Directors Report of Ester Industries Ltd.
Mar 31, 2023
The Directors are pleased to present the 37th Annual Report of Ester Industries Limited (âthe Companyâ) along with the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2023.
The salient features of the Companyâs financial statement for the year under review are as follows:
|
(Rs. in Crores |
||
|
Particulars |
Year Ended |
|
|
31st March, 2023 |
31st March, 2022 |
|
|
Net Sales Revenue |
1060.01 |
1097.07 |
|
Other Operating Revenue |
17.47 |
13.17 |
|
Other Income |
17.22 |
8.80 |
|
Profit before Financial Expenses, Depreciation and Tax |
117.24 |
181.71 |
|
Less: Interest & Other Financial Expenses |
30.16 |
24.86 |
|
Profit/(Loss) before Depreciation and Tax |
87.08 |
156.85 |
|
Depreciation and amortization expenses |
39.01 |
36.71 |
|
Profit/(Loss) before Tax from continuing operations |
48.07 |
120.14 |
|
Current & Deferred Tax expense / (credit) |
12.24 |
32.32 |
|
Profit/(Loss) after Tax from continued operations |
35.83 |
87.82 |
|
Profit/(Loss) before Tax from discontinued operations |
163.24 |
68.21 |
|
Current & Deferred Tax expense / (credit) |
38.03 |
17.17 |
|
Profit/(Loss) after Tax from discontinued operations |
125.21 |
51.04 |
|
Total Profit After Tax (PAT) from continuing and discontinued operations |
161.04 |
138.86 |
|
Other Comprehensive Income (net of income tax effect) |
0.27 |
(0.11) |
|
Total Comprehensive Income |
161.31 |
138.75 |
|
Basic & diluted EPS (Rupees) from continued operations |
4.30 |
10.53 |
|
Basic & diluted EPS (Rupees) from discontinued operations |
15.01 |
6.12 |
|
Basic & diluted EPS (Rupees) from continued & discontinued operations |
19.31 |
16.65 |
|
Note: During the year under review, the Engineering Plastics Business of the Company was divested with effect from 15th September, 2022. Profit before Tax (PBT) from discontinued operations represent operating profits till the date of divestment of Engineering Plastics business and profit on account of sale of the business. |
||
During the year under review, Total Revenue from operations of the Company on standalone basis from continuing operations decreased by 2.95% from ?1,110.24 crores to f1,077.48 crores, mainly on account of lower sales of Polyester Chips that decreased from 11648 MT to 2925 MT (in value terms from f95.35 crores to f27.11 crores).
While the profit before interest, depreciation and tax (PBIDT) from continuing operations including âother incomeâ on a standalone basis decreased from ?181.71 crores in FY 2021-22 to f117.24 crores in FY 2022-23, the PAT earned during the year under review from both continuing and discontinued operations including capital gain after tax accruing from divestment of Engineering Plastics business stood at ?161.04 crores as compared to f138.86 crores earned during FY 2021-22, higher than last year by 16%.
Film SBU continued to drive the bulk of revenue for the Company though EBIT of the business was lower due to commissioning of new capacities & recessionary pressure globally which caused margin compression. EBIT for the business reduced from f152.59 crores to ?71.68 crores. Volume of sales was marginally lower mainly due to breakdown
of CP Plant and consequent stoppage of Film Plant #3 for a period of 28 days.
Capacity utilization in Polyester Films was about 100%. Revenue from operations decreased by 6.1% from f937.59 crores to f879.97 crores on account of reduction in quantities of sales of Polyester Chips.
Specialty Polymer business witnessed second consecutive year of improvement. Revenue from operations increased by 14.4% from f172.66 crores to f197.51 crores while sales in volumetric terms was almost the same. EBIT for the business improved from f55.67 crores to f57.15 crores.
Performance of Engineering Plastics business was available only from 1st April, 2022 to 14th September, 2022 before its divestment on15th September, 2022. During about 6 months, it achieved revenue from operations of f136.01 crores with EBIT of f17.69 crores (reported as discontinued operations).
The Company earned Capital Gain after Tax of ?111.98 crores from the divestment of Engineering Plastics business. This enabled Company to post PAT of ?161.04 crores during the year under review as compared to PAT of ?138.86 crores during FY 2021-22.
Sustained performance of the Specialty Polymer coupled with capital gain from divestment of Engineering Plastics business enabled company to post higher PAT during the year under review.
Your Company continues to make investments towards modernization, technical upgradation and de bottle necking initiatives in all the business segments to improve productivity, production efficiency and reduce wastages.
As regards expansion of BoPET Film capacity through Wholly owned Subsidiary (WoS) namely Ester Filmtech Limited in the state of Telangana, commencement of commercial operations was achieved on 20th January 2023.
Your Directors have recommended payment of final dividend at the rate of f 0.50 per equity share having face value of f 5/-each (i.e. 10%) for the year ended 31st March, 2023. Dividend pay-out is in accordance with the Companyâs dividend distribution policy and will be payable, subject to approval of Members at the ensuing Annual General Meeting and deduction of tax at source, to those Members whose names appear in the Register of Members as on the Record Date.
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [âSEBI (LODR) Regulations, 2015â], the Dividend Distribution Policy is available on the Companyâs website at https://www.esterindustries.com/sites/default/files/ Dividend%20Distribution%20Policv%20-%20Ver%202.pdf
Your Company has not transferred any amount to the Reserves for the financial year ended 31st March, 2023.
There is no change in the paid up equity share capital of the Company during the year under review.
As on 31st March, 2023, paid-up Equity Share Capital of the Company is f41,69,68,795/- (Rupees Forty One Crores Sixty-Nine Lacs Sixty Eight Thousand Seven Hundred and Ninety-Five only). Of the total paid-up share capital of the Company, 64.04% is held by Promoters and Promoter Group and balance of 35.96% is held by persons other than Promoters and Promoter Group, out of which majority is in dematerialized form.
During the year under review, your Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 the Companies Act, 2013 (âthe Actâ) read with the Companies (Acceptance of Deposit) Rules, 2014. There are no outstanding deposits at the end of the financial year 2022-23. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act and the details of deposits which are not in compliance with Chapter V of the Act is not applicable.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of loans, investments, guarantees and securities provided the Company are listed in the notes forming part of the Standalone Financial Statements of the Company as per section 186 of the Act.
In accordance with the provisions of the Act, the Annual Return of the Company as on 31st March, 2023 in the prescribed form is available on the Companyâs website at https://www.esterindustries.com/policies.
As on 31st March, 2023, your Company has one subsidiary viz. Ester Filmtech Limited, which is a wholly owned material subsidiary of the Company.
A separate statement highlighting the financial statements of subsidiary of the Company are detailed in the prescribed Form AOC-1, which forms part of the Consolidated Financial Statements in compliance with Section 129(3) and other applicable provisions, if any, of the Act, read with rules made thereunder.
There has been no material change in the nature of the business of the subsidiary. During the financial year under review, no Company is ceased to be Companyâs subsidiary and the Company does not have any Joint Venture or associate within the meaning of Section 2(6) of the Act.
In accordance with Section 136 of the Act, the Audited Financial Statements, including the Consolidated Financial Statement and related information of the Company, and the audited accounts in respect of subsidiary, are available on the website of the Company at www.esterindustreis.com.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements of the Company as on March 31, 2023, are prepared in accordance with the relevant applicable Indian Accounting Standards (IND AS), and the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI (LODR) Regulations, 2015â) and the Act, which forms part of this Annual Report.
In Financial year 2020-21, the Nomination and Remuneration Committee and Board had approved the Employee Stock option Scheme, namely, ESTER EMPLOYEES STOCK OPTION PLAN-2021 (ESOP-2021), in its meeting held on 25th February, 2021, and same was approved by shareholders of the company in the Extra-ordinary General Meeting held on 26th March, 2021.
The Board granted 248179 stock Options to eligible employees under ESOP-2021 in its meeting held on 1st April, 2021.
Company had obtained in principal approval from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
During the year 2022-23, no allotment of Equity Share was made by Company under the ESOP-2021.
Details pursuant to Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 {erstwhile SEBI (Share Based Employee Benefits) Regulations, 2014} are appended as Annexure-I to the Boardâs Report.
During the year, there has not been any material change in the ESOP Plan adopted by the Company. The Plan is in compliance with the said ESOP Regulations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
As on 31st March, 2023, your Companyâs Board of Directors (âthe Boardâ), consists of ten Directors comprising of three Executive Directors, one Non-Executive Non-Independent Director and six Independent Directors including one Women Independent Director. The details of the Board and Committee composition, tenure of Directors, areas of expertise and other details are available in the Corporate Governance Report, which forms part of this Annual Report.
Further, as the tenure of Mr. Arvind Singhania, as Managing Director designated Chairman & CEo and Mr. Pradeep Kumar Rustagi, as Whole-Time Director designated Executive Director-Corporate Affairs was expired on 31st March 2023, they have been re-appointed for a further period of 3 (three) years till 31st March, 2026 by the Members of the Company through postal ballot on 25th June, 2023.
Retirement by Rotation
In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and the Articles of Association of the Company, Mrs. Archana Singhania (DIN 01096776), Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting (âAGMâ) and being eligible, seeks re-appointment. An appropriate resolution for her re-appointment is being placed for the approval of the Members of the Company at the ensuing AGM. The brief resume of the Director and other related information as stipulated under Secretarial Standard-2 and Regulation 36 of the SEBI (LoDR) Regulations, 2015, is appended as an Annexure to the Notice of the ensuing AGM.
Key Managerial Personnel (KMP)
During the year under review following changes were made in the Key Managerial Personnel of the Company:
1. Mr. Manish Gupta stepped down from the position of Chief Financial Officer of the Company w.e.f. closure of the business hours of 29th August, 2022.
2. Mr. Diwaker Dinesh stepped down from the position of Head legal & Company Secretary of the Company w.e.f. closure of the business hours of 31st January, 2023 after serving company for more than 13 years.
3. Mr. Sourabh Agarwal was appointed as the Chief Financial Officer of the Company w.e.f. 16th March, 2023.
As on 31st March, 2023, Mr. Arvind Singhania, Managing Director (designated Chairman & CEo), Mr. Pradeep Kumar Rustagi, Whole-Time Director (designated executive Director-Corporate Affairs), Mr. Ayush Vardhan Singhania, Whole-time Director and Mr. Sourabh Agarwal, Chief Financial Officer are the Key Managerial Personnel of your Company.
Further, after the closure of financial year, upon the recommendation of the Nomination and Remuneration Committee, the Board, at its meeting held on 12th July, 2023, appointed Ms. Poornima Gupta as Company Secretary and Compliance Officer of the Company with effect from the said date and in keeping with the provisions of Section 203 of the Act.
Declaration by Independent Directors
The Company has, inter alia, received the following declarations from all the Independent Directors confirming that:
⢠they meet the criteria of independence as prescribed under the provisions of the Act, read with the rules made thereunder and SEBI (LoDR) Regulations, 2015. There has been no change in the circumstances affecting their status as Independent Directors of the Company;
⢠they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act; and
⢠they have registered themselves with the Independent Directorâs Database maintained by the Indian Institute of Corporate Affairs.
In the opinion of the Board, all Independent Directors possess requisite qualifications, experience, expertise and hold high standards of integrity required to discharge their duties with an objective independent judgment and without any external influence. Details of key skills, expertise and core competencies of the Board, including the Independent Directors, are available in the Corporate Governance Report, which forms part of this Annual Report.
During the year under review, a separate meeting of the Independent Directors was held on 14th February, 2023.
The Board of Directors met 8 (eight) times during the year under review. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms part of this Annual Report.
The details of various Committees constituted by the Board, are given in the Corporate Governance Report, which forms part of this Annual Report.
The Company has a Policy for performance evaluation of all the Directors, Chairperson of Board as a whole and Committees of the Board.
An annual evaluation was carried out of the performance of the Board, Boardâs committees, all the directors and Chairperson pursuant to the provisions of the Act as well as SEBI (LoDR) Regulations, 2015.
The following evaluation process has been adopted by the Company-
1. Independent Directors at their separate meeting without the presence of Non-Independent Director, had reviewed the performance of the Chairperson, Non-Independent Directors and the Board. While evaluating the performance of the Chairperson, the views of Executive Directors and Non-Executive Directors were also taken into account.
2. Nomination and Remuneration Committee carried out the performance evaluation of all the Directors, Committees of the Board and the Board as a whole.
3. The Board had evaluated its own performance, performance of its Committees and each Director.
The process of performance evaluation was based on the criteria prescribed in the Policy on Performance Evaluation which is available on the Companyâs website at https://www.esterindustries.com/sites/default/files/ Performance Evaluation Policy.pdf
AUDITORS AND AUDITORSâ REPORT Statutory Auditors
Pursuant to the provisions of Section 139 of the Act read with rules made thereunder, M/s Walker Chandiok & Co. LLP, Chartered Accountants (FRN: 001076N/ N500013), were appointed as the Statutory Auditors of the Company at the 36th Annual General Meeting (AGM) held on 28th September, 2022, for a period of five (5) years to hold office till the conclusion of the 41st AGM of the Company, to be held in the year 2027.
The Auditorâs Report for the year under review does not contain any qualification, reservation or adverse remark and do not call for any explanation/clarification. The notes on financial statements referred to in the Report are self-explanatory.
During the year under review, the Board of Directors, based on the recommendation of the Audit Committee, re-appointed M/s. R. J. Goel & Co., Cost Accountants as the Cost Auditors to audit the cost records of the Company for the financial year 2023-24.
Pursuant to the provisions of Section 148 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, the approval of the members is being sought at the forthcoming AGM of the Company for the ratification of remuneration amounting to f 3,50,000/- (Three Lakh Fifty Thousand only) excluding applicable taxes and reimbursement of out-of-pocket expenses, payable to the Cost Auditors for the financial year 2023-24.
Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has re-appointed M/s. Dhananjay Shukla & Associates, Company Secretaries in Practice as Secretarial Auditors of the Company for the financial year 2022-23.
Further as per the provisions of Regulation 24A of the SEBI (LODR) Regulations, 2015, Ester Filmtech Limited (âEFTLâ), which is a material subsidiary of the Company, has appointed Mr. Akash Jain, Practising Company Secretary, as its Secretarial Auditor for the financial year 2022-23.
The Secretarial Audit Report of the Company and of EFTL are appended as Annexure-II to the Boardâs Report. The said Reports does not contain any qualification, reservation, adverse remark or disclaimer requiring explanation or comments from the Board under Section 134(3) of the Act.
Reporting of frauds by Auditors
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported to the Audit Committee or to the Board, any instances of fraud committed against your Company by its officers or employees under Section 143(12) of the Act.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to provisions of Section 135 of the Act and rules made thereunder, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee and framed a CSR Policy. The brief details of CSR Committee are provided in the Corporate Governance Report, which forms part of this Annual Report. The updated CSR Policy is available on the Companyâs webiste at https://www.esterindustries.com/sites/default/ files/Corporate Social Responsibility Policy.pdf
The Annual Report on CSR activities is appended as Annexure-III to the Boardâs Report. Further, the Chief Financial Officer of the Company has certified that the amount spent on CSR for the financial year 2022-23 have been utilized for the purposes and in the manner approved by the Board.
Your Company has been practicing the principles of good Corporate Governance over the years and it is a continuous and ongoing process. A detailed Report on Corporate Governance practices followed by your Company in terms of the SEBI (LODR) Regulations, 2015, together with a Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance are provided separately in this Annual Report.
In compliance with corporate governance requirements as per the SEBI (LODR) Regulations, 2015, your Company has formulated and implemented a Code of Conduct which is applicable to all Directors and Senior Management of the Company, who have affirmed the compliance thereto. A declaration to this effect duly signed by Mr. Arvind Singhania, Chairman & CEO is enclosed as a part of the Corporate Governance Report which forms part of this Annual Report. The said Code of Conduct is available on the website of the Company at https://www.esterindustries.com/sites/default/files/ Code%20of%20Conduct.pdf
MANAGEMENT DISCUSSION AND ANALYSIS
The Managementâs Discussion and Analysis Report for the year under review, as stipulated under the SEBI (LoDR) Regulations, 2015, is presented in a separate section forming part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Business Responsibility and Sustainability Report (BRSR) for the financial year ended 31st March, 2023, as stipulated by the SEBI (LODR) Regulations, 2015, is presented in a separate section forming part of this Annual Report.
The Company has laid down well defined and documented Internal Controls.
Your companyâs internal control systems & procedures are adequate to ensure compliance with various policies, practices, laws, rules, regulations and statutes in force. Internal Controls in your company have been designed & implemented in such a manner that it provides reasonable assurance regarding the following:
⢠Effectiveness, efficiency and transparency of operations
⢠Adequacy of safeguards for assets
⢠Preventionand detection offrauds,errors, misappropriations and mis-statements
⢠Accuracy and completeness of the accounting data, records and reporting
⢠IT security controls
⢠System, policies, practices & procedures adopted for adequate, effective and fair financial reporting
⢠Timely and accurate preparation of reliable financial information & reports. During the year under review, few internal controls have been modified to align with change in scenario.
Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India.
Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.
The Companyâs Internal Auditors have conducted periodic audits to evaluate the existence, adequacy & effectiveness of financial and operating internal controls, to report significant findings to the Audit Committee of the Board and to provide reasonable assurance that the Companyâs established systems, policies, practices and procedures have been followed. The Audit Committee constituted by the Board reviews the internal controls and financial reporting issues with Internal Auditors on a regular basis.
The Company uses an ERP (SAP S/4 HANA 2021) which is supplemented by internal controls framework to ensure reliable and timely financial reporting.
Compliance with laws, rules and regulations is also monitored through a well laid down framework which requires individual functions to confirm and report statutory compliances on all laws and regulations concerning their respective functions. This gets integrated with the overall compliance reporting on all laws and regulations for the purpose of review and monitoring by the Board.
All contracts/arrangements/transactions with related parties, entered into during the financial year under review, were on an armâs length basis and in the ordinary course of business. All such contracts or arrangements, wherever required, have been approved by the Audit Committee and the Board.
Your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2, is not applicable.
The details of the related party transactions as required under IND AS 24 have been disclosed in Note 37 to the standalone financial statements forming part of this Annual Report.
The Policy on Related Party Transactions, is available on the
Companyâs website at https://www.esterindustries.com/
sites/default/files/RPT %20Clean Ver.pdf
POLICIES ADOPTED BY THE COMPANY
a) Vigil Mechanism/Whistle Blower Policy
The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. The Company has a Vigil Mechanism/Whistle Blower Policy with a view to provide a mechanism for employees of the Company to raise concerns of suspected frauds, instances for leakage or suspected leakage of Unpublished Price Sensitive Information, any violations of legal/ regulatory requirements or code of conduct/policy of the Company, incorrect or misrepresentation of any financial statements and reports, etc. The policy aims to provide an avenue for employees and directors to raise concerns and reassure them that they will be protected from reprisals or victimization for whistle blowing in good faith. The practice of the Whistle Blower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee.
The Whistle Blower Policy of the Company is also available on the Companyâs website at https://www. esterindustries.com/sites/default/files/Whistle blower policy.pdf.
b) Nomination and Remuneration Policy
Nomination and Remuneration Committee has framed a Nomination and Remuneration policy for determining criteria of selection and appointment of Directors, Key Managerial Personnel, Senior Management Personnel including determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Act and SEBI (LODR) Regulations, 2015. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Annual Report.
The Policy is available on the Companyâs website at https://www.esterindustries.com/sites/default/files/ Revised%20NRC%20Policy%20PDF.pdf
c) Policy on Material Subsidiaries
The Companyâs Policy on Material Subsidiaries is available on Companyâs website at https://www.esterindustries. com/sites/default/files/Policv%20on%20Material%20 Subsidiary%20Version%20-2%2017th%20June%20 2020.pdf
d) Risk Management Policy
Pursuant to requirements of SEBI (LODR) Regulations, 2015 the Company has constituted the Risk Management Committee of the Company to frame, implement and monitor the risk management plan for the Company. The constitution and the terms and reference of the Committee are given in Report on Corporate Governance which forms part of this Annual report.
v) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
vi) The Company has not issued any equity shares or shares with differential voting rights as to dividend, voting or otherwise. The Company has also not issued any shares (including sweat equity shares) to employees of the Company under any scheme.
vii) Details of unclaimed dividends and equity shares transferred to the Investor Education and Protection Fund authority are available in the Corporate Governance Report, which forms part of this Annual Report.
viii) Neither the Chairman & Managing Director nor the Whole-Time Director has received any remuneration or commission from the Companyâs subsidiary.
ix) No application has been made under the Insolvency and Bankruptcy Code, hence the requirement to disclose the details of any application made, or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 is not applicable for the year under review.
x) The requirement to disclose the details of any difference between the valuation done at the time of a one-time settlement and the valuation done while taking loan from banks or financial institutions, along with the reasons thereof, is not applicable for the year under review.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 134 of the Act read with the Companies (Accounts) Rules, 2014 is set out in Annexure-V to the Boardâs Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of the Act (including any statutory modification(s) or re-enactment(s) for the time being in force), the Directors of your Company, to the best of their knowledge and ability, state that:-
1. in the preparation of the annual accounts for the financial Year ended 31st March 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;
2. they have selected appropriate accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent, so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year and of the Profit and Loss of the Company for that period;
3. they 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
A detailed note on Risk Management System has been provided in the Management Discussion and Analysis (MDA) Report, which forms part of this Annual Report.
The Risk Management Policy is available on the Companyâs website at https://www.esterindustries. com/sites/default/files/Risk%20Management%20 Policv.pdf.
e) Prevention of Sexual Harassment at workplace
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee have been set up to redress the complaints received regarding sexual harassment. There was no incident of sexual harassment reported and pending for investigation during the financial year 2022-23.
i) Secretarial Standards
The Company complies with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
ii) Change in Registered Office and Nature of Business
There was no change in the Registered Office and nature of business of the Company during the year under review.
iii) Material changes and commitments 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 were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statement relates and the date of this Report.
iv) Disclosure under section 197(12) and Rule 5 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 is appended as Annexure-IV to the Boardâs Report.
Other information on compensation of employees as required under section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report.
Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the registered office of the Company during business hours on working days upto the date of ensuing Annual General Meeting. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at [email protected].
of the Company and for preventing and detecting fraud and other irregularities;
4. they have prepared the accounts of the Company for the financial year ended 31st March 2023 on a going concern basis;
5. they have laid down internal financial controls for the Company and such internal financial controls were adequate and operating effectively; and
6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
Your Directors acknowledge the co-operation and assistance received from various departments of the Central & State Government, banks and Non-banking finance companies. Directors also express their gratitude and thanks to Customers, Suppliers and other Business Associates for their continued co-operation and patronage.
Your Directors wish to place on record their appreciation of the sincere services rendered by the workmen, staff and executives of the Company at all levels ensuring satisfactory management of the Company. Your Directors also thank the shareholders for their continued support.
Mar 31, 2018
The directors are pleased to present the 32nd Annual Report together with Audited Statement of Accounts of your Company for the year ended 31st March 2018.
FINANCIAL RESULTS
|
For the year ended 31.03.2018 (Rs. / crores) |
For the year ended 31.03.2017 (Rs. / Crores) |
|
|
Net Sales Revenue |
798.71 |
696.40 |
|
Other Operating Revenue |
8.03 |
6.32 |
|
Other Income |
5.67 |
6.34 |
|
Profit before Financial Expenses, Depreciation and Tax |
71.30 |
49.19 |
|
Less: Interest & Other Financial Expenses |
32.78 |
33.36 |
|
Profit / (Loss) before Depreciation and Tax |
38.52 |
15.83 |
|
Depreciation and amortization expenses |
31.03 |
31.76 |
|
Profit / (Loss) before Tax |
7.49 |
(15.93) |
|
Current & Deferred Tax expense / (credit) |
2.20 |
(5.24) |
|
Profit / (Loss) after Tax |
5.29 |
(10.69) |
|
Other Comprehensive Income (net of income tax effect) |
0.29 |
(0.11) |
|
Total Comprehensive Income |
5.58 |
(10.80) |
|
Basic Earnings Per Equity Share (Rupees) |
0.63 |
(1 28) |
|
Diluted Earnings Per Equity Share (Rupees) |
0.63 |
(1 28) |
DIVIDEND AND RESERVES
Your directors have not recommended payment of dividend as the Company has earned marginal Net Profit after Tax during the year under review. Your Company has not transferred any amount of Profit & Loss account to any reserve.
OPERATIONS REVIEW
During the year under review, your Company earned a Net Profit after Tax of Rs. 5.29 crores, a significant improvement as compared to a Net Loss after Tax of Rs. 10.69 crores incurred during FY 2016-17. Revenue from Operations during the year under review stood at Rs. 806.74 crores as compared to Rs. 702.72 crores during FY 2016-17, an increase of 14.8%.
One of the main factors for increased revenue from operations was increase in sales of Polyester Film. Besides the 2.4% increase in sales volume of Polyester Film - from 51201 MT to 52414 MT - increase in selling price of Polyester Film (consequent to increase in feedstock prices) and higher proportion of Value Added products also contributed towards an increase in sales revenue by 11.2%
Increase in selling prices of Polyester Film was higher than the increase in feedstock prices - owing to bridging of demand-supply gap consequent to growth in demand - resulting in improved profitability of Polyester Film SBU. Demand growth of 10% - 12% (domestic) and 6% - 6.5% (global) is expected to further bridge the demand-supply gap.
During the year under review, capacity utilization in Polyester Films was about 92%, with production higher at 52534 MT as compared to 51778 MT during the FY 2016-17.
While sales of Engineering Plastics Compounds remained stable despite adverse effect of GST roll out on the demand for application industries for a quarter, sales of Engineering Plastics for OFC application- in quantitative terms - increased by 32.2% on the back of increased demand. Despite improved sales -by 10.3% & 18.4% in volumetric and value terms respectively - the profitability for the Engineering Plastics SBU witnessed a marginal reduction in EBIT (from Rs. 13.26 crores to Rs. 12.59 crores) due to the time lag in passing on the full impact of in creasing polymer costs to customers.
Despite the initial setback following the Goods & Service Tax (GST) roll out with effect from 1st July 2017, overall impact on the Polyester Film and Engineering Plastics SBUs has been positive.
Specialty Polymers SBU witnessed marginal improvement in sales by 5.7% in quantitative terms. The improvement in sales in value terms was 15.5% on account of favorable product mix.
Improvement in the financial performance of the Company was on account of improved market scenario and also on account of sustained focus towards its strategic objective of enhancing sales of Value Added & Specialty products. Company continues to take various initiatives towards optimizing costs and improving operating efficiencies.
Various initiatives taken over the last eight years - supported by capacity expansions - have resulted in Net Sales of the Company growing at a CAGR of 9.2% pa, from Rs. 395.37 crores in FY 2009-10 to Rs.798.71 crores in FY 2017-18.
Your Company continues to make investments towards modernization, technical upgradation and debottlenecking initiatives in all the business segments to improve productivity, production efficiency and reduce wastages.
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate Governance as prescribed in the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (âSEBI (LODR) Regulations, 2015â). We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance, as well as the leadership and governance of the Company.
Pursuant to SEBI (LODR) Regulations, 2015, the Corporate Governance Report and the Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made part of the Annual Report.
SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards as issued by the Institute of Company Secretaries of India (ICSI).
MANAGEMENT DISCUSSION AND ANALYSIS
The Management''s Discussion and Analysis Report on performance, state of affairs of the company, risk management system, industry trends and other material changes and commitments, if any, affecting the financial position of the company forms an integral part of the Annual Report.
PUBLIC DEPOSIT
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on public deposits was outstanding at the end of financial year 2017-18.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment of Independent Directors
Pursuant to the provisions of section 149 & other applicable provisions of the Companies Act, 2013 (âthe Act'') and prescribed provisions of the erstwhile Listing Agreement, the Company had appointed Mr. Ashok Newatia, Mr. M S Ramachandran, Dr. Anand Chand Burman, Mr. Dinesh Chandra Kothari and Mr. P S Dasgupta, as Independent Directors of the Company in the Annual General Meeting held on 22nd September, 2014 to hold office upto 31st March, 2019.
As per Section 149(10) of the Act, an Independent Director shall hold office for a term of upto five consecutive years on the Board of a Company, but shall be eligible for re-appointment on passing a special resolution by the Company for another term of upto five consecutive years on the Board of a Company. Section 149(11) of the Act provides that Independent Directors shall not hold office for more than two consecutive terms. Pursuant to Section 152, an Independent Director shall not be liable to retire by rotation. Accordingly the Board recommends to re-appoint Mr. Dinesh Chandra Kothari, Mr. M S Ramachandran, Mr. Ashok Newatia, Dr. Anand Chand Burman and Mr. P S Dasgupta as Independent Directors for a second term of 5 (Five) consecutive years to hold office up to 31st March, 2024.
Accordingly, resolutions proposing appointment of Independent Directors till 31st March 2024, form part of the Notice of the Annual General Meeting.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Pradeep Kumar Rustagi will retire by rotation at the forthcoming AGM of Company and being eligible, offers himself for reelection.
Key Managerial Personnel (KMP)
Mr. Arvind Singhania, Chairman & Managing Director (designated as Chairman & CEO), Mr. Pradeep Kumar Rustagi, Executive Director & CFO and Mr. Diwaker Dinesh, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) read with Section 203 of the Companies Act, 2013 and rules made thereunder.
DECLARATION OF INDEPENDENCE
The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013, that he meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and other applicable provisions, if any, of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI (LODR) Regulations, 2015.
COMPOSITION AND MEETING OF THE BOARD AND AUDIT COMMITTEE
The details of the composition of Board of Directors and Audit Committee and number of Board and Audit Committee meetings held during the year are given in the Corporate Governance Report which forms part of the Annual Report.
AUDITORS AND AUDIT REPORT
Statutory Audit
M/s Walker Chandiok & Co. LLP, Chartered Accountants, was appointed as Statutory Auditors by the Shareholders in their Annual General Meeting (AGM) held on 4th September, 2017, to hold office from 31st AGM till 36th AGM. The requirement to place the matter relating to the ratification of appointment of Statutory Auditors by Members at every Annual General Meeting is done away with vide notification dated 7th May, 2018 issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of appointment of Statutory Auditors.
The Auditors'' Report for the year under review read together with Annexures do not contain any qualification of significant nature and do not call for any explanation/clarification.
Cost Audit
In terms of Section 148(1) and other applicable provisions, if any, of the Companies Act, 2013 and rules made thereunder, the Company is required to maintain Cost records of the Company and accordingly such accounts and records are made and maintained.
The Company is also required to have the audit of its cost records conducted by a Cost Accountant in practice.The Board has re-appointed M/s. R. J. Goel & Co., Cost Accountants, as the Cost Auditor for the financial year 2018-19. In terms of the provisions of Section 148(3) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditors has to be ratified by the Members of the Company. Accordingly, the Board seeks ratification of the remuneration payable to the Cost Auditors for the financial year 2018-19. A resolution seeking your ratification of the remuneration of M/s. R. J. Goel & Co. is provided in the Notice of AGM.
Secretarial Audit
Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex with its Board''s report, a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form.
M/s Dhananjay Shukla & Associates, Company Secretaries, has conducted secretarial audit of the Company for the financial year ended 31st March, 2018. The Report of M/s Dhananjay Shukla & Associates is provided in the âAnnexure-Aâ forming part of this Report.
There are no qualifications, reservation or adverse remark made by the auditor in the report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 with respect (including any statutory modification(s) or re-enactment(s) for the time being in force), the Directors of your company, on the basis of information placed before them by the Management and Auditors, confirm that:-
1) in the preparation of the annual accounts for the Financial Year ended 31st March 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departure, if any.
2) they have selected appropriate accounting policies and applied them consistently and made judgement and estimates that were reasonable and prudent, so as to give a true and fair view of the state of the 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;
3) 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;
4) they have prepared the accounts of the Company for the financial year ended 31st March 2018 on a going concern basis.
5) proper internal financial controls laid down by them were followed by the Company and that such internal financial controls are adequate and were operating effectively; and
6) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
INTERNAL CONTROLS
The Company has laid down well defined and documented Internal Controls.
Your company''s internal control procedures are adequate to ensure compliance with various policies, practices and statutes. Your Company maintains a system of internal controls designed to provide reasonable assurance regarding the following:
- Effectiveness and efficiency of operations
- Adequacy of safeguards for assets
- Prevention and detection of frauds and errors
- Accuracy and completeness of the accounting records
- Timely and accurate preparation of reliable financial information Few internal controls have been modified to align with change in scenario.
Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.
The Company''s Internal Auditors have conducted periodic audits to evaluate the adequacy & effectiveness of financial and operating internal controls, to report significant findings to the Audit Committee of the Board and to provide reasonable assurance that the Company''s established systems, policies and procedures have been followed. The Audit Committee constituted by the Board reviews the internal controls and financial reporting issues with Internal Auditors on a regular basis. Compliance with laws and regulations is also monitored through a well laid down framework which requires individual functions to confirm and report statutory compliances on all laws and regulations concerning their respective functions. This gets integrated with the overall compliance reporting on all laws and regulations for the purpose of review and monitoring by the Board.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is applicable to all Directors and senior management of the Company. They have affirmed compliance with the Code of Conduct. A declaration to this effect duly signed by Mr. Arvind Singhania, Chairman & CEO is enclosed as a part of the Corporate Governance Report which forms part of the Annual Report. A copy of the Code of Conduct is available on the Company''s website viz. www.esterindustries.com
The Code of Conduct is based on the fundamental principles of good corporate governance and corporate citizenship. The Code covers the Company''s commitment to sustainable development, concern for occupational health, safety and environment, a gender friendly workplace, vigil mechanism, transparency, auditability and legal compliance etc.
CHANGES IN CAPITAL
During the financial year 2017-18, there was no change in the Capital of the Company.
LISTING OF SECURITIES
Your Company''s Equity Shares are currently listed with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company has paid the listing fees to BSE and NSE for the financial year 2018-19.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as âAnnexure - Bâ. The same is also available on the Company''s website viz. www.esterindustries.com
PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
The particulars of the loan, if any (along with the purpose of utilization by recipient of loan) and investments covered under Section 186 of the Companies Act, 2013 are provided in Notes 7, 8 and 9 to financial statements. The Company has not issued any guarantee or provided any security as covered under Section 186 of the Companies Act, 2013.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Companies Act, 2013 and rule made thereunder, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The details of the Composition of the Committee is set out in Corporate Governance Report which forms part of the Annual Report. The Committee has adopted a Corporate Social Responsibility Policy. Brief outline of the CSR Policy of the Company along with total amount spent on CSR and reason for unspent amounts are set out in âAnnexure -Câ of this report as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The Policy is uploaded on Company''s website and the same can be accessed at the following link -
http://www.esterindustries.com/sites/default/files/Corporate_Social_
Responsibility_Policy.pdf
PERFORMANCE EVALUATION
The Company has a Policy for performance evaluation of all the Directors, Board as a whole and Committees of the Board.
An annual evaluation was carried out of the performance of the Board, Board committees, all the directors and Chairperson pursuant to the provisions of the Companies Act, 2013 as well as SEBI (LODR) Regulations, 2015.
During the year the following evaluation process was adopted -
1. Independent Directors at their separate meeting without the presence of Non-Independent Director, had reviewed the performance of the Chairperson, Non-Independent Directors and the Board. While evaluating the performance of the Chairman, the views of executive directors and non-executive directors were also taken into account.
2. Nomination and Remuneration Committee carried out the evaluation of every Director''s performance. The Committee, while doing so, considered the outcome of meeting of Independent Directors;
3. The Board had evaluated its own performance, performance of its Committees and each Director. While conducting the evaluation, the Board considered and discussed the outcome of the separate meeting of Independent Directors and the meeting of Nomination & Remuneration Committee.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.
The process of evaluation was based on the criteria prescribed in the Policy on Performance Evaluation. The Policy is uploaded on Company''s website and the same can be accessed at the following link -
http://www.esterindustries.com/sites/default/files/Performance_
Evaluation_Policy.pdf
POLICY AND DISCOSURE RELATING TO THE NOMINATION AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNELS AND OTHER EMPLOYEES
Nomination and Remuneration Committee has framed a Nomination and Remuneration policy for determining criteria of selection and appointment of Directors, Key Managerial Personnel, Senior Management Personnel including determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Companies Act, 2013. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report.
The Policy is uploaded on Company''s website and the same can be accessed at the following link -
http://www.esterindustries.com/sites/default/files/Nomination_and_
Remuneration_Policy.pdf
The information required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in âAnnexure - Dâ of this report. The same is open for inspection at the Registered Office of your Company at all working days except Saturday, till the date of AGM.
RISK MANAGEMENT SYSTEM
The Audit Committee constituted by the Board reviews and evaluates the risk management plan along with matters pertaining to review of internal audit, financial results, operational performance etc. placed before it on quarterly basis. The terms of references of the Audit Committee stipulated by the Board includes the âEvaluation of Risk Management System.â The Audit Committee is mandated to make recommendation to the Board for the matters pertaining to framing, implementing and monitoring the risk management system & plan for the Company entity as and when the Committee thinks necessary. A detailed note on Risk Management System has been provided under the Management Discussion and Analysis (MDA) Report
RELATED PARTY TRANSACTIONS
All contracts or arrangements with related parties, entered into or modified during the financial year, were on an arm''s length basis and in the ordinary course of business.
All such contracts or arrangements, wherever required, have been approved by the Audit Committee and the Board. However no material contract or arrangement with related parties was entered into during the year under review. The company has not entered any transaction with the Related parties, which are not at arm''s length. Accordingly, no transactions are being reported in Form No. AOC-2 provided in âAnnexure - Eâ pursuant to Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.
The details of the related party transactions as required under IND AS 24 are set out in Note 39 to the standalone financial statements forming part of this Annual Report.
The Policy on Related Party Transactions, can be accessed on the Company website at the following link
http://www.esterindustries.com/sites/default/files/Related_Party_
Transactions_Policy.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as prescribed under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is set out in the âAnnexure - Fâ forming part of this report.
VIGIL MECHANISM
The Company has formulated Vigil Mechanism/Whistle Blower Policy with a view to provide a mechanism for employees of the Company to raise concerns of suspected frauds, any violations of legal/ regulatory requirements or code of conduct/policy of the Company, incorrect or misrepresentation of any financial statements and reports, etc. The purpose of this Policy is to encourage employees and directors who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. The policy aims to provide an avenue for employees and directors to raise concerns and reassure them that they will be protected from reprisals or victimization for whistle blowing in good faith.
The practice of the Whistle Blower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The Policy can be accessed on the Company website at following link -
http://www.esterindustries.com/sites/default/files/Whistle_blower_policy.pdf
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The Company has complied with provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].
In terms of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder, it is mandatory to review status of sexual harassment related complaints in the Annual Report. There was no incident of sexual harassment reported in the Company during financial year 2017-18. For protection against sexual harassment, Company has formed an internal complaints committee to which employees can write their complaints. The Company has a Prevention of Sexual Harassment Policy which has laid down a process for dealing with such issues.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.
ACKNOWLEDGEMENT
Your Directors acknowledge the co-operation and assistance received from various departments of the Central & State Government, banks and Non-banking finance companies. Directors also express their gratitude and thanks to Customers, Suppliers and other Business Associates for their continued co-operation and patronage.
Your Directors wish to place on record their appreciation of the sincere services rendered by the workmen, staff and executives of the Company at all levels ensuring satisfactory management of the Company. Your Directors also thank the shareholders for their continued support.
For and on behalf of the Board
Sd/-
Date: 14th August, 2018 Arvind Singhania
Place: New Delhi Chairman & CEO.
Mar 31, 2015
The directors are pleased to present the 29th (Twenty Ninth) Annual
Report together with Audited Statement of Accounts of your Company for
the year ended 31st March 2015
FINANCIAL RESULTS (Rs in lacs)
For the year
ended For the year
ended
31.03.2015 31.03.2014
Sales and Other Income 98608.68 101956 88
Profit before Financial Expenses,
Depreciation and Tax 7407.77 7931.83
Less: Interest & Other Financial Expenses 3709.55 3486.77
Profit / (Loss) before Depreciation, Extra
Ordinary Items and Tax 3698.22 4445.06
Depreciation 3210.58 3030.39
Profit / (Loss) before Tax 487.64 1414.67
Deferred Tax 103.73 573.96
Impact of Scheme of amalgamation relating
to earlier period -- (3.76)
Profit / (Loss) after Tax 383.91 836.95
Balance brought forward from previous year 12317.40 11846.90
Appropriation: Dividend & Tax on Dividend -- 366.45
Balance Carried to Balance Sheet 12701.31 12317.40
Basic Earnings Per Share (Rupees) 0.61 1.34
Diluted Earnings Per Share (Rupees) 0.57 1.34
DIVIDEND AND RESERVES
Your directors have not recommended payment of dividend as the Net
Profit after Tax earned during the year under review is marginal Your
Company has not transferred any amount of Profit & Loss account to any
reserve
OPERATIONS REVIEW
During the year under review, your Company earned a Net Profit after
Tax, albeit at reduced levels as compared to FY 2013-14 Revenue from
Operations during the year under review stood at Rs 98608 68 lacs as
compared to Rs 101956 88 lacs during FY 2013-14, a reduction of 3 3% A
significant reduction was witnessed in the price of feedstock used by
the Company  during the period from August 2014 to January 2015  on
account of the unprecedented fall in the price of Crude Oil However,
this benefit could not be realized as sluggish market conditions,
coupled with an oversupply situation, resulted in a drop in the
Company's product prices which was greater than the fall in feedstock
prices The consequential impact on margins, together with inventory
valuation losses, resulted in a reduction in Profits
Despite sluggish market conditions, your Company was successful in
improving sales of Chips, Polyester Films and Engineering Plastics  in
quantitative terms  by 11%, 1 8% and 21% respectively In order to
mitigate the adverse effect of sluggish market conditions and an
oversupply scenario, the Company sustained its focus towards increasing
the proportion of Value Added & Specialty products in its portfolio
aligned with its strategic objective Sales of Value Added & Specialty
Films contributed about 15% of the total sales volume of Polyester
Films in FY 2014-15
In the Engineering Plastics segment, the Company maintained its
aggressive growth strategy, registering a compounded annual growth rate
 in quantitative terms  of 35% over the last three years This was
significantly higher than the industry growth rate During the year under
review, the Company achieved a quantitative growth of 21% over the
previous year in sales of Engineering Plastics products, primarily on
account of a healthy growth of about 60% in sales of Engineering
Plastics for OFC application Consequently, Gross Revenue from sales of
Engineering Plastics products increased from Rs 16191 16 lacs in FY
2013-14 to Rs 19406 17 lacs in FY 2014- 15, translating to a growth of
20% Continuous growth ahead of industry helped the Company in securing
the Plasticon Gold Award for the "Fastest Growing Enterprise Â
Processing (Engineering Polymers)" at the Plastindia Exhibition in
February 2015
Various initiatives taken over the last five years  supported by
capacity expansions  have resulted in Net Sales of the Company growing
at a CAGR of 17 9% pa, from Rs 39537 10 lacs in FY2009-10 to Rs 89626
76 lacs in FY2014-15
During the year under review, capacity utilization in Polyester Films
was about 77%, with production marginally higher at 43788 MT as
compared to 42846 MT during the year 2013-14
Interest and financial expenses during the year under review were 4 14%
of Net Sales, with overall leveraging at prudent levels of 1 55
Details on operations, a view on the outlook for the current year and
various strategies (internal and external) adopted by the Management
are provided in the 'Management Discussion & Analysis Report' which
forms an integral part of this Annual Report
EXPENDITURE ON PLANT & MACHINERIES AND PROJECTS
UNDER IMPEMENTATION
Your Company is continuously concerned about ongoing global
environmental issues and accordingly commissioned a Bio-mass (Rice
Husk) fuelled Thermic Fluid Heater of 10 MKCal capacity  during the
year under review  to enhance its Thermal Energy generation capacity
whilst reducing dependence on Furnace Oil and also achieving savings in
the process In addition to the existing UPS of 7950 KVA, a rotary type
UPS of 1670 KVA has also been commissioned to improve quality and
reliability of operations
Aligned with the strategic objective of increasing the proportion of
Value Added & Specialty products, the Company is in the process of
modifying its Film Line # 1 by installing a Twin Screw Extruder and
Primary Scanner for measuring Thickness With this modification, Film
Line # 1 will be able to produce various Specialty Films with reduced
conversion cost and wastage The modification is likely to be completed
by August 2015
To exploit opportunities likely to be created in the Optical Fiber
Cable segment upon implementation of Digital India program of the
Government of India, the Company is likely to commission two 24 cubic
meters SSP dryers to enhance its Solid State Polymerization (SSP)
capacity by 1800 TPA during the year 2015-16
Your Company continues to make investments towards modernization,
technical upgradation and debottlenecking initiatives in all the
business segments During the year under review, the Company undertook
Business Improvement initiatives towards controlling costs, improving
quality and operating efficiency Your Company would continue to focus on
Business Improvement initiatives to further improve operating
efficiencies' and reduce costs
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate
Governance as prescribed in the Listing Agreement with the Stock
Exchanges A separate report on Corporate Governance, which forms part
of this Board's Report is included as a part of the Annual Report along
with the Practicing Company Secretary's Certificate on its compliance
MANAGEMENT DISCUSSION AND ANALYSIS
The Management's Discussion and Analysis Report on performance, state
of afairs of the company, risk management system, industry trends and
other material changes and commitments, if any, affecting the financial
position of the company forms an integral part of this Report
SUBSIDIARY COMPANIES
In accordance with Section 129(3) of the Companies Act, 2013, a
statement containing salient features of the financial statements of the
subsidiary companies in Form AOC-1 is provided as part of this Annual
Report
In accordance with Section 136 of the Companies Act, 2013, the Annual
Report of the Company containing audited standalone and consolidated
financial statements including all other documents required to be
attached thereto and financial statements of subsidiaries have been
uploaded on the website of the Company at www.esterindustries.com.
Further the financial statement of the Subsidiary Company shall be made
available to the members of the Company on their request Such Annual
Accounts are also kept for inspection by any member at the Corporate
Office and Registered Office of the Company on business hours on all
working days except Saturday till the date of AGM
The Board has formulated a Policy on Material Subsidiaries to set out
the criteria to determine "Material Subsidiaries" in accordance with
provision of Clause 49 of the Listing Agreement The policy can be
accessed on Company website at the following link -
http://www.esterindustries.com/ester_cms/userfiles/file/policies/
Policy_on_material_subsidiary.pdf
PUBLIC DEPOSIT
The Company has not accepted any deposits from public and as such, no
amount on account of principal or interest on public deposits was
outstanding at the end of financial year 2014-15
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr Arvind Kumar Singhania has been appointed as Whole-time Director
from 21st May 2014 till 31st March 2017 by the Board in the meeting
held on 21st May, 2014 and by the Shareholders in the AGM held on 22nd
September, 2014 In the Board Meeting held on 11th February, 2015, he
has been appointed as Managing Director of the company for the
remaining tenure viz from 11th February, 2015 till 31st March 2017 and
designated as Chairman & CEO by the Board of Directors and the
appointment was approved by the Shareholder through Postal Ballot
Mrs Archana Singhania was appointed as Additional Director (Non-
Executive) of your Company at the meeting of the Board of Directors
held on 4th August, 2014 and subsequently appointed as a Non- Executive
Director by the shareholders at the AGM held on 22nd September, 2014
In the last Annual General Meeting of the Company held on 22nd
September, 2014, Mr V B Haribhakti, Mr M S Ramachandran, Mr Dinesh
Kothari, Mr P S Dasgupta, Mr Anand Chand Burman, Mr Ashok Newatia were
appointed as Independent Directors to hold Office till 31st March, 2019
in accordance with the requirement of Section 149 of the Companies Act,
2013 and Clause 49 of the Listing Agreement
During the year Mr V B Haribhakti has resigned from the directorship of
the Company He was also the Chairman of the Audit Committee and
Nomination & Remuneration Committee Your Directors record appreciation
for the services and guidance rendered by him
Mr Sandeep Dinodia, Chartered Accountant was appointed as the
Additional Director of the Company w e f 25th May, 2015 in the capacity
of Independent Director He has also been appointed as the Chairman of
Audit Committee A resolution proposing his appointment as Independent
Director to hold Office up to 5 (fve) consecutive years up to 31st March,
2020 forms part of the Notice of the forthcoming AGM
In accordance with the provisions of Section 152 of the Companies Act,
2013, Mr Pradeep Rustagi will retire by rotation at the forthcoming AGM
of Company and being eligible, ofer themselves for re-election
Mr Arvind Kumar Singhania, Chairman & Managing Director
(designated as Chairman & CEO), Mr Pradeep Kumar Rustagi, Executive
Director & CFO and Mr Diwaker Dinesh, Company Secretary are the Key
Managerial Personnel of your Company in accordance with the provisions
of Section 2(51) read with 203 of the Companies Act, 2013 and rules
made thereunder
DECLARATION OF INDEPENDENCE
Your Company has received declarations from all the Independent
Directors confirming that they meet the criteria of independence as
prescribed under Section 149 and other applicable provisions, if any,
of Companies Act, 2013 read with the Schedules and Rules issued
thereunder as well as Clause 49 of the Listing Agreement
COMPOSITION AND MEETING OF THE BOARD AND AUDIT COMMITTEE
The details of the composition of Board of Directors and Audit
Committee and number of Board and Audit Committee meetings held during
the year are given in the Corporate Governance Report which forms part
of this Report
AUDITORS AND AUDIT REPORT
Statutory Audit
During the year M/s S R Batliboi & Associates LLP, Chartered
Accountants had expressed their unwillingness to be considered for
reappointment as Statutory Auditors of the Company in the 28th AGM held
on 22nd September, 2014
At the recommendation of Audit Committee and the Board, M/s S R
Batliboi & Company LLP, Chartered Accountants, was appointed as
Statutory Auditors by the Shareholders to hold Office from 28th AGM till
31st AGM subject to the ratification by the Shareholders every year The
appointment is accordingly proposed in the Notice of AGM for
ratification by the Shareholders
The Auditors' Report read together with Annexure do not contain any
qualification of significant nature and do not call for any
explanation/clarification
Cost Audit
The Board of Directors had appointed M/s Sanjay Gupta & Associates,
Cost Accountants, as the Cost Auditor of your Company for the financial
year 2014-15 to conduct the audit of the cost records of your Company
The Cost Auditor has submitted the report of the Audit Committee and
the Board There are no qualifications, reservation or adverse remark
made by the auditor in the report
In accordance with the Section 148 and other applicable provisions, if
any, of the Companies Act, 2013 and rules made thereunder, the Board of
Directors of your Company has appointed M/s R J Goel & Co , Cost
Accountants as the Cost Auditor for the financial year 2015- 16 on the
recommendations made by the Audit Committee
In terms of Section 148 of the Companies Act, 2013 and rules made
thereunder, a resolution seeking your ratification of the remuneration
of M/s R J Goel & Co is provided in the Notice of AGM
Secretarial Audit
The Board, during the year, appointed M/s Sanjay Grover & Associates,
Company Secretaries, to conduct secretarial audit of the Company for
the financial year ended 31st March, 2015 The Report of M/s Sanjay
Grover & Associates in terms of Section 204 of the Act is provided in
the "Annexure-A" forming part of this Report
There are no qualifications, reservation or adverse remark made by the
auditor in the report
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(C) of the Companies
Act, 2013 with respect to the Directors' Responsibility Statement, the
Directors confirm that: -
1 in the preparation of the annual accounts for the Financial Year
ended 31st March 2015, the applicable Accounting Standards have been
followed along with proper explanation relating to material departure,
if any
2 they have selected appropriate accounting policies and applied them
consistently and made judgment and estimates that were reasonable and
prudent, so as to give a true and fair view of the state of the afairs
of the Company at the end of the financial year and of the Profit and
Loss of the Company for the year under review;
3 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; and
4 they have prepared the accounts of the Company for the financial year
ended 31st March 2015 on a going concern basis
5 proper internal financial controls laid down by them were followed by
the Company and that such internal financial controls are adequate and
were operating effectively; and
6 they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively
INTERNAL CONTROLS
Your company has put in place adequate internal financial controls The
systems and procedures adopted by the company ensure the orderly and
efcient conduct of its business and adherence to the Company's
policies, prevention and detection of frauds and errors, accuracy and
completeness of records and the timely preparation of reliable financial
information
Your company operates in SAP, an ERP system, and has many of its
accounting records stored in an electronic form and backed up
periodically The ERP system is configured to ensure that all
transactions are integrated seamlessly with the underlying books of
accounts
Management periodically reviews the financial performance of your
Company against the approved plans across various parameters and takes
necessary actions, wherever necessary
The Company's Internal Auditors have conducted periodic audits to
evaluate the adequacy & effectiveness of financial and operating internal
controls, to report significant findings to the Audit Committee of the
Board and to provide reasonable assurance that the Company's
established systems, policies and procedures have been followed The
Audit Committee constituted by the Board reviews the internal controls
and financial reporting issues with Internal Auditors on a regular basis
Compliance with laws and regulations is also monitored through
a well laid down framework which requires individual functions to
confirm and report statutory compliances on all laws and regulations
concerning their respective functions This gets integrated with the
overall compliance reporting on all laws and regulations for the
purpose of review and monitoring by the Board
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors and senior management of the Company They
have affirmed compliance with the Code of Conduct A declaration to this
effect duly signed by Mr Arvind Kumar Singhania, Chairman & CEO is
enclosed as a part of the Corporate Governance Report which forms part
of this report A copy of the Code of Conduct is available on the
Company's website viz www.esterindustries.com
The Code of Conduct is based on the fundamental principles of good
corporate governance and corporate citizenship The Code covers the
Company's commitment to sustainable development, concern for
occupational health, safety and environment, a gender friendly
workplace, transparency, auditability and legal compliance
CHANGES IN CAPITAL
During the financial year 2014-15 the following changes were effected in
the Share Capital of your Company:-
1. Scheme of Amalgamation
Pursuant to Scheme of Amalgamation between the Company and Sriyam Impex
Private Limited (SIPL), 9972703 Equity Shares of Rs 5/- each were
issued to the Shareholders of SIPL and 1,02,22,650 held by SIPL in the
Company were cancelled
2. Preferential Allotment to Non-Promoter entity Â
2,07,50,000 Warrant of Rs 10 10/- each convertible into Equity Shares
of Rs 5/- at a premium of Rs 5 10/- were issued to a Non- Promoter
entity The said warrants have been converted into Equity Shares in the
Board Meeting held on 25th May, 2015
LISTING OF SECURITIES
Your Company's Equity Shares are currently listed with Bombay Stock
Exchange Limited (BSE) and National Stock Exchange of India Limited
(NSE) The Company has paid the listing fees to BSE and NSE for the
financial year 2015-16
EXTRACT OF ANNUAL RETURNS
The details forming part of the extract of the Annual Return in form
MGT-9 is annexed herewith as Annexure B.
PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
The particulars of the loan, if any (along with the purpose of
utilization by recipient of loan) and investments covered under Section
186 of the Companies Act, 2013 are provided in Notes 12, 13 to financial
statements The Company has not issued any guarantee or provided any
security as covered under Section 186 of the Companies Act, 2013
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Companies Act, 2013 and rule made
thereunder, the Board of Directors has constituted a Corporate Social
Responsibility (CSR) Committee The details of the Composition of the
Committee is set out in Corporate Governance Report which forms part of
this report The Committee has adopted a Corporate Social Responsibility
Policy Brief outline of the CSR Policy of the Company are set out in
Annexure ÂC" of this report as prescribed in the Companies (Corporate
Social Responsibility Policy) Rules, 2014 The policy is available on
the website of the Company viz www.esterindustries.com
As per Section 135(5) of the Act, the Company needs to ensure that at
least 2% of average net Profit of preceding three financial years is
spent on CSR activities as mentioned in CSR Policy However, due to
losses incurred in past and average of preceding three financial years
(2011-12, 2012-13 and 2013-14) being a loss, the Company has not
incurred amount on CSR activities during financial year 2014-15
PERFORMANCE EVALUATION
The Company has devised a Policy for performance evaluation of all the
Directors, Board as a whole and Committees of the Board
An annual evaluation was carried out of the performance of the Board,
Board committees, all the directors and Chairperson pursuant to the
provisions of the Companies Act, 2013 and the requirements of Clause 49
of the Listing Agreement
During the year the following evaluation process was adopted Â
1 Independent Directors at their separate meeting without the presence
of Non-Independent Director, had reviewed the performance of the
Chairperson, Non-Independent Directors and the Board While evaluation
the performance of the Chairman, the views of executive directors and
non-executive directors were also taken into account
2 Nomination and Remuneration Committee carried out the evaluation of
every Director's performance The Committee, while doing so, considered
the outcome of meeting of Independent Directors;
3 The Board had evaluated its own performance, performance of its
Committees and each Director While conducting the evaluation, the Board
considered and discussed the outcome of the separate meeting of
Independent Directors and the meeting of Nomination & Remuneration
Committee
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc
The process of evaluation was based on the criteria prescribed in the
Policy on Performance Evaluation The Policy is uploaded on Company's
website and the same can be accessed at the following link
http://www.esterindustries.com/ester_cms/userfiles/file/policies/
Performance_Evaluation_Policy.pdf
POLICY AND DISCOSURE RELATING TO THE NOMINATION AND REMUNERATION OF
DIRECTORS, KEY MANAGERIAL PERSONNELS AND OTHER EMPLOYEES
The Nomination and Remuneration Committee has framed a Nomination and
Remuneration policy for determining criteria selection and appointment
of Directors, Key Managerial Personnel, Senior Management Personnel
including determining qualifications, positive attributes, independence
of a Director and other matters provided under Section 178(3) of the
Companies Act, 2013 The salient aspects covered in the Nomination and
Remuneration Policy, covering the policy on appointment and
remuneration of Directors and other matters have been outlined in the
Corporate Governance Report which forms part of this Report
The information required under Section 197 of the Companies Act, 2013
read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is provided in "Annexure  D" of this
report The same is open for inspection at the Registered Office of your
Company at all working days except Saturday, till the date of AGM
RISK MANAGEMENT SYSTEM
As per the requirements of Clause 49 of the Listing Agreement, the
Board of the Company has formed a risk management committee of
directors to frame, implement and monitor the risk management plan for
the Company The details of the Composition of the Committee is set out
in Corporate Governance Report which forms part of this report The
Company has framed a Risk Management Policy covering risk management
process, governance and execution of same Major risks identified by the
businesses and functions are systematically addressed through
mitigating actions on a continuing basis
RELATED PARTY TRANSACTIONS
All contracts or arrangements with related parties, entered into or
modified during the financial year, were on an arm's length basis and in
the ordinary course of business
All such contracts or arrangements, wherever required, have been
approved by the Audit Committee and the Board However no material
contracts or arrangements with related parties were entered into during
the year under review Accordingly, no transactions are being reported
in Form No AOC-2 provided in "Annexure  E" pursuant to Section 134 of
the Act read with Rule 8 of the Companies (Accounts) Rules, 2014
The details of the related party transactions as required under
Accounting Standard - 18 are set out in Note 34 to the standalone
financial statements forming part of this Annual Report
The Policy on Related Party Transactions, can be accessed on the
Company website at
http://www.esterindustries.com/ester_cms/userfiles/file/policies/
Related_Party_Transactions_Policy.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo as prescribed under Section 134 of
the Companies Act, 2013 read with the Companies (Accounts) Rules 2014
is set out in the "Annexure  F" forming part of this report
VIGIL MECHANISM
The Company has formulated Vigil Mechanism/Whistle Blower Policy with a
view to provide a mechanism for employees of the Company to raise
concerns of suspected frauds, any violations of legal/regulatory
requirements or code of conduct/policy of the Company, incorrect or
misrepresentation of any financial statements and reports, etc The
purpose of this Policy is to encourage employees and directors who have
concerns about suspected misconduct to come forward and express these
concerns without fear of punishment or unfair treatment The policy aims
to provide an avenue for employees and directors to raise concerns and
reassure them that they will be protected from reprisals or
victimization for whistle blowing in good faith
The practice of the Whistle Blower Policy is overseen by the Audit
Committee of the Board and no employee has been denied access to the
Committee The Policy can be accessed on the Company website at
following link -
http://www.esterindustries.com/ester_cms/userfiles/file/policies/
Whistle_blower_policy.pdf
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
In terms of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and rules made thereunder, it is
mandatory to review status of sexual harassment related complaints in
the Annual Report There were no incidents of sexual harassment reported
in the Company For protection against sexual harassment, Company has
formed an internal complaints committee to which employees can write in
their complaints The Company has a Prevention of Sexual Harassment
Policy which has laid down a process for dealing with such issues
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or
Courts or Tribunals impacting the going concern status of your Company
and its operations in future
ACKNOWLEDGEMENT
Your Directors acknowledge the cooperation and assistance received from
various departments of the Central & State Government, banks and
Non-banking finance companies Directors also express their gratitude and
thanks to Customers, Suppliers and other Business Associates for their
continued co-operation and patronage
Your Directors wish to place on record their appreciation of the
sincere services rendered by the workmen, staff and executives of the
Company at all levels ensuring successful management of the Company
Your Directors also thank the shareholders for their continued support
For and on behalf of the Board
Sd/-
New Delhi Arvind Kumar Singhania
27th July 2015 Chairman & CEO
Mar 31, 2014
To The Members
The directors are pleased to present the Twenty Eighth Annual Report
together with Audited Statement of Accounts of your Company for the
year ended 31st March 2014.
FINANCIAL RESULTS
(Rs. in lacs)
For the year ended For the year ended
31.03.2014 31.03.2013
Sales and Other Income 101956.88 96442.59
Profit before Financial Expenses,
Depreciation and Tax 7931.83 4724.44
Less: Interest & Other Financial
Expenses 3486.77 2646.81
Profit / (Loss) before Depreciation,
Extra Ordinary Items and Tax 4445.06 2077.63
Depreciation 3030.39 2858.52
Profit / (Loss) before Tax 1414.67 (780.89)
Deferred Tax 573.96 (253.90)
Impact of Scheme of amalgamation
relating to earlier period (3.76)
Profit / (Loss) after Tax 836.95 (526.99)
Balance brought forward from
previous year 11846.90 12373.89
Appropriation : Dividend & Tax on
Dividend 366.45 --
Balance Carried to Balance Sheet 12317.40 11846.90
Basic Earnings Per Share (Rupees) 1.34 (0.84)
DIVIDEND
In respect of financial year 2013-14, your directors are pleased to
recommend, subject to the approval of the shareholders, a dividend of
10% on the paid up equity share capital.
OPERATIONS REVIEW
After two years of sub optimal performance, the Company has been able
to earn Net Profit after Tax of Rs. 836.95 lacs. During the year under
review, Gross Revenue from operations crossed landmark of Rs. 1000
crores. The Gross Revenue from operations is Rs. 101,956.88 lacs as
compared to Rs. 96,442.59 lacs in the previous year, an increase of
5.7%. The increase is primarily on account of higher sales volume of
Engineering Plastics. Though the sales volume of Polyester Films
decreased by 14%, revenues of Polyester Film increased by 1.8%. The
year under review witnessed improvement in margins in Polyester Film
due to bridging of demand supply gap and increase in share of Value
Added & Specialty products in overall product portfolio. Drop in the
demand for Polyester Film in India caused by ban on use of Plastics
Films in packing of Pan Masala and Gutkha in the year 2011 has been
completely of set by increase in demand from other applications during
2012 to 2014.To mitigate the adverse effect of ban and cyclicality,
Company continued to implement the defined strategy of increasing the
proportion of Value Added & Specialty products in its portfolio. The
sales of Value Added and Specialty film increased by 15% from 5285 MT
in 2012-13 to 6064 MT in 2013-14.
In Engineering Plastics segment, following an aggressive growth
strategy, the Company achieved volume growth at a compounded annual
rate of 43% over the last two years which is significantly higher than
the industry annual growth rate of about 8%. During the year under
review, the Company, in quantitative terms, witnessed a growth of 37%
in sales of Engineering Plastics products. Consequently, Gross Revenue
from sale of Engineering Plastics products increased by 37% from Rs.
11807.17 lacs to Rs. 16191.16 lacs. Volatility in forex market and
liquidity crunch faced by customers had adverse effect on the prof
tability of Engineering Plastics segment.
As a result of various initiatives and capacity expansions over the
last five years, the Net Sales have grown at a CAGR of 20% pa, viz from
Rs. 37241 lacs in FY2008-09 to Rs. 91868 lacs in FY2013-14.
Interest and financial expenses during the year under review were 3.76%
of Net Sales with overall leveraging at prudent levels of 1.59.
Details on operations, a view on the outlook for the current year and
various strategies (internal and external) adopted by the Management
are provided in the ''Management Discussion & Analysis Report'' which
forms an integral part of this Annual Report.
CAPACITY EXPANSION
During the year under review, the Company enhanced operating capacity
in Engineering Plastics to 16500 TPA by installing state of the art
compounding extruder of 8000 TPA capacity.
To exploit the opportunity in the Optical Fiber Cable segment created
by several government & private projects including National Optic Fiber
Network''s plan to connect all 250,000 gram panchayats in the country,
the Company has enhanced its Solid State Polymerization (SSP) capacity
by 4800 TPA by installing a 32 cubic meters SSP dryer during the year
under review.
Company continued to make investment in modernization and
debottlenecking initiatives during the year under review.
PROJECTS UNDER IMPEMENTATION
Enthused by the performance of its first Bio-mass based Thermal Energy
generation unit and awareness of ongoing global warming concerns, the
Company is enhancing its Thermal Energy generation capacity by
installing an additional Bio-mass based Thermal Energy generation unit
of 10 million kilo calories. Company would be able to further reduce
its dependence on Furnace Oil based thermal energy generation after
commissioning of Bio-mass based Thermal Energy generation project by
August 2014.
In order to achieve objective of increasing proportion of Value Added &
Specialty products, Company has decided to modify Film Line # 1 by
installing Twin Screw Extruder and Primary Scanner for measuring
Thickness. With this modification, Film Line # 1 will be able to
produce various Specialty Films, reduce conversion cost and wastage.
The modification is likely to be completed by March 2015.
In addition to existing UPS of 7590 KVA, a rotary type UPS of 1670 KVA
will be installed during 2014-15. This will ensure uninterrupted supply
of power resulting into improvement in the quality of production and
reliability of operations.
Company has also undertaken Business Improvement initiatives that will
result into reduced cost, improved quality and operating ef ciency.
SCHEME OF ARRANGEMENT
Ester Industries Limited (Transferee) has entered into a Scheme of
Arrangement with M/s. Sriyam Impex Private Limited (Transferor). The
Hon''ble High Court of Uttarakhand, Nainital has approved the said
Scheme of Arrangement vide its order dated 25th March 2014. The ef
ective date of the Scheme is 7th May 2014. Company has filed necessary
intimations and forms with the concerned authorities. effect of the
Scheme has been incorporated in the accounts for the FY 2013-14.
SUBSIDIARY COMPANIES
Pursuant to Circular no. 2/2011 dated 8th February, 2011 of Ministry of
Corporate Af airs (MCA), the Company has not attached Annual Accounts
and Directors'' Report of Ester International (USA) Limited(Subsidiary
of Ester Industries Limited) for financial year 2013-14, subject to
compliance of conditions stated in the Circular.
Further the Annual Accounts of the Subsidiary Company and the related
detailed information shall be made available to the membersof the
Company or its subsidiary on their request. Such Annual Accounts shall
also be kept for inspection by any member at the Corporate office and
Registered office of the Company and its subsidiary.
FIXED DEPOSIT
The Company has not accepted any deposit during the year.
DIRECTORS
Mr. Ashok Kumar Agrawal resigned from the Directorship of the Company
w.e.f. 31st March, 2014 to pursue his career growth aspiration.
Mr. Pradeep Kumar Rustagi has been re-appointed as Whole-time Director
for 3 years w.e.f. 1st April, 2014 and Mr. Arvind Singhania has been
appointed as Whole-time Director from 21st May 2014 till 31st March
2017. Their appointments are subject to the approval of the
shareholders in the forthcoming Annual General Meeting.
As per the provisions of the Companies Act, 2013 and rules/ circulars
made thereunder, Independent Directors are required to be appointed for
a term upto five consecutive years and shall not be liable to retire by
rotation. Accordingly, resolutions proposing appointment of Independent
Directors till 31st March 2019, form part of the Notice of the Annual
General Meeting
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate
Governance as prescribed in the Listing Agreement with the Stock
Exchanges. A separate report on Corporate Governance is included as a
part of the Annual Report along with the practicing Company Secretary''s
Certif cate on its compliance.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directors'' Responsibility Statement, the
Directors confirm the following, on the basis of information placed
before them by the Management and Auditors: -
1. That in the preparation of the annual accounts for the Financial
Year ended 31st March 2014 the applicable Accounting Standards have
been followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent, so as to give a true and fair state of the af
airs of the Company at the end of the financial year and of the Profit
and Loss of the Company for the year under review;
3. That the Company has taken proper and suf cient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended 31st
March 2014 have been prepared on a going concern basis.
INTERNAL CONTROLS
The Company''s Internal Auditors have conducted periodic audit to
evaluate the adequacy & effectiveness of internal controls and to
provide reasonable assurance that the Company''s established systems,
policies and procedures have been followed. The Audit Committee
constituted by the Board reviews the internal controls and financial
reporting issues with Internal Auditors on regular basis.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors and senior management of the Company. They
have af rmed compliance with the Code of Conduct. A declaration to this
effect duly signed by Mr. Arvind Singhania, Executive Chairman is
enclosed as a part of the Corporate Governance Report. A copy of the
Code of Conduct is available on the Company''s website viz.
www.esterindustries.com
The Code of Conduct is based on the fundamental principles of good
corporate governance and corporate citizenship. The Code covers the
Company''s commitment to sustainable development, concern for
occupational health, safety and environment, a gender friendly
workplace, transparency, auditability and legal compliance.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, your directors have made available the audited
Consolidated Financial Statements in the Annual Report.
AUDITORS'' REPORT
The Auditors'' Report read together with Annexures referred to in
Paragraph 3 of the Auditors'' Report do not contain any qualification of
signif cant nature and do not call for any explanation/clarif cation.
STATUTORY AUDITORS
M/s. S.R. Batliboi & Associates LLP, Chartered Accountants have
expressed their unwillingness to be considered for reappointment as
Statutory Auditors of the Company for the ensuing term.
Your directors recommend the appointment of M/s S R Batliboi & Company
LLP, Chartered Accountants, as Statutory Auditors from the forthcoming
ie 28th Annual General Meeting till 31st Annual General Meeting. M/s S
R Batliboi & Company LLP, Chartered Accountants, have confirmed that
their appointment, if made, shall be as per Section 139 and other
applicable provisions of the Companies Act, 2013.
COST AUDITORS
During the year under review, with the approval of the Central
Government, your directors re-appointed M/s. Sanjay Gupta & Associates,
Cost Accountants as Cost Auditor to carry out the cost audit for year
FY 2013-14. The cost audit for the year 2013- 2014 shall be completed
within the statutory time limit i.e. 27th September, 2014.
The particulars of Cost Auditor and Cost Audit Report, as required vide
General Circular No. 15/2011 dated 11th April, 2011 issued by Cost
Audit Branch, Ministry of Corporate Af airs, Government of India, are
as under:
Name of the Cost Auditor for 2012-2013
M/s. Sanjay Gupta & Associates, Cost Accountants C4E/135, Janak Puri,
New Delhi- 110058
Firm Registration Number of Cost Auditor
00212
Due date for filing of Cost Audit Report for the financial 2012-13 by
the Cost Auditor with the Central Government
Within 180 days from the close of the Company''s financial year, i.e.
upto 27th September, 2013
Actual date for filing of Cost Audit Report for the financial year
2012-13 by the Cost Auditor with the Central Government
Cost Auditor filed the Cost Audit Report on 13th November, 2013
LISTING OF SECURITIES
Your Company''s securities are currently listed with Bombay Stock
Exchange Limited (BSE) and National Stock Exchange of India Limited
(NSE). The Company has paid the listing fees to BSE and NSE for the
financial year 2014-15.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The prescribed details as required under Section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure ''A'' forming part of this report. Your Company was a net
foreign exchange earner during the year under review.
PARTICULARS OF THE EMPLOYEES
The particulars of the employees drawing the salary as prescribed under
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 form part of this report.
As per the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the reports and accounts are being sent to all shareholders of
the Company excluding the statement of particulars of the employees.
Any shareholder interested in obtaining a copy may write to the Company
Secretary of the Company.
ACKNOWLEDGEMENT
Your Directors acknowledge the cooperation and assistance received from
various departments of the Central & State Government, banks and
Non-banking finance companies. Directors also express their gratitude
and thanks to Customers, Suppliers and other Business Associates for
their continued co- operation and patronage.
Your Directors wish to place on record their appreciation of the
sincere services rendered by the workmen, staf and executives of the
Company at all levels ensuring successful management of the Company.
Your Directors also thank the shareholders for their continued support.
On behalf of the Board
Place : New Delhi A.K. Singhania
Date : 4th August, 2014 Chairman
Mar 31, 2013
To The Members
The directors are pleased to present the Twenty Seventh Annual Report
together with Audited Statement of Accounts of your Company for the
year ended 31st March 2013.
FINANCIAL RESULTS
(Rs. in lacs)
For the year ended For the year ended
31.03.2013 31.03.2012
Sales and Other Income 96442.59 74785.38
Proft before Financial
Expenses, Depreciation and Tax 4724.44 4106.41
Less: Interest & Other
Financial Expenses 2646.81 3549.48
Proft / (Loss) before
Depreciation, Extra Ordinary
Items and Tax 2077.63 556.93
Depreciation 2858.52 2653.54
Proft / (Loss) before Tax (780.89) (2096.61)
Deferred Tax (253.90) (704.70)
Proft / (Loss) after Tax (526.99) (1391.91)
Balance brought forward
from previous year 12373.89 13765.80
Appropriation : General Reserve - -
: Dividend & Tax on Dividend - -
Balance Carried to Balance Sheet 11846.90 12373.89
Basic Earnings Per Share (Rupees) (0.84) (2.21)
DIVIDEND
In the absence of profts, your directors do not recommend any dividend.
OPERATIONS REVIEW
The Gross Revenue from operations during the year under review is Rs.
96,442.59 lacs as compared to Rs. 74,785.38 lacs in the previous year,
an increase of 29%. The increase is primarily on account of higher
sales volume of Polyester Chips, Engineering Plastics and Specialty
Polymers. Though the sales volume of Polyester Films decreased
marginally, revenues of Polyester Film increased by 5.9%. The margins
in the Polyester Film business remained under pressure due to an
adverse demand supply situation caused by commissioning of further new
capacities in 2012-13. The collective demand for Polyester Film in
India in FY 2012-13 and FY 2011-12 increased to such an extent that all
the loss of demand caused in the domestic market due to the ban on use
of Plastics Films in packing of Pan Masala and Gutkha during FY
2010-11, was more than recovered. To mitigate the efect of loss of
sales volumes due to the aforesaid ban and cyclicality in its markets,
the Company continued to focus on increasing the proportion of Value
Added and specialty products in its portfolio and also initiated
engagements with key accounts to ink long term sales agreements indexed
to the raw material. The sales of Value Added products and Specialty
flms increased from 8898 MT in 2011-12 to 10493 MT in 2012-13
To counter the threat of cheaper imports of Engineering Plastics in CFL
segment, development of cost efective formulations yielded the desired
results and the Company could regain erstwhile lost market share. The
Company witnessed a material growth of 49% in sales of Engineering
Plastics products. Consequently, the Net Sales of Engineering Plastics
increased from Rs. 7,036.84 lacs to Rs. 10,528.07 lacs.
As a result of a focused strategy adopted by the management, the sales
of Polyester Chips increased by about 180% both in quantity and value
terms.
The Company''s initiative to diversify into Specialty Polymers is on
track and is likely to yield good results in the following years. The
Sales volume of Specialty Polymers increased from 472 MT in FY2011-12
to 2241 MT in FY2012-13, an increase of 375% with corresponding sales
value increasing from Rs. 568.98 lacs to Rs. 3983.68 lacs.
As a result of various initiatives and capacity expansions over the
last fve years, the Net Sales have grown at a CAGR of 22% pa, viz from
Rs. 31,918.21 lacs in FY2007-08 to Rs. 87,129.44 lacs in FY2012-13.
The production of Polyester Film was marginally lower at 50,076 MT as
compared to 51,744 MT during the year 2011-12. The capacity utilization
in Polyester Films was approx. 88%, which is a good performance
considering that the capacity was enhanced in FY 2010-11.
Pursuant to the clarifcation issued by Ministry of Corporate Afairs,
Government of India dated 9th August 2012, the foreign exchange
fuctuation on foreign currency borrowings for Capital goods has been
capitalized. Interest and fnancial expenses during the year under
review were 2.99% of Net Sales with overall leveraging at prudent
levels of 1.48.
Subsequent to the registration of Bio-mass based Thermal Energy
generation project of the Company by the Executive Board of the Clean
Development Mechanism (CDM) under United Nations Framework Convention
on Climate Change in its meeting dated 15th April 2011, the Company has
started to earn Certifed Emissions Reductions (CERs) with efect from
November 2010. As the Company is aware of ongoing global environment
concerns, it has committed to enhance its Thermal Energy generation
capacity by installing an additional Bio-mass based Thermal Energy
generation project of 10 million kilo calories during FY2013-14 to
reduce its dependence on Furnace Oil based thermal energy generation.
Details on operations, a view on the outlook for the current year and
various strategies (internal and external) adopted by the Management
are provided in the ''Management Discussion & Analysis Report'' which
forms an integral part of this Annual Report.
CORPORATE OFFICE BUILDING
During the year under review, the Company moved its Corporate Ofce from
a rented premises in the Central Business District of Gurgaon to a self
owned premises in the upcoming area of Infocity, Gurgaon.
DEBOTTLENECKING AND MODERNIZATION PROJECTS
The Company has undertaken to invest about Rs. 60 crores during FY
2013-14 in various initiatives that will enhance capability / capacity
to increase production of Value Added products, reduce Power & Fuel
cost and improve operating efciency. By the end of FY2013-14, Company
would be commissioning additional extrusion capacity of 8000 MT per
annum in Engineering Plastics. With this expansion, the operating
capacity in Engineering Plastics will increase from 8500 MT per annum
to 16500 MT per annum.
SCHEME OF ARRANGEMENT
Ester Industries Limited (Transferee) has entered into a Scheme of
Amalgamation with M/s. Sriyam Impex Private Limited (Transferor). Your
directors have already approved the Scheme. After the implementation
of the Scheme, M/s. Sriyam Impex Private Limited will be merged into
your company. The Company has obtained ''No Objection Certifcates'' from
NSE and BSE as per Listing Agreement and as on date, the company is in
process to fle the petition to Hon''ble High Court of Uttarakhand.
SUBSIDIARY COMPANIES
Pursuant to Circular no. 2/2011 dated 8th February, 2011 of Ministry of
Corporate Afairs (MCA), the Company has not attached Annual Accounts
and other statutory reports of Ester International (USA) Limited
(Subsidiary of Ester Industries Limited) for fnancial year 2012-13,
subject to compliance of conditions stated in the Circular.
Further the Annual Accounts of the Subsidiary Company and the related
detailed information shall be made available to the members of the
Company or its subsidiary on their request. Such Annual Accounts shall
also be kept for inspection by any member at the Corporate Ofce and
Registered Ofce of the Company and its subsidiary. The same is also
available on company''s website viz. www.esterindustries.com.
FIXED DEPOSIT
The Company has not accepted any deposit during the year.
DIRECTORS
Mr. P S Dasgupta and Dr. Anand Chand Burman, directors of the Company,
retire by rotation and being eligible, ofer themselves for
reappointment at the ensuing Annual General Meeting.
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate
Governance as prescribed in the Listing Agreement with the Stock
Exchanges. A separate report on Corporate Governance is included as a
part of the Annual Report along with the practicing Company Secretary''s
Certifcate on its compliance.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directors'' Responsibility Statement, the
Directors confrm the following, on the basis of information placed
before them by the Management and Auditors: -
1. That in the preparation of the annual accounts for the Financial
Year ended 31st March 2013 the applicable Accounting Standards has been
followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent, so as to give a true and fair state of the
afairs of the Company at the end of the fnancial year and of the Proft
and Loss of the Company for the year under review;
3. That the Company has taken proper and sufcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the fnancial year ended 31st
March 2013 have been prepared on a going concern basis.
The Company''s Internal Auditors have conducted periodic audit to
evaluate the adequacy & efectiveness of internal controls and to
provide reasonable assurance that the Company''s established systems,
policies and procedures have been followed. The Audit Committee
constituted by the Board reviews the internal controls and fnancial
reporting issues with Internal Auditors on regular basis.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors and senior management of the Company. They
have afrmed compliance with the Code of Conduct. A declaration to this
efect duly signed by Executive Director  Operations & Projects is
enclosed as a part of the Corporate Governance Report. A copy of the
Code of Conduct is available on the Company''s website viz.
www.esterindustries.com
The Code of Conduct is based on the fundamental principles of good
corporate governance and corporate citizenship. The Code covers the
Company''s commitment to sustainable development, concern for
occupational health, safety and environment, a gender friendly
workplace, transparency, auditability and legal compliance.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, your directors have made available the audited
Consolidated Financial Statements in the Annual Report.
AUDITORS'' REPORT
The Auditors'' Report read together with Annexures referred to in
Paragraph 3 of the Auditors'' Report do not contain any qualifcation of
signifcant nature and do not call for any explanation/clarifcation.
STATUTORY AUDITORS
M/s S.R. Batliboi & Co. LLP, Chartered Accountants who retires at this
Annual General Meeting has shown its unwillingness for reappointment as
Statutory Auditors of the Company and has not ofered themselves for
reappointment.
The Company has received special notice of a resolution from a Member
of the Company, in terms of the applicable provisions of the Act,
signifying his intention to propose the appointment of M/s. S. R.
Batliboi & Associates LLP as the statutory auditors, in place of
existing Statutory Auditors, of the Company from the conclusion of this
AGM till the conclusion of the next AGM of the Company.
Your Directors recommend the appointment of M/s. S. R. Batliboi &
Associates LLP, Chartered Accountants as Statutory Auditors.
M/s. S. R. Batliboi & Associates LLP has expressed its willingness to
act as statutory auditors of the Company, if appointed, and have
further confrmed that the said appointment would be in conformity with
the provisions of Section 224(1B) of the Act.
COST AUDITORS
During the year under review, with the approval of the Central
Government, your directors re-appointed M/s. Sanjay Gupta & Associates,
Cost Accountants as Cost Auditor to carry out the cost audit for the
year 2013-14. The cost audit for the year 2012-2013 shall be completed
within the stipulated time as prescribed in the Companies Act, 1956
read with Cost Audit (Report) Rules, 2001.
The particulars of Cost Auditor and Cost Audit Report, as required vide
General Circular No. 15/2011 dated 11th April, 2011 issued by Cost
Audit Branch, Ministry of Corporate Afairs, Government of India, are as
under:
Name of the Cost Auditor M/s. Sanjay Gupta &
Associates, Cost Accountants
C4E/135, Janak Puri,
New Delhi - 110058
Firm Registration Number
of Cost Auditor 00212
Due date for fling of
Cost Audit Report for the
fnancial year 2012-13
by the Cost Auditor with the
Central Government Within 180 days from the
close of the Company''s
fnancial year, i.e.
upto 27th September, 2013
Actual date for fling of
Cost Audit Report for the
fnancial year 2012-13 by
the Cost Auditor with the
Central Government The report shall be fled to
the Central Government within
due date.
LISTING OF SECURITIES
Your Company''s securities are currently listed with Bombay Stock
Exchange Limited (BSE) and National Stock Exchange of India Limited
(NSE). The Company has paid the listing fees to BSE and NSE for the
fnancial year 2013-14.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The prescribed details as required under Section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure ''A'' forming part of this report. Your Company was a net
foreign exchange earner during the year under review.
PARTICULARS OF THE EMPLOYEES
The particulars of the employees drawing the salary as prescribed under
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 form part of this report.
As per the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the reports and accounts are being sent to all shareholders of
the Company excluding the statement of particulars of the employees.
Any shareholder interested in obtaining a copy may write to the Company
Secretary of the Company.
ACKNOWLEDGEMENT
Your Directors acknowledge the cooperation and assistance received from
various departments of the Central & State Government, banks and
Non-banking fnance companies.
Your Directors wish to place on record their appreciation of the
sincere services rendered by the workmen, staf and executives of the
Company at all levels ensuring successful management of the Company.
Your Directors also thank the shareholders for their continued support.
On behalf of the Board
Place : Gurgaon (A.K. Singhania)
Date : 5th August, 2013 Chairman
Mar 31, 2012
The directors are pleased to present the 26th Annual Report together
with Audited Statement of Accounts of your Company for the year ended
31st March 2012.
FINANCIAL RESULTS
(Rs. in lacs)
For the
year ended For the
year ended
31.03.2012 31.03.2011
Sales and Other Income 74785.38 71900.94
Profit before Financial Expenses,
Depreciation and Tax 4106.41 22408.30
Less: Interest & Other Financial Expenses 3549.48 1276.40
Profit / (Loss) before Depreciation, Extra
Ordinary Items and Tax 556.93 21131.90
Depreciation 2653.54 1792.58
Profit / (Loss) before Tax (2096.61) 19339.32
Current Tax - 5339.81
MAT Credit Entitlement - -
Deferred Tax (704.70) 1052.74
Profit / (Loss) after Tax (1391.91) 12946.77
Balance brought forward from previous year 13765.80 5042.44
Appropriation : General Reserve _ 1294.68
: Dividend & Tax on Dividend _ 2928.73
Balance Carried to Balance Sheet 12373.89 13765.80
Basic Earnings Per Share (Rupees) (2.21) 20.59
DIVIDEND
In the absence of profits, your directors do not recommend any
dividend.
OPERATIONS REVIEW
Gross Revenue from operations during the year under review is Rs.
747,85.38 lacs as compared to Rs. 719,00.94 lacs in the previous year,
an increase of 4.01%. The increase is primarily on account of larger
sales volume of Polyester Film (Current Year - 50,207 MT, Previous Year
- 31,210 MT). Though the volume of sales of Polyester Film increased by
60.9%, the sales of Polyester Film in value terms increased by only
5.9%. The increase in value terms was not proportionate to increase in
volume terms on account of drastic reduction in per unit realization,
due to adverse demand supply situation. Adverse demand supply
situation was caused mainly due to commissioning of new capacities both
in India & Overseas and on account of ban on use of plastic films in
packing of Pan Masala & Gutkha. Consumption of Polyester Film in Pan
Masala & Gutkha accounted for 30% - 35% of the domestic demand, though
the demand of Polyester Film for other applications continued to grow
at about 15%. Drastic reduction in unit realization and margins
resulted in Net Loss after Tax of Rs. 13,91.91 lacs during the current
year as compared to Profit of Rs. 129,46.76 lacs in the previous year.
Due to cheaper imports coming in from China, the sale of Engineering
Plastics in CFL segment was lower by 40.6% as compared to previous
year. Consequently, Net Sales of Engineering Plastics decreased by 8.6%
from Rs. 7698.35 lacs to Rs. 7035.39 lacs, Due to adverse demand supply
situation, the sale of Polyester Chips was also lower than the previous
year by 26.2%.
Company responded well to the adverse impact on domestic demand for
Polyester Film caused due to ban and increased its focus on exports.
During the year, Exports of Polyester Film increased by 78.7% in
quantitative terms and by 27.4% in value terms. Exports accounted for
40.2% of the Net Sales Turnover of the company during the year.
The production of Polyester Film was higher at 51744 MT as compared to
32116 MT during the year 2010-11 on account of commissioning of new
Polyester Film plant in January 2011 and successful operation of
enhanced capacity resulted in capacity utilization of approx. 91% in
Polyester Film.
On account of borrowings including foreign currency borrowings for the
expansion projects and higher utilization of working capital
facilities, interest and other financial expenses increased from Rs.
1276.40 lacs to Rs. 3549.48 lacs. During the year 2011-12, Finance cost
includes loss of Rs. 906.01 Lacs representing exchange losses arising
on restatement of foreign currency borrowings to the extent they are
regarded as an adjustment to finance cost, in accordance with paragraph
4(e) of Accounting Standard 16 - 'Borrowing Cost'. Interest and
financial expenses during the year under review were 5.07% of Net Sales
though overall leveraging was still at prudent levels of 1.32.
Executive Board of the Clean Development Mechanism (CDM) under United
Nations Framework Convention on Climate Change in its meeting dated
15th April 2011 has approved registration of Biomass based Thermal
energy generation project of the company. Company would now be entitled
to earn Certified Emissions Reductions (CERs) with effect from November
2010.
Details on operations, a view on the outlook for the current year and
mitigation strategies adopted by the Management are provided in the
'Management Discussion & Analysis Report' which forms an integral part
of this Annual Report.
DEBOTTLENECKING PROJECTS
During the year under review, Company successfully commissioned
Recycling Extruder, Off - Line Coater and Thermic Fluid Heating system.
The initiatives would enable the Company to improve operating
efficiency, inventory management and production of Value Added
products.
SUBSIDIARY COMPANIES
Pursuant to Circular no. 2/2011 dated 8th February, 2011 of Ministry of
Corporate Affairs (MCA), the Company has not attached Annual Accounts
and other statutory reports of Ester International (USA) Limited
(Subsidiary of Ester Industries Limited) for financial year 2011-12
subject to compliance of conditions stated in the Circular.
Further the Annual Accounts of the Subsidiary Company and the related
detailed information shall be made available to the members of the
Company or its subsidiary on their request. Such Annual Accounts shall
also be kept for inspection by any member at the Corporate Office and
Registered Office of the Company and its subsidiary.
FIXED DEPOSIT
The Company has not accepted any deposit during the year.
DIRECTORS
The terms and conditions of appointment of Mr. Pradeep Kumar Rustagi,
Executive Director & CFO and Mr. Ashok Kumar Agarwal, Executive
Director - Operations & Projects were modified in the Board Meeting
held on 14th February, 2012 with approval of shareholders in the
Extra-Ordinary General Meeting held on 7th April, 2012.
Mr. V. B. Haribhakti, Mr. Dinesh Chandra Kothari and Mr. Arvind Kumar
Singhania, directors of the Company, retire by rotation and being
eligible, offer themselves for reappointment at the ensuing Annual
General Meeting.
CORPORATE GOVERNANCE
The Company has complied with the mandatory provisions of Corporate
Governance as prescribed in the Listing Agreement with the Stock
Exchanges. A separate report on Corporate Governance is included as a
part of the Annual Report along with the practicing Company Secretary's
Certificate on its compliance.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directors' Responsibility Statement, the
Directors confirm on the basis of information placed before them by the
Management and Auditors:-
1. That in the preparation of the annual accounts for the Financial
Year ended 31st March 2012 the applicable Accounting Standards has been
followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair state of the
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;
3. That the Company has 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
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended 31st
March 2012 has been prepared on a going concern basis.
The Company's Internal Auditors have conducted periodic audit to
evaluate the adequacy of internal controls and to provide reasonable
assurance that the Company's established policies and procedures have
been followed. The Audit Committee constituted by the Board reviews the
internal controls and financial reporting issues with Internal Auditors
on regular basis.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors and senior management of the Company. They
have affirmed compliance with the Code of Conduct. A declaration to
this effect duly signed by Executive Director-Operations & Projects is
enclosed as a part of the Corporate Governance Report. A copy of the
Code of Conduct is available on the Company's website viz.
www.esterindustries. com
Code is based on fundamental principles, viz. good corporate governance
and corporate citizenship. The Code covers Company's commitment to
sustainable development, concern for occupational health, safety and
environment, a gender friendly workplace, transparency and auditability
and legal compliance.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, your directors provide the audited Consolidated
Financial Statements in the Annual Report.
AUDITORS' REPORT
Auditors' Report read together with Annexures referred to in Paragraph
3 of the Auditors' Report do not contain any qualification of
significant nature and do not call for any explanation/clarification.
AUDITORS
M/s. S.R. Batliboi & Company, Chartered Accountants retire at the
forthcoming Annual General Meeting and are eligible for reappointment.
M/s S. R. Batliboi & Company has confirmed that their appointment, if
made, shall be within the limits of Section 224(1B) of the Companies
Act, 1956.
COST AUDITOR
During the year under review, Ministry of Corporate Affairs (MCA) had
issued orders and notification under which the Company is required to
appoint Cost Auditor in terms of section 233B of the Companies Act,
1956 to get the cost Records audited for financial year 2012-13 and
onwards.
Your Directors have appointed M/s Sanjay Gupta & Associates, Cost
Accountants, to conduct the audit of Cost Records of the Company for
the financial year 2012-13 in respect of all Businesses of the Company
LISTING OF SECURITIES
Your Company's securities are currently listed with Bombay Stock
Exchange Limited (BSE) and National Stock Exchange of India Limited
(NSE). The Company has paid the listing fees to BSE and NSE for the
financial year 2012-13.
CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The prescribed details as required under Section 217(1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure 'A' forming part of this report. Your Company was a net
foreign exchange earner during the year under review.
PARTICULARS OF THE EMPLOYEES
The particulars of the employees drawing the salary as prescribed under
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 form part of this report.
As per the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the reports and accounts are being sent to all shareholders of
the Company excluding the statement of particulars of the employees.
Any shareholder interested in obtaining a copy may write to the Company
Secretary of the Company.
ACKNOWLEDGEMENT
Your Directors acknowledge the cooperation and assistance received from
various departments of Central & State Government and banks.
Your Directors wish to place on record their appreciation of the
sincere services rendered by the workmen, staff and executives of the
Company at all levels ensuring successful management of the Company.
Your Directors also thank the shareholders for their continued support.
On behalf of the Board
Date : 1st August, 2012 Arvind Kumar Singhania
Place : New Delhi Chairman
Mar 31, 2011
The directors are pleased to present the Twenty Fifth Annual Report
together with Audited Statement of Accounts of your Company for the
year ended 31st March 2011.
Financial Results (Rs. in lacs)
For the year ended For the year ended
31st March 2011 31st March 2010
Sales and Other Income 70,871.56 42,286.69
Profit before Financial
Expenses, Depreciation and Tax 22,324.45 6,192.79
Less: Interest & Other
Financial Expenses 1,192.55 643.22
Profit / (Loss) before
Depreciation, Extra O
rdinary Items and Tax 21,131.90 5,549.57
Depreciation 1,792.58 1,415.32
Profit / (Loss) before Tax 19,339.32 4,134.24
Current Tax 5,339.82 1,127.25
MAT Credit Entitlement à 8.85
Deferred Tax 1,052.73 229.29
Profit / (Loss) after Tax 12,946.76 2,786.56
Balance brought forward
from previous year 5,042.44 3,198.27
Appropriation : General Reserve 1,294.68 208.99
: Dividend & Tax on Dividend 2,928.73 733.40
Balance Carried to Balance Sheet 13,765.80 5,042.43
Basic Earnings Per Share (Rs.) 20.59 4.85
Dividend
Your directors were pleased to declare interim dividend of 40%
consequent to a vastly improved performance. The directors have now
recommended final dividend of 40% making aggregate dividend of 80%.
Operations Review
Your directors are pleased to inform that during the year under review,
Company has earned Net Profit after Tax of Rs. 12946.76 lacs as
compared to Rs.2786.54 lacs in the year 2009-10, an increase of 364.6%
on account of significant improvement in
margins in Polyester Film business due to favorable demand supply
scenario. The sales including excise duty and other income during the
year under review are Rs. 70869.56 lacs as compared to Rs. 42286.69
lacs in the previous year, an increase of 67.6% This increase is mainly
due to increase in per unit sales realisation and better product mix in
Polyester Film. The production of Polyester Film was higher at 32116 MT
as compared to 30122 MT during 2009-10 on account of commissioning of
new Polyester Film plant in January 2011.
Sales (net of Excise Duty) of Compounded and Unfilled Engineering
Plastics increased from Rs.6569.45 lacs to Rs. 7698.35 lacs, an
increase of 17.2%. Sales value of Polyester Chips increased 67.0%.
Exports accounted for 32.7% of the net turnover of the Company during
the year.
On account of fresh borrowings for the expansion projects and higher
utilisation of working capital facilities, interest and other financial
expenses increased from Rs.643.22 lacs to Rs.1192.55 lacs, an increase
of 85.4%. As percentage to Net Sales, interest and financial expenses
were 1.80%.
As a result of continuous focus on development of new products, the
proportion of Value Added products in the total sales quantities of
Polyester Film increased from 17% to 23%.
Executive Board of the Clean Development Mechanism (CDM) under United
Nations Framework Convention on Climate Change in its meeting dated
15th April 2011 has approved the registration of a Biomass-based
Thermal energy generation project of the Company. Company would now be
entitled to earn Certified Emissions Reductions (CERs) with effect from
November 2010.
Details on operations and a view on the outlook for the current year
are provided in the Management Discussion & Analysis Report which
forms an integral part of this Annual Report.
Expansion Projects
During the year under review, Company has successfully commissioned
Continuous Polymerisation plant of 71,000 MT capacity, Polyester Film
plant of 30,000 MT capacity and Metalliser of 7,200 MT capacity as per
schedule. By the year end, capacity utilisation of 70% has been
achieved in the new Polyester Film plant.
Subsidiary Companies
In pursuance to Section 212 of the Companies Act, 1956, the audited
statement of accounts along with the report of the Board of Directors
of Ester International (USA) Limited is annexed.
Fixed Deposit
The Company has not accepted any deposit during the year.
Directors
Dr. Anand Burman and Mr. P. S. Dasgupta were appointed Additional
Directors effective from 12th August 2010 and 14th February 2011
respectively to hold office upto the date of the ensuing Annual General
Meeting. The Company has received requisite notice under Section 257 of
the Companies Act, 1956 in writing from members proposing their
candidature for the office of Director liable to retire by rotation.
Mr. Arvind Kumar Singhania, Chairman and Managing Director of the
Company had resigned from the office of Managing Director effective
from 1st April 2011. He will continue to act as Non-Executive Chairman
of the Company.
Mr. Pradeep Kumar Rustagi, Chief Financial Officer and Mr. Ashok
Agarwal, Business Head- Film of the Company were inducted to the Board
and appointed as Whole time Directors effective from 14th February 2011
subject to the approval of the shareholder in the ensuing Annual
General Meeting. They
were appointed as Additional Directors to hold office upto the date of
the ensuing Annual General Meeting. The Company has received requisite
notice under Section 257 of the Companies Act, 1956 in writing from
members proposing their candidature. Board has now granted the
authority to Mr. Ashok Agarwal and Mr. Pradeep Kumar Rustagi that were
earlier vested with Mr. Arvind Kumar Singhania.
Mr. Ashok Kumar Newatia and Mr. M. S. Ramachandran, directors of the
Company, retire by rotation and being eligible, offer themselves for
reappointment at the ensuing Annual General Meeting.
Mr. M. R. Hosangady and Mr. A. P. Sarwan, Independent Directors of the
Company have resigned from the directorship of the Company with effect
from 7th January 2011 and 12th January 2011 respectively.
Corporate Governance
The Company has complied with the mandatory provisions of Corporate
Governance as prescribed in the Listing Agreement with the Stock
Exchange. A separate report on Corporate Governance is included as a
part of the Annual Report along with the Practicing Company Secretarys
Certificate on its compliance.
Directors Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directors Responsibility Statement, the
Directors confirm on the basis of information placed before them by the
Management and Auditors:-
1. That in the preparation of the annual accounts for the Financial
Year ended 31st March 2011 the applicable Accounting Standards have
been followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair state of the
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;
3. That the Company has 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
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the financial year ended 31st
March 2011 has been prepared on a going concern basis.
The Companys Internal Auditors have conducted periodic audits to
evaluate the adequacy of internal controls and to provide reasonable
assurance that the Companys established policies and procedures have
been followed. The Audit Committee constituted by the Board reviews the
internal controls and financial reporting issues with Internal
Auditors.
Code of Conduct
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors and senior management of the Company. They
have affirmed compliance with the Code of Conduct. A declaration to
this effect duly signed by Executive Director and Business Head-Films
is enclosed as a part of the Corporate Governance Report. A copy of the
Code of Conduct is available on the Companys website viz.
www.esterindustries.com
Code is based on fundamental principles, viz. good corporate governance
and corporate citizenship. The Code covers Companys commitment to
sustainable development, concern for occupational health, safety and
environment, a gender friendly workplace, transparency and auditability
and legal compliance.
Consolidated Financial Statement
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, your directors provide the audited Consolidated
Financial Statements in the Annual Report.
Auditors Report
Auditors Report read together with Annexures referred to in Paragraph
3 of the Auditors Report do not contain any qualification of
significant nature and do not call for any explanation/clarification.
Auditors
M/s. S.R. Batliboi & Company, Chartered Accountants retire at the
forthcoming Annual General Meeting and are eligible for reappointment.
M/s S. R. Batliboi & Company have confirmed that their appointment, if
made, shall be within the limits of Section 224(1B) of the Companies
Act, 1956.
Listing of Securities
Your Companys securities are currently listed with BSE (Mumbai).
During the year, the securities of the Company were delisted from
Calcutta Stock Exchange (CSE) under SEBI (Delisting of Securities)
Guidelines 2003. The Company has paid the listing fees to Mumbai Stock
Exchange for the financial year 2011-2012.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earning and Outgo
The prescribed details as required under Section 217(1) (e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure A forming part of this report. Your Company was a net
foreign exchange earner during the year under review.
Particulars of the Employees
The particulars of the employees drawing the salary as prescribed under
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 form part of this report.
As per the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the reports and accounts are being sent to all shareholders of
the Company excluding the statement of particulars of the employees.
Any shareholder interested in obtaining a copy may write to the Company
Secretary of the Company.
Acknowledgement
Your Directors acknowledge the cooperation and assistance received from
various departments of Central & State Government and banks.
Your Directors wish to place on record their appreciation of the
sincere services rendered by the workmen, staff and executives of the
Company at all levels ensuring successful management of the Company.
Your Directors also thank the shareholders for their continued support.
On behalf of the Board
(A.K. Singhania)
Chairman
New Delhi
9th May 2011
Mar 31, 2010
The directors are pleased to present the Twenty Fourth Annual Report
together with Audited Statement of Accounts of your Company for the
year ended 31st March 2010.
FINANCIAL RESULTS
OPERATIONS
Your directors are pleased to inform that during the year under review,
Company has earned Net Profi t after Tax of Rs. 2786.56 lacs as
compared to Rs. 3343.39 lacs in the year 2008-09. The sales including
excise duty and other income
For the year For the year
ended ended
31.03.2010 31.03.2009
(Rs. In Lacs) (Rs. In Lacs)
Sales and Other Income 42271.69 40514.06
Profit before Financial Expenses,
Depreciation and Tax 6177.79 7113.76
Less - Interest & Other Financial Expenses 628.22 963.45
Profi t / (Loss) before Depreciation, Extra
Ordinary Items and Tax 5549.57 6150.31
Less - Depreciation 1415.32 1341.68
Profit / (Loss) before Tax 4134.25 4808.64
Less - Current Tax 1127.25 -
Minimum Alternate Tax - 540.86
MAT Credit Entitlement (8.85) (682.54)
Fringe Benefi t Tax - 34.90
Deferred Tax 229.29 1572.03
Profi t / (Loss) after Tax 2786.56 3343.39
Balance brought forward from previous year 3198.27 459.62
Appropriation : Transfer to General Reserve 208.99 -
: Transfer to Capital Redemption Reserve - 279.76
: Dividend & Tax on Dividend 733.40 324.98
Balance Carried to Balance Sheet 5042.44 3198.27
Basic Earnings Per Share (Rupees) 4.85 6.02
DIVIDEND
In respect of fi nancial year 2009-10, your directors are pleased to
recommend, subject to the approval of the shareholders, a dividend of
20% i.e. Rs. 1.00 per equity share on the paid- up equity share capital
as compared to 10% for the fi nancial year 2008-09.
during the year under review are Rs. 42271.69 lacs as compared to Rs.
40514.06 lacs in the previous year, an increase of 4.3%. This increase
is mainly due to increase in sale of Engineering Plastics both in
quantitative & value terms. The production of Polyester Film was higher
at 30122 MT as compared to 29534 MT during 2008-09
as a result of continuous process improvements. The capacity
utilisation in Polyester Film remained higher than the operating
capacity at 111.6%.
Sales of Compounded and Unfi lled Engineering Plastics increased from
2744 MT to 5833 M T, an increase of 112.6%. Sales (net of excise duty)
in value terms increased from Rs. 3411.23 lacs to Rs. 6569.45 lacs, an
increase of 92.6%. Sales of Polyester Chips has increased both in
quantitative and value terms by 11%. Exports accounted for 20.3% of the
turnover during the year.
Interest and other Financial Expenses reduced signifi cantly during the
year due to repayment of term loans and lower utilisation of working
capital facilities on account of retention of profi ts.
Net Profi t after Tax has reduced on account of following exceptional
items viz: (a) Mark à To à Market (MTM) losses of Rs. 402.13 lacs
towards forward contracts booked to hedge the foreign currency
liabilities related to Capital Goods under Polyester Film Expansion
Project, (b) increase of Rs. 160.00 lacs in managerial remuneration on
account of payment of commission on profi ts earned to Whole Time
Director and (c) increase of Rs. 42.00 lacs in Administrative and Other
Expenses on account of payment of commission on profi ts earned to Non-
Executive Directors..
Company continues to remain focused on development of new products and
during the year under review, certain new value added niche products
were developed and commercialised, both in Polyester Film and
Engineering Plastics.
Environment friendly/Cost reduction initiatives like installation of
Bio-mass (Rice Husk) based Thermic Fluid Heater and Glycol Ejectors
implemented in later part of the year 2008-09 have given the envisaged
results during the year under review.
Details on operations and a view on the outlook for the current year
are provided in the ÃManagement
Discussion & Analysis Reportà which forms an integral part of this
Annual Report.
CAPITAL
Pursuant to the resolution passed by the Shareholders of the Company at
the Extra Ordinary General Meeting (EGM) held on 21st October 2009, the
Company has by way of preferential issue allotted 21,73,914 Share
Warrants of face value of Rs. 5.00 each to Promoters, 26,08,696 Zero
Coupon Unsecured Fully and Compulsorily Convertible Debentures (FCD) of
face value of Rs. 5.00 each to an Independent Overseas Investor and
26,08,696 Zero Coupon unsecured Fully and Compulsorily Convertible
Debentures (FCD) of Face Value of Rs. 5.00 each to Person Acting in
Concert with Promoters for cash at a premium of Rs. 18.00 as part fi
nancing of the Polyester Film Expansion Project. Board of Directors in
the meeting dated 24th December 2009 has converted these Share Warrants
and FCDs into 73,91,306 equity shares at a price of Rs. 23.00 including
premium of Rs. 18.00 per equity share.
ENGINEERING PLASTICS
Your company commissioned new extruder for Compounded Engineering
Plastics of 9,600 MTPA capacity in November 2009, thereby taking the
total capacity to 14,400 MTPA. During the year under review, capacity
utilisation, on pro rata basis, was 55.6%. Company is confi dent of
improving capacity utilization during 2010 Ã11 and achieving near 100%
capacity utilization in 2011Ã12.
After commissioning of extruder in November 2009, company has been able
to develop Poly Carbonate and ABS compounds and expects to
commercialise sales on a larger scale in the year 2010 Ã 11.
EXPANSION PROJECTS
During the year under review, Company has undertaken expansion of
Polyester Film capacity. Progress in the implementation of project is
going on as per schedule. Financial closure for
the project is already achieved. Company is going for cost effective
ÃContinuous Polymerization and Direct Castingà technology. Project is
likely to be commissioned by December 2010. Company has also undertaken
expansion of Polyester Chips by putting up a Continuous Polymerization
plant of 70,000 MTPA capacity.
Besides these expansions, company is installing a Metallizer with a
capacity of 7,200 MTPA at a project cost of Rs. 2000.00 lacs, thereby
taking the total capacity to 13,200 MTPA. Metallizer is likely to be
commissioned by October 2010.
COST REDUCTION INITIATIVES Your directors are pleased to inform that
continuous focus on Cost reduction has enabled the company to remain
competitive. During the year 2010 -11, a further investment of Rs. 400
lacs has been planned in various projects which will have a Payback
period of less than a year.
SUBSIDIARY COMPANIES In pursuance to Section 212 of the Companies Act,
1956, the audited statement of accounts along with the report of the
Board of Directors of Ester International (USA) Ltd. and Ester Europe
GmbH are annexed.
FIXED DEPOSIT
The Company has not accepted any deposit
during the year.
DIRECTORS
Mr A P Sarwan and Mr. Dinesh Kothari, directors of the Company retire
by rotation at the ensuing Annual General Meeting and being eligible,
have offered themselves for re-appointment.
CORPORATE GOVERNANCE The Company has complied with the mandatory
provisions of Corporate Governance as prescribed in the Listing
Agreement with the Stock Exchanges. A separate report on Corporate
Governance is included as a part of the Annual Report along with the
practicing Company
SecretaryÃs Certifi cate on its compliance.
DIRECTORSÃ RESPONSIBILITY STATEMENT Pursuant to the requirement under
Section 217(2AA) of the Companies Act, 1956 with respect to the
Directorsà Responsibility Statement, the Directors confi rm on the
basis of information placed before them by the Management and Auditors:
-
1. That in the preparation of the annual accounts for the Financial
Year ended 31st March 2010 the applicable Accounting Standards have
been followed;
2. That the Company has selected appropriate accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair state of the
affairs of the Company at the end of the fi nancial year and of the
Profi t and Loss of the Company for the year under review;
3. That the Company has taken proper and suffi cient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. That the accounts of the Company for the fi nancial year ended 31st
March 2010 has been prepared on a going concern basis.
CODE OF CONDUCT
The Code of Conduct, as adopted by the Board of Directors, is
applicable to all Directors and senior management of the Company. They
have affi rmed compliance with the Code of Conduct. A declaration to
this effect duly signed by Chairman and Managing Director is enclosed
as a part of the Corporate Governance Report. A copy of the Code of
Conduct is available on the CompanyÃs website viz.
www.esterindustries.com
Code is based on fundament al principles, viz. good corporate
governance and corporate citizenship. The Code covers CompanyÃs
commitment to sustainable development, concern for occupational health,
safety and environment, a gender friendly workplace, transparency and
auditability and legal compliance.
CONSOLIDATED FINANCIAL STATEMENT In accordance with the Accounting
Standard AS-21 on Consolidated Financial Statements, your directors
provide the audited Consolidated Financial Statements in the Annual
Report.
AUDITORSÃ REPORT
Auditorsà Report read together with Annexures referred to in Paragraph
3 of the Auditorsà Report do not contain any qualifi cation of signifi
cant nature and do not call for any explanation/ clarifi cation.
AUDITORS
M/s. S.R. Batliboi & Company, Chartered Accountants retire at the
forthcoming Annual General Meeting and are eligible for reappointment.
M/s S. R. Batliboi & Company have confi rmed that their appointment, if
made, shall be within the limits of Section 224(1B) of the Companies
Act, 1956.
LISTING OF SECURITIES
Your CompanyÃs securities are currently listed with CSE (Kolkata) and
BSE (Mumbai). The Company has paid the listing fees to Mumbai Stock
Exchange for the fi nancial year 2009- 2010. Application for listing of
73,91,306 equity shares allotted on preferential basis is under
consideration of BSE, Mumbai.
The CompanyÃs application for voluntary delisting, pursuant to the
special resolution passed by the shareholders in the 17th Annual
General Meeting in this behalf, of securities from The Calcutta Stock
Exchange Association Limited is pending with the exchange since October
2003.
Therefore, the listing fee has not been paid to this exchange.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The prescribed details as required under Section 217(1) (e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 are set out in the
Annexure ÃAÃ forming part of this report.
PARTICULARS OF THE EMPLOYEES The particulars of the employees drawing
the salary as prescribed under Section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 form
part of this report.
As per the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the reports and accounts are being sent to all shareholders of
the Company excluding the statement of particulars of the employees.
Any shareholder interested in obtaining a copy may write to the Company
Secretary of the Company.
ACKNOWLEDGEMENT
Your Directors acknowledge the cooperation and assistance received from
various departments of Central & State Government and banks.
Your Directors wish to place on record their appreciation of the
sincere services rendered by the workmen, staff and executives of the
Company at all levels ensuring successful management of the Company.
Your Directors also thank the shareholders for their continued support.
On behalf of the Board
Arvind Kumar Singhania
Chairman and Managing Director
Gurgaon
18th May 2010
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