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Source Natural Foods & Herbal Supplements Ltd.

BSE: 531398 Sector: Health care
NSE: N.A. ISIN Code: INE679C01027
BSE 15:40 | 02 Dec 110.00 0.10
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NSE 05:30 | 01 Jan Source Natural Foods & Herbal Supplements Ltd
OPEN 109.00
PREVIOUS CLOSE 109.90
VOLUME 85
52-Week high 224.90
52-Week low 101.90
P/E 24.72
Mkt Cap.(Rs cr) 71
Buy Price 0.00
Buy Qty 0.00
Sell Price 110.00
Sell Qty 175.00
OPEN 109.00
CLOSE 109.90
VOLUME 85
52-Week high 224.90
52-Week low 101.90
P/E 24.72
Mkt Cap.(Rs cr) 71
Buy Price 0.00
Buy Qty 0.00
Sell Price 110.00
Sell Qty 175.00

Source Natural Foods & Herbal Supplements Ltd. (SOURCENATURAL) - Director Report

Company director report

To

The Members

Source Natural Foods and Herbal Supplements Limited. Bangalore

Your Directors take pleasure in presenting this 26th Annual Report onthe business and operations of your Company along with the Audited Financial Statementsand Auditors Report for the Financial year ended 31st March 2021.The Financial Highlightsfor the year under review are given below:

1. Financial results

(Rs. in Lakhs)
Particulars 31.03.2021 31.03.2020
Total revenue 2521.98 1361.54
Profit/ (Loss) before exceptional and extraordinary items and tax 404.63 184.74
Exceptional Items 1.47 -
Profit before extraordinary items and tax 403.15 184.74
Extraordinary Items - -
Tax expenses 65.75 20.77
Net Profit/(Loss) carried to Balance Sheet 337.40 163.98
Earnings Per Share (Basic/ Diluted) 5.24 2.55

2. Operations:

The company adopted well planned systems to carry out its operations inan optimised and safe manner to continue catering to consumers without interruption. Beinga specialised facility for health care products all systems were adhered to strictly andextra special care was taken to ensure a safe environment for the workforce. Our focus wason our people's health & safety ensuring uninterrupted supplies of the Covid-19relevant portfolio meeting the demand of consumers arising out of changed lifestyles andneeds during the pandemic caring for the communities in which we operate preserving cashand optimising our business model. The year 2020 saw Ayurveda being adopted by newconsumers as an effective way to prevent and protect oneself from the adverse effects of arestricted lifestyle and also ailments and viruses. Immunity building herbal products wereat the forefront to help people stay healthy and protected.

The Total revenue of the Company for the year ended 31stMarch 2021 was Rs. 2521.98 Lakhs which has increased by 85.22 % as compared to the totalrevenue in previous year of Rs 1361.54 Lakhs.

The total expenses for the year ended 31st March 2021 has increased toRs.2117.35 lakhs compared to Rs. 1176.81 lakhs of the previous year ended 31st March 2020

3. Future prospects & outlook:

This unprecedented pandemic has encouraged people and organizations tobecome more conscious of their choices and move towards better lifestyle choices. Ayurvedais an immortal time tested repository of the healthcare system in the world and throughthe pandemic saw more people relying on its remedies than before.

Indian Ayurvedic products market exhibited strong growth during2015-2020 and is expanding at a CAGR of around 15% during 2021-2026. A key factor drivingthe Indian Ayurvedic products market is increasing popularity of effective and pureformulations which consumers can trust. Moreover catalysed by economic growth and risingincomes per capita expenditures on healthcare products have increased significantly overthe past few years creating a positive impact on the Ayurvedic products and foodsupplements market. The distribution network of herbal products have improvedsignificantly increasing the accessibility of these products across both urban and ruralregions. The government of India is also promoting the usage of Ayurvedic products throughawareness programmes and campaigns.

With the continuing situation of Covid-19 the demand for specialisedand natural Immunity booster products has grown and for that your Company will focus onbuilding widespread awareness for its products both through the offline as well as theonline space simultaneously expand distribution channels and consistently increase itscustomer base.

In this continue situation of the COVID the demand for specialised andnatural Immunity booster products have grown exponentially and for that your Company willcontinue to contribute its might to the growth of Ayurveda and Herbal Supplements and atthe same time enhance shareholder's wealth by accelerated performance.

4. Research and development:

Ayurveda the traditional Indian medicinal system remains the mostancient yet living traditions with sound philosophical and experimental basis. It is ascience of life with a holistic approach to health and personalized medicine. It is knownto be a complete medical system that comprised physical psychological philosophicalethical and spiritual health.

In Ayurveda each cell is considered to be inherently an essentialexpression of pure intelligence hence called self-healing science. In addition to theself-healing concept the use of herbal treatment is equally important in this Indiantraditional system of medicine.

The COVID-19 pandemic has seen unprecedented demand for COVID-19 aroundthe world it is the time to define Ayurveda itself that whether the use of herbs isAyurveda or the use of herbs and other treatment modalities as per Ayurvedic principles isAyurveda. The research methodology should be planned and adopted accordingly.

5. Dividend:

In order to reserve the available resources for future growth yourDirectors do not recommend any dividend for the financial year ended 31-03-2021.

6. Amount transferred to reserves:

The amount to be carried to Reserves is Rs. 337.39 Lakhs

7. CHANGE IN THE NATURE OF BUSINESS:

There is no change in nature of business of the Company during theyear.

8. Material changes and commitment if any affecting the financialposition of the company occurred between the end of the financial year to which thesefinancial statements relate and the date of the report:

No material changes and commitments affecting the financial position ofthe Company occurred between the end of the financial year to which these financialstatements relate on the date of this report.

9. Share capital:

The Authorised Share Capital of your Company is Rs. 90000000/-divided into 9000000Equity Shares of Rs. 10/- each. The Paid up Capital is Rs.64369310/- divided into 6436931 Equity Shares of Rs. 10/- each.

During the year under review there is no change in the Share Capitalof the Company.

A: Provision of money by company for purchase of its own shares byemployees or by trustees for the benefit of employees:

The Company has not made any provision of money for purchase of its ownshares by employees or by trustees for the benefit of employees as per Rule 16(4) ofCompanies (Share capital and Debentures) Rules 2014.

B: Issue of Sweat Equity Shares:

The Company has not issued any sweat equity share during the financialyear in accordance with the provisions of Section 54 of Companies Act 2013 read withRule 8 of the Companies (Share Capital and Debentures) Rules 2014.

C: Issue of Equity Shares with Differential Rights:

The Company has not issued any equity shares with differential votingrights during the financial year as per Rule 4(4) of Companies (Share capital andDebentures) Rules 2014.

D: Issue of Employee Stock Option:

The Company has not issued any employee stock option during thefinancial year as per Rule 12 of Companies (Share Capital and Debentures) Rules 2014.

10. Directors:

Pursuant to the provisions of Section 152 of the Companies Act 2013and the Articles of Association of the Company Shri Narayanan Narasimhan retires byrotation at the conclusion of the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.

The profiles of Directors retiring by rotation is given elsewhere inthe Annual Report.

11. Number of meetings of the board and their attendance during thefinancial year 2020-21

26-06-2020 31-08-2020 12-11-2020 13-02-2021
Mr. N. Narasimhan P P P P
Mr. Arvind Varchaswi P P P P
Mr. Tejagna Katpitia P P P P
Mr. Srinivas Gowra P P P P
Mr. Sriram Chandrasekaran P P P P
Mr. CL Rathi A P P P
Mrs. Bharathy P P P P

12. Number of meetings of the audit committee

During the year 2020-21 the Committee met 4 (Four) times on thefollowing dates viz June 26th 2020 August 31st 2020 November 12th 2020 and February13th 2021.

The following are the details of the Directors their attendance at theAudit Committee Meeting held during the year 2020-21.

Name Designation in committee Attendance
Mr. Srinivas Gowra Chairman 4
Mr.Sriram Chandrasekaran Member 4
Mr. Chandrakumar L. Rathi Member 3

13. Number of meetings of the stakeholders relationship committee

The Stakeholders Relationship Committee is constituted pursuant to theprovisions of the Companies Act 2013.

During the year one meeting of the Committee was held on 12th November2020.

The following are the details of the Directors their attendance at theStakeholders Relationship Committee Meeting held during the year 2020-21.

Name Designation Attendance
Mr.SriramChandrasekaran Chairman 1
Mr. Srinivas Gowra Member 1
Mr. Arvind Varchaswi N. Member 1

14. Number of meetings of the nomination and remuneration committee

The Nomination and Remuneration Committee is constituted pursuant tothe provisions of the Companies Act 2013.

During the year Two meeting of the Committee was held on 26th June 2020and 31st August 2020.

The following are the details of the Directors their attendance at theNomination and Remuneration Committee Meeting held during the year 2020-21.

Name Designation Attendance
Mrs. Bharthy Chairman 2
Mr. Srinivas Gowra Member 2
Mr. Sriram Chandrasekaran Member 2

15. Details of shareholders meetings held and attendance for thefinancial year 2019-20

Details of General Meeting Date of Meeting Number of Shareholders
Entitled Attended %
Annual General Meeting 29-09-2020 3060 30 0.98

16. A) Distribution of shareholding as at 31st march 2021

Category / No of Shares Number of Shareholders % of Total Shareholders Amount in Rs. % of Holdings to Total shareholding
Upto-500 2749 93.19 1963260 3.05
501-1000 88 2.98 669360 1.04
1001-2000 36 1.22 522850 0.81
2001-3000 14 0.47 344900 0.54
3001-4000 9 0.31 304170 0.47
4001-5000 7 0.24 318000 0.49
5001-10000 15 0.51 1082640 1.68
10001 and above 32 1.08 59164130 91.56
Total 2950 100 64369310 100

17. B) Market price data and performance comparison:

1) The market price data High Low and Close during each month from 1stApril 2020 to 31st March 2021 are mentioned below:

Monthly Market price details from 01.04.2020 to 31.03.2021
Trade date/Month Open High Low Close
April 2020 72.30 87.00 70.30 70.30
May 2020 70.30 70.50 46.05 48.00
June 2020 46.00 68.25 46.00 68.25
July 2020 71.65 74.90 60.15 67.10
August 2020 67.10 176 64.25 171.30
September 2020 171 178.50 123.05 123.05
October 2020 120.60 128.35 112.45 125.50
November 2020 128 176.35 125.50 168.15
December 2020 171.50 189 159.75 169.95
January 2021 174 174 126.10 141.25
February 2021 134.20 188 134.10 149.90
March 2021 164.75 164.75 130 148

17. Key managerial personnel:

In compliance with Section 203 of the Companies Act 2013 thefollowing are the Key managerial Personnel of the Company:

Mr. Arvind Varchaswi N Managing Director
Mr. Tejagna K. Katpitia Whole-time Director
Mr. Seshadri Ramaswamy Chief Financial Officer
Mrs. Sweta Gaur ^ Company Secretary

18. Declaration of independent directors:

In accordance with Section 149(7) of the Companies Act 2013 theIndependent Directors of your Company have given a Declaration that they meet thecriteria of Independence as provided in sub section (6)of Section 149 of the Act. Therehas been no change in terms and conditions of appointment of Independent Directors. ThePolicy relating to appointment of Independent Directorsis available on the website of theCompany: http://www.source-natural.com.

19. Policy on directors appointment annual perfomance evaluation ofthe board and policy on remuneration:

Pursuant to the requirement under Section 134(3)(e) and Section 178(3)of the Companies Act 2013 the policy on appointment of Board members including criteriafor determining qualification positive attributes independence of a director and thepolicy on remuneration of Directors KMP and other employees is available on the websiteof the Company: http://www.source-natural.com.

In a separate meeting of Independent directors performance ofnon-independent directors performance of the Board as a whole and performance of theChairman was evaluated taking into account the views of Executive directors andnon-executive directors. The same was discussed in the Board meeting that followed atwhich the performance of the Board its Committees and individual directors werediscussed.

20. Particulars of remuneration to directors/kmp/employees:

There were no employees during the year 2020-21 covered under theprovisions of Section 197of the Companies Act 2013.

The details of Remuneration paid to the Directors Key ManagerialPersonnel and Employees as required under Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given in Form MGT-9 which is posted on website of thecompanyhttp://www.source-natural.com/announcements-other.php

21. Directors' responsibility statement:

Pursuant to the provisions under Section 134(5) of the Companies Act2013 with respect to Directors' Responsibility Statement the Directors confirm:

A: That in the preparation of the Annual Accounts the applicableAccounting Standards have been followed and no material departures have been made from thesame;

B: That they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year on 31st March 2021 and of the profit and loss of the Company for thatperiod;

C: That they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the CompaniesAct2013 for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;

D: That they have prepared the annual accounts on a going concernbasis;

E: That they have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively; and

F: That they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

22. Auditors:

In accordance with Section 139(9) 140(4) 141 142 and otherapplicable provisions if any of the Companies Act 2013 The Statutory Auditors M/s.Srinaga&Giridharan Chartered Accountants Bangalore having Firm Registration No004013S holds office until the conclusion of the ensuing Annual General Meeting and iseligible for reappointment.

Your Company has received confirmation from the Auditors to the effectthat their appointment if made will be in accordance with the limits specified under theCompanies Act 2013

Your Board is of the opinion that continuation M/s.Srinaga&Giridharan as Statutory Auditors during FY 2020- 21 will be in the bestinterests of the Company and therefore Members are requested to consider theirre-appointment as Statutory Auditors of the Company from the conclusion of 26th AnnualGeneral Meeting till 31st next Annual General Meeting at remuneration be decided by theBoard.

The Audit Report for the financial year 2020-21 as certified by theStatutory Auditors of the Company does not contain any qualification reservation oradverse remarks and therefore does not require any explanations from the Directors.

23. Secretarial audit report:

The Board appointed Mr. Ajay Suman Shrivastava Practicing CompanySecretary to carry out Secretarial Audit for the financial year 2020-21 under theprovisions of Section 204 of the Companies Act 2013. The Secretarial Audit Report isannexed to this report as Annexure-1. There are no qualifications made by the Auditor inthe report. Annexure 2 is annexed as certificate of Non Dis-Qualification of Directors.

24. Management discussion and analysis:

The Management Discussion and Analysis Report prepared in accordancewith Schedule V of the SEBI Listing Regulations are annexed to this report as Annexure-3.

25. Details of significant & material orders passed by theregulators or courts or tribunal:

During the year under review there have been no significant andmaterial orders passed by any regulators or courts or tribunal.

26. Risk management:

The Company has a comprehensive risk assessment and minimizationprocedure which are reviewed by the Board and the Audit Committee of the Company.Preparation of Risk Management Plan reviewing and monitoring the same on regular basis.

The Company identifies risks and control systems to mitigate them arein place. In the opinion of the Board at present there are no risks which may threatenthe existence of the Company

27. Adequacy of internal financial controls with reference to financialstatements:

The Act re-emphasizes the need for an effective Internal FinancialControl system in the Company which should be adequate and shall operate effectively. Rule8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regarding adequacyof Internal Financial Controls with reference to the financial statements to be disclosedin the Board's Report.

The Company has in place adequate internal financial controls which arecommensurate and adequate with the size and scale of operations of the Company. During theyear under review such controls were tested and no reportable material weakness in thedesign or operation were observed. The reports on Internal Audit given by M/s Krishna& Suresh Chartered Accounts the Internal Auditors are placed before the AuditCommittee and the Board periodically for review.

28. Establishment of vigil mechanism:

In pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013 The Company has established a vigil mechanism through whichdirectors employees and business associates may report unethical behavior malpracticeswrongful conduct fraud violation of Company's code of conduct leak or suspected leak ofunpublished price sensitive information without fear of reprisal. The Vigil MechanismPolicy has been uploaded on the website of the Company- www.source-natural.com.

29. The sexual harassment of woman at workplace (preventionprohibition and redressal) act 2013:

The Company has formulated an Anti-Sexual Harassment policy in linewith the requirement of the Sexual harassment of Woman at Workplace (Preventionprohibition and redressal) Act 2013. There have been NIL complaints of such nature duringthe period under review.

30. Corporate social responsibility (csr):

As your Company's net worth does not exceed Rs. 500 Crores (or)Company's turnover does not exceed Rs. 1000 Crores or company's net profit does not exceedRs. 5 Crores for the financial year the provisions under Section 135 of the Act read withrules made there under are not applicable. Hence the compliance to the initiative ofCorporate Social Responsibility is not required.

31. Prevention of insider trading:

The Board of Directors have adopted the Insider Trading Policy inaccordance with the requirement of the SEBI (Prohibition of Insider Trading)Regulation2015 as amended from time to time. The Insider Policy of the Company lays downguidelines and procedures to be followed and disclosures to be made while dealing withshares of the Company as well as the consequences of violation The policy has beenformulated to regulate monitor and ensure reporting of deals by employees and to maintainthe highest ethical standards of dealing in Company securities.

The Code requires pre-clearance for dealing in the Company's shares andprohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code. All Directors and the designated employeeshave confirmed compliance with the Code. The same has been displayed at the company'swebsite at www.sourcenatural.com

32. Listing:

The shares of your Company are listed at BSE Limited and tradedactively during the year. Your Company has duly complied with all the applicableprovisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015during the year under review.

33. General Shareholder Information

1) 26th Annual General Meeting Date and Time : 5th August 202112:00PM

2) Financial Calendar (2021-22) (Tentative) The Financial year of thecompany is from 1st April of the year to 31st March of the next year.

For the year ending 31st March 2022 quarterly Un-audited / AnnualAudited results shall be announced as follows:

Financial reporting for Proposed Date
Unaudited Results for the Quarter ending: 30th June 2021 On or before 14th August 2021
Unaudited Results for the Quarter ending: 30th September 2021 On or before 14th November 2021
Unaudited Results for the Quarter ending: 31st December 2021 On or before 14th February 2022
Audited Results for the year ended 31st March 2022 On or before 30th May 2022
3) Book Closure Date: Thursday 29th July 2021 to Thursday 05th August2021 (Both days inclusive)
4) Registered Office No: 201 Sumeru Towers 2nd Floor #54/46 39th A Cross 11th Main Road Jayanagar 4thT Block Bangalore - 500 041
5) Listing of Equity Shares: BSE Limited Mumbai (BSE)
6) Listing Fees: Listing fee has been paid to BSE Limited till the year 2021-22
7) Stock Code: 531398
8) ISIN No.: INE679C01027
9) CIN Number: L24231KA1995PLC101742
10) Plant Location: Plot No: 22 & 23 SVCIE Bachupally Quthbullapur Mandal Hyderabad - 500 090.

34. Disclosures:

A: Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:

Pursuant to the provisions of Section 134 of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 the details of conservation ofenergy and technology absorption and Foreign exchange earnings and outgo are attached asAnnexure-4.

B: Subsidiary Holding Associate Companies:

There are no subsidiaries to your Company as on the date of report. Interms of the shareholding the Company is a subsidiary of Sriveda Sattva Private Limited.

C: Particulars of Loans Guarantees or Investments made under Section186 of the Companies Act 2013:

There were no loans guarantees or investments made by the Companyunder Section 186 of the Companies Act 2013 during the year under review and hence thedetails required to be furnished herein are NIL.

D: Particulars of Contracts or Arrangements made with Related Parties:

All the related party transactions are entered on arm's length basisand in the ordinary course of business in compliance with the applicable provisions ofthe Companies Act 2013 and the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.

The details of the transactions with related parties are provided inthe Notes to the financial statements.

E: Fixed Deposits:

Your Company has not accepted any Fixed Deposits from the Public withinthe meaning of Section 73 to 76 of the Companies Act 2013 during the year under review.The details for the same are filed with the concerned authorities

.