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Source Natural Foods and Herbal Supplements

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Directors Report Year End : Mar '16    Mar 15

DIRECTORS'' REPORT

To,

Members ,

Source Natural Food and Herbal Supplements Limit ed Bangalore

The Directors are pleased to present 21st Annual Report of the Company together with Audited Balance Sheet and Profit and Loss Account for the year ended 31 March 2016.

1. FINANCIAL RESULTS: _(Rs. Lakhs)_

Particulars

31.03.2016

31.03.2015

Total revenu e

09 3.4

654. 43

Profit/ (Loss) before exceptional and extraordinary i and tax

47.72

6.21

Exceptional Item s

-

041

Profit before extraordinary items and tax

47.72

5.79

Extraordinary Items

-

-

Tax expenses

5.05

-

Net Profit/(Loss) carried to Balance Sheet

42.67

5.79

Earnings Per Share (Basic/ Diluted)(Basic for 31C3.205

0.66

026

2. OPERATIONS:

The Total revenue of the Company for the year endetdM3arch, 206 was Rs.

093.4 Lakhs which has increased by6703% from the Total revenue of the previous year which was Rs654. 43Lakhs. The increase in revenue is due to the expansion in the sales of flagship product of the Company. The Company has made an additional investment of Rs. 4.1 5 Lakhs in the Fixed Assets during the ye a The Net Profit of the Company during the financial year under review is42R7. Lakhs as compared to Rs. 5.79 Lakhs during the previous year During the year there was increase in expenses towards advertisement, august punting the Marketing team land and building of the Products the Company. Since the benefits of these expenses will be derived over a long period of time, the performance profits of the company certain to grow in the future years .

3. FUTURE OUTLOOK:

The Ayurveda and Herbal Supplement sector has huge potential for growth not only in India but all over the world The Company has a vision to provide Ayurveda and Herbal Supplements to everyone who needs act loss the globe .

Your Company focuses on such products which will bring Ayurveda in an individual’s daily diet by manufacturing various Ayurvedic and herbal supplements products.

The Company will continue to contribute its might to the growth of Ayurveda and Herbal Supplements and at the same time hence shareholders wealth by accelerated performance.

4. DIVIDEND:

In order to conserve the available resources for future grow your Directors do not recommend any Dividend for the financial year ended 3103.201

5. DIRECTORS:

Pursuant to the provisions of Section 52 of the Companies Act, 203 and the Articles of Association of the Company, MNarayanan Narasimhan, Chairman and director retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible, offers himself for-appointment.

6. AUDITORS:

M/s Vijay Narayan and Co, Chartered Accounts, Firm Registration NumbeiS,0C9F were appointed as the Statutory Auditors of the Company at the 28th Annual General Meeting of the Company held on 5th September, 204, for a period of three years, subject to ratification every annual general meeting the appointment was ratified at the 20th Annual General Meeting of the Company held on 26th September, 205

The Company has received a Special Notice under Sanction 40(4) of the Companies Act, 203, from eligible member(s) for appointing M/s Srinaga & Giridharan, Chartered Accountants, 36/1, I Floor, 5th MaiChamarajpet, Bangalore 560 0B, Chartered Accountants, as the Statutory Auditors of the Company, 2it Annual General Meeting of the Company for a period of 5 years.

M/s Srinaga & Giridhara Chartered Accountants have given written consent for their appointment and also certificate that the appointment, if made, shall be in accordance with the conditions prescribed under the Companies Act, 20B and the Rules made there under and that it satisfies the criteria provided under Section Ml of the Companies Act, 203

The Board recommends the appointment M /s Srinaga & Giridhar,a chartered Accountants

The Statutory Auditor’s Report for the financial year 2015-6 does not contain any qualifications, reservation or adverse remarks and therefore does not require any comments from the Directors.

7. FIXED DEPOSITS:

Your Company has not accepted any Fix Deposits from the Public within the meaning of Section 73 to 76 of the companies Act, 20B , during the year under review.

8. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the provisions under Section 34(5) of the Companies Act, 20B, with respect to Directors’ Responsibility Statement, the Directors confirm:

a. That in the preparation of the Annual Accounts , applicable Accounting Standards have been followed and 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 tea and fair view of the state of affairs of the Company and of the financial year and of the profit and loss (tire Company for that period;

c. That they have taken proper and sufficient care those maintenance of adequate accounting records accordance with the provisions of the Companies Act,20B, for safeguarding the assets of the Company and preventing and erecting fraud and other irregularities;

d. That they have prepared the annual accounts on a go in concerns basis ;

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

f. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operation 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 whiffed financial statements related on the date of these port

11. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

The Board had appointed Mr. Ajay S Shrivastava, Company effectively in whole time practice, to carry out Secretarial Audit under the provisions of Section 2(4 of the Companies Act, 203 for the financial year 2015-16. The report of the Secretarial Auditor is annexed to this report as Anixter e

The Secretarial Auditor has observed that Company has not complied with the provisions stated in Section 203 of the Companies Act, 203 with regard appointment of the Chief Financial Officer (CFO) during the Audit period.

In this connection the explanation of the Board is as follows:

The Paid-up Share Capital of the Company is less than Rs.0.00 crores and it has already appointed other Key Managerial Personnel. However he Company is in process of selecting a suitable candidate for the post of Chief Financial Officer, which will be completed at the earliest.

12. EXTRACT OF ANNUAL RETURN:

Pursuant to the Section 92(3) of the Companies Act . extract of the Annual Return is annexed to this port in Form No. MGT as Annexure-2

13. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report pursuant to the Corporate Governance Clause of the Listing Agreement EBI(LODR) Regulations, 205 is annexed to this report as Annexure

14. CORPORATE GOVERNANCE REPORT:

The Report on Corporate Governance s per Schedule V of the SEBI (LODR) Regulations, 205 is attached herewith as Annexure 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 oi employees during the year 20516 covered under the provisions of Section 97(E) of the Companies Act, 203 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 204.

Disclosures pertaining to remuneration and other details as required Sanction 97(2) of the Act read with Rule 5() 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 PERFOMANCE EVALUATION OF THE BOARD AND POLICY ON REMUNERATION:

Pursuant to the requirement under Section B4(3)(e) and Section 78(3) of the Companies Act, 203, the policy on appointment of Board members including criteria for determining qualification, positive tributes’, independence of a director and the policy on remuneration of Directors, KMP and other employees is attached as Annexure 6 which forms part of this report.

17. POLICY IN TERMS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has adopted the Public pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, prohibition and redressal) Act, 203.

During the year under review, the Company has not received any complain Harassment from any of the women employees of the Company.

18. 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 06.04.2015, 27.05.2015, 12.08.2015, 14.11.2015, 11.02201 6.

19. DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors of the Company have given the Declaration pursuant to the provisions of Section 49 of the Companies Act, 203.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to the provisions of Section 34 of the Companies Act, 203 read with Rule 8(3) of the Companies (Accounts Rules 204, the details of conservation of energy and technology absorption and Foreign exchange earnings and outgo are attached as Annexure- 7

21. RESEARCH AND DEVELOPMENT:

Ayurveda is a system of Medicine with high credentials as a Holistic Healing and wellness Science. It is concerned with the whore smith complete system rather than with the analysis or treatment of parts ant tempts to tat both the Mindnd the Body.

Research and Development through scientific validation will help to reinstate the high credentials of Ayurveda System of Medicine as a holistic Healing and wellness science.

Your Company understands that combining rich Ayurveda wisdom with modern science will help in providing simple but effective methods of Ayurveda.

Research and Development activities undertaken by the Company will also enable it to adhere to the benchmarks and standards set by the Government and other Standard Institutes.

The focus of tedious Research & Development activities of the Company to bring more herbal and organic products in to the existing/new product portfolio and to add more value to the existing products and Develop organic food and nutritional supplements with an opimt um mix of naturally available ingredients for attaining a sustainable improvement in the Health of all age Groups

22. LISTING:

The shares of your Company are listed in the BSE Limited.

23. CODE OF CONDUCT:

The Company has adopted a uniform Code 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.

24. 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 fimeru Ayurveda Pritea Limited

25. 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 system mitigate them are in plied the opinion of the Board, at present there are no risks which hamates the existence of the Company

26. 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 86 of the Companies Act, 203 during the year under review and hence the details required to be furnished herein are NIL.

27. 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, 203 and the listing agreement Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations; 2015

The details of the tractions with related parties provided in the Notes to the financial statement®^ also in Form AO-C as Annexure 8.

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

The Company has in place adequate intern Conical 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

29. THE DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR:

1 Mr. Arvind Varchaswi N was reappointed as the Managing Director of the Company with effect fortune 26, 205 for a period of 5 years;

2 Mrs. RashmP G, Company Secretary; signed from the post with deft from 3s! July, 205.

3. Mr. Vijayendra. R was appointed as Company Secretary with effect from 1 August, 205.

30. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The following are the details of the under Committee off the Company as on 31st March 2016.

Name

Designation

Mr. Gowra Srinivas

Chairman

Mr. Nkhil Sen

Member

Mr. Sriram Chandrasekaran

Member

The Company has established a vigil mechanism which is overseen through the Audit Committee. The Audit Committee airman has been appointed as the Omdsman of Vigil mechanism. Adequate safeguards against victimization of employees and Directors who express their concerns, forms part of affairs The Company has also provided direct access to the chairman of Audit Committee on reporting issues concerning the interests of the employees and the Company. The policy is available on the website of the Company

31. 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 holding or joint venture or associate company oh e Company.

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to express their granite am nous 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:11.8.2016 Arvind Varchaswi N. Nikhil Sen

Managing Director Director

DIN: 00143713 DIN: 00842114

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