Notes to Accounts of Ester Industries Ltd.

Mar 31, 2025

4.14 Provisions

Provisions are recognized when the Company has a present obligation as a result of past events, for which it is
probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount
can be made. Provisions required to settle are reviewed regularly and are adjusted where necessary to reflect the
current best estimates of the obligation. Provisions are discounted to their present values, where the time value of
money is material.

4.15 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its
existence in the financial statements.

Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain,
related asset is recognized.

4.16 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding
during the period. The weighted average number of equity shares outstanding during the period is adjusted for events
including a bonus issue, right issue and share split transaction.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects
of all dilutive potential equity shares.

4.17 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker is considered to be the Board of Directors who makes strategic
decisions and is responsible for allocating resources and assessing performance of the operating segments.

The Company''s operating businesses are organized and managed separately according to the nature of products, with
each segment representing a strategic business unit that offers different products and serves different markets. The
identified segments are Manufacturing and Sale of Polyester film and Engineering plastics.

Inter segment transfers

Inter segment transfers of goods, as marketable products produced by separate segments of the Company for captive
consumption, are not accounted for in the books of account of the Company. For the purpose of segment disclosures,
however, inter segment transfers have been taken at cost.

Allocation of common costs

Common allocable costs are allocated to each segment on a logical and reasonable basis.

Unallocated items

Corporate income and expense are considered as a part of un-allocable income and expense, which are not
identifiable to any business segment.

4.18 Significant management judgement and estimates

The preparation of the Company''s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related
disclosures.

Significant management judgements

Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an
assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be
utilized.

Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of
assets requires assessment of several external and internal factors which could result in deterioration of recoverable
amount of the assets.

Contingent liabilities - At each balance sheet date basis the management judgment, changes in facts and legal
aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However,
the actual future outcome may be different from this judgement.

Significant estimates

Government grants - Grants receivables are based on estimates for utilisation of grant as per the regulations as well
as analysing actual outcomes on a regular basis and compliance with stipulated conditions. Changes in estimates or
non-compliance of stipulated conditions could lead to significant changes in grant income and are accounted
prospectively over the balance life of asset.

Defined benefit obligation (DBO) - Management''s estimate of the DBO is based on a number of underlying
assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases.
Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Useful lives of depreciable/amortisable assets - Management reviews its estimate of the useful lives of
depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in
these estimates relate to technical and economic obsolescence that may change the utilisation of assets.

Allowance for expected credit losses - The allowance for doubtful debts reflects management''s estimate of losses
inherent in its credit portfolio. This allowance is based on Company''s estimate of the losses to be incurred, which
derives from past experience with similar receivables, current and historical past due amounts, write-offs and
collections, the careful monitoring of portfolio credit quality and current and projected economic and market
conditions. Should the present economic and financial situation persist or even worsen, there could be a further
deterioration in the financial situation of the Company''s debtors compared to that already taken into consideration in
calculating the allowances recognised in the financial statements.

Allowance for obsolete and slow-moving inventory - The allowance for obsolete and slow-moving inventory
reflects management''s estimate of the expected loss in value and has been determined on the basis of past
experience and historical and expected future trends in the market. A worsening of the economic and financial
situation could cause a further deterioration in conditions compared to that taken into consideration in calculating the
allowances recognized in the financial statements.

Provisions - At each balance sheet date basis management estimate, changes in facts and legal aspects, the
Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual
future outcome may be different from this judgement.

Impairment of non-financial assets - If any indication exists, or when annual impairment testing for an asset is
required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an
asset''s or CGU''s fair value less costs of disposal and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

4.19 Share based payment

Employees of the Company receive remuneration in the form of share-based payments in consideration of the services
rendered (equity settled transactions).

Under the equity settled share-based payment, the fair value on the grant date of the Options given to employees is
recognised as ‘employee benefit expense'' with a corresponding increase in equity over the vesting period. The fair
value of the options on the grant date is calculated using an appropriate valuation model.

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that
are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision
to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. An additional expense is
recognised for any modification that increases the total fair value of the shares-based payments transactions, or is
otherwise beneficial to the employee as measured at the date of modification.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted
earnings per share. When the options are exercised, the Company issues fresh equity shares.

5. Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025,
MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and
leaseback transactions, applicable to the Company w.e.f. April 1, 2024. The Company has reviewed the new
pronouncements and based on its evaluation has determined that it does not have any significant impact in its
financial statements.

Further MCA has notified amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, with respect
to lack of exchangeability and this will be applicable to the Company for reporting periods beginning on or after
1 April 2025.

Capital reserve

Capital reserve was created underthe previous GAAP out of the profit earned from a specific transaction of capital nature. Capital reserve is not available for
the distribution to the shareholders.

Securities premium

Securities premium is used to record the premium on issue of shares. The reserve will be utilised in accordance with provisions of the Companies Act, 2013.
Capital redemption reserve

The same has been created in accordance with provision of Companies Act, 2013 against redemption of preference shares.

General reserve

The Company is required to create a general reserve out of the profits when the Company declares dividend to shareholders.

Retained earnings

Retained earnings represents surplus in the Statement of profit and loss.

Share options outstanding account

The Company has allotted equity shares to certain employees under an employee share purchase scheme. The share options outstanding account is used to
recognise the value of equity settled share based payments provided to such employees as part of their remuneration. Refer note 42 for further details of the
scheme.

Effe ctive porti ons of cash flow hod ge

This comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have
not yet occurred.

Money received against share warrant

Share warrants are issued to promotera and althers in term''s of the Guidelines foe preferential iss ues viz., SEBI (Issuc of Ca pitaland Disclosure Requirements),
Since shares are yet to be allotted against the same, these are not reflected as part of share capital but as a separate line item - ‘Money received against share
warrants. (Refer note below for details)

Pursuant to hhe fpproeal granted by the Bodrd of Directors at its meeting hold on 14th September 2024, rhe Preferential Issue Committee oo trie [Board, in its
meeting held on 16th September 2024, considered and approved the issuance of up to 1,10,75,9)41 Fully Convertible Warrants having a face value of Rs. 5/-
each at an isise price of Rs. 158/- per warrant, aggregating up to Rs. 1,74,99,98,678/- (Rupees One Hundred Seventy-Four Crores Ninety-Nine Lakhs Ninety-
Eight Thousand Six Hundred Seventy-Eight Only).

The issuance was duly/ approved by/ the sha2eholders of the Company/ehrough a postal ballot daled 16th October 2024.

Upon receipt of 433.7 55 crores, representing 25o/o of the total con''s idee ration towards the subscripeion of the warrants from all alrotaees, rhe Board of Directors,
througlr a circular resoletion dated 13th November 20^c4, allotted 1,10,75,941 Fully Convertible Warrants et an issue price o^ff?158/- per warrant. These
warrants are convertible, at the option of the warrant holdet(s), in one vs more tranches within 18 (Eighteen) months from the date of allotment, into an
equivalent number of fully paid-up equity shares of face value Rs. 5/- each, aggregating a total subscription amount of Rs.1,74,99,98,678/- for cash.

Subiequent to rhe close of tie financiar year, the Boarl of Dilectors, througl a circular reiolution dated 30th April 20055, approved the allotment of 35,44,302
equity shares of face value Rs. 5/- each, fully paid-up, ai an issue price of Rs.l58/r per equity share, pursuant to the conversion of an equivalent number of fully
convertible warrants. This conversion was carried out on a preferential basis for a total consideration of Rs. 55,99,99,716/- for cash.

I. Term loans

a) Outstanding loan from Karnataka Bank Limited with outstanding balance of ^ NIL lacs (31 March 2024 : ^ 931.44 lacs) for capital expenditure (purchase of plant and
equipments) bearing floating interest at the MCLR plus 0.50% per annum. The term loan is repayable in 60 unequal monthly instalments starting from October 2020.##

b) Outstanding loan from Tata Capital Limited, a loan with outstanding balance of ^ 94.69 lacs (31 March 2024 : ^ 659.86 lacs) was sanctioned for infusion of funds in
Subsidiary Company of borrower (Ester Filmtech Limited). The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building
constructed thereupon in Gurgaon and first and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and
further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus
9.10% per annum. The loan is repayable in 54 equal monthly instalments starting from Dec 2020.

c) From Tata Capital Limited, a loan with outstanding balance of ^ 950.37 lacs (31 March 2024 : ^ 1,387.28 lacs) was sanctioned for infusion of funds in Subsidiary Company
of borrower (Ester Filmtech Limited), general corporate and capex. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 54
equal monthly instalments starting from June 2022. #

d) From Tata Capital Limited, a loan with outstanding balance ^ 593.45 lacs (31 March 2024 : ^ 735.38 lacs) was sanctioned for infusion of funds in Subsidiary Company of
borrower (Ester Filmtech Limited),general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office
building constructed thereupon in Gurgaon and first and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand
and further secured by irrevocable guarantee of its Holding Company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR
minus 11.25% per annum. The loan is repayable in 84 equal monthly instalments starting from June 2022.

e) From Tata Capital Limited, a loan with outstanding balance ^ 2,304.34 lacs (31 March 2024 : ^ 2,426.62 lacs) was sanctioned for infusion of funds in Subsidiary Company
of borrower (Ester Filmtech Limited),general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office
building constructed thereupon in Gurgaon and further secured by irrevocable personal guarantee of Mr. Arvind Singhania.. The term loan bearing floating interest at the LTLR
minus 11.80% per annum. The loan is repayable in 84 equal monthly instalments starting from Oct 2023.

f) From Tata Capital Limited , a loan with outstanding balance ^ 1,941.29 lacs (31 March 2024 : ^ NIL) was sanctioned for infusion of funds in Subsidiary Company of
borrower (Ester Filmtech Limited),general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office
building constructed thereupon in Gurgaon and further secured by irrevocable personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the
LTPLR plus 1.70% per annum. The loan is repayable in 84 equal monthly instalments starting from Oct 2024.

g) From Bajaj Finance Limited of ^ 1,794.31 lacs (31 March 2024 : ^ 2,390.1 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest
linked to BFL IRR at the rate of 7.35% per annum. The term loan is repayable in 20 equal quarterly instalments starting from May 2023 .##

h) From IDFC Limited of ^ NIL lacs (31 March 2024 : ^ 215.9 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at
the MCLR plus 0.30% per annum. The term loan is repayable in 37 equal monthly instalments starting July 2021.#

i) From Axis Finance Limited of ^ NIL lacs (31 March 2024 : ^ 1,992.64 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating
interest at the MCLR plus .85% per annum. The term loan is repayable in 18 unequal quarterly instalments starting March 2022.##

j) From QNB Bank of ^ NIL lacs (31 March 2024 : ^ 2,848.9 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at
the MCLR plus 1.80% per annum. The term loan is repayable in 42 equal monthly instalments starting April 2023.#

k) From Shinhan Bank of ^ NIL lacs (31 March 2024 : ^ 3,549.17 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest
at the repo rate plus 2.10% per annum. The term loan is repayable in 18 equal quarterly instalments starting Dec 2023.^##

l) From IDFC First Bank Limited of USD 10.014 million equivalent to ^ 8408.92 lacs (31 March 2024 : ^ NIL lacs) as foreign currency term loan to takeover of Term loan
from Shinhan Bank & Qatar National Bank amounting to ^ 3333.33 lacs & ^2571.43 lacs respectively and balance loan for reimbursement of capital expenditure. The term
loans is secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.O.
Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Limited and second
Pari passu charge on current assets and further secured by irrevocable personal guarantee of Mr. Arvind Singhania .The term loan is also secured by first charge on Debt
Service Reserve Account (DSRA) to be created to meet debt service requirements of the project for the ensuring 90 days principal and interest payment. The term loan bearing
interest ranging from 9.73% to 9.75% per annum. The term loan is repayable in 24 quarterly instalments starting September 2024.

m) From Bajaj Finance Limited of ^ 1,146.64 lacs (31 March 2024 : ^ 1,792.33 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest
linked to BFL IRR at the rate of 8.00% per annum. The term loan is repayable in 60 equal monthly instalments starting from April 2022 .^##

Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan

Nagar, P.O. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Limited &
Vehicles and second Pari passu charge on current assets and further secured by irrevocable guarantee of its Holding Company and personal guarantee of Mr. Arvind Singhania.

^##Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan

Nagar, P.O. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Limited
and second Pari passu charge on current assets and further secured by irrevocable personal guarantee of Mr. Arvind Singhania.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the loans. Vehicle loans bearing interest rates ranging from 7.25% per annum to
10.25% per annum. These loans are repayable in monthly instalments till Mar 2029.

Hedges of highly probable forecasted transactions

The Company has hedged its floating rate interest payment cash flows. Consequently, interest rate swap has been designated in cash flow hedge relationship with borrowings. Hedged
item and hedging instruments have been identified in below paragraphs.

Hedge effectiveness is determined at inception of the hedge relationship and at every reporting period end through the assessment of the hedged items and hedging instrument to
determine whether there is still an economic relationship between the two.

All derivative financial instruments used for hedge accounting are recognised initially at fair value and reported subsequently at fair value in the standalone balance sheet.

To the extent the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognised in other comprehensive income and
included within the cash flow hedge reserve in equity. Any ineffectiveness in the hedge relationship is recognised immediately in profit or loss.

At the time the hedged item affects profit or loss, any gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss and presented as a
reclassification adjustment within other comprehensive income.

If a forecast transaction is no longer expected to occur, any related gain or loss recognised in other comprehensive income is transferred immediately to profit or loss. If the hedging
relationship ceases to meet the effectiveness conditions, hedge accounting is discontinued, and the related gain or loss is held in the equity reserve until the forecast transaction occurs.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, tenors, repricing dates
and maturities and the notional or par amounts

The Company assesses whether the derivative designated in each hedging relationship is expected to be effective in offsetting changes in cash flows of the hedged item using the
hypothetical derivative method.

In these hedge relationships the main source of ineffectiveness are:

The effect of the counterparty''s and the Company''s own credit risk on the fair value of the swaps, which is not reflected in the change in the fair value of the hedged cash flows
attributable to the change in interest rates; and differences in repricing dates between the swaps and the borrowings.

The Company does not frequently reset hedging relationships because both the hedging instrument and the hedged item frequently change (i.e., the entity does not use a dynamic
process in which neither the exposure nor the hedging instruments used to manage that exposure remain the same for a long period). If it did, then it would be exempt from providing
the disclosures required by paragraphs 23A and 23B of Ind AS 107, but would instead provide information about the ultimate risk management strategy, how it reflects its risk
management strategy in its hedge accounting and designations, and how frequently. antly hedging relationships are discontinued and restarted. If the volume of these hedges is
unrepresentative of normal volumes during the year (i.e. the volume at the reporting date does not reflect the volumes during the year), then the entity would disclose that fact and the
reason it believes the volumes are unrepresentative.

(ii) Foreign exchange risk

Foreign exchange risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects
of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the
functional currency and other currencies from the Company''s operating, investing and financing activities. The Investment and Borrowing Committee evaluates foreign exchange rate
exposure arising from foreign currency transactions on periodic basis and follows appropriate risk management policies.

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from
recognised assets and liabilities denominated in a currency that is not the Company''s functional currency.

The Company’s objectives when managing capital are to:

- To ensure Company’s ability to continue as a going concern, and

- To provide adequate return to shareholders

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached
to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would attract
penalty/financial interest. There have been few breaches in the financial covenants due to decline in performance of the Company. However, default in
financial Covenant doesn’t lead to calling of loan by banks

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders or issue new shares.

The Company''s leased asset consist of leases for land and building . With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the
balance sheet as a right-of-use asset and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used
by the Company. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as
security.

Right of use asset as at 31 March 2025 amounting to ? 56.09 lacs (as at 31 March 2024 amounting to ? 56.85 lacs) are for the lease of land and building.

A Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments
made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right of use the underlying asset
recognised in the standalone financial statement.

The expense relating to payments not included in the measurement of the lease liability for short term leases for the year ended 31 March 2025 is ^7.84 lacs (for the year ended
31 March 2024 amounting to ^ 60.80 lacs).

B Total cash outflow for leases for the year ended 31 March 2025 was ^ 0.15 lacs (year ended 31 March 24 was ^ 0.15 lacs).

(e) In the normal course of business, the payment terms given to domestic customers ranges from 0 to 60 days and for export customers, it ranges from 0 to 105 days.

(f) AH the contracts are for periods of one year or less or are billed based on time incurred. As per practical expedient given under Ind AS 115, the transaction price to
allocated these unsatisfied contracts is not disclosed.

42 (i). Share based payment
Employee Stock Option Plan (ESOP) 2021

The Nomination and Remuneration Committee of the Company had at its meeting held on 01 April 2021, approved grant of 2,48,179 (face value of ^ 5/- per share) to the
eligible employees of the Company under the of Ester Share based expenses Plan-2021, at an exercise price of ^ 105 per option (being 10% less that the closing price at NSE

on 31 March 2021 i.e. immediately preceding the grant date), each option being convertible in to one Equity Share of the Company upon vesting subject to the Securities and

Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the terms and conditions of the Ester Share based expenses Plan-2021.
The terms and conditions of the grant as per the Ester Share based expenses Plan-2021 are as under:

A. Vesting period

Vesting of the options will take place as per the following schedule:

- 10% of options will vest at the end of a period of 1 (one) year from date of grant

- 20% of options will vest at the end of a period of 2 (two) years from date of grant

- 30% of options will vest at the end of a period of 3 (three) years from date of grant

- 40% of options will vest at the end of a period of 4 (four) years from date of grant

B. Exercise period

8 (Eight) years from the date of grant. The employee shall have a right to exercise all the option vested in him at one time or various points of time within the exercise period.

Risk free return has been considered as Zero Coupon Bond Yield (continuous compound) for a term equal to the expected option life of the ESOP''s,available on The Clearing
Corporation of India Limited''s (CCIL) website. Expected volatility calculation is based on historical daily closing stock prices of competitors using standard deviation of daily
change in stock price. The minimum life of the stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which
options cannot be exercised'' The expected life has been considered based on average of maximum life and minimum life and may not necessarily be indicative of exercise
patterns that may occur.

42 (ii). Employee Stock Option Plan (ESOP) 2024

The Nomination and Remuneration Committee of the Company had at its meeting held on 14 January 2025, approved grant of 1,43,742 (face value of ^ 5/- per share) to the
eligible employees of the Company under the of “Ester Industries Limited Employees Stock Option Plan 2024 (“ESOP 2024”), at an exercise price of ^ 114 per option (being
20% less that the closing price at NSE on 13 January 2025 i.e. immediately preceding the grant date), each option being convertible in to one Equity Share of the Company
upon vesting subject to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the terms and conditions of the
“Ester Industries Limited Employees Stock Option Plan 2024 (“ESOP 2024”).

The terms and conditions of the grant as per the “Ester Industries Limited Employees Stock Option Plan 2024 (“ESOP 2024”) are as under:

A. Vesting period

Vesting of the options shall take place on the basis of time-based Vesting condition or performance- based vesting condition or a combination of both as per the following
schedule:

Time based vesting for 50 % Options:

-12.5 % of the Options will vest on 14^th January 2026 i.e. post completion of P (One) year from date of grant

-12.5 % of the Options will vest on 14^th January 202S i.e. post completion of 2 (Two) years from date of grant

-12.5 % of the Options will vest on 14^th January 2028 i.e. post completion of 3 (Three) years from date of grant

-12.5 % of the Options will vest on 14^th January 2029 i.e. post completion of 4 (Four) years from date of grant

Performance based Vesting for 50 % of Options:

-Up to 12.5 % of the Options will vest on 14^th January 2026 i.e. post completion of P (One) year from date of grant

-Up to 12.5 % of the Options will vest on 14^th January 202S i.e. post completion of 2 (Two) years from date of grant

-Up to 12.5 % of the Options will vest on 14^th January 2028 i.e. post completion of 3 (Three) years from date of grant

-Up to 12.5 % of the Options will vest on 14^th January 2029 i.e. post completion of 4 (Four) years from date of grant

B. Exercise period

Maximum 5 (five) years from the date of respective Vesting for the particular Option.

(c) The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

(d) The Company has complied with the number of layers of companies prescribed under the Companies Act, 2013.

(e) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(f) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

(g) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or
in any persons or entities, including foreign entities (‘the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary
shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate
Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.

(h) No funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties''), with the understanding, whether
recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party (‘Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in
the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(j) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(k) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

47. No subsequent event occurred post balance sheet date which requires adjustment in the standalone financial statements for the year ended 31 March 2025.

48. The Board of directors at its meeting held on 21 May 2025, has recommended final dividend of Rs. 0.60 per equity share for the year ended 31 March 2025, subject to
the approval of shareholder of the Company in the forthcoming Annual General Meeting.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants Ester Industries Limited

Firm Registration No. 001076N/N500013

Sd/- Sd/- Sd/- Sd/- Sd/-

Sandeep Mehta Arvind Singhania Pradeep Kumar Rustagi Sourabh Agarwal Poornima Gupta

Partner Chairman & CEO Executive Director - Chief Financial Officer Company Secretary

Membership No.099410 DIN: 00934017 Corporate Affairs Membership No.A49876

DIN: 00879345

Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi

Date: 21 May 2025 Date: 21 May 2025 Date: 21 May 2025 Date: 21 May 2025 Date: 21 May 2025

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Mar 31, 2024

4.14 Provisions

Provisions are recognized when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions required to settle are reviewed regularly and are adjusted where necessary to reflect the current best estimates of the obligation. Provisions are discounted to their present values, where the time value of money is material.

4.15 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.

4.16 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, right issue and share split transaction.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

4.17 Operating segments

operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker is considered to be the Board of Directors who makes strategic decisions and is responsible for allocating resources and assessing performance of the operating segments.

The Company’s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing and Sale of Polyester film and Engineering plastics.

Inter segment transfers

Inter segment transfers of goods, as marketable products produced by separate segments of the Company for captive consumption, are not accounted for in the books of account of the Company. For the purpose of segment disclosures, however, inter segment transfers have been taken at cost.

Allocation of common costs

Common allocable costs are allocated to each segment in proportion to the turnover of the segment, except where a more logical allocation is possible.

Unallocated items

Corporate income and expense are considered as a part of un-allocable income and expense, which are not identifiable to any business segment.

4.18 Significant management judgement and estimates

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures.

Significant management judgements

Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company’s future taxable income against which the deferred tax assets can be utilized.

Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

Contingent liabilities - At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

Significant estimates

Government grants - Grants receivables are based on estimates for utilisation of grant as per the regulations as well as analysing actual outcomes on a regular basis and compliance with stipulated conditions. Changes in estimates or noncompliance of stipulated conditions could lead to significant changes in grant income and are accounted prospectively over the balance life of asset.

Defined benefit obligation (DBO) - Management’s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Useful lives of depreciable/amortisable assets - Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.

Allowance for expected credit losses - The allowance for doubtful debts reflects management’s estimate of losses inherent in its credit portfolio. This allowance is based on Company’s estimate of the losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write-offs and collections, the careful monitoring of portfolio credit quality and current and projected economic and market conditions. Should the present economic and financial situation persist or even worsen, there could be a further deterioration in the financial situation of the Company’s debtors compared to that already taken into consideration in calculating the allowances recognised in the financial statements.

Allowance for obsolete and slow-moving inventory - The allowance for obsolete and slow-moving inventory reflects management’s estimate of the expected loss in value and has been determined on the basis of past experience and historical and expected future trends in the market. A worsening of the economic and financial situation could cause a further deterioration in conditions compared to that taken into consideration in calculating the allowances recognized in the financial statements.

Provisions - At each balance sheet date basis management estimate, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

Impairment of non-financial assets- If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

4.19 Non-current assets held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. The appropriate level of management must be committed

to a plan to sell, an active programme to locate a buyer and complete the plan has been initiated, the sale is considered highly probable and is expected within one year from the date of classification. Non-current assets (or disposal groups) held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Assets and liabilities classified as held for sale are presented separately from other assets and liabilities in the balance sheet. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised. A discontinued operation is a component of the Company that either has been disposed of, or is classified as held for sale, and:

a) Represents a separate major line of business or geographical area of operations,

b) Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or

c) Is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented separately in the statement of profit and loss

4.20 Share based payment

Employees of the Company receive remuneration in the form of share-based payments in consideration of the services rendered (equity settled transactions).

Under the equity settled share-based payment, the fair value on the grant date of the Options given to employees is recognised as ‘employee benefit expense’ with a corresponding increase in equity over the vesting period. The fair value of the options on the grant date is calculated using an appropriate valuation model.

The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. An additional expense is recognised for any modification that increases the total fair value of the shares-based payments transactions, or is otherwise beneficial to the employee as measured at the date of modification.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. When the options are exercised, the Company issues fresh equity shares.

5. Recent accounting pronouncements

The Ministry of Corporate Affairs had notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind As which are effective for annual periods beginning on or after 1 April 2023. The Company applied for the first-time these amendments.

Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have had an impact on the Company’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any Items in the Company’s financial statements.

Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments had no impact on the Company’s standalone financial statements.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12

The amendments had no impact on the Company’s standalone financial statements.

For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

I. Term loans

a) From Canara Bank of ? NIL (31 March 2023 : ? 301.71 lacs) as capex loan for augmentation of capital expenditure (modification, de-bottlenecking, modernization, cost reduction and maintenance capex). The term loan bearing floating interest at the MCLR plus 0.65% per annum. The term loan is repayable in 60 equal monthly instalments starting from September 2019.#

b) From Karnataka Bank Limited of ? 931.44 lacs (31 March 2023 : ? 1,366.09 lacs) as capex loan for capital expenditure (purchase of plant and equipments). The term loan bearing floating interest at the MCLR plus 0.50% per annum. The term loan is repayable in 60 unequal monthly instalments starting from October 2020.##

c) From Tata Capital Limited of ? NIL (31 March 2023 : ? 122.86 lacs) as corporate loan for augmentation of working capital bearing floating interest at the LTLR minus 9.50% per annum. The corporate loan is repayable in 16 unequal quarterly instalments starting from Sep 2019.#

d) From Tata Capital Limited of ? 659.86 lacs (31 March 2023 : ? 1,220.01 lacs) for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited). The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon andfirst and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and further securedby irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus 9.10% per annum. The loan is repayable in 54 equal monthly instalments starting from Dec 2020.

e) From Tata Capital Limited of ? 1,387.28 lacs (31 March 2023 : ? 2,614.84 lacs) for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited), general corporate and capex. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 60 equal monthly instalments starting fromJune 2022. ##

f) From Tata Capital Limited of ? 735.38 lacs (31 March 2023 : ? 877.24 lacs) for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited),general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon andfirst and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and further securedby irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 84 equal monthly instalments starting from June 2022.

g) From Tata Capital Limited of ? 2,426.62 lacs (31 March 2023 : ? NIL) for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited), general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon and further securedby irrevocable personal guarantee of Mr. Arvind Singhania.. The term loan bearing floating interest at the LTLR minus 11.80% per annum. The loan is repayable in 84 monthly instalments starting from Oct 2023.

h) From Bajaj FinanceLimited of ? 1,792.33 lacs (31 March 2023 : ? 2,386.49 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest linked to BFL IRR at the rate of 8.00% per annum. The term loan is repayable in 60equal monthly instalments starting from April 2022 .##

i) From Bajaj FinanceLimited of ? 2,390.1 lacs (31 March 2023 : ? 2,984.07 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest linked to BFL IRR at the rate of 7.35% per annum. The term loan is repayable in 20 equal quarterly instalments starting from May 2023 .##

j) From IDFC Limited of ? NIL (31 March 2023 : ? 315.96 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 1,50% per annum. The term loan is repayable in 12 equal quarterly instalments starting from Dec 2020.#

k) From IDFC Limited of ? 215.9 lacs (31 March 2023 : ? 860.45 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 0.30% per annum. The term loan is repayable in 37 equal monthly instalments starting July 2021.#

Term loans (cont’d)

l) From Axis Finance Limited of ? 1,992.64 lacs (31 March 2023 : ? 2,784.82 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus .85% per annum. The term loan is repayable in 18 unequal quarterly instalments starting March 2022.##

m) From QNB Bank of ? 2,848.9 lacs (31 March 2023 : ? 3,983.25 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 1.80% per annum. The term loan is repayable in 42 equal monthly instalments starting April 2023.#

n) From Shinhan Bank of ? 3,549.17 lacs (31 March 2023 : ? 3,990.16 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the repo rate plus 2.10% per annum. The term loan is repayable in 18 equal quarterly instalments starting Dec 2023.##

# Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.O. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited & Vehicles and second Pari passu charge on current assets and further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania.

## Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.o. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited and second Pari passu charge on current assets and further secured by irrevocablepersonal guarantee of Mr. Arvind Singhania.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the loans. Vehicle loans bearing interest rates ranging from 7.25% per annum to 10.25% per annum. These loans are repayable in monthly instalments till Jan 2028.

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, investments, trade receivables and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

i) Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk B: Moderate credit risk C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period (including extension). Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with floating interest rates.

(ii) Foreign exchange risk

Foreign exchange risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating, investing and financing activities. The Investment and Borrowing Committee evaluates foreign exchange rate exposure arising from foreign currency transactions on periodic basis and follows appropriate risk management policies.

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency.

35. Segment reporting

The Company operates in three segments manufacturing and sale of polyester film engineering plastics and speciality polymer. The Company has chosen business segments considering the dominant source of nature of risks and returns, internal organisation, management structure and the manner chief operating decision maker (CODM) review the financial performance of the business for allocating the economic resources. A brief description of the reportable segment is as follows:

Polyester chips and film: Polyester chips andfilms that are used in primarily flexible packaging and other industrial application. Polyester film is known for high tensile strength, chemical and dimensional stability, transparency,reflective, gas and aroma barrier properties and electrical insulation. PET chips is the main raw material used to manufacture the film.

Engineering plastics-Discontinued : Engineeringplastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc. Speciality Polymer: Specialty Polymers are Polymers that are high performance material catering to the global needs of the industries / applications such as carpets, textiles, food and beverages, consumer electronics, industrial etc. which cannot be met by commodity PET grades.

Information about major customer

During the year ended 31 March 2024 revenue of approximately 6.01% (31 March 2023: 6.96%) was derived from a single external customer in the polyester chips and film business and approximately 24.03% in 31 March 2023 (31 March 2023: 66.42%) was derived from a single external customer in the speciality polymer business.

Non-current assets

Non-current assets of the Company (property, plant and equipment, capital work-in-progress, intangible assets) are held in India.

36. Capital management

The Company’s objectives when managing capital are to:

- To ensure Company’s ability to continue as a going concern, and

- To provide adequate return to shareholders

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would attract penalty/ financial interest. There have been few breaches in the financial covenants due to decline in performance of the Company. However, default in financial covenant doesn’t lead to calling of loan by banks.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The amounts managed as capital by the Company are summarised as follows:

* Due to lower performance(loss) as compared to last financial year

** Due to reduction in working capital. In current assets, inventory as a % of sale had reduced due to lesser inventory holding period, reduction in trade receivables is due to decline in sales, reduction in current investment due to sale of investments in the current year.

*** Investments in mutual funds were made in October 2022 for the fiscal year 2022-23 but were not present for the entirety of the last fiscal year.

46. Audit trail

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

During the current year, the audit trail (edit logs) feature for any direct changes made at the database level was not enabled for the accounting software SAP S/4 HANA used for maintenance of books of account. The management will evaluate the implementation of audit logs at database level for all the accounting software in the next financial year.

47. During the year ended 31 March 2024, the Company has raised money by the way of issuing 1,05,60,250 Equity Shares of face value of ? 5 per equity share on preferential basis for cash to Promoter & Promoter Group and Non-Promoter Category at a price of ? 94.60 per equity share (including a premium of ? 89.60 per equity share) aggregating to ? 9,990 lacs. The issue was made in accordance with applicable Regulations of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 [‘SEBI (ICDR)]. Expenses incurred in relation to preferential allotment amounting to ? 13.57 lacs (net of taxes) have been adjusted from securities premium account. As per the offer document, entire proceeds will be used for the purpose of repayment of term loan, investment in subsidiary of the Company and general corporate purpose. As on 31 March 2024, 100% proceeds of the aforesaid allotment were unutilised and were temporarily parked/ invested in fixed deposits

48. Additional regulatory information not disclosed elsewhere in the standalone financials statements.

(a) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(g) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.

(h) No funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(j) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(k) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

49. The previous year numbers have been regrouped/ reclassified wherever necessary to conform to current year presentation.

50. No subsequent event occurred post balance sheet date which requires adjustment in the standalone financial statements for the year ended 31 March 2024.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of

Chartered Accountants Ester Industries Limited

Firm Registration No. 001076N/N500013

Sd/- Sd/- Sd/- Sd/- Sd/-

Nitin Toshniwal Arvind Singhania Pradeep Kumar Rustagi Sourabh Agarwal Poornima Gupta

Partner Chairman & CEO Executive Director - Corporate Chief Financial Officer Company Secretary

Affairs

Membership No.507568 DIN: 00934017 DIN: 00879345 Membership No. A49876

Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi

Date: 22 May 2024 Date: 22 May 2024 Date: 22 May 2024 Date: 22 May 2024 Date: 22 May 2024

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Mar 31, 2023

Rights, preferences and restrictions attached to equity share

The Company has only one class of equity share having a par value of f 5 per share. Each equity shareholder is entitled for one vote per share. The Company declares and pays dividend in Indian rupees (f). The final dividend proposed by the Board of Director is subject to the approval of the shareholder in the ensuing annual general meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholder.

i) Nature and purpose of other reserves Capital reserve

Capital reserve was created under the previous GAAP out of the profit earned from a specific transaction of capital nature. Capital reserve is not available for the distribution to the shareholders.

Securities premium

Securities premium is used to record the premium on issue of shares. The reserve will be utilised in accordance with provisions of the Companies Act, 2013.

Capital redemption reserve

The same has been created in accordance with provision of Companies Act, 2013 against redemption of preference shares. General reserve

The Company is required to create a general reserve out of the profits when the Company declares dividend to shareholders. Retained earnings

Retained earnings represents surplus in the Statement of Profit and Loss.

Share options outstanding account

The Company has allotted equity shares to certain employees under an employee share purchase scheme. The share options outstanding account is used to recognise the value of equity settled share based payments provided to such employees as part of their remuneration. Refer note 43 for further details of the scheme.

Equity component of redeemable financial instrument

The same has been created in accordance with Indian accounting standard (Ind AS) 109 against the Redeemable financial instrument (foreign currency loan) and it will be transfer to Retained earning when loan fully repaid.

I. Term loans

a) From Canara Bank of f 301.71 lacs (31 March 2022 : f 725.09 lacs) as capex loan for augmentation of capital expenditure (modification, de-bottlenecking, modernization, cost reduction and maintenance capex). The term loan bearing floating interest at the MCLR plus 0.65% per annum. The term loan is repayable in 60 equal monthly instalments starting from September 2019.#

b) From Karnataka Bank Limited of f 1,366.09 lacs (31 March 2022 : f 1,992.37 lacs) as capex loan for capital expenditure (purchase of plant and equipments). The term loan bearing floating interest at the MCLR plus 0.50% per annum. The term loan is repayable in 60 unequal monthly instalments starting from October 2020.##

c) From Tata Capital Financial Services Limited of f 122.86 lacs (31 March 2022 : f 546.66 lacs) as corporate loan for augmentation of working capital bearing floating interest at the LTLR minus 9.50% per annum. The corporate loan is repayable in 16 unequal quarterly instalments starting from Sep 2019.#

d) From Tata Capital Financial Services Limited of f 1,220.01 lacs (31 March 2022 : f 1,773.52 lacs) has been sanctioned for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited). The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon andfirst and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus 9.10% per annum. The loan is repayable in 54 equal monthly instalments starting from Dec 2020.

e) From Tata Capital Financial Services Limited of f 2,614.84 lacs (31 March 2022 : f NIL) has been sanctioned for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited), general corporate and capex. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 54 equal monthly instalments starting fromJune 2022. ##

f) From Tata Capital Financial Services Limited of f 877.24 lacs (31 March 2022 : f NIL) has been sanctioned for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited), general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon andfirst and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and further securedby irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 84 equal monthly instalments starting from June 2022.

g) From Bajaj FinanceLimited of f 2,386.49 lacs (31 March 2022 : f 2,979.01 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest linked to BFL IRR at the rate of 8.00% per annum. The term loan is repayable in 60 equal monthly instalments starting from April 2022 .##

Term loans (cont’d)

h) From Bajaj Finance Limited of f 2,984.7 lacs (31 March 2022 : f 1,978.19 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest linked to BFL IRR at the rate of 7.35% per annum. The term loan is repayable in 20 equal quarterly instalments starting from May 2023 .##

i) From IDFC Limited of f 315.96 lacs (31 March 2022 : f 944.99 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 1,50% per annum. The term loan is repayable in 12 equal quarterly instalments starting from Dec 2020.#

j) From IDFC Limited of f 860.45 lacs (31 March 2022 : f 1,501.51 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 0.30% per annum. The term loan is repayable in 37 equal monthly instalments starting July 2021.#

k) From Axis Finance Limited of f 2,784.82 lacs (31 March 2022 : f 3,373.75 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus .85% per annum. The term loan is repayable in 18 unequal quarterly instalments starting March 2022.##

l) From QNB Bank of f 3,983.25 lacs (31 March 2022 : f 3,973.91 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 1.80% per annum. The term loan is repayable in 42 equal monthly instalments starting April 2023.#

m) From Shinhan Bank of f 3990.16 lacs (31 March 2022 : f NIL) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the repo rate plus 2.10% per annum. The term loan is repayable in 18 equal quarterly instalments starting Dec 2023.##

# Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.O. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited & Vehicles and second Pari passu charge on current assets and further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania.

## Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.o. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited and second Pari passu charge on current assets and further secured by irrevocablepersonal guarantee of Mr. Arvind Singhania.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the loans. Vehicle loans bearing interest rates ranging from 7.25% per annum to 9.40% per annum. These loans are repayable in monthly instalments till May 2027.

Working capital loans, bills discounting, acceptances and buyer’s credit for raw materials : These loans are secured by first charge by way of hypothecation of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of its holding Company and personal guarantee of Mr. Arvind Singhania. Working capital, bill discounting facilities, acceptances and buyer’s credit for raw materials are further secured by way of second charge in respect of immovable properties and movable fixed assets except fixed assets that are exclusively charged to Tata Capital Financial Services Limited.

The working capital loans from banks bear floating interest rate at MCLR plus ranging from 0.65% per annum to 1.20% per annum. The bill discounting from banks bear floating interest rate ranging from 7.55% per annum to 8.60% per annum.

The quarterly returns/statements of current assets filed by the Company with banks or financial institutions in relation to secured borrowings / sanctioned loans, wherever applicable, are in agreement with the books of accounts

i) Corporate social responsibility expenses

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are promoting health care, promoting education, rural development projects and environment sustainability. A CSR committee has been formed by the company as per the Act. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

33. Fair value disclosures

(i) Fair value hierarchy

Financial assets measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: unobservable inputs for the asset or liability.

(ii) Valuation technique used to determine fair value

A. Specific valuation techniques used to value mutual funds include - the use of net asset value for mutual funds on the basis of the statement received from investee party.

B. Derivative asset/ liability is measured using forward contract exchange rates at the balance sheet rate as confirmed from banks/ financial institutions.

The above disclosures are presented for non-current financial assets (excluding bank deposits) and non-current financial liabilities. Carrying value of current financial assets and current financial liabilities (trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, trade payables, current borrowings and other current financial liabilities) represents the best estimate of fair value.

*Long term borrowing facilities availed by the Company are variable rate facilities which are subject to changes in underlying interest rate indices. Further, the credit spread on these facilities are subject to change with changes in Company’s creditworthiness. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, investments, trade receivables and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period (including extension). Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(C) Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with floating interest rates.

(ii) Foreign exchange risk

Foreign exchange risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating, investing and financing activities. The Investment and Borrowing Committee evaluates foreign exchange rate exposure arising from foreign currency transactions on periodic basis and follows appropriate risk management policies.

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency.

Sensitivity

The following table illustrates the sensitivity of profit in regards to the Company’s financial assets and financial liabilities and the USD/INR exchange rate, EUR/INR exchange rate and GBP/INR exchange rate ‘all other things being equal’. It assumes a /- 4.92% change of the INR/USD exchange rate for the year ended at 31st March, 2023 (2022: 4.65%). A /- 8.75% change is considered for the INR/EUR exchange rate (2022: 5.80%). A /- 11.60% change is considered for the INR/GBP exchange rate (2022: 6.01%). All of these percentages have been determined based on the average market volatility in exchange rates in the previous 12 months.

(iii) Price risk

The Company’s exposure to price risk arises from investments held and classified as FVTPL. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

35. Segment reporting

The Company operates in three segments manufacturing and sale of polyester film ,engineering plastics and speciality polymer. The Company has chosen business segments considering the dominant source of nature of risks and returns, internal organisation, management structure and the manner chief operating decision maker (CODM) review the financial performance of the business for allocating the economic resources. A brief description of the reportable segment is as follows:

Polyester chips and film: Polyester chips and films that are used in primarily flexible packaging and other industrial application. Polyester film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation. PET chips is the main raw material used to manufacture the film.

Engineering plastics-Discontinued : Engineering plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

Speciality Polymer: Specialty Polymers are Polymers that are high performance material catering to the global needs of the industries / applications such as carpets, textiles, food and beverages, consumer electronics, industrial etc. which cannot be met by commodity PET grades.

Information about major customer

During the year ended 31 March 2023 revenue of approximately 6.96% (31 March 2022: 10.80%) was derived from a single external customer in the polyester chips and film business, approximately 16.32% in 31 March 2023 (31 March 2022: 13.47%) was derived from a single external customer in the engineering plastics business (discontinued operations) and approximately 66.42% in 31 March 2023 (31 March 2022: 41.30%) was derived from a single external customer in the speciality polymer business.

Non-current assets

Non-current assets of the Company (property, plant and equipment, capital work-in-progress, intangible assets) are held in India.

36. Capital management

The Company’s objectives when managing capital are to:

- To ensure Company’s ability to continue as a going concern, and

- To provide adequate return to shareholders

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company’s leased asset classes primarily consist of leases for land, certain equipments and building, including warehouses and related facilities. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security.

For some of the leases, the lessee may terminate the lease by giving 3 months notice period to lessor, subject to other terms and conditions. At the end of the tenor under certain leases, lessee can avail to buy the asset at the agreed value as per buyback agreement between the lessor and lessee.

Right of use asset as at 31 March 2023 amounting to f 57.61 lacs (31 March 2022 amounting to f 835.36 lacs) are for the leases of equipments and lease of land.

A Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right of use the underlying asset recognised in the standalone financial statement.

The expense relating to payments not included in the measurement of the lease liability for short term leases is f99.08 lacs (31 March 2022 amounting to f 127.01 lacs).

B Total cash outflow for leases for the year ended 31 March 2023 was f 48.26 lacs (year ended 31 March 22 was f 120.24 lacs).

40. Employee benefits obligations I Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of continuous service gets a gratuity on departure at fifteen day salary (last drawn salary) for each completed year of service in terms of the provisions of the Payments of Gratuity Act, 1972. The Company provides for liability in its books of accounts based on actuarial valuation.

The following table summaries the components of net benefit expense recognised in statement of profit and loss and the amount recognised in the balance sheet for gratuity benefit:

II Provident fund

Provident fund for certain eligible employees is managed by the Company through trust “Ester Industries Limited Employee’s Provident Trust” in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate as notified by the Provident Fund authority. The contribution by the employer and employee together with the interest thereon are payable to the employee at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. In this regard, actuarial valuation as at 31 March 2023 was carried out by actuary to find out value of projected defined benefit obligation arising due to interest rate guarantee by the Company towards provident fund.

e. Pursuant to requirements of Ind AS 105, the amounts in the statement of profit and loss (and notes 25,28 and 30) for the current year and the previous year have been presented for continuing operations, as if the operations had been discontinued from the start of the previous year, as applicable, unless otherwise stated.

(e) In the normal course of business, the payment terms given to domestic customers ranges from 0 to 60 days and for export customers, it ranges from 0 to 105 days.

43. Share based payment

The Nomination and Remuneration Committee of the Company had at its meeting held on 01 April 2021, approved grant of 2,48,179 (face value of f 5/- per share) to the eligible employees of the Company under the of Ester Employee Stock Option Plan-2021, at an exercise price of f 105 per option (being 10% less that the closing price at NSE on 31 March 2021 i.e. immediately preceding the grant date), each option being convertible in to one Equity Share of the Company upon vesting subject to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the terms and conditions of the Ester Employee Stock option Plan-2021.

The terms and conditions of the grant as per the ester employee Stock option Plan-2021 are as under:

A. Vesting period

Vesting of the options shall take place as per the following schedule:

- 10% of options shall vest at the end of a period of 1 (one) year from date of grant

- 20% of options shall vest at the end of a period of 2 (two) years from date of grant

- 30% of options shall vest at the end of a period of 3 (three) years from date of grant

- 40% of options shall vest at the end of a period of 4 (four) years from date of grant

Risk free return has been considered as Zero Coupon Bond Yield (continuous compound) for a term equal to the expected option life of the ESOP’s, available on The Clearing Corporation of India Limited’s (CCIL) website. Expected volatility calculation is based on historical daily closing stock prices of competitors using standard deviation of daily change in stock price. The minimum life of the stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which options cannot be exercised. The expected life has been considered based on average of maximum life and minimum life and may not necessarily be indicative of exercise patterns that may occur.

(e) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(f) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (RoC) beyond the statutory period.

(g) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.

(h) No funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered

or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(j) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(k) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both

during the current or previous year.

47. During the current year, a fraud of f 65.00 lacs has happened on the Company where on the basis of WhatsApp messages from a mobile phone that did not belong to CEO of the Company, the person in-charge of approving / authorising payments instructed one of the accounts team person to make on-line payments through Bank of Baroda. Total of such payments amounted to f 65.00 lacs. The Company has filed a First Information Report (FIR) on 25 August 2022 regarding this matter. Further, Company has recorded this amount as expense in statement of profit and loss.

48. The previous year numbers have been regrouped/ reclassified wherever necessary to conform to current year presentation. The impact of such reclassification/regrouping is not material to the standalone financial statements.

49. No subsequent event occurred post balance sheet date which requires adjustment in the standalone financial statements for the year ended 31 March 2023.

---

Mar 31, 2018

1. Nature of operations

Ester Industries Limited (‘the Company'') is a manufacturer of polyester film and engineering plastics.The Company is domiciled in India and its registered office is situated at Pilibhit Road, Sohan Nagar, P.O. Charubeta, Khatima - 262308, District - Udhamsingh Nagar, Uttarakhand.

2. General information and compliance with Ind AS

These financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS'') as notified by Ministry of Corporate Affairs (‘MCA'') under section 133 of the Companies Act, 2013 (‘Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act. The Company has uniformly applied the accounting policies for the periods presented.

The financial statements for the year ended March 31, 2018 are the first financial statements which the Company has prepared in accordance with Ind AS. For all periods up to and including the year ended March 31, 2017, the Company had prepared its financial statements in accordance with accounting standards notified under section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP), which have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS. For the purpose of comparatives, financial statements for the year ended March 31, 2017 and opening balance sheet as at April 1, 2016 are also prepared and presented as per Ind AS. Note 41 describe the disclosures required under Ind AS 101.

The financial statements for the year ended March 31, 2018 along with the comparative financial information were authorised and approved for issue by the Board of Directors on May 16, 2018.

3. Basis of preparation

The financial statements have been prepared on going concern basis in accordance with generally accepted accounting principles in India. Further, the financial statements have been prepared on a historical cost basis except for following items:

Items Measurement basis

Certain financial assets and liabilities Fair value

Net defined benefits (assets)/liability Fair value of plan assets less present value of defined

benefits obligations.

4. Recent accounting pronouncement

In March 2018, the Ministry of Corporate Affairs (‘MCA'') issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying amendments to Ind AS 12, ‘Income taxes'', Ind AS 21, ‘The effects of changes in foreign exchange rates and also introduced new revenue recognition standard Ind AS 115 ‘Revenue from contracts with customers''. These amendments rules are applicable to the Company from April 1, 2018.

Ind AS 115 ‘Revenue from Contracts with Customers’ (Ind AS 115)

MCA has notified new standard for revenue recognition which overhauls the existing revenue recognition standards including Ind AS 18 - Revenue and Ind AS 11 - Construction contracts. The new standard provides a control-based revenue recognition model and provides a five step application principle to be followed for revenue recognition:

1. Identification of the contracts with the customer

2. Identification of the performance obligations in the contract

3. Determination of the transaction price

4. Allocation of transaction price to the performance obligations in the contract (as identified in step ii)

5. Recognition of revenue when performance obligation is satisfied.

The management is yet to assess the impact of this new standard on the Company''s financial statements.

Amendment to Ind AS 12

The amendment to Ind AS 12 requires the entities to consider restriction in tax laws in sources of taxable profit against which entity may make deductions on reversal of deductible temporary difference (may or may not have arisen from same source) and also consider probable future taxable profit. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

Amendment to Ind AS 21

The amendment to Ind AS 21 requires the entities to consider exchange rate on the date of initial recognition of advance consideration (asset/ liability), for recognising related expense/income on the settlement of said asset/liability. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

(ii) The Company has elected to measure all its property, plant and equipment at the previous

GAAP carrying amount at the date of transition to Ind AS.

(iii) Refer note 37B for disclosure of contractual commitments for the acquisition of property,plant and equipment.

(iv) Refer note 18 for information on property, plant and equipment pledged as security by the Company.

(v) Borrowing cost capitalised during the year Nil (March 31, 2017: Rs. 67.67 lacs; April 1, 2016: Rs. 148.26 lacs) as part of plant and machinery.

*Since Ester International (USA) Limited (EIUL), a wholly owned subsidiary of the Company in USA did not have any operation for last many years, the Board of Directors of the Company decided to dissolve EIUL. Accordingly EIUL was voluntarily dissolved on September 09, 2016 vide dissolution certificate issued by Department of Treasury, State of New Jersey, USA. The total financial impact of liquidation of EIUL is 18.63 Lacs which was charged off to the statement of profit and loss in year ended 31 March 2017.

# The Company has made 100% impairment on the said investment.

(i) The Company has created provision for obsolete inventories amounting to Rs. 101.92 lacs (31 March 2017: Rs. 3.92 lacs)

(ii) The cost of inventories recognised as expense during the year is Rs. 53,926.03 lacs (31 March 2017: Rs. 46,680.90 lacs)

iv) Rights, preferences and restrictions attached to equity share

The Company has only one class of equity share having a par value of Rs. 5 per share. Each equity shareholder is entitled for one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders.

i) Nature and purpose of other reserves Capital reserve

Capital reserve was created under the previous GAAP out of the profit earned from a specific transaction of capital nature. Capital reserve is not available for the distribution to the shareholders.

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve will utilised in accordance with provisions of the Companies Act 2013.

Capital redemption reserve

The same has been created in accordance with provision of Companies Act 2013 against the buy back of equity shares from the market. General reserve

The Company is required to create a general reserve out of the profits when the Company declares dividend to shareholders.

Retained earnings

All the profits made by the Company are transferred to retained earnings from statement of profit and loss.

I. Term loans

a) From Bank of India of Rs. 575.04 lacs (March 31, 2017: Rs. 475.24 lacs, April 01, 2016: Rs 378.00 lacs) for Engineering Plastics Extruder, Twin Screw Extruder for Film Plant 1 and UPS. The term loan bears floating interest at the MCLR plus 3.60% per annum. The term loan is repayable in 20 equal quarterly installments starting from June 2014.#

b) From Bank of India of Rs. 696.28 lacs (March 31, 2017: Rs. 1,091.24 lacs, April 01, 2016: Rs 1,584.07 lacs) as Corporate loan for augmentation of Working Capital Corporate Loan bears floating interest at the rate MCLR plus 3.60% per annum. The Corporate loan is repayable in 20 equal quarterly installments starting from March 2015.#

c) From Bank of Baroda of Rs. 348.52 lacs (March 31, 2017: Rs.546.52 lacs, April 01, 2016: Rs 743.67 lacs) as Corporate loan for augmentation of Working Capital Corporate Loan bears floating interest at the MCLR plus 4.65% per annum. The Corporate loan is repayable in 20 equal quarterly installments starting from April 2015.#

d) From Union Bank of India of Rs. 46.70 lacs (March 31, 2017: Rs.233.05 lacs, April 01, 2016: Rs 418.67 lacs) for metalizer project. The term loan bears floating interest at the MCLR plus 3.75% per annum. The term loan is repayable in 20 equal quarterly installments starting from September 2013.#

e) From Union Bank of India of Rs. 274.79 lacs (March 31, 2017: Rs. 494.79 lacs, April 01, 2016: Rs 714.79 lacs) for bio mass (Husk) fuelled thermic fluid heater bears floating interest at the MCLR plus 3.75% per annum. The term loan is repayable in 20 equal quarterly installments starting from September 2014.#

f) From State Bank of India of Rs.695.48 lacs (March 31, 2017: Rs. 893.60 lacs, April 01, 2016: Nil) for augmentation of working capital. The term loan bears floating interest at the MCLR plus 4.35% per annum. The term loan is repayable in 20 equal quarterly installments starting from December 2016.#

g) From consortium member banks namely Bank of India, Bank of Baroda, Union Bank of India, Canara Bank and State Bank of India of Rs. 2,108.03 lacs (March 31, 2017: Rs.4,243.40 lacs, April 01, 2016: Rs 6,376.57 lacs) for expansion of Film Plant capacity. The term loans bear floating interest rate ranging from MCLR plus 3.60% per annum to 4.50% per annum. These term loans are repayable in 28 equal quarterly installments starting from April 2012.#

# Above term loans are secured by first pari passu charge on fixed assets of the Company (both present & future) including factory land and building at Pilibhit Road, Sohan Nagar, P.O. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited and second Pari passu charge on current assets and further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania.

h) From State Bank of India of Nil (March 31, 2017: Nil, April 01, 2016: Rs 250.26 lacs) for Oil fired heater, Reclaim Co-extruder and In-Line Coat-er is secured by first exclusive charge by way of hypothecation of Oil Fired Heater, Reclaim Co-extruder and In-Line Coater and further secured by irrevocable guarantee of its holding company. The term loan bears floating interest at the base rate plus 2.75% per annum.

i) From Tata Capital Financial Services Limited of Rs.1,788.28 lacs (March 31, 2017: Rs. 2,098.27 lacs, April 01, 2016: Rs 1,656.03 lacs) has been sanctioned for repayment of outstanding dues of Karnataka Bank and augmentation of Working Capital. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and Corporate Office building constructed thereupon in Gurgaon and first and exclusive charge over the hypothecation of certain plant and machinaries installed at factory premises at Uttrakhand and further secured by personal guarantee of Mr. Arvind Singhania. The term loan bears floating interest at the LTLR minus 6.50% per annum. Out of Rs. 1,788.28 lacs, Rs. 36.89 lacs is repayable in 29 months starting from April 2016 with terminal date of repayment being August 2020, and balance Rs. 1,751.39 lacs is repayable in 36 months starting from October 2016 with terminal date of repayment being March 2021.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the loans. Vehicle loans bears interest rates ranging from 8.25% per annum to 13.25% per annum. These loans are repayable in monthly installments till March 2023.

III. Buyers’ credit for capital goods

a) Buyers'' credit amounting to Rs. Nil (March 31, 2017: Rs.676.57 lacs : April 01, 2016: Rs 979.83 lacs) are against LOUs / LOCs issued by Bank of India (BOI). LOUs / LOCs facility from BOI is secured by first exclusive charge by way of hypothecation of Engineering Plastics Extruder, Twin Screw Extruder and UPS and further secured by irrevocable guarantee of its holding company. Company has availed LOUs / LOCs facilities from the banks to avail the Buyers'' Credit of Rs. Nil (previous year - Rs. 676.57 Lacs). These LOU / LOC facilities are sanctioned to the Company as a sub limit to the term loans.

IV. Redeemable financial instrument

During the year, the Company has obtained interest free unsecured foreign currency loan of Rs. 504 lacs from its Holding Company. This foreign currency loan is repayable in not more than five unequal installments between April 2023 to June 2023.

Working capital loans, bills discounting and acceptances: These loans are secured by first charge by way of hypothecation of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of its holding Company and personal guarantee of Mr. Arvind Singhania. Working capital and bill discounting facilities are further secured by way of second charge in respect of immovable properties and movable fixed assets except fixed assets that are exclusively charged to Tata Capital Financial Services Limited. The working capital loans from banks bear floating interest rate at MCLR plus ranging from 1.15% per annum to 4.05% per annum. The bill discounting from banks bear floating interest rate ranging from 7.85% per annum to 10.40% per annum.

Buyers’ credit for raw material are against LOUs / LOCs issued by consortium of banks. The LOUs / LOCs facilities is sanctioned to the Company as a sub limit of Non Fund (LCs) based facility. The facility is secured by first charge by way of hypothecation of stocks of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of its holding Company and personal guarantee of Mr. Arvind Singhania. Buyers'' credit for raw material taken in USD, Euro and JPY bears interest rate ranging from 0.23% per annum to 3.56% per annum.

i) Corporate social responsibility expenses

Gross amount required to be spent by the Company during the year is Rs. Nil (31 March 2017: Rs. 17.29 lacs). Amount spent during the year on corporate social responsibility: Rs. 2.80 lacs (31 March 2017: Rs. 23.06 lacs).

5. Fair value disclosures

(i) Fair value hierarchy

Financial assets measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3: unobservable inputs for the asset or liability.

(ii) Valuation technique used to determine fair value

A. Specific valuation techniques used to value mutual funds include - the use of net asset value for mutual funds on the basis of the statement received from investee party.

B. Derviative asset/liability is measured using forward contract exchange rates at the balance sheet rate as confirmed from banks/financial institutions.

The above disclosures are presented for non-current financial assets and non-current financial liabilities. Carrying value of current financial assets and current financial liabilities (trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, trade payables, current borrowings and other current financial liabilities) represents the best estimate of fair value.

*Borrowings taken by the Company are as per the Company''s credit and liquidity risk assessment and there is no comparable instrument having the similar terms and conditions with related security being pledged and hence the carrying value of the borrowings represents the best estimate of fair value.

(i) Risk management

The Company''s activities expose it to market risk, liquidity risk and credit risk. The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

(A) Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

i) Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk

B: Moderate credit risk

C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period (including extension). Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(ii) Foreign exchange risk

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the company''s functional currency.

6. Segment reporting

The Company operates in two segments manufacturing and sale of polyester film and engineering plastics. The Company has chosen business segments as its primary segments considering the dominant source of nature of risks and returns, internal organisation, management structure and the manner chief operating decision maker (CODM) review the financial performance of the business for allocating the econcomic resources. A brief description of the reportable segment is as follows:

Polyester film: Polyester films that are used in primarily flexible packaging and other industrial application. Polyester film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation. PET chips is the main raw material used to manufacture the film.

Engineering plastics: Engineering plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

Information about major customer

During the year ended March 31, 2018 revenue of approximately 10% (March 31, 2017: 8%) was derived from a single external customer in the polyester film business and approximately 9% in March 31, 2018 (March 31, 2017: 7%) was derived from a single external customer in the engineering plastics.

Non-current assets

Non-current assets of the Company (property, plant and equipment, capital work-in-progress, intangible assets) are held in India.

7. Capital management

The Company''s objectives when managing capital are to:

- To ensure Company''s ability to continue as a going concern, and

- To provide adequate return to shareholders

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

* The amounts indicated as contingent liability or claims against the Company only reflect the basic value. Interest, penalty if any or legal costs, being indeterminable are not considered.

^A These claims represents various civil case filed against the Company. The Company has deposited Rs. 41.71 lacs with “Registrar General, Delhi High Court” in compliance with the orders of High Court of Delhi under the two civil appeal filed by the Company against the orders of Tis Hazari Court, Delhi.

# In view of the amendment in The Payment of Bonus Act, 1965 notified on January 1, 2016, the Company has made a provision for incremental bonus for the financial year i.e. for 2015-16. Though the amendment was effective retrospectively from April 1, 2014, the Company on the legal advice has decided not to consider it on account of interim order of various Hon''ble High Courts allowing stay on the amendment with retrospective effect till the time its constitutional validity is established.

8. Leases disclosure as lessee Operating leases

The Company has taken various residential, office and warehouse premises under operating lease agreements. These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed under the lease agreement and there are no subleases.

9. Employee benefits - gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of continuous service gets a gratuity on departure at fifteen day salary (last drawn salary) for each completed year of service. The Company provides for liability in its books of accounts based on actuarial valuation.

The following table summarise the components of net benefit expense recognised in statement of profit and loss and the amount recognised in the balance sheet for gratuity benefit:

Employee benefits - provident fund

Provident fund for certain eligible employees is managed by the company through trust “Ester Industries Limited Employee''s Provident Trust” in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate as notified by the Provident Fund authority. The contribution by the employer and employee together with the interest thereon are payable to the employee at the time of separation from the company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. In this regard, actuarial valuation as at March 31, 2018 was carried out by actuary to find out value of projected defined benefit obligation arising due to interest rate guarantee by the Company towards provident fund.

10. First time adoption of Ind AS

A. Explanation of transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (the Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (‘previous GAAP'' or ‘Indian GAAP''). An explanation of how the transition from previous GaAp to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

B Ind AS optional exemptions

1 Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment, capital work-in-progress and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Consequential changes arising on the application of other Ind AS is adjusted from the deemed cost of property, plant and equipment and intangible assets.

2 Investment in subsidiary

Ind AS 101 permits a first-time adopter to continue previous GAAP carrying value for investment in equity instrument of subsidiary. Accordingly, the Company has elected to apply the said exemption.

C Ind AS mandatory exceptions

1 Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

a) Investment in financial instruments carried at fair value through profit and loss (‘FVTPL'').

b) Impairment of financial assets based on expected credit loss model.

2 Classification and measurement of financial assets and liabilities

Classification of financial asset is required to be made on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Further, if it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind AS shall be the new gross carrying amount of that financial asset or the new amortised cost of that financial liability at the date of transition to Ind AS.

D Other reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Note - 11

Effective interest rate adjustment on borrowings

As per Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the finance cost by applying the effective interest method. Under previous GAAP, these transaction costs were charged to statement of profit and loss on straight-line basis over the period of loan.

Note - 12

Deferred payment terms on intangible assets

Under the previous GAAP, intangible assets purchased on deferred payment terms were to be recorded at the transaction value. As per Ind AS 109, such intangible assets are recorded at the present value of the deferred payment and related interest cost is charged to statement of profit and loss over the agreed period of contract for payment.

Note - 13

Mark to market on derivative instruments

Under the previous GAAP, the premium or discount arising at the inception of forward contracts are amortised as an expense in statement of profit and loss. As per Ind AS 109, such derivative contracts are marked to market at reporting date and resultant gain/(loss) is recognised in statement of profit and loss.

Note - 14

Expected credit loss on trade receivables

Under the previous GAAP, impairment for trade receivables is recognised on specific identification method based on management assessment of recoverability of trade receivables. As per Ind AS 109, the Company is required to apply expected credit loss model (provision matrix approach) for recognising the allowance for doubtful receivables.

Note - 15

Fair value through profit and loss

Under previous GAAP, investments in long-term equity instrument are shown at cost and tested for provision other than temporary diminution. As per Ind AS 109, such investments are measured at fair value through profit and loss (FVTPL) and resultant gain/(loss) is recognised in statement of profit and loss.

Note - 16

Reversal of depreciation on stores and spares

The Company has capitalised stores and spares starting 1 April 2016 (as per the provisions of revised AS 10 of previous GAAP) and provided depreciation prospectively. However, under Ind AS, these have been capitalised from the transition date leading to reversal in subsequent years.

Note - 17

Reversal of revaluation reserve and related depreciation impact

The Company has netted off revaluation reserve with net block of respective property, plant and equipment as per the transition provision of revised AS 10 of previous gAaP. In previous GAAP, the Company has taken the related impact on 1 April 2016 and presented the related numbers in previous GAAP financial statements of 31 March 2017. Considering, the transition date under Ind AS is also 1 April 2016 and hence, the related impact also netted off under Ind AS on transition date.

Note - 18

Tax impact on adjustments

Retained earnings and statement of profit and loss has been adjusted consequent to the Ind AS transition adjustments with corresponding impact to deferred tax, wherever applicable.

Note - 19 Others

Other adjustments include adjustments on various matters which have not been disclosed separately considering the materiality of the amounts involved.

Note - 20

Other comprehensive income

Items of income and expense that are not recognised in profit and loss but are shown in ‘other comprehensive income'' includes re-measurements gain/(loss) of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP. As a consequence, re-measurement gain/(loss) of defined benefit plans has been regrouped from employee benefit expense to other comprehensive income.

Note - 21

Government grants

Under previous GAAP, government grant/assistance relating to the purchase of property plant and equipment was recognised net of acquisition cost of property, plant and equipment. Under Ind AS, government grant/assistance is recognised on gross basis as deferred income. The said deferred income is released to statement of profit and loss over the same period and in same proportion over which additional depreciation is recognised on underlying property, plant and equipment.

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Mar 31, 2016

Term Loans from banks are further secured by second charge by way of hypothecation of stocks of raw material, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future).

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the Loans .Vehicle loans bears interest rates ranging from 8 . 25% to 13 . 50% pa. These loans are repayable in monthly installments till January 2020.

III. Buyers'' credit for capital goods

a) Buyers'' Credit amounting to Rs .979.83 lacs (previous year Rs . 534.22 lacs) are against LOUs / LOCs issued by Bank of India. LOUs / LOCs facility from BOI is secured by first exclusive charge by way of hypothecation of Engineering Plastics Extruder, Twin Screw Extruder and UPS and further secured by irrevocable guarantee of Wilemina Finance Corp. (Holding company) and Personal Guarantee of Mr. Arvind Singhania.

Company has availed LOUs / LOCs facilities from the banks to avail the Buyers'' Credit of Rs . 979.83 lacs (previous year - Rs. 534.22 Lacs). These LOU / LOC facilities are sanctioned to the company as a sub limit of term loans upto a period of 3 years till March 2018 .

LOCs / LOUs facilities are sanctioned to the company as a sub limit of term loan, bears interest rate ranging from 0.45% to 1. 53%. Liability towards Buyers'' Credit under LOCs / LOUs will be liquidated out of the proceeds of term loans that are repayable in 12 quarterly installments .

Working capital loan, bills discounting and acceptances: These loans are secured by first charge by way of hypothecation of stocks of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of Wilemina Finance Corp. (Holding company) and Personal Guarantee of Mr. Arvind Singhania. Working Capital and Bill discounting facilities are further secured by way of second charge in respect of immovable properties and movable fixed assets

The working capital loans from banks bear floating interest rate at Base Rate plus ranging from 2 50% to 3 00% pa The bill discounting from banks bear floating interest rate ranging from 10 15% to 11 75% pa

Buyers'' credit for raw material are against LOUs / LOCs issued by consortium of banks . The LOUs / LOCs facilities is sanctioned to the Company as a sub limit of Non Fund (LCs) based facility The facility is secured by first charge by way of hypothecation of stocks of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of Wilemina Finance Corp. (Holding company). Buyers'' credit for raw material taken in USD and Euro bears interest rate ranging from 0 . 93% to 1. 53% pa.

1. Directors'' Remuneration

The shareholders of the Company had approved the remuneration of Mr. Arvind Singhania, Managing Director of the Company, vide Special Resolution passed through Postal Ballot on 20th May, 2015 . However due to changed market condition, the profits of the Company during FY 2015-16 were inadequate for payment of remuneration to Mr. Arvind Singhania and the remuneration paid to Mr Arvind Singhania is in excess of the limit prescribed under Section 197, 198 read with Schedule V of the Companies Act, 2013. Such inadequacy of the profit was not determinable at the time of appointment Therefore, the Company has made an application to the Central Government seeking its approval for the payment of remuneration in case of inadequacy of profit. The application is still under consideration with the Central Government In case the Central Government does not provide the approval for the payment of remuneration/waiver of excess remuneration, Mr. Arvind Singhania will refund the excess remuneration to the Company.

The remuneration of Mr. Pradeep Kumar Rustagi was approved by the Shareholders vide Special Resolution passed through Postal ballot on 20th May, 2015 .The remuneration paid to Mr Rustagi during FY 2015-16 is within the limits prescribed under Part II of Schedule V of the Companies Act, 2013 .

2. Gratuity and other post employment benefits plan Gratuity

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation.The benefit vests on the employees after completion of 5 years of service .The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summaries the components of net benefit expense recognized in the Statement of profit and loss and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Provident Fund

Provident fund for certain eligible employees is managed by the company through trust "Ester Industries Limited Employee''s Provident Trust" in line with the Provident Fund and Miscellaneous Provision Act, 1952.The plan guarantees interest at the rate as notified by the Provident Fund authority. The contribution by the employer and employee together with the interest thereon are payable to the employee at the time of separation from the company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee .

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary have provided a valuation of provident fund liability and based on assumptions provided below there is no shortfall as at March 31, 2016 and March 31, 2015 .

As per the guidance note on implementing AS-15, employee benefits (revised 2005) issued by the accounting standard board (ASB), provident fund trust set up by employers, which required interest shortfall to be met by employer, needs to be treated as defined benefit plan

3. In the Board Meeting held on 25th May, 2015, the Company has allotted 2,07,50,000 Equity Shares of Rs . 5/- each (face value) fully paid at a price of Rs . 10 .10 each including premium of Rs . 5 .10/- each (the Equity Shares) to Vettel International Limited, a Non-Promoter entity, pursuant to conversion of 2,07,50,000 Zero Coupon Warrants of Rs . 10 .10 each (the Warrants) in compliance with the Companies Act, 1956 and SEBI Regulations .The company had already obtained approvals from Shareholders, Stock Exchanges and FIPB. During the month of May, 2015, the Company had received an amount of Rs . 1587.02 Lacs towards 75% of the total amount of the Warrants required for the conversion of the Warrants into Equity Shares. The Company had already received 25% of the total amount of the Warrants during FY 2014-15 .

The Company has obtained listing approvals of the Equity Shares from both the Stock Exchanges viz Bombay Stock Exchange and National Stock Exchange in the month of June, 2015 .

4. Pursuant to Section 135 of the Companies Act,2013 and rules made there under, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The Committee has adopted a Corporate Social Responsibility Policy. As per Section 135(5) of the Act, the Company needs to ensure that at least 2% of the average net profit of preceding 3 (three) financial years is spent on CSR activities as mentioned in CSR Policy. The prescribed amount to be spent on CSR during FY 2015-16 was Rs . 7 . 47 Lacs being 2% of the average net profit of preceding three financial years (2012-13, 2013-14 and 2014-15) .

As against obligation to spend Rs . 7 . 47 lacs on CSR during FY 2015-16, the Company has spent only Rs . 2 . 90 lacs and carried forward unspent amount of Rs . 4 .57 Lacs for spending on CSR activities during FY 2016-17.The Company observed that obligated amount of Rs . 7.47 lacs was not large enough to make any worthwhile impact on the society. The Company feels that brought forward amount of Rs . 4 .57 lacs together with obligation of Rs . 17 .29 lacs, would be large enough to make positive impact on the society and accordingly has decided to spend Rs . 21. 86 lacs during the FY 2016-17 on CSR activities .

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Mar 31, 2015

1. Directors Remuneration

Mr Pradeep Kumar Rustagi was re-appointed as Whole-time Director w e f April 1, 2014 for 3 years Mr Arvind Singhania was appointed w e f May 21, 2014 as Whole-time Director of the Company The shareholders approved their appointment in Annual General Meeting held on September 22, 2014

The remuneration paid to Mr Arvind Singhania and Mr Pradeep Rustagi during financial year 2014-15 was within the limits prescribed in Schedule V of the Companies Act, 2013 In accordance with the requirements of Section 203 read with schedule V of the Companies Act, 2013, approval of Shareholders by way of Special Resolution through Postal Ballot was granted for payment of remuneration in case of inadequacy of Profits to Mr Pradeep Kumar Rustagi and Mr Arvind Singhania

2. Gratuity and other post employment benefits plan Gratuity

The Company has a defined benefit gratuity plan Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation The benefit vests on the employees after completion of 5 years of service The Gratuity liability has not been externally funded Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and loss and the unfunded status and amounts recognized in the balance sheet for the Gratuity

Provident Fund

Provident fund for certain eligible employees is managed by the company through trust "Ester Industries Limited Employee's Provident Trust" in line with the Provident Fund and Miscellaneous Provision Act, 1952 The plan guarantees interest at the rate as notified by the Provident Fund authority The contribution by the employer and employee together with the interest thereon are payable to the employee at the time of separation from the company or retirement, whichever is earlier The benefits vests immediately on rendering of the services by the employee

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary have provided a valuation of provident fund liability and based on assumptions provided below there is no shortfall as at March 31, 2015 and March 31, 2014

As per the guidance note on implementing AS-15, employee benefits (revised 2005) issued by the accounting standard board (ASB), provident fund trust set up by employers, which required interest shortfall to be met by employer, needs to be treated as defined benefit plan

3. Leases:

The Company has taken various residential, Office and warehouse premises under operating lease agreements These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms There are no restrictions imposed under the lease agreement and there are no subleases The company have paid Rs 69 97 lacs (previous year Rs 47 51 lacs) towards operating lease rentals

4. Capitalization of expenditure:

During the year, the company has capitalized the following expenses to the cost of fixed asset/ capital work-in-progress (CWIP) Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company

5. Segment Reporting

The Company operates in two segments manufacturing and sale of polyester film and engineering plastics The Company has chosen business segments as its primary segments considering the dominant source of nature of risks and returns, internal organization and management structure A brief description of the reportable segment is as follows:

Polyester Film: Polyester Films that are used in primarily flexible packaging and other industrial application Polyester Film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation PET Chips is the main raw material used to manufacture the film

Engineering Plastics: Engineering Plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics Engineering Plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc

6. Scheme of amalgamation

The shareholders of the Company had approved a scheme of amalgamation between the Company (transferee Company) and fellow subsidiary Sriyam Impex Private Limited (transferor Company) with an appointed date of April 1, 2012 This scheme of amalgamation was approved by the High Court of Uttrakhand on March 25, 2014 and was subsequently submitted with Registrar of Companies (RoC), Uttrakhand on May 7, 2014 Accordingly, from April 1, 2012, the operation of the Transferor Company stood transferred to and vested in the company on a going concern basis

Equity shares of transferee Company held by the transferor Company were cancelled and new equity shares were issued to equity shareholders of transferor Company in the exchange ratio as specified in the Scheme The effect of cancellation and issuance of equity shares has been disclosed under head "Share Capital Control Account" in previous year's Balance Sheet The excess of book value of the investment held by the transferor Company in the transferee Company over the face value of equity shares was adjusted in the Capital Reserve of the transferee Company

In previous year, the credit balance of security premium account and capital reserve account of the transferor company was transferred to the transferee company

The reduction in the share capital and security premium account of the transferee Company was effected as an integral part of the Scheme in accordance with the provisions of Sections 100 to 103 of the Companies Act, 1956 and the order of the High Court sanctioning the Scheme was deemed to be the order under Section 102 of the Companies Act, 1956 for the purpose of confirming the reduction

Since the impact of amalgamation was considered in previous year's financial statements, the loss after tax of Rs 3 76 lacs of transferor Company from April 1, 2012 to March 31, 2013, was accounted for in the previous year's statement of Profit & loss as a separate line item However, debit balance of Profit and loss and Goodwill as on March 31, 2012 was adjusted from Securities Premium account Further, net cash fows for the period April 1, 2012 to March 31, 2013 pertaining to the transferor Company on account of operating, investing and financing activities aggregating Rs 25 11 lacs, Rs nil and Rs nil respectively were included in the previous year's statement of cash flows as a separate line item under the respective heads

7. In the Board Meeting held on October 3, 2013, the Board of Directors approved the proposal for preferential allotment of 20,750,000 Zero Coupon Warrants of Rs 10 10 each and convertible into 20,750,000 equity shares of Rs 5 each fully paid up at a price of Rs 10 10 each including premium of Rs 5 10 each to a Non-Promoter entity in compliance with the Companies Act, 1956 and SEBI regulations and subject to the shareholders and other necessary approvals required

After obtaining approval from Shareholders, Stock Exchanges and FIPB, the Company allotted Warrants in its Board Meeting held on April 11, 2014 As on March 31, 2015 the company has received an amount of Rs 524 23 lacs which is 25% of the total amount of warrants including premium

8. Pursuant to Section 135 of the Companies Act, 2013 and rule made thereunder, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee The Committee has adopted a Corporate Social Responsibility Policy As per Section 135(5) of the Act, the Company needs to ensure that at least 2% of the average net Profit of preceding three financial years is spent on CSR activities as mentioned in CSR Policy However, due to losses incurred in past, the average result of preceding three financial years (2011-12, 2012-13 and 2013-14) is loss Consequently the Company is not required to spend any amount on CSR during the current year

9. Previous year figure have been regrouped / reclassified whenever considered necessary, so as to confirm with the current year's classification

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Mar 31, 2014

1. Nature of operations

Ester Industries Limited (hereinafter referred to as ''the Company'') is a manufacturer of polyester film and engineering plastics.

2. Contingent liabilities

(Rs. In lacs)

As at As at March 31, 2014 March 31, 2013

(a) Excise Duty and Customs Duty pending hearing of appeals/writ petitions:

(i) Cenvat credit disallowed on inputs (for the period March 1990 to Mar 8.06 8.06 1991) not covered under rule 57A, mainly Santotherm, Diethyl Glycol, Delion etc. Disallowance was due to use of inputs for manufacture of exempted goods.

(ii) Removal of PET chips (exempted goods) from bonded warehouse 3.00 3.00 without payment of duty.

(iii) Goods sold from depot at higher value than one declared at factory gate 25.46 25.46 price for the period Jun 1988 to Mar 1992.

(iv) Cenvat credit disallowed on inputs like DMT, additives etc. for the 164.20 164.20 manufacturing of polyester chips. Disallowance was due to use of inputs for manufacturing of exempted goods.

(v) Reversal of Cenvat credit availed on HSD. Department disallowed credit 206.92 206.92 alleging that cenvat credit has been wrongly availed on HSD.

(vi) Cenvat credit availed on raw material. Disallowance on account of credit 11.72 11.72 availed fully on raw material and not on pro-rata basis for clearance of dutiable goods i.e. polyester films.

(vii) Availment of credit on import of Dimethyl Terephalate. Disallowance was 57.71 57.71 due to use of inputs for manufacturing of exempted goods.

(viii) Other Miscellaneous Cases 33.82 33.82

(ix) Cenvat credit of Rs. 0.59 lacs not admissible on shape & section as capital 3.09 3.09 goods and Rs. 2.5 lacs recoverable against shortage of cenvatable inputs.

(x) Demand raised on account of excess / shortfall in stocks alleged by 12.95 12.95 preventative staf .

(xi) Demand raised for differential amount of Custom Duty on import of PBT chips. 188.36 188.36

Total (a) 715.29 715.29

(b) Show cause notices related to Service Tax & Excise rebate on export 13.54 13.54

(c) Income Tax:

(i) Disallowance of advertisement expenditure pursuant to rule 6B of IT 1.68 1.68 rules, 1962 in the revised return of income which is based on the auditor''s report in respect of A.Y. 1990-91, 1993-94 to 1997-98 by ITAT.

(ii) Disallowance of club expenditure on the contention that they are not 1.80 1.80 wholly and exclusively for the business needs of the company in respect of A.Y. 1990-91, 1993-94 to 1994-95 & A.Y. 2005-06 by ITAT.

(iii) Disallowance of 50% of entertainment expenses on the contention 5.10 5.10 that there has been no participation of the employee for incurring such expenditure in respect of A.Y. 1993-94 to 1997-98 by ITAT.

(iv) Disallowance of expenses relating to previous years in respect of A.Y. 14.68 14.68 1993-94 to 1997-98 by ITAT.

(v) Demand of MAT (including interest) A.Y. 2004-05* 5.78 5.78

* Disallowances of expenses incurred on earning exempt income like dividend and interest by invoking section 14A of the act by AO in respect of A.Y. 2004-05.

* Disallowances of provision for doubtful debts and advances for computing book Profits under section 115JB of the Act as they are in the nature of reserves as per assessing officer.

* Disallowances of claim of Profit under section 80HHC for computing book Profits under section 115JB of the act on the contention that company should have adjusted unabsorbed business loss and depreciation with the Profits of the business first before arriving at the deduction under section 80HHC of the Act. Since, the two exceed the current years Profits, there can be no deduction under section 80HHC of the Act.

(vi) Demand of MAT (including interest) A.Y. 2005-06@ 11.16 11.16

@ Disallowance of carry forward of loss on sale of investment on which dividend income is earned which is exempt from tax by invoking section 94(7) of the Act.

@ Disallowance of other expenses under MAT including foreign technician fees, unexplained investment.

(vii) Liability in respect of disallowances of excess depreciation claimed by 11.66 11.66 company, bonus provision, disallowance of expenses incurred on earning exempt income like dividend and interest by invoking section 14A of the Act in respect of A.Y. 2006-07 to A.Y. 2009-10.

(viii) Disallowances out of travelling exp and U/S 14A in respect of AY 2011-12 6.27 -

Total (c) 58.13 51.86

(d) Labour Cases:

Workers suspended, pending in High Court, Delhi - 1.67

Total (D) = (a) (b) (c) (d) 786.96 782.36

(e) Other claims not acknowledged as debts 83.14 49.20

(f) Bonds amounting to Rs 510 lacs executed in favour of Central Excise & 324.55 366.84 Customs Authorities, out of which, amount to be re-credited on receiving the proof of export is yet to be submitted.

(g) Amount of duty saved on import under advance license - corresponding 7.77 8.33 export obligation pending is Rs. 953.15 lacs (previous year Rs. 972.66 lacs)

Based on favorable decisions in similar cases, legal opinion taken by the company, discussions with the solicitors etc., the company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (e) above and hence no provision is considered necessary against the same.

3. Directors'' Remuneration

The Company appointed Mr. Ashok Kumar Agarwal and Mr. Pradeep Kumar Rustagi as Whole Time Directors of the Company with effect from February 14, 2011 with the approval of the shareholders. During the FY 2010-11, the Company had adequate Profits and both the directors were paid remuneration within the limits as prescribed in Schedule XIII to the Companies Act, 1956.

During the financial year 2011-12, due to changed market condition caused by over-supply, the Company had suf ered losses which were not determinable at the time of appointment. The remuneration paid/accrued to both the whole time directors was in excess of the limit prescribed under schedule XIII of the Companies Act, 1956 by Rs. 25.19 lacs. Therefore the Company, with the approval of shareholders in the Extra ordinary general meeting held on April 7, 2012, had made an application to the Central Government seeking its approval for the payment of remuneration in case of losses. The said application has been approved by the Central Government on July 17, 2012.

The remuneration paid to Mr. Ashok Kumar Agarwal and Mr. Pradeep Kumar Rustagi during the current financial year has been accrued / paid in accordance with the approval given by the Central Government.

Further in respect of managerial remuneration of Rs. 15.50 lacs paid during earlier years and not sanctioned by the department of company af airs, an interim stay has been granted by the Hon''ble High Court of Delhi on the writ petition filed by the Company.

4. Gratuity and other post employment benefits plan

Gratuity

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and loss and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Statement of Profit and loss

Net employee benefit expense recognised in employee cost

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets, categories of plan assets as a percentage of the fair value of total plan assets and Company''s expected contribution to the plan assets in the next year is not given. The principal assumptions used in determining gratuity benefit obligations for the Company''s plans are shown below:

Provident Fund

Provident fund for certain eligible employees is managed by the company through trust "Ester Industries Limited Employee''s Provident Trust" in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate as notif ed by the Provident Fund authority. The contribution by the employer and employee together with the interest thereon are payable to the employee at the time of separation from the company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary have provided a valuation of provident fund liability and based on assumptions provided below there is no shortfall as at March 31, 2014 and March 31, 2013.

As per the guidance note on implementing AS-15, employee benefits (revised 2005) issued by the accounting standard board (ASB), provident fund trust set up by employers, which required interest shortfall to be met by employer, needs to be treated as defined benefit plan.

5. Leases:

The Company has taken various residential, office and warehouse premises under operating lease agreements. These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed under the lease agreement and there are no subleases. The company have paid Rs. 47.51 lacs (previous year Rs. 123.01 lacs) towards operating lease rentals.

6. Segment Reporting

The Company operates in two segments manufacturing and sale of polyester film and engineering plastics. The Company has chosen business segments as its primary segments considering the dominant source of nature of risks and returns, internal organization and management structure. A brief description of the reportable segment is as follows:

Polyester Film: Polyester Films that are used in primarily flexible packaging and other industrial application. Polyester Film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation. PET Chips is the main raw material used to manufacture the film.

Engineering Plastics: Engineering Plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering Plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

7. Scheme of amalgamation

i) The shareholders of the Company had approved a scheme of amalgamation between the Company (transferee Company) and fellow subsidiary Sriyam Impex Private Limited (transferor Company) with an appointed date of April 1, 2012. Sriyam Impex private limited was engaged in trading of BOPP film, chemicals and other items. This scheme of amalgamation has been approved by the High Court of Uttrakhand on March 25, 2014 and was subsequently submitted with Registrar of Companies (RoC), Uttrakhand on May 7, 2014. Accordingly, from April 1, 2012, the operation of the transferor Company stood transferred to and vested in the company on a going concern basis.

ii) The Transferee Company shall, without further application, issue and allot to the Equity Shareholder(s) of the Transferor Company, 100 (One Hundred only) Equity Shares of the nominal value of Rs. 5/- each, credited as fully paid up, for every 197 (One hundred and ninety seven only) Equity Shares of the nominal value of Rs. 10 each fully paid up held by them in the Transferor Company. For the purpose of allotment referred to in this clause, fractional entitlements shall be rounded-of to the next higher whole number.

iii) Pursuant to the scheme, equity shares of transferee Company held by the transferor Company''s shareholders shall stand cancelled and new equity shares will be issued to equity shareholders of transferor Company in the exchange ratio as specified above. The effect of cancellation and issuance of equity shares has been disclosed under head "Share Capital Control Account"

iv) The excess of book value of the investment held by the transferor Company in the transferee Company over the face value of equity shares has been adjusted in the Capital Reserve of the transferee Company.

v) Debit balance of statement of Profit and loss and the goodwill transferred from transferor Company has been adjusted from security premium account.

vi) The reduction in the share capital and security premium account of the transferee Company shall be effected as an integral part of the Scheme in accordance with the provisions of Sections 100 to 103 of the Act and the order of the High Court sanctioning the Scheme shall be deemed to be also the order under Section 102 of the Act for the purpose of confirming the reduction. The reduction would not involve either a diminution of liability in respect of unpaid share capital or payment of paid-up share capital, and the provisions of Section 101 of the Act will not be applicable.

vii) Pursuant to the scheme, the authorized share capital of the transferee Company on the effective date shall automatically stand increased by merging the authorized share capital of transferor Company with transferee Company without any further act or deed on the part of the transferee Company, including payment of stamp duty and Registrar of Companies fees, for the authorized share capital of transferor Company. Further, if required, the transferee Company shall take necessary steps to further increase and alter its authorized share capital suitably to enable it to issue and allot the equity shares required to be issued and allotted by it in terms of this scheme.

viii) Upon the Scheme becoming effective, the rransferor Company shall stand dissolved without winding up.

ix) The transfer of assets and liabilities has been effected from the "Appointed date" of April 1, 2012, as defined in the scheme and approved by the High Court of Uttrakhand.

x) Credit balance of security premium account and capital reserve account of the transforer company have been transferred to the tranferee company.

# This excludes the amount of Rs. 162.92 lacs pertaining to the amortization of goodwill debited in the statement of Profit and Loss account of the transferor Company for the year ended March 31, 2013. However, as per the approved scheme of amalgamation, goodwill as on April 1, 2012 in the books of transferor Company should be adjusted from the securities premium account of the transferee Company. Accordingly, the amortization of goodwill amounting to Rs. 162.92 lacs has not been considered while giving effect of the operations of the transferee Company for the year April 1, 2012 to March 31, 2013 and it has been adjusted from the securities premium account as part of goodwill brought in the books of transferee Company.

Further, net cash flows for the period April 1, 2012 to March 31, 2013 pertaining to the transferor Company on account of operating, investing and financing activities aggregating Rs. 25.11 lacs, Rs. nil and Rs. nil respectively have been included in the current year''s statement of cash flows as a separate line item under the respective heads.

8. In the Board Meeting held on October 3, 2013, the Board of Directors approved the proposal for preferential allotment of 20,750,000 Zero Coupon Warrants of Rs. 10.10 each and convertible into 20,750,000 equity shares of Rs. 5 each fully paid up at a price of Rs. 10.10 each including premium of Rs. 5.10 each to a Non-Promoter entity in compliance with the Companies Act, 1956 and SEBI regulations and subject to the shareholders and other necessary approvals required.

After obtaining approval from Shareholders, Stock Exchanges and FIPB, the Company allotted Warrants in its Board Meeting held on April 11, 2014.

9. Previous year figure have been regrouped / reclassified whenever considered necessary, so as to confirm with the current year''s classif -ication.

---

Mar 31, 2013

1. Nature of operations

Ester Industries Limited (hereinafter referred to as ''the Company'') is a manufacturer of polyester flm and engineering plastics.

2. Directors'' Remuneration

The Company appointed Mr. Ashok Kumar Agarwal and Mr. Pradeep Kumar Rustagi as Whole Time Directors of the Company with efect from February 14, 2011 with the approval of the shareholders. During the FY 2010-11, the Company had adequate profts and both the directors were paid remuneration within the limits as prescribed in Schedule XIII to the Companies Act, 1956.

During the fnancial year 2011-12, due to changed market condition caused by over-supply, the Company had sufered losses which were not determinable at the time of appointment. The remuneration paid/accrued to both the whole time directors was in excess of the limit prescribed under schedule XIII of the Companies Act, 1956 by Rs. 25.19 lacs. Therefore the Company, with the approval of shareholders in the Extra ordinary general meeting held on April 7, 2012, had made an application to the Central Government seeking its approval for the payment of remuneration in case of losses. The said application has been approved by the Central Government on July 17, 2012.

The remuneration paid to Mr. Ashok Kumar Agarwal and Mr. Pradeep Kumar Rustagi during the current fnancial year has been accrued / paid in accordance with the approval given by the Central Government.

Further in respect of managerial remuneration of Rs. 15.50 lacs paid during earlier years and not sanctioned by the department of company afairs, an interim stay has been granted by the Hon''ble High Court of Delhi on the writ petition fled by the Company.

3. Gratuity and other post employment benefts plan

Gratuity

The Company has a defned beneft gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The beneft vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summaries the components of net beneft expense recognized in the Statement of proft and loss and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

4. Leases:

The Company has taken various residential, ofce and warehouse premises under operating lease agreements. These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed under the lease agreement and there are no subleases. The company have paid Rs. 123.01 lacs (previous year Rs. 123.85 lacs) towards operating lease rentals.

5. Segment Reporting

The Company operates in two segments manufacturing and sale of polyester flm and engineering plastics. The Company has chosen business segments as its primary segments considering the dominant source of nature of risks and returns, internal organization and management structure. A brief description of the reportable segment is as follows:

Polyester Film : Polyester Films that are used in primarily fexible packaging and other industrial application. Polyester Film is known for high tensile strength, chemical and dimensional stability, transparency, refective, gas and aroma barrier properties and electrical insulation. PET Chips is the main raw material used to manufacture the flm.

Engineering Plastics : Engineering Plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering Plastics are equipped with certain electrical properties which enable it to be used in specifc industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

6. The Board of Directors in its meeting held on January 17, 2013 accorded the approval of Scheme of amalgamation of Sriyam Impex Private Limited ("the Promoter group company") with Ester Industries Limited ("the Company") subject to regulatory and other approvals. In this process the company have fled an application with stock exchange for obtaining "No Objection" and in principle approval.

7. Previous year fgure have been regrouped / reclassifed whenever considered necessary, so as to confrm with the current year''s classifcation.

---

Mar 31, 2012

1. Nature of operations

Ester Industries Limited (hereinafter referred to as 'the Company') is a manufacturer of polyester film and engineering plastics.

a) Terms / rights attached to equity shares

The Company has only one class of equity share having a par value of Rs. 5 per share. Each equity shareholder is entitled for one vote per share. The Company declares and pays dividend in Indian rupees.

During the year ended March 31, 2012, the amount of dividend recognized as distribution to equity shareholders was Rs. nil per share (previous year : Rs. 4 including interim dividend of Rs. 2).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholder.

* Shares held by Super Leasing Limited has been included in Sriyam Impex Private Limited pursuant to it's merger with Sriyam Impex Private Limited w.e.f. February 18, 2011.

** Shares held by Saraswati Trading Company Ltd and Sri Lakshmi Investments Ltd has been included in Wilemina Finance Corp. pursuant to it's merger w.e.f. April 20, 2011.

As per records of the company, including its register of shareholders/members and other declarations received from share- holders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

* Shares held by Super Leasing Limited has been included in Sriyam Impex Private Limited pursuant to it's merger with Sriyam Impex Private Limited w.e.f. February 18, 2011.

** Shares held by Saraswati Trading Company Ltd and Sri Lakshmi Investments Ltd has been included in Wilemina Finance Corp. pursuant to it's merger w.e.f. April 20, 2011.

I. Term loans

a) From Bank of Baroda of Rs. 514.38 lacs (Previous year Rs. 721.00 lacs) for Corporate Office project is secured by mortgage created by way of deposit of title deeds in respect of the immoveable property (land and building under construction thereon) at Gurgaon. The term loan bears floating interest at the rate base rate plus 4.25% pa. The term loans are repayable in 59 monthly installments starting from April 2013.

b) From State bank of Bikaner and Jaipur of Rs. 162.50 lacs (Previous year Rs. Nil) is secured by first exclusive charge by way of hypothecation of Oil Fired Heater, Reclaim Co-extruder and In-Line coater and further secured by irrevocable guarantee of Wilemina Finance Corp. (Holding company). The term loan bears floating interest at the rate base Rate plus 3.25% pa. The Term Loans are repayable in 14 quarterly installments starting from April 2013.

c) From consortium member banks of Rs. 2,373.57 lacs (Previous Year Rs. 3,707.07 lacs) are secured by first mortgage created by way of deposit of title deeds in respect of the immovable properties at Khatima, both present & future and first charge by way of hypothecation of Company's all movable assets (save and except inventories, book debts, vehicles acquired through vehicles loans and machinery acquired through term loan taken from banks / body corporate on exclusive charge basis), ranking pari passu inter-se and further secured by irrevocable guarantee of Wilemina Finance Corp. (Holding company). The term loans bear floating interest rate ranging from Base Rate plus 2.75% - 4.25% pa. These term loans are repayable in 24 quarterly installments starting from April 2013.

Term Loans from banks are further secured by second charge by way of hypothecation of stocks of raw material, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future).

d) From Body Corporate (Tata Capital Limited) is secured by first exclusive charge by way of hypothecation of Engineering Plastics Extruder No: 3 & Off Line Coater and further secured by irrevocable guarantee of Mr. Arvind Kumar Singhania (Chairman of the Company) and Wilemina Finance Corp. (Holding company). The term loan from body corporate bears floating interest at the rate 16.50% pa. Term Loans are repayable in 9 monthly installments starting from April 2013.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the Loans.

III. Buyers' Credit for capital goods

a) Buyers' credit amounting to Rs. 11,585.76 lacs (Previous Year Rs. 10,516.80 lacs) are against Letters of Undertaking (LOUs) / Letter of Comfort (LOCs) issued by consortium of banks. LOUs / LOCs facility is secured by first mortgage created by way of deposit of title deeds in respect of the immovable properties situated at Khatima, both present & future and first charge by way of hypothecation of all movable assets (save and except inventories, book debts, vehicles acquired through vehicles loans and machinery acquired through term loans taken from body corporate on exclusive charge basis), ranking pari passu inter-se and further secured by irrevocable guarantee of Wilemina Finance Corp. (Holding company).

b) Buyers' Credit amounting to Rs. 1,012.91 lacs (Previous Year Rs. 884.16 lacs) are against LOUs / LOCs issued by Union Bank of India (UBI). LOUs / LOCs facility from UBI is secured by first exclusive charge by way of hypothecation of Metallizer (Topmet 2850) and further secured by irrevocable guarantee of Wilemina Finance Corp. (Holding company).

c) Buyers' Credit amounting to Rs. 989.80 lacs (Previous Year Rs. nil) are against LOUs / LOCs issued by State bank of Bikaner & Jaipur (SBBJ). LOUs / LOCs facility from SBBJ is secured by first exclusive charge by way of hypothecation of Reclaim co- extruder and In-Line coater, and further secured by irrevocable guarantee of Wilemina Finance Corp. (Holding company).

Company has availed LOUs / LOCs facilities from the banks to avail the Buyers' Credit of Rs. 13,588.47 lacs (Previous Year - Rs. 11,400.96 Lacs). LOU / LOC facilities to the extent of Rs.12,575.56 Lacs (previous year- Rs 10,516.80 lacs) is sanctioned to the company as a sub limit of term loans upto a period of 3 years from May 2010 to Aug 2013.

LOCs / LOUs facilities are sanctioned to the company as a sub limit of term loan. Liability towards Buyers' Credit under LOCs / LOUs will be liquidated out of the proceeds of term loans that are repayable over a period of seven years.

IV. Working capital loan and bills discounting: These loans are secured by first charge by way of hypothecation of stocks of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of Wilemina Finance Corp. (Holding company). Working Capital and Bill discounting facilities are further secured by way of second charge in respect of immovable properties and movable fixed assets. The working capital loans from banks bear floating interest rate ranging from Base Rate plus 2.50% to 2.75% pa.

V. Buyers' Credit for raw material are against LOUs / LOCs issued by consortium of banks. The LOUs / LOCs facilities is sanc- tioned to the Company as a sub limit of Non Fund (LCs) based facility. The facility is secured by first charge by way of hypotheca- tion of stocks of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of Wilemina Finance Corp. (Holding company).

(i) Conveyance deed in respect of part of the land valued at Rs. Nil (previous year Rs 4.75 lacs) is pending for execution.

(ii) (a) Amount of borrowing cost aggregating Rs. 5.34 lacs (Previous year Rs.428.64 lacs) is capitalised during the year.

(b) Current year's deletions from plant & machinery include Rs. 6.00 lacs (Previous year Rs.687.10 lacs) on account of discarding of the old machinery and equipments

(iii) (a) Gross block of fixed assets includes Rs. 7299.53 lacs (previous Year Rs.7,299.53 lacs) being the amount added on revaluation of fixed assets on 31-10-1992

Revaluation was carried out by an external valuer as per "Existing Use Value" method using prevailing market prices of the assets and where such prices were not available, RBI indices were used.

Details of additions due to revaluation during 1992 are as follows:

Land - Rs. 39.93 Lacs (previous year Rs. 39.93 lacs)

Building - Rs. 526.23 Lacs (previous year Rs. 526.23 lacs)

Plant and machinery - Rs. 6733.37 Lacs (previous year Rs. 6733.37 lacs)

(iv) Plant & machinery Rs. 448.05 lacs (previous year nil) have been adjusted for remission of liability towards technician fee & other expenses.

Excise duty on sales amounting to Rs. 4,249.06 lacs (previous year Rs. 4,572.75 lacs) has been reduced from sales in statement of profit & loss and excise duty on increase/decrease of stock Rs. 202.66 lacs (previous year Rs. 132.62 lacs) has been considered as (income) / expenses in note 22 of the financial statements.

1. Contingent liabilities not provided for

(Rs. In lacs)

As at As at March 31, 2012 March 31, 2011

(a) Excise Duty and Customs Duty pending hearing of appeals/writ petitions:

(i) Cenvat credit disallowed on inputs (for the period March 1990 to Mar 1991) not covered under rule 57A, mainly Santotherm, Diethyl Glycol, Delion etc. Disallowance was due to use of inputs for manufacture of exempted goods. 8.06 8.06

(ii) Removal of PET chips (exempted goods) from bonded warehouse without payment of duty. 3.00 3.00

(iii) Goods sold from depot at higher value than one declared at factory gate price for the period Jun 1988 to Mar 1992. 25.46 25.46

(iv) Cenvat credit disallowed on inputs like DMT, additives etc. for the manufacturing of polyester chips. Disallowance was due to use of inputs for manufacturing of exempted goods. 164.20 164.20

(v) Reversal of Cenvat credit availed on HSD. Department disallowed credit alleging that cenvat credit has been wrongly availed on HSD. 206.92 206.92

(vi) Cenvat credit availed on raw material. Disallowance on account of credit availed fully on raw material and not on pro-rata basis for clearance of dutiable goods i.e. polyester films. 11.72 11.72

(vii) Availment of credit on import of Dimethyl Terephalate. Disallowance was due to use of inputs for manufacturing of exempted goods. 57.71 57.71

(viii) Other Miscellaneous Cases 33.82 33.82

(ix) Cenvat credit of Rs. 0.59 lacs not admissible on shape & section as capital goods and Rs. 2.5 lacs recoverable against shortage of cenvatable inputs. 3.09 3.09

(x) Demand raised on account of excess / shortfall in stocks alleged by preventative staff. 12.95 12.95

Total (a) 526.93 526.93

(b) Show cause notices related to Service Tax & Excise rebate on export 13.75 2.59

(c) Income Tax:

(i) Demand raised during assessment (A.Y. 1989-90) 1.84 1.84

(ii) Disallowance of advertisement expenditure pursuant to rule 6B of IT rules, 1962 in the revised return of income which is based on the auditor's report in respect of A.Y. 1990- 91, 1993-94 to 1997-98 by ITAT. 1.68 1.68

(iii) Disallowance of club expenditure on the contention that they are not wholly and exclusively for the business needs of the company in respect of A.Y. 1990-91, 1993-94 to 1994-95 & A.Y. 2005-06 by ITAT. 1.80 1.80

(iv) Disallowance of 50% of entertainment expenses on the contention that there has been no participation of the employee for incurring such expenditure in respect of A.Y. 1993-94 to 1997-98 by ITAT. 5.10 5.10

(v) Disallowance of expenses relating to previous years in respect of A.Y. 1993-94 to 1997-98 by ITAT. 14.68 14.68

(vi) Demand of MAT (including interest) A.Y. 2004-05* 5.78 46.63

* Disallowances of expenses incurred on earning exempt income like dividend and interest by invoking section 14A of the act by AO in respect of A.Y. 2004-05.

* Disallowances of provision for doubtful debts and advances for computing book profits under section 115JB of the Act as they are in the nature of reserves as per assessing officer.

* Disallowances of claim of profit under section 80HHC for computing book profits under section 115JB of the act on the contention that company should have adjusted unabsorbed business loss and depreciation with the profits of the business first before arriving at the deduction under section 80HHC of the Act. Since, the two exceed the current years profits, there can be no deduction under section 80HHC of the Act.

(vii) Demand of MAT (including interest) A.Y. 2005-06@ 11.16 17.05

@ Disallowance of carry forward of loss on sale of investment on which dividend income is earned which is exempt from tax by invoking section 94(7) of the Act.

@ Disallowance of other expenses under MAT including foreign technician fees, unexplained investment.

(viii) Liability in respect of disallowances of excess depreciation claimed by company, bonus provision, disallowance of expenses incurred on earning exempt income like dividend and interest by invoking section 14A of the Act in respect of A.Y. 2006-07 to A.Y. 2009-10. 37.27 14.43

Total (c) 79.31 103.21

(d) Labour Cases:

Workers suspended, pending in High Court, Delhi 1.67 1.67

Total (D) = (a) (b) (c) (d) 621.66 634.40

(e) Other claims not acknowledged as debts 48.50 47.50

(f) Bonds amounting to Rs 510 lacs executed in favour of Central Excise & Customs Authorities, out of which, amount to be re-credited on receiving the proof of export is yet to be submitted. 163.75 426.48

Based on favorable decisions in similar cases, legal opinion taken by the company, discussions with the solicitors etc., the company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (e) above and hence no provision is considered necessary against the same.

2. Directors' Remuneration

The Company appointed Mr. Ashok Kumar Agarwal and Mr. Pradeep Kumar Rustagi as Whole Time Directors of the Company with effect from February 14, 2011 with the approval of the shareholders. During the FY 2010-11, the Company had adequate profits and both the directors were paid remuneration within the limits as prescribed in Schedule XIII to the Companies Act, 1956.

During the current year, due to changed market condition caused by over-supply, the Company has suffered losses which were not determinable at the time of appointment. The remuneration paid to both the whole time directors is in excess of the limit prescribed under schedule XIII of the Companies Act, 1956 by Rs. 25.19 lacs. Therefore the Company, with the approval of shareholders in the Extra ordinary general meeting held on April 7, 2012, has made an application to the Central Government seeking its approval for the payment of remuneration in case of losses. The application is still under consideration with the Central Government.

Further in respect of managerial remuneration of Rs. 15.50 lacs paid during earlier years and not sanctioned by the department of company affairs, an interim stay has been granted by the Hon'ble High Court of Delhi on the writ petition filed by the Company.

3. Gratuity and other post employment benefits plan Gratuity

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summaries the components of net benefit expense recognized in the Statement of profit and loss and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets, categories of plan assets as a percentage of the fair value of total plan assets and Company's expected contribution to the plan assets in the next year is not given.

Provident Fund

The company has set up provident fund trust which is managed by the company, and as per the guidance note on implementing AS-15, employee benefits (revised 2005) issued by the accounting standard board (ASB), provident fund trust set up by employers, which required interest shortfall to be met by employer, needs to be treated as defined benefit plan.

The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended December 31, 2011 the actuary has accordingly provided a valuation for the year ended on March 31, 2012 (previous year ended on March 31, 2011 valuation is not available) and based on the below provided assumptions there is a shortfall of Rs. 1.50 lacs as at March 31, 2012. This shortfall in Provident Fund has been made good by way of creating sufficient provision.

4. Leases:

The Company has taken various residential, office and warehouse premises under operating lease agreements. These are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed under the lease agreement and there are no subleases. The company have paid Rs. 123.85 lacs (previous year Rs. 109.79 lacs) towards lease rentals.

5. Segment Reporting

The Company operates in two segments manufacturing and sale of polyester film and engineering plastics. The Company has chosen business segments as its primary segments considering the dominant source of nature of risks and returns, internal organization and management structure. A brief description of the reportable segment is as follows:

Polyester Film: Polyester Films that are used in primarily flexible packaging and other industrial application. Polyester Film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation. PET Chips is the main raw material used to manufacture the film.

Engineering Plastics: Engineering Plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering Plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

6. Previous year figure have been regrouped / reclassified whenever considered necessary, so as to confirm with the current year's classification.

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Mar 31, 2011

1. Nature of Operations

Ester Industries Limited (hereinafter referred to as the Company) is a manufacturer of Polyester Film and Engineering Plastics.

2. Contingent Liabilities not provided for (Rs. in lacs) March 31, 2011 March 31, 2010

a) Excise Duty and Customs Duty pending hearing of appeals/writ petitions: i) Cenvat Credit Disallowed on inputs (for the period March 1990 to May 1991) not covered Under Rule 57A, mainly Santotherm, Diethyl Glycol, Delion MS etc. Disallowance was due to use of inputs for manufacturing of exempted goods. 8.06 8.06

ii) Removal of PET Chips (exempted goods) from bonded warehouse without payment of duty 3.00 6.95

iii) Goods sold from depot at higher value than one declared at factory gate price for the period Jun 1988 to Mar1992. 25.46 26.96

iv) Cenvat Credit disallowed on Inputs like DMT, additives etc. for the manufacturing of Polyester Chips.

Disallowance was due to use of inputs for manufacturing of exempted goods. 164.20 164.20

v) Reversal of Cenvat credit availed on HSD.

Department disallowed credit alleging that Cenvat credit has been wrongly availed on HSD 206.92 206.92

vi) Cenvat credit availed on raw material.

Disallowance on account of credit availed fully on raw materials and not on pro-rata basis for clearance of dutiable goods i.e. Polyester Films. 11.72 11.72

vii) Availment of credit on import of Dimethyl Terephalate

Disallowance was due to use of inputs for manufacturing of exempted goods. 57.71 57.71

viii) Other Miscellaneous Cases 33.82 39.85

ix) CENVAT credit Rs .58 lacs not admissible on shape & section as capital goods and Rs 2.5 lacs recoverable against shortage of cenvatable inputs 3.09 0.00

x) Demand raised on account of Excess / Shortfall in stocks alleged by Preventive Staff 12.95 12.95

Total (A) 526.93 535.32

b) Show cause notices related to denial of Service Tax credit & Excise rebate on export 2.59 2.59

c) Income Tax:

Demand raised during assessment (A.Y. 1989-90) 1.84 1.84

Disallowed of advertisement expenditure pursuant to Rule 6B of IT Rules, 1962 in the revised return of income which is based on the auditors report in respect of A.Y. 1990-91, 1993-94 to 1997-98 by ITAT 1.68 1.68

Disallowances of club expenditure on the contention that they are not wholly and exclusively for the business needs of the Company in respect of A.Y. 1990-91, 1993-94 to 1994-95 & A.Y.2005-06 by ITAT 1.80 1.80

Disallowances of 50% of entertainment expenses on the Contention that there has been no participation of the employee for incurring such expenditure in respect of A.Y. 1993-94 to 1997-98 by ITAT 5.10 5.10

Disallowances of expenses relating to previous year in respect of A.Y. 1993-94 to 1997-98 by ITAT 14.68 14.68

Demand of MAT (including interest) A.Y.04-05* 46.63 46.63

* Disallowances of expenses incurred on earning exempt income like dividend and interest by invoking section 14A of the Act by AO in respect of A.Y.2004-05

* Disallowances of provision for doubtful debts and advances for computing book profits under section 115JB of the Act as they are in the nature of reserves as per Assessing officer.

* Disallowance of claim of profits under section 80HHC under for computing book profits under section 115JB of the Act on the contention that Company should have adjusted unabsorbed business loss and depreciation with the profits of the business first before arriving at the deduction under section 80HHC of the Act. Since, the two exceed the current years profits, there can be no deduction under section 80HHC of the Act.

Demand of MAT (including interest) A.Y.05-06@ 17.05 17.05

@ Disallowances of carry forward of loss on sale of investments on which dividend income is earned which is exempt from tax by invoking section 94(7) of the Act.

@ Disallowances of other expenses under MAT including Foreign technician fees, unexplained investments.

Liability in respect of disallowances of excess depreciation claimed by company, bonus provision, disallowances of expenses incurred on earning exempt income like dividend and interest by invoking section 14A of the Act in respect of A.Y. 2006-07 to A.Y. 2008-09 14.43 14.43

d) Labour Cases: Workers suspended, pending in High Court, Delhi 1.67 1.67

Total (D) = (A)+(b)+(c)+(d) 634.36 642.79

e) Other claims not acknowledged as debts 47.50 46.70

f) Contingent liability in respect of partly paid up shares - 5.15

g) Bonds amounting to Rs 510 lacs executed in favour of Central Excise & Customs Authorities, out of which, amount to be re-credited on receiving the proof of export is yet to be submitted. 426.48 264.06

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (e) above and hence no provision is considered necessary against the same.

3. a) Directors Remuneration

As the liability for gratuity and leave encashment are provided on actuarial basis for the Company as a whole, the amounts pertaining to the whole time director is not included above.

Note:

In respect of the Managerial Remuneration of Rs.15.50 lacs paid during earlier years and not sanctioned by the Department of Company Affairs, an interim stay has been granted by the Honble High Court of Delhi on the writ petition filed by the Company.

4. Excise duty on sales amounting to Rs. 4,572.75 lacs (previous year Rs. 2,628.75 lacs) has been reduced from sales in profit & loss account and excise duty on increase of stock Rs. 132.62 lacs (Previous year Rs. 32.29 lacs) has been considered as expense in Schedule 15 of financial statements.

5. Gratuity and other post-employment benefit plans: a) Gratuity

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the unfunded status and amounts recognised in the balance sheet for the Gratuity.

b) Provident Fund

The Company has set up Provident Fund Trust which is managed by the Company, and as per the Guidance note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB), Provident Fund set up by the employers, which required interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Pending the issuance of the guidance note from the Acturial Society of India, the Companys Actuary has expressed his inability to reliably measure the Provident Fund liability. However, the Company has ascertained that at the year end there is no shortfall in the Provident Fund Trust.

6. Segment Reporting

The Company operates in two segments manufacturing and sale of polyester film and engineering plastics. The Company has chosen business segments as its primary segments considering the dominant source of nature of risks and returns, internal organisation and management structure. A brief description of the reportable segment is as follows:

Polyester Film : Polyester Films that are used in primarily flexible packaging and other industrial application. Polyester Film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation. PET Chips is the main raw material used to manufacture the film

Engineering Plastics : Engineering Plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering Plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

B. Information About Secondary Segments

c) The Company has common fixed assets for producing goods for Domestic Market and Overseas Market. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished.

7.a) Names of Related parties

Nature of Relationship Name of Related Party

Names of related parties where control exists

- Holding Company - Goldring Investments Corp.

- Subsidiary Company - Ester International (USA) Limited (EIUL)

Names of Associates/ Joint Ventures :

- Associates - Saraswati Trading Company Limited

Key Management Personnel. - Mr. A K Singhania (Chairman & Managing Director)

- Mr. Ashok Kumar Agrawal (Executive Director with effect from 14th February 2011)

- Mr. Pradeep Rustagi (Executive Director with effect from 14th February 2011)

Relatives of Key Management Personnel. - Mr. Sitaram Singhania (Father of Mr. A K Singhania)

- Uma Devi Singhania (Mother of Mr. A.K.Singhania)

- Jai Vardhan Singhania (Son of Mr. A K Singhania)

- Ayush Vardhan Singhania (Son of Mr. A K Singhania)

Individuals, which directly or indirectly - Uma Devi Singhania (upto 3rd May 2010) through subsidiaries, control or exercise - Jai Vardhan Singhania (with effect from 3rd May 2010) significant influence over the company.

Enterprises owned or significantly - Super Leasing Limited * influenced by Key management personnel - Sriyam Impex Private Limited or their relatives - Saraswati Trading Company Limited

- Sri Lakshmi Investments Limited

- Wilemina Finance Corporation

- Polyplex Corporation Limited

* Now merged with Sriyam Impex Private Limited (with effect from 18th February 2011)

8. During the current financial year, the Company has received the approval of the appropriate authority for the closure of Ester Europe Gmbh, accordingly we have eliminated the investments from the standalone financial statements.

9. Previous year figures have been regrouped / reclassified wherever considered necessary, so as to confirm with the current years classification.

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Mar 31, 2010

1. Contingent Liabilities not provided for March 31, 2010 March 31, 2009 (Rs. In Lacs) (Rs. In Lacs) (a) Excise Duty and Custom Duty pending hearing of appeals/writ petitions: (i) Cenvat credit disallowed on certain items 8.06 8.06 (ii) Removal of PET chips without payment of duty 6.95 6.95 (iii) Goods sold from depot at higher value than one declared at factory gate price 26.96 26.96 (iv) Cenvat credit disallowed on inputs 164.20 164.20 (v) Reversal of Cenvat credit availed on HSD 206.92 206.92 (vi) Cenvat credit availed on raw material utilized on prorata basis. 11.72 11.72 (vii) Availment of credit on import of Dimethyl Terephalate 57.71 57.71 (viii) Other Miscellaneous Cases 39.85 40.21 (ix) Show cause notice issued by Commissioner, based on CAG audit, alleging short reversal of Modvat Credit while disposing Yarn Plant. - 63.83 Total (a) 522.37 586.56 (b) Show cause notices related to denial of Service Tax credit & Excise rebate on export 2.59 2.59 (c) Income Tax: Demand raised during assessment (A.Y. 89-90) 1.84 1.84 Demand of MAT (including interest) A.Y.04-05 46.63 46.63 Demand of MAT (including interest) A.Y.05-06 17.05 17.05 (d) Labour Cases: Workers suspended, pending in High Court, Delhi 1.67 1.67 Total (a to d) 592.15 656.34 (e) Other claims not acknowledged as debts 46.70 46.00 (f) Contingent liability in respect of partly paid up shares 5.15 5.15 (g) Bonds amounting to Rs 510 lacs executed in favour of Central Excise & Customs Authorities, out of which, amount to be re-credited on receiving the proof of export is yet to be submitted. 264.06 88.69

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) to (e) above and hence no provision is considered necessary against the same.

2. Company had taken an unsecured interest free loan in 1999-2000 from an overseas corporate body (Spring Falls Limited - Related Party) in the form of External Commercial Borrowing (ECB). Loan was due for repayment in one installment on March 31, 2005 but it was rescheduled with the consent of lender and was repayable by March 31, 2006. Company was not able to repay the loan on that date and the same was not renewed in the previous year as per the guidelines of Reserve Bank of India. The Company has repaid the said Loan during the year.

3. In the opinion of the Board of Directors of the Company, Loans and Advances have a realisable value at least at the amounts at which they are stated.

As the liabilities for gratuity and leave encashment are provided on actuarial basis for the Company as a whole, the amounts pertaining to the whole time director is not included above.

Note:

In respect of the Managerial Remuneration of Rs.15.50 lacs paid during earlier years and not sanctioned by the Department of Company Affairs, an interim stay has been granted by the Hon’ble High Court of Delhi on the writ petition filed by the Company.

4. Excise duty on sales amounting to Rs. 2,628.75 lacs (previous year Rs. 3,180.65 lacs) has been reduced from sales in profit & loss account and excise duty on increase of stock Rs. 32.29 lacs in the current year is considered as expense and excise duty on decreased in stock of Rs. 51.92 Lacs is considered as income in previous year in Schedule 17.

5. Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets, categories of plan assets as a percentage of the fair value of total plan assets and Company’s expected contribution to the plan assets in the next year is not given.

6. Pursuant to the resolution passed by the Shareholders of the Company at the Extra Ordinary General Meeting (EGM) held on 21st October 2009, the Company has by way of preferential issue allotted 21,73,914 Shares Warrants of face value of Rs. 5/- each to Promoters, 26,08,696 Zero Coupon Unsecured Fully and Compulsorily Convertible Debentures (FCCD) of face value of Rs. 5/-each to an independent Overseas Investor and 26,08,696 Zero Coupon unsecured Fully and Compulsorily Convertible Debentures (FCCD) of Face Value of Rs. 5/- each to Person Acting in Concert with Promoters for cash at a premium of Rs. 18/- as part financing of the Polyester Film Expansion project. Board of Directors in their meeting dated 24th December 2009 has converted these Share Warrants and FCDs into 73,91,306 equity shares at a price of Rs. 23/- including a premium of Rs. 18/- per equity share.

7. Loss on foreign exchange fluctuation during the year includes Mark – to – Market losses of Rs. 402.13 lacs (previous year nil) towards forward contracts booked to hedge the foreign currency liabilities related to Polyester Film Expansion Project.

8. Previous year figures have been regrouped / reclassified wherever considered necessary, so as to confirm with the current year’s classification.