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Directors Report of Source Natural Foods & Herbal Supplements Ltd.

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, 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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