Your Directors have pleasure in presenting the Twenty Fourth Annual Report of yourCompany together with the Audited Financial Statements for the year ended March 31 2017.
FINANCIAL HIGHLIGHTS / RESULTS
Your Directors take pleasure in presenting the 24 Annual Report on the business andoperations of your Company along with the financial statements for the year ended 31March 2017.
| || ||(Rs In Lacs) |
| ||2016-2017 ||2015-2016 |
|Gross Turnover and other Income ||42024.03 ||38972.71 |
|Profit / (Loss) before Tax ||(1493.34) ||(3301.60) |
|Less : Tax Expenses || || |
|Current Tax || ||- |
|Deferred Tax (Charge)/ Credit ||(312.77) ||(3119.59) |
|Profit After Tax ||(1180.57) ||(172.23) |
|Less : Prior Period Expenses ||-- ||9.78 |
|Net Profit for the year ||(1180.57) ||(182.01) |
|Surplus Brought Forward from last balance sheet ||600.21 ||687.29 |
|Add: Earlier Year Adjustment (Tax) ||5.12 ||94.92 |
|Less: Adjustment for net carrying amount of tangible fixed assets ||- ||- |
|Balance at the end of the year ||(575.24) ||(600.21) |
INDIAN ACCOUNTING STANDARD (IND AS)
In accordance with the notification issued by the Ministry of Corporate Affairs (MCA)your Company has complied with the new Accounting Standards IND AS in preparation offinancial statements under Indian Accounting Standards (Ind AS) prescribed under section133 of the Companies Act 2013 read with rule 3 of the Companies (Indian AccountingStandards Rules 2015 and Companies (Indian Accounting Standards) Amendment Rules 2016with effect from 1st April 2016. Ind AS has replaced the existing Indian GAAP prescribedunder section 133 of the Companies Act 2013 read with rule 7 of Companies (Accounts)Rules 2014.
Accordingly the Company has adopted Indian Accounting Standard ("Ind AS")with effect from 1st April 2016 with the transition date of 1st April 2015 and thefinancial Statements for the year ended 31st March 2017 has been prepared in accordancewith Ind AS. The financial statements for the year ended 31st March 2016 have beenrestated to comply with Ind AS to make them comparable.
The effect of the transition from IGAAP to Ind AS has been explained by way of anreconciliation in the Standalone Financial Statements.
RESULTS OF OPERATIONS & STATE OF AFFAIRS OF THE COMPANY
The gross turnover from manufacturing operation and including of other income thecompany has achieved Rs 42024.03 lakhs which is incremental income of Rs 3051.32 lakhsas compared to corresponding period of last fiscal . There is a enhancement of 7.83% ingross sales and other income due to incremental quantity movement as compared to lastfiscal. The net Loss after tax was Rs 11.81 crores as compared to previous year loss of Rs1.82 crore. The reason of Loss is unprecedented movement in realization price of thefinished product of the company.
The Company produced 62542 tonnes (MT) of TMT Rods in FY 2016-17 increased by 27.58%in compare to the previous year and sold 46611.00 MT decreased by 21.65% in compare toprevious year.
The Company's sustained efforts towards back-end cost control new product launches andefficiency improvement measures supported the insulation and limited the impact on theprofitability margins. The Company's ability to better utilise capacities and productrange will help derive better margins out of the businesses. The outlook of each businesshas been discussed in detail in the Management Discussion & Analysis' whichforms a part of this Annual Report.
PRODUCTION & TURNOVER / SALES
The production of steel product during the year under report compared to the previousyear is given below.
|Item ||Production (Qty in MT) ||Turnover ||(Qty in MT) |
| ||Years ended 31st March 2017 ||Years ended 31st March 2016 ||Years ended 31st March 2017 ||Years ended 31st March 2016 |
|Sponge Iron ||148179.120 ||133529.280 ||105152.170 ||98638.27 |
|MS Ingot/ Billet ||68767.000 ||39648.000 ||7865.760 ||5410.65 |
|Long and Flat Products ||62542.000 ||49025.500 ||64919.270 ||46611.94 |
NEW PROJECTS AND EXPANSION
Your company has emerged as a flourishing and dexterous steel enterprise because of itsability to cope with the changing steel scenario and to contribute to the growth of steelproduction where the country is aiming to increase the crude steel production. For whichyour company has obtained necessary clearances from appropriate authorities. The upcomingproject compositions are as enumerated below:
|Unit ||Product ||Rated Capacity ||Annual Production in TPA |
|1. DRI Kiln ||Sponge Iron ||2 X 500 TPD ||300000 |
|2. Blast furnace 175 M ||HM/Pig Iron ||350 TPD ||122500 Hot Metal / 36750 Pig Iron |
|3. Captive Power Plant ||Power ||30 MW (20 MW WHRB +4 MW BF Gas based (TRT) +6 MW AFBC) ||- |
|4. SMS || || || |
|Induction Furnace ||Billets || || |
|Elec. Arc Furnace || ||2 x30 T ||311040 |
|Ladle Refining Furnace || ||1x30 T || |
|Continues Casting M/c. || ||1x4 Strand || |
|5. Pellet Plant ||Iron Ore ||4000 TPD ||1200000 |
| ||Pellet || || |
|6. Submerged ||Silico Management ||2x 7.5 MVA ||10200 |
|Arc Furnace || || || |
|7. Rolling Mill-1 ||TMT Rods/ Bars ||1 x 38 TPH ||200000 |
|8. Rolling Mill-2 ||Structural Steel ||1 x 38 TPH ||200000 |
|9. Galvanizing Plant ||Galvanized Product ||20 TPH ||108000 |
|10. Oxygen Plant ||Oxygen ||4800 Nm/hr || |
| || || ||622 Mn. Nm/year |
The process of land acquisition work for our project at Gangajal BudhakataSundargarh Odisha is in progress. Discussion with concerned authorities for allotment ofland has been initiated. The environmental clearances for this proposed project has beenobtained from the appropriate authorities and consent to establishment from statepollution control board of Odisha has been obtained.
Currently the Steels business account for nearly 100% of its revenues. The outlook forits margins and profitability for this business depends on overall economic outlook. Thiscompany is likely to benefit most from an upturn in the business cycle given its scale ofoperations and its competitive cost positions. Today it is truly a market-driven companymaking innovative changes and technological improvements leaving no stone unturned infulfilling dreams of its founding fathers tuning every activity to meet the subtledemands of its customers.
The Company has a Well-organized Marketing Department We have major market share inOdisha and also catering to outside states. We are in the process expanding our marketplan in India by appointment of Dealers at other major cities across India. We alsodirectly sell to the Customers through our Marketing staffs and agents.
In view of the losses incurred during the FY 2016-17 your Board of Directors has notrecommended any dividend on equity shares as well as on preference shares.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
Your Company did not recommended any dividend therefore there were no such funds whichwere required to be transferred to Investor Education and Protection Fund (IEPF).
TRANSFER TO RESERVE
During the financial year 2016 -17 the company has not transfer any amount to thereserve. the Company is maintaining a balance of Rs 1344.12 Lacs in General Reserve Rs554.73 Lacs in Capital Reserve and there is a loss of Rs 575.23 Lacs in retained earningaccounts is to be carried forward to next year.
CONSOLIDATED FINANCIAL STATEMENT
As per the definition in the Companies Act 2013 ("the Act") and AccountingStandard (AS)-21 on Consolidated Financial Statements read with AS - 23 on Accounting forInvestments the company does not have any investment in the Subsidiary Company JointVentures Company or any other Associates Company therefore the Consolidation of FinancialStatements is not applicable.
DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES
The Company does not have any Subsidiary Associates and Joint venture Companies thereby; there are no details to be provided under [Rule 8 of the Companies (Accounts) Rules2014]. Read with section 129 (3) of the Companies Act 2013.during the year under reviewno 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 25374000/-
b. remained unpaid or unclaimed as at the end of the year Nil
c. whether there has been any default in repayment of deposits or payment ofinterest thereon during the year and if so number of such cases and the total amountinvolved
i. at the beginning of the year - Nil ii. maximum during the year - Nil iii. at the endof the year - Nil
There was No default in repayment of deposits or payment of interest thereon during theyear 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 Vof the Act-
Your Company has not accepted any deposits which are not in Compliance with therequirement of Chapter V of the Act.
CHANGE IN THE NATURE OF BUSINESS IF ANY
Company is in to Steel Manufacturing Business and also expended its business activitiesinto Derivatives market and now in to setting up a power Plant to generate electricity forcaptive and distribute by using coal coal-waste Hydro Power and conserving heat arisingout of production process of owned units and adjacent units and to use purchase saleelectricity subject to government regulation.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS.
INTERNAL CONTROL SYSTEMS AND AUDIT OVERVIEW
The Company has in place adequate internal financial controls with reference tofinancial statements commensurate with the size and nature of its business forms anintegral part of the Company's corporate governance policies.
The Company has a proper and adequate system of internal control commensurate with thesize and nature of its business. Internal control systems are integral to the Company'scorporate governance policy. Some of the significant features of internal control systemsinclude:
Documenting of policies guidelines authorities and approval proceduresencompassing the Company's all primary functions.
Deploying of an ERP system which covers most of its operations and is supportedby a defined on-line authorization protocol.
Ensuring complete compliance with laws regulations standards and internalprocedures 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 andreporting of all transactions.
Preparing and monitoring of annual budgets for all operating and servicefunctions.
Ensuring the reliability of all financial and operational information.
Forming an Audit committee of the Board of Directors comprising IndependentDirectors. The Audit Committee regularly reviews audit plans significant audit findingsadequacy of internal controls and compliance with accounting standards and so on.
Forming a comprehensive Information Security Policy and continuous up-gradationof IT Systems.
The internal control systems and procedures are designed to assist in theidentification and management of risks the procedure-led verification of all complianceas well as an enhanced control consciousness.
The Company has a strong internal audit department reporting to the Audit Committeecomprising Directors and Independent Directors who are experts in their field. The scopeof work authority and resources of Internal Audit (IA) are regularly reviewed by theAudit Committee and its work is supported by the services of M/s GRC & Associates theInternal Auditor of the Company.
The Company continued to implement their suggestions and recommendations to improve thecontrol environment. Their scope of work includes review of processes for safeguarding theassets of the Company review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas. Internal Auditorsfindings are discussed with the process owners and suitable corrective actions taken asper the directions of Audit Committee on an ongoing basis to improve efficiency inoperations.
Through IA function the Board obtains the assurance it requires to ensure that risks tothe business are properly identified evaluated and managed. IA also provides assurance tothe Board on the effectiveness of relevant internal controls.
Audit plan and execution
Internal Audit department has prepared a risk-based Audit Plan. The frequency of auditis decided by risk ratings of areas functions. The audit plan is carried out by theinternal team. The audit plan is reviewed periodically to include areas which have assumedsignificant importance in line with the emerging industry trend and the aggressive growthof the Company.
In addition the audit committed also places reliance on internal customer feedback andother external events for inclusion of areas into the audit plan.
INTERNAL FINANCIAL CONTROLS
As per Section 134 (5) (e) of the Companies Act 2013 the Directors have an overallresponsibility for ensuring that the Company has implemented robust systems and frameworkof internal financial controls. This provides the Directors with reasonable assuranceregarding the adequacy and operating effectiveness of controls with regards to reportingoperational and compliance risks. To enable them to meet these responsibilities theCompany has devised appropriate systems and framework including proper delegation ofauthority policies and procedures effective IT systems aligned to business requirementsrisk based internal audit framework risk management framework and whistle blowermechanism.
The Audit Committee regularly reviews the internal control system to ensure that itremains effective and aligned with the business requirements. Where weaknesses areidentified as a result of the reviews new procedures are put in place to strengthencontrols. These are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing effectiveness ofinternal controls over financial reporting and has already laid down entity level policiesand process level standard operating procedures.
The entity level policies comprise anti-fraud policies (code of conduct includingconflict of interest confidentiality and whistle-blower policy) and other policies(organization structure roles and responsibilities insider trading policy HR policyrelated party policy prevention of sexual harassment policy IT security policy businesscontinuity and disaster recovery plan and treasury risk management policy). The Companyhas also prepared Standard Operating Practices (SOP) for each of its processes of revenueto receive procure to pay hire to retire finance and accounts fixed assets treasuryinventory manufacturing operations and administrative expenses.
Directors had devised proper systems to ensure compliance with the provisions of allapplicable laws and During the year such controls were tested and no reportable materialweakness in the design or operation were observed and such systems were adequate andoperating effectively.
GOODS AND SERVICES TAX (GST)
The introduction of Goods and Services Tax (GST) is a very significant step in thefield of indirect tax reforms in India. By amalgamating a large number of Central andState taxes into a single tax it would mitigate cascading or double taxation in a majorway and pave the way for a common national market.
The transition to GST scenario is a major change process and the Company hasestablished a dedicated team to evaluate the impact analysis and carry out changes to thebusiness process & IT systems as per the GST framework.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties referred to in Section 188 (1) of the Companies Act 2013 werein the ordinary course of business and on an arm's length basis and Detail of which isfurnished in the Annexure A' in Form AOC-2 attached with this Report in compliancewith Section 134 (3) (h) read with188 (2) of the Companies Act 2013.
Further there are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large. All RelatedParty Transactions are placed before the Audit Committee as also the Board for approval.
The Company has developed an Internal Guide on Related Party Transactions Manual andprescribed Standard Operating Procedures for purpose of identification and monitoring ofsuch transactions. none of the Directors has any pecuniary relationships or transactionsvis--vis the Company.
Moreover on the recommendations of the Audit Committee your Board had revised thePolicy on Related Party Transactions in accordance with Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 and as per theamended provisions of the Companies Act 2013.The Policy on materiality of related partytransactions and dealing with related party transactions as approved by the Board may beaccessed on the Company's website at www.scansteels.com - Investor Relations Segment. ThePolicy intends to ensure that proper reporting; approval and disclosure processes are inplace for all transactions between the Company and Related Parties. This Policyspecifically deals with the review and approval of Related Party Transactions keeping inmind the potential or actual conflicts of interest that may arise because of entering intothese transactions. All Related Party Transactions are placed before the Audit Committeefor review and approval. All Related Party Transactions are subjected to independentreview by a reputed accounting firm to establish compliance with the requirements ofRelated Party Transactions under the Companies Act 2013 and Regulation 23 of theSecurities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulations 2015.
Your Directors draw attention of the members to Note 2.3(B) to the financial statementwhich sets out related party disclosures.
ISO 9002 CERTIFICATION
Your company is having status of ISO 9001 ISO 14001 and ISO 18001 certification whichis internationally recognized for the production quality control and Environmental aswell as OHSAS respectively.
AUTHORITY TO DETERMINE MATERIALITY OF AN EVENT AND DISCLOSURE OF THE SAME TO STOCKEXCHANGE UNDER REGUALTION 30(5) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)REGAULTION 2015
Mr. Ankur Madaan Whole- Time Director of the Company and Mr. Prabir Kumar DasCompany Secretary and Compliance Officer of the Company and Mr. Gobinda Chandra NayakChief Financial Officer of the Company authorized by the Board for the purpose ofdetermining the materiality of an event or information in terms with the Company's Policyon disclosure of material event / information and archival policy to comply with theProvisions of Regulation 30 (5) of the SEBI ( Listing Obligations and DisclosureRequirements) Regulations 2015 and they are jointly and severally authorized to makenecessary disclosure to stock exchanges regarding the same on behalf of the Company.
The "SHRISTII" brand for its TMT bars are well accepted in the market invaried segments and sectors with wide customer base.
The Assets of the company are adequately insured against the loss of fire riotearthquake loss of profit etc and other risk which is considered by management Inaddition to this coverage a statutory public liability insurance policy has been taken tocover by the company for providing against the public liability arising out of industrialaccidents for employees working in plants.
INDUSTRIAL RELATIONS AND PERSONNEL
Your Company attaches great importance to human resource. Over a period of time wehave built and nurtured a dedicated and excellent workforce and also recruiting new peoplein order to meet the revival plans of the company. The processes for attracting retainingand rewarding talent are well laid down and the systems are transparent to identify andreward performers. Company is committed to the welfare of its people and their familiesand to improve the quality of their life by providing the required facilities. The Companyrecognizes the importance and contribution of its people towards achieving the commongoal. During the year under the review industrial relations at all units of the Companycontinued to be cordial and peaceful.
During the year the company has faced finance crises and could not met financi alcommitment in time reason being liquidity problems arose due to sluggish economicalconditions of the country resulting lower demand and low price of finished products andcheaper import of Steels products into India.
The banker State Bank of India being leader of Consortium has treated its lendingfacilities to the company as non-performing on 28th November 2015. To get rid of thissituation the Company has placed the re-structuring proposal to the consortium members.The proposal is under process with the lead bank i.e. State Bank of India. Theinsufficient cash flow due to drastic reduction in prices of steel products cheaperimports into India & slowdown of global economy being the reasons for non honoringcommitments to the bank.
BANKERS AND CONSORTIUM ARRANGEMENT
The Company has consortium arrangement of their bankers with State Bank of India asLead Bank. This consortium arrangement is well defined and takes care of company's termloan and working capital requirement from time to time. The consortium members meetregularly at company office quarterly and also visit company's plant from time to time.
The company has continued to scale up safety performance at all locations. Safetymeasures have been strengthened and employees are being trained to think on hazards/risksassociated with their job. Systems have been established to make employees responsible andaccountable for safety. Good safety performance is being rewarded. While Safety has beenincluded as a corporate value the main objective is to achieve better standard of safetyin the shortest possible time.
HUMAN RESOURCE DEVELOPMENT
The company has been given much emphasis on Human Resources Development and thus hasbeen well recognized in the steel industrial for sound Human Resources Management. TheCompany has emerged as a true national firm with cosmopolitan atmosphere.
The company's HR polices and process is as well aligned to effectively suit itsexpanding business horizons and future manpower requirement. This has been achieved bycontinuously stressing upon training & development empowerment and creating acompelling work environment and maintaining well structured reward & recognitionmechanism. Company is committed to the welfare of its people and their families and toimprove the quality of their life by providing the required facilities.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is the continuing commitment by the business to behaveethically and contribute to economic development while improving the quality of life ofthe 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 associatedwith charitable and social activities and thereby playing a pro-active role in thesocioeconomic growth. In structuring its efforts to the various aspects of CorporateSocial Responsibilities the Company takes account guidelines and statements issued bystakeholders and other regulatory bodies.
The management has adopted corporate social responsibility (CSR) well at par with itsbusiness with the objective of creating wealth in the community with focus on educationhealth water and society. Social welfare community development economic andenvironmental responsibilities are at the core of the CSR of the Company.
The Corporate Social Responsibility Committee (CSR Committee) Composition and Terms ofreference of which is detailed in the Corporate Governance Part of this Annual Report hasformulated and recommended to the Board a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company which has been approvedby the Board.
The key philosophy of all CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability.
The Company has identified six focus areas of engagement which are as under:
Rural Transformation: Creating sustainable livelihood solutions addressingpoverty hunger and malnutrition.
Health: Affordable solutions for healthcare through improved access awarenessand health seeking behavior.
Education: Access to quality education training and skill enhancement.
Environment: Environmental sustainability ecological balance conservation ofnatural resources.
The Company would also undertake other need based initiatives in compliance withSchedule VII to the Act.
The disclosures required to be made as per Rule 9 of Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed to this report as Annexure B'.
The CSR Policy of the Company is available on the company's website atwww.scansteels.com - Investor Relations Segment.
ISSUED / SUBSCRIBED / PAID UP CAPITAL
The authorized share capital of the Company is Rs 700000000/- (Rupees Seventy Croresonly) divided into 55000000 (Five Crore Fifty Lacs) equity shares of Rs 10/- (RupeesTen) each and 15000000 (One Crore Fifty Lacs only) Non-cumulative Redeemable PreferenceShare of Rs 10/- (Rupees Ten) each. The paid-up equity share capital as on March 31 2017was Rs 515522950 (Fifty one Crore Fifty Five Lakhs Twenty Two Thousand Nine Fifty)divided into 51552295 (Five Crore Fifteen Lakhs Fifty Two Thousand Two Hundred NinetyFive) fully paid up Equity Shares of Rs 10/- (Rupees Ten Only) each and the preferenceshare capital was Rs 128496050/- (Twelve Crore Eighty Four Lacs Ninety Six ThousandFifty) divided into 12849605 (One crore Twenty Eight Lacs Forty Nine Thousand SixHundred Five only) fully paid up NCRPS of Rs 10/- (Rupees Ten) each.
During the Year under review the company has allotted 2746665 Equity Shares of Rs 10/ - each on Conversion of Warrants in to Equity Shares.
The aggregate outstanding amount of Warrants of the company as on March 31 2017 was Rs40000250 /- representing 800005 warrants convertible into equity shares.
However as on 04.04.2017 the allottee(s) had exercised their right to convert 800000warrants into equity shares of Rs 10/- each out of total allotted to them.
Thereby The paid-up equity share capital of the Company as on date is Rs 523522950(Fifty Two Crore Thirty Five Lakhs Twenty Two Thousand Nine Fifty) divided into52352295 (Five Crore Twenty Three Lakhs Fifty Two Thousand Two Hundred Ninety Five)fully paid up Equity Shares of Rs 10/- (Rupees Ten Only) each.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 andin terms of the Articles of Association of the Company Mr. Runvijay Singh (DIN:02239382)retires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for reappointment.
The proposal regarding the re-appointment of the aforesaid Director is placed for yourapproval. The Board of Directors recommends his re-appointment.
Suitable resolution(s) for appointment / reappointment of Director(s) as referredabove will be placed for approval of the members in the forthcoming Annual GeneralMeeting. The brief resume and other information of the concerned director(s) in terms ofthe Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 have been detailed as an annexure in the notice convening theforthcoming Annual General Meeting.
KEY MANAGERIAL PERSONNEL
Mr. Ankur Madaan Whole Time Director Mr. Prabir Kumar Das President & CompanySecretary and Mr. Gobinda Chandra Nayak Chief Financial Officer are the Key ManagerialPersonnel of your company in accordance with the provision of Section 2(51) and 203 of thecompanies act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 read with SEBI (LODR) Regulations 2015.
Company's policy of appointment and remuneration for directors KMP and other employeesincluding criteria for determining qualifications positive attributes director'sindependence (read with Sections 178 (1) (3) (4).
The Nomination and Remuneration Committee works with the Board to determine theappropriate characteristics skills and experience for the Board as a whole and itsindividual members with the objective of having a Board with diverse backgrounds andexperience in business government education and public service. Characteristics expectedof all Directors include independence integrity high personal and professional ethicssound business judgment ability to participate constructively in deliberations andwillingness to exercise authority in a collective manner.
The current policy is to have a balanced mix of executive and non-executive IndependentDirectors to maintain the independence of the Board and separate its functions ofgovernance and management.
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isfurnished in Annexure C' and is attached to this report.
Further Nomination and Remuneration Policy for Directors Key Managerial Personnel andother employees is furnished in Annexure D' and is attached to this report.
Declaration by Independent Director(s)
As required under section 149(7) of the Companies Act 2013 The Company has receiveddeclarations from all the Independent Directors of the Company confirming that they meetthe criteria of independence and / or to qualify themselves to be appointed as IndependentDirectors as prescribed both under Section 149 (6) of the Companies Act' 2013 andRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 The Board considered the independence of each of the Independent Directors in termsof the above provisions and is of the view that they fulfill/meet the criteria ofindependence. And the declarations are put up on the website of the Company atwww.scansteels.com - Investor Relations Segment.
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 anoverview of our operations to familiarize the new Ids with the Company's businessoperations. The new IDs are given an orientation on our products group structure Boardconstitution and Procedures matters reserved for the Board and our major risks and riskmanagement strategy.
The company familiarises the Independent Directors of the Company with their rolesrights responsibilities in the company nature of the industry in which the companyoperates business model of the company etc and related matters are put up on the websiteof the Company at www.scansteels.com - Investor Relations Segment.
Separate Independent Director Meeting
In term of requirements of Schedule IV of the Companies Act 2013 and Regulation 25 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate meeting of the independent directors ("Annual IDmeeting") was convened on 14th March 2017 and All the Independent Directors werepresent at the said Meeting.
The Independent Directors at the meeting reviewed the following:
a. Performance of Non-Independent Directors and the Board as a whole;
b. Performance of the Chairman of the Company taking into account the views ofExecutive Directors and Non-Executive Directors; and
c. Assess the quality quantity and timeliness of flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
Post the Annual ID meeting the collective feedback of each of the IndependentDirectors was discussed by the Chairperson of the Nomination Remuneration Committee withthe Board covering performance of the Board as a whole performance of the non-independentdirectors and performance of the Board Chairman.
In addition to formal meetings interactions outside the Board meetings also take placebetween the Chairman and Independent Directors.
BOARD ANNUAL EVALUATION
Pursuant to Regulation 17(10) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 and In compliance with the Section 134(3) (p) Company hasdevised a Policy for performance - evaluation of Independent Directors Board Committeesand other individual Directors which include criteria for performance evaluation of thenon-executive directors and executive directors.
The Board carried out an annual performance evaluation of its own performance theindividual Directors as well as the working of the Committees of the Board. Theperformance evaluation of the Independent Directors was carried out by the entire Board incompliance with Schedule IV to the Companies Act 2013. The performance evaluation of theChairman Whole-Time Director and the Non- Independent Directors was carried out byIndependent Directors. Details of the same are given in the Report on Corporate Governanceannexed hereto.
The Chairperson of the Nomination and Remuneration Committee (NRC) held separatediscussions with each of the Directors of the Company and obtained their feedback onoverall Board effectiveness as well as on each of the other Directors.
While evaluating the performance and effectiveness of the Board various aspects of theBoard's functioning such as adequacy of the composition and quality of the Board timedevoted by the Board to Company's long-term strategic issues quality and transparency ofBoard discussions execution and performance of specific duties obligations and -governance were taken into consideration. Committee performance was evaluated on the basisof their effectiveness in carrying out respective mandates. A separate exercise wascarried out to evaluate the performance of Independent Directors including the Chairman ofthe Board who were evaluated on parameters such as level of engagement and contributionto Board deliberations independence of judgment safeguarding the interest of the Companyand focus on creation of shareholders value ability to guide the Company in key mattersattendance at meetings etc. The Executive Directors were evaluated on parameters such asstrategy implementation leadership skills quality quantity and timeliness of theinformation flow to the Board etc.
The Directors expressed their satisfaction with the evaluation process.
The Detailed Policy on Performance Evaluation of Independent Directors BoardCommittees and other individual Directors can be accessed from the website of the Companyat www.scansteels.com - Investor Relations Segment.
The following disclosures have been mentioned in detail under the heading"Corporate Governance" part of this Annual Report:
(i) all elements of remuneration package such as salary benefits bonuses stockoptions pension etc. of all the directors;
(ii) details of fixed component and performance linked incentives along with theperformance criteria;
(iii) service contracts notice period severance fees;
(iv) Stock option details if any and whether the same has been issued at a discountas 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 ofthe Companies Act 2013. The code is a guide to professional conduct for independentdirectors' adherence to these standards by independent directors and fulfillment of theirresponsibility in a professional and faithful manner will promote confidence of theinvestment community and regulators.
The broad items for code for independent directors are:
(i) Guidelines for Professional conduct.
(ii) Role and Functions.
(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 withoutattendance 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 ofConduct for Board of Directors and Senior Management of the Company can be accessed on thewebsite of the Company at www.scansteels.com - Investor Relations Segment.
SCAN STEEL'S CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulations 2015.
The Insider Trading Policy of the Company lays down guidelines and procedures to befollowed and disclosures to be made while dealing with shares of the Company. As well asthe consequences of violation. The Policy has been formulated to regulate monitor andensure reporting of deals by employees and to maintain the highest ethical standards ofdealing in Company Securities.
The Insider Trading Policy of the Company covering code of Practices and procedures forfair disclosures of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our website at www.scansteels.com - InvestorRelations Segment.
COMPLIANCE WITH CODE OF ETHICS FOR BOARD OF DIRECTORS AND SENIOR EXECUTIVES
All Directors and Senior Management Personnel have affirmed Compliance with the Code ofEthics for Board of Directors and Senior Executives. A Declaration to that effect isattached with The Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under section 134(3)(c) and 134(5) of the Companies Act2013 your directors hereby state and confirm that
a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31 2017 and of the profitand loss of the company for the year ended on that date;
c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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) Thedirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
AUDITORS AND AUDITOR'S REPORT
The Auditors M/s. SRB & Associates Chartered Accountant (Firm's Registration No.310009E) (SRB) of Bhubaneswar were appointed with your approval at the 21st AGM for aperiod of five years to hold such office till the conclusion of the 26th AGM.
In terms of the first proviso to section 139 of the companies act 2013 theappointment of the Auditors shall be placed for ratification at every annual generalmeeting. Accordingly The Board on the recommendation of the Audit Committee hasrecommended for the ratification of the Members the appointment of M/s. SRB &Associates from the conclusion of the ensuing AGM till the conclusion of the 25th AGM.Appropriate resolution for the purpose is appearing in the Notice convening the 24th AGMof the Company.
The Company has received necessary consent and certificates under Section 139 from theabove Auditors to the effect that they satisfied the criteria provided in section 141 ofthe Companies Act 2013 read with Cos. (Audit &Auditors) Rules 2014.
No frauds have been reported by the Auditors under Section 143 (12) of the CompaniesAct 2013 requiring disclosure in the Board Report.
Explanation to Auditor's emphasis of matter:
Auditors have in their report drawn attention to Note No. 2.5 to the financialstatements which describes that the company has defaulted on debt payments to consortiumlenders due to unprecedented adverse developments witnessed by industry as a whole duringthe financial year.
In the opinion of the Board The company's funding has been funded through consortiummember banks. The leader State Bank of India alongwith two other member banks haveclassified the asset as Non-performing Assets in their books of account during the yearunder review and in earlier year. Besides this rest of the member banks have alsoclassified the asset as Non- performing Assets but for which the company has not receivedany communication in this regard.
The monthly interest application has been made by the three member banks and the othermembers have not applied the monthly interest since the account is treated as"Non-performing Assets". The non charging of interest by the three memberbanks has an impact on the profitability of the company for aggregating loan of Rs 12628lakhs which was extended to the company the interest component not being determinable asof now.
Auditors have in their report drawn attention to Note No-2.6 to the financialstatements which describes that the company has advance from customers for more than 365days.
In the opinion of the Board The Company has advance from customers for more than 365days which is against the provisions of Sec 73 of the Companies Act 2013 which statesthat "Any money received as advance in the course of ordinary business shall betreated as deposit if goods or services are not provided within 365 days of receipt".It is to be clarified that the company is in the process of to identifying the reasons ofsuch accumulation. Also necessary correspondences has been made in this regards and willbe squared off in the coming financial year.
The Company has advance from customers for more than 365 days which is against theprovisions of Sec 73 of the Companies Act 2013 which states that "Any money receivedas advance in the course of ordinary business shall be treated as deposit if goods orservices are not provided within 365 days of receipt".
Auditors have in their report drawn attention to Note No-2.7 to the financialstatements which describes on steps taken by the company for transition to Ind AScompliance.
In the opinion of the Board The company has opted to implement / adopt the followingpolicies and procedures as per the Indian GAAP irrespective of the requirements andcompliance on transition to Ind AS:
1. Componetisation: As per prevailing practice company compontises fixed assets asdetailed in the Invoice. It does not have a separate componetisation policy. Accordinglycomponents identified ( as mentioned above ) are also depreciated based on the usefullives prescribed under Schedule-II (of the Companies Act. ) for the main asset.
2. Stores and Spares: The company on purchases of stores and spares If it relates toan item of PPE the same are capitalized on the date of issue and Which are issued forrevenue expenditure purpose are charged to Profit & Loss Account on the date ofconsumption.
3. The company is in the process of identification of the major components significantto the total cost of the asset accordingly necessary requirements to be complied.
4. The company is in the process of identifying the doubtful debtors to make provisionfor impairment to be recognized as per the Expected Credit Loss Method.
Except of the emphasis of matters mentioned above all other observations made by theStatutory Auditors in their report for the financial year ended 31st March 2017 read withthe explanatory notes therein are self-explanatory and therefore do not call for anyfurther explanation or comments from the Board under Section 134(3) of the Companies Act2013.
Pursuant to Section 148 (2) of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 your Company is required to get its costaccounting records audited by Cost Auditor.
Accordingly the Board at its meeting held on May 30 2017 has on the recommendation ofthe Audit Committee re-appointed M/s. Ray Nayak & Associates Partner CMA. ChaitanyaKumar Ray Cost Accountants having office at MIG-26 Manorama Estate RasulgarhBhubaneswar - 751010 (Odisha) as the Cost Auditors of the Company to conduct the audit ofthe cost accounting records of the Company for the financial year 2017-18 on aremuneration of Rs 45000/- plus tax as applicable and reimbursement of actual travel andout of pocket expenses.
The remuneration is subject to the ratification of the members in terms of Section 148read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 and is accordinglyplaced for your ratification.
The Cost Audit Report for the Financial year ended 31st March 2016 was filed in XBRLmode on 27th September 2016.
The Cost Auditor submitted their Cost Audit Reports for the financial year 2016-2017 tothe Board and the report does not contain any qualification reservation or adverseremark.
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. K.K.Giri & Associates aPracticing Company Secretary (CP No-14459) having office at Plot No-215(I) 2nd FloorDistrict Centre Chandrasekharpur Bhubaneswar-751016 to undertake the Secretarial Auditof the Company. The Report of the Secretarial Audit carried out is annexed herewith asAnnexure "E".
The report does not contain any observation or qualification requiring explanation orcomments from the Board under Section 134(3) of the Companies Act 2013.
The Board at its meeting held on May 30 2017 has reappointed M/s. K.K.Giri &Associates a Practicing Company Secretary (CP No-14459) having office at Plot No-215(I)2nd Floor District Centre Chandrasekharpur Bhubaneswar-751016 as Secretarial Auditorfor conducting Secretarial Audit of the Company for FY 2017-18.
Audit Committee is constituted as per Regulation 18 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 read with Section 177 of the Companies Act2013. Composition of Audit Committee is as per Section 177 (8) of Companies Act 2013. ThePrime Objective of the Committee is to monitor and provide effective supervision of theManagements financial reporting process to ensure accurate and timely disclosureswith the highest levels of transparency integrity and quality of financial reporting.
Composition and Terms of reference of the Committee is explained in Detail in theCorporate Governance Part of this Annual Report.
There was no recommendation as such in the Financial Year 2016-2017 from the AuditCommittee which was not accepted by the Board.
In pursuance of Section 177(9) of the Companies Act 2013 and Regulation 22 read withRegulation
4(2)(d)(iv) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 Vigil Mechanism has been Constituted fordirectors and employees to report genuine concerns and Audit committee shall oversee thevigil mechanism through the committee and provide adequate safeguards againstvictimization of employees and directors who availed of the vigil mechanism and have adirect 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 theaudit 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) ofthe Companies Act 2013 and Regulation 20 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The SR Committee is primarily responsible to review allmatters connected with the Company's transfer of securities and redressal of shareholders'/ investors' / security holders' complaints.
Composition and Terms of Reference of the SR Committee is Detailed in CorporateGovernance Report Part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Board has set up a Nomination and Remuneration Committee In compliance with Section178 of the Companies Act 2013 and Regulation 19 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. This Committee is responsible for makingPolicy pursuant to Proviso to Section 178 (3) & (4) read with Rules made there underand Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and / or recommending to the Board the remunerationpackage of Directors KMP & other employees including their annual increment andcommission after reviewing their performance and also to decide the Criteria fordetermining appointment Qualifications Positive attributes and Independence of aDirector
The details regarding the composition of the Committee Meetings held and terms ofreference etc. is detailed in Corporate Governance Report Part of this Annual Report andthe detailed Nomination and Remuneration Policy is attached as Annexure D' to thisReport.
CONSTITUTION OF CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Scan Steels's commitment towards excellence in Health Safety and Environment is one ofthe company's core values by complying with the Laws and Regulations first and then goingbeyond the mandate to keep our planet safe for future generations. Minimizing theenvironment impact of our operations assumes utmost priority.
The company is unwavering in its policy of ''safety of persons overrides all productiontargets'' which drives all employees to continuously break new grounds in safetymanagement for the benefit of the people property environment and the communities inwhich Scan Steels operate. Our dedicated measures by conducting the Risk AssessmentIdentification of significant environment aspects of all manufacturing plants andsignatory commitment of Responsible Care Greatest emphasis is given to safety measuresfor minimizing accidents and incidents.
In View of the above The Board has Constituted Corporate Social ResponsibilityCommittee to Comply the Section 135 of the Companies Act 2013. Composition and Terms ofReference of which is Detailed in Corporate Governance Report Part of this Annual Report.
The Board has set up a Risk Management Committee in Compliance with Companies Act 2013and
Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 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 strategicfinancial credit market liquidity security property IT legal regulatoryreputational and other risks have been identified and assessed and there is an adequaterisk management infrastructure in place capable of addressing those risks. A RiskManagement Policy was reviewed and approved by the Committee and which can be accessed onthe website of the Company at www.scansteels.com - Investor Relations Segment.
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organizational structures processes standards code of conduct and behaviorstogether form the Scan Steels Management System that governs how the Group conducts thebusiness of the Company and manages associated risks.
The Company has introduced several improvements to Integrated Enterprise RiskManagement Internal Controls Management and Assurance Frameworks and processes to drive acommon integrated view of risks optimal risk mitigation responses and efficientmanagement of internal control and assurance activities. This integration is enabled byall three being fully aligned across Group wide Risk Management Internal Control andInternal Audit methodologies and processes.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013.
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules there under.
Your Directors state that during the year under review there were no cases filedpursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Transparency is the cornerstone of your Company's philosophy and all requirements ofCorporate Governance are adhered to both in letter and spirit. All the Committees of theBoard of Directors meets at regular intervals as required in terms of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015. Your Board of Directors hastaken all necessary steps to ensure compliance with all statutory requirements. TheDirectors and Key Management Personnel of your Company have complied with the approvedCode of Ethics for Board of Directors and Senior Executives' of the Company.
The Report on Corporate Governance as required under the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 forms part of this Annual Report. TheAuditors' Certificate on compliance with Corporate Governance requirements is alsoattached to Corporate Governance's Report. Further as required under Regulation 17(8) ofSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 a certificatefrom the Whole- Time Director & CFO is being annexed with this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management's Discussion and AnalysisReport for the year under review is presented in a separate section forming part of theAnnual Report.
E-VOTING FACILITY AT AGM
In compliance with Section 108 of the Companies Act 2013 Rule 20 of the Companies(Management and Administration) Rules 2014 as substituted by the Companies (Managementand Administration) Amendment Rules 2015 and Regulation 44 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the company is pleased toprovide members facility to exercise their votes for all the resolutions detailed in theNotice of the 24th Annual Report of the company and the business may be transacted throughe-voting. The company has engaged the services of Central Depository Services Limited(CDSL) as the authorized agency to provide the e-voting facility.
LISTING ON STOCK EXCHANGE
The Company continues to remain listed with Bombay Stock Exchange Limited and annuallisting fee for the same has been paid.
During the year under review your Company had cordial and harmonious industrialrelations at all levels of the Organization.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year Seven Board Meeting were convened and held details of the meetings ofthe Board and various Committees of your Company are set out in the Corporate GovernanceReport which forms part of this Report. The intervening gap between the meetings waswithin the period prescribed under the Companies Act 2013 and Regulation 17 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
EXTRACT OF THE ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 and Section 134(3)(a) ofCompanies Act 2013 is furnished in Form No. MGT9 as Annexure F' and isattached to this Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans guarantees made by the Company under Section 186 of the CompaniesAct 2013 during the year under review. However the company has made the Investment inquoted securities as a long term investments and the details of the investments coveredunder the provisions of section 186 of the companies act 2013 are given in the financialstatements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of conservation of energy technology absorption foreign exchange earningsand outgo as required under Section 134 (3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure G' and isattached 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 ANDUNDER SECTION 197(12) OF THE ACT
The total number of employees as on 31st March 2017 stood at 1533.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annexure H'in this Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
In term of Section 134(3)(l) of the Companies Act 2013 no material changes andcommitments have occurred after the close of the year till the date of this Report whichcould affect the financial position of the Company.
Your Directors state that no disclosure or reporting is required in respect of thefollowing 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 underany scheme.
3. No significant or material orders were passed by the Regulators or Courts orTribunals 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 Companythereby there is no Disclosures to be made by the Company u/s 131 of the Companies Act2013 for Voluntary Revision of Financial Statement.
5. Your Company has No Holding or Subsidiary Company and thereby Whole time Directorof the Company do not receive any commission or remuneration from the same. Accordinglythere is no Details to be Provided by the Company pursuant to Section 197 (14) of theCompanies Act 2013.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors wish to place on record their gratitude for the valuable guidance andsupport rendered by the Government of India various State Government departmentsFinancial Institutions Banks and various stakeholders such as shareholders customersand suppliers among others. The Directors also commend the continuing commitment anddedication of the employees at all levels which has been critical for the Company'ssuccess. The Directors look forward to their continued support in future.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||Ankur Madaan Whole-Time Director |
| ||(DIN: 07002199) |
|Place: Bhubaneswar ||Runvijay Singh Director |
|Date: 30th May 2017 ||(DIN: 02239382) |
ANNEXURES TO THE BOARD REPORT
|ANNEXURE NO. ||CONTENTS |
|ANNEXURE A' ||Form AOC 2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014) disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 and Related Party Transactions Justification for Entering into Related Party Transactions referred to in sub-section (2) of section 188 of the Companies Act 2013 including certain arm's length transactions under third proviso thereto. |
|ANNEXURE B' ||Annual Report on CSR |
|ANNEXURE C' ||Policy for Selection of Directors and determining Directors' independence. |
|ANNEXURE D' ||Nomination and Remuneration Policy |
|ANNEXURE E' ||Secretarial Audit Report (In Form- MR 3 ) |
|ANNEXURE F' ||Extracts of the Annual Return (In Form MGT 9) |
|ANNEXURE G' ||Particulars of Conservation of Energy Technol ogy Absorption and foreign Exchange Earnings and outgo. |
|ANNEXURE H' ||Rule 5 (1) (2) AND (3) of Companies (Managerial Remuneration) Rules |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 and RelatedParty Transactions Justification for Entering into Related Party Transactions referred toin sub-section (2) of section 188 of the Companies Act 2013 including certain arm'slength transactions under third proviso thereto.
1. Details of contracts or arrangements or transactions not at arm's length basis
|a. Name(s) of the related party and nature of relationship || |
|b. Nature of contracts /arrangements / transactions ||NIL |
|c. Duration of the contracts / arrangements/transactions ||(All the contracts or arrangements or transactions with related parties are at arm's length basis.) |
|d. Salient terms of the contracts or arrangements or transactions in cluding the value if any || |
|e. Justification for entering into such contracts or arrangements or transactions || |
|f. date(s) of approval by the Board || |
|g. Amount paid as advances if any: || |
|h. Date on which the special resolution was passed in general meeting as required under first proviso to section 188 || |
2. Details of material contracts or arrangement or transactions at arm's length basis
|(a) Name(s) of the related party and nature of relationship ||(b) Nature of contracts / arrangements / transactions ||(c) Duration of the contracts / arrangements / transactions ||(d) Salient terms of the contracts or arrangements or transactions including the value if any: ||(e) Date(s) of approval by the Board if any: ||(f) Amount paid as advances if any: |
|Nav Durga Fuel Private Limited One director is member ||Sale and Purchase products goods etc. ||Continuous Basis ||Sale of Steel Products Purchase of Steel/Scrap and allocating common corporate expenditure providing guarantee etc. at arm's length basis. (for details of transactions during the year refer Note 2.3(B) to the financial statements) ||Please refer note below ||Nil |
|Scan Energy & Power Limited One director is holding more than two percent of its paid up share capital ||Sale of Steel Products Purchase of Steels etc. ||Continuous Basis ||Sale of Steel Products Purchase of Steel/Scrap and allocating common corporate expenditure providing guarantee etc. at arm's length basis. (for details of transactions during the year refer Note 2.3(B) to the financial statements) ||Please refer note below ||Nil |
Note: as per regulation 23 of the SEBI Listing Regulations transaction with abovementioned related parties were considered material and approval of shareholders has beenobtained at the Extraordinary General Meeting held on 26.03.2015 for an estimated amountaround Rs 200 cr. every financial year.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||Ankur Madaan Whole-Time Director |
| ||(DIN: 07002199) |
|Place: Bhubaneswar ||Runvijay Singh Director |
|Date: 30th May 2017 ||(DIN: 02239382) |
POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTOR'S INDEPENDENCE
1.1 Scan Steels Limited (SSL) believes that an enlightened Board consciouslycreates a culture of leadership to provide a long-term vision and policy approach toimprove the quality of governance. Towards this SSL ensures constitution of a Board ofDirectors with an appropriate composition size diversified expertise and experience andcommitment to discharge their responsibilities and duties effectively.
1.2 SSL recognizes the importance of Independent Directors in achieving theeffectiveness of the Board. SSL aims to have an optimum combination of ExecutiveNon-Executive and Independent Directors.
2. Scope and Exclusion :
2.1 This Policy sets out the guiding principles for Nomination and RemunerationCommittee for identifying person who are qualified to become Director and to determine theindependence of Directors in case of their appointment as independent director of theCompany.
3. Terms and References:
In this Policy the following terms shall have the following meaning :
3.1 "Director" means a director appointed to the Board of a company.
3.2 "Nomination and Remuneration Committee" means the committeeconstituted by SSL's Board in accordance with the provision of section 178 of theCompanies Act 2013 and Regulation 19 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
3.3 "Independent Director" means a director referred to in sub-section(6) of section 149 of the companies Act 2013 and Regulation 16 (1) (b) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015
4. Policy :
4.1 Qualification and criteria
4.1.1 The Nomination and Remuneration Committee and the Board shall review on anannual basis appropriate skills knowledge and experience required of the Board as awhole and its individual members. The objective is to have a Board with diverse backgroundand experience that are relevant for the Company's global operations.
4.1.2 In evaluating the suitability of individual Board members the Nomination andRemuneration Committee may take into account factors such as:
General understanding of the Company's business dynamics global business and socialperspective;
Educational and professional background;
Standing in the profession;
Personal and professional ethics integrity and values;
Willingness to devote sufficient time and energy in carrying out their duties andresponsibilities effectively.
4.1.3 The proposed appointee shall also fulfill the following requirements:
Shall possess a Director Identification Number;
Shall not be disqualified under the Companies Act 2013;
Shall give his written consent to act as a Director;
Shall Endeavour to attend all Board Meetings and wherever he is appointed as acommittee members the committee Meetings;
Shall abide by the code of conduct established by the Company for Directors and seniorManagement Personnel;
Shall disclose his concern or interest in any company or companies bodies corporatefirms or other association of individuals including his shareholding at the first meetingof the Board in every financial year and thereafter whenever there is a change in thedisclosures already made;
Such other requirements as may be prescribed from time to time under the CompaniesAct 2013 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andother relevant laws.
4.1.4 The Nomination and Remuneration committee shall evaluate each individual withthe objective of having a group that best enables the success of the Company's business.
4.2 Criteria of Independence
4.2.1 The Nomination and Remuneration Committee shall assess the independence ofDirector at the time of appointment/re-appointment and the Board shall assess the sameannually. The Board shall re-assess determinations of independence when any new interestsor relationships are disclosed by a Director.
4.2.2 The criteria of independence as laid down in Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is as below:
An independent director in relation to a company means a director other than amanaging director or a whole-time director or a nominee director-a. Who in theopinion of the Board is a person of integrity and possesses relevant expertise andexperience;
b.(i) who is or was not a promoter of the company or its holding subsidiary orassociate company;
(ii) who is not related to promoters or directors in the company its holdingsubsidiary or associate company;
c. Who has or had no pecuniary relationship with the company its holdingsubsidiary or associate company or their promoters or directors during the twoimmediately preceding financial year or during the current financial year;
d. None of whose relatives has or had pecuniary relationship or transaction withthe company its holding subsidiary or associate company or their promoters or directoramounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial years;
e. Who neither himself nor any of his relatives
(i) Holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;
(ii) Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial in which he is proposed to beappointed of
(A) A firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or
(B) Any legal or a consulting firm that has or any transaction with the company itsholding subsidiary or associate company amounting to ten per cent or more of the grossturnover of such firm;
(iii) Holds together with his relative two per cent or more of the total votingpower of the company; or
(iv) Is a Chief Executive or director by whatever name called of any non-profitorganization that receives twenty-five per cent or more of its receipts from the companyany of its promoter directors or its holding subsidiary or associate company or thatholds two per cent or more of more of the total voting power of the company; or
(v) Is a material supplier service provider or customer or a lessor or lessee ofthe company
f. Shall possess appropriate skills experience and knowledge in one or more fieldsof finance law management sales marketing administration research corporategovernance technical operations corporate social responsibility or other disciplinesrelated to the Company's business.
g. Shall possess such other qualifications as may be prescribed from time to timeunder the Companies Act 2013
h. Who is not less than 21 years of age
4.2.3 The Independent Director shall abide by the "Code for IndependentDirectors" as specified in schedule IV to the Companies Act 2013
4.3 Other directorship/committee memberships
4.3.1 The Board members are expected to have adequate time and expertise andexperience to contribute to effective Board performance. Accordingly members shouldvoluntarily limit their directorship in other listed public limited companies in such away that is does not interfere with their role as directors of the Company. The Nominationand Remuneration Committee shall take into account the nature of and the time involved ina Director's service on other Boards in evaluating the suitability of the individualDirectors and making its recommendations to the Board.
4.3.2 A Director shall not serve as Director in more than 20 companies of which notmore than 10 shall be Public Limited Companies.
4.3.3 A Director shall not serve as an Independent Director in more than 7 ListedCompanies and not more than 3 listed Companies in case he is serving as a whole-timeDirector in any Listed Company.
4.3.4 A Director shall not be a member in more than 10 Committees or act asChairman of more than 5 Committees across all companies in which he holds directorships.
For the purpose of considering the limit of the Committees Audit Committee andstakeholders' Relationship Committee of all Public Limited Companies whether listed ornot shall be included and all other companies including Private Limited CompaniesForeign Companies and Companies under Section 8 of the Companies Act2013 shall beexcluded.
SCAN STEELS LIMITED (SSL)
NOMINATION AND REMUNERATION POLICY
In pursuance of the Company's policy to consider human resources as its invaluableassets to pay equitable remuneration to all Directors key managerial personnel andemployees of the company to harmonize the aspirations of human resources consistent withthe goals of the company and in terms of the provisions of the Companies Act 2013 and incompliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (as amended from time to time) this policy on nomination and remuneration ofDirectors Key Managerial Personnel (KMP) and Senior Management has been formulated by theNomination and Remuneration Committee ("NRC") and approved by the Board ofDirectors of the Company.
The Nomination and Remuneration Committee and this Policy shall be in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andRegulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The objective of this policy is to lay down a framework in relation to remunerationof directors KMP senior management personnel and other employees. The Key Objectives ofthe Committee would be:
1.1 To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
1.2 Formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of Directors key managerial personnel and other employees.
1.3 Formulation of criteria for evaluation of Independent Director and the Board.
1.4 To evaluate the performance of the members of the Board and provide necessaryreport to the Board for further evaluation of the Board.
1.5 To recommend to the Board on Remuneration payable to the Directors KeyManagerial Personnel and Senior Management.
1.6 To provide to Key Managerial Personnel and Senior Management reward linkeddirectly to their effort performance dedication and achievement relating to theCompany's operations.
1.7 To retain motivate and promote talent and to ensure long term sustainabilityof talented managerial persons and create competitive advantage.
1.8 To develop a succession plan for the Board and to regularly review the plan.
1.9 To assist the Board in fulfilling responsibilities.
1.10 To Implement and monitor policies and processes regarding principles ofcorporate governance.
A. Directors (Executive and Non Executive)
B. Key Managerial Personnel
C. Senior Management Personnel
"Act" means the Companies Act 2013 and Rules framed there under as amendedfrom time to time.
"Board" means Board of Directors of the Company. "Directors" meanDirectors of the Company. "Key Managerial Personnel" means
i. Managing Director or Chief Executive Officer or Manager and in their absence aWhole-time Director;
ii. Chief Financial Officer; iii. Company Secretary; and iv. suchother officer as may be prescribed.
"Senior Management" means the personnel of the company who are members of itscore management team excluding Board of Directors comprising all members of management onelevel below the executive directors including the functional heads.
Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.
CONSTITUTION OF COMMITTEE
The Board of Directors of the Company (the Board) constituted the committee tobe known as the Nomination and Remuneration Committee consisting of three or morenon-executive directors out of which not less than one-half are independent directors.
The Chairman of the Committee is an Independent Director. In the absence of theChairperson the members of the Committee present at the meeting shall choose one amongstthem to act as Chairperson.
However the chairperson of the company (whether executive or nonexecutive) maybe appointed as a member of the Nomination and Remuneration Committee but shall not chairsuch Committee."
Minimum Two (2) members shall constitute a quorum for the Committee meeting.
Membership of the Committee shall be disclosed in the Annual Report.
Term of the Committee shall be continued unless terminated by the Board ofDirectors.
FREQUENCY OF COMMITTEE MEETING
The meeting of the Committee shall be held at such regular intervals as may berequired.
POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR KMP AND SENIOR MANAGEMENT
1. Appointment Criteria and Qualifications
a) The Committee shall identify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director KMP or at SeniorManagement level and recommend to the Board his / her appointment.
b) A person should possessadequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.
c) The Company shall not appoint or continue the employment of any person asWhole-time Director who has attained the age of seventy years. Provided that the term ofthe person holding this position may be extended beyond the age of seventy years with theapproval of shareholders by passing a special resolution based on the explanatorystatement annexed to the notice for such motion indicating the justification for extensionof appointment beyond seventy years.
2. Term / Tenure
a) Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Executive Chairman ManagingDirector or
Executive Director for a term not exceeding five years at a time. No re-appointmentshall be made earlier than one year before the expiry of term.
b) Independent Director:
An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for reappointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms of uptomaximum of 5 years each but such Independent Director shall be eligible for appointmentafter expiry of three years of ceasing to become an Independent Director. Provided that anIndependent Director shall not during the said period of three years be appointed in orbe associated with the Company in any other capacity either directly or indirectly.
At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serves is restricted to seven listed companiesas an Independent Director and three listed companies as an Independent Director in casesuch person is serving as a Whole-time Director of a listed company or such other numberas may be prescribed under the Act.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly).
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations there under the Committee may recommend to theBoard with reasons recorded in writing removal of a Director KMP or Senior ManagementPersonnel subject to the provisions and compliance of the said Act rules and regulations.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position /remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.
POLICY FOR REMUNERATION TO DIRECTORS / KMP / SENIOR MANAGEMENT PERSONNEL
1. Remuneration to Managing/Whole-time / Executive / Managing Director KMP andSenior Management Personnel:
The Remuneration / Compensation / Commission etc. to be paid to Director / ManagingDirector etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force.
2. Remuneration to Non- Executive / Independent Director:
The Non-Executive Independent Director may receive remuneration / compensation /commission as per the provisions of Companies Act 2013. The amount of sitting fees shallbe subject to ceiling/ limits as provided under Companies Act 2013 and rules made thereunder or any other enactment for the time being in force.
COMMITTEE MEMBER'S INTEREST
A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.
The Committee may invite such executives as it considers appropriate to bepresent at the meetings of the Committee.
The Company Secretary of the Company shall act as Secretary of the Committee.
Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
In the case of equality of votes the Chairman of the meeting will have acasting vote.
DUTIES IN RELATION TO NOMINATION MATTERS
The duties of the Committee in relation to nomination matters include:
Ensuring that there is an appropriate induction in place for new Directors andmembers of Senior Management and reviewing its effectiveness;
Ensuring that on appointment to the Board Non-Executive Directors receive aformal letter of appointment in accordance with the Guidelines provided under the Act;
Identifying and recommending Directors who are to be put forward for retirementby rotation
Determining the appropriate size diversity and composition of the Board;
Developing a succession plan for the Board and Senior Management and regularlyreviewing the plan;
Evaluating the performance of the Board members and Senior Management in thecontext of the Company's performance from business and compliance perspective;
Making recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract;
Delegating any of its powers to one or more of its members or the Secretary ofthe Committee;
Recommend any necessary changes to the Board; and
Considering any other matters as may be requested by the Board.
DUTIES IN RELATION TO REMUNERATION MATTERS
The duties of the Committee in relation to remuneration matters include:
Considering and determining the Remuneration Policy based on the performanceand also bearing in mind that the remuneration is reasonable and sufficient to attractretain and motivate members of the Board and such other factors as the Committee shalldeem appropriate all elements of the remuneration of the members of the Board.
Approving the remuneration of the Senior Management including key managerialpersonnel of the Company maintaining a balance between fixed and incentive pay reflectingshort and long term performance objectives appropriate to the working of the Company.
Delegating any of its powers to one or more of its members or the Secretary ofthe Committee.
Considering any other matters as may be requested by the Board.
MINUTES OF COMMITTEE MEETING
Proceedings of all meetings must be minuted and signed by the Chairman of the Committeeat the subsequent meeting. Minutes of the Committee meetings will be tabled at thesubsequent Board and Committee meeting.
REVIEW AND AMENDMENT
i. The NRC or the Board may review the Policy as and when it deems necessary.
ii. The NRC may issue the guidelines procedures formats reporting mechanism andmanual in supplement and better implementation to this Policy if it thinks necessary.
iii. This Policy may be amended or substituted by the NRC or by the Board as andwhen required and also by the Compliance Officer where there is any statutory changesnecessitating the change in the policy.
The Members Scan Steels Limited 104/105 E-Square'
Subhash Road opp. Havmor Ice-Cream Vile- Parle (East) Mumbai 400057.
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial recordsand Books of Accounts of the company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viabilityof the company nor of the efficacy or effectiveness with which the management hasconducted the affairs of the company.
7. We further report that based on the information provided by the Company itsofficers authorised representatives during the conduct of the audit and also on thereview of quarterly compliance report by the respective departmental heads / CompanySecretary / Managing Director taken on record by the Board of the Company in our opinionadequate systems and process and control mechanism exist in the Company to monitorcompliance with applicable general laws like labour laws & Environment laws.
8. We further report that the Compliance by the Company of applicable Financiallaws like Direct & Indirect tax laws has not been reviewed in this audit since thesame has been subject to review by the statutory financial audit and other designatedprofessionals.
| ||For K.K. Giri & Associates |
| ||Company Secretaries |
| ||Sd/- |
| ||Kamala Kanta Giri |
|Place: Bhubaneswar ||ACS No.: 34449 |
|Date: 30th May 2017 ||C.P. No. 14459 |
The details of conservation of energy technology absorption foreign exchange earningsand outgo as required under Section 134 (3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 for the year ended 31st March2017.
A) CONSERVATION OF ENERGY:
I. Steps taken or impact on for conservation of energy:
In addition to the existing measures being practiced the following steps were taken:-
i) Education of work at the Head Office regarding use of various office equipmentsespecially computers in a manner that use less energy.
ii) Adoption of Policy of Having our heating and cooling equipment serviced regularly.
iii) Moved to energy efficient compressors and motors along with optimisation ofcapacity;
iv) Replacement of conventional lamps to LED for Street lights;
v) All machines provided with timers to reduce idling;
II. Steps taken by the Company for utilising alternate source of energy:
The Company is under process for installation of Solar Power Plant.
III. The Capital investment on energy conservation equipments:
The company has Not made any capital investment for utilising alternate source ofenergy.
B) TECHNOLOGY ABSORPTION:
(I) the efforts made towards technology absorption
Introduced "modifier" in flotation cell to increase clean coal yield.
Developed process flow sheet for new washery at Rajgangpur by introducing intermediatecoal beneficiation to enhance clean coal recovery.
Research and Development:
Specific areas in which R & D is carried out by your company.
i) Horizontal and vertical expansion of company's product profile.
ii) New & Improved Product Development.
iii) Up gradation of R&D lab efforts are being made to develop state of the artR&D centre at Rambahal works to cater to the growing demand of products.
(II) The benefit derived like product improvement cost reduction product developmentor import substitution:
Quality of Coal improved and ultimately the production has been improved.
Customer satisfaction cost reduction and quality improvement.
Efficiency and yield improvement loss reduction and modernization program.
Increased Market share for various products.
Better market penetration of various products.
Strength of Products are being developed by up gradation and innovation.
(III) Information regarding imported technology (imported during last three yearsreckoned from the beginning of the financial year)
a) the details of technology imported; Not Applicable b) the year of import; NotApplicable
c) whether the technology been fully absorbed; Not Applicable
d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof; Not Applicable
(IV) The expenditure incurred on Research and Development:
|Particulars ||Amount (Rs . in Crore) |
|1 Capital ||Nil |
|2 Revenue ||Nil |
|Total ||Nil |
C) FOREIGN EXCHANGE EARNING AND OUTGO:
| ||Current Year ||Previous Year |
| ||(Rs in Lakhs) ||(Rs in Lakhs) |
|Total foreign exchange outgo in terms of actual outflow ||9.52 ||13.97 |
|Total foreign exchange earned in terms of actual inflows ||Nil ||Nil |
DETAILS PERTAINING TO EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT2013 READ WITH RULE 5 (1) (2) & (3) OF COS (APPOINTMENT & REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
THE INFORMATION REQUIRED UNDER SECTION 197 OF THE ACT READ WITH RULE 5(1) OF THECOMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 ARE GIVENBELOW:
(i) The percentage increase in remuneration of each director Chief FinancialOfficer Company Secretary during the financial year 2016-2017 and ratio of theremuneration of each director to the median remuneration of the employees of the companyfor the financial year 2016-17 are as under;
|Name of the Director/ KMP and designation ||Remuneration of Director/ KMP for the FY 2016-2017 (Rs in lacs) ||% increase in remuneration in the FY 2016-2017 ||Ratio of remuneration of each Director/ to median remuneration of employees |
|1 #Mr. Rajesh Gadodia ||4.03 ||* ||* |
|2 * Mr. Ankur Madaan ||3.83 ||* ||6.88 |
|3 **Mr. Runvijay singh ||3.00 ||* ||5.39 |
|4 Mr. Prabir Kumar Das Company Secretary & Compliance Officer ||6.00 ||Nil ||Not Applicable |
|5 Mr. Gobinda Chandra Nayak Chief Financial Officer ||12.00 ||Nil ||Not Applicable |
* Since the remuneration of these directors is only for part of the year the ratio oftheir remuneration is not comparable and hence increase in remuneration is not stated.
# Mr. Rajesh Gadodia (DIN 00574465) had been elected as Non-executive chairman of thecompany w.e.f. 24.05.2016 and He ceased to be KMP (Managing Director) of the companyw.e.f 24.05.2016 thereby he is been paid remuneration only for the Month of April 2016 to24.05.2016 during the FY 2016-2017
* Mr. Ankur Madaan (DIN:07002199) was appointed as Whole- Time Director of the Companyw.e.f 24.05.2016 hence he is been paid remuneration from the Month of June 2016 to march2017 during the FY 2016-2017.
** Mr. Runvijay Singh (DIN:02239382) was appointed w.e.f 24.05.2016 as an ExecutiveDirector of the Company hence he is been paid remuneration from the Month of June 2016 tomarch 2017 during the FY 2016-2017.
(ii) The median remuneration of employees of the company during the financial year wasRs . 55645; (iii) In the Financial year there was an increase 8.58% in the medianremuneration of employees; (iv) There were 1533 permanent employees on the rolls ofCompany as on March 31 2017;
(v) Average percentage increase in the salaries of employees other than the managerialpersonnel in the last financial year i.e. 2016-17 was 6.62% whereas there were no increasein the managerial remuneration for the same financial year.; and
(vi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employee.
THE INFORMATION REQUIRED UNDER SECTION 197 OF THE ACT READ WITH RULE 5(2) & (3) OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 ARE GIVENBELOW:
|Name || ||Qualification || ||Designation || || || || |
| ||AGE IN YEARS || ||Date of Comencement Of Employment || ||Remuneration (Amount in ||Total Experience (No. of yrs.) ||Previous Employment (Designation) ||Percentage of equity share held by employee in company |
|1 GOBIND CHANDRA NAYAK ||45 ||B.Com ||01/11/2014 ||Chief Financial Officer ||1200000 ||18 yrs ||Sree Metaliks Ltd. GM (finance) ||NIL |
| || || || || || || || || |
|2 MUKESH KUMAR VERMA ||34 ||B A ||01/01/2010 ||Manager- Commercial ||678000 ||13 yrs ||Navdurga Ltd Fule Pvt (DGM- Marketing) ||NIL |
|3 AJIT KUMAR KESHRI ||41 ||B.Com MBA ||01/03/2003 ||Marketing Head ||675000 ||14 yrs ||NA ||NIL |
|4 PRAVEEN KUMAR PATRO ||44 ||B-Tech (Electrical) ||01/02/2000 ||Vp-Project and Operation ||600000 ||17 yrs ||NA ||NIL |
|5 PRABIR KUMAR DAS ||45 ||Company Secretary MBA LLB ||01/03/2005 ||President & Company Secretary ||600000 ||19 yrs ||Rohit Ferro Tech Ltd. Company Secretary ||NIL |
|6 OMPRAKASH AGRAWAL ||50 ||B.Com ||01/02/2011 ||Senior Manager Accounts ||480000 ||29 yrs ||Orissa cement Limited Chief Manager - Accounts ||NIL |
| || || || || || || || || |
|7 SURI BABU ||39 ||Dipl in met engineering ||02/01/2000 ||Process-HOD ||432000 ||17 yrs ||NA ||NIL |
|8 AMARNATH CHOUDHURY ||53 ||Graduate ||01/02/2015 ||GM (Admin) ||415161 ||20 years ||Orissa Iron and Steels Ltd. Sr.Manager ||NIL |
|9 MADHUSUDAN PATTNAIK ||49 ||Graduate ||01/03.2012 ||Manager (Insurance) ||395420 ||18 years ||Cholamandal am MS General Insurance Manager ||NIL |
| || || || || || || || || |
|10 MOHAMMED SANAULLA ||67 ||BE MECH ||05/05/1974 ||GM (Tech) ||372000 ||43 years ||ACC Cements Limited DGM (Operation) ||NIL |
1. The remuneration includes salary perquisites and contribution to provident fund.
2. None of the employee is a relative of any director of the company.
3. All appointments are/were contractual in accordance with terms and conditions as percompany rules.
4. None of the employees hold by himself or along with his/her spouse and dependentchildren 2% or more equity shares of the company.
5. Details of remuneration of Directors are given elsewhere in the Board Report andCorporate Governance Report.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||Ankur Madaan Whole-Time Director |
| ||(DIN: 07002199) |
|Place: Bhubaneswar ||Runvijay Singh Director |
|Date: 30th May 2017 ||(DIN: 02239382) |