Mangalam Organics Ltd Directors Report.

TO THE MEMBERS OF MANGALAM ORGANICS LIMITED

Your Directors have pleasure in presenting the Thirty Eighth Annual Report on the performance of the Company together with the audited financial statements for the Financial Year (‘FY) ended March 31, 2020.

FINANCIAL RESULTS

The financial performance of your Company for the year ended March 31, 2020 is summarized below:

(Rs. in Lakhs)

Particulars FY 2019-20 FY 2018-19
Revenue from Operations 37,452.44 42,462.48
Other Income 102.89 179.97
Total Revenue 37,555.33 42,642.45
Profit before Depreciation and Finance cost 8,736.41 11,044.28
Depreciation and Amortisation expense 897.35 621.17
Finance Cost 521.90 363.41
Profit after Depreciation, Finance costs and Exceptional items and before Tax 6,291.21 10,162.58
Tax expense 1,497.54 2,896.83
Profit after Tax 4,793.67 7,265.75
Other comprehensive income (37.65) (26.24)
Total Comprehensive Income for the Year 4,756.02 7,239.51

NATURE OF BUSINESS AND FINANCIAL PERFORMANCE

Your Company is 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 er Tax (PAT) of aft NetSalesTurnoverofRs.374.52Crorewith Profit Rs. 47.56 Crore during FY 2019-20 as compared to Rs. 424.62 Crore and Rs. 72.39 Crore, respectively, during FY 2018-19 signifying decline of 11.80% in turnover and 34.30% on PAT. Approximately 90% of the revenue has come from Terpene Chemicals. There was no change in nature of the business of the Company, during the year under review.

DIVIDEND:

The Directors are pleased to recommend a dividend of Re.1 per equity share of the face value of Rs. 10/- each for the year ended March 31, 2020 (previous year: Re.1 per Equity Share). The dividend, as recommended by the Board, if declared at the ensuing Annual General Meeting ("AGM") will be paid to those members whose names appear in the Register of Members at the end of business hours on September 25, 2020. In respect of shares held in dematerialized form, the dividend will be paid on the basis of beneficial ownership, as per the details to be furnished for purpose by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) as at the end of business hours on September 25, 2020.

UNCLAIMED AND UNPAID DIVIDEND AND TRANSFER OF SHARES TO IEPF

As on March 31, 2020 an amount of Rs. 2,69,978/- and Rs. 3,81,914/- are lying in the Unclaimed dividend account of the Company in respect of the dividends for FY 2018-19 & 2017-18. 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 2018-19 & FY 2017-18 is placed on the Companys website www.mangalamorganics.com. 124 of the Companies Act, 2013 read with Pursuant to Section 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:

The Board of Directors has decided to retain the entire amount of profits for FY 2019-20 in the Retained Earnings.

SHARE CAPITAL

During the year under review, there was no change in the share capital of the Company. As on March 31, 2020, 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:

As on March 31, 2020, the Company did not have any subsidiary/ joint ventures/ associates companies. However, the Company has incorporated Campure Private Limited, a wholly owned subsidiary on April 21, 2020.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of Directors and Key Managerial Personnel

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

Pursuant to the recommendationsof the Nomination Remuneration Ms. Sonal Dandekar as an Additional Woman Independent Director w.e.f. October 30, 2019 in place of Mrs. Anita Shriya who resigned from the Directorship of the Board w.e.f October 30, 2019. On February 11, 2020, Ms. Sonal Dandekar resigned from the said directorship of the Company due to her other professional and personal commitments. Pursuant to the recommendations of the Nomination and Remuneration appointed Mrs. Manisha Agarwal as an Additional Woman Independent Director w.e.f. March 20, 2020. Mrs. Agarwal holds office as an Additional Director until the Thirty Eighth Annual General Meeting and is eligible for appointment as an Independent Director. The CompanyhasreceivedanoticeunderSection160 of the Act from a member signifying his intention to propose the candidature of Mrs. Agarwal for the Office of an Independent Director. A brief profile of Mrs. Agarwal is given as an Additional Information in the Notice convening the Thirty Eighth Annual General Meeting.

As the 5 (five) years term of Mr. Pannkaj Dujodwala as an Managing Director of the Company will be expiring on August 12, 2020, the Nomination and Remuneration Committee (‘NRC) recommended the Board to re-appoint Mr. Pannkaj Dujodwala as an Managing Director of the Company for a next term of 5 (five) years w.e.f. August 13, 2020 upto August 12, 2025 and resolution for his reappointment, is incorporated in the Noticeof the ensuing Annual General Meeting.

As on the date of this report, the Company has following Key Managerial Personnel:

1. Mr. Kamalkumar Dujodwala, Chairman

2. Mr. Pannkaj Dujodwala, Managing Director

3. Mr. Sanjay Bhardwaj, Chief Executive Officer

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

5. Ms. Heena Tank, Company Secretary

In accordance with the provisions of Section 152 read with Section 149(13) of the Companies Act, 2013, Mr. Kamalkumar Dujodwala 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.

Declarations By Independent Directors

Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act, 2013, the Company has received declarations from all the Independent Directors confirming that the criteria of independence as specified Companies Act, 2013 read with Regulation 17(10) of the SEBI (Listing Requirements) Regulations, Obligations 2015 (hereinafter referred to as ‘SEBI Listing Regulations).Annual Evaluation of Directors, Committee and Board and

The Board of Directors has carried out an annual evaluation of Directors and individual directors committ its own performance, board 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 (‘NRC), the Board of Directors 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,

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 has views of executive directors and non-executive directors.

DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES

BoardMeetings

The Board of Directors met 7 times during the financial year ended March 31, 2020. 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 as Auditors of the

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, 2020, the Board of Directors hereby confirms that action, reservation, adverse remark or disclaimer given by qualific

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, 2020 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

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

Committ of Board: TheCompanyhasconstitutedthefollowing

1. Audit Committee Committ

2. Nominationand Remuneration

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Management Committee

etc.The details of the composition, 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 appointed as the statutory auditors of the Company to hold office for a term of 5 years from the conclusion of the 34th Annual General Meeting on September 30, 2016 until the conclusion of the 39th Annual General Meeting of the Company to be held in the year 2021. As per the provisions of Section 139 of the Act, they have confirmed that they are not disqualified from continuing Company.

Further, the report of the Statutory Auditors along with notes to Schedules is a part of the Annual Report. There has been no

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 Financial Year 2020-21. 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. 4 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 Financial year 2019-20. 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 2019-20 forms part to this report. The said report does not contain any adverse observation orqualification 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 issued by the Institute of Company Secretaries of India.

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure I 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 www.mangalamorganics.com

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, 2020, the Company has following credit ratings from CRISIL and which were reaffirmed:

Long Term Rating: CRISIL A-/Stable (outlook revised from ‘BBB+/ Positive and Rating reaffirmed)

Short Term Rating:

CRISIL A2+ (outlook revised from ‘A2 and Rating reaffirmed)

DISCLOSURES UNDER SECTION 134(3)(l) OF THE

COMPANIES ACT, 2013

Covid-19 pandemic

The Covid-19 pandemic is the defining global health crisis of our time and is spreading very fast across the continents. But more than a health crisis and is having an unprecedented impact on people and economies world wide. s of contracts/arrangements with related parties referred Particular The Company is taking all necessary measures in terms of mitigating the impact of the challenges being faced in the business. Though the long-term directional priorities of the Company remain firm, in light of Covid-19 and its expected impact on the operating environment, the key priorities of the Company would be to closely monitor supply chain, conserve cash and control fixed costs.

The Ministry of Home Affairs, Government of India on March 24, 2020 notified the first ever nation wide lockdown the outbreak of Covid-19. Towards the end of the quarter ended March 2020, the operations were disrupted at manufacturing facilities of the Company. The manufacturing operations at Khopoli (Maharashtra) were shut down temporarily. The operations of the factory were started with effect from April 17, 2020, on receiving the permission from appropriate authorities manufacturing facility at Khopoli.

In view of the outbreak of the pandemic, the Company undertook timely and essential measures to ensure the safety and well-being of all its employees at its plant location, various branch offices and the head office. advisories and guidelines thoroughly and in good faith.

NTERNAL FINANCIAL CONTROLS I

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 Auditors of the Company on the inefficiency 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 achievement of operational policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used 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 it is much which is available on the Companys website at the link: www.mangalamorganics.com to in Section188(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 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 in India to contain furnished in financial statements as on March 31, 2020.

LOAN FROM DIRECTORS

Pursuant to the provisions of Section179(3)(d) and any other applicable provisions of the Companies Act, 2013 read with Rules there under, your Company had borrowed a sum up to Rs. 7.21 Crore (Rupees Seven Crore Twenty One Lakhs only) from the to start the Directors of the Company on the terms and conditions as furnished in Annexure III to this report. The aforesaid loan was approved by the Board in its meeting of May 11, 2019. The Company had received a declaration from the Directors that the amount to be extended by them to the Company is not being given out of the funds acquired by them by borrowing or accepting loans and deposits from others.

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 disclosed in Investors section on the website of the Company at www.mangalamorganics.com and Remuneration of Directors, KMP & Policy Nomination

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 on www.mangalamorganics.com.

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 Section197(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 its employees continue to be cordial.

A Statement containing the details of the Employees employed throughout the financial year and who were in receipt 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.

Extract of Annual Return:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended March 31, 2020 made under the provisions of Section 92(3) of the Act is attached asAnnexure VI and which forms part of this Report.

OTHER DISCLOSURES

Other disclosures asperprovisionsofSection134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

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 VII with activities undertaken by the Company respect to the nature of 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.

During the year under review, 1(one) complaint was filed with the Committee of the Company under the provisions of the said Act and such complaint was resolved. There were no complaints outstanding at the end of the FY 2019-20.

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 of all concerned, compliance of environmental regulations between the Company and preservation of natural resources. All Plants of the Company are fully complied with the laws, regulations stipulated by the concerned pollution Control Board. of

ACKNOWLEDGMENTS AND APPRECIATION:

Your Directors take this opportunity to thank the employees, customers, suppliers, bankers, business partners/associates, financial institutions 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 18, 2020