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Source Natural Foods and Herbal Supplements

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Directors Report Year End : Mar '15    « Mar 14
Dear members,
 
 The Directors are pleased to present 20th Annual Report of the
 Company together with Audited Balance Sheet and Profit and Loss
 Account for the year ended 31st March 2015.
 
 1. FINANCIAL RESULTS:                                  (Rs. Lakhs)
 
 Particulars                                   31.03.2015      31.03.2014
 
 Total revenue                                   654.43          455.12
 
 Profit/ (Loss) before exceptional and 
 extraordinary items                              16.21           17.23
 and tax
 
 Exceptional Items                                 0.41              -
 
 Profit before extraordinary items and tax        15.79          17.23
 
 Extraordinary Items                                  -              -
 
 Tax expenses:                                        -              -
 
 Net Profit/(Loss) carried to Balance Sheet       15.79          17.23
 
 Earnings Per Share (Basic/ Diluted)
 (Basic for 31.03.2015                             0.26           0.33
 
 2. OPERATIONS:
 
 The Total revenue of the Company for the year ended 31st March, 2015
 was Rs. 654.43 Lakhs which has increased approximately by 43.79% from
 the Total revenue of the previous year which was Rs. 455.12 Lakhs. The
 increase in revenue is due to the expansion in the sales of flagship
 products of the Company. The Company has made an additional investment
 of Rs.  25.53 Lakhs in the plant & Equipment and Rs. 7.77 Lakhs
 towards Building. The Net Profit of the Company during the financial
 year under review is Rs. 15.79 Lakhs as compared to 17.23 Lakhs during
 the previous year. The Company spent Rs. 34.43 Lakhs more than the
 previous year on augmenting the Marketing team and Rs.37.42 Lakhs over
 brand building of the Products.
 
 Since these expenses will derive profits eventually in the future
 years, your company is confident of performing better in the coming
 years.
 
 3. FUTURE OUTLOOK:
 
 Company''s vision is to make the Ayurveda reach the masses across the
 globe. Your Company focuses on such products which will bring Ayurveda
 in to an individual''s daily diet. Company manufactures various
 Ayurvedic products in the form of medicines and herbal supplements.
 
 The Company intends to focus and increase the market share of its
 products by increase the products range.
 
 4. DIVIDEND:
 
 In order to conserve the meagre resources for future growth, your
 Directors do not recommend any Dividend for the financial year ended
 31.03.2015.
 
 5. DIRECTORS:
 
 Pursuant to the provisions of Section 152 of the Companies Act, 2013
 and the Articles of Association of the Company, Mr. Arvind Varchaswi
 N, Managing Director retire by rotation at the conclusion of the
 ensuing Annual General Meeting and being eligible, offers himself for
 re-appointment.
 
 Mr. Chandrakant L Rathi, Independent Director of the Company was
 appointed on 12th November, 2010. As per the provisions of Section 149
 of the Companies Act, 2013, he is eligible for appointment as
 Independent Director for a term of five years.
 
 The Board recommends his appointment as Independent Director for a
 period of five years.
 
 The profile Mr. Chandrakant L Rathi are given elsewhere in the Annual
 Report.
 
 6. AUDITORS:
 
 M/s. Vijay Narayan & Co., Chartered Accountants were appointed as the
 Statutory Auditors of the Company at 19th Annual General Meeting of
 the Company held on 15th September, 2014 to hold office until the
 conclusion of the Annual General Meeting of the Company to be held
 during the year 2017 subject to the ratification of members at every
 Annual General Meeting.
 
 In view of the above, necessary Resolution is proposed to be passed at
 the 20111 Annual General Meeting ratifying the appointment of M/s.
 Vijay Narayan & Co., Chartered Accountants as the Statutory Auditors
 of the Company from the conclusion of the 20th Annual General Meeting
 of the Company until the conclusion the next Annual General Meeting of
 the Company
 
 The Statutory Auditor''s Report for the financial year 2014-15 does
 not contain any qualification, reservation or adverse remarks and
 therefore does not require any comments from the Directors.
 
 7. 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.
 
 8. DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 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 judgements 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 and of the
 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 of
 the Companies Act, 2013, for safeguarding the assets of the Company
 and for preventing and detecting fraud and other irregularities;
 
 d. That they 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.
 
 9. CHANGE IN THE NATURE OF BUSINESS:
 
 There is no change in the nature of business of the Company during the
 year.
 
 10. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL
 POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR
 TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
 
 No material changes and commitments affecting the financial position
 of the Company occurred between the end of the financial year to which
 these financial statements relate on the date of this report.
 
 11. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
 
 The Board has appointed Mr. Ajay S Shrivastava, Company Secretary in
 whole time practice, to carry out Secretarial Audit under the
 provisions of Section 204 of the Companies Act, 2013 for the financial
 year 2014-15. The report of the Secretarial Auditor is annexed to this
 report as Annexure-1.
 
 The Secretarial Auditor has observed that the Company has not complied
 with the provisions stated in Section 203 of the Companies Act, 2013
 with regard to appointment of the Chief Financial Officer (CFO) during
 the Audit period.
 
 In this connection the explanation of the Board is as follows:
 
 The Company after incurring losses has now entered into revival stage
 and has started earning profits.
 
 The Paid-up Share Capital of the Company is less than Rs. 10.00 crores
 and it has already appointed other Key Managerial Personnel. However
 appointment of Chief Financial Officer will also be completed at the
 earliest.
 
 12. EXTRACT OF ANNUAL RETURN:
 
 Pursuant to the Section 92(3) of the Companies Act, 2013 extract of
 the Annual Return is annexed to this report as Annexure-2
 
 13. MANAGEMENT DISCUSSION AND ANALYSIS:
 
 The Management Discussion and Analysis Report pursuant to the
 Corporate Governance Clause of the Listing Agreement is annexed to
 this report as Annexure- 3
 
 14. CORPORATE GOVERNANCE REPORT:
 
 The Report on Corporate Governance as per Clause 49 of the Listing
 Agreement is attached herewith as Annexure-4 which forms a part this
 report. The Compliance Certificate on Corporate Governance received
 from the Statutory Auditors is also given as an Annexure to this
 report.
 
 15. PARTICULARS OF REMUNERATION TO DIRECTORS / KMP / EMPLOYEES:
 
 There were no employees during the year 2014-15 covered under the
 provisions of Section 197(12) of the Companies Act, 2013 read with
 Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
 Personnel) Rules, 2014.
 
 Disclosures pertaining to remuneration and other details as required
 under Section 197(12) of the Act read with Rule 5(1) of the Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
 attached as ''Annexure- 5 which forms part of this report.
 
 16. POLICY ON DIRECTORS APPOINTMENT, ANNUAL PERFORMANCE EVALUATION OF
 THE 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 criteria for determining qualification, positive attributes,
 independence of a director and the policy on remuneration of
 Directors, KMP and other employees is attached as Annexure- 6
 respectively, which forms part of this report.
 
 17. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
 
 The Company conducted five Board meetings during the financial year
 under review. The Board Meetings were held on 26.05.2014, 04.08.2014,
 14.08.2014, 13.11.2014, 14.02.2015.
 
 18. DECLARATION OF INDEPENDENT DIRECTORS:
 
 The Directors of the Company have given the Declaration pursuant to
 the provisions of Section 149 ofthe Companies Act, 2013.
 
 19. 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- 7
 
 20. RESEARCH AND DEVELOPMENT:
 
 Research & Development is a core activity in any medical
 /nutraceuticals industry. Your Company is currently involved in
 carrying out various Research & Development to bring more herbal and
 organic products in to the existing / new product portfolio and to add
 more value to the existing products. The Company is also emphasizing
 on organic food and nutritional supplements with an optimum mix of
 naturally available ingredients for attaining a sustainable
 improvement in the Health of all age Groups.
 
 21. LISTING:
 
 The shares of your Company are listed in the BSE Limited.
 
 22. CODE OF CONDUCT:
 
 The Company has adopted a uniform Code of Conduct for Directors,
 Senior Management Personnel and other Executive level officers to
 ensure proper ethical standards and further ensure due compliance to
 such established standards.
 
 23. SUBSIDARY/ HOLDING 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 Sumeru
 Ayurveda Private Limited on account of shareholding.
 
 24. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK
 MANAGEMENT:
 
 The Company has comprehensive risk assessment and minimization
 procedure which are reviewed by the Board.
 
 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
 
 25. 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.
 
 26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED
 PARTIES:
 
 All the related party transactions are entered on arm''s length basis
 and in the ordinary course of business and are in compliance with the
 applicable provisions of the Companies Act, 2013 and the listing
 agreement.
 
 The details of the transactions with related parties are provided in
 the Notes to the financial statements
 
 27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO
 FINANCIAL STATEMENTS:
 
 The Company has in place adequate internal financial controls with
 reference to financial statements. During the year under review, such
 controls were tested and no reportable material weakness in the design
 or operation were observed.
 
 28. THE DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE
 APPOINTED OR HAVE RESIGNED DURING THE YEAR:
 
 There are no appointments or resignations of directors or Key
 Managerial Personnel during the year.
 
 29. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL
 MECHANISM:
 
 The following are the details of the Audit Committee of the Company as
 on 31st March 2015.
 
 Name                               Designation
 
 Mr. Gowra Srinivas                  Chairman
 
 Mr. Nikhil Sen                      Member
 
 Mr. Sriram Chandrasekaran           Member
 
 The Company has established a vigil mechanism which is overseen
 through the Audit Committee. The Audit Committee Chairman has been
 appointed as the Ombudsman of Vigil mechanism. Adequate safeguards
 against victimization of employees and Directors who express their
 concerns, forms part of the mechanism. The Company has also provided
 direct access to the chairman of the Audit Committee on reporting
 issues concerning the interests of the employees and the Company. The
 policy is available on the website of the Company.
 
 30. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS
 SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:
 
 During the year no company has become or ceased to be a subsidiary or
 joint venture or associate company of Company.
 
 31. ACKNOWLEDGEMENTS:
 
 Your Directors take this opportunity to express their gratitude for
 continuous support and co-operation extended by Government
 Authorities, Bankers and other business associates along with our
 esteemed Shareholders and employees.
 
 Place: Bangalore                                On Behalf of the Board
 Date: 12th August, 2015             Arvind Varchaswi N.       Nikhil Sen
                                     Managing Director          Director
                                       DIN: 00143713         DIN: 00842114
Source : Dion Global Solutions Limited
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