You are here » Home » Companies » Company Overview » Ester Industries Ltd

Ester Industries Ltd.

BSE: 500136 Sector: Industrials
NSE: ESTER ISIN Code: INE778B01029
BSE LIVE 19:40 | 19 Oct 41.50 1.60
(4.01%)
OPEN

39.90

HIGH

41.75

LOW

39.90

NSE 19:45 | 19 Oct 41.50 1.75
(4.40%)
OPEN

41.20

HIGH

41.90

LOW

40.15

OPEN 39.90
PREVIOUS CLOSE 39.90
VOLUME 49336
52-Week high 59.00
52-Week low 30.00
P/E
Mkt Cap.(Rs cr) 346
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.90
CLOSE 39.90
VOLUME 49336
52-Week high 59.00
52-Week low 30.00
P/E
Mkt Cap.(Rs cr) 346
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ester Industries Ltd. (ESTER) - Auditors Report

Company auditors report

To the Members of Ester Industries Limited

Report on the financial Statements

We have audited the accompanying financial statements of Ester Industries Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and a summaryof significant accounting policies and other explanatory information.

Management's responsibility for the financial statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and theCompanies (Accounting Standards) Amendment Rules 2016. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing issued by the Institute of Chartered Accountants of Indiaas specified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 its loss and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules 2016;

(e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of section 164 (2) ofthe Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 27 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

iv. The Company has provided requisite disclosures in Note 42 to these financialstatements as to the holding of Specified Bank Notes on November 8 2016 and December 302016 as well as dealings in Specified Bank Notes during the period from November 8 2016to December 30 2016. Based on our audit procedures and relying on the managementrepresentation regarding the holding and nature of cash transactions including SpecifiedBank Notes we report that these disclosures are in accordance with the books of accountsmaintained by the Company and as produced to us by the Management.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
New Delhi Partner
June 2 2017 Membership Number: 086370

Annexure 1 referred to in paragraph 1 of our report of even date under section‘Report on other legal and regulatory requirements'

Re: Ester Industries Limited ("the Company")

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to information and explanations given by the management the title deedsof immovable properties included in fixed assets are held in the name of the Company.

It has been explained to us that the title deeds and possession letters of the freeholdland and building has been given as security (mortgage and charge) against the term loansand working capital loans taken from banks and that original title deeds are kept with thelead Bank- Bank of India and Tata Capital Financial Services Ltd as security for thelenders and therefore the same could not be made available to us for our verification andhas also not been independently confirmed by the banks.

ii. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to usprovisions of section 186 of the Companies Act 2013 in respect of investments made havebeen complied by the Company. There are no other loans guarantees and securities grantedin respect of which provisions of section 185 and 186 of the Companies Act 2013 areapplicable. v. The Company has not accepted any deposits within the meaning of Sections 73to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacture of polyester films andengineering plastics and are of the opinion that prima facie the specified accounts andrecords have been made and maintained. We have not however made a detailed examinationof the same.

vii. (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax cess and other material statutory dues have generally been regularly deposited withthe appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

Name of the Statute Nature of Dues Amount (Rs. in lacs) Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Dispute on MODVAT credit taken on chips used in yarn and on exempted clearance of chips. Demand raised for duty on removal of PET Chips in custody 30.04 July 87 to June 93 and Jan 95 Commissioner Central Excise (Noida)
Central Excise Act 1944 Dispute on MODVAT credit taken on inputs and Capital Goods used in chips which were cleared at NIL duty. 173.86 March 90 to Feb 92 and Oct 94 to Feb 95 Commissioner (Appeals) Central Excise Ghaziabad
Central Excise Act 1944 Dispute on disallowance of MODVAT on TEG as documents were more than six months old. 4.8 March 92 Customs Excise Service Tax Appellate Tribunal (Delhi)
The Customs Act 1962 Demand for Custom Duty forgone on value based advance license. 57.71 June 93 to April 95 Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Demand on PET Chips waste cleared at nil rate of duty. MEG received under chapter X after rescinding of Notification No. 34/87 CE. Inadmissibility of MODVAT credit against PBT Chips and Polyester films. 4.57 July 93 to May 94 and Feb to Aug 2000 Deputy Commissioner Central Excise Rampur
Central Excise Act 1944 Demand raised on account of differences in stocks as per physical and book records. 7.72 November 1992 Commissioner Meerut II
Central Excise Act 1944 Demand on shortages on inputs on department physical verification. 3.09 July 2010 Assistant Commissioner Rampur
The Customs Act 1962 Dispute on disallowance of remission on MEG lost in Transit and utilization of MODVAT credit 32.99 June 87 to Oct 88 March 91 to May 91 and 1993 Assistant Commissioner Rampur
Central Excise Act 1944 Reversal of cenvat credit on account of Inventory written off U/R 3(5B) 34.11 Financial Year 2008- 2009 to 2013-14 Commissioner of Central Excise (Appeals) Meerut-II
Central Excise Act 1944 Reversal of Cenvat credit availed on commission paid to selling agent. 123.05 Financial Year 2011-12 to 2012-2015 Commissioner of Central Excise (Appeals) Meerut-II
Finance Act 1944 Service tax liability under reverse charge on permanent transfer of patent 14.55 Financial Year 2015-16 Assistant Commissioner Audit-I Circle Haldwani
Central Excise Act 1944 Reversal of cenvat credit on the group insurance policy paid by the employer 1.74 April 2015 to May 2015 Assistant Commissioner Audit-I Circle Haldwani
The Customs Act 1962 Non-compliance of the conditions prescribed under EPCG Authorization 15.8 Financial Year 2015-16 Additional Commissioner of Customs New Delhi
Cenvat Credit Rules 2004 Reversal of Cenvat credit availed on civil construction work services 0.29 January 2011 to January 2012. Deputy Commissioner Rampur
Finance Act 1944 Demand for short payment of Service Tax against brokerage and commission 13.54 F.Y. 2011-12 Additional Commissioner Meerut
Income Tax Act 1961 Dispute on Disallowance of advertisement expenditure pursuant to Rule 6B of IT Rules 1962 by ITAT 1.16 A.Y. 1993-94 to 1997-98 Income Tax- Assessing officer
Income Tax Act 1961 Dispute on Disallowances of club expenditure on the contention that expenses not incurred wholly and exclusively for the business needs. 0.47 A.Y. 1993-94 to 1994-95 Income Tax - Assessing officer.
Income Tax Act 1961 Dispute on Disallowances of 50% of entertainment expenses on the contention of non participation of the employee for incurring such expenditure. 5.10 A.Y. 1993-94 to 1997-98 Income Tax - Assessing officer
Income Tax Act 1961 Dispute on disallowances of expenses relating to previous year. 14.68 A.Y. 1993-94 to 1997-98 Income Tax - Assessing officer
Income Tax Act 1961 Dispute on disallowances of excess depreciation claimed by company commission paid to agent club expenses provision for doubtful debts and expenses incurred on earning exempt income by invoking section 14A of the Act 16.94 A.Y. 2004-05 to 2005-06 Income Tax Appellate Tribunal Delhi
Income Tax Act 1961 Dispute on disallowances of excess depreciation claimed by company bonus provision expenses incurred on earning exempt income by invoking section 14A of the Act 18.15 A.Y. 2006-07 to A.Y. 2013-14 Commissioner of Income Tax (Appeals) Delhi & Income Tax Appellate Tribunal Delhi
Income Tax Act 1961 Disallowance of Deferred Tax for computing book profit for the purpose of levying MAT. 33.38 A.Y. 2004-05 Supreme Court
Income Tax Act 1961 Dispute on disallowances of export commission paid by the company. 45.74 A.Y. 2014-15 Commissioner of Income Tax (Appeals) Delhi.

viii In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of borrowings to a financialinstitution and banks.

The company does not have any dues outstanding to debenture holders.

ix In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans for thepurposes for which they were raised. The company has not raised any money by way ofinitial public offer / further public offer / debt instrument during the year.

x Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud / materialfraud on the company by the officers and employees of the Company has been noticed orreported during the year.

xi According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013. xii. In our opinion the Company is not a nidhi company. Therefore theprovisions of clause 3(xii) of the order are not applicable to the Company and hence notcommented upon.

xiii. According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

xv. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

xvi. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
New Delhi Partner
June 2 2017 Membership Number: 086370

Annexure 2 referred to in paragraph 2 of our report of even date under section‘Report on other legal and regulatory requirements'

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of EsterIndustries Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's responsibility for internal financial controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

Meaning of internal financial controls over financial reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
New Delhi Partner
June 2 2017 Membership Number: 086370