source natural foods herbal supplements ltd Directors report

To,

The Members,

Source Natural Foods and Herbal Supplements Limited Bangalore

The Board of Directors hereby submits the report of the business and operations of your Company along with the audited financial statements, for the financial year ended March 31,2023. The Financial Highlights for the year under review are given below:

1. FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars	31.03.2023	31.03.2022
Total revenue	1980.03	2201.76
Profit/ (Loss) before exceptional and extraordinary items and tax	273.57	368.15
Exceptional Items	0.00	0.00
Profit before extraordinary items and tax	273.57	368.15
Extraordinary Items	0.00	0.00
Tax expenses	61.46	124.90
Deferred Tax	-	-
Net Profit/(Loss) carried to Balance Sheet	212.11	243.25
Earnings Per Share (Basic/ Diluted)	3.30	3.78

2. PERFORMANCE REVIEW:

The Total revenue of the Company for the year ended 31^st March, 2023 was Rs. 1980.03 Lakhs, as compared to the total revenue in previous year of Rs.2201.76 Lakhs.

The total expenses for the year ended 31st March 2023 have decreased to Rs. 1706.46 lakhs compared to Rs. 1833,62 lakhs of the previous year ended 31 st March 2022,

3. FUTURE PROSPECTS& OUTLOOK:

The future looks to be very interesting for the dietary supplements market. Ayurveda and herbal are increasingly becoming "backto roots" answers to modern problems. Your company vision is to make the Ayurveda reach across the globe by focusing on selling Ayurveda-based and immunity-boosting products. The requirements of consumers has shifted to healthy foods and beverages options. With the onset of Covid-induced pandemic, consumers are now demandingfor immunity booster sand this trend is boosting FMCG immunity portfolio.

Your Company intends to focus on increasing their portfolio of immunity-boosting products and will continue to contribute towards the growth of Ayurveda and Herbal Supplements and at the same time enhance shareholders wealth by accelerated performance.

Source Natural is all geared up for 2023-24 with new product lines. The focus will be on offering wellness products enriched with Ayurvedic herbs.

4. RESEARCH AND DEVELOPMENT:

Ayurveda refers to natural ancient healthcare system and science of medicine The Indian ayurvedic products market is primarily driven by the increasing preference for organic and natural products among the masses. In line with this,

the rising awareness regarding the harmful effects of chemicals utilized in the formulation of various skincare and personal care products and the growing health-consciousness among individuals are creating a positive market outlook. Moreover, the penetration of high-speed internet and the rising popularity of social media among the masses are further providing a boost to the demand for ayurvedic products in India. The research methodology should be planned and adopted accordingly.

5. DIVIDEND:

In order to conserve the available resources for future growth, your directors do not recommend any dividend for the financial year ended 31-03-2023.

6. AMOUNTTRANSFERREDTO RESERVES:

The amount to be carried to Reserves is Rs. 212.11 Lakhs.

7. CHANGE IN THE NATURE OF BUSINESS:

As per the requirements Rule 8(5)(ii) of the Companies (Accounts) Rules, 2014, Company declares that, there is no significant change in the nature of business of the Company during the financial year under review.

8. EVENTS SUBSEQUENT TOTHE DATE OF FINANCIAL STATEMENTS:

As per the requirements Section 134(3)(1) of the Companies Act, 2013, Company declares that, there are no significant material changes and commitments affecting financial position of the Company between 31st March 2023 and the date ofBoards Report.

9. SHARE CAPITAL:

The Authorised Share Capital of your Company is Rs.9,00,00,000/-divided into 90,00,000Equity Shares of Rs.10/-each. The Paid-up Capital is Rs. 6,43,69,310/-divided into 64,36,931 Equity Shares ofRs.10/-each.

During the year under review, there is no change in the Share Capital of the Company.

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

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

b. lssue of Sweat Equity Shares:

The Company has not issued any sweat equity share during the financial year, in accordance with the provisions of Section 54 of Companies Act, 2013 read with Rule 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 voting rights during the financial year, as per Rule 4(4) of Companies (Share capital and Debentures) Rules, 2014.

d. Issue of Employee Stock Option:

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

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL KEY MANAGERIAL PERSONNEL:

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

Mr. Arvind Varchaswi N. -	Managing Director
Mr. Tejagna K. Katpitia	Whole-time Director
Mr. R. Ramachandra	Chief Financial Officer
Mrs. Ruchi Chowdhury	Company Secretary & Compliance Officer

A. RETIREMENTBYROTATION

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri Narayanan Narasimhan retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend his re-appointment.

B. APPOINTMENT

Mr. R. Ramachandra, CFO has been appointed on 19^th December, 2022 in place of Mr. Seshadri Ramaswamy. Ms. Trishla

Bisawa, Company Secretary and Compliance Officer has been appointed on 13^th February, 2023 as the Key Managerial Personnel in place of Mrs. Swetajoshi, and noappointment of Directors has occurred during the year under review.

Mrs. Ruchi Chowdhury, Company Secretary and Compliance Officer has been appointed on 27^th April, 2023 as the Key Managerial Personnel in place of Ms.Trishla Bisawa.

C. CESSATION

No cessation of Directors has occurred during the year under review. Key Managerial Personnel Mr. Seshadri Ramaswamy, Mrs. Swetajoshi resigned from the company du ring the year under review,

D. 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 Board adopted the policy on appointment of Board members including criteria for determining qualification, positive attributes, independence of a director and the policy on remuneration of Directors, KMP.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive directors and non-executive directors. The same was discussed in the Board meeting that followed, at which the performance of the Board, its Committees and individual directors were discussed.

E. DECLARATION OF INDEPENDENT DIRECTORS:

In accordance with Section 149(7) of the Companies Act, 2013, the Independent Directors of your Company, have given a Declaration that they meet the criteria of In dependence as provided in subsection (6)of Section 149 of the Act. There has been no change in terms and conditions of appointment of Independent Directors. The Policy relating to appointment of Independent Directors is available on the website of the Company: http://www.source-natural.com.

F. PARTICULARSOF REMUNERATION TO DlRECTORS/KMP/EMPLOYEES:

There were no employees during the year 2022-23 covered under the provisions of Section 197of the Companies Act, 2013.

The details of Remuneration paid to the Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Form MGT-7 which is posted on website of the CQmpanvhttp://www.source- natural.com/announcements-other.php

11. NUMBER OF MEETINGS OFTHE BOARD AND THEIR ATTENDANCE DURING THE FINANCIAL YEAR2022-23

Name of the Director & their Attendance
Sr.no	Date of the Board Meeting	MR.N NARASIMHAN	Mr. ARVIND VARCHASWIN	MR. TEJAGNA KATPITIA	MR. SRI NIVAS GOWRA	MR. SRIRAM CHANDRASE KARAN	MR. CL RATHI	MRS. BHARATHY
1	26-05-2022	LOA	P	P	P	LOA	P	P
2	13-08-2022	P	P	P	P	P	P	P
3	14-11-2022	P	P	P	P	P	P	P
4	19-12-2022	P	P	LOA	P	P	LOA	P
5	13-02-2023	P	P	LOA	P	LOA	P	P

12. NUMBER OF MEETINGS OF THE AUDITCOMMITTEE

During the year 2022-23, the Committee met 4 (Four) times on the following dates, viz, May 26^th, 2022, August 13^Ih, 2022, November 14^th 2022and February 13^th, 2023.

The following are the details of the Directors, their attendance at the Audit Committee Meeting held during the year 2022-23.

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

13. NUMBEROF MEETINGS OFTHESTAKEHOLDERS RELATIONSHIP COMMITTEE

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

During the year one meeting of the Committee was held on 14^th November 2022.

The following are the details of the Members, their attendance at the Stakeholders Relationship Committee Meeting held duringtheyear2022-23.

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

14. NUMBEROF MEETINGS OF THE NOMINATION AND REMUNERATIONCOMMITTEE

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

During the year 2022-23, the Committee met 3 (Three) times on the following dates, viz August 13th, 2022, December 19th 2022 and February 13th, 2023,

The following are the details of the Members, their attendance at the Nomination and Remuneration Committee Meeting held during the year 2022-23.

Name	Designation	Attendance
Mrs. Bharathy	Chairman	3
Mr. Srinivas Gowra	Member	3
Mr. Sriram Chandrasekaran	Member	2

15. DETAILS OFSHAREHOLDERS MEETINGS HELD AND ATTENDANCE FORTHE YEAR2022

Details of General Meeting	Date of Meeting	Number of Shareholders
		Entitled	Attended	%
Annual General Meeting	26-09-2022	3085	25	0.81

16. A) DISTRIBUTION OF SHAREHOLDING AS AT31st MARCH, 2023

Category / No of Shares	Number of Shareholders	% of Total Shareholders	Amount in Rs.	% of Holdings to Total shareholding
Up to - 500	2887	92.68	206097	3.20
501 -1000	100	3.21	75875	1.18
1001 -2000	38	1.22	53916	0.84
2001-3000	23	0.74	58195	0.90
3001 - 4000	11	0.35	38670	0.60
4001 - 5000	12	0.39	54924	0.85
5001 - 10000	12	0.39	90499	1.41
10001 and above	32	1.03	5858755	91.02
Total	3115	100	6436931	100

16. B) MARKET PRICE DATA AND PERFORMANCE COMPARISON:

The market price data High, Low and Close during each month from 1 st April, 2022 to 31 st March, 2023 are mentioned below:

	Monthly Market price details from 01.04.2022 to 31.03.2023
Trade date/Month	Open	High	Low	Close
April, 2022	99.95	122.90	92.05	98.05
May, 2022	114.75	114.75	78.50	87.00
June, 2022	87.50	97.00	81.50	90.15
July, 2022	90.00	109.95	87.05	101.85
August, 2022	106.45	150.45	88.05	150.45
September, 2022	160.00	188.85	138.00	179.40
October, 2022	179.00	188.20	148.10	163.80
November, 2022	171.45	180.10	150.05	156.95
December, 2022	160.95	171.45	102.15	124.15
January, 2023	130.35	167.40	125.65	148.05
February, 2023	154.65	157.95	118.80	126.25
March, 2023	125.00	129.90	88.00	88.90

17. DIRECTORS RESPONSIBILITYSTATEMENT:

Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, the Directors confirm:

a. That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;

b. That they 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 on 31st March, 2023 and ofthe profit and loss of the Company for that period;

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

d. Thatthey have prepared the annual accounts on a going concern basis;

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

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

18. AUDITORS:

In accordance with Section 139 ofthe Companies Act, 2013 and rules there under, M/s. Srinaga & Giridharan, Chartered Accountants, Bangalore were appointed as the Statutory Auditors ofthe Company at 26TH Annual General Meeting for a period of 5 years. The Audit Report for the financial year 2022-23 as certified by the Statutory Auditors of the Company does not contain any qualification, reservation or adverse remarks and therefore does not require any explanations from the Directors.

19. SECRETARIAL AUDIT REPORT:

The Board appointed Mr. Ajay Suman Shrivastava, Practicing Company Secretary, to carry out Secretarial Audit for the financial year 2022-23, under the provisions of Section 204 ofthe Companies Act, 2013. The Secretarial Audit Report is annexed to this report as Annexure-1. There are no qualifications made by the Auditor in the report. Annexure 2 is annexed as certificate of Non-Dis-Qualification of Directors.

20. COVID-19 IMPACTON BUSINESS:

In 2022, global economies faced significant headwinds as a result of broadening inflationary pressures and rising energy costs due to geopolitical strife in Europe. Global economic activity has also started slowing significantly as a result of monetary policy tightening to combat inflation, less favourable financial conditions and supply chain disruptions caused by geopolitical tensions.

The sudden surge of COVID-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery. Global inflation is likely to decline from *8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024. The emerging and developing economies ofthe world are expected to play a major role in accelerating global economic growth goingforward.

21. MANAGEMENT DISCUSSION AND ANALYSIS:

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

22. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

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

23. RISK MANAGEMENT:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the Meetings of the Audit Committee and the Board of Director of the Company.

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

24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS:

According to section 134(5)(e) ofthe Act the term Internal Financial Control (IFC) means the policies and procedures adopted bythe company for ensuringthe orderly and efficient conduct ofits business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information

The Company has put in place an adequate system of internal financial controls with respect to the Financial Statement and commensurate with its size and nature of business which helps in ensuring the orderly and efficient conduct of business. No reportable material weakness in the operation was observed.

25. ESTABLISHMENT OF VIGIL MECHANISM:

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9} of the Act and as perSEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

26. THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

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

27. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As your Companys net worth does not exceed Rs. 500 Crores (or) Companys turnover does not exceed Rs. 1000 Crores or companys net profit does not exceed Rs. 5 Crores for the financial year, the provisions under Section 135 of the Act read with rules made there under, are not applicable. Hence, the compliance to the initiative of Corporate Social Responsibility is not required.

28. PREVENTION OF INSIDERTRADING:

The Board of Directors have adopted the Insider Trading Policy in accordance with the requirement of the SEBI (Prohibition of Insider Trading) Regulation,2015 as amended from time to time. The Insider Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.

The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees have confirmed compliance with the Code. The same has been displayed at the companys website atwww.sourcenatural.com.

29. LISTING:

The shares of your Company continue to be listed on BSE Limited and traded actively during the year and the listing fees for the year 2022-23 have been paid. Your Company has duly complied with all the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the year under review.

30. General Shareholder Information

1. 28th Annual General Meeting

Date and Time: 6th September 2023, 11:00 A.M

2. Financial Calendar (2023-24)(Tentative)

The Financial year of the company is from 1st April of the year to 31 st March of the next year.

For the year ending 31st March 2024 quarterly Un-audited/Annual Audited results shall be announced as follows:

Financial reporting for	Proposed Date
Unaudited Results for the Quarter ending: 30th June, 2023	On or before 14th August, 2023
Unaudited Results for the Quarter ending: 30th September, 2023	On or before 14th November, 2023
Unaudited Results for the Quarter ending: 31st December, 2023	On or before 14th February, 2024
Audited Results for the year ended 31st March, 2024	On or before 30th May, 2024

 

3. Book Closure Date	Thursday, 31 st August 2023 to Wednesday 6th September, 2023 (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 2023-2024
7. Stock Code	531398
8. IS 1N No.	INE679C01027
9. CIN Number	L24231 KA1995PLC101742
10. Plant Location:	Plot No: 22 & 23, SVCIE, Bachupally, Quthbullapur Mandal, Hyderabad - 500 090.

31. OTHER DISCLOSURES:

a. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

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

b. Subsidiary, Holding, Associate Companies:

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

c. Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013:

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the details 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 arms length basis and in the ordinary course of business, in compliance with the applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

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

e. Fixed Deposits:

Your Company has not accepted any Fixed Deposits from the Public within the 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.

f. Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year:

Your company has not made any application under Insolvency and bankruptcy Code, 2016 during the year under review.

g. 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:

The company has not done any one time settlement with the banks during the year under review,

32. ACKNOWLEDGEMENTS:

The Board take this opportunity to express their gratitude all the customers, vendors, investors and bankers for their continued support during the year. It places on record its appreciation for the contribution made by employees of the company at all levels. The Board also wishes to record its appreciation for business constituents like SEBI, BSE, NSDL, CDSL etc. for their continued support in the growth of the Company.

The Board thanks the Government of India, particularly the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate affairs the State Governments, and other government agencies for their support, and look forward to their continued support in the future.

Place: Bangalore	For and On Behalf of the Board
Date: 11-08-2023	SD/-	SD/-
	(Arvind Varchaswi N.)	(Tejagna K Katpitia)
	Managing Director	Whole-time Director
	DIN:00143713	DIN:00445283