Esteem Bio Organic Food Processing Ltd Management Discussions.

INDUSTRY STRUCTURE, DEVELOPMENTS, OPPORTUNITIES AND THREATS

On macroeconomic front the financial year 2014- 15 was among the most challenging years. The policy and governance environment impacted the economic scenario. Persistent inflation resulted in the regulator raising the policy rates leading to a high interest-rate environment.

All these factors contributed towards an industrial slowdown and eventually led to a moderation in GDP growth. Raising capital became more difficult and working capital cycles in most industries increased, resulting in cash flow issues across various sectors. The microfinance sector came to a standstill, owing to regulatory hurdles.

However, in the midst of these challenges, there were certain pockets and segments that continued to thrive.

OPPORTUNITIES AND THREATS

Your Company being an agricultural Company seeks opportunities and making efforts to fully utilize it.

OUTLOOK

The long term objective of the Company is to remain strong player in the market with strong emphasis on product and market development. Your Company is also continuously improving its operational efficiency, and cost control which alone can improve the bottom line in future in highly competitive environment. Further, your Company is hopeful to get advantage of this overall boom likely to happen for the Indian markets and will do all out efforts to secure the bigger share of the increasing market in future.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper adequate internal control system to ensure that all the assets are safe guarded and protected against the loss from unauthorized used or disposition and that transactions are authorized, recorded and reported correctly. The internal control is supplemented by an extensive internal audit, periodical review by the management and documented policies, guidelines and procedures. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets.

FINANCIAL AND OPERATIONAL PERFORMANCE

Share Capital

During the period under review, The Authorized Share Capital as on March 31, 2015 is Rs.25,00,00,000(Rupees Twenty Five crores only) (25,00,00,000 shares of Rs.1/each). The Company has split up its share capital from Rs.10 per share into the shares of Rs. 1/- each w.e.f. 12.02.2015 divided into 25,00,00,000(Rupees Twenty Five crores only)Equity Shares of Rs.1/-(Rupees One Only)each.

Reserves and Surplus

The Reserves and Surplus is Rs. 1362.72 Lacs as on the end of the Current year and the Profit of the Current year Rs. 122.83 Lacs has been transferred to Reserve and Surplus.

Total Income

During the year under consideration, total income was Rs. 330.91 lacs as against Rs. 651.05 during the previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

There has been no material development on the Human Resources front during the year as on 31st March, 2015.

The Company continues to lay emphasis on developing and facilitating optimum human performance. Performance management was the key word for the Company this year.

For and on behalf of board of
Dated: 18/08/2015 Esteem Bio Organic Food Processing Limited
Place: New Delhi Sd/
Jai Kumar
Director
DIN No: 06416683

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2015

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2015

To,

The Members,

Esteem Bio Organic Food Processing Limited

49, Gujrawala Town, Part-II

New Delhi 110009

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Esteem Bio Organic Food Processing Limited (hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on March 31, 2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (ECB). Not Applicable

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India

Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; Not Applicable

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 Not Applicable; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 Not Applicable;

(vi) The Factories Act, 1948, Industrial Disputes Act, Industrial (Development & Regulation) Act, 1956, Payment of Bonus Act, 1965, Payment of Gratuity Act, 1972, Contract Labour (Regulation and Abolition) Act, 1970 and other labour legislations governing the Company and its establishments.

(vii) Employee Provident Fund and Miscellaneous Provisions Act, 1952 Not Applicable

(viii) Air (Prevention & Control of Pollution) Act, 1981, Water (Prevention & Control of Pollution) Act, 1974 and Environment Protection Act, 1986- Not Applicable

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India. Not Applicable

(ii) The Listing Agreements entered into by the Company with BSE Limited.

For examining compliance of Accounting Standards, Income-tax Act, Sales Tax Act, VAT, Service Tax, Excise Duty and Entry Tax, the report of Statutory Auditor has been referred.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

1. During the period under review, the Company has not appointed the Internal Auditor pursuant to the provisions of section 138 of the Companies Act, 2013.

2. During the period under review, the company has not appointed the Chief financial officer pursuant to the provisions of section 203 of Companies Act, 2013.

3. During the period under review, The Company has not filed form ADT-1 with MCA for the appointment of auditor for the financial year 2014-2015.

4. During the period under review, there are some instances where the Company has filed delay intimations/Compliances to BSE Limited and Registrar of Companies, NCT of Delhi & Haryana.

I further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period there has been no events/ actions having major bearing on the

Company’s affairs.

For Sumit Gupta & Associates
Company Secretaries
Place: New Delhi Sumit Gupta
Date: 18/08/2015 Prop.
ACS No. : A29247
C P No.: 10542