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Ester Industries Ltd.

BSE: 500136 Sector: Industrials
NSE: ESTER ISIN Code: INE778B01029
BSE 00:00 | 02 Dec 122.15 2.50






NSE 00:00 | 02 Dec 122.30 2.80






OPEN 119.65
VOLUME 12141
52-Week high 164.60
52-Week low 98.10
P/E 7.41
Mkt Cap.(Rs cr) 1,019
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 119.65
CLOSE 119.65
VOLUME 12141
52-Week high 164.60
52-Week low 98.10
P/E 7.41
Mkt Cap.(Rs cr) 1,019
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ester Industries Ltd. (ESTER) - Director Report

Company director report

To The Members

Your directors are pleased to present the 35th Annual Report together withAudited Statement of Accounts of your Company for the year ended 31st March2021.


For the year ended 31.03.2021 For the year ended 31.03.2020
(Rs. / crores) (Rs. / crores)
Net Sales Revenue 984.86 1031.71
other operating Revenue 6.90 6.99
other Income 7.98 8.89
Profit before Financial Expenses Depreciation and Tax 243.75 198.30
Less: Interest & Other Financial Expenses 18.55 24.46
Profit / (Loss) before DepreciationandTax 225.20 173.84
Depreciation and amortization expenses 35.22 35.28
Profit / (Loss) before Tax 189.98 138.57
Current & Deferred Tax expense / (credit) 47.90 39.07
Profit / (Loss) after Tax 142.08 99.50
Other Comprehensive Income (net of income tax effect) (0.25) (0.76)
Total Comprehensive Income 141.83 98.74
Basic earnings Per equity Share (Rupees) 17.04 11.93
Diluted earnings Per equity Share (Rupees) 17.04 11.93


In addition to payment of Interim Dividend of Rs. 1.50 per equity share your directorshave recommended payment of final Dividend at the rate of Rs. 1.90 per equity share as theof Rs. 142.08 Crores Companyhas earned Net Profit during the year under review. YourCompany enhancement in profitability has not transferred any amount of Profit & Lossaccount to any reserve

In terms of Regulation 43A of the Securities and exchange Board of India (Listingobligations and Disclosure Requirements) Regulations 2015 ("SeBI (LoDR) Regulations2015") the Dividend Distribution Policy is available on the Company’s websiteat


During the year under review your Company earned a Net Profit improvement after Tax(NPAT) of Rs. 142.08 crores a significant as compared to NPAT of Rs. 99.50 crores earnedduring fY 2019-20. Revenue from operations during the year under review stood at Rs.991.76 crores as compared to Rs. 1038.70 crores during fY 2019-20 a reduction of 4.5%. fY2020-21 has been a historic year a year wherein your company has delivered its bestfinancial performance till date / best in over a decade. Profit was at an all - time highwith bulk of the contribution coming from legacy businesses namely Polyester film andengineering plastics.

Revenue from operations are lower on account of significantly lower sales of Polyesterincrease in revenues from Rs. 160.77 crores Chips owing to non – availability ofadequate heating capacity consequent to fire in Primary Heater #5 on 19th March 2020.Primary Heater #5 has been restored and is operational again since March 2021.

Specialty Polymers a business which is largely export dependent had a relatively softyear given the Covid – 19 related lockdowns & restrictions which were imposedduring the year in some of key customer markets (including USA) - the demand and shipmentactivities had to face severe challenges. of the Main factors for significant . companyare substantially improved performance of Polyester film on account of higher margins andengineering Plastics on account of higher volume as well as significantly better margins.

Film SBU continued to drive the bulk of revenue and profitability momentum for theCompany benefiting from the improving demand –supply dynamics. Steady realizationsbetter margins and higher proportion of Value Added & Specialty (VAS) has positivelycontributed to the improved bottom line. Covid-19 pandemic in fact has had positiveimpact on the economics of the business on the back of consumers’ preference forpackaged products for reasons of health hygiene and safety. Demand for Polyester filmcontinues to grow at the rate of 10% - 12% (domestic) and 6%- 6.5% (global).

The profitability for the Polyester Film SBU witnessed an improvement in eBIT from Rs.182.64 crores to Rs. 218.57 crores – eBIT margin improving from 22.7% to 30.1%. forengineering Plastics SBU the fY 2020-21 has been a landmark year. Despite starting on asoft note it has delivered its best performance till date. engineering Plastics SBUwitnessed to Rs.significant

204.99 crores both on account of higher volume and selling price. Rising trend inpolymer prices as well as shortage of base polymers have resulted in higher salesrealizations & unprecedented margin expansion. engineering Plastics SBU registered agrowth of 27.5% in value terms (23% in volumetric terms). The higher increase in valueterms was on account of ~4% increase in unit selling price (compared to the previous year)consequent to the steady rise in polymer prices and more than proportionate rise inmargins. eBIT of the eP SBU has increased multi-fold on the back of strong demand from theend-user industries & unprecedented margins. eBIT for the engineering Plastics SBUimproved from Rs. 8.63 crores to Rs. 40.65 crores – eBIT margin improving from 5.4%to 19.8%.

During the year under review capacity utilization in Polyester films was about 100%.Production & sales volume were marginally lower than last year on account of Covid– 19 related restrictions on movement of men and materials during June 2020 quarter.Various initiatives taken over the last ten years – supported by capacity expansions& higher productivity in Polyester film – have resulted in revenues fromoperations growing at a CAGR of 10.1% pa from Rs. 395.37 crores in fY 2009-10 to Rs.991.76 crores in fY 2020-21.

Your Company continues to make investments towards modernization technical upgradationand debottlenecking initiatives in all the business segments to improve productivityproduction efficiency and reduce wastages

As regards expansion of BoPeT film capacity through Wholly owned Subsidiary (WoS)namely ester filmtech Limited we are on course in implementation of the project in thestate of Telangana. Your company has already invested Rs. 96.35 crores as equity in theWoS till 31st March 2021.


The Company has complied with the mandatory provisions of Corporate Governance asprescribed in the SeBI (LoDR) Regulations 2015. We consider it our inherentresponsibility to disclose timely and accurate information regarding our financials andperformance as well as the leadership and governance of the Company.

Pursuant to SeBI (LoDR) Regulations 2015 the Corporate regarding Governance Reportand the Auditors’ Certificate compliance of conditions of Corporate Governance aremade part of the Annual Report.


The Company is in compliance with all applicable Secretarial Standards as issued by theInstitute of Company Secretaries of India (ICSI).


The Management’s Discussion and Analysis Report on performance state of affairsof the company risk management system industry trends and other material changes andcommitments if any affecting the financial position of the company forms an integralpart of the Annual Report.


The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on public deposits was outstanding at the end of financial year2020-21


Pursuant to the provisions of Section 196 197 203 read with Schedule V and all otherapplicable provisions of the Companies

Act 2013 (including any statutory modification or re-enactment thereof for the timebeing in force) (Act) and Regulation 17 of SeBI (LoDR) Regulations 2015 the Board inits meeting held on 18th May 2021 appointed Mr. Ayush Vardhan Singhania (DIN05176205) as Additional Director w.e.f. 1st June 2021 till the date of forthcoming AnnualGeneral Meeting. In the same meeting the Board appointed him as Whole-time Director ofthe Company for a period of 3 years w.e.f. 1st June 2021 subject to the approval ofshareholders of the Company and Central Government if required. The Company has receiveda Notice under section 160 of the Companies Act 2013 proposing his candidature asDirector.

The period of office of Mr. Ayush Vardhan Singhania shall be liable for determinationby way of retirement by rotation.

The proposal for approval by shareholders of his appointment is given in the noticeconvening the forthcoming Annual General Meeting at Item No. 5 as Special Business. Termsand conditions of his appointment are given in the Notice read with its explanatorystatement.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Pradeep Kumar Rustagi (DIN 00879345) will retire by rotation at the forthcoming AGM ofCompany and being eligible offers himself for re-election

Key Managerial Personnel (KMP)

Mr. Arvind Singhania Chairman & Managing Director (designated as Chairman &Ceo) Mr. Pradeep Kumar Rustagi executive Director & Cfo Mr. Ayush VardhanSinghania Whole-time Director and Mr. Diwaker Dinesh Head-Legal & Company Secretaryare the Key Managerial Personnel of your Company in accordance with the provisions ofSection 2(51) read with Section 203 of the Act and rules made thereunder.

There was no change in the Key Managerial Personnel of the Company during the year2020-21.


The Independent Directors of your Company have confirmed that they meet the criteria ofIndependence as prescribed under Section 149 of the Act read with Regulation 16 of theSeBI (LoDR) Regulations 2015 and they are not aware of any circumstance or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any externalinfluence. Further in the opinion of the Board the Independent Directors fulfil theconditions prescribed under the

SeBI (LoDR) Regulations 2015 and are independent of the management of the Company.


The details of the composition of Board of Directors and Audit Committee and number ofBoard and Audit Committee meetings held during the year are given in the CorporateGovernance Report which forms part of the Annual Report.


M/s Walker Chandiok & Co. LLP Chartered Accountants is the Statutory Auditors ofthe Company appointed by the Shareholders in their Annual General Meeting (AGM) held on4th September 2017 to hold office from 31st AGM till 36th AGM.

The Auditors’ Report for the year under review read together with Annexures do notcontain any qualification reservation or adverse remark and do not call for anyexplanation/clarification.

Cost Audit

In terms of Section 148(1) and other applicable provisions if any of the Act andrules made thereunder the Company is required to maintain the Cost records andaccordingly such accounts and records are made and maintained.

At the recommendation of the Audit Committee the Board has re-appointed M/s. R. J.Goel & Co. Cost Accountants as the Cost Auditor for the financial year 2021-22. Interms of the provisions of Section 148(3) of the Act read with the Companies (Audit andAuditors) Rules 2014 the remuneration payable to the Cost Auditors has to be ratified bythe Members of the Company.

Accordingly the Board seeks ratification of the remuneration payable to the CostAuditors for the financial year 2021-22. A resolution seeking your ratification of theremuneration of M/s. R. J. Goel & Co. for financial year 2021-22 forms part of theNotice convening the forthcoming Annual General Meeting.

Secretarial Audit

In terms of Section 204 of the Act M/s Dhananjay Shukla & Associates CompanySecretaries has conducted secretarial audit of the Company for the financial year ended31st March 2021. The Report of M/s Dhananjay Shukla & Associates is provided in the"Annexure-A" forming part of this Report.

There are no qualifications reservation or adverse remark made by the Secretarialauditor in the report for the year under review.


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 on the basis of information placed before them by theManagement and Auditors confirm that:-

1) in the preparation of the annual accounts for the financial Year ended 31st March2021 the applicable Accounting Standards have been followed along with proper explanationrelating to material departure if any.

2. they have selected appropriate accounting policies and applied them consistently andmade judgement and estimates that were reasonable and prudent so as to give a true andfair view of the state of the affairs of the Company at the end of the financial year andof the Profit and Loss of the Company for the year under review;

3. they have taken proper and maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

4. they have prepared the accounts of the Company for the financial year ended 31stMarch 2021 on a going concern basis.

5. proper internal financial controls laid down by them were followed by the Companyand 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 allapplicable laws and that such systems were adequate and operating effectively


During the year 2020-21 the wholly-owned subsidiary was incorporated on 21st July2020 namely ester filmtech Limited. ester filmtech Limited is setting up a new BoPeTfilm Line in the state of Telangana.

The consolidated financial statements of the Company for the financial year ended 31stMarch 2021 have been prepared in accordance with the provisions of the Act SeBI (LoDR)Regulations 2015 and the applicable Accounting Standards.

The audited consolidated financial statements together with the Auditors’ Reportand form AoC-1 form a part of the Annual Report. Pursuant to the provisions of Section 136of the Act the standalone financial statements the consolidated financial statementsAuditors’ Report along with relevant documents and separate audited accounts inrespect of subsidiary are available on the website of the Company. During the financialyear under review no Company is ceased to be Company’s subsidiary. The Company doesnot have any Joint Venture or associate.


The Company has laid down well defined and documented

Internal Controls.

Your company’s internal control procedures are adequate to ensure compliance withvarious policies practices laws and statutes. Internal Controls in your company havebeen designed & implemented in such a manner that it provides reasonable assuranceregarding the following:

Effectiveness and efficiency of operations

Adequacy of safeguards for assets

Prevention and detection of frauds errors & misappropriations

Accuracy and completeness of the accounting data & records

IT security controls

System policies practices & procedures adopted for adequate and fair financialreporting

Timely and accurate preparation of reliable financial information & reports. Duringthe year under review few internal controls have been modifiedto align with changeinscenario

Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Indian Accounting Standards) Rules 2015 thatcontinue to apply under Section 133 and other applicable provisions if any of the Actread with Rule 7 of the Companies (Accounts) Rules 2014. These are in accordance withgenerally accepted accounting principles in India.

Changes in policies if any are approved by the Audit Committee in consultation withthe Statutory Auditors.

The Company’s Internal Auditors have conducted periodic audits to evaluate theexistence adequacy & effectiveness of financial and operating internal controls toreport significant findings to the Audit Committee of the Board and to provide reasonableassurance that the Company’s established systems policies practices and procedureshave been followed. The Audit Committee constituted by the Board reviews the internalcontrols and financial reporting issues with Internal Auditors on a regular basis.

The Company uses an eRP (SAP eCC 6.0 eHP-5) which is supplemented by internal controlsframework to ensure reliable and timely financial reporting.

Compliance with laws and regulations is also monitored through a well laid downframework which requires individual functions to confirm and report statutory complianceson all laws and regulations concerning their respective functions. This gets integratedwith the overall compliance reporting on all laws and regulations for the purpose ofreview and monitoring by the Board.


The Code of Conduct as adopted by the Board of Directors is applicable to allDirectors and senior management of the

Company. They have affirmed compliance with the Code of Conduct. A declaration to thiseffect duly signed by Mr. Arvind

Singhania Chairman & Ceo is enclosed as a part of the Corporate Governance Reportwhich forms part of the Annual Report. A copy of the Code of Conduct is available on theCompany’s website viz. The Code of Conduct is based onthe fundamental principles of good corporate governance and corporate citizenship. TheCode covers the Company’s commitment to sustainable development concern foroccupational health safety and environment a gender friendly workplace vigil mechanismtransparency auditability and legal compliance etc.


During the financial year 2020-21 there was no change in the Capital of the Company.


During the year 2020-21 the Nomination and Remuneration Committee and Board hadapproved the employee Stock option Scheme namely ESTER EMPLOYEES STOCK OPTIONPLAN-2021 in its meeting held on 25th february 2021 followed by approval ofshareholders in the extra-ordinary General Meeting held on 26th March 2021. The Boardgranted 248179 stock options to eligible employees under ESTER EMPLOYEES STOCK OPTIONPLAN-2021 in its meeting held on 1st April 2021.


Your Company’s equity Shares are currently listed with BSe Limited (BSe) andNational Stock exchange of India Limited (NSe). The Company has paid the listing fees toBSe and NSe for the financial year 2021-22.


Details forming part of the extract of the Annual Return in form MGT-9 is available onthe Company’s website viz. PARTICULARS OF LOANSINVESTMENTS AND GUARANTEES

The particulars of the loan if any (along with the purpose of utilization by recipientof loan) and investments covered under Section 186 of the Act are provided in Notes 7 and8 to financial statements. During the year under review the Board had approved theexecution of Corporate Guarantee in favour of oldenburgische Landesbank Aktiengesellschaft(oLB Bank) for an amount not exceeding eUR 30278750 as security for extending externalCommercial Borrowing to ester filmtech Limited wholly owned Subsidiary of the Company ascovered under Section 186 of the Act.


Pursuant to Section 135 of the Act and rule made thereunder the Board of Directors hasconstituted a Corporate Social Responsibility (CSR) Committee. The details of theComposition of the Committee is set out in Corporate Governance Report which forms part ofthe Annual Report. The Committee has adopted a Corporate Social Responsibility Policy.Annual Report on CSR activities containing brief outline of the CSR Policy of the Companyalong with total amount spent on CSR and other details is set out in "Annexure–B"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 thefollowing link –



The Company has a Policy for performance evaluation of all the Directors Chairpersonof Board as a whole and Committees of the Board.

An annual evaluation was carried out of the performance of the Board Board’scommittees all the directors and Chairperson pursuant to the provisions of the Act aswell 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 ofNon-Independent Director had reviewed the performance of the Chairperson Non-IndependentDirectors and the Board. While evaluating the performance of the Chairperson the views ofexecutive directors and non-executive directors were also taken into account.

2. Nomination and Remuneration Committee carried out the performance evaluation of allthe Directors Committees of the Board and the Board as a whole.

3. The Board had evaluated its own performance performance of its Committees and eachDirector.

The process of performance evaluation was based on the criteria prescribed in thePolicy on Performance evaluation. The Policy is uploaded on Company’s website and thesame can be accessed at the following link–


Nomination and Remuneration Committee has framed a Nomination and Remuneration policyfor determining criteria of selection and appointment of Directors Key ManagerialPersonnel Senior Management Personnel including determining qualifications positiveattributes independence of a Director and other matters provided under Section 178(3) ofthe Act. The salient aspects covered in the Nomination and Remuneration Policy coveringthe policy on appointment and remuneration of Directors and other matters have beenoutlined in the Corporate Governance Report which forms part of the Annual Report.

The Policy is uploaded on Company’s website and the same can be accessed at thefollowing link – The information required under Section 197 of the Act readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided in "Annexure - C" of this report. The same is open forinspection at the Registered Office of your Company at all working days except Saturdaytill the date of forthcoming Annual General Meeting.


The Audit Committee constituted by the Board reviews and evaluates the risk managementplan along with matters pertaining to review of internal audit financial resultsoperational performance etc. placed before it on quarterly basis. The terms of referencesof the Audit Committee stipulated by the Board includes the "evaluation of RiskManagement System." The Audit Committee is mandated to make recommendation to theBoard for the matters pertaining to framing implementing and monitoring the riskmanagement system & plan for the Company as and when the Committee thinks necessary. Adetailed note on Risk Management System has been provided under the Management Discussionand Analysis (MDA) Report.

Pursuant to SeBI (Listing obligations and Disclosure Requirements) (second amendments)Regulations 2021 vide notification No. SEBI/LAD-NRO/GN/2021/22 dated 5 May 2021 therequirement of constitution of Risk Management Committee has become applicable to Top 1000listed entities based on market capitalization as at the end of immediate previousfinancial year.

Accordingly the Company has constituted the Risk Management Committee of the Company.The constitution and the terms and reference of the Committee are given in CorporateGovernance Report which forms part of this Annual report.


All contracts or arrangements with related parties entered into or modified during thefinancial 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 AuditCommittee and the Board. However no material contract or arrangement with related partieswas entered into during the year under review. The company has not entered any transactionwith the Related parties which are not at arm’s length. Accordingly no transactionsare being reported in form No. AoC-2 provided in "Annexure-D" pursuant toSection 134 of the Act 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 36 to the standalone financial statements forming part ofthis Annual Report.

The Policy on Related Party Transactions can be accessed on the Company website at thefollowing link –



The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as prescribed under Section 134 of the Act read with the Companies(Accounts) Rules 2014 is set out in the "Annexure–E" forming partof this report.


The Company has a Vigil Mechanism/Whistle Blower Policy with a view to provide amechanism for employees of the Company to raise concerns of suspected frauds instancesfor leakage or suspected leakage of Unpublished Price Sensitive Information anyviolations of legal/ regulatory requirements or code of conduct/policy of the Companyincorrect or misrepresentation of any financial statements and reports etc. The purposeof this Policy is to encourage employees and directors who have concerns about suspectedmisconduct to come forward and express these concerns without fear of punishment or unfairtreatment. The policy aims to provide an avenue for employees and directors to raiseconcerns and reassure them that they will be protected from reprisals or victimization forwhistle blowing in good faith.

The practice of the Whistle Blower Policy is overseen by the Audit Committee of theBoard and no employee has been denied access to the Committee. The Policy can be accessedon the Company’s website at following link– blower_policy.pdf


There was no incident of sexual harassment reported and pending for investigationduring the financial year 2020-21. For protection against sexual harassment Company hasformed an internal complaints committee to which employees can write their complaints. TheCompany has a Prevention of Sexual Harassment Policy which has laid down a process fordealing with such issues.

The Company has complied with provisions relating to the constitution of InternalComplaint Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.


There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.


Your Directors acknowledge the co-operation and assistance received from variousdepartments of the Central & State Government banks and Non-banking financecompanies.

Directors also express their gratitude and thanks to Customers Suppliers and otherBusiness Associates for their continued cooperation and patronage.

Your Directors wish to place on record their appreciation of the sincere servicesrendered by the workmen staff and executives of the Company at all levels ensuringsatisfactory management of the Company. Your Directors also thank the shareholders fortheir continued support.

For and on behalf of the Board


Arvind Singhania

Chairman & Ceo

Date: 9th August 2021

Place: Gurugram