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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Source Natural Foods & Herbal Supplements Ltd.

Mar 31, 2024

The Board of Directors hereby submits the report of the business and operations of your Company along with the audited financial statements, for the financial year ended March 31, 2024. The Financial Highlights for the year under review are given below:

1. FINANCIAL RESULTS:

(? in Lakhs)

Particulars	31.03.2024	31.03.2023
Total revenue	2730.31	1980.04
Profit/ (Loss) before exceptional and extraordinary items and tax	322.81	273.58
Exceptional Items	5.00	0
Profit before extraordinary items and tax	317.81	273.58
Extraordinary Items	0	0
Tax expenses	144.15	61.46
Net Profit/(Loss) carried to Balance Sheet	173.65	212.11
Earnings Per Share (Basic/ Diluted)	2.7	3.3

2. PERFORMANCE REVIEW:

The Total revenue of the Company for the year ended 31st March 2024 was Rs. 2,730.31 Lakhs, as compared to the total

revenue in previous year of Rs. 1,980.04 Lakhs.

The total expenses for the year ended 31st March 2024 have increased to Rs. 2,407.50 lakhs compared to Rs. 1,706.46

lakhs of the previous year ended 31st March 2023.

Company Performance and Valuation

â¢ Growth Metrics: The Company has experienced impressive growth with a topline of approximately 37% over the last year. Your directors are confident of continuous growth in the coming years in terms of revenue and profitability.

â¢ Financial Strength: Strong financial fundamentals are evidenced by peer-average net margins and ROE percentages. The intrinsic value of the company exceeds its current market capitalization, suggesting potential for further growth.

New Product Launch

â¢ Product Introduction: The company has planned to expand its product portfolio with new launches in Ayurvedic Medicines and Foods Supplements segments.

Marketing Strategy

â¢ Communication:

a. Pull Mechanism: Leverages reputation and cumulative advantages to attract customers rather than traditional push methods.

b. Direct Marketing: Utilizes personal presentations, product demonstrations, and participation in industry events to build and maintain relationships.

â¢ Customer Engagement & Retention:

â¢ a. Acquisition Criteria: Focuses on clients'' creditworthiness, market standing, and long-term relationship potential.

â¢ b. Ongoing Engagement: Regular interaction to align with customer preferences and market trends, aiming for

high customer satisfaction and delight.

â¢ Target Audience Segmentation:

a. National Chains: Company is engaging with some other channels for products to be on their shelfs in newer markets. Formal presentations and demonstrations are being made.

b. Local Chains: Informal approaches with physical stock presentations and product benefits explanations.

c. Family or standalone Stores: Personalized engagement with high retention.

â¢ Distributors & Exporters: Tailored strategies for supply and export are being worked upon continuously as per market needs.

â¢ Industry Challenges and Future Outlook

a. Labour Issues: Shortage of skilled labor and resistance to automation due to traditional methods.

b. Automation: The shift towards high-end automation is ongoing but slow, with a need for systematic training for new technologies.

3. FUTURE PROSPECTS & OUTLOOK:

The future looks to be very interesting for the dietary supplements market. Ayurveda and herbal are increasingly becoming "back to roots" answers to modern problems. Your company vision is to make the Ayurveda reach across the globe by focusing on selling Ayurveda-based and immunity-boosting products. The requirements of consumers have shifted to healthy foods and beverages options. With the onset of Covid-induced pandemic, consumers are now demanding for immunity boosters and this trend is boosting FMCG immunity portfolio.

Your Company intends to focus on increasing their portfolio of immunity-boosting products and will continue to contribute towards the growth of Ayurveda and Herbal Supplements and at the same time enhance shareholders wealth by accelerated performance.

Source Natural is all geared up for 2024-25 with new product lines. The focus will be on offering wellness products enriched with Ayurvedic herbs.

4. RESEARCH AND DEVELOPMENT:

Ayurveda refers to natural ancient healthcare system and science of medicine The Indian ayurvedic products market is primarily driven by the increasing preference for organic and natural products among the masses. In line with this, the rising awareness regarding the harmful effects of chemicals utilized in the food and daily use products and the growing health-consciousness among individuals are creating a positive market outlook. Moreover, the penetration of high-speed internet and the rising popularity of social media among the masses are further providing a boost to the demand for ayurvedic products in India. The research methodology should be planned and adopted accordingly.

5. DIVIDEND:

In order to conserve the available resources for future growth, your directors do not recommend any dividend for the financial year ended 31-03-2024.

6. AMOUNT TRANSFERRED TO RESERVES:

Your directors do not propose to transfer any amount to any reserves. The entire profit will be retained as surplus.

7. CHANGE IN THE NATURE OF BUSINESS:

As per the requirements Rule 8(5)(ii) of the Companies (Accounts) Rules, 2014, Company declares that there is no significant change in the nature of business of the Company during the financial year under review.

8. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

As per the requirements Section 134(3)(I) of the Companies Act, 2013, Company declares that, there are no significant material changes and commitments affecting financial position of the Company between 31st March, 2024 and the date of Board''s Report.

9. SHARE CAPITAL:

The Authorised Share Capital of your Company is Rs.9,00,00,000/- divided into 90,00,000Equity Shares of Rs. 10/- each. The Paid-up Capital is Rs. 6,43,69,310/- divided into 64,36,931 Equity Shares of Rs. 10/- each.

During the year under review, there is no change in the Share Capital of the Company.

a. Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees:

The Company has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees as per Rule 16(4) of Companies (Share capital and Debentures) Rules, 2014.

b. Issue of Sweat Equity Shares:

The Company has not issued any sweat equity share during the financial year, in accordance with the provisions of Section 54 of Companies Act, 2013 read with Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014.

c. Issue of Equity Shares with Differential Rights:

The Company has not issued any equity shares with differential voting rights during the financial year, as per Rule 4(4) of Companies (Share capital and Debentures) Rules, 2014.

d. Issue of Employee Stock Option:

The Company has not issued any employee stock option during the financial year, as per Rule 12 of Companies (Share Capital and Debentures) Rules, 2014.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

KEY MANAGERIAL PERSONNEL:

In compliance with Section 203 of the Companies Act, 2013, the following are the Key managerial Personnel of the Company:

Mr. Arvind Varchaswi N. - Managing Director

Mr. R. Ramachandra - Chief Financial Officer

Mrs.Ruchi Chowdhury - Company Secretary & Compliance Officer*

*Mrs. Ruchi Chowdhury has resigned with effect from 31st July 2024

A. RETIREMENT BY ROTATION

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri Tejagna Katapitia retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Your Directors recommend his re-appointment.

B. APPOINTMENT

Mrs. Ruchi Chowdhury was appointed as Company Secretary and Compliance Officer effective from April 27, 2023. Except for this, no appointment of KMP and Directors have occurred during the year under review.

C. CESSATION

No cessation of KMP and Directors have occurred during the year under review.

D. POLICY ON DIRECTORS'' APPOINTMENT, ANNUAL PERFOMANCE 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 Board adopted 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.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive directors and nonexecutive directors. The same was discussed in the Board meeting that followed, at which the performance of the Board, its Committees and individual directors were discussed.

E. DECLARATION OF INDEPENDENT DIRECTORS:

In accordance with Section 149(7) of the Companies Act, 2013, the Independent Directors of your Company, have given a Declaration that they meet the criteria of Independence as provided in sub section (6)of Section 149 of the Act. There has been no change in terms and conditions of appointment of Independent Directors.

(I) Familiarization Programmes for Independent Directors:

In accordance with the requirements of Listing Regulations, all the Independent Directors are familiarized with their roles, rights and responsibilities in the Company at the time of appointment and also on a recurrent basis. The details of the policy relating to appointment of Independent Directors and familiarization programme imparted to Independent Directors of the Company during Financial Year 2023-24 are available on the website of the Company at: http://www.source-natural.com.

F. PARTICULARS OF REMUNERATION TO DIRECTORS/KMP/EMPLOYEES:

There were no employees during the year 2023-24 covered under the provisions of Section 197of the Companies Act, 2013.

The details of Remuneration paid to the Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Form MGT-7 which is posted on website of the company. https://www.source-natural.com/pages/annual-report-annual-returns-2024.

Sl. No.	Date of the Board Meeting	Name of the Director & their Attendance
Sl. No.	Date of the Board Meeting	Mr. N. Narasimhan	Mr. Arvind Varchaswi . N	Mr. Tejagna Katpitia	Mr. Srinivas Gowra	Mr. Sriram Chandrasekaran	Mr. C L Rathi	Mrs. Bharathy
1	27.04.2023	P	P	P	P	LoA	LoA	P
2	24.05.2023	P	P	P	P	P	LoA	P
3	31.07.2023	LoA	P	P	P	LoA	P	P
4	11.08.2023	LoA	P	P	P	P	P	LoA
5	09.11.2023	P	P	P	P	LoA	P	LoA
6	14.02.2024	P	P	LoA	P	LoA	P	P

12. NUMBER OF MEETINGS OF THE AUDIT COMMITTEE:

During the year 2023-24, the Committee met 5 (Five) times on the following dates, viz, May 24, 2023, July 31, 2023, August 11, 2023, November 9, 2023 and February 14, 2024.

The following are the details of the Directors, their attendance at the Audit Committee Meeting held during the year 202324.

Name	Designation in committee	Attendance
Mr. Srinivas Gowra	Chairman	5
Mr. Sriram Chandrasekaran	Member	2
Mr. Chandrakumar L. Rathi	Member	4

13. NUMBER OF MEETINGS OF THE STAKEHOLDERS'' RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee is constituted pursuant to the provisions of the Companies Act, 2013.

During the year one meeting of the Committee was held on 9th November 2023.

The following are the details of the Members, their attendance at the Stakeholders Relationship Committee Meeting held during the year 2023-24.

Name	Designation	Attendance
Mr. Sriram Chandrasekaran	Chairman	-
Mr. Srinivas Gowra	Member	1
Mr. Arvind Varchaswi N.	Member	1

14. NUMBER OF MEETINGS OF THE NOMINATION AND REMUNERATIONCOMMITTEE:

The Nomination and Remuneration Committee is constituted pursuant to the provisions of the Companies Act, 2013.

During the year 2023-24, the Committee met 2 (Two) times on the following dates, viz April 27th, 2023 and August 11th 2023.

The following are the details of the Members, their attendance at the Nomination and Remuneration Committee Meeting held during the year 2023-24.

Name	Designation	Attendance
Mrs. Bharathy	Chairman	1
Mr. Srinivas Gowra	Member	2
Mr. Sriram Chandrasekaran	Member	1

Details of General Meeting	Date of Meeting	Number of Shareholders
		Entitled	Attended	%
Annual General Meeting	06-09-2023	3,085	25	0.81

16. A) DISTRIBUTION OF SHAREHOLDING AS AT 31st MARCH, 2024

Category / No of Shares	Number of Shareholders	% of Total Shareholders	Amount in Rs.	% of Holdings to Total shareholding
Upto - 500	2887	92.68	206097	3.20
501 - 1000	100	3.21	75875	1.18
1001 - 2000	38	1.22	53916	0.84
2001 - 3000	23	0.74	58195	0.90
3001 - 4000	11	0.35	38670	0.60
4001 - 5000	12	0.39	54924	0.85
5001 - 10000	12	0.39	90499	1.41
10001 and above	32	1.03	5858755	91.02
Total	3115	100	6436931	100

16. B) MARKET PRICE DATA AND PERFORMANCE COMPARISON:

The market price data High, Low and Close during each month from 1st April 2023 to 31st March, 2024 are mentioned below:

Trade date/Month	Monthly Market price details from 01.04.2023 to 31.03.2024
	Open	High	Low	Close
April, 2023	99.95	122.90	92.05	98.05
May, 2023	114.75	114.75	78.50	87.00
June, 2023	87.50	97.00	81.50	90.15
July, 2023	90.00	109.95	87.05	101.85
August, 2023	106.45	150.45	88.05	150.45
September, 2023	160.00	188.85	138.00	179.40
October, 2023	179.00	188.20	148.10	163.80
November, 2023	171.45	180.10	150.05	156.95
December, 2023	160.95	171.45	102.15	124.15
January, 2024	130.35	167.40	125.65	148.05
February, 2024	154.65	157.95	118.8	126.25
March, 2024	125.00	129.90	88.00	88.90

17. 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 judgments 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 on 31st March, 2024 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.

18. AUDITORS:

In accordance with Section 139 of the Companies Act, 2013 and rules there under, M/s. Srinaga & Giridharan, Chartered Accountants, Bangalore were appointed as the Statutory Auditors of the Company at 26th Annual General Meeting for a period of 5 years. The Audit Report for the financial year 2023-24 as certified by the Statutory Auditors of the Company does not contain any qualification, reservation or adverse remarks and therefore does not require any explanations from the Directors.

Reporting of Frauds by Auditors:

During the year under review, there is no instance of frauds reported by the Auditors under Section 143 (12) of the Companies Act, 2013 and the rules made thereunder.

19. SECRETARIAL AUDIT REPORT:

The Board appointed CS. Ajay Suman Shrivastava, Practicing Company Secretary, to carry out Secretarial Audit for the financial year 2023-24, under the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report is annexed to this report as Annexure-1. There are no qualifications made by the Auditor in the report. Annexure 2 is annexed as certificate of Non-Dis-Qualification of Directors.

20. COMPLIANCE WITH SECRETARIAL STANDARDS:

During the year under review, the Company has complied with the various provisions of all mandatory Secretarial Standards, including amendments thereto, as issued by the Institute of Company Secretaries of India (''ICSI'').

21. RELATED PARTY TRANSACTIONS:

All Related Party Transactions are in compliance of the Companies Act, 2013 and the SEBI Listing Regulations. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc., which may have potential conflict with the interest of the Company at large.

All Related Party Transactions entered into by the Company were in the Ordinary Course of Business and at an Arm''s Length basis and were reviewed and approved by the Audit Committee and the Board and have been approved by shareholders also. Omnibus approval is obtained for transactions which are foreseeable and repetitive in nature. A statement of all Related Party Transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of the transactions. Complete details of Related Party Transactions are given in the Notes to Financial Statements forming part of this Annual Report.

In compliance with the requirements of the Listing Regulations, the Policy on Materiality of Related Party Transactions and on dealing with Related Party Transaction as approved by the Board may be accessed on the Company''s website: http://www.source-natural.com.

Information on transactions with Related Parties pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are given in Form AOC-2 and is attached as "Annexure - 5" to this Annual Report.

22. CREDIT RATINGS:

The Company has not obtained any Credit Rating from any agency as the same is not mandated by any Bank due to low Credit exposure of the Company.

21. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report, prepared in accordance with Schedule V of the SEBI Listing Regulations, are annexed to this report as Annexure-3.

22. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

During the year under review, there have been no significant and material orders passed by any regulators or courts or tribunal.

23. RISK MANAGEMENT:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified are systematically addressed through mitigating actions on a continuing basis. These are discussed at the Meetings of the Audit Committee and the Board of Director of the Company.

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.

23. ANNUAL RETURN:

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rule, 2014, the Annual Return of the Company for the year ended March 31, 2024, has been hosted on the Company''s website, which can be accessed at www.source-natural.com

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

According to section 134(5)(e) of the Act the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information

The Company has put in place an adequate system of internal financial controls with respect to the Financial Statement and commensurate with its size and nature of business which helps in ensuring the orderly and efficient conduct of business. No reportable material weakness in the operation was observed.

25. ESTABLISHMENT OF VIGIL MECHANISM:

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and as per SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

26. THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has formulated an Anti-Sexual Harassment policy in line with the requirement of the Sexual harassment of Woman at Workplace (Prevention, prohibition and redressal) Act, 2013. There have been NIL complaints of such nature during the period under review.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As your Company''s net worth does not exceed Rs. 500 Crores (or) Company''s turnover does not exceed Rs. 1000 Crores or company''s net profit does not exceed Rs. 5 Crores for the financial year, the provisions under Section 135 of the Act read with rules made there under, are not applicable. Hence, the compliance to the initiative of Corporate Social Responsibility is not required.

28. PREVENTION OF INSIDER TRADING:

The Board of Directors have adopted the Insider Trading Policy in accordance with the requirement of the SEBI (Prohibition of Insider Trading) Regulation,2015 as amended from time to time. The Insider Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.

The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees have confirmed compliance with the Code. The same has been displayed at the company''s website at www.source-natural.com.

29. LISTING:

The shares of your Company continue to be listed on BSE Limited and traded actively during the year and the listing fees for the year 2023-24 have been paid. Your Company has duly complied with all the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the year under review.

30. General Shareholder Information

1. 29th Annual General Meeting

Date and Time: 30th September 2024, 11:00 A.M

2. Financial Calendar (2024-25) (Tentative)

The Financial year of the company is from 1st April of the year to 31st March of the next year.

For the year ending 31st March, 2025 quarterly Un-audited / Annual Audited results shall be announced as follows:

Financial reporting for	Proposed Date
Unaudited Results for the Quarter ending: 30th June, 2024	On or before 14th August 2024
Unaudited Results for the Quarter ending: 30th September, 2024	On or before 14th November 2024
Unaudited Results for the Quarter ending: 31st December, 2024	On or before 14th February 2025
Audited Results for the year ended 31st March, 2025	On or before 30th May 2025

3) Book Closure Date: 24th day of September 2024 to 30th day of September 2024

(Both days inclusive)

4) Registered Office No: 201, Sumeru Towers, 2nd Floor, #54/46, 39th A Cross,

11th Main Road, Jayanagar 4thT Block, Bangalore - 500 041

5) Listing of Equity Shares: BSE Limited, Mumbai (BSE)

6) Listing Fees Listing fee has been paid to BSE Limited till the year 2024-2025

7) Stock Code 531398

8) ISIN No. INE679C01027

9) CIN Number L24231KA1995PLC101742

10) Plant Location: Plot No: 22 & 23, SVCIE, Bachupally, Bachupally Mandal,

Medchal Malkajigiri - Dist Hyderabad - 500 090.

31. OTHER DISCLOSURES:

a. 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-4.

b. Subsidiary, Holding, Associate 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 Sriveda Sattva Private Limited.

c. 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.

d. 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, in compliance with the applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015.

The details of the transactions with related parties are provided in the Notes to the financial statements.

e. 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. The details for the same are filed with the concerned authorities.

f. Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year:

Your company has not made any application under Insolvency and bankruptcy Code, 2016 during the year under review.

The details of difference between amount of the valuation done at the time of one time-settlement and the valuation done while taking Loan from the Banks or Financial Institutions along with the reasons thereof:

The company has not done any one-time settlement with the banks during the year under review.

32. ACKNOWLEDGEMENTS:

The Board take this opportunity to express their gratitude all the customers, vendors, investors and bankers for their continued support during the year. It places on record its appreciation for the contribution made by employees of the company at all levels. The Board also wishes to record its appreciation for business constituents like SEBI, BSE, NSDL,

CDSL etc. for their continued support in the growth of the Company.

The Board thanks the Government of India, particularly the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate affairs the State Governments, and other government agencies for their support, and look forward to their continued support in the future.

Place: Bangalore For and On Behalf of the Board

Date: 06.09.2024

SD/- SD/-

(Arvind Varchaswi N.) (Tejagna K Katpitia)

Managing Director Whole-time Director

DIN: 00143713 DIN:00445283

Mar 31, 2018

The Members,

Source Natural Foods and Herbal Supplements Limited Bangalore

The Directors are pleased to present the 23^rd Annual Report of the Company together with Audited Financial Statements for the year ended 31^st March 2018.

1. FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars	31.03.2018	31.03.2017
Total revenue	1084.74	1594.66
Profit/ (Loss) before exceptional and extraordinary items and tax	83.21	140.98
Exceptional Items	-	-
Profit before extraordinary items and tax	83.21	140.98
Extraordinary Items	-	-
Tax expenses	16.98	28.74
Net Profit/(Loss) carried to Balance Sheet	80.09	140.44
Earnings Per Share (Basic/ Diluted)	1.24	2.18

2. OPERATIONS:

The Total revenue of the Company for the year ended 31^st March, 2018 was Rs. 1084.74 Lakhs, which has decreased by 31.98% as compared to the total revenue of the previous year of Rs. 1594.66Lakhs.This is result of the lower off take by the traders on account of uncertainty on Goods & Services tax implementation during the year. The Net Profit of the Company during the financial year under review is Rs. 80.09 Lakhs as compared to 140.44 Lakhs during the previous year.

During the year, there was decrease in expenses towards advertisement by Rs. 214.5 Lakhs as compared to the previous year of Rs. 311.18 Lakhs and also there was decrease in total expenses by Rs. 452.15 Lakhs as compared to the previous year of Rs. 1453.69 Lakhs.

3. FUTURE OUTLOOK:

The Ayurveda and Herbal Supplement sector has growing potential globally. The Company has built its strengths to build a portfolio of products that cater to an individual''s health and wellness needs. Ayurveda medicines, herbal supplements and daily consumption health products will continue to be an area of focus. Maintaining high standards of quality that contribute truly to the health of an individual will ensure that the company builds an excellent reputation as a research based developer and manufacturer and continues to contribute to wealth creation for shareholders.

The portfolio of ayurveda products will be strengthened over coming time to address specific lifestyle needs of our growing population across the globe. More products for daily intake that have a base in ayurveda and are appropriate for enhancing health of individuals of all age groups will be developed in the future.

4. RESEARCH AND DEVELOPMENT:

Ayurveda is a system of Medicine with high credentials as a Holistic Healing and wellness Science. It is concerned with the whole and complete system rather than with the analysis or treatment of parts. It attempts to treat both the Mind and the Body. Research and Development is a core activity in any Pharma industry and through its scientific validation, it will help to reinstate the high credentials of Ayurveda System of Medicine as a complete alternative wellness mechanism.

Your Company focuses on ongoing R & D, which helps it to achieve its core objectives so as 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 optimum mix of naturally available ingredients for attaining a sustainable improvement in the Health of all age Groups.

Over the years, the Company has developed a variety of products on the basis of their continued and in depth efforts in R & D and it also 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.

5. DIVIDEND:

In order to conserve the available resources for future growth, your Directors do not recommend any Dividend for the financial year ended 31.03.2018.

6. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as the Company has not declared and paid any dividend in previous years.

7. AMOUNT TRANSFERRED TO RESERVES:

The amount to be carried to Reserves is Rs. 80.09 Lakhs.

8. CHANGE IN THE NATURE OF BUSINESS:

There is no change in nature of business of the Company during the year.

9. 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.

10. SHARE CAPITAL:

The Authorised Share Capital of your Company is Rs. 9,00,00,000/- divided into 90,00,000Equity Shares of Rs. 10/- each. The Paid up Capital is Rs. 6,43,69,310/divided into 64,36,931 Equity Shares of Rs. 10/- each.

During the year under review, there is no change in the Share Capital of the Company.

a. Provision of money by company for purchase of its own shares by employees or by trustees for the benefit of employees:

b. Issue of Sweat Equity Shares:

c. Issue of Equity Shares With Differential Rights:

The Company has not issued any equity shares with differential voting rights during the financial year, as per Rule 4(4) of Companies (Share capital and Debentures) Rules, 2014.

d. Issue of Employee Stock Option:

The Company has not issued any employee stock option during the financial year, as per Rule 12 of Companies (Share Capital and Debentures) Rules, 2014.

11. DIRECTORS:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri Arvind Varchaswi N retires by rotation at the conclusion of the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

During the period under review, pursuant to Section 161 of the Companies Act, 2013, the Board appointed Mrs. Bharathy as Additional Director w.e.f August 02, 2018 who shall hold office till the ensuing Annual General Meeting. The Board recommends her appointment as Independent Women Director pursuant to the provisions Companies Act, 2013.

As per Section 149 and 161 Section of the Companies Act, 2013 and the recommendation of the Nomination and Remuneration Committee, Mrs. Bharathy has been appointed as Independent Women Director for a period of Five years, without any remuneration. The Board recommends approval of the said resolution in the ensuing Annual General Meeting.

The profiles of Directors retiring by rotation and of those proposed to be appointed are given elsewhere in the Annual Report.

Mr. Tejagna Kashmira Katpitia has been appointed as an Executive Director of the Company with effect from 01.08.2017, without any remuneration. The Board places on record and welcomes Mr. Tejagna Kashmira Katpitia and is confident that the Company will benefit immensely from his rich and varied experience as a Whole-time Director of the Company.

Mr. Nikhil Sen (Independent Director) resigned from the directorship of the Company due to his pre-occupation with effect from August 12th, 2017. The Board places on record its appreciation for the services rendered by him during his tenure.

12. NUMBER OF MEETINGS OF THE BAORD:

During the financial year under review, the Board met Four times on 26.05.2017, 12.08.2017, 13.11.2017 and 07.02.2018.

The details of the meetings of the Board are covered in the Corporate Governance Report, annexed to this report as Annexure-3.

13. KEY MANAGERIAL PERSONNEL:

In compliance with Section 203 of the Companies Act, 2013, the following are the Key managerial Personnel of the Company:

Mr. Arvind Varchaswi N. - Managing Director

Mr. Tejagna K. Katpitia - Whole-time Director

Mr. Seshadri Ramaswamy - Chief Financial Officer*

Mrs. Sweta Joshi - Company Secretary

During the year, Mr. Ravi Shankar Murthy GV resigned from the post of Chief Financial Officer of the Company with effect from 12.08.2017.

During the year, the Board has appointed Mr. Seshadri Ramaswamy as the Chief Financial Officer of the Company with effect from 13.11.2017.

14. DECLARATION OF INDEPENDENT DIRECTORS:

15. POLICY ON DIRECTORS APPOINTMENT, ANNUAL PERFOMANCE 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 available on the website of the Company: http://www.source-natural.com.

In a separate meeting of Independent directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive directors and non-executive directors. The same was discussed in the Board meeting that followed, at which the performance of the Board, its Committees and individual directors were discussed.

In accordance with Regulation 17(10) of SEBI Listing Regulations, the Board of Directors of the Company shall evaluate the performance of Independent Directors of the Company. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Directors being evaluated.

16. PARTICULARS OF REMUNERATION TO DIRECTORS/KMP/EMPLOYEES:

There were no employees during the year 2017-18 covered under the provisions of Section 197of the Companies Act, 2013.

A statement on the Ratio of the remuneration of each director to the median remuneration of the employees of the Company and the related remuneration details is provided elsewhere in the Annual report.

17. 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 judgments 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 on 31^st March, 2018and of the profit and loss of the Company for that period;

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.

18. AUDITORS:

The Audit Report for the financial year 2017-18 as certified by the Statutory Auditors of the Company does not contain any qualification, reservation or adverse remarks and therefore does not require any explanations from the Directors.

19. SECRETARIAL AUDIT REPORT:

The Board appointed Mr. Ajay Suman Shrivastava, Practicing Company Secretary, to carry out Secretarial Audit for the financial year 2017-18, under the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report is annexed to this report as Annexure-1. There are no disqualifications and adverse remarks made by the Auditor in the report.

20. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report, prepared in accordance with Schedule V of the SEBI Listing Regulations, are annexed to this report as Annexure-2.

21. CORPORATE GOVERNANCE REPORT:

The Company''s philosophy on Corporate Governance oversees business strategies and ensures fiscal accountability, ethical corporate behaviour and fairness to all stakeholders comprising regulators, employees, investors and the society at large. 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.

The Report on Corporate Governance as per Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, covering amongst other matters, the details of Meetings of the Board and Committees, along with Compliance Certificate on Corporate Governance received from the Statutory Auditors is attached herewith as Annexure-3 to this report.

22. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

During the year under review, there have been no significant and material orders passed by any regulators or courts or tribunal.

23. RISK MANAGEMENT:

The Company has comprehensive risk assessment and minimization procedure, which are reviewed by the Board and the Audit Committee of the Company. 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

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

The Company has in place adequate internal financial controls which are commensurate and adequate with the size and scale of operations of the Company. During the year under review, such controls were tested and no reportable material weakness in the design or operation were observed. The reports on Internal Audit given by M/s Krishna & Suresh, Chartered Accounts, the Internal Auditors, are placed before the Audit Committee and the Board periodically for review.

25. ESTABLISHMENT OF VIGIL MECHANISM:

The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism as defined under Regulation 22 of SEBI Listing Regulations, for directors and employees to report concerns about unethical behaviour. Adequate safeguards agaisnt 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 said policy has been also put up on the website of the Company - www.source-natural.com.

26. THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has place an Anti-Sexual Harassment policy in line with the requirement of the Sexual harassment of Woman at Workplace (Prevention, prohibition and redressal) Act, 2013. There have been NIL complaints of such nature during the period under review.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As your Company''s net worth does not exceed Rs. 500 Crores (or) Company''s turnover does not exceed Rs. 1000Crores or company''s net profit does not exceed Rs. 5 Crores for the financial year, the provisions under Section 135 of the Act read with rules made there under, are not applicable. Hence, the compliance to the initiative of Corporate Social Responsibility is not required.

However, as a good Corporate Citizen, the Company aims to provide sustainable value to the society in which it operates. Moreover, your Company is focused to bring Ayurveda into every individual''s daily diet by manufacturing various Ayurvedic and herbal products, thus elevating the healthcare standards in the country as a whole.

28. LISTING:

The shares of your Company are listed at BSE Limited and traded actively during the year. Your Company has duly complied with all the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the year under review.

29. DISCLOSURES:

a. Extract of Annual Return:

Pursuant to the Section 92(3) of the Companies Act, 2013, the extract of the Annual Return in Form MGT-9, is annexed to this report as Annexure-4 and also available on www.source-natural.com.

b. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

c. Subsidiary, Holding, Associate 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 Sriveda Sattva Private Limited. (CIN: U85191KA2009PTC042791)

d. Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013:

e. Particulars of Contracts or Arrangements made with Related Parties:

The details of the transactions with related parties are provided in the Notes to the financial statements and in Form AOC-2, being annexed to the report in Annexure-6

f. 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.

30. ACKNOWLEDGEMENTS:

Your Directors take this opportunity to express their gratitude for the assistance and cooperation extended by Government Authorities, Bankers and other business associates along with our estimated Shareholders. Your Directors also acknowledge the support extended by the Company''s employees for their dedicated services.

Place: Bangalore For and On Behalf of the Board

Date: 02.08.2018 (Arvind Varchaswi N.) (Narayanan Narasimhan)

Managing Director Director

DIN: 00143713 DIN: 00143620

Mar 31, 2016

DIRECTORS'' REPORT

To,

Members ,

Source Natural Food and Herbal Supplements Limit ed Bangalore

The Directors are pleased to present 21^st 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 ende^tdM3arch, 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 individualâs 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 Auditorâs 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. DIRECTORSâ RESPONSIBILITY STATEMENT:

Pursuant to the provisions under Section 34(5) of the Companies Act, 20B, with respect to Directorsâ 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 âAnnexure-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 tributesâ, 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 armâs 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 statementÂ®^ 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 3^s! 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

Mar 31, 2015

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

Mar 31, 2014

Dear Members,

Source Natural Foods and Herbal Supplements Limited.

The Directors are pleased to present 19th Annual Report of the Company together with Audited Balance Sheet and Profit and Loss Account for the year ended 31st March 2014.

1. FINANCIAL RESULTS:

(Rs. Lakhs)

Particulars 31.03.2014 31.03.2013

Total revenue 455.12 376.17

Profit/ (Loss) before exceptional and extraordinary items and tax 17.23 36.11

Exceptional Items - 0.64

Profit before extraordinary items and tax 17.23 35.47

Extraordinary Items - -

Tax expenses - -

Net Profit/(Loss) carried to Balance Sheet 17.23 35.47

Earnings Per Share (Basic/ Diluted) 0.33 0.79

2. OPERATIONS:

The Total revenue of the Company for the year ended 31st March, 2014 was Rs. 455.12 Lakhs which has increased approximately by 20.99% from the Total revenue of the previous year which was Rs. 376.17 Lakhs. The increase in revenue is due to the expansion in the sales market of the Company. The Company has made an additional investment of Rs. 30.23 Lakhs in the plant & machinery, Rs. 21.92 Lakhs towards building and Rs. 8.15 lakhs in Intangible assets. The Net Profit of the Company during the financial year under review is Rs. 17.23 Lakhs when compared to Rs. 35.47 Lakhs during the previous year under review. During the financial year under review, the Company has more expenses towards hiring of new staff for operations and sales team. The Company has spent Rs. 28.97 Lakhs more than it spent in the previous year towards employee related expenses. The Company has spent Rs. 30.85 Lakhs over selling and distribution expenses towards brand building of the Product. These major expenses resulted in lesser net profits during this financial year.

Since these expenses will derive profits eventually in the future years, your company is confident of performing better in the next years.

3. FUTURE OUTLOOK:

Company''s vision is to make the Ayurveda reach the mass across the globe. Your Company focuses on such products which will bring Ayurveda in to individual''s daily diet. We provide various Ayurvedic products in the form of medicines and herbal supplements.

The Company intends to focus to increase the market share of the products. The company also intends to increase its products and services.

4. DIVIDEND:

Since the Company has not yet recovered from the previous years piled up losses, your Directors do not recommended any Dividend for the financial year ended 31.03.2014.

5. DIRECTORS:

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. C. L. Rathi and Mr. Narayanan Narasimhan retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

Mr. Digvijay Dattatraya Choudhari resigned from the Directorship of the Company due to his personal reasons which was accepted by the Board on May 26, 2014 and the Board appreciates the contribution made by him towards the Company.

Mr. Srinivas Gowra, Mr. Nikhil Sen and Mr. Sriram Chandrasekaran, Independent Directors of the Company were appointed in June 25, 2010. As per the provisions of Section 149 of the Companies Act, 2013, their tenure will expire by the end of five years. Hence the Board recommends the members to re-appoint them as Independent Directors for a term of five years.

The profiles of Directors retiring by rotation are given elsewhere in the Annual Report.

6. AUDITORS:

M/s. Vijay Narayan & Co., Chartered Accountants retire as the Statutory Auditors of the Company at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. As per the provisions of Section 139 of the Companies Act, 2013 and Companies (Audit & Auditors) Rules, 2014, M/s. Vijay Narayan & Co., Chartered Accountants are eligible for re-appointment as statutory auditors for the next three years from the conclusion of this Annual General Meeting subject to the ratification of members at every Annual General Meeting. Their remuneration shall be fixed by the Board of Directors as per the terms of arrangement agreed upon.

7. FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits from the Public or its shareholders within the meaning of the section 58A of the Companies Act, 1956, during the year under review.

8. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, in respect of the financial statements as at 31st March, 2014, Your Directors state:

(i) That in the preparation of the Annual accounts, the applicable accounting standards have been followed.

(ii) That your Directors have selected appropriate accounting policies and applied them consistently and diligently so as to depict 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 account for that period.

(iii) That your Directors have taken proper and sufficient care with respect to the maintenance of required and mandated records under the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and preventing any frauds and irregularities.

(iv) That your Directors have prepared the Annual Accounts for the Financial Year ended 31.03.2014 as per the going concern concept.

9. PARTICULARS OF EMPLOYEES:

During the year under review, all the employees have drawn their salaries within the Limits specified under Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

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

Pursuant to the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the particulars of conservation of energy and technology absorption are annexed hereto and Foreign exchange earnings and outgo are NIL.

12. RESEARCH AND DEVELOPMENT:

Research & Development is a core activity in any food products industry. Your Company is currently involved in carrying out various Research & Development activities 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

13. LISTING:

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

14. 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.

15. SUBSIDIARY/ 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.

16. CORPORATE GOVERNANCE REPORT:

The Code of Corporate Governance as per Clause 49 of the Listing Requirement is attached herewith. The Compliance Certificate on Corporate Governance received from the Statutory Auditors is also given as an Annexure to this report.

17. 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 Date : August 04, 2014

On Behalf of the Board

Sd/- Arvind Varchaswi N. Managing Director Sd/- Sriram Chandrasekaran Director

Mar 31, 2013

To, Members of Source Natural Foods and Herbal Supplements Limited.

The Directors are pleased to present 18 Annual Report of the Company together with Audited Balance Sheet and Profit and Loss Account for the year ended 31st March 2013.

1. FINANCIAL RESULTS:

(Rs. Lakhs)

Particulars 31.03.2013 31.03.2012

Total revenue 376.17 155.13

Profit/ (Loss) before exceptional and extraordinary items and tax 36.11 (48.34)

Exceptional Items 0.64 16.78

Profit before extraordinary items and tax 35.47 (65.13)

Extraordinary Items - - Tax expenses - -

Net Profit/Loss) carried to Balance Sheet 35.47 (65.13)

Earnings Per Share (Basic/ Diluted) 0.79 (1.45)

2. OPERATIONS:

The Total revenue of the Company for the year ended 31st March, 2013 was Rs. 3,76,17,324 which has increased approximately by 143% from the total revenue of the previous year which was Rs. 155,13,167/-. The increase in revenue is due to the expansion in the sales market of the Company. With the efforts of the management, the Company has evolved as a profit making unit in the current year. The Company has made an additional investment of Rs. 31,22,000 in the plant & machinery during the current year under review as the Company intends to improvise and standardise the production process.

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 individual''s daily diet. We provide various Ayurvedic products in form of medicines and herbal supplements.

The Company intends to focus on the standardisation of production and related processes. It also intends to invest in the Research and Development to achieve wider product portfolio.

The Company intends to create mass awareness of the products through various advertisements and promotional media to further boost the sales of the product. In the next two years the company intends to create a strong marketing team to support the promotional activity and to establish a strong distributor network throughout the country.

4. DIVIDEND:

Since the Company has just started making profits and it needs more funds for future operations, your Directors do not recommend any Dividend for the Financial year ended 31.03.2013.

5. DIRECTORS:

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Narayanan Narasimhan and Mr. Srinivas Gowra retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

Mr. Ramesh Chandra Agarwal resigned from the Directorship of the Company due to his personal reasons which was accepted by the Board on November 05, 2012 and the Board appreciates the contribution made by him towards the Company.

The profiles of Directors retiring by rotation are given elsewhere in the Annual Report.

6. AUDITORS:

M/s. Vijay Narayan & Co., Chartered Accountants retire as the Statutory Auditors of the Company at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment for holding office until the conclusion of next Annual General Meeting, pursuant to the provisions of Section 224(ID) of the Companies Act, 1956. Their remuneration shall be fixed by the Board of Directors as per the terms of agreed upon.

7. FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits from the Public or its shareholders within the meaning of the section 58A of the Companies Act, 1956, during the year under review.

8. COMPLIANCE CERTIFICATE UNDER SECTION 383A OF THE COMPANIES ACT, 1956:

Pursuant to Section 383A of the Companies Act, 1956, the company is required to obtain compliance certificate from a Practicing Company Secretary certifying that the company has duly complied with all applicable statutory regulations and requirements and file the same with the Registrar of Companies, Andhra Pradesh. In this connection, a Compliance Certificate issued by a Practicing Company Secretary has been obtained and is attached hereto.

9. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, in respect of the financial statements as at 31st March, 2013, Your Directors state:

(i) That in the preparation of the Annual accounts, the applicable accounting standards have been followed.

(ii) That your Directors have selected appropriate accounting policies and applied them consistently and diligently so as to depict 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 account for that period.

(iii) That your Directors have taken proper and sufficient care with respect to the maintenance of required and mandated records under the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and preventing any frauds and irregularities.

(iv) That your Directors have prepared the Annual Accounts for the Financial Year ended 31.03.2013 as per the going concern concept.

10. PARTICULARS OF EMPLOYEES:

During the year under review, all the employees have drawn their salaries within the limits specified under Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

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

Pursuant to the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the particulars of conservation of energy and technology absorption are provided hereunder:-

Power and Fuel Consumption

Current Year

Electricity

a) Purchased Units (Kwh) 1,10,424.00

Total Amount (Rs.) 10,11,969.00

Rate/Unit (Rs.) 9.16

b) Own Generation Through Diesel Generator 8,184.10

Units (Kwh)

Total Amount (Rs.) 2,27,175

Cost/Unit (Rs.) 27.76

Foreign exchange earnings of the company during the current financial year is NIL and there were few expenditures in foreign currency for the purpose of renewal of certificates to an extent of Rs. 37,875.80/-.

12. RESEARCH AND DEVELOPMENT:

Research & Development is a core activity in any pharma 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

13. LISTING:

The shares of your Company are listed in the Bombay Stock Exchange and traded regularly.

14. 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.

15. 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.

16. CORPORATE GOVERNANCE REPORT:

The Code of Corporate Governance as per Clause 49 of the Listing Agreement is attached herewith. The Compliance Certificate on Corporate Governance received from the Statutory Auditors is also given as an Annexure to this report.

17. COST AUDITOR APPOINTMENT

Pursuant to Section 233B of the Companies Act, 1956 and General Circular No. 15/2011 [52/5/CAN-2011], M/s. Susarla & Co. has been re-appointed as cost auditing firm of the Company with effect from June 18, 2013 for conducting Cost Audit and issue of Cost Compliance Certificate of the Company for the financial year 2013-14.

18. 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

Date: August 23, 2013

On Behalf of the Board

Sd/- Arvind Varchaswi N.

Managing Director

Sd/- Narayanan Narasimhan

Director

Mar 31, 2012

To, The Members of Source Natural Foods and Herbal Supplements Limited.

The Directors are pleased to present 17th Annual Report of the Company together with Audited Balance Sheet and Profit and Loss Account for the year ended 31st March 2012.

1. FINANCIAL RESULTS:

(Rs. Lakhs)

Particulars 31.03.2012 31.03.2011

Sales 1,54,93,397 45.19,785

Profit/ (Loss) before exceptional and extraordinary items and tax (48,34,991) (1,30,04.720)

Exceptional Items 16,78,845 -

Profit before extraordinary items and tax - -

Extraordinary Items - -

Tax expenses - -

Net Profit/Loss) carried to Balance Sheet (65,13,836) (1,30,04,720)

Earnings Per Share (Basic/ Diluted) (1.45) (2.89)

2. OPERATIONS:

The Total revenue of the Company for the year ended 3P1 March, 2012 was Rs. 1.54.93,397 which has increased approximately 3.4 times when compared to the Total revenue of the previous year which was Rs. 45,19,785/-. The increase in revenue is due to the increased sales. The loss of the Company has decreased from Rs. 1,30,04,720 to 65,13,836 in the current financial year. The Company has made an additional investment of Rs. 10,50,000 in the plant & machinery during the current year as the Company intends to improvise and standardize the production process.

3. CHANGE OF NAME:

During the year, the name of the company has changed from 'Inwinex Pharmaceuticals Limited' to 'Source Natural Foods and Herbal Supplements LimitedÃ vide special resolution passed by the members of the Company through Postal Ballot on May 17, 2012 and approval of the Registrar of Companies, Andhra Pradesh granted on June 06, 2012.

4. FUTURE OUTLOOK:

Company's vision is to make the Ayurveda reach the mass across the globe. Your Company focuses on such products which will bring Ayurveda in to individualÃs daily diet. We provide various Ayurvedic products in form of medicines and herbal supplements.

The Company intends to focus on the standardization of production and related processes. It also intends to invest in the Research and Development to achieve wider product portfolio.

4. DIVIDEND:

In view of the losses suffered during the year and in order to conserve resources, your Directors do not recommended any Dividend for the Financial year ended 31.03.2012.

5. DIRECTORS:

Pursuant to the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Sriram Chandrasekaran and Mr. Nikhil Sen retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

During the year, Mr. Chandrakant Laxminarayan Rathi and Mr. Digvijay Choudhari have given their consents to act as Directors and pursuant to Section 264, the Board appointed them as Additional Directors in their meeting held on December 26, 2011 and their term expires at the ensuing Annual General Meeting. The Board recommends their appointment as

Directors by passing the requisite resolutions at the ensuing Annual General meeting. Notices have been received from a Member in writing, under Section 257 of the Companies Act. 1956. proposing their candidature for the office of a Director.

The profiles of Directors retiring by rotation and of those proposed to be appointed are given elsewhere in the Annual Report.

6. AUDITORS:

M/s. Vijay Narayan & Co., Chartered Accountants retire as the Statutory Auditors of the Company at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment for holding office until the conclusion of next Annual General Meeting, Pursuant to the provisions of Section 224(ID) of the Companies Act, 1956. Their remuneration shall be fixed by the Board of Directors as per the terms of arrangement agreed upon.

7. FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits from the Public or its shareholders within the meaning of the section 58A of the Companies Act, 1956, during the year under review.

8. COMPLIANCE CERTIFICATE UNDER SECTION 383A OF THE COMPANIES ACT, 1956:

Pursuant to Section 383A of the Companies Act, 1956, the company is required to obtain compliance certificate from a Practicing Company Secretary certifying that the company has duly complied with all applicable statutory regulations and requirements and file the same with the Registrar of Companies, Andhra Pradesh. In this connection, a Compliance Certificate issued by Mr. Ajay S. Shrivastava. a Practicing Company Secretary has been obtained and is attached hereto.

9. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act. 1956, in respect of the financial statements as at 31st March, 2012, Your Directors state:

(i) That in the preparation of the Annual accounts, the applicable accounting standards have been followed.

(ii) That your Directors have selected appropriate accounting policies and applied them consistently and diligently so as to depict 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 account for that period.

(iii) That your Directors have taken proper and sufficient care with respect to the maintenance of required and mandated records under the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and preventing any frauds and irregularities.

(iv) That your Directors have prepared the Annual Accounts for the Financial Year ended 31.03.2012 as per the going concern concept.

10. PARTICULARS OF EMPLOYEES:

During the year under review, all the employees have drawn their salaries within the Limits specified under Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time.

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

Pursuant to the provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the particulars of conservation of energy and technology absorption are annexed hereto and Foreign exchange earnings and outgo are NIL.

Power and Fuel Consumption

Current Year

Electricity

a) Purchased Units (Kwh) 68,466

Total Amount (Rs.) 446259

Rate/Unit (Rs.) 6.52

b) Own Generation Through Diesel Generator 2,405

Units (Kwh)

Total Amount (Rs.) 75,520

Cost/Unit (Rs.) 31.40

12. RESEARCH AND DEVELOPMENT:

Research & Development is a core activity in any pharma 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

13. LISTING:

The shares of your Company are listed in the Bombay Stock Exchange.

14. 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.

15. 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.

16. CORPORATE GOVERNANCE REPORT:

The Code of Corporate Governance as per Clause 49 of the Listing Requirement is attached herewith. The Compliance Certificate on Corporate Governance received from the Statutory Auditors is also given as an Annexure to this report.

17. COST AUDITOR APPOINTMENT

Pursuant to Section 233B of the Companies Act, 1956 and General Circular No. 15/2011 [52/5/CAN-2011], Mr. Nagendra

S. has been appointed as cost auditor of the Company with effect from July 22, 2012 for conducting Cost Audit and issue of Cost Compliance Certificate of the Company for the financial year 2011-12.

18. 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: Hyderabad

Date: August 14, 2012 On Behalf of the Board

Sd/- Arvind Varchaswi N. Managing Director Sd/- Narayanan Narasimhan Director

Mar 31, 2010

The Directors have pleasure in presenting the Fifteenth Annual Report of the Company together with the Audited Balance Sheet and Profit & Loss Account for the year ended 31st March, 2010.

1. FINANCIAL RESULTS: -

Rs. In Lakhs

Particulars 31.03.2010 31.03.2009

Sales / Job Work Charges 34.76 21.20

Profit / (Loss) before depreciation

Interest and Income Tax (PBDIT) (56.91) 0.56

Interest & Finance Charges 0.05 0.05

Depreciation 16.49 9.10

Net Profit / (Loss) before tax (73.45) (8.60)

Provision for tax NIL NIL

Net Profit / (Loss) carried to Balance Sheet (110.62) (778.81)

Earning Per Share (Basic / Diluted) (1.63) (0.10)

2. OPERATIONS: -

The Sales / Job work charges income for the year ended 31st March, 2010 was Rs. 34,76,480 (Rs. 21,20,000 for the year ended 31st March, 2009). The sales of the Company have increased considerably i.e. by 64% (approx) during the year. On the other hand, there has also been an increase in the various expenditure of the Company. Owing to such similar unexpected expenditure, the loss before tax of the Company for the year has increased from Rs. 8,59,769 to Rs. 73,44,700. But however, as a result of the approval of the Scheme of Arrangement sanctioned by the Honble High Court of AP, the Company could write off the accumulated losses substantially against its Paid-up Capital and consequently the accumulated losses during the year have declined to Rs. 1,10,61,866.

3. FUTURE OUTLOOK: -

With the approval of the Scheme of arrangement and the consequent allotment of shares to the Strategic Investors, their nominees have assumed control of the affairs of the Company as the largest shareholder. The Company is now in the process to draw several plans to undertake manufacturing of variety of Ayurvedic products including undertaking job work for various Ayurvedic Companies and firms and also line up to launch several products on its own in future.

With that intent, plans are being drawn to install new equipment with latest technology available and few old equipments are being replaced for optimization of the manufacturing capacity. Several balancing equipments are also being installed and few are being automated to shore up the capacity.

The Company is now poised to take off for steady growth in view of various accreditions obtained from various agencies like the ISO 22000 registered by Swiss based SGS HACCP certification from SGS, GMP certificate, US DA - Organic products approval, EEC and India Organic certification. These will enable the Companys products to be widely acceptable across the globe.

The Company shall also undertake the process of manufacturing various Ayurvedic capsules and tablets. It also has plans to undertake the work of export of various Ayurvedic capsules and tablets manufactured by the Company.

4. DIVIDEND:-

In view of the losses suffered during the year under review, your Directors do not recommend any Dividend for the year ended 31.03.2010.

5. DIRECTORS:-

In terms with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Arvind Varchaswi N retires by rotation, at the conclusion of the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

6. AUDITORS:

M/s. Prakash Chokda, Chartered Accountants, Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. However, the Board of Directors have decided to appoint M/s Vijay Narayan & Co, Chartered Accountants, Hyderabad in his place as Auditors of the Company for the year 2010- 2011. The Company has received Certificate from them to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. Board recommends for their re-appointment and requests members to authorize the Board to fix their remuneration.

7. COMMENTS OF THE DIRECTORS ON THE OBSERVATIONS OF THE AUDITORS: -

a) On point no. 3(a) of the Auditors Report, unsecured loans have been taken from the Promoter group company and a company relating to one of the Directors, to meet the normal working expenses since the Company was not able to operate at full capacity and generate suitable revenues.

b) On point no. 5 of the Auditors Report, the transactions with related parties are detailed in Point no. 17 of the Notes to Accounts in accordance with AS - 18 and have been duly approved by the Board of Directors from time to time. Since the bulk of transactions with parties related to Promoter / Director are in the nature of loan and repayments are made whenever surplus are available, no specific approval has been sought.

c) On point no. 9 (c ) of the Auditors Report, the detailed explanation is given in point 1 (d) in the Notes to Accounts.

d) On point nos. 2 to 4 of the Notes to Accounts, same are factual position on various matters pending with Government Authorities which are under Appeals or litigation pending final settlement. Similarly, point no. 5 of the Notes to Accounts is the position of a pending litigation.

8. FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits from the Public or it shareholders within the meaning of the section 5 8 A of the Companies Act, 1956, during the year under review.

9. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, in respect of the financial statements as at 31st March, 2010 your Directors state:

(i) That in the preparation of the Annual accounts, the applicable accounting standards have been followed.

(ii) That your Directors have selected such accounting policies and applied them consistently and made judgment 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 & loss of the Company for that period.

(iii) That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(iv) That your Directors have prepared the Annual Accounts for the Financial Year ended on 31 St March, 2010 on a going concern concept.

10. PARTICULARS OF EMPLOYEES:

During the year under review, there were no employees drawing salaries more thanor equal to the limits laid under Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975 as amended.

11. RESEARCH & DEVELOPMENT: -

The Company is planning to undertake several research works in the field of Ayurveda as well as pertaining to research of various kinds of herbal and nutritional supplements.

Company shall be focusing on the research for organic food and nutritional supplements with an optimum mix of naturally available ingredients for a sustainable HEALTH improvement for all.

12. LISTING:

The shares of your Company are listed at Bombay Stock Exchange. The Company has obtained the Certified Copy of the High Court Order relating to the approval of the Scheme of Arrangement on 6 November, 2009 and has obtained the trading permission for the reduced capital (as per the Order i.e. from Rs. 8,24,04,000 to Rs. 82,40,400) on 27th December, 2009. Further, subject to the Order received, the Company has issued 36,76,000 Equity shares on preferential basis thereby increasing the Paid up Capital from Rs. 82,40,400 to Rs. 4,50,00,400 and the listing permission for the same was accorded by the Bombay Stock Exchange on 21st May, 2010.

13. SCHEME OF ARRANGEMENT: -

As was reported in the Annual Report for the year ended 31st March, 2009, the Scheme of Arrangement u/s 391-394 of the companies Act, 1956 for reduction of capital by writing off the losses and further issue of shares to shore up the capital base has been successfully completed with the Honble High Court of Andhra Pradesh pronouncing the Order on 19th October, 2009 which has been successfully implemented also with the last stage being listing of the shares at Bombay Stock Exchange completed on 21st May, 2010.

14. CODE OF CONDUCT:-

The Company has adopted a uniform Code of Conduct for Directors and Senior Management and above Officers level to ensure ethical standards and ensure compliance to the laid down standards.

15. SUBSIDIARY COMPANIES:-

There are no subsidiaries to the Company as on date of the report.

16. CORPORATE GOVERNANCE CODE:

The Code of Corporate Governance as per Clause 49 of the Listing Agreement is attached herewith. The Compliance Certificate on Corporate Governance received from the Statutory Auditors is given as Annexure to this report.

17. ACKNOWLEDGEMENTS :-

Your Directors take this opportunity to express their grateful appreciation for the cooperation and assistance by Government Authorities, Bankers and other business associates as well as shareholders and employees.

By order of the Board

Place: Hyderabad

Date: 08.08.2010

ARVIND VARCHASWIN. NARAYANAN NARASIMHAN

Managing Director Director

Mar 31, 2009

The Directors have pleasure in presenting the 14th ANNUAL REPORT together with Audited Accounts for the year ended 31st March, 2009.

FINANCIAL RESULTS (Rs.in Lacs)

Year ended Year ended 31.03.2009 31.03.2008

Sales / Job Work Charges 21.20 43.71

Profit/ (Loss) before Depreciation

Interest and Income Tax (PBDIT) 0.56 9.42

Interest & Finance Charges 0.05 1.26

Depreciation 9.11 8.27

Net Profit/(Loss) before Tax (8.60) (10.30)

Provision for Tax Nil Nil

Net Profit/ (Loss) carried to Balance Sheet (778.80) (770.02)

OPERATIONS:

The sales / Job work Charges for the year ended 31st March 2009 was Rs 21.20 Lacs (Rs.43.71 for the year ended 31st March 2008). The Job Work Charges was declined by 48.50% as the job work with the party is terminated in July 2008 and fresh Job Work for Ayurvedic Formulations was taken up by the company w.e.f 01.02.2009. The Company could not undertake own manufacturing activity due to lack of working capital. With the mounting losses, the Company has suffered vast erosion of capital and therefore is contemplating a scheme of reconstruction of capital for embarking on a revival drive.

OUT LOOK & FUTURE PLANS

The outlook and future plans of the company are presented in Management Discussion and Analysis, forming part of this report.

DIVIDEND

Your directors have not recommended any dividend in view of the accumulated losses and need to build up long term working capital resources.

SCHEME OF ARRANGEMENT U/S 319/394 OF THE COMPANIES ACT, 1956.

The Honble High Court of Andhra Pradesh has vide order dated 19.10.2009 approved the Scheme of Arrangement u/s 391 /394 of the Companies Act, 1956 for reconstruction of capital. The Company is now in the process for implementation of the said order of the Honble High Court for reduction of capital by set-off of accumulated losses to the extent of Rs.7,41,63,600 against the Capital whereby the Paid Up Capital of the Company shall stand reduced to Rs.82,40,400 and infusion of fresh capital to the extent of Rs.341.50 lakhs by way of preferential allotment of shares and conversion of unsecured loan of Rs.26.10 lakhs into Equity shares.

FIXED DEPOSITS:

Your company has not accepted any Deposits from the Public during the year.

DIRECTORS:

Ms.C.Soujanya, & Mr.N.Narasimhan, Directors of the Company who retires by rotation and being eligible for reappointment, offers themselves for appointment.

LISTING OF SHARES:

The securities of the company are listed at The Stock Exchange, Mumbai.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2009, the applicable accounting standards had been followed.

(ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review.

(iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE:

Your Company believes in creating wealth for its Shareholders. In pursuit of this objective, the policies of the Company are designed to strengthen the ability of the Board of the Directors to supervise the management and to enhance long term shareholder value.

Pursuant to Clause 49 of the said Listing Agreement (a) Management Discussion and Analysis, (b) the Report of the Directors on the practices prevalent on Corporate Governance in the Company and (c) the Auditors Certificate on compliance of mandatory requirements of Corporate Governance are given as an annexure to this report.

AUDITORS:

Mr.Prakash Chokda, Chartered Accountant, Auditor of the company who retires at the conclusion of the Annual General Meeting has given his consent to be reappointed for the current year.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

No employees are drawing salary as specified in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 hence the details as per section 217(2A) are nil.

Information as per Section 2I7(I)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particular) in the report of Board of Directors Rules, 1988 is annexed and form part of this Report.

INFORMATION AS REQUIRED U/S 217(3)

Explanation to point No.9 a) Annexure to the Auditors Report

The Company has been incurring losses as the company is facing working capital problem and not able to sustain its day to day financial pressures, there are some instances of delays in payment of PF due, however the company cleared total outstanding before 30.04.2009.

ACKNOWLEDGEMENT

The Board of Directors wish to acknowledge the support extended by the Syndicate Bank. Your Company wish to place on record the appreciation for the devoted services rendered by employees at all levels. The board also extends its gratitude to the Companys shareholders, various Government Authorities and Stockist, Distributors for their full co- operation.

For and on behalf of the Board

Sd/-

RAMESH CHANDRA AGARWAL

Place: Hyderabad CHAIRMAN

Date: 27.11.2009

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