CONTENTS Corporate Information ................................................................................................................................................2 Notice of Annual General Meeting .........................................................................................................................3 Chairman’s Message ................................................................................................................................................. 15 Directors’ Report ......................................................................................................................................................... 17 Management Discussion & Analysis ................................................................................................................... 24 Corporate Governance Report .............................................................................................................................. 33 Auditors’ Report ......................................................................................................................................................... 48 Balance Sheet .............................................................................................................................................................. 52 Profi t and Loss Account ........................................................................................................................................... 53 Cash Flow Statement ................................................................................................................................................ 54 Notes to Financial Statement ................................................................................................................................ 55 Subsidiary Details under Section 212(3) of the Companies Act, 1956 ................................................... 85 Auditors’ Report on Consolidated Financial Statement ............................................................................... 86 Consolidated Balance Sheet .................................................................................................................................. 87 Consolidated Profi t and Loss Account . ............................................................................................................. 88 Consolidated Cash Flow Statement .................................................................................................................... 89 Notes to Consolidated Financial Statement .................................................................................................... 90 Subsidiary Financial Information under Section 212(8) of the Companies Act, 1956 ....................120 E-Communication Registration Form NECS Mandate Form Attendance Sheet and Proxy Form 28th Annual Report 2013-14 ESTER INDUSTRIES LTD. 1 CORPORATE INFORMATION BOARD OF DIRECTORS MR. ARVIND SINGHANIA EXECUTIVE CHAIRMAN MR. V. B. HARIBHAKTI INDEPENDENT DIRECTOR MR. A. K. NEWATIA INDEPENDENT DIRECTOR MR. M. S. RAMACHANDRAN INDEPENDENT DIRECTOR MR. DINESH CHANDRA KOTHARI INDEPENDENT DIRECTOR DR. ANAND CHAND BURMAN INDEPENDENT DIRECTOR MR. P. S. DASGUPTA INDEPENDENT DIRECTOR MR. PRADEEP KUMAR RUSTAGI EXECUTIVE DIRECTOR & CFO MRS. ARCHANA SINGHANIA NON - EXECUTIVE DIRECTOR COMPANY SECRETARY MR. DIWAKER DINESH STATUTORY AUDITORS M/S S.R. BATLIBOI & ASSOCIATES, GURGAON BANKERS BANK OF INDIA BANK OF BARODA UNION BANK OF INDIA CANARA BANK STATE BANK OF BIKANER & JAIPUR HEAD OFFICE PLOT NO. 11, BLOCK-A, INFOCITY-I, SECTOR 33 & 34, GURGAON-122001, HARYANA REGISTERED OFFICE & WORKS SOHAN NAGAR, P.O. CHARUBETA KHATIMA – 262 308, DISTRICT UDHAM SINGH NAGAR UTTARAKHAND REGISTRAR & SHARE MCS LIMITED TRANSFER AGENTS F-65, OKHLA INDUSTRIAL AREA, PHASE-I NEW DELHI – 110 020 LISTING OF SECURITIES BOMBAY STOCK EXCHANGE LIMITED PHIROZE JEEJEEBHOY TOWERS 25TH FLOOR, DALAL STREET MUMBAI 400 001 NATIONAL STOCK EXCHANGE OF INDIA LTD. EXCHANGE PLAZA, PLOT NO. C/1, G BLOCK, BANDRA-KURLA COMPLEX, BANDRA (E) MUMBAI - 400 051 2 ESTER INDUSTRIES LTD. 28th Annual Report 2013-14 CIN: L24111UR1985PLC015063 Registered Offi ce: Sohan Nagar, P. O. Charubeta, Khatima-262308, Distt. Udham Singh Nagar, Uttarakhand Phone : (05943) 250153-57, Fax No. (05943) 250158 Website – www.esterindustries.com, Email – [email protected] NOTICE OF ANNUAL GENERAL MEETING NOTICE is hereby given that the 28th ANNUAL GENERAL pocket expenses payable to M/s. Sanjay Gupta & Associates MEETING (AGM) of ESTER INDUSTRIES LIMITED will be held on (Regn No. 000212), the Cost Auditor of the Company for 22nd September, 2014 at 12.30 PM at the Registered Offi ce of the fi nancial year 2014-15, as recommended by the Audit the Company at Sohan Nagar, P.O. Charubeta, Khatima - 262308, Committee and approved by the Board of Directors, be and District Udham Singh Nagar, Uttarakhand, to transact the is hereby approved and ratifi ed.” following business: 6. APPOINTMENT OF MR. V B HARIBHAKTI AS AN Ordinary Business INDEPENDENT DIRECTOR OF THE COMPANY 1. To receive, consider and adopt the Audited Balance Sheet “RESOLVED THAT pursuant to the provisions of sections as on 31st March 2014 and the Profi t and Loss account for 149, 152 and other applicable provisions, if any, of the the year ended on that date together with the reports of Companies Act, 2013 and the rules framed thereunder, read Directors and Auditors thereon. with Schedule IV to the Act, as amended from time to time, Mr. V B Haribhakti (DIN 00088062), an Independent Director 2. To declare fi nal dividend of Rs. 0.50/- per equity share of the Company, in respect of whom the Company has 3. To appoint a Director in place of Mr. Arvind Singhania (DIN received a notice in writing from a member proposing his 00934017) who retires by rotation and being eligible, off ers candidature for the offi ce of Director, and who is eligible for himself for re-appointment; appointment, be and is hereby appointed as an Independent 4. To consider and, if thought fi t, to pass with or without Director of the Company to hold offi ce upto 31 March, 2019 modifi cation(s), the following resolution as an Ordinary and whose term of offi ce shall not be liable to retirement by Resolution:- rotation.” “RESOLVED THAT subject to the provisions of Section 7. APPOINTMENT OF MR. DINESH CHANDRA KOTHARI AS 139, 140 & 142 and other applicable provisions, if any, of AN INDEPENDENT DIRECTOR OF THE COMPANY the Companies Act, 2013, M/s. S.R. Batliboi & Co. LLP (Regn “RESOLVED THAT pursuant to the provisions of sections No. 301003E), Chartered Accountants, be and are hereby 149, 152 and other applicable provisions, if any, of the appointed as Statutory Auditors of the Company to hold Companies Act, 2013 and the rules framed thereunder, read offi ce from the conclusion of this Annual General Meeting with Schedule IV to the Act, as amended from time to time, i.e. 28th Annual General Meeting till the conclusion of the Mr. Dinesh Chandra Kothari (DIN 00195609), an Independent 31st Annual General Meeting of the Company to be held in Director of the Company, in respect of whom the Company the year 2017 (subject to ratifi cation of their appointment at has received a notice in writing from a member proposing his every AGM) in place of the retiring Auditors, M/s. S. R. Batliboi candidature for the offi ce of Director, and who is eligible for & Associates LLP (Regn No. 101049W), at a remuneration to appointment, be and is hereby appointed as an Independent be fi xed by the Board of Directors. Director of the Company to hold offi ce upto 31 March, 2019 Special Business: and whose term of offi ce shall not be liable to retirement by rotation.” To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolutions: 8. APPOINTMENT OF MR. M S RAMACHANDRAN AS AN INDEPENDENT DIRECTOR OF THE COMPANY As Ordinary Resolution “RESOLVED THAT pursuant to the provisions of sections 5. RATIFICATION OF REMUNERATION FIXED FOR COST 149, 152 and other applicable provisions, if any, of the AUDITOR OF THE COMPANY Companies Act, 2013 and the rules framed thereunder, read “RESOLVED THAT pursuant to Sections 148 and other with Schedule IV to the Act, as amended from time to time, applicable provisions, if any, of the Companies Act, 2013, Mr. M S Ramachandran (DIN 00943629), an Independent and rules made thereunder (including any statutory Director of the Company, in respect of whom the Company modifi cation(s) or re-enactment thereof for the time being has received a notice in writing from a member proposing his in force) a Remuneration of Rs. 2,50,000/- (Rs. Two Lacs candidature for the offi ce of Director, and who is eligible for and Fifty thousands only) plus applicable taxes and out of appointment, be and is hereby appointed as an Independent 28th Annual Report 2013-14 ESTER INDUSTRIES LTD. 3 Director of the Company to hold offi ce upto 31 March, 2019 writings or other papers as may be necessary and to do all and whose term of offi ce shall not be liable to retirement by such acts, deeds, matters and things as it may, in its sole rotation.” discretion, deem necessary, proper, desirable, expedient 9. APPOINTMENT OF MR. ASHOK NEWATIA AS AN or incidental for the purpose and to settle any question, INDEPENDENT DIRECTOR OF THE COMPANY diffi culty or doubt that may arise in giving eff ect to this resolution.” “RESOLVED THAT pursuant to the provisions of sections 149, 152 and other applicable provisions, if any, of the 13. REAPPOINTMENT