ester industries ltd share price Auditors report


To the Members of Ester Industries Limited

Report on the Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying standalone financial statements of Ester Industries Limited (‘the Company?), which comprise the Balance Sheet as at 31 March 2022, the Statement of Pro t and Loss (including Other Comprehensive loss), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (‘the Act?) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS?) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of a airs of the Company as at 31 March 2022, and its profit (including other comprehensive loss), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor?s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI?) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matter described below to be the key audit matters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue recognition Sale of products Our audit procedures included, but were not limited, to the following:
Revenue of the Company majorly comprises of revenue from sale of polyester lms and engineering plastics. The Company sells its products through various distribution channels involving a high volume of sale transactions. Obtained an understanding of the process of identi cation and recording of revenue transaction from sale of polyester lms and engineering plastics;
The Company recognised an amount of 140,565.94 lacs as revenue for the year ended 31 March 2022, as disclosed in Note 24 to the standalone financial statements. Refer Note 5.5 for the related accounting policy adopted by the management for recognition of revenue in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers (‘Ind AS 115?). Evaluated the design, implementation and tested the operating effectiveness of key controls over revenue recognition including around quantity sold, pricing and accounting of revenue transactions;
Revenue recognition is a significant audit risk primarily as there is a risk that revenue is recognised on sale of goods before the control in the goods is transferred. Revenue is also a key performance indicator of the Company and accordingly, testing occurrence of revenue transactions is a key focus area for our audit. Performed substantive analytical procedures on revenue which included ratio analysis, product mix analysis, region wise analysis, etc;
We determined this to be a key audit matter due to significant time and e ort involved in testing revenue recorded during the year. On a sample basis, evaluated the terms and conditions of the contracts, including incoterms, with customers to ensure that the revenue recognition accounting policy adopted by the management is in accordance with Ind AS 115;
On a sample basis, tested revenue transactions recorded during the year, and revenue transactions recorded in the period before and after year-end, with supporting documents such as invoices, agreements with customers, proof of deliveries;
Performed other substantive audit procedures including obtaining debtor con rmations on a sample basis and reconciling revenue recorded during the year with statutory returns;
Tested manual journal entries impacting revenue including credit notes, claims etc., which were material or irregular in nature with supporting documents and evaluated business rationale thereof;
Evaluated disclosures made in the standalone financial statement for revenue recognition from sale of goods for appropriateness in accordance with the accounting standards.

Information other than the Financial Statements and Auditor?s Report thereon

6. The Company?s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor?s report thereon. The Annual Report is expected to be made available to us after the date of this auditor?s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Company?s Board of Directors. The Company?s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive loss, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the Company?s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company?s financial reporting process.

Auditor?s Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor?s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

x Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to standalone financial statements in place and the operating effectiveness of such controls;

x Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

x Conclude on the appropriateness of Board of Directors? use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company?s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor?s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor?s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

x Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor?s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor?s Report) Order, 2020 (‘the Order?) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

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

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act; e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure B wherein we have expressed an unmodi ed opinion; and

g) With respect to the other matters to be included in the Auditor?s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in Note 37 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2022;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2022;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022;

iv. a. The management has represented that, to the best of its knowledge and belief, as disclosed in Note 43 (f) to the standalone financial statements, 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 Bene ciaries?) or provide any guarantee, security or the like on behalf the Ultimate Bene ciaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in Note 43 (f) to the standalone financial statements, 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 Bene ciaries?) or provide any guarantee, security or the like on behalf of the Ultimate Bene ciaries; and c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The interim dividend declared and paid by the Company during the year ended 31 March 2022 and until the date of this audit report is in compliance with section 123 of the Act; The nal dividend paid by the Company during the year ended 31 March 2022 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend; and As stated in Note 35 (b) to the accompanying standalone financial statements, the Board of Directors of the Company have proposed nal dividend for the year ended 31 March 2022 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Sd/-
Nitin Toshniwal
Partner
Membership No.: 507568
UDIN: 22507568AJHBUY5689
Place: Kolkata
Date: 20 May 2022

Annexure A referred to in Paragraph 16 of the Independent Auditor?s Report of even date to the members of Ester Industries Limited on the standalone financial statements for the year ended 31 March 2022

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that: (i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and right of use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a regular program of physical veri cation of its property, plant and equipment and right of use assets under which the assets are physically veri ed in a phased manner over a period of 3 years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain property, plant and equipment and right of use assets were veri ed during the year and no material discrepancies were noticed on such veri cation.

(c) The title deeds of all the immovable properties (including investment properties) held by the Company (other than properties where the Company is a lessee) disclosed in the financial statements are held in the name of the Company. For properties where the Company is a lessee, the lease arrangements have been duly executed in favour of the Company. However, for title deeds of immovable properties in the nature of land situated at Sohan nagar, P.O. Charubeta, Khatima, Distt. Udham Singh nagar, Uttarakhand and at Plot No.11, Block A, Sector 33 & 34, Gurgaon -122001 with gross carrying values of 226.85 lacs and 1,426.51 lacs as at 31 March 2022, which have been pledged as security for loans taken by the Company, confirmations with respect to title of the Company have been directly obtained by us from the respective.

(d) The Company has not revalued its Property, Plant and Equipment and Right of Use assets or intangible assets during the year.

(e) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, reporting under clause 3(i)(e) of the Order is not applicable to the Company.

(ii) (a) The management has conducted physical veri cation of inventory at reasonable intervals during the year, except for goods-in-transit. In our opinion, the coverage and procedure of such veri cation by the management is appropriate and no discrepancies of 10% or more in the aggregate for each class of inventory were noticed.

(b) The Company has a working capital limit in excess of 5 crore sanctioned by banks based on the security of current assets. The quarterly statements, in respect of the working capital limits have been led by the Company with such banks and such statements are in agreement with the books of account of the Company for the respective periods, which were subject to review.

(iii) (a) The Company has provided guarantee to Subsidiary as per details given below:

Particulars Guarantees
Aggregate amount during the year
- Subsidiary 33,078.45
Balance outstanding as at balance sheet date
- Subsidiary 33,078.45

(b) In our opinion, and according to the information and explanations given to us, the investments made and guarantees provided and terms and conditions of the grant of guarantees provided are, prima facie, not prejudicial to the interest of the Company. (c) The Company does not have any outstanding loans and advances in the nature of loans at the beginning of the current year nor has not granted any loans or advances in the nature of loans during the year. Accordingly, reporting under clauses 3(iii)(c), 3(iii)(d), 3(iii)(e) and 3(iii)(f) of the Order is not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act in respect of investments and guarantees, as applicable. Further, the Company has not entered into any transaction covered under section 185.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there is no amount which has been considered as deemed deposit within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company. (vi) The Central Government has specified maintenance of cost records under sub-section (1) of section 148 of the Act in respect of the products of the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) In our opinion, and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, employees? state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities by the Company, though there have been slight delays in a few cases.

Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues referred in subclause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:

Name of the statute Nature of dues Gross Amount ( in lacs) Amount paid under protest ( in lacs) Period to which the amount relates Forum where dispute is pending
Central Excise Act, 1944 Excise Duty 8.06 Nil March 1990 to May 1991 Commissioner (Appeals), Central Excise, Ghaziabad, UP
Central Excise Act, 1944 Excise Duty 164.20 Nil April 1990 to February 1992 Commissioner (Appeals), Central Excise, Ghaziabad, UP
Central Excise Act, 1944 Excise Duty 11.72 Nil June 1987 to October 1988 Assistant Commissioner, Central Excise, Rampur
Central Excise Act, 1944 Excise Duty 20.61 Nil March 1991 to May 1991 Commissioner (Appeals), Central Excise, Ghaziabad, UP
Central Excise Act, 1944 Excise Duty 17.23 Nil April 1992 to November 1993 Commissioner, Central Excise, Meerut, UP
Central Excise Excise Duty 4.79 Nil Financial year Commissioner (Appeals), Central
Act, 1944 1998-99 Excise, Ghaziabad
Central Excise Act, 1944 Excise Duty 12.95 5.23 April 1991 to November 1992 Joint Commissioner, Meerut II, UP
Central Excise Act, 1944 Excise Duty 1.58 Nil July 1987 to December 1988 Commissioner, Central Excise, Meerut, UP
Central Excise Act, 1944 Excise Duty 3.09 Nil Financial year 2009-10 Commissioner (Appeals), Central Excise, Rampur, UP
Central Excise Act, 1944 Excise Duty 2.50 Nil April 2009 to December 2009 Commissioner (Appeals), Central Excise, Rampur, UP
Central Excise Act, 1944 Excise Duty 6.95 3.95 Financial year 1994-95 Commissioner (Appeals), Noida, UP
Central Excise Act, 1944 Excise Duty 4.32 Nil Financial year 1994-95 Assistant Commissioner Central Excise, Rampur
Central Excise Act, 1944 Excise Duty 476.73 Nil March 1997 to March 1998 Appellate Tribunal, New Delhi
Finance Act, 1994 Service Tax 16.23 8.00 March 2017 to February 2019 Superintendent CGST, Khatima, Uttarakhand
Finance Act, 1994 Service Tax 13.53 Nil Financial year 2011-12 Assistant Commissioner, Central Excise, Rampur, UP
Finance Act, 1994 Service Tax 123.30 Nil April 2010 to March 2015 Superintendent Adjudication, Meerut II
Finance Act, 1994 Service Tax 14.55 Nil March 2017 to February 2019 Superintendent CGST, Khatima
The Customs Act, 1962 Custom Duty 2.58 Nil Financial year 1997-98 Additional Commissioner Customs (DEEC), Mumbai
The Customs Act, 1962 Custom Duty 12.07 Nil January 1997 to March 1998 Additional Commissioner Customs (DEEC), Mumbai
The Customs Act, 1962 Custom Duty 43.05 Nil April 1998 to March 1999 Commissioner of Customs, Mumbai
Goods & Services Tax, 2017 GST 2.41 2.41 Financial Year 2018-19 Addl. Comm. Grade-2 (Appeals), Trade Tax, Moradabad, U.P.
Goods & Services Tax, 2017 GST 2.33 2.33 Financial Year 2018-19 Joint Commissioner (Appeals), Haldwani, Uttarakhand
Goods & Services Tax, 2017 GST 2.68 2.68 Financial Year 2019-20 Joint Commissioner (Appeals), Haldwani, Uttarakhand
Goods & Services Tax, 2017 GST 1.98 1.98 Financial Year 2019-20 Joint Commissioner (Appeals), Haldwani, Uttarakhand
Income Tax Act, 1961 Income Tax 18.00 Nil Assessment year 1993-94 to Assessment year 1995-96 Income Tax - Assessing o cer
Income Tax Act, 1961 Income Tax 9.19 Nil Assessment year 1997-98 and Assessment year 2004-05 The Hon?ble Supreme Court of India
Income Tax Act, 1961 Income Tax 6.63 Nil Assessment year 2006-07, Assessment year 2007-08 and Assessment year 2011-12 Income Tax - Assessing o cer
Income Tax Act, 1961 Income Tax 0.06 Nil Assessment year 2012-13 and Assessment year 2013-14 Income Tax - Assessing o cer
Income Tax Act, 1961 Income Tax 7.53 1.51 Assessment year 2016-17 Commissioner of Income Tax (Appeals) Delhi
Income Tax Act, 1961 Income Tax 33.68 Nil Assessment year 2004-05 The Hon?ble Supreme Court of India
Income Tax Act, 1961 Income Tax 45.74 Nil Assessment year 2014-15 Commissioner of Income Tax (Appeals), New Delhi
Income Tax Act, 1961 Income Tax 11.59 Nil Reassessment assessment year 2015-16 Commissioner of Income Tax (Appeals), New Delhi

(viii) According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been recorded in the books of accounts. (ix) (a) According to the information and explanations given to us, the Company has not defaulted in repayment of its loans or borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us including confirmations received from banks and financial institution and representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaulter by any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained.

(d) In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements of the Company, funds raised by the Company on short term basis have not been utilised for long term purposes. (e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary. (f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiary.

(x) (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the period covered by our audit.

(b) No report under section 143(12) of the Act has been led with the Central Government for the period covered by our audit.

(c) According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. Further, the details of such related party transactions have been disclosed in the standalone financial statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system as required under section 138 of the Act which is commensurate with the size and nature of its business.

(b) We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

(xv) According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with them and accordingly, provisions of section 192 of the Act are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clause 3(xvi) of the Order is not applicable to the Company.

(xvii) The Company has not incurred any cash loss in the current as well as the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable to the Company. (xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the plans of the Board of Directors and management and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) According to the information and explanations given to us, the Company does not have any unspent amount in respect of other than ongoing project as at the expiry of the financial year. Accordingly, reporting under clause 3(xx) (a) of the Order is not applicable to the Company.

(b) The Company has transferred the remaining unspent amount under sub-section (5) of section 135 of the Act, in respect of ongoing project, within a period of 30 days from the end of financial year to a special account in compliance with the provision of sub-section (6) of section 135 of the Act.

(xxi) The reporting under clause 3(xxi) is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Sd/-
Nitin Toshniwal
Partner
Membership No.: 507568
UDIN.: 22507568AJHBUY5689
Place: Kolkata
Date: 20 May 2022

Annexure B

Independent Auditor?s Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act?)

1. In conjunction with our audit of the standalone financial statements of Ester Industries Limited (‘the Company?) as at and for the year ended 31 March 2022, we have audited the internal financial controls with reference to standalone financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

2. The Company?s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance note?) issued by the Institute of Chartered Accountants of India (‘ICAI?). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Company?s business, including adherence to the Company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor?s Responsibility for the Audit of the Internal Financial Controls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Company?s internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor?s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company?s internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

6. A company?s internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company?s internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company?s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

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

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such controls were operating effectively as at 31 March 2022, based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Sd/-
Nitin Toshniwal
Partner
Membership No.: 507568
Place: Kolkata UDIN: 22507568AJHBUY5689
Date: 20 May 2022