To
The Shareholders,
MANGALAM INDUSTRIAL FINANCE LIMITED
Your Directors are delightfully presenting the 41st (Forty-First) Report of the Board of Directors ("Board") of Mangalam Industrial Finance Limited ("Company" or "MIFL"), together with the Audited Standalone Financial Statements for the Financial Year ("FY") ended 31st March, 2024 prepared as per Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ('the Act').
1. COMPANY OVERVIEW:
Mangalam Industrial Finance Limited, a public limited company established in 1983, operates as a non-deposit taking non-banking finance company. The company is registered with the Reserve Bank of India under registration number B.05.02961. Its registered office is located at Old Nimta Road, Nandan Nagar, Belghoria, Kolkata, West Bengal - 700 083, India while its corporate office is situated at Hall No-1, M R Icon, Next to Milestone, Vasna Bhayli Road, Vadodara, Gujarat - 391 410, India.
2. FINANCIAL HIGHLIGHTS:
The financial performance of your Company for the FY ended March 31, 2024, is summarized below:
(Amount Rs in Lakhs)
The Financial Statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS), notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 and other relevant provisions of the Companies Act, 2013.
3. OPERATIONS/STATE OF COMPANY'S AFFAIRS:
The Profit before tax during the year is Rs 25.64 Lakhs against loss before tax Rs (489.01) Lakhs in previous year. The Profit after tax is Rs 18.77 Lakhs against loss of Rs (500.94) Lakhs in previous year. In assessing the recoverability of loans, receivables and investments, the Company has considered internal and external sources of information, economic forecast and industry reports upto the date of approval of these financial results. Your Directors are identifying prospective areas and will make appropriate investments that will maximize the revenue of the Company in the current Financial Year.
? BRIEF DESCRIPTION OF THE STATE OF COMPANY'S AFFAIRS
The Company is a Non-Banking Finance Company and is presently engaged in the business of investing and financing.
4. TRANSFER TO RESERVES:
The Company during the year under review, in accordance with Section 45-IC (1) of The Reserve Bank of India Act, 1934 has transferred an amount of Rs 3.75 Lakhs to Statutory Reserve. As on 31st March, 2024, the balance in the Statutory Reserve is Rs 36.80 Lakhs.
5. CHANGES IN THE NATURE OF BUSINESS:
During the year under review, the nature of business of the Company remained unchanged.
6. DIVIDEND:
The company has not declared a dividend for the financial year 2023-24 in order to strengthen its financial position and increase its reserves.
7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
As the company has not declared or paid any unpaid or unclaimed dividends in previous years, it is not subject to the provisions of Section 125 of the Companies Act, 2013.
8. RIGHTS ISSUE:
? The Board of Directors at its Meeting held on 25th May, 2023 approved raising of funds for an amount not exceeding Rs. 49,00,00,000/- (Rupees Forty-nine crores only), through a Right Issue to the eligible equity shareholders of the Company in accordance with applicable laws, including the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, SEBI Listing Regulations, along with relevant circulars issued by the Securities and Exchange Board of India, The Companies Act, 2013 ("Right Issue").
? Further The Board of Directors at its Meeting held on 17th January, 2024 approved Issue of up to 12,38,92,721 Fully Paid-Up Equity Shares of Face Value of Rs 1 Each of our Company (The "Rights Equity Shares") for Cash at a Price of Rs3.95 (Rupees Three and Paise Ninety Five Only) Per Rights Equity Share Aggregating up to Rs 4893.76 Lakhs on a Rights Basis to the Eligible Equity Shareholders of Company In the Ratio of 21 (Twenty One) Rights Equity Shares For Every 163 (One Hundred Sixty Three) Fully Paid-Up Equity Shares held by the Eligible Equity Shareholders on the Record Date, that is on Monday, January 29, 2024 ("Record Date") (The "Issue").
? The Rights Issue was initially opened on Monday, February 12, 2024 and Issue closure date was fixed on Monday, February 26, 2024.
? The Rights Issue Committee of the Company at their Meeting held on Sunday, February 25, 2024 has approved the extension of closure period of Rights Issue of Mangalam Industrial Finance Limited by 15 (fifteen) days i.e. Tuesday, March 12, 2024 (New Closure of Offer Date) which is earlier scheduled to be closed on Monday, February 26, 2024 (Old Closure of Offer Date) and notice announcing this extension was published in newspapers on February 26, 2024.
Upon the Closure of Rights Issue, RTA to the Issue i.e. Purva sharegistry (India) Pvt. Ltd, provided details are as under:
? Rights issue was under subscribed by 5.45% due to which Rights Issue Committee at its Meeting held on 16th March, 2024 considered and approved the Devolvement of the Rights Issue of Company. The Company instructed the RTA on 16th March, 2024 to the Issue to Refund / unblock the ASBA account of all the shareholders who have applied for the Rights Issue.
? Summary of Corporate Action of Debit of Rights Entitlement
Note 1 :* According to the records maintained by Purva Share Registry, the Registrar and Transfer Agent (RTA) of Mangalam Industrial Finance Limited, the entitlement of 73 shareholders, totaling 31,85,35 securities, have not yet been debited from their National Securities Depository Limited (NSDL) demat accounts. This delay is likely due to factors such as inactive or dormant demat accounts or other unforeseen circumstances.
9. SHARE CAPITAL:
During the Financial Year 2023-24, following changes took place in Share capital structure of the Company:
? AUTHORIZED SHARE CAPITAL
During the Financial Year 2023-24, Authorized share capital of the company has been increased from Rs. 96,17,00,000/- (Rupees Ninety-six crore seventeen lakhs) to Rs. 126,17,00,000/- (Rupees One hundred twenty-six crore seventeen lakhs) divided into 126,17,00,000 (One hundred twenty-six crore seventeen lakhs) equity shares of Re. 1/- (Rupees One Only) each.
The increase in authorized share capital provides the company with greater flexibility to raise additional funds in the future by issuing new shares.
? ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
There were no changes in Issued, Subscribed and Paid up Share Capital during the Financial Year 2023-24.As on 31st March, 2024, the issued, subscribed and Paid-up Share Capital of the company stood at:
(Amount in Rs.)
? UTILISATION OF PROCEEDS
During the Financial Year ended 31st March, 2024, the Company has not raised any funds. As a result, the company submitted a NIL statement of deviation indicating zero deviations from its fundraising plans.
? BUYBACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
? SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
? BONUS SHARES
No Bonus Shares were issued during the year under review.
? EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
10. LISTING OF EQUITY SHARES:
The Company's equity shares are listed on the BSE Limited (Scrip Code: 537800).
The company has fulfilled its obligation to pay the annual listing fees for the financial year 2023-2024 to The BSE Limited.
11. CREDIT RATING
The Company did not issue any debt securities or offer fixed deposit programs during the financial year ending March 31, 2024. This means the company did not raise funds through borrowing or taking deposits from investors.
Consequently, there was no requirement for the company to obtain a credit rating, which is typically used to assess the creditworthiness of an entity that issues debt.
12. MANAGEMENT- DIRECTORS AND KEY MANAGERIAL PERSONNEL:
As of March 31st, 2024, the Board of Directors consisted of Seven (07) Directors. This included One (01) Executive Director, who is involved in the company's day-to-day operations, Four (04) Non-Executive Independent Directors, and Two (02) Non-Executive Non-Independent directors.
For comprehensive information about the board and committee structure, director tenure, and other relevant details, please refer to the Corporate Governance Report included in this Annual Report.
In accordance with the requirements of the listing regulations, the Board has identified the essential skills, expertise, and competencies that its directors need to possess to effectively function in the context of the company's business. These key skills, expertise, and core competencies are outlined in detail in the Corporate Governance Report.
? COMPOSITION OF BOARD OF DIRECTORS TILL DATE OF THE REPORT:
During the year under review, there is change in the composition of the Board as stated below:
? KEY MANAGERIAL PERSONNEL (KMP) TILL DATE OF THE REPORT
In terms of Section 203 of The Companies Act, 2013; Following are the details of Key Managerial Personnel and changes thereon.
13. MEETINGS OF THE BOARD OF DIRECTORS
During the year, 11 (Eleven) Board Meetings were convened and held. The intervening gap between the Meetings was within the period prescribed under the Act. Details of all Board and Committee meetings, including dates and director attendance, are provided in the Report on Corporate Governance.
Here are the dates on which the Board Meetings were held during FY 2023-2024:
? DETAILS OF THE ATTENDANCE OF THE DIRECTORS AT THE BOARD MEETINGS HELD DURING THE FINANCIAL YEAR ENDED ON 31st MARCH, 2024 ARE AS FOLLOWS:
14. RETIRE BY ROTATION:
Pursuance to the Section 152 of the Act provides that unless the Articles of Association provide for retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company (excluding the Independent Directors) shall be persons whose period of office is liable to determination by retirement of directors by rotation, of which one-third are liable to retire by rotation.
At the 41st Annual General Meeting (AGM), the following re-appointment is being proposed:
Mr. Sojan Vettukallel Avirachan, (DIN: 07593791), shall retire by rotation and being eligible, offers himself, for re- appointment.
Details of the proposal for the re-appointment of Mr. Sojan Vettukallel Avirachan, (DIN: 07593791), along with his brief resume is mentioned in the Explanatory Statement under Section 102 of the Act and disclosure under Regulation 36(3) of the Listing Regulations as annexed to the Notice of the 41st AGM. The Board recommends the re-appointment/ appointment of the above Director.
15. BOARD GOVERNANCE:
Board Governance is the framework that structures the Board and its operation. The Company Board's governance guidelines covers aspects relating to composition and role of the Board, Chairman and its Directors, Board diversity, definition of independence, term of Directors, retirement age and committees of the Board. The Board governance guidelines also cover key aspects relating to nomination, appointment, induction and development of Directors, remuneration, code of conduct and Board effectiveness.
16. BOARD DIVERSITY:
The company acknowledges the importance of diversity on its board of directors and has established guidelines to ensure a mix of perspectives, expertise, and backgrounds. These guidelines consider factors such as thought, knowledge, skills, regional and industry experience, cultural and geographical background, perspective, gender, age, ethnicity, and race, while adhering to applicable laws and regulations and meeting the specific needs of the company's businesses.
17. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013:
The company's directors provide the following statements, which they believe to be true and accurate based on the information they have available. These statements comply with the requirements of Section 134 of the Companies Act, 2013.
The company's board of directors confirms that it has complied with the requirements of Section 134(3)(c) of the Companies Act, 2013, regarding the directors' responsibility statement with regards to following:
i. In the preparation of the annual accounts for the Financial Year ended 31st March, 2024 the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. That Directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit of the Company for the year ended 31st March, 2024;
iii. The Directors have taken sufficient and proper care for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the Company and for preventing and detecting material fraud and other irregularities;
iv. The Directors have prepared the annual accounts for the Financial Year ended 31st March, 2024 on a going concern basis;
v. That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;
vi. That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
18. DECLARATION BY INDEPENDENT DIRECTORS AS ON MARCH 31, 2024:
The company's independent directors have formally declared that they meet the requirements for independence as defined in Section 149(6) of the Companies Act, 2013, along with Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. These declarations were submitted to the company in accordance with Section 149(7) of the Companies Act, 2013. The Independent Directors of the Company have registered themselves with the data bank of Independent Directors created and maintained by the Indian Institute of Corporate Affairs (IICA) Manesar. Also, the Independent Directors who are required to undertake online proficiency self-assessment test, have undertaken and cleared the online proficiency self-assessment test conducted by the IICA within the stipulated time period. The Board, after undertaking assessment and on examination of the relationships disclosed, considered the following Non-Executive Directors as Independent Directors:
Furthermore, the board of directors has confirmed that there are no known circumstances or situations that could potentially compromise or affect the independent directors' ability to fulfill their duties. The board has also verified that these directors are truly independent and not influenced by the company's management.
? SEPARATE MEETING OF INDEPENDENT DIRECTORS:
A separate meeting of the Independent Directors was held on 21st March, 2024; as per the provisions of Schedule IV (Code for Independent Directors) of The Companies Act, 2013 and Regulation 25(3) of The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; in which the following matters were considered:
• Evaluation of the performance of Non-Independent Directors and the Board of Directors as a whole.
• Evaluation of the performance of the Chairman, taking into account the views of the Executive and Non- Executive Directors.
• Evaluation of the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
The Independent Directors expressed satisfaction with the overall performance of the Directors and the Board as a whole.
19. CODE OF CONDUCT:
The Company has laid down a policy which has been effectively adopted by the Board Members and Senior Management Code of Conduct Personnel of the Company.
The detail policy on the Code of Conduct is available on the website at https://www.miflindia.com/investor- relations/policies.
? COMPLIANCE WITH THE CODE OF CONDUCT
A declaration signed by the Managing Director affirming compliance with the Company's Code of Conduct by the Directors and Senior Management Personnel, for the financial year 2023-24, as required under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 forms a part of this Annual Report.
? COMPLIANCE WITH SECRETARIAL STANDARDS
The company has adhered to the relevant secretarial standards, SS-1 and SS-2, which govern board meetings and general meetings, respectively. Throughout the year, the company has ensured compliance with all mandatory secretarial standards.
20. BOARD COMMITTEES:
The company has formed the following committees in accordance with the relevant provisions of the Companies Act, 2013, Listing Regulations, circulars, notifications, and directives issued by the Reserve Bank of India, and the company's internal corporate governance requirements. Each committee has a specific mandate outlined in its terms of reference to address particular issues and ensure efficient decision-making on various matters:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholder Relationship Committee
4. Rights Issue Committee
The annual report includes a detailed report on corporate governance that aligns with corporate governance standards and provides comprehensive information on the various committees established by the company. The report outlines the composition, roles and functions, terms of reference, meeting frequency, meetings held during the last financial year, and attendance records for each committee.
? COMMITTEE MEETINGS (AS ON 31st MARCH, 2024)
Following are the details of Committee meetings held during the Financial Year 2023-24
? COMMITTEE RECOMMENDATIONS
Throughout the year, the board of directors adopted all recommendations made by its committees, as required by the Companies Act.
21. BOARD PROCESSES, PROCEDURES AND PRACTICES:
? The company believes that an effective board should be composed of diverse and knowledgeable members who are committed to their roles and responsibilities. The board follows a structured approach to lead the company effectively and efficiently towards achieving its vision.
? The board's processes and practices generally involve sharing meeting agendas, convening meetings, making decisions, finalizing minutes, and overseeing board committees. The company adheres to best practices when convening and conducting board and committee meetings.
? The board holds at least four meetings annually, with no more than 120 days between consecutive meetings. Detailed notices, agendas, relevant notes, and other information are distributed to each director in advance or, in exceptional cases, presented at the meeting with the board's approval. This ensures that the board can make timely and informed decisions.
? During board meetings, constructive discussions are encouraged to facilitate effective decision-making. The chairman ensures that sufficient time is allocated for discussing all agenda items, especially strategic matters.
? The company provides relevant information to the board and its committees, as outlined in Regulation 17 and Part A of Schedule II of the Listing Regulations. This information is shared either through agenda papers before meetings or during presentations and discussions. With the unanimous approval of the board, all unpublished price-sensitive information (UPSI) is circulated securely to board members at short notice before meetings.
22. ANNUAL EVALUATION OF THE BOARD & INDIVIDUALS ON ITS PERFORMANCE AND COMMITTEES:
In accordance with the Companies Act and Listing Regulations, the board has conducted an annual performance evaluation of itself, its individual directors, as well as the evaluation of Independent Directors and also of audit committee, nomination and remuneration committee, stakeholder relationship committee, and rights issue committee. The process used for this evaluation is detailed in the corporate governance report.
23. FAMILIARIZATION PROGRAMMES:
The company's board members have had opportunities to familiarize themselves with the company, its management, and its operations. As part of a familiarization program, the company conducts various programs, sessions, and seminars for directors to keep them informed about industry trends, business processes, procedures, laws, rules, and regulations applicable to the company's business. Presentations on business areas, including business strategy, risk opportunities, and quarterly performance, are also provided. These materials help directors gain a better understanding of the company, its diverse operations, and the industry in which it operates.
A formal letter of appointment is issued to directors at the time of their appointment, outlining their roles, functions, duties, responsibilities, and the board's expectations. The familiarization program for independent directors aims to help them become acquainted with the company, its management, and its operations.
The detailed policy on the familiarization programme is available on the website at https://www.miflindia.com/investor- relations/policies.
24. AUDIT COMMITTEE:
The company has established an audit committee in compliance with the Companies Act, its rules, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. Details about the audit committee are included in the corporate governance report. The board has adopted all recommendations made by the audit committee during the year, and therefore, no disclosure is necessary regarding any non-acceptance of these recommendations.
The Composition of Audit Committee pursuant to provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations is provided hereunder:
? COMPOSITION OF THE AUDIT COMMITTEE AS ON 31st MARCH, 2024:
* Mrs. Mansi Jayendra Bhatt who was member of the Audit Committee appointed on 25th May, 2023 was designated as Chairperson pursuant to reconstitution approved by Board of Directors at its Meeting held on 01st March, 2024.
? AUDIT COMMITTEE RECOMMENDATIONS
During the year there was no such instance where the recommendation of Audit Committee were not accepted by the Board.
25. RISK MANAGEMENT:
The company has developed a risk management policy that outlines the company's risks and strategies for mitigating them. The management reviewed this policy during the year to improve its effectiveness in identifying, prioritizing, and managing risks, as well as defining the roles of various executives in risk monitoring, mitigation, and reporting. The goal is to increase shareholder value and achieve an optimal balance between risk and reward.
The company is currently not required to have a risk management committee as per Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Management has assessed various risks and determined that none of them pose a significant threat to the company's existence.
26. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has established a vigil mechanism for Directors and employees pursuant to the requirements of Section 177(9) of The Companies Act, 2013 and Regulation 22 of The SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and the same has been communicated to the Directors and employees of the Company. The vigil mechanism policy / whistle blower policy is also posted on the website of the Company.
The whistleblower policy/vigil mechanism allows directors and employees to report confidentially to management, without fear of retaliation, any unacceptable or unethical behavior, suspected or actual fraud, violations of the company's code of conduct or ethics policy, and instances of leaked or suspected leaked unpublished price-sensitive information that harm the organization's interests. It protects directors and employees who use the mechanism and provides direct access to the chairman of the audit committee in exceptional cases.
During the financial year under review, no such incidence was reported and no person was denied access to the Chairman of the Audit Committee. The policy of the whistle blower is posted on the company's website at https://www.miflindia.com/investor-relations/policies.
27. DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and of Managerial Personnel) Rules, 2014 are annexed to this Board's Report as Annexure -B. The Company has not appointed any employee(s) in receipt of remuneration exceeding the limits specified under Rule 5 (2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.
28. POLICY ON REMUNERATION:
In compliance with the requirements of Section 178 of the Act and Regulation 19 of the Listing Regulations, 2015, the Company has laid down a comprehensive policy on Nomination and Remuneration of Directors and Key Managerial Personnel on the Board. As per such policy, candidates proposed to be appointed as Directors, Key Managerial Personnel and Senior Management on the Board shall be first reviewed by the Nomination and Remuneration Committee in its duly convened Meeting.
The salient features of the NRC Policy are as under:
1) Setting out the objectives of the Policy.
2) Definitions for the purposes of the Policy.
3) Policy for appointment and removal of Director, KMP and Senior Management.
4) Policy relating to the Remuneration for the Managerial Personnel, KMP, Senior Management Personnel & other employees.
5) Remuneration to Non-Executive/Independent Director.
29. ACCEPTANCE OF PUBLIC DEPOSIT:
During the financial year under review, your Company being a NBFC has neither accepted nor renewed any deposits from the public or its employees within the meaning of Section 73 of The Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.
30. DETAILS OF LOANS AVAILED FROM DIRECTORS OR THEIR RELATIVES:
As required under Clause (viii) of Rule 2 of Companies (Acceptance of Deposits) Rules, 2014, the details of loans availed by the Company from its Directors and/or from their relatives, are given below:
31. PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
In terms of section 186(11) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as amended, the Company being a NBFC registered with RBI and whose main objects as per its Memorandum of Association is to carry on business of investment activities and financing industrial enterprises, the Company is exempt from complying with provisions of Section 186 of the Act except subsection (1) of Section 186 in respect of loans made, guarantees given, securities provided, or investments made by the Company.
Further, for details of investments made by the Company, if any, please refer Notes to the Audited Financial Statements of the Company for the financial year ended March 31, 2024.
32. CONTRACTS AND AGREEMENTS WITH RELATED PARTIES:
The company has adopted a policy of conducting related-party transactions only in the ordinary and normal course of business and at arm's length, reflecting its commitment to the highest ethical standards, transparency, and accountability. In accordance with the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board has approved a policy on related-party transactions. During the financial year 2023-24, all contracts, arrangements, and transactions entered into by the company with related parties under Section 188(1) of the Companies Act, 2013, were conducted in the ordinary course of business and on an arm's length basis and were approved by the company's audit committee.
During the financial year 2023-24, all materially significant related-party transactions entered into by the company with promoters, directors, key managerial personnel, or other designated persons approved by the board are disclosed in the related-party disclosures in the notes to the financial statements for the year ended March 31, 2024.
All related party transactions were placed before the Audit Committee for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Related party transactions were disclosed to the Board on regular basis as per IND AS-24. Details of related party transactions as per IND AS-24 may be referred to in Note 31 of the Standalone Financial Statements. Pursuant to Regulation 23(9) of The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company had filed the reports on related party transactions with the Stock Exchange within the stipulated time period.
The details of contracts or arrangements with related parties entered into by the company during the financial year ended March 31, 2024, as specified in subsection (1) of Section 188, are included in Annexure A of this report.
The policy on related party transactions as approved by the Board of Directors has been uploaded on the website of the Company viz. https://www.miflindia.com/investor-relations/policies.
33. CORPORATE SOCIAL RESPONSIBILITY:
The company is not subject to the provisions of Section 135 of the Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, for the financial year 2023-24. Therefore, there is no requirement to develop a CSR policy or undertake any CSR initiatives.
34. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO THE PROVISIONS OF SECTION 134(3)(M) OF THE COMPANIES ACT. 2013 (ACT) READ WITH THE COMPANIES (ACCOUNTS) RULES. 2014:
The company is not required to provide information regarding conservation of energy, technology absorption, foreign exchange earnings and outgo, as per Section 134(3)(m) of the Companies Act, 2013, and the Companies (Accounts) Rules, 2014.
35. AUDITORS. AUDIT QUALIFICATIONS AND BOARD'S EXPLANATIONS
? STATUTORY AUDITORS
The shareholders of the company, at the 38th Annual General Meeting held on September 27, 2021, appointed M/s. Mahesh Udhwani & Associates, Chartered Accountants, Vadodara (Firm registration number 129738W) as the company's statutory auditors for a two-year term, ending with the conclusion of the Annual General Meeting in 2023.
The board has reappointed M/s. Mahesh Udhwani & Associates for a second term of three years, ending with the conclusion of the company's 43rd Annual General Meeting. The terms of engagement and remuneration for the auditors will be mutually agreed upon by the auditors and the board of directors.
M/s. Mahesh Udhwani & Associates (Firm registration number 129738W), Chartered Accountants, have confirmed that they are not ineligible to serve as the company's statutory auditors and meet the eligibility criteria set forth in Section 139 and 141 of the Companies Act, 2013, and RBI guidelines.
The auditor's report contains no qualifications or adverse remarks. The statutory auditor's observations in their report, along with relevant notes to the accounts, are clear and do not require further explanation.
? INTERNAL AUDITOR
M/s. Upadhyay & Company-LLP, Chartered Accountant (Firm Registration Number : 131136W) have been appointed as Internal Auditors of the Company by complying with the provisions of Section 138 (1) of The Companies Act, 2013 read with Rule 13 of The Companies (Accounts) Rules, 2014.
The Internal Auditors report directly to Audit Committee of the Board. The Audit Committee quarterly review the audit findings as well as the adequacy and effectiveness of internal control measures.
Further the Board of Directors at its meeting held on 24th April, 2024, has approved reappointment M/s. Upadhyay & Company-LLP, Chartered Accountant (Firm Registration Number : 131136W) as Internal Auditors to carry out Internal Audit for Financial Year 2024-25.
? SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of The Companies Act, 2013 read with Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014; the Company had appointed M/s. Pooja Amit Gala, Company Secretary in Practice (Membership Registration No. 69393) as Secretarial Auditor of the company to conduct the secretarial audit for the financial year 2023-24.
The Secretarial Auditor has submitted his report in Form MR-3 form for the Financial Year ended 31st March, 2024 which forms part of the Report on Corporate Governance. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in her Report.
The Board of Directors at its meeting held on 24th April, 2024, appointed M/s. Pooja Gala & Associates, Practicing Company Secretaries, as Secretarial Auditor of the Company in terms of Section 204 of the Companies Act, 2013 read with Rule 8 of the Companies (Meetings of Board and its powers) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for undertaking the Secretarial Audit of the Company for the Financial Year 2024-25.
Further on recommendation of Audit Committee, The Board of Directors at its meeting held on 21st June, 2024, appointed CS Kamal A Lalani, Practicing Company Secretaries as Secretarial Auditor of the company in place of M/s. Pooja Gala & Associates, Practicing Company Secretaries, in terms of Section 204 of The Companies Act, 2013 read with Rule 8 of The Companies (Meetings of Board and its powers) Rules, 2014 and Regulation 24A of The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for undertaking the Secretarial Audit of the Company for the Financial Year 2024-25, w.e.f. 21st June,2024.
? REPORTING OF FRAUDS
During the Financial Year 2023-24, neither Statutory Auditors nor Secretarial Auditors have reported under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in Board's report.
? INTERNAL FINANCIAL CONTROLS
The Company has undertaken an audit for the FY 2023-2024 for all applicable compliances as per the Listing Regulations of the Securities Exchange Board of India, and Circulars/Guidelines issued thereunder.
As required under Section 134(3)(q) of the Companies Act 2013 read with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, the Company has adequate system of internal control commensurate with its size, scale, nature, and complexity of business to ensure that all assets and investments are safeguarded against loss from unauthorized use or disposition. These systems provide reasonable assurance in respect of providing financial and operational information, safeguarding the assets of the Company, adhering to the management policies besides ensuring compliance.
? STAUTORY DISCLOSURES
A copy of audited financial statements of the said Company will be made available to the members of the Company, seeking such information at any point of time. A cash flow statement for the FY 2023-2024 is attached to the Balance Sheet.
36. COST AUDIT AND COST RECORDS:
During the year under review maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.
37. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY :
Your company has a strong and well-established system of internal controls. Comprehensive policies, guidelines, and procedures are in place for all business processes. The internal control system is designed to ensure that financial and other records are reliable for preparing financial and other statements and maintaining asset accountability. Based on the internal financial controls and compliance systems established and maintained by the company, the work performed by internal, statutory, and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors, and the reviews conducted by management and relevant board committees, including the audit committee, the internal audit plan is dynamic and aligned with the company's business objectives and is reviewed quarterly by the audit committee. Additionally, the audit committee monitors the status of management actions arising from internal audit reviews. The board believes that the company's internal financial controls were adequate and effective during the fiscal year 2023-2024. Throughout the year, these controls were assessed, and no reportable material weaknesses were identified in their design or operation.
38. INTERNAL AUDIT & CONTROL SYSTEMS:
The company has a well-defined and documented internal control system that is appropriate for its size and operations. This system is designed to provide reasonable assurance of accurate transaction recording and reliable information and is closely monitored. Checks and balances, along with control systems, are in place to safeguard assets, ensure their proper authorization and use, and accurately record them in the company's books. The company continuously reviews its processes and systems to adapt to changing regulatory and business environments.
Internal auditors report directly to the audit committee, which consists of four directors, including one non-executive non-independent director and three non-executive independent directors as on 31st March, 2024. The audit committee is regularly informed of internal audit findings and corrective actions taken. The committee reviews the adequacy and effectiveness of the internal control system and recommends improvements as needed. The audit committee also seeks the internal auditor's opinion on the adequacy of the internal control system. The company has a robust management information system that is an essential component of the control mechanism.
39. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
There have been no significant changes or commitments since the end of the financial year on March 31, 2024, that have affected the company's financial position.
40. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report, which provides a detailed overview of the company's operations, is included as Annexure C of this Annual Report.
41. CORPORATE GOVERNANCE:
The Company has a rich legacy of ethical governance practices and committed to implement sound corporate governance practices with a view to bring about transparency in its operations and maximize shareholder value.
As per requirement of Listing Regulations a separate section on Corporate Governance practices followed by the Company along with a Certificate from the Secretarial Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of Listing Regulations as forms part of this Annual Report, "Report on Corporate Governance".
42. ANNUAL RETURN:
Pursuance to Section 92(3) read with Section 134(3)(a) of the Companies a copy of Annual Return as required under The Companies Act, 2013 has been placed on the Company's website viz. https://www.miflindia.com/investor- relations/corporate-announcement/annual-return-and-report.
43. EQUAL OPPORTUNITY AND DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:
The company is dedicated to fostering a safe, healthy, and welcoming work environment for all employees, regardless of their gender, caste, creed, color, or social status. This commitment extends to all employees. During the financial year, no complaints were received regarding workplace conditions or discrimination.
44. AMENDMENT IN MEMORANDUM OF ASSOCIATION:
Pursuant to provisions of Section 13, 61 and other applicable provisions of The Companies Act, 2013, the authorized share capital of the company was increased from Rs. 96,17,00,000/- (Rupees Ninety-six crore seventeen lakhs) divided into 96,17,00,000 (Ninety-six crore seventeen lakhs) equity shares of Re. 1/- (Rupees One Only) each to Rs.
126.17.00. 000/- (Rupees One hundred twenty-six crore seventeen lakhs) divided into 126,17,00,000 (One hundred twenty-six crore seventeen lakhs) equity shares of Re. 1/- (Rupees One Only) each by creation of additional
30.00. 00.000 (Thirty crore only) equity shares of Re. 1/- (Rupees One Only) each.
Accordingly, the members of the Company pursuant to Postal Ballot Results dated 28th October, 2023 approved alteration of Memorandum of Association by substituting the existing Clause V thereof by the new Clause V.
45. POLICY ON PRESERVATION OF DOCUMENTS AND ARCHIVAL OF DOCUMENTS :
The company has established a policy on document preservation and archiving in accordance with Regulation 9 and Regulation 30(8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This policy outlines guidelines for retaining records and preserving relevant documents for a specific duration before they are archived. The policy is accessible on the company's website at https://www.miflindia.com/investor-relations/policies.
46. INSIDER TRADING CODE:
As per SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The Company has appointed Company Secretary as Compliance Officer who is responsible for setting forth procedures and implementing of the code for trading in Company's securities. During the year under review, there has been due compliance with the said code.
47. CFO CERTIFICATION:
In terms of Regulation 17(8) read with Part B of the Listing Regulations, a certificate from the Chief Financial Officer (CFO) of the company as addressed to the Board of Directors, confirming the correctness of the financial statements, Cash flow statements for the Financial Year ended 31st March 2024, adequacy of the internal control measures and matters reported to the Audit Committee, is provided in this Annual Report.
48. DECLARATION SIGNED BY THE CEO/MANAGING DIRECTOR STATING THAT THE MEMBERS OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL HAVE AFFIRMED COMPLIANCE WITH THE CODE OF CONDUCT OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT:
The Annual Report includes a declaration by the Managing Director confirming that all Directors and Senior Management Personnel adhered to the Company's Code of Conduct during the financial year 2023-2024. This declaration is required by Schedule V of the Securities and Exchange Board of India's Listing Obligations and Disclosure Requirements Regulations 2015.
The Code of Conduct is available on website at https://www.miflindia.com/investor-relations/policies.
49. DETAILS OF APPLICATION MADE OR PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
During the year under review, there were no applications filed or any proceedings pending in the name of the company under the Insolvency and Bankruptcy Code (IBC), 2016.
50. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOANS FROM BANKS AND FINANCIAL INSTITUTIONS
The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.
51. NAME CHANGE :
? The Board of Directors has approved to change the name of the Company from Mangalam Industrial Finance Limited to "Incred Credit Services Limited" or "In Credit Capital Services Limited" or such other name as may approved by the Registrar of Companies or as per prior approval of Reserve Bank of India which was further approved by the Shareholders of the Company at Extra Ordinary General Meeting dated 13th July, 2023"
? The Company has complied with Regulation 45(1) of The SEBI (Listing Obligations and Disclosure) Requirements, 2015, to the extent they are applicable.
? The Board of Directors at its meeting held on 02nd November, 2023 later dropped the special resolution regarding the change in name of the company from "Mangalam Industrial Finance Limited" to "InCred Credit Services Limited" passed by the members of the company on 13th July, 2023.
52. SHARE TRANSFER SYSTEM
As per Regulation 40 of Listing Regulations, as amended, securities of listed companies can be transferred/transmitted/ transposed only in dematerialized form with effect from, 01st April, 2019. In view of this and to eliminate all risks associated with physical shares and for ease of portfolio management, Members holding shares in physical form are requested to consider converting their holdings to dematerialized form.
53. HOLDING, SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES COMPANIES AS PER THE COMPANIES ACT, 2013:
During the year under review, The Company does not have any holding, subsidiary, joint venture and associate companies.
54. INDIAN ACCOUNTING STANDARDS. 2015:
The annexed financial statements complies in all the material aspects with The Indian Accounting Standards (IND AS) notified under Section 133 of The Companies Act, 2013 read with The Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of The Companies Act, 2013.
55. SECRETARIAL STANDARDS OF ICSI:
Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India and approved by the Central Government.
56. ACKNOWLEDGEMENTS:
The board of directors expresses its sincere gratitude and appreciation for the support and cooperation received from its members, business associates, the Reserve Bank of India, financial institutions, and other government authorities during the past year.
The board of directors would like to express its appreciation for the contributions made by employees at all levels to the company's continued growth and success. The board also wishes to thank shareholders, consumers, and banks for their ongoing support.