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.
(Rs. in lacs)
year ended For the
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
In the absence of profits, your directors do not recommend any
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
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
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.
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
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.
The Company has not accepted any deposit during the year.
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
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
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
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.
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 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.
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
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
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.
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