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Esteem Bio Organic Food Processing Ltd.

BSE: 534927 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE209O01028
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NSE 05:30 | 01 Jan Esteem Bio Organic Food Processing Ltd
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VOLUME 52500
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P/E 258.33
Mkt Cap.(Rs cr) 385
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OPEN 15.50
CLOSE 15.80
VOLUME 52500
52-Week high 32.50
52-Week low 15.50
P/E 258.33
Mkt Cap.(Rs cr) 385
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Esteem Bio Organic Food Processing Ltd. (ESTEEMBIOORG) - Director Report

Company director report

TO THE MEMBERS

To

The Members

Esteem Bio Organic Food Processing Limited

Your Directors have great pleasure in presenting the Annual Report together with theAudited Accounts of the Company for the year ended at 31st March 2017.

FINANCIAL RESULTS

The summarized performance of the Company for the years 2015-16 and 2016 -17 is givenbelow:

(Rupees in Lacs)

For Financial Year Ended

Particulars

31st March 2017

31st March 2016

Total Income 371.52 390.54
Total Expenditure 242.16 258.92
Profit before Tax 129.35 131.62
Less: Tax Expense 5.93 10.35
Profit / (Loss) After Tax 123.42 121.27

FINANCIAL PERFORMANCE

During the year under review Your Company has recorded a total income of Rs. 371.52(Lacs) against Rs. 390.54 (lacs) in the previous year. Profit after taxation for thefinancial year ended on 31st March 2017 increased to Rs.123.42 against Rs. 121.27 in theprevious year.

RESERVES & SURPLUS

The Reserve and Surplus is Rs. 1607.40 Lacs as on the end of the Current year and theProfit of the Current year Rs. 123.42 Lacs has been transferred to Reserve and Surplus.

DIVIDEND

To Plough back the profits into the business the Board of Directors has not declaredany dividend during the year.

CHANGE IN THE NATURE OF BUSINESS

During the year the Company has not changed its nature of business.

DEPOSITS

The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014. No amount of principal or interest was outstanding as on the date of Balance Sheet.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments which can affect the financialposition of the Company occurred between the end of the financial year of the Company anddate of this report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

The Company has a formal system of internal control testing which examines both thedesign effectiveness and operational effectiveness to ensure reliability of financial andoperational information and all statutory / regulatory compliances. The Company has astrong monitoring and reporting process resulting in financial discipline andaccountability.

RISK MANAGEMENT POLICY

Although the company has long been following the principle of risk minimization as isthe norm in every industry it has now become a compulsion.

Therefore in accordance with Companies Act 2013 the Board members were informedabout risk assessment and minimization procedures after which the Board formally adoptedsteps for framing implementing and monitoring the risk management plan for the company.

The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues. In today's challenging and competitive environmentstrategies for mitigating inherent risks in accomplishing the growth plans of the Companyare imperative. The common risks inter alia are: Regulations competition Business riskTechnology obsolescence Investments retention of talent and expansion of facilities.Business risk inter-alia further includes financial risk political risk fidelity risklegal risk. As a matter of policy these risks are assessed and steps as appropriate aretaken to mitigate the same.

PARTICULARS OF EMPLOYEES AND OTHER DISCLOSURE

The prescribed particulars of Employees required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith as Annexure to this Report.

The information required pursuant to Section 197(12) read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofEmployees of the Company will be provided on request. In terms of Section 136 of the Actthe reports and accounts are being sent to the members and others entitled theretoexcluding the information on employees particulars mentioned in rule 5(2) of the said rulewhich is available for inspection by the Members at the Registered Office of the Companyduring the business hours on working days of the Company upto the date of ensuing AnnualGeneral Meeting. If any Member is interest in inspecting the same such Member may writeto the Compliance officer in advance.

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014

Sr. No. Name of Director/KMP and Designation Remuneration of Director/ KMP for FY 2016-17 (Rs. In Lakhs) % increase in Remuneration in FY 2016-17**
1. Mr. Jai Kumar Whole Time Director (01.04.2016 to 05.02.2017) 240000 N.A.
2. Ms. Nishu Tomar CS (01.04.2016 to 15.09.2016) 66000 NA

During the year under review Ms. Nishu Tomar Company Secretary has resigned from thepost w.e.f. September 15 2016.

The number of permanent employees as on 31st March 2017 was 3.

Average of remuneration of employees excluding KMPs Nil

No employee's remuneration for the year 2016-17 exceeded the remuneration of any of theDirectors.

Company's performance has been provided in the Directors' Report which forms part ofthe Board Report.

The key parameter for the variable component of key Managerial personnel(s) is linkedwith Company performance and Individual performance.

The remuneration of Directors KMPs and other employees is in accordance with theRemuneration Policy of the Company.

STATEMENT CONTAINING THE PARTICULARS OF EMPLOYEES IN ACCORDANCE WITH SECTION 197 OF THECOMPANIES ACT 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014 AND FORMING PART OF DIRECTORS' REPORT FOR THE FINANCIALYEAR ENDED MARCH 31 2017 NOT APPLICABLE

RE-APPOINTMENT OF DIRECTORS

In accordance with Section 152 of the Companies Act 2013 [corresponding section 255& 256 of Companies Act 1956] read with the Articles of Association of the Company Mr.Brij Kishore Sabharwal Non-Executive Director of the Company retire by rotation and arebeing eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

NAME OF THE COMPANIES WHICH HAVE BEEN BECOME OR CEASED TO BE ITS SUBSIDIARIES ANDASSOCIATE COMPANIES DURING THE YEAR

Since the Company has no subsidiaries as on 31st March 2017 provision of section 129of the Companies Act 2013 is not applicable.

STATE OF COMPANY AFFAIRS:

The Company is complying with all the applicable laws and provisions and there is noadverse action against the business operations of the Company.

FAMILIARIZATION PROGRAMME

The Company at its various meetings held during the Financial year 2016 -17 hadfamiliarize the Independent Directors with regard to the roles rights responsibilitiesin the Company nature of the industry in which the Company operates the Business modelsof the Company etc. The Independent Directors have been provided with necessary documentsreports and internal policies to familiarize then with the Company's policies proceduresand practices. Periodic presentations are made to the Board and Board Committee meeting onBusiness and performance updates of the Company Business strategy and risks involved.

Quarterly updates on relevant statutory changes and judicial pronouncements andencompassing important amendments are briefed to the Directors.

AUDITORS

The Board has recommended the ratification of appointment of M/s. Sushil Upadhyay &Associates Chartered Accountants by the shareholders in the forthcoming Annual GeneralMeeting as required under Section 139 of the Companies Act 2013 to the effect that theirappointment if made will be within the limits as prescribed under the provisions thereof.Your Directors recommend their Appointment as the Statutory Auditors of the Company.

In terms of the provisions of Section 139 of the Companies Act 2013 the appointmentof M/s. Sushil Upadhyay & Associates Chartered Accountants as the statutory of thecompany is placed for the ratification by the shareholders of the company to hold officeform the conclusion of this meeting until the conclusion of the three consecutive annualgeneral meeting and are eligible for appointment. The said re-appointment is subject toratification by the members at every Annual General Meeting.

AUDITOR'S REPORT

The observation made in the Auditors' Report read together with relevant notes thereonare self explanatory and hence do not call for any further comments under Section 134(3)of the Companies Act 2013.

INDUSTRIAL RELATIONS

During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.

EXTRACT OF THE ANNUAL RETURN

Pursuant to the provisions of Sect ion 134 (3) (a) of the Companies Act 2013 Extractof the Annual Return for the financial year ended 31st March 2017 made under theprovisions of Section 92 (3) of the Act in Form MGT -9 is annexed herewith as Annexure-I.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under the provisions of Section 314(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of The Companies (Accounts) Rules 2014 in respect ofConservation of Energy and Technology Absorption have not been furnished considering thenature of activities undertaken by the Company during the year under review.

There was no foreign exchange earning & outgo during the financial year underreview.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review the Company is not required to comply with the provisionsrelated to Corporate Social Responsibility on the basis of its financial statement.

DIRECTORS & COMMITTEES:

a) Changes in Directors and Key Managerial Personnel

During the year 2016-17 Deepika Garg has resigned from the directorship of theCompany w.e.f. 17th December 2016 and Mr. Sushil Kumar appointed in place ofher as Independent Director.

The Board of Directors expressed their deep condolence on the untimely and sad demiseof Late Mr. Jai Kumar on 05th February 2017. The Board of Director took onrecord the invaluable contribution made by Late Mr. Jai Kumar as a Director of the Companyfrom the time of his appointment until his death.

Later on Ms. Nishu Tomer who was appointed as Company Secretary has resigned from herpost with effect from 15.09.2016.

b) Declaration by an Independent Director(s) and re- appointment if any

All Independent Directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act and ListingAgreement.

c) Formal Annual Evaluation

Pursuant to the provisions of companies Act 2013 the Board has carried out annualperformance evaluation of its own performance the directors individually as well theevaluation of the working of its Audit Nomination & Remuneration and Stakeholdercommittee. The manner in which the evaluation has been carried out has been explained inCorporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

a. BOARD MEETINGS

During the year Six Board Meetings were convened and held. The details of which aregiven below. The intervening gap between the Meetings was within the period prescribedunder the Companies Act 2013.

S. No.

Date of meeting

Total No. of Directors on the Date of Meeting

No. of Directors attended

1. 27.05.2016 4 4
2. 16.07.2016 4 4
3. 15.09.2016 4 4
4. 11.11.2016 4 4
5. 17.12.2016 4 4
6. 06.02.2017 3 3

AUDIT COMMITTEE

The Board has well-qualified Audit Committee with majority of Independent Directorsincluding Chairman. They possess sound knowledge on Accounts Audit Finance TaxationInternal Controls etc.

The Audit Committee also advises the Management on the areas where internal controlsystem can be improved. The Terms of reference of the Audit Committee are in accordancewith Regulation 18 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and Section 177 of the Companies Act 2013 asfollows:

• Oversight of the Issuer's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible;

• Recommending to the Board the appointment re-appointment and if requiredthere placement or removal of the statutory auditor and the fixation of audit fees.

• Approval of payment to Statutory Auditors for any other services rendered by thestatutory auditors.

• Reviewing with the management the annual financial statements beforesubmission to the board for approval with particular reference to:

(i) Matters required to be included in the Directors' Responsibility Statement to beincluded in the Board's report in terms of clause (2AA) of Section 217 of the CompaniesAct 1956;

(ii) Any changes in accounting policies and practices and reasons for the same;

(iii) Major accounting entries involving estimates based on exercise of judgment bymanagement;

(iv) Significant adjustments made in the financial statements arising out of auditfindings;

(v) Compliance with listing and other legal requirements relating to financialstatements;

(vi) Disclosure to any related party transactions;

(vii) Qualifications in the draft audit report.

• Reviewing with the management the half yearly financial statements beforesubmission to the Board for approval.

• Reviewing with the management performance of statutory and internal auditorsadequacy of internal control systems;

• Reviewing the adequacy of internal audit function including the structure ofthe internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit.

• Discussion with internal auditors any significant findings and follow upthereon;

• Reviewing the findings of any internal investigations by the internal auditorsinto matters where there is suspected fraud or irregularity or a failure of internalcontrol systems of a material nature and reporting the matters to the Board;

• Discussion with Statutory auditors before the audit commences about the natureand scope of audit as well as post-audit discussion to ascertain any area of concern;

• Carrying out any other function as is mentioned in the terms of reference of theAudit Committee.

• COMPOSITION AND MEETINGS OF AUDIT COMMITTEE

Name of Member Designation Category
Deepika Garg** Chairman Independent Director
Sujit Gupta Kumar Member Independent Director
Jai Kumar* Member Executive Director
Sushil Kumar* Chairman Independent Director

During the financial year 2016-17 Four (4) meeting of Audit Committee was held i.e.27.05.2016 16.07.2016 11.11.2016 and 17.12.2016.

*Late Mr. Jai Kumar ceases to be on the Board of the Company w.e.f. 5thFebruary 2017.

**Ms. Deepika Garg has resigned from the Directorship of the Company w.e.f. 17thDecember 2016 and Mr. Sushil Kumar was appointed as the Director of the company in placeof her.

STAKEHOLDER RELATIONSHIP COMMITTEE

Our Company has constituted a Stakeholder Relationship Committee to redress thecomplaints of the shareholders. The committee currently comprises of three Directors. Ms.Deepika Garg is the Chairman of the committee.

COMPOSITION AND MEETINGS OF STAKEHOLDERS RELATIONSHIP COMMITTEE

Name of Member Designation Category
Deepika Garg* Chairman Independent Director
Sujit Kumar Gupta Member Independent Director
Brij Kishore Sabharwal Member Non-Independent Non Executive Director
Sushil Kumar* Chairman Independent Director

During the financial year 2016-17 Four (4) meeting of Stakeholder RelationshipCommittee was held i.e. 27.05.2016 16.07.2016 11.11.2016 and 17.12.2016.

**Ms. Deepika Garg has resigned from the Directorship of the Company w.e.f. 17thDecember 2016 and Mr. Sushil Kumar was appointed as the Director of the company in placeof her.

ROLE OF STAKEHOLDER RELATIONSHIP COMMITTEE

The Stakeholder Relationship Committee of our Board look into:

The redressal of investors complaints viz. non-receipt of annual report dividendpayments etc.

Matters related to share transfer issue of duplicate share certificatedematerializations. Also delegates powers to the executives of our Company to processtransfers etc.

The status on various complaints received / replied is reported to the Board ofDirectors as an Agenda item.

NOMINATION & REMUNERATION COMMITTEE

The Company has duly constituted Nomination and Remuneration Committee to align withthe requirements prescribed under the provisions of the Companies Act 2013.

The details of the Composition of the Nomination and Remuneration Committee are givenbelow:

Name of Member Designation Category
Deepika Garg* Chairman Independent Director
Sujit Kumar Gupta Member Independent Director
Brij Kishore Sabharwal Member Non-Independent Non Executive Director
Sushil Kumar* Chairman Independent Director

During the financial year 2016-17 Four (4) meeting of Stakeholder RelationshipCommittee was held i.e. 27.05.2016 16.07.2016 11.11.2016 and 17.12.2016.

**Ms. Deepika Garg has resigned from the Directorship of the Company w.e.f. 17thDecember 2016 and Mr. Sushil Kumar was appointed as the Director of the company in placeof her.

TERMS OF REFERENCE

The terms of reference of Remuneration Committee includes the following:

• The remuneration committee recommends to the board the compensation terms of theexecutive directors.

• The committee to carry out evolution of every director's performance andrecommend to the board his/her appointment and removal based on the performance. Thecommittee to identify persons who may be appointed in senior management/Director inaccordance with the criteria laid down.

• Framing and implementing on behalf of the Board and on behalf of theshareholders a credible and transparent policy on remuneration of executive directorsincluding ESOP Pension Rights and any compensation payment.

• Considering approving and recommending to the Board the changes in designationand increase in salary of the executive directors. Ensuring the remuneration policy isgood enough to attract retain and motivate directors.

• Bringing about objectivity in deeming the remuneration package while striking abalance between the interest of the Company and the shareholders."

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

During the year as per Section 177(9) read with Rule 7(1) of The Companies (Meeting ofBoard and its Powers) Rules 2014 Company is required to establish a Vigil Mechanism forits Directors and employees. In order to ensure that the activities of the Company and itsemployees are conducted in a fair and transparent manner by adoption of highest standardsof professionalism honesty integrity and ethical behavior the company has adopted avigil mechanism policy. This policy is explained in corporate governance report and alsoposted on the website of company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year Company has not provided Loans Guarantees and Investments coveredunder the provisions of Section 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has no material significant transactions with its related parties which mayhave a potential conflict with the interest of the Company at large. The details oftransactions with the Company and related parties are given for information under notes toAccounts.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

In order to prevent sexual harassment of women at workplace; the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 areeffective in the Company. Under the said Act every company is required to set up anInternal Complaints Committee to look into complaints relating to sexual harassment atworkplace of any women employee. The Company has in place an Anti Sexual Harassment Policyin line with the requirements of the Sexual Harassment of Woman at Workplace (PreventionProhibition and Redressal) Act 2013. All women employees (permanent contractualtemporary and trainee) are covered under this Policy.

The following is a summary of Sexual Harassment complaints received and disposed offduring the year:

a. No. of Complaints received: 0

b. No. of Complaints disposed off : 0

MANAGERIAL REMUNERATION POLICY

Provisions relating to Managerial Remuneration as per Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 The Boardhas on the recommendation of the Nomination & Remuneration Committee framed a Policyfor Selection and appointment of Directors Senior management and their Remuneration. TheRemuneration Policy is stated in the Corporate Governance Report.

SECRETARIAL AUDIT REPORT AND EXPLANATION TO THE QUALIFICATIONS REPORTED IN THE REPORT

Provisions relating to Secretarial Audit as per Section 204 read with Rule 9 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Ms. Shalu Singhal Proprietor of Shalu Singhal & Associates CompanySecretaries to undertake the Secretarial audit of the Company. The Secretarial AuditorReport provided By the Secretarial Auditor in Form No. MR-3 has been enclosed asAnnexure-II.

Explanation to the observations as notice in the Audit Report: The Management issearching the best person for the position and the Company will strive to complete thepending e-filing with Registrar of Companies NCT of Delhi & Haryana.

CORPORATE GOVERNANCE

As per Chapter IV Regulation 15 of SECURITIES AND EXCHANGE BOARD OF INDIA (LISTINGOBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015 A Company Listed on BSE SMEPlatform is not required to contain Corporate Governance Report in its Annual Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There have been no material changes and commitments which can affect the financialposition of the Company occurred between the end of the financial year of the Company anddate of this report.

But during the financial year 2015-2016 SEBI has passed an ad interim Order dated 29thJune 2015 restraining the Company from Security market and Company has not yet receivedany and Investigation Report and Final order from SEBI.

PERSONNEL

The Management-Employees relations remained very cordial throughout the year. YourDirectors wish to place on record their appreciation of sincere and devoted servicesrendered by all the workers and staff at all levels.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state that

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis; and

(e) The directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.

(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff and workers at all levels for their continuous cooperation and assistance.

For and on behalf of board of Directors
Dated: 30/08/2017 Esteem Bio Organic Food Processing Limited
Place: New Delhi Sd/- Sd/-
Brij Kishore Sabharwal Sujit Gupta Kumar
Director Director
Din No.: 01303907 DIN No: 06642102