reviewed and approved by the Committee. The Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organisational structures, processes, standards, code of conduct and behaviors together form the Scan Steels Management System that governs how the Group conducts the business of the Company and manages associated risks. The Company has introduced several improvements to Integrated Enterprise Risk Management, Internal Controls Management and Assurance Frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. This integration is enabled by all three being fully aligned across Group wide Risk Management, Internal Control and Internal Audit methodologies and processes. LISTING ON STOCK EXCHANGE The Company continues to remain listed with Bombay Stock Exchange Limited and annual listing fee for the same has been paid. INDUSTRIAL RELATIONS During the year under review, your Company had cordial and harmonious industrial relations at all levels of the Organization. DISCLOSURES NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS During the year, Ten Board Meeting were convened and held, the details of which are given in the Corporate Governance Report part of this Annual Report. The Intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. EXTRACT OF THE ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration ) Rules, 2014 and Section 134(3)(a) of Companies Act, 2013 is furnished in Annexure 'F' and is attached to this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the reporting under the said provision is not applicable to the Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 'G' and is attached to this report. PARTICULARS OF EMPLOYEES (RULE 5(2), AND 5(3)) AND MANAGERIAL REMUNERATION ( RULE 5(1) ) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 , AND UNDER SECTION 197(12) OF THE ACT Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Annexure 'H' in this Report. During the year under review there were no employees receiving remuneration of or in excess of limits prescribed as per the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT In term of Section 134(3)(l) of the Companies Act, 2013, no material changes and commitments have occurred after the close of the year till the date of this Report, which could affect the financial position of the Company. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 4. There is No Revision of Financial Statement or Board Report Adopted by the Company, thereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act, 2013 for Voluntary Revision of Financial Statement. 5. Your Company has No Holding or Subsidiary Company and thereby, neither managing Director nor Whole time Director of the Company received any commission or remuneration from the same. Accordingly there is no Details to be Provided by the Company pursuant to Section 197 (14) of the Companies Act, 2013. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENTS Your Directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company's success. The Directors look forward to their continued support in future. FOR AND ON BEHALF OF THE BOARD Rajesh Gadodia , Managing Director (DIN: 00574465) Nimish Gadodia, Director (DIN: 01258815) Date: 31st August, 2015 Place: Mumbai |