Source Natural Foods & Herbal Supplements Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT- INDIAN ECONOMY Healthcare

Healthcare is one of Indias largest and significant sectors, both in terms of Revenue and Employment. The Indian healthcare sector is growing at an agile pace due to its strengthening coverage, services and increasing expenditure by public as well private players. Ayurveda is witnessing a resurgence in India because people have accepted this as a way of life as opposed to the earlier notion of Ayurveda as an alternative area of medicine.

COVID-19 has created the biggest seismic shift taking health and immunity to the centre stage. Indian consumers have opened their wallets to fitness classes and activities, consuming natural foods, health supplements, and following specialized diets.

Customers embracing digital platforms on health subjects is a new reality, opening a range of opportunities for companies in the sector. As growth begins to stabilize in more developed countries such as the US, attention is turning to emerging markets with a fastexpanding middle class. Consumers have started to realize the benefits of spending today for a healthier tomorrow. In India, with relatively suboptimal access to health infrastructure, this could pave the way for a new balanced model of managing health.

Green Energy

India is working towards ambitious goals like 500 GW of non-fossil electricity capacity by 2030 and Net Zero by 2070, supported by schemes like the National Green Hydrogen Mission and the PM-KUSUM scheme. This offers numerous business opportunities, especially in solar energy, Electric vehicle (EV) charging infrastructure, etc attracting both large companies and smaller ventures.

Waste Management

Business opportunities in Indias wastewater and solid waste management sectors are vast, driven by growing urban and industrial demands, regulatory mandates, and government initiatives like the Jal Jeevan Mission and Namami Gange. Key areas for business ventures include building and operating sewage treatment plants (STPs) and effluent treatment plants (ETPs), offering Operations & Maintenance (O&M) services, developing smart water monitoring systems, promoting waste-to-energy production, and creating industrial-scale water reuse and Zero Liquid Discharge (ZLD) solutions

OUTLOOK

Some of the many latent benefits that came in conjunction with the challenges of the pandemic include a better and faster decisionmaking approach, increased focus on upskilling, and individual and team productivity. With these learnings we have developed a more optimistic future outlook, we believe that we are well-positioned to meet the challenges and generate sustainable long-term growth.

The Company is planning to invest more in R & D in order to improve the quality and standards of services and existing products.

E-commerce has emerged as strong growth driver and as the most preferred method of purchase. This trend is only set to growing the coming years. Use of Digital transformation to flare growth and innovation is not a new imperative for Source. But the pandemic has made it urgent for us to enhance our agility, reach, and data-driven decisions. Your company is riding high on the digital revolution by pursuing aggressive-commerce and digital marketing strategy to tap the growing segment and market size.

During the year we made promising start into our green energy business, reinforcing our commitment to a low-carbon future. Our operations saw successful implementation of few projects covering residential rooftop solar solutions under Pradhan Mantri Surya Ghar Muft Bijli Yojana, delivering state-of-the-art solar power solutions to organisations and ground mounted 10MW solar installation at Pavagada, Karnataka.

The Company has also forayed into wastewater management with its patented BIO-Green STP model which showed early encouraging results.

The Company will keenly focus on expanding its footprint in these new business ventures exploring emerging technologies. As we continue to grow, we remain dedicated to making green energy more accessible, reliable, and impactful for the communities we serve.

RISKS AND OPPORTUNITIES

Regulatory concerns, consumer perceptions, Competition, Environment & Climate Change, Counterfeit Products are the main concerns for the Ayurveda Industry. Regulatory Agencies all over the world are focussing on quality, efficiency, safety and standardization of herbal medicines.

Business is subject to risks and uncertainties that could have both short-term and long-term implications for the Company. The COVID-19 outbreak in 2020 and consequent measures undertaken by various governments across the world to contain its spread negatively impacted our business in the initial part of the 2020-21 financial year. Your Company not only managed these risks successfully but also converted them into opportunities.

Since the onset of Covid-19 pandemic, people are focusing on their diet, nutrition intake, and how they can possibly boost their immunity and overall health. Your company offer products to strengthen immunity for both adults and kids. From Ayurvedas standpoint, commonly available natural herbs that are found in the kitchen can do wonders for our immunity. We focus on the products based on that natural herb and they are doing extremely well with the consumers.

These risks and concerns are mitigated through appropriate risk management systems which have been an integral part of the business of the Company. The risk management system of the Company enables to reassess critical risks in changing business environment that need to be focussed on.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has a well-established and comprehensive internal control system and structure across the value chain to ensure that its assets are safeguarded, transactions are authorized, recorded and reported correctly and operations are conducted in an efficient and cost-effective manner. In order to ensure orderly and efficient conduct of business the company has put in place systems which include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit by Third party and review framework etc.

Further the Audit Committee comprises of the members from the Board so as to ensure total transparency and consists of three Independent non-executive Directors. The Committee performs the task of review of internal audit reports, internal control systems from time to time and reviews the financial Statements every quarter before recommending the same to the Board of Directors.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Source Natural has prioritised human capital development and reinforcement of expertise across critical functions. The Company believes that a competent, motivated team and a nurturing work culture are critical for achieving long-term success. In FY 2024-25, notwithstanding the pandemic-led interruptions, the Company continued to have an employee first strategy while synchronising HR processes to support the business. As a part of its strategy to build a contemporary organisation, the Company undertook organisational restructuring and delayering to create a flatter organisation.

The Company strives to ensure the health and well-being of its employees through an array of initiatives. It took care of not only the physical well-being of the employees but also their mental well-being.

The Company has been continuously working on retaining the best talent in the industry, but it is a constant challenge to retain the good talent. The Companys human resource agenda focuses mainly on building a robust and diverse talent pipeline by hiring fresh management graduates to cater to various businesses and functions, enhancing individual and organisational capabilities for future readiness, driving greater employee engagement and strengthening employee relations.

The number of permanent employees of the Company as on 31st March 2025 were 40.

CAUTIONARY STATEMENT

Statements in this Integrated Annual Report, particularly those that relate to the Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute forward looking statements within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.