Scan Steels Ltd.

Dear Shareholders,

At the outset, I would like to thank you all the stakeholders for the unflinching support for the growth of the company during the financial year 2017-18 and Wonderful contributions from our employees, dealers and all the stakeholders in our value chain. I thank you all by the name of sincerity, professionalism and patron-ship. This is an exceptional year of reckoning in the history of Company. This year has seen lots of tumultuous in Steel and Mining industry around the globe. Scan Steels Limited belongs to different league of steel making house and we are proud of our business Modus -Vivendi to run the show with financial leverage. We come over challenges with grit and elan. Our organizational capital in term of People, other tangible and intangible assets has buttressed our growth. The aftermath affect of GST and demonetization has created tremor everywhere and we particularly were under serious operational hammering, which induces us to change our financial as well as operational model to sync with growth and compliances.

We do not have backward integration, probably, we never intended for looking into to the complexities of Mining? We Preferred to focus and ameliorate our core competence to make its a sustainable business model. Over the year, we have focused on strategic sourcing and make sure to have our raw materials security strong .The world and India today is now going thru the business order of M&A.

Since the recession in 2008, most of the big Steel makers of India are not able wake up from the financial doldrums. Steel Industries is now seeing inorganic growth thru stressed asset acquisition by big Players. Never applied financial gimmicks like CDR and SDR are being promulgated by banks. Big Steel companies are into ICU and some are in ventilators, waiting haplessly for their self-demolition.

NCLAT monster has spread its tentacles to dissolute the stressed assets and giving way new lease of life. India has seen worst banking embezzlement in the financial history which became the anathema of growth driver. The NPA become a talk in the street though the percentage is less than the USA.

India is going thru Challenging fund situation as there are huge irregularities of advances. Banks are bleeding with denudation of assets and squeezed funding created a stymie for industrial growth. It’s becoming a Herculean task to get fund for business. RBI recent PCA policy tightened the noose around bank operation as a result cost of funding has eroded. Tough time is ahead for all manufacturers. The ray of hope is CAGR of Steel demand/production is around 10 Percentage. India is poised next to China by 2030 with a vision of 300 Million ton production, it will have 300 % jump in 12 years, the scope for all small and medium scale production units will have enough scope to grab the share and grow faster. The present consolidation of Steel industries thru acquisition will create a bridge which will be a scope for us to grow

Scan Steels Limited as a company will happy to announce that we are the number one accepted TMT Producer as local company in Odisha. We become a house lore in all rural as well urban area. At last, I thank our management team, who have been with us since last 20 years and have their unstinted support with lots of sacrifice. Let’s have resolution together to make Scan Steels Limited as great company of values & services. I request all of my employees to work with professional disposition aligning the business strategy with tailor made approach to maintain our growth trajectory.

I appreciate for the support and co-operation received from all Shareholders, Regulatory & Government Authorities, Suppliers, Customers and Bankers. The Company has always looked upon them as partners in its progress. It will be the Company’s endeavor to build and nurture strong links with trade based on mutuality, respect and co-operation with each other. On behalf of the Company I wish all of the employees for their committed services and responsibilities towards

Place: Bhubaneswar With kind regards,

Date: 30th May 2018

Rajesh Gadodia

Chairman

(DIN: 00574465]