Esteem Bio Organic Food Processing Ltd Directors 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 the Audited Accounts of the Company for the year ended at 31st March, 2020.

1. FINANCIAL RESULTS

The summarized performance of the Company for the years 2019-20 and 2018 -19 is given below:

(Rupees in Lacs)
For Financial Year Ended
Particulars 31st March, 2020 31st March, 2019
Total Income 263.30 361.76
Total Expenditure 142.63 175.20
Profit before Tax 120.67 186.56
Less: Tax Expense 3.30 5.67
Profit / (Loss) After Tax 117.36 180.88

2. FINANCIAL PERFORMANCE

During the year under review, Your Company has recorded a total income of Rs. 263.30 Lacs against Rs. 361.76 lacs in the previous year. Profit after taxation for the financial year ended on 31st March, 2020 decreased to Rs. 117.36 against Rs. 180.88 lacs in the previous year.

3. RESERVES & SURPLUS

The Reserve and Surplus is Rs. 2048.87 Lacs as on the end of the Current year and the Profit of the Current year Rs. 1931.50 Lacs have been transferred to Reserve and Surplus.

4. DIVIDEND

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

5. CHANGE IN THE NATURE OF BUSINESS

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

6. DEPOSITS

The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. No amount of principal or interest was outstanding as on the date of Balance Sheet.

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

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

But during the financial year 2015-2016, SEBI has passed an ad interim Order dated 29th June, 2015 restraining the Company from Security market and Company has not yet received final order from SEBI.

8. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

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

9. RISK MANAGEMENT POLICY

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

Therefore, in accordance with Companies Act, 2013, the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

In todays challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

10. PARTICULARS OF EMPLOYEES AND OTHER DISCLOSURE

The prescribed particulars of Employees required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure to this Report. The information required pursuant to Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Employees of the Company, will be provided on request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars mentioned in rule 5(2) of the said rule which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company upto the date of ensuing Annual General Meeting. If any Member is interest in inspecting the same, such Member may write to the Compliance officer in advance.

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 (Rs. In Lakhs)

Sr. No. Name of Director/KMP and Designation Remuneration of Director/ KMP for FY 2019-20 % increase in Remuneration in FY 2019-20**
1. Mr. Sanjay Lohra, Whole Time Director Nil N.A.
2. Company Secretary 1,40,000 NA

The number of permanent employees as on 31st March 2020 was 2.

Average of remuneration of employees excluding KMPs Nil

No employees remuneration for the year 2019-20 exceeded the remuneration of any of the Directors.

Companys performance has been provided in the Directors Report which forms part of the Board Report.

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

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

11. STATEMENT CONTAINING THE PARTICULARS OF EMPLOYEES IN ACCORDANCE WITH SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 AND FORMING PART OF DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2020 NOT APPLICABLE

12. RE-APPOINTMENT OF DIRECTORS

In accordance with Section 152 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Brij Kishore Sabharwal, Non-Executive Director of the Company, retire by rotation and are being eligible offer themselves for re-appointment at the ensuing Annual General Meeting.

13. NAME OF THE COMPANIES WHICH HAVE BEEN BECOME OR CEASED TO BE ITS SUBSIDIARIES AND ASSOCIATE COMPANIES DURING THE YEAR

Since the Company has no subsidiaries as on 31st March, 2020, provision of section 129 of the Companies Act, 2013 is not applicable.

14. STATE OF COMPANY AFFAIRS:

The Company is complying with all the applicable laws and provisions and there is no adverse action against the business operations of the Company.

15. FAMILIARIZATION PROGRAMME

The Company at its various meetings held during the Financial year 2019-20 had familiarize the Independent Directors with regard to the roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, the Business models of the Company etc. The Independent Directors have been provided with necessary documents, reports and internal policies to familiarize then with the Companys policies, procedures and practices. Periodic presentations are made to the Board and Board Committee meeting on Business and performance updates of the Company, Business strategy and risks involved.

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

16. AUDITORS

The Board has appointed M/s. Sushil Upadhyay & Associates, Chartered Accountants, as the statutory auditor of the company from the forthcoming annual general meeting till the conclusion of next annual general meeting of the company as required under Section 139 of the Companies Act, 2013, to the effect that their appointment 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.

17. AUDITORS REPORT

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

18. INDUSTRIAL RELATIONS

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

19. EXTRACT OF THE ANNUAL RETURN

Pursuant to the provisions of Sect ion 134 (3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March, 2020 made under the provisions of Section 92 (3) of the Act in Form MGT -9 is annexed herewith as Annexure-I.

20. 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 Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 in respect of Conservation of Energy and Technology Absorption have not been furnished considering the nature of activities undertaken by the Company during the year under review. There was no foreign exchange earning & outgo during the financial year under review.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

22. DIRECTORS & COMMITTEES: a) Changes in Directors and Key Managerial Personnel

During the year 2019-20, there has been no change in the composition of Board of Directors of the company. Ms. Garima Verma has resigned from the post of company secretary w.e.f 30.01.2020.

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

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

c) Formal Annual Evaluation

Pursuant to the provisions of companies Act, 2013, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder committee. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

23. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS a. BOARD MEETINGS

During the year Five Board Meetings were convened and held. The details of which are given below. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

S. No. Date of meeting Total No. of Directors on the Date No. of Directors attended of Meeting
1. 30.05.2019 4 4
2. 03.09.2019 4 4
3. 12.11.2019 4 4
4. 30.01.2020 4 4
5. 25.03.2020 4 4

b. AUDIT COMMITTEE

The Board has well-qualified Audit Committee with majority of Independent Directors including Chairman. They possess sound knowledge on Accounts, Audit, Finance, Taxation, Internal Controls etc.

The Audit Committee also advises the Management on the areas where internal control system can be improved. The Terms of reference of the Audit Committee are in accordance with Regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013 as follows:

? Oversight of the Issuers financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible; ? Recommending to the Board, the appointment, re-appointment and, if required, there 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 the statutory auditors. ? Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: (i) Matters required to be included in the Directors Responsibility Statement to be included in the Boards report in terms of clause (2AA) of Section 217 of the Companies Act, 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 by management; (iv) Significant adjustments made in the financial statements arising out of audit findings; (v) Compliance with listing and other legal requirements relating to financial statements; (vi) Disclosure to any related party transactions; (vii) Qualifications in the draft audit report.

? Reviewing with the management the half yearly financial statements before submission to the Board for approval. ? Reviewing with the management, performance of statutory and internal auditors, adequacy of internal control systems; ? Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. ? Discussion with internal auditors any significant findings and follow up thereon; ? Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matters to the Board; ? Discussion with Statutory auditors before the audit commences, about the nature and 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 the Audit Committee.

COMPOSITION AND MEETINGS OF AUDIT COMMITTEE

Member Designation Category
Ms. Sita Devi Chairman Independent Director
Mr. Sujit Kumar Gupta Member Independent Director
Mr. Brij Kishore Sabharwal Member Non-Executive & Non Independent Director

During the financial year 2019-20, Four (4) meeting of Audit Committee was held i.e. 30.05.2019, 03.09.2019, 12.11.2019 and 30.01.2020.

c. STAKEHOLDER RELATIONSHIP COMMITTEE

Our Company has constituted a Stakeholder Relationship Committee to redress the complaints of the shareholders. The committee currently comprises of three Directors. Ms. Sita Devi is the Chairman of the committee.

COMPOSITION AND MEETINGS OF STAKEHOLDERS RELATIONSHIP COMMITTEE

Member Designation Category
Ms. Sita Devi Chairman Independent Director
Mr. Sujit Kumar Gupta Member Independent Director
Mr. Brij Kishore Sabharwal Member Non-Executive & Non Independent Director

During the financial year 2019-20, Four (4) meeting of Stakeholder Relationship Committee was held i.e. 30.05.2019, 03.09.2019, 12.11.2019 and 30.01.2020.

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, dividend payments etc.

Matters related to share transfer, issue of duplicate share certificate, dematerializations. Also delegates powers to the executives of our Company to process transfers etc.

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

d. NOMINATION & REMUNERATION COMMITTEE

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

The details of the Composition of the Nomination and Remuneration Committee are given below:

Name of Member Designation Category
Ms. Sita Devi Chairman Independent Director
Mr. Sujit Kumar Gupta Member Independent Director
Mr. Brij Kishore Sabharwal Member Non-Executive & Non Independent Director

During the financial year 2019-20, Four (4) meeting of Nomination and Remuneration Committee was held i.e. 30.05.2019, 03.09.2019, 12.11.2019 and 30.01.2020.

TERMS OF REFERENCE

The terms of reference of Remuneration Committee includes the following:

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

The committee to carry out evolution of every directors performance and recommend to the board his/her appointment and removal based on the performance. The committee to identify persons who may be appointed in senior management/Director in accordance with the criteria laid down.

Framing and implementing on behalf of the Board and on behalf of the shareholders, a credible and transparent policy on remuneration of executive directors including ESOP, Pension Rights and any compensation payment.

Considering approving and recommending to the Board the changes in designation and increase in salary of the executive directors.

Ensuring the remuneration policy is good enough to attract, retain and motivate directors.

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

24. 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 of Board and its Powers) Rules, 2014, Company is required to establish a Vigil Mechanism for its Directors and employees. In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of company.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

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

26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

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

27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,

PROHIBITION AND REDRESSAL) ACT, 2013

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

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

a. No. of Complaints received: 0 b. No. of Complaints disposed off : 0

28. MANAGERIAL REMUNERATION POLICY

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

29. 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 The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Nikita Rohilla, Proprietor of Nikita Rohilla & Associates, Company Secretaries to undertake the Secretarial audit of the Company. The Secretarial Auditor Report provided By the Secretarial Auditor in Form No. MR-3 has been enclosed as Annexure-II.

Explanation to the observations as notice in the Audit Report: The Management is searching the best person for the position and the Company will strive to complete the pending e-filing with Registrar of Companies, NCT of Delhi & Haryana and to comply with all other qualification in future.

30. CORPORATE GOVERNANCE

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

31. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR

TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

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

But during the financial year 2015-2016, SEBI has passed an ad interim Order dated 29th June, 2015 restraining the Company from Security market and Company has not yet received Final order from SEBI.

32. PERSONNEL

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

33. DIRECTORS RESPONSIBILITY STATEMENT

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

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

(b) the directors had 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 and of the profit and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) The directors had devised proper systems to ensure compliance with the provisions of 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 of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.

For and on behalf of board of Directors

Dated: 29.08.2020

Esteem Bio Organic Food Processing Limited

Place: New Delhi Sd/- Sd/-
Brij Kishore Sabharwal Sanju Lohra
Director Whole Time Director
Din No.: 01303907 DIN No: 08083009