To the Members of Ester Industries Limited
Report on the Audit of the Standalone Financial Statements Opinion
1. We have audited the accompanying standalone financial statements of ester IndustriesLimited (the Company) which comprise the Balance Sheet as at 31 March 2021the Statement of Profit and Loss (including Other Comprehensive Income) the Cash flowStatement and the Statement of Changes in equity for the year then ended policies and anda summary of the significant other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Act) in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act of the state of affairs of the Company as at 31 March 2021 and its profit othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. our responsibilities under those standards are furtherdescribed in the Auditors Responsibilities for the Audit of the financial Statementssection of our report. We are independent of the Company in accordance with the Code ofethics issued by the Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofethics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.
Key Audit Matter
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.
These matters were addressed in the context of our audit of the financial statements asa whole and in forming our (including opinion thereon and we do not provide a separateopinion on these matters.
5. We have determined the matter described below to be the key audit matters to becommunicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Revenue recognition Sale of products ||Our audit procedures included but were not limited to the following: |
|Revenue of the Company majorly comprises of revenue from sale of polyester films engineering plastics. The Company sells its products through various distribution channels involving a high volume of sale transactions. ||Obtained an understanding of the process of identification and recording of revenue transaction from sale of polyester films and engineering and plastics. |
|The Company recognised an amount of 99175.88 lacs as revenue for the year ended 31 March 2021 as disclosed in Note 24 to the standalone financial statements. Refer Note 5.5 for the related accounting policy adopted by the management for recognition of revenue in accordance with the requirements of Ind AS 115 Revenue from Contracts with Customers (Ind AS 115). ||evaluated the design implementation and tested the operating effectiveness of key controls over revenue recognition including around quantity sold pricing and accounting of revenue transactions; |
|Revenue recognition is a significant risk primarily as there is a risk that revenue is recognised on sale of goods before the control in the goods is transferred. Revenue is also a key performance indicator of the Company and accordingly testing occurrence of revenue transactions is a key focus area for our audit. ||Performed substantive analytical procedures on revenue which included ratio analysis product mix analysis region wise analysis etc; |
|We determined this to be a key audit matter due to significant time and effort involved in testing revenue recorded during the year. ||on a sample basis evaluated the terms and conditions of the contracts including incoterms with customers to ensure that the revenue recognition accounting policy adopted by the management is in accordance with Ind AS 115; |
| ||on a sample basis tested revenue transactions recorded during the year and revenue transactions recorded in the period before and after year-end with supporting documents such as invoices agreements with customers proof of deliveries; |
| ||Performed other substantive audit procedures including obtaining debtor confirmations on a sample basis and reconciling revenue recorded during the year with statutory returns; |
| ||Tested manual journal entries impacting revenue including credit notes claims etc. which were material or irregular in nature with supporting documents and evaluated business rationale thereof; |
| ||Evaluated disclosures made in the financial statement for revenue recognition from sale of goods for appropriateness in accordance with the accounting standards. |
Information other than the Financial Statements and Auditors Report thereon
6. The Companys Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditors report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
7. The accompanying standalone financial statements have been approved by theCompanys Board of Directors. The Companys Board of Directors is responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Ind AS specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
8. In preparing the financial statements management is responsible for assessing theCompanys ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
9. Those Board of Directors is also responsible for overseeing the Companysfinancial reporting process
Auditors Responsibilities for the Audit of the Financial Statements
10. our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control;
obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls;
evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;
Conclude on the appropriateness of managements use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. our conclusions are based on the audit evidence obtained up to thedate of our auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern;
evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14. from the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act based on our audit we report that theCompany has paid/provided remuneration to its directors during the year in accordance withthe provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditors Report) order 2016 (theorder) issued by the Central Government of India in terms of section 143(11) of theAct we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4of the order.
17. further to our comments in Annexure A as required by section 143(3) of the Actbased on our audit we report to the extent applicable 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 of theaccompanying standalone financial statements;
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 standalone financial statements dealt with by this report are in agreement withthe books of account;
d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2021 from being appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 31 March 2021 as per Annexure B expressed unmodified opinion; and
g) with respect to the other matters to be included in the Auditors Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. the Company as detailed in note 37 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at 31 March 2021;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2021;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor education and Protection fund by the Company during the year ended 31 March2021; and
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
Membership No.: 507568
Date: 18 May 2021
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The Company has a regular program of physical verification of its property plantand equipment under which property plant and equipment are verified in a phased mannerover a period ofthree years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this program certainproperty plant and equipment were verified during the years and no material discrepancieswere noticed on such verification
(c) The title deeds of all the immovable properties (which are included under the headProperty plant and equipment) are held in the name of the Company.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-in-transit and no materialdiscrepancies between physical inventory and book records were noticed on physicalverification.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the order are not applicable.
(iv) In our opinion the Company has not entered into any transaction covered underSections 185 and 186 of the Act. Accordingly the provisions of clause 3(iv) of the orderare not applicable.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). 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 pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Companys products and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund employees stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax goods and services tax act cess and other material statutory dues asapplicable have generally been regularly deposited to the appropriate authorities thoughthere has been a slight delay in a few cases. further no undisputed amounts payable inrespect thereof were outstanding at the year-end for a period of more than six months fromthe date they became payable.
(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:
Statement of Disputed Dues
|Name of the statute ||Nature of dues ||Amount ( in lacs) ||Amount paid under protest ( in lacs) ||Period to which the amount relates ||Forum where dispute is pending |
|Central excise Act 1944 ||excise Duty ||8.06 ||Nil ||March 1990 to May 1991 ||Commissioner (Appeals) Central excise Ghaziabad UP |
|Central excise Act 1944 ||excise Duty ||164.20 ||Nil ||April 1990 to february 1992 ||Commissioner (Appeals) Central excise Ghaziabad UP |
|Central excise Act 1944 ||excise Duty ||20.61 ||Nil ||March 1991 to May 1991 ||Commissioner (Appeals) Central excise Ghaziabad UP |
|Central excise Act 1944 ||excise Duty ||17.23 ||Nil ||April 1992 to November 1993 ||Commissioner Central excise Meerut UP |
|Central excise Act 1944 ||excise Duty ||4.79 ||Nil ||financial year 1998-99 ||Commissioner (Appeals) Central excise Ghaziabad |
|Central excise Act 1944 ||excise Duty ||12.95 ||5.23 ||April 1991 to November 1992 ||Joint Commissioner Meerut II UP |
|Central excise Act 1944 ||excise Duty ||1.58 ||Nil ||July 1987 to December 1988 ||Commissioner Central excise Meerut UP |
|Central excise Act 1944 ||excise Duty ||3.09 ||Nil ||financial year 2009-10 ||Commissioner (Appeals) Central excise Rampur UP |
|Central excise Act 1944 ||excise Duty ||2.50 ||Nil ||April 2009 to December 2009 ||Commissioner (Appeals) Central excise Rampur UP |
|Central excise Act 1944 ||excise Duty ||6.95 ||3.95 ||financial year 1994-95 ||Commissioner (Appeals) Noida UP |
|Central excise Act 1944 ||excise Duty ||4.32 ||Nil ||financial year 1994-95 ||Assistant Commissioner Central excise Rampur |
|Central excise Act 1944 ||excise Duty ||476.73 ||Nil ||March 1997 to March 1998 ||Appellate Tribunal New Delhi |
|finance Act 1994 ||Service Tax ||16.23 ||8.00 ||March 2017 to february 2019 ||Superintendent CGST Khatima Uttrakhand |
|finance Act 1994 ||Service Tax ||13.53 ||Nil ||financial year 2011-12 ||Assistant Commissioner Central excise Rampur UP |
|finance Act 1994 ||Service Tax ||123.30 ||Nil ||April 2010 to March 2015 ||Superintendent Adjudication MeerutII |
|finance Act 1994 ||Service Tax ||14.55 ||Nil ||March 2017 to february 2019 ||Superintendent CGST Khatima |
|The Customs Act 1962 ||Custom Duty ||2.58 ||Nil ||financial year 1997-98 ||Additional Commissioner Customs (DeeC) Mumbai |
|The Customs Act 1962 ||Custom Duty ||12.07 ||Nil ||January 1997 to March 1998 ||Additional Commissioner Customs (DeeC) Mumbai |
|The Customs Act 1962 ||Custom Duty ||43.05 ||Nil ||April 1998 to March 1999 ||Commissioner of Customs Mumbai |
|Goods & Services Tax 2017 ||GST ||2.41 ||2.41 ||financial Year 2018-19 ||Addl. Comm. Grade-2 (Appeals) Trade Tax Moradabad U.P. |
|Goods & Services Tax 2017 ||GST ||2.33 ||2.33 ||financial Year 2018-19 ||Joint Commissioner (Appeals) Haldwani Uttarakhand |
|Goods & Services Tax 2017 ||GST ||2.68 ||2.68 ||financial Year 2019-20 ||Joint Commissioner (Appeals) Haldwani Uttarakhand |
|Goods & Services Tax 2017 ||GST ||1.98 ||1.98 ||financial Year 2019-20 ||Joint Commissioner (Appeals) Haldwani Uttarakhand |
|Goods & Services Tax 2017 ||GST ||1.43 ||1.43 ||financial Year 2019-20 ||Assistant Commissioner Ghaziabad Uttar Pradesh |
|Income Tax Act 1961 ||Income Tax ||18.00 ||Nil ||Assessment year 1993-94 to Assessment year 1995-96 ||Income Tax - Assessing officer |
|Income Tax Act 1961 ||Income Tax ||9.19 ||Nil ||Assessment year 1997-98 and Assessment year 2004-05 ||The Honble Supreme Court of India |
|Income Tax Act 1961 ||Income Tax ||6.63 ||Nil ||Assessment year 2007-08 and Assessment year 2011-12 ||Income Tax - Assessing officer |
|Income Tax Act 1961 ||Income Tax ||0.06 ||Nil ||Assessment year 2013-14 ||Income Tax - Assessing officer |
|Income Tax Act 1961 ||Income Tax ||7.53 ||1.51 ||Assessment year 2016-17 ||Commissioner of Income Tax (Appeals) Delhi |
|Income Tax Act 1961 ||Income Tax ||33.68 ||Nil ||Assessment year 2004-05 ||The Honble Supreme Court of India |
|Income Tax Act 1961 ||Income Tax ||45.74 ||Nil ||Assessment year 2014-15 ||Commissioner of Income Tax (Appeals) New Delhi |
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution during the year. The Company did not have any outstanding debenturesor dues to government during the year.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained though idle funds which were not required forimmediate utilisation have been invested in liquid investments payable on demand.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid/provided by the Company in accordance withthe requisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
Membership No.: 507568
Date: 18 May 2021
Independent Auditors Report on the internal financial controls with reference tothe standalone financial statements under Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act 2013 (the Act)
1. In conjunction with our audit of the standalone financial statements of esterIndustries Limited (the Company) as at and for the year ended 31 March 2021we have audited the internal financial controls with reference to financial statements ofthe Company as at that date.
Responsibilities of Management and Those Charged with Governance for Internal FinancialControls
2. The Companys Board of Directors is responsible for establishing andmaintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of Internalfinancial Controls over financial Reporting issued by the Institute of CharteredAccountants of India. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating conducteffectively of the Companys business including adherence to the Companyspolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Auditors Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements
3. our responsibility is to express an opinion on the Companys internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India prescribed under Section 143(10) of the Act to the extent applicableto an audit of internal financial controls with reference to financial statements and theGuidance Note on Audit of Internal financial Controls over financial Reporting issued bythe ICAI. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls with reference to financial statements wereestablished and in all maintained and if such controls operated effectively materialrespects.
4. our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
5. We believe that the audit evidence we have obtained is sufficient opinion on theCompanys internal financial controls with reference to financial statements.
Meaning of Internal Financial Controls with Reference to Financial Statements
6. A companys internal financial controls with reference to financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A companys internalfinancial controls with reference to financial statements include those policies andprocedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2021 based on the internal financial controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal financialControls over financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
Membership No.: 507568
Date: 18 May 2021
and appropriate to provide a basis for our audit