TO THE MEMBERS OF MANGALAM ORGANICS LIMITED
Your Directors have pleasure in presenting the Forty First Annual
Report on the performance of the Company together with the audited financial statements
for the Financial Year (FY) ended March 31, 2023.
FINANCIAL RESULTS
The financial performance of your Company for the year ended March 31,
2023 is summarized below:
(Rs in Lakhs)
| Particulars |
Standalone |
Consolidated |
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
| Revenue from Operations |
46697.39 |
49091.51 |
49252.62 |
49064.87 |
| Other Income |
139.03 |
144.18 |
33.69 |
144.18 |
| Total Revenue |
46836.42 |
49235.69 |
49286.31 |
49209.05 |
| Profit before Depreciation and Finance cost |
-200.99 |
9264.48 |
-242.73 |
9242.55 |
| Depreciation and Amortization expense |
1663.99 |
1491.29 |
1754.46 |
1501.92 |
| Finance Cost |
1268.45 |
388.61 |
1378.77 |
419.73 |
| Profit after Depreciation, Finance costs and Exceptional
items and before Tax |
-3133.43 |
7384.58 |
-3375.96 |
7320.89 |
| Tax expense |
-592.97 |
1955.30 |
-653.47 |
1946.57 |
| Profit After Tax |
-2540.46 |
5429.28 |
-2722.49 |
5374.32 |
| Other comprehensive income |
13.13 |
(6.18) |
13.13 |
(6.17) |
| Total Comprehensive Income for the Year |
-2527.33 |
5423.10 |
-2709.36 |
5368.15 |
NATURE OF BUSINESS AND FINANCIAL PERFORMANCE
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. Your Company has achieved Net Sales Turnover of Rs. 466.97 Crore with a
Profit after Tax (PAT) of Rs. (25.40) Crore during FY 2022-23 as compared to Rs. 490.92
Crore and Rs. 54.29 Crore, respectively, during Financial Year 2021-22 signifying a de
growth of 5.19 % in turnover. There has been decline of 146.79 % on PAT.
Approximately 90% of the revenue has come from Terpenes Chemicals. There was no change in
nature of the business of the Company, during the year under review.
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, 2023 amount of Rs. 17,39,660/-, comprising of Rs.
4,07,926/-, Rs. 4,14,142/-, Rs. 2,70,798/-, Rs. 2,66,081/- and
Rs. 3,80,714/- are lying in the unpaid equity dividend account of the
Company in respect of the dividends for FY 2021-22, FY 2020- 21, FY 2019-20, FY 2018-19
and FY 2017-18 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
2021-22, FY 2020-21, FY 2019-20, FY 2018-19 and FY 2017-18 is placed on the Companys
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 Companys website www.mangalamorganics.com.
TRANSFER TO RESERVE
In view of the losses incurred in the FY 2022-23, the Board of
Directors do not propose to transfer any amount to the General Reserve.
SHARE CAPITAL
During the year under review, there was no change in the share capital
of the Company. As on March 31, 2023, the paid up share capital of the Company was Rs.
8,56,44,400 divided into 85,64,440 Equity of the face value of Rs. 10/- each.
DEPOSITS
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.
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 year under review, Mangalam Organics Limited acquired 40,000
equity shares of Mangalam Pooja Stores Private Limited (MPSPL) on March 31, 2023 at a
price of Rs. 10/- per equity share, out of the total 50,000 equity shares of face value of
Rs. 10/- each allotted by MPSPL under Private placement. Since the Corporate Action was
approved after March 31, 2023; for the FY 2022-23, MPSPL is considered as a wholly owned
subsidiary of the Company.
The performance and financial position of the subsidiaries of the
Company for the year ended March 31, 2023 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 Boards 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, Pannkaj Dujodwala (DIN: 00546353) 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.
Rajkumar Jatia (DIN: 00136303) Independent Director of the Company
stepped down from the post of directorship on November 02, 2022 due to personal reasons.
The Board at its meeting held on November 11, 2022 took note of the same and placed on
record its appreciation for the contributions made by him during his tenure as a director.
Shree Narayan Baheti (DIN: 01760198) Independent Director of the
Company stepped down from the post of directorship on December 07, 2022 due to personal
reasons. The Board at its meeting held on December 30, 2022 took note of the same and
placed on record its appreciation for the contributions made by him during his tenure as a
director.
Two Directors viz. Sanjay Bhiva Kadam (DIN: 09826377) and Sidharath
Singh Sekhon (DIN: 01983046) were appointed as Additional Directors at the Board
Meeting held on December 30, 2022. They were later appointed as Independent Directors by
the Members of the Company via Postal Ballot activity through e-voting on February 12,
2023 for a tenure of 5 years commencing from December 30, 2022.
As required under the SEBI Listing Regulations, particulars of
Directors seeking appointment/Re-appointment at the ensuing General Meeting have been
given under Corporate Governance Report and in the Notice of the 41st Annual General
Meeting.
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 programme 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
Familiarisation programme 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, 2023 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. Ms. Shachi Sanghavi, Company Secretary & Compliance Officer
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
Board Meetings
The Board of Directors met 7 times during the financial year ended
March 31, 2023. 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.
Directors 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, 2023, 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, 2023 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 2023-24. 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 for FY 2022-23. 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
Form MR-3 for the FY 2022-23 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
The brief outline of the Corporate Social Responsibility (CSR) 28 I
Mangalam Organics Limited policy of the Company and the initiatives undertaken by the
Company on CSR activities during the year under review are set out in Annexure II of
this report in the format prescribed in the Companies (Corporate Social Responsibility
Policy) Rules, 2014. For details regarding the CSR Committee, please refer to the
Corporate Governance Report, which is a part of this report. The CSR policy is available
on https://uploads-ssl.webfiow.com/6173d2812ea50ef2de67463e/61d5e2efdb504707211ba8ee
Corporate%20 Social%20Responsibilitv%20Policy.pdf
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, 2023, the Company has following credit ratings from
CRISIL:
Long Term Rating: CRISIL BBB+/Stable (Downgraded from CRISIL
A-/Stable)
Short Term Rating: CRISIL A2 (Downgraded from CRISIL A2+)
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
Companys 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, 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.
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 Companys
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 Companys
website at the link: https://uploads-ssl.
webfiow.com/6173d2812ea50ef2de67463e/647496db3cfe3851b739ac81Policy%20on%20Related%20Partv%20Transactions.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 Form AOC-2 is appended as Annexure III 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, 2023
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 IV attached herewith and
which forms part of this report. The relation between the Company and its employees
continue 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 V 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, 2023 is available on the Companys website at
https://uploads-ssl.webflow.com/ 6173d2812ea50ef2de67463e/649ba004be0d7edb0347673e
Annual%20Return%202023.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://uploads-ssl.webflow.com/6173d2812ea50ef2de67463 e/61d5e2f6cac59753f9802c49
Vigil%20Mechanism%20and%20 Whistle%20Blower%20Policy.pdf
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://uploads-ssl.
webflow.com/6173d2812ea50ef2de67463e/61d5e2f385b673d3890e879aNomination%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 been3 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 2022-23 under
the provisions of the said Act, nor were any complaints outstanding as at the beginning of
the year under review.
SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION
The Company is conscious of the importance to environmental friendly
and safe operations. The Companys policy requires conduct of operations in such a manner
so as to ensure safety of all concerned, compliance of environmental regulations and
preservation of natural resources. The plant of the Company at Kumbhivali village is fully
complied with the laws, regulations and requirements stipulated by the concerned pollution
Control Board.
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.
Your Directors would also like to thank the Members for reposing their
confidence and faith in the Company and its Management.
| For and on behalf of the Board of Directors |
| Sd/- |
| Kamalkumar Dujodwala |
| Chairman |
| DIN:00546281 |
| Place: Mumbai |
| Date: August 11, 2023 |
+91-9892691696
