Desh Rakshak Aushdhalaya Ltd Management Discussions

In compliance of the provisions of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( " LODR Regulations 2015 " ), Please find Management Discussion and Analysis Report for the year 2024-25, forming part of Annual Report.

1. INDUSTRY STRUCTURE & DEVELOPMENTS

Company recognizes operations as an important source of competitive advantage and further believes in continually striving for higher and better levels of quality not just in its products, but also in its operations, without losing sight of its commitments towards the environment and communities where it operates. A host of initiatives are continually rolled out by the company to improve productivity while reducing its energy usage.

Company is committed to create an open and transparent organization that is focused on people and their capability, and fostering an environment that enables them to deliver superior performance. Company continued to focus on expanding its product offerings to consumers by way of new product launches and expansion of existing products, thereby continuing to address the growing and ever changing needs of its consumers.

Health care has been identified as an important growth engine for the future. Your Company is lining up a host of new initiatives for the same in Ayurveda and range of Ayurveda Based ethical and Classical and Health care products.

2. OPPORTUNITIES AND THREATS

The consumer landscape has been continuously evolving and one has to keep pace with the

changing trends in order to win consumer confidence. The Herbal Wave in India offers a significant

growth opportunity to be tapped and appropriate strategies need to be formulated to capture

this opportunity. Desh Rakshak Aushdhalaya Limited is capturing these opportunities by investing in brands that are positioned strongly on the herbal platform and appeal to the

contemporary consumers. Desh Rakshak Aushdhalaya Limited is leveraging its deep experience

and heritage in the field of Ayurveda and building its business based on the Health and

Wellness theme across categories. Currency volatility, slowdown in category growth rates and unpredictable weather patterns are some of the threats to the company s prospects.

3. SEGMENT-WISE/ PRODUCT-WISE PERFORMANCE

Products ranging from Amalaki Churna, Ashwagandha Tablet, Triphala Churna, Lavana Bhaskar Churna, Saptashilajeet, Shunthi Churna, Hingwadi Churna, Gashar Vati, Buddhivardhak Yog, Balamrit, Lodhra Churna, Narayan Churna, Gangadhar Churna, Mustaka Churna, Shatavari Churna Tablet, Ashwagandha Tablet, Lavangadi Churna, Shringyadi Churna, Shatavaryadi Churna, Mulethi Churna Tablet, Dant Mohini Manjan, Gokshur Churna, Bhringraj Churna, Mulethi Churna, Dashmool Kwath, Punarnavastak Kwath, Somkalp Churna, Vach Churna, Ashwagandha Lehya, Bansavaleha, Chyawanprash Special, Chyawanprash Vishesh, Giloy Satva, Haridra Khanda, Brahmi Ghrita, Triphala Ghrita, Neem Taila, Jatyadi Taila, Dashmool Taila, and Dhanvantari Taila are products that are widely popular among consumers.

The product range is extensive, covering faster-consumed Ayurvedic categories such as Rasa-Rasayan, Churna, Avaleha-Pak, Kwath Churna, Bhasma-Pishti, Guggul, Lauha-Mandoor, Parpati, Kupipakwa Rasayan, Asava-Arishta, Aushadhi Taila, Avaleha-Pak and Kshar-Satva , making the Company s products competitive and among the best in the Ayurvedic industry.

With a portfolio of Ayurvedic and natural products, nature and herbs are the key to our existence and company continues to invest in Research & development in order to establish beyond the boundaries of Uttarakhand.

Company has a wide range of ethical healthcare products based upon the age-old system of Ayurveda. It has a wide range of ethical medicines that are derived from herbs and form part of this holistic healthcare system, focusing on all-round well-being. The range was promoted aggressively through focused activities. This centre seeks to promote Ayurveda among the urban Indians, besides enhance availability and visibility of Ayurvedic medicines

4. OUTLOOK

An improvement in the macro-economic fundamentals is expected to ramp up demand by improving the overall consumer sentiment. The Company expects demand to pick up as and when the disposable income in the hands of consumers increases due to pick up in economic activity and various government initiatives like NREGA, 7 th Pay commission,

implementation of DBT schemes etc .The company has a good product pipeline and has also been investing in various distribution channels to service the demand all across geographies. We are well poised to effectively capture the growth opportunities in the FMCG domain.

5. RISKS AND CONCERNS

The market for our products is highly competitive on account of both the organized and unorganized players. Players in this industry generally compete with each other on key attributes such as technical competence, quality of products, brand image, distribution network, pricing and timely delivery. The unorganized sector offers their products at highly competitive prices which may not be matched by our company s product price and consequently affect our company s volume of sales and growth prospects. Growing competition may result in a decline in our company s market share and may affect our company s margins which may adversely affect our company s business operations and our company s financial condition.

Global economic, political and social factors that are beyond our company s control could directly affect our company s performance. These factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, consumer credit availability, fluctuations in commodities markets, consumer debt levels, unemployment trends and other matters that influence consumer confidence, spending and tourism. A slowdown in economic growth in India could adversely impact our company s business. Our company s performance and the growth of our company s business are dependent on the performance of the overall Indian economy.

Increased inflation can contribute to an increase in interest rates and increased costs to our company s business, including increased costs of transportation, wages, raw materials and other expenses relevant to our company s business. Any increase in inflation in India can increase our Company s expenses and may adversely affect our company s business, cash flow, results of operations, and financial condition.

The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions. One of the key risks faced by the Company in today s scenario is the continued inflationary trend which is not only increasing cost pressures, but may also lead to demand compression for its products. Increase of imitation/fake products and brands can hamper our growth. The input Cost Pressures were managed effectively and the Company did not take any significant price increases during the year. Growth rates across quarters have been consistent and reflect your company s sound business strategies and strong execution capabilities. A slowdown in overall economic growth can lead to pressure on disposable incomes and spending power of people.

To overcome the hurdles posed by a challenging external environment, Company has been taking proactive measures in portfolio, product and channel optimization. The focus of the Company is on ensuring deeper penetration and more effective distribution of products. Company is committed to its motto of being dedicated to the health and well-being of every household. With a legacy and experience, company is today trusted healthcare brand and Ayurvedic and Natural Health Care Company.

The Company increased its efforts to improve productivity by deploying various cost reduction and energy saving initiatives, resulting in a reduction in manufacturing costs to lower levels.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has a proper and adequate system of internal control including internal financial controls. Your Company has an Audit Committee headed by a non-executive independent director, inter-alia, to oversee your Company s financial reporting process, disclosure of financial information, and reviewing the performance of statutory and internal auditors with management. The internal control system, including internal financial controls of the Company, is monitored by an independent internal audit team, which encompasses examination/ periodic reviews to ascertain adequacy of internal controls and compliance to Company s policies. Weaknesses noted along with agreed upon action plans are shared with audit committee, which ensures orderly and efficient conduct of the business and effectiveness of the system of internal control. The audit function also looks into related party transactions, preventive controls, investigations, as well as other areas requiring mandatory review per applicable laws. The powers of the Audit Committee, inter-alia, include seeking information from any employee, obtaining outside legal or other professional advice, and investigating any activity of the Company within the committee s term of reference. Your Company s internal audit department verifies the information of the financial statements as well as the compliance with your Company s policies to maintain accountability and ensuring controls are in place to safeguard of all its assets and correctness of accounting records. The internal audit department

shares regular updates regarding the work done, coverage, weaknesses noted and other relevant issues with appropriate management levels including Audit Committee. Observations/ weaknesses noted from time to time are suitably acted upon and followed up at different levels of management. The internal control is supplemented by an extensive program of audits and periodic review by the management.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the turnover of the Company is Rs. 6,27,06,600 in comparison with the last years Rs 6,00,68,700. The profit after tax of the company is Rs 47,66,200. Despite high inflationary and cost pressures throughout the year, company capitalized on every available opportunity and undertook strategic initiatives coupled with to exploit the full industry potential, besides making efforts towards cost reduction and improved efficiency which enable the company to grow reasonably well.

In continuation of its efforts towards offering innovative, more effective and value added products to the consumers for providing them with value for money. Company continued combining traditional Ayurvedic Science with adoption of the modern manufacturing technology.

8. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Humankind is the Greatest Resource

The Company s endeavour has always been to build an organization where its people are always engaged and empowered to do their best. The Company s culture is focused on customer-centricity collaborative team work, result orientation, entrepreneurial mindset and developing people.

Owing to the competitiveness and diversity of Indian markets, the Company strives to ensure adequate succession planning of its leadership talent pool. In line with the Company s focus on employee empowerment, it has also designed new Ways of Working to deliver high operational excellence and governance.

To remain competitive, improving employee productivity is of utmost importance to the organization and the company strive to achieve benchmark performance in this area. During Financial Year 2024-25, the overall Employee Productivity for the Company increased.

The Company recognizes and appreciates the contribution of all its employees in its growth path. Our Company strives to retain talent by facilitating career growth through job enrichment and empowerment, as it believes that the pool of the human resource is the biggest asset of the organization. Your Company maintains a cordial relationship with its employees through a constructive work environment in support of productive gains. There are 20 employees in the company.

9.KEY FINANCIAL RATIOS/ACCOUNTING RATIOS

Following are important ratios comparing performance of financial year ended on 31.03.2025 and financial year ended on 31.03.2024:

S.No.	Particulars	Formula	Calculation 24-25	Ratio	Calculation 23-24	Ratio	Reasons
1.00	Current Ratio	Current Assets	79,740,152.00	1.61	59,219,294.10	1.48	The current ratio compares all of a companys current assets to its current liabilities. An increasing current ratio is caused by an increase in current assets
		Current Liabilities	49,388,826.00		40,076,639.19
2.00	Debt Equity Ratio	Debt	30,820,107.00	0.31	28,342,162.75	0.30	The debt-to-equity (D/E) ratio compares a companys total liabilities with its shareholder equity and can be used to assess the extent of its reliance on debt.Among similar companies, a higher D/E ratio suggests more risk, while a particularly low one may indicate that a business is not taking advantage of debt financing to expand.
		Equity	99,552,035.00		94,785,791.32
3.00	Return On Equity	Profit after tax	4,766,244.00	0.05	4,275,361.32	0.05	ROE is a gauge of a corporations profitability and how efficiently it generates those profits.The higher the ROE, the better a company is at converting its equity financing into profits.ROE will vary based on the sector a company is in, so it provides the most information when its used to compare companies in the same industry.
		Total Equity	99,552,035.00		94,785,791.32
4.00	Inventory Turnover	Cost of Goods Sold (COGS)	25,676,903.00	10.38	25,216,374.19	4.55	Inventory turnover measures how efficiently a company uses its inventory by dividing the cost of goods sold by the average inventory value during the period.A relatively low inventory turnover ratio may be a sign of weak sales or excess inventory, while a higher ratio signals strong sales but may also indicate inadequate inventory stocking.
		Average Inventory	2,473,113.50		5,536,706.00
5.00	Trade Receivable Turnover	Credit Sales	62,706,562.00	0.85	58,022,443.57	1.13	High ratio may indicate that corporate collection practices are efficient with quality customers who pay their debts quickly.A low ratio could be the result of inefficient collection processes, inadequate credit policies, or customers who are not financially viable or creditworthy.
		Average Trade Receivable	73,546,672.00		51,278,118.00
6.00	Debt Service Coverage Ratio	EBDITA	12,788,282.00	0.38	13,002,886.56	0.41	A ratio below 1 indicates a company may have a difficult time paying principal and interest charges in the future, as it may not generate enough operating income to cover these charges as they become due.
		Principle + Interest	33,285,053.00		31,360,263.37
7.00	Trade Payable Turnover Ratio	Credit Purchase	22,599,725.00	0.54	18,722,391.35	0.62	Measured over time, a decreasing figure for the AP turnover ratio indicates that a company is taking longer to pay off its suppliers than in previous periods. This could signal that a company is in financial distress. Alternatively, a decreasing ratio could also mean the company has negotiated different payment arrangements with its suppliers.
		Average Trade Payable	41,687,994.50		30,434,801.86
8.00	Net Capital Turnover Ratio or Net Assets Turnover Ratio	Sales/COGS	62,706,562.00	0.63	60,068,743.57	0.63	Asset turnover is the ratio of total sales or revenue to average assets.This metric helps investors understand how effectively a company uses assets to generate sales.
		Net Assets	99,552,035.00		94,785,791.32
9.00	Net Profit Ratio	Net Profit	4,766,244.00	0.08	4,275,361.32	0.07	Company has improved its net profit margin by reducing the expenses. Net Profit Ratio is higher due to increase In net profit
		Sales	62,706,562.00		60,068,743.57
10.00	Return On Capital Employed	EBIT	8,926,258.00	0.07	8,622,919.94	0.07	Return on capital employed is a financial ratio that measures a companys profitability in terms of all of its capital. Higher ratio indicates that company is profitable.
		Capital Employed	130,372,142.00		123,127,953.85
11.00	Return On Investment	Net Profit	4,766,244.00	1.59	4,275,361.32	1.21	Return on investment (ROI) is a simple and intuitive metric of the profitability of an investment. Return on investment (ROI)is higher due to increase in profit
		Total Investment	3,001,296.00		3,521,357.00
12.00	De btor T u rnove r Rati o	Debtor	73,546,672.00	1.17	51,278,118.00	0.85	The ratio measures the number of times that receivables are converted to cash during a certain time period.A high ratio may indicate that corporate collection practices are efficient with quality customers who pay their debts quickly.
		Sales	63,038,579.00		60,068,743.57
13.00	Interest Coverage Ratio	EBDITA	12,788,282.00	4.29	13,002,886.56	3.66	The interest coverage ratio (ICR) measures a companys ability to handle its outstanding debt.A higher interest coverage ratio (ICR) means a company is more poised to pay its debts; a low ICR indicates that a companys debts are great.
		Interest	2,981,059.00		3,557,325.62
14.00	Return On Net Worth	Net Income	4,766,244.00	0.05	4,275,361.32	0.05	Return on net worth is a gauge of a corporations profitability and how efficiently it generates those profits.The higher the ROE, the better a company is at converting its equity financing into profits.ROE will vary based on the sector a company is in, so it provides the most information when its used to compare companies in the same industry.
		Shareholders Equity	99,552,035.00		94,785,791.32
15.00	Operating Profit Margin	Operating Margin	8,926,258.00	0.14	8,622,919.94	0.14	The operating margin represents how efficiently a company is able to generate profit through its core operations.Higher margins are considered better than lower margins, and can be compared between similar competitors but not across different industries.
		Revenue	63,038,579.00		60,068,743.57

10. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Desh Rakshak Aushdhalaya Limited objectives, projections, estimates and expectations might be construed as forward looking statements within the meaning of applicable laws and regulations.

Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company s operations include a downward trend in the FMCG industry, rise in input costs, exchange rate fluctuations and significant changes in political and economic environment, environment standards, tax laws, litigation and labour relations.

To ensure our Long term corporate success, company implements risk management system which includes recording, monitoring and controlling internal enterprise business risks and addressing them through informed and objective strategies.