Mangalam Organics Ltd

TO THE MEMBERS OF MANGALAM ORGANICS LIMITED

Your Directors have pleasure in presenting the Forty Second Annual Report on the performance of the Company together with the audited financial statements for the Financial Year ('FY') ended March 31, 2024.

FINANCIAL RESULTS

The financial performance of your Company for the year ended March 31, 2024 is summarized below:

(? in Lakhs)

NATURE OF BUSINESS AND FINANCIAL PERFORMANCE / STATE OF COMPANY'S AFFAIRS

Your Company is engaged in the business of manufacturing

chemical and has Terpenes and Synthetic Resins as primary

segment, which falls under a single segment of chemicals.

Financial Performance Highlights for FY 2023-24

1. Net Sales Turnover: Our net sales turnover reached an impressive Rs. 493.52 Crore, reflecting steady growth. This compares favorably to the Rs. 492.53 Crore achieved in the previous financial year.

2. Profit after Tax (PAT): Our profit after tax (PAT) turned the corner significantly. In FY 2023-24, we recorded a PAT of Rs. 4.29 Crore, a remarkable improvement from the negative PAT of Rs. (27.22) Crore in FY 2022-23.

3. Revenue Composition: Approximately 94% of our revenue came from Terpenes Chemicals.

4. Business Continuity: There was no change in the nature of our business and structure of the business during the period under review. We remain committed to our core operations and strategic direction.

5. New Acquisitions : No new acquisitions made by the Company during the Period under review.

The chemicals industry has undergone significant transformations, with new entrants and expanded capacities leading to a softer demand environment and downward pressure on selling prices. However, we anticipate a gradual recovery in demand, paving the way for improved pricing and restored profitability.

We remain steadfast in our commitment to profitable growth. Our risk-mitigated strategies have enabled us to maintain consistent annual sales despite market fluctuations.

DIVIDEND

With a view to conserve resources, the Directors have thought it prudent not to recommend any dividend for the financial year under review.

UNCLAIMED AND UNPAID DIVIDEND AND TRANSFER OF SHARES TO IEPF

As on March 31, 2024 amount of Rs. 17,29,034/-, comprising of Rs. 3,79,914/-, Rs. 2,63,486/-, Rs. 2,68,524/-, Rs. 4,10,274/- and Rs. 4,06,836/- are lying in the unpaid equity dividend account of the Company in respect of the dividends for FY 2017-18, FY 2018-

19, FY 2019-20, FY 2020-21 and FY 2021-22 respectively. Members who have not yet received/ claimed their dividend entitlements are requested to contact the Company or the Registrar and Transfer Agents of the Company. The list of such shareholders for unpaid and unclaimed dividend for FY 2017-18, FY 2018-19, FY 2019-20, FY 2020-21 and FY 2021-22 is placed on the Company's website www.mangalamorganics.com.

Pursuant Section 124 of the Companies Act, 2013 read with the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("Rules"), all dividends remaining unpaid or unclaimed for a period of seven years and also the shares in respect of which the dividend has not been claimed by the shareholders for seven consecutive years or more are required to be transferred to Investor Education Protection Fund in accordance with the procedure prescribed in the Rules. In this regard, all dividends remaining unpaid or unclaimed for a period of seven years and also the shares in respect of which the dividend have not been claimed by the shareholders for seven consecutive years for FY 2010-11 have been transferred to Investor Education Protection Fund (IEPF) account on November 2, 2018 and February 15, 2019 respectively. The members can claim the transfer of such shares from IEPF in accordance with the procedure and on submission of the documents as prescribed from time to time. The list of such shareholders whose shares and dividend has been transferred to IEPF is placed on the Company's website www. mangalamorganics.com.

TRANSFER TO RESERVE

The Board of Directors has decided to retain the entire amount of profits for FY 2023-24 in the Retained Earnings.

SHARE CAPITAL

a. Authorized Capital: The authorized share capital of the Company as on March 31, 2024 stood at 12,00,00,000/- (Rupees Twelve Crores only) comprising of 1,20,00,000 Equity shares of Rs. 10/- each.

b. Paid-Up Capital: The paid-up capital of the Company as on March 31, 2024 stood at 8,56,44,400 /- (Rupees Eight Crore Fifty Six Lakh Forty Four Thousand Four Hundred only) comprising of 85,64,440 shares of 10/- each.

During the year under review, the Company has not issued any:

a) shares with diffrential rights

b) sweat equity shares.

DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

During the year under review, your Company neither accepted any deposits nor there were any amounts outstanding at the

beginning of the year which were classified as 'Deposits' in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014.

FINANCIAL STATEMENT

The audited Standalone and Consolidated Financial Statements for the year ended on March 31, 2024 have been prepared in accordance with the Indian Accounting Standards (Ind AS) , provisions of the Companies Act, 2013 (hereinafter referred to as "The Act") read with the Companies (Accounts) Rules, 2014 as amended from time to time and Regulation 33 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"). The estimates and judgment relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of a airs, profits and cash flows for the year ended March 31, 2024. The Notes to the Financial Statements adequately cover the Standalone and Consolidated Audited Statements and form an integral part of this Report. The Audited Financial Statements together with Auditor's Report form part of the Annual Report.

SUBSIDIARY/ JOINT VENTURES/ ASSOCIATES COMPANIES

The Company has three wholly owned subsidiary Companies, viz. 'Mangalam Brands Private Limited', 'Mangalam Pooja Stores Private Limited' and 'Mangalam Speciality Chemicals Private Limited'

During the period under review, Private Placement took place in Mangalam Pooja Stores Private Limited, this event has changed the status of the Company from Wholly Owned Subsidiary Company to Subsidiary Company.

The performance and financial position of the subsidiaries of the Company for the year ended March 31, 2024 is attached to the financial statements hereto.

In accordance with Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is provided as Annexure - 1 to the Board's Report.

DirectorS AND KEY MANAGERIAL PERSONNEL

a. Composition

The Board of the Company comprises of 6 (Six) Directors. Out of the said Directors, 4 (Four) are Independent Directors including a Woman Director and 2 (Two) are Executive Directors.

The Board Composition is in compliance with Section 149 of the Companies Act, 2013.

b. Appointment / Re-appointment / Resignation

In accordance with the provisions of Section 152 read with Section 149(13) of the Companies Act, 2013 Mr. Kamalkumar Dujodwala (DIN: 00546281) is liable to retire by rotation. The said Director has offered himself for reappointment and resolution for his reappointment is incorporated in the Notice of the ensuing Annual General Meeting.

There was no change in the composition of Board of Directors during the period under review.

During the year under review, there was a change in the Company Secretary & Compliance officer of the Company:

Ms. Shachi Sanghavi was resigned w.e.f. 27/10/2023 and @ Mr. Nitin Kore was appointed as the Company Secretary & Compliance officer of the Company w.e.f. 28/10/2023.

@ Mr. Nitin Kore: Resigned w.e.f. June 12, 2024

None of the Directors are disqualified from being appointed as Directors, as specified in Section 164 of the Companies Act, 2013.

c. Declaration by Independent Directors:

All the Independent Directors of Company have given the declarations that they meet the criteria of Independence as prescribed pursuant to the provisions of Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) & Regulation 17(10) of SEBI Listing Regulations, as amended from time to time and are independent of the management.

d. Familiarization Program for Independent Directors:

The Company has set Familiarization program for Independent Directors with regard to their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company etc. The details of which are available on the website of the Company.

The Weblink of the same is as: https://www.mangalamorganics. com/post/familiarization-program-for-independent- Directors. For details of the Familiarization program conducted, kindly refer Corporate Governance Report which forms part of this Annual Report.

e. Annual Evaluation of Directors, Committee and Board:

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance evaluation was carried out by way of obtaining feedback from the Directors through a structured questionnaire prepared in accordance with the policy adopted by the Board and also taking into consideration the Guidance Note on Board Evaluation issued by SEBI. The structured questionnaire prepared to evaluate the performance of the board included criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The evaluation of performance of individual Directors was carried out on the basis of criteria such as the contribution of the individual Director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. The questionnaire for performance of the committees included criteria such as the composition of committees, effectiveness of committee meetings, etc.

In a separate meeting of independent Directors, performance of non-independent Directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive Directors and non-executive Directors.

f. Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Act, the KMPs of the Company as on March 31, 2024 were as follows:

1. Mr. Kamalkumar Dujodwala, Chairman and Executive Director

2. Mr. Pannkaj Dujodwala, Managing Director

3. Mr. Sanjay Bhardwaj, Chief Executive Officer

4. Mr. Shrirang V. Rajule, Chief Financial Officer

5. @Mr. Nitin Kore, Company Secretary & Compliance Officer @: Resigned w.e.f. June 12, 2024

DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES

Board Meetings

The Board of Directors met 5 times during the financial year ended March 31, 2024. The maximum gap between two Board meetings did not exceed 120 days. The details of the Board meetings and the attendance of Directors thereat are provided in the Corporate Governance Report forming part of the Annual Report.

Director's Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended March 31, 2024, the Board of Directors hereby confirms that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, wherever applicable;

b) such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profits of the Company for the year ended on that date;

c) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of the Company have been prepared on a going concern basis;

e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Committees of Board

The Company has constituted the following Committees of Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

The details of the composition, terms of reference, meetings, etc. are given in the Corporate Governance Report forming part of the Annual Report.

AUDITORS

I. STATUTORY AUDITORS

M/s. NGST & Associates, Chartered Accountants, Mumbai (Firm Registration No. 135159W) were reappointed as the statutory auditors of the Company to hold office for a term of 5 years from the conclusion of the 39th Annual General Meeting held on September 29, 2021 until the conclusion of the 44th Annual General Meeting of the Company to be held in the year 2026. As per the provisions of Section 139 of the Act, they have confirmed that they are not disqualified from continuing as Auditors of the Company.

Further, the report of the Statutory Auditors along with notes to Schedules is a part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

II. COST AUDITORS:

The Board of Directors based on recommendation of the Audit

Committee has appointed M/s. NKJ & Associates, Cost Accountants in practice, to audit the cost accounts of the Company for the FY 2024-25. In term of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the shareholders. Accordingly, a resolution seeking ratification by the members for the remuneration is listed as Item No. 3 of the AGM Notice as Ordinary Resolution.

III. SECRETARIAL AUDITORS:

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. Yogesh Sharma & Co., Practicing Company Secretary to undertake the Secretarial Audit of the Company and its Unlisted material subsidiary Company - Mangalam Brands Private Limited, for FY 2024-25. As required under provisions of Section 204 of the Companies Act, 2013, the report in respect of the Secretarial Audit carried out by M/s. Yogesh Sharma & Co., Company Secretaries, in Forms MR-3 for the FY 2023-24 forms part to this report. The said report does not contain any adverse observation or qualification or modified opinion requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards i.e. SS-1 & SS-2, relating to 'Board of Directors Meeting' and 'Annual General Meeting', respectively, issued by the Institute of Company Secretaries of India.

Corporate Social Responsibility

Pursuant to notification of the Ministry of Corporate Affairs dated September 20, 2022, regarding the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022, sub rule (2) of Rule 3 has been omitted. Due to this amendment the criteria for complying with the CSR provisions was modified from immediately preceding three financial years to the immediately preceding financial year.

The Company had incurred the loss of Rs. 31,33,43,379 as per Section 198 of the Companies Act, 2013, in financial year 2022-23, in light of the amendment as prescribed above the requirement of incurring expenditure on CSR are not applicable to the Company for this Financial year 2023-24.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company set out in Annexure III of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The CSR policy is available on https://assets-global.website-files.

MANAGEMENT DISUSSION AND ANALYSIS

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), the report on Management Discussion & Analysis is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE REPORT

The Company has complied with the Corporate Governance requirements under the Act and as stipulated under the Listing Regulations. A report on the Corporate Governance along with the certificate from the statutory auditors is separately given in this Annual Report.

CREDIT RATINGS

As on March 31, 2024, the Company has following credit ratings from CRISIL:

Long Term Rating: CRISIL BBB+/Positive (Reaffirmed)

Short Term Rating: CRISIL A2 (Reaffirmed)

DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013

INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditor of the Company on the inefficiency or inadequacy of such controls.

RISK MANAGEMENT & INTERNAL CONTROL SYSTEMS

Adequate internal control systems commensurate with the nature of the Company's business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting including financial statements timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

MAINTENANCE OF COST RECORD

The Central Government has prescribed maintenance of the cost records under sub section (1) of section 148 of the Companies Act, 2013 in respect to the Company's products. We have broadly reviewed the books of accounts & records maintained by the Company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made & maintained.

We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete

DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No significant and material orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has formulated a Policy on Related Party Transactions and manner of dealing with related party transactions which is available on the Company's website at the link: https://assets- global.website-files.com/6173d2812ea50ef2de67463e/64749 6db3cfe3851b739ac81 Policv%20on%20Related%20Partv%20 Transactions.pdf

Particulars of contracts/arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 entered by the Company during the year under review in the prescribed under Section Section 134(3)(h) of the Act in Form AOC-2 is appended as Annexure II to the Boards' Report.

PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS UNDER SECTION 186

The particulars of loans, guarantees and investments given/ made during the financial year under review and governed by the provisions of Section 186 of the Companies Act, 2013 has been furnished in financial statements as on March 31, 2024

Fraud Reporting

During the year under review, no instances of fraud were reported by the Statutory Auditors of the Company.

Particulars of Employees and Remuneration

The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure V attached herewith and which forms part of this report. The relation between the Company and its employees continues to be cordial.

A Statement containing the details of the Employees employed throughout the financial year and who were in receipt of remuneration of Rs. 102 lakhs or more and employees employed for part of the year and in receipt of remuneration of Rs. 8.50 lakhs or more per month, pursuant to Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure IV to this report.

Annual Return:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the draft of the Annual Return as on March 31, 2024 is available on the Company's website at https://uploads-ssl.webflow.com/ 6173d2812ea50ef2de67463e/649ba004be0d7edb0347673e_ Annual%20Return%202024.pdf

OTHER DISCLOSURES

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

Vigil Mechanism for the Directors and Employees

In compliance with the provisions of Section 177(9) of the Companies Act, 2013, the Board of Directors of the Company has framed the "Whistle Blower Policy" as the vigil mechanism for Directors and employees of the Company.

The Whistle Blower Policy is placed on the website of the Company at https://www.mangalamorganics.com/post/vigil-mechanism- and-whistle-blower-policy

Policy on Nomination and Remuneration of Directors, KMP & Senior Employees

The Company has in place a Nomination and Remuneration Policy for the Directors, KMP and senior employees pursuant to the provisions of the Act and the SEBI Listing Regulations which is placed on the website of the Company at https://assets-global. website-files.com/6173d2812ea50ef2de67463e/61d5e2f385b 673d3890e879a Nomination%20Remmuneration%20and%20 Evaluation%20Policy%20for%20Board%20of%20Directors.pdf

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy and technology absorption have been furnished in Annexure- VI with respect to the nature of activities undertaken by the Company during the year under review.

Service of documents through electronic means

Subject to the applicable provisions of the Companies Act, 2013, all documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or are otherwise provided by the members. A member shall be entitled to request for physical copy of any such documents.

Internal Complaints Committee

The Internal Complaints Committee of the Company as required

under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 exists for both Factory and Administrative Office of the Company. The Company is strongly opposed to sexual harassment and employees are made aware about the consequences of such acts and about the constitution of the said Committee.

Neither were any complaints filed during financial year 2023-24 under the provisions of the said Act, nor were any complaints outstanding as at the beginning of the year under review.

Insurance:

The Company's buildings, plant & machinery and inventories have been adequately insured. Loss of profit with respect to both factories has also been adequately insured.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION

The Company is deeply committed to pollution control, environmental protection, and sustainability throughout its manufacturing processes. By maximizing resource recovery, conserving water, and minimizing e uents and emissions, we are actively working to reduce our environmental impact. To ensure transparency and accountability, we submit the required analytical reports to local authorities, demonstrating our commitment to maintaining high environmental standards The Company holds the Environmental Management Systems (EMS) ISO 14001:2015 certification, validating our efforts in establishing and maintaining an active environmental management system. This certification enhances our environmental performance, helps achieve environmental objectives, and ensures compliance with regulatory obligations. By implementing an EMS, we demonstrate our commitment to continuous improvement in environmental performance and sustainable practices. The Company's focus on pollution control, environmental protection and sustainability, along with our compliance with environmental regulations, positions us as a responsible and environmentally conscious organization.

OTHER DISCLOSURES

The Directors state that no disclosure or reporting is required in respect of the following items as they were either not applicable to the Company or there were no transactions/events on these matters during the year under review:

i. No material changes and commitments aected the financial position of the Company between the end of the financial year and the date of this Report

ii. There has been no change in the nature of business of the Company as on the date of this report.

iii. There was no revision in the financial statements.

iv. The Managing Director & CEO of the Company did not receive any remuneration or commission from any of its subsidiaries.

v. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

vi. There are no proceedings, pending under the Insolvency and Bankruptcy Code, 2016.

vii. There was no instance of one-time settlement with any Bank or Financial Institution.

ACKNOWLEDGMENTS AND APPRECIATION

Your Directors take this opportunity to thank the employees, customers, suppliers, bankers, business partners/associates, financial institutions and various regulatory authorities for their consistent support/ encouragement to the Company.

The Directors appreciate and value the contribution made by every member of the MOL family.

For and on behalf of the Board of Directors