jeena sikho lifecare ltd share price Management discussions

ECONOMIC OVERVIEW GLOBAL ECONOMY

The global economy is showing signs of resilience in 2023 following a turbulent year. It is expected that the slowdown will be less severe than previously anticipated. Despite the lingering effects of high inflation, tightening financial conditions, and the ongoing Russia-Ukraine war on the global economy, there is now a sense of optimism that inflation has reached its peak and that recovery may occur sooner than initially expected. Central banks efforts to tame inflation through substantial tightening of monetary policies have resulted in a decline in headline inflation. Global inflation is projected to decrease from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024. Further, the recent resolution of the US debt ceiling standoff and strong action by authorities to contain turbulence in the US and Swiss banking reduced the immediate risks of financial sector turmoil. Moreover, the rebounding of Chinas economy, improved functioning of supply chains, and the decrease in energy and food prices indicate an improvement in economic activity for 2023.

According to the International Monetary Fund (IMF), the global economy expanded by 3.5% in 2022 and is projected to decline to 3.0% in both 2023 and 2024. The growth of Advanced Economies (AEs) is expected to decline from 2.7% in 2022 to 1.5% in 2023 and 1.4% in 2024. Economic prospects for

Emerging Market and Developing Economies (EMDEs) are on average stronger than for Advanced Economies. EMDEs grew at 4.0% in 2022 and are expected to grow at 4.0% in 2023 and 4.1% in 2024. Growth in emerging and developing Asia is on track to rise from 4.5% in 2022 to 5.3% in 2023, then to moderate to 5.0% in 2024. The growth will be predominantly driven by the buoyant outlook for China and India.

INDIAN ECONOMY

The Indian economy has demonstrated remarkable resilience to external shocks and surpassed the United Kingdom to become the fifth-largest economy in the world. Despite strong global headwinds, India remains the fastest-growing major economy. Its real GDP grew by 7.2% in FY 2022-23 as against 9.1% in FY 2021-22, driven by higher private consumption and an accelerated pace of economic reforms. Further, due to increasing disposable income levels, there is a surge in household consumption in both urban and rural regions, boosting the demand across sectors. The International Monetary Fund (IMF) projects the Indian economy to expand at 6.1% in FY 2023-24 before rising to 6.3% in FY 2024-25. The economic growth will be supported by a conducive domestic policy environment, robust domestic consumption, abating of inflation, thrust on domestic manufacturing and infrastructure development, improvement in capacity utilisation, and revival in credit growth among others. Supportive policies such as the production-linked incentives (PLI) schemes and the governments emphasis on self-reliance are helping attract foreign investment, enhancing manufacturing and the countrys overall competitiveness and building a strong foundation for sustained economic growth. With unprecedented levels of optimism and multiple growth levers in place, the Indian economy remains well-positioned to navigate global headwinds in FY 2023-24 and reach the US$ 5 trillion mark by FY 2026-27.

INDUSTRY STRUCTURE AND DEVELOPMENTS Indian Ayurvedic Products Market

India is establishing itself as a health and wellness hub and focal point of Ayurveda, Yoga, and alternative therapies. Alternative medicines and ancient healing practices including Ayurveda are a big part of the Indian healthcare and wellness industry. As an alternative healthcare system, Ayurveda is being adopted by cultures globally for its preventive healthcare properties and treatment of many chronic lifestyle diseases with medicinal plants, herbs and natural products. According to IMARC Group, the Indian Ayurvedic products market size reached Rs. 626 billion in 2022 and is expected to reach Rs. 1,824 billion by FY 2027-28, exhibiting a growth rate (CAGR) of 19.3% during FY 2023 to FY 2028. Multiple factors are driving the Ayurveda market. These include rising health concerns and awareness of preventive healthcare and concerns about potential side effects of allopathic medicines. After the pandemic, a tremendous growth in the demand of Ayurvedic-based solutions has been observed. People realised that prescribed drugs have failed in offering mechanisms to build natural health and prevent chronic issues from within the body. The increasing popularity of Ayurvedic products as a safe and healthy alternative to synthetic chemicals and pharmaceuticals, the trend of ‘Turn to Nature for remedies and the affordability and easy availability of Ayurvedic products through online and offline distribution channels are propelling the market growth in India.

Indian Wellness Industry

The Indian health and wellness industry is expected to exhibit a growth rate of 5.55% during FY 2023 to FY 2028. Health and wellness refer to the complete state of well-being of the body, mind and soul of an individual. Indias ancient disciplines of yoga and Ayurveda offer therapeutic benefits and a comprehensive approach to wellness encompassing every aspect of physical, mental, and emotional health. Indias yoga and Ayurveda heritage also attract visitors from around the world who seek wellness services and authentic holistic experiences in Ayurvedic retreats, yoga ashrams and wellness centres in India. States like Kerala, Meghalaya and Goa are increasingly attracting tourists with wellness retreat packages.

The Indian Ayurveda and wellness industries are closely associated. India has a great potential to leverage Ayurveda and wellness industries for economic growth with a clear monopoly and a significant demand in the domestic as well as foreign markets. Considering its tremendous growth potential, the government is undertaking favorable initiatives to support the Ayurveda industry. The government is organising exhibitions, trade fairs, and roadshows for the promotion of Ayurveda and investing in different programs to increase the visibility, acceptability and usage of Ayurvedic products in the health system. The government endeavours to integrate the AYUSH system viz. Ayurveda, Yoga and Naturopathy, Unani, Siddha, Sowa-Rigpa and Homeopathy into the National Health ecosystem and modern medical practice to provide holistic, safe and effective healthcare. The Ministry of Ayush has a mandate to develop Ayush systems and promote the countrys indigenous alternative medicines. It has launched several programs to promote Ayurveda and increase its accessibility.

The year 2022 was a landmark year for the Ministry of Ayush as it strongly and effectively reinforced its vision and mission at national as well as global levels. The establishment of WHOs Global Centre for Traditional Medicine (GCTM) in India and the successful organisation of the first Global Ayush Investment & Innovation Summit (GAIIS) 2022 have resulted in taking Ayush to the next level of global recognition. This mega event witnessed letters of intent (LOIs) worth more than Rs. 9,000 crore in major categories like FMCG, Medical Value Travel (Heal in India), Pharma, Technology & Diagnostic and Farmers & Agriculture. It facilitated agreements with international and national institutions and various other sectors, fueling financial considerations, mutual research and increasing the reach of Ayush globally. Further, the achievements in the field of Ayush healthcare infrastructure development, research collaboration, "One Herb, One Standard and One Nation" initiative, export promotion mechanism, educational reforms, and use of Artificial Intelligence (AI) in traditional medicine have been quite noticeable in 2022. Other remarkable initiatives include the introduction of a special ‘Ayush mark for Ayush products, development of a network of Ayush parks to encourage the promotion, research and manufacturing of Ayush products across the country and the announcement of a new category named Ayush Aahar which will facilitate the producers of Ayurvedic nutritional supplements. Moreover, three National Ayush Institutes of eminence in Ayurveda, Unani and Homeopathy were inaugurated by the Prime Minister in 2022. These institutes are All India Institute of Ayurveda in Goa, National Institute of Unani Medicine in Ghaziabad, and National Institute of Homoeopathy in Delh

i. These institutes will collectively create a pool of quality human resources and availability of trained Ayush professionals. Through these institutes, 400 additional seats will be made available for UG, PG & PhD courses and 550 more beds will be added for patient care. A memorandum of understanding (MOU) was signed between the Ministry of Ayush and the Department of Biotechnology for mutual collaboration to explore the possibility of cooperation, convergence and synergy to bring out the expertise under one platform towards evidence-based biotechnological interventions in Ayush sector. It is expected that traditional healthcare and biotechnology together would enable tremendous possibilities to undertake innovative and path-breaking research. Another MOU was signed with the Ministry of Electronics and Information Technology for providing technical support to the Ministry of Ayush for digitalisation of Ayush Sector under the Ayush Grid project, as part of the Digital India Program to leverage Information and Technology to transform operational efficiency, improve service delivery and enhance the quality of services. Further, a dedicated Working Group (WG 10 – Traditional Medicine) was created in ISO under ISO/TC 215 – Health Informatics to formulate international standards on Ayush Informatics for creating a stronger presence for the International Organisation for Standardisation (ISO) of Ayush. The Talking Group (TG) for AI for traditional medicine has also been formed under Focus

Group on Artificial Intelligence for Health (FG-AI4H) at

W.H.O/ ITU-Focus Group on AI in Health. The Ministry of Ayush would lead this project along with other traditional medicine partners. The government had also mandated the Ministry of Ayush to operationalise 12,500 Health & Wellness Centres (HWCs) by FY 2023-24 to provide Ayurvedic healthcare services to rural and remote areas. The Ministry has approved 12,300 HWCs till the end of FY 2022-23. Additionally, the Ministry of Ayush has provided support for the establishment of 38 Ayush Information Cells in 34 foreign nations to provide information and guidance on Ayurveda. The Budget 2023-24 lays major emphasis on enhancing Ayush services and promoting evidence-based research in Ayush systems. The total budgetary allocation to the Ministry of Ayush has been increased by 20% to Rs. 3,647 crore. The government has also been supporting the development of GMP (Good Manufacturing Practices) and systems for the Ayurvedic products industry. The Minister of State of Ayush at the 7th Ayurveda Day 2022 stated that Ayush medicines are exported to more than 100 countries and Ayurveda is now recognised as a traditional medicine in more than 30 countries and its acceptance is fast increasing globally. The worlds growing fascination with natural remedies and traditional and alternative medicines augurs well for India and it is set to become a key player in the global healthcare industry. The growing popularity of Ayurvedic and alternative medicines and their adoption in mainstream healthcare is expected to propel the growth of the Ayurvedic products market in the coming years. Further, various strategies to promote Ayurveda and alternative therapies and the growing medical and wellness tourism in India offer lucrative growth opportunities to Ayurveda and wellness industries.

OPPORTUNITIES AND THREATS Opportunities

Government support and favourable initiatives: The government has undertaken several initiatives to promote wellness, Ayurveda, yoga and other systems in India as well as in the international markets aimed at making India a hub of medical tourism. Some of the key measures undertaken include:

The ‘Heal in India initiative has been launched to promote medical tourism in the country. The government has extended the e-medical visa facility to the citizens of 156 countries. The Ministry of Health and Family Welfare (MHFW) and the Ministry of Ayush have collaborated to develop a ‘one step portal for Medical Value Travel (MVT) promotion. Further, the Ministry of Ayush and the India Tourism Development Corporation (ITDC) signed an MOU for the promotion of MVT in Ayurveda and other traditional systems of medicine. The Ministry of Ayush also developed Central Sector Scheme for MVT to offer financial assistance to private investors for establishing Super Specialty Hospitals and Day Care Centres.

Medical and wellness tourism are key growth drivers for Indias healthcare market. India is ranked 10^th by the Medical Tourism Association on the Medical Tourism Index (MTI) for 2020-21 out of 46 destinations of the world, 12^th in the top 20 wellness tourism markets globally, and 5^th in wellness tourism markets in Asia Pacific (APAC).

The government introduced a special category of Ayush Visa for foreign nationals seeking treatment under Ayush systems/Indian systems of medicine.

The government transformed 1.5 lakh existing health centres across the country to Ayushman Bharat Health and Wellness Centres.

Ministry of Health and Family Welfare (MHFW) approved AYUSH Day Care Therapy Centers and all Central Government Health Scheme (CGHS) beneficiaries as well as pensioners can avail the benefit of these centres.

Uttar Pradesh (UP) Government sanctioned Rs. 1,138 crore for AYUSH services and the UP State Ayush Society Action Plan, which includes the rejuvenation of the infrastructure of Ayush Health and Wellness Centres of the state.

Haryanas Health and AYUSH Minister announced that Haryana state government employees will get reimbursement for Ayurvedic medicines treatment. The Haryana government also proposes to include Ayurveda subjects in MBBS course in the state.

Rising Medical and Wellness Tourism: Medical and wellness tourism are key growth drivers for Indias healthcare market. India is ranked 10^th by the Medical Tourism Association on the Medical Tourism Index (MTI) for 2020-21 out of 46 destinations of the world, 12^th in the top 20 wellness tourism markets globally, and 5^th in wellness tourism markets in Asia Pacific (APAC). India has emerged as an attractive destination for yoga and wellness with its focus on traditional therapies. Around 1.4 million medical tourists visited India in 2022. Backed by affordable treatment, quality healthcare and wellness services, and the availability of highly qualified and multilingual professionals, India is attractively positioned to catapult its share in the global wellness tourism market.

Burgeoning lifestyle diseases: Increasing prevalence of lifestyle diseases such as diabetes, hypertension, and cardiovascular diseases in India primarily due to sedentary lifestyles, stress, physical inactivity, nutritional deficiency, etc. are leading to rising demand for alternative medicines and therapies.

Popularity of Ayurveda and alternative medicine: Ayurveda has become increasingly popular in India and around the world, and has experienced significant tailwinds from COVID-related demand. More people are seeking natural and holistic treatment and personalised approaches to health and wellness, reducing dependence on pharmaceutical interventions. The Ayurveda and wellness industries are also witnessing a global consumer trend toward herbal, organic and natural health solutions, which has propelled the demand for Ayurvedic products, alternative medicines, healthcare services, and holistic treatment in India.

IRDAI mandate to include AYUSH treatments in insurance coverage: The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for health insurance providers to offer Ayush treatment as part of their coverage and the expenses incurred on treatment under AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy) shall be covered in a health insurance policy up to the sum insured.

Adoption of technology and digital platforms:

Advancements in technology and increasing use of digital platforms for marketing and distribution along with Ayurveda-based digital health platforms are also contributing to the expansion of the Ayurveda market in India. The growth of e-commerce and online platforms has helped leverage digital channels to reach a wider audience. Innovative technologies are used by companies to develop personalised Ayurvedic products and treatments and launch digital health platforms to provide online consultations and wellness plans to consumers.

Threats

Lack of awareness about Ayurveda: There is a trust deficit in Ayurveda due to a lack of awareness and the diminished evidence-based quality of treatments. There is also a common perception that Ayurvedic treatments are slow to heal. There is a need to create greater public awareness about the benefits and efficacy of Ayurveda and alternate therapies.

Lack of proper recognition: Despite its rich history and cultural significance, the Ayurvedic profession in India lacks proper recognition. Aspiring Ayurvedic practitioners have to navigate a complex landscape and overcome numerous obstacles to achieve success and make a meaningful contribution to the field.

Shortage of trained practitioners: There is a shortage of trained and qualified Ayurvedic practitioners in India. The government and private organisations should focus on training and education programs to increase the number of practitioners and improve the quality of training in the Ayush system.

Inadequate research and science ecosystem: While the government is on a major drive to promote Yoga and Ayurveda globally as key wellness initiatives, inadequate scientific scrutiny is a major concern. Ayurveda does not have a vibrant ecosystem of science and research. The lack of evidence-based research makes it difficult for Ayurveda to be accepted as a mainstream medical system.

Unregulated industry: The Ayurveda industry is still largely unregulated, leading to concerns regarding the standards, quality and authenticity of Ayurvedic treatments being offered. Effective regulation is essential to develop and maintain public trust and confidence in the system.

COMPANY OVERVIEW

Incorporated in 2017, Jeena Sikho Lifecare Private Limited (hereinafter also referred to as JSLL or Jeena Sikho or the Company) is Indias leading Ayurvedic healthcare company. The Company was founded by Mr. Manish Grover, popularly known as Acharya Manish Ji, who has been actively promoting Ayurvedic healthcare products and services since 2009. The Company offers a wide range of herbal/Ayurvedic products, alternative treatments and healthcare services, tailored to meet the unique requirements of patients. The Company operates under the globally recognised brand ‘Shuddhi, and aims to build a healthy India and spread knowledge of Ayurveda for healthcare.

Over the years, the Company has established itself as a holistic Ayurvedic healthcare service provider on a pan-India basis. Its extensive network spans 119 hospitals and clinics, including 14 Shuddhi Ayurveda Panchakarma Hospitals, also known as Hospitals & Institution of Integrated Medical Sciences (HIIMS), 21 Shuddhi Panchakarma Day Care Clinics, 4 Suddhi Clinics and 80 franchises. Its clinics and hospitals have qualified and skilled doctors having expertise in treating critical health conditions using an integrated approach of using the best solutions from alternative treatments like Ayurveda, Panchakarma, Homeopathy and Naturopathy. These treatments are complemented by its high-quality, authentic Ayurvedic products which are manufactured by reputed third parties following stringent quality requirements, and retailed through the Companys extensive network. In addition to this, the Company operates a dedicated health care contact centre (known as Contact or Order Service Provider internally). Having a solid team of skilled executives, subject matter experts, assistant managers, managers and doctors and enabled by robust technology, these centres are crucial in processing orders and assisting all needs of customers.

The Company currently has a strong presence in North, Central, Eastern and Western India. It is now foraying in the Southern states. It further intends to expand its footprint in the international healthcare market to serve people across the world. In a recent strategic move, it signed a memorandum of understanding (MOU) to establish a hospital in Vietnam.

OPERATIONAL OVERVIEW

The Company in a short span has achieved substantial growth in business volume and profitability positioning itself strongly to sustain this growth trajectory. During FY 2022-23, the Company diligently pursued its strategic agenda of expanding the healthcare services business, evolving into a holistic healthcare services company from the earlier focus on only Ayurvedic products. It is committed to broadening the scope of its offerings of all-natural healthcare services. It also strives to move up the value chain through focused efforts.

Leveraging its strong brand equity, the Company deepened its presence in the existing market and focused on expanding its geographical reach to capture a major market share. Further, it continued with its strategic approach of adopting a healthy mix of owned and franchise models to open new clinics and hospitals, enabling a rapidly expanding footprint in an asset-light manner. It is also focused on cost management and achieving efficiencies to remain a cost-competitive company. Moreover, it remained steadfast in its commitment to foster long-term customer relationships to achieve its organisational goals, increase turnover and enter into new markets.

Operational Highlights FY 2022-23

The Company opened 20 clinics and hospitals across the country including large hospitals in Lucknow, Jaipur and Navi Mumbai and a first-of-its-kind 1,000-bed HIIMS hospital in Meerut.

It expanded its footprint overseas, signing an MOU to open a hospital in Vietnam.

Particulars	FY 2022-23
Clinics and hospitals opened (Nos.)	20
Bed capacity (Nos.)	1,563
Operational beds (Nos.)	820
Occupancy (Beds)	420
Utilisation ratio	51.22%
Patients treated (Nos.)	2,41,496

FINANCIAL OVERVIEW

The Company has demonstrated remarkable agility and resilience, achieving steady growth during the year under review. It registered a robust revenue of Rs. 204 crore in FY 2022-23 as against Rs. 147 crore in FY 2021-22, recording a growth of 38.7%. Net Profit for the fiscal year stood at Rs. 34 crore compared to Rs. 11 crore in the preceding year, showing a commendable growth of 209%. EBITDA stood at Rs. 48 crore in FY 2022-23 as against Rs. 20 crore in FY 2021-22.

Statement of Standalone Financials Result for the Year Ended March 31, 2023 (Amount in Rs. Lakhs)

1. Particulars Income	For the year ended March 31, 2023
a. Revenue from operations	20,389.63
b. Other Income	228.25
Total Income	20,617.88
2. Expenses
a. Purchase of stock in trade	1,528.58
b. Change in inventories of stock-in-trade	165.44
c. Employee benefits expenses	4,343.52
d. Finance costs	70.23
e. Depreciation and amortisation expenses	312.75
f. Other expenses	9,744.36
Total Expenses	16,164.88
3. Profit before exceptional and extraordinary items and tax	4,453.00
4. Exceptional items and extraordinary items	-
5. Profit before tax	4,453.00
6. Tax Expenses
a. Current tax	1,150.07
b. Tax for earlier period	-
c. Deferred tax	(71.51)
Total tax expenses	1,078.56
7. Profit for the year	3,374.44
8. Earnings per share (Face value of Rs. 10 each)
Basic (in Rs.)	24.82
Diluted (in Rs.)	24.82

Statement of Consolidated Financials Result for the year ended March 31, 2023 (Amount in Rs. Lakhs)

Particulars	For the year ended March 31, 2023
1. Income
a. Revenue from operations	20,475.15
b. Other Income	259.51
Total Income	20,734.66
2. Expenses
a. Cost of material consumed	90.13
b. Purchases of stock-in-trade	1,528.58
c. Change in inventories of stock-in-trade	121.69
d. Employee benefits expenses	4,405.02
e. Finance Costs	70.44
f. Depreciation and amortisation expenses	320.04
g. Other expenses	9,769.30
Total Expenses	16,305.20
3. Profit before exceptional and extraordinary items and tax	4,429.46
4. Exceptional items and extraordinary items	-
5. Profit before tax	4,429.46
6. Tax Expenses
a. Current tax	1,150.07
b. Tax for earlier period	-
c. Deferred tax	(72.86)
Total tax expenses	1,077.21
7. Profit for the year	3,352.25
8. Less: Minority interest	(26.19)
9. Profit for the year attributed to the owner of the company	3,378.44
12. Earnings per share (Face value of Rs. 10 each)
Basic (in Rs.)	24.84
Diluted (in Rs.)	24.84

Key Financial Ratios

Particulars	FY 2022-23	FY 2021-22
Current Ratio	3.15	0.93
Debt-Equity Ratio	0.01	0.17
Debt Service Coverage Ratio	68.86	17.21
Return on Equity Ratio	0.27	0.31
Inventory Turnover Ratio	3.72	2.01
Trade Receivables Turnover Ratio	9.24	16.32
Trade Payables Turnover Ratio	2.52	2.50
Net Capital Turnover Ratio	3.86	-82.00

In terms of segments, revenue from Medicine sales stood at

Rs. 141.33 crore compared to Rs. 131.94 crore in FY 2021-22.

Revenue from Service sales during FY 2022-23 stood at

Rs. 38.68 crore as against Rs. 8.52 crore in FY 2021-22 and revenue from Government Panel sales stood at Rs. 23.89 crore in FY 2022-23 compared to Rs. 5.99 crore last year.

Segment-wise Revenue

( Rs. Crore)

Particulars	FY 2022-23	FY 2021-22
Medicine Sale	141.33	131.94
Service Sale	38.68	8.52
Government Panel Sale	23.89	5.99

KEY STRENGTHS

Strong R & D capability to develop medicines that can provide relief to medical conditions for which allopathy medicines do not provide much relief.

Fully integrated GMP manufacturing facility to manufacture both classical and proprietary ayurvedic formulations in the most hygienic condition and with strict adherence to prescribed norms.

Competent and experienced team of experts for the standardisation of treatments.

Well-established network of clinics, treatment centres and distribution centres.

OUTLOOK

The ayurveda and wellness industries are expected to grow significantly in the coming years, primarily led by the increasing healthcare requirements of a large population, increasing per capita expenditures on healthcare products and alternative therapies, rising demand for natural and herbal products, the governments support and increase in medical tourism in India. The demand of Ayurveda will surge in the coming years as people understand that the only way to avoid long-term health issues and avoid becoming a slave of prescription medicines is by working on gut health using the 3 R formula of healing and tools of diet, home remedies, detox, herbs, etc. Going forward, Ayurvedic solutions will play a significant role in helping people build real health by preventing and removing the root cause of chronic health issues. Ayurveda also has the potential to revolutionise the modern healthcare ecosystem and make the future medical system more sustainable. Further, advancements in digitally-enabled healthcare such as the utilisation of artificial intelligence (AI) and telemedicine will also pave the way for the growth of the Ayurveda and wellness industries.

The Company expects to maintain its growth trajectory going forward and is well-positioned to capitalise on the huge opportunity in the market. It is consistently investing in advertisement and promotion through social media and marketing activities to strengthen brand awareness and widen its reach to attract consumers. Providing holistic healthcare services and treatments is an important focus area for the Company. It has already aggressively expanded its hospitals and clinics which are expected to drive growth and enhance profitability. It further intends to expand the network, adopting a prudent mix of owned and franchisee models to ensure better margins. It also intends to drive synergies between the services and products business. With the number of treatments increasing, the demand for complementary products is set to grow. The Company is confident of meeting this without committing additional capex through its network of third-party manufacturers and thus ensures higher margins.

The Company is focused on expansion and targets to enter markets in the Southern Indian states to maximise revenue potential. It is also evaluating its growth strategy in the international market. Further, it plans to collaborate with Central and State Governments to set up AYUSH treatment facilities under various models. The Company is confident to drive sustainable growth in the future, backed by its unique business model, superior products, service capabilities and domain expertise in the market. Its strategic approach has enabled it to capitalise on emerging trends and opportunities, positioning it for continued success in the Ayurveda and wellness sectors.

RISKS AND CONCERNS

The Company has an efficient Risk Management framework in place for the timely identification, assessment and mitigation of key business risks. Key risks associated with the business and its mitigation strategies are mentioned below:

Competition risk	The Company operates in highly competitive markets with low barriers to entry. The market has both organised and unorganised players, both classified under the Ayurveda industry. Further, free information available on the internet about ayurvedic products and homemade remedies also poses a competitive risk.	Mitigation: The Company is confident to stay ahead of the competition backed by its expertise, end-to-end offerings and extensive presence. The Company has a solid portfolio of over 300+ Shuddhi-branded Ayurvedic products for various diseases and all-natural healthcare services. Additionally, it has over 200+ Ayurvedic doctors across its pan-India network who have a proven track record of delivering alternative treatments. The Company also offers virtual and telephonic consultations to enhance accessibility and convenience for patients/individuals.
Regulatory risk	Regulatory agencies all over the world are focusing on the quality, efficacy, safety and standardisation of herbal medicines. The continuously evolving regulations in the industry require an understanding of their implications and adaptation in business operations, resulting in increased cost and compliance risk.	Mitigation: The Company adheres to all statutory and regulatory requirements on a timely basis. It has demonstrated excellence in maintaining the quality of its medicines and products and is well-positioned in the market. 17 of the Companys clinics are NABH (National Accreditation Board for Hospitals & Healthcare) accredited, reflecting its commitment to maintaining the highest standards of quality and patient care.
Reputational risk	The Company depends on brand recognition and reputation. As it expands into new geographies in India and the market becomes increasingly competitive, maintaining the brand image may become increasingly difficult and expensive. The Companys inability to maintain or enhance its brand image may adversely impact its business, financial condition and results of operations. Further, its consumers who use and recommend the Companys products and services expect a high level of efficacy and quality, and the Companys failure to meet that expectation could adversely impact its brand and reputation.	Mitigation: The Company has developed its own brand "Shuddhi". It believes that the recognition and reputation of the brand among consumers have contributed significantly to the growth and success of its business, and continues to maintain a strong focus on further enhancing its reputation. The Company aims to consistently maintain quality standards and improve customer satisfaction to maintain the popularity, attractiveness and quality of its products and services. The Companys founder and Managing Director, Acharya Manish Ji, has an immense following. He proactively undertakes promotional activities across social media platforms and national television channels and organises yoga and health awareness camps.
Third-party risk	The Companys products are manufactured by third parties and it relies on franchisees for selling its products. The activities of its franchisees, agents, or distributors could have a material adverse effect on the Companys goodwill and the "Shuddhi" brand and also expose the Company to risks associated with reliance on third parties. Any disruptions at such third-party manufacturing facilities or failure of such third parties to maintain quality standards may negatively affect the reputation, business and financial condition of the Company.	Mitigation: The reputation and integrity of the parties such as franchisees, joint venture partners and other third parties with whom the Company engages in business activities, are important to the Companys reputation and ability to continue to operate in compliance with its licenses and applicable regulations. Hence, the Company ensures that such parties comply with high standards of probity and integrity through contractual protections and proper implementation of the Companys compliance and monitoring systems. JSLLs products are manufactured by reliable third parties with quality standards prescribed and monitored by the Company.
Potential litigation risk	The Company is exposed to consumer complaints and potential litigation risk on grounds of alleged deficiency in products, injuries sustained during treatments or malicious rumours. Such events may generate negative publicity and reduce consumers confidence. In addition, it may lead to time and legal costs.	Mitigation: The Company maintains a zero-tolerance policy on quality issues and employs only doctors having the necessary qualification, skills and experience. Further, it maintains strong relationships with existing consumers through its dedicated healthcare contact centres. The team at these centres actively coordinates with the customers for processing orders, addressing their queries and complaints, providing valuable information and support and ensuring their continued satisfaction with the Companys products and services. They also provide guidance on insurance and support virtual and telephonic consultations.

HUMAN RESOURCES

The Company considers its employees as one of the most valuable assets and integral to its growth and business sustainability. The Company places great emphasis on its employees and believes that they are the core of the Corporate Purpose. The HR mission is to empower employees to make continuous improvements and enhance their professional skills. The Company believes in respecting the individual rights and dignity of its people. It continues to invest in human resources to build new businesses while simultaneously improving individual and organisational preparedness for future challenges.

The Company has a qualified and professional employee base of 1,897 full-time employees as on March 31, 2023. Many of the employees, particularly the senior management, have been working with the Company for long. The Companys workforce is a prudent mix of experienced and young employees which gives it the dual advantage of stability and growth, execution of services within time and quality. Their technical know-how, experience and skill sets strengthen the Companys position in the market and provide a competitive advantage over its competitors.

INTERNAL CONTROL SYSTEMS

The Company has strong internal control systems commensurate with the nature of its business, size and complexity of its operations. In order to ensure orderly and efficient conduct of business, the Company has put in place systems that include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and review framework etc.

The team is cognizant of applicable laws and regulations particularly those related to the protection of resources and assets, and the accurate reporting of financial transactions. The audit findings are reviewed by the audit committee.