Your Directors are pleased to present the 40^th Annual Report of Ester Industries Limited ("the Company" or "EIL") along with
the Audited Financial Statements of the Company for the financial year ended 31^st March 2026.

FINANCIAL HIGHLIGHTS

The Audited Financial Statements of your Company as on 31^st March 2026, are prepared in accordance with the relevant
applicable Indian Accounting Standards ("Ind AS"), Regulation 33 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and the provisions of the Companies Act,
2013 ("Act").

The summarized financial highlight is depicted below:

OPERATIONS REVIEW

During the year under review, total Revenue from Operations
of the Company on standalone basis reduced by 2.37% from
H,070.46 crores to H,045.13 crores.

The reduction was primarily caused by lower revenue from
operations of Polyester Film by 13.11% (from ^734.06 crores
to ^637.82 crores). In volumetric terms, the reduction was by
9.92% (from 49,798 MT to 44,861 MT), indicating shrinkage
in per unit realization. Though Polyester Films witnessed
reduction in revenue, it continues to drive the bulk of revenue
for the Company.

Despite degrowth in revenue from Polyester Films in
volumetric terms, the proportion of Value Added & Specialty
products increased from 31% to 36% and in value terms, the
proportion increased from 43% to 50%. The volume of Value
Added & Specialty products increased by 5.81%.

Drop in revenue from Polyester Films was largely compensated
with increased revenue from Specialty Polymers & rPET.

Revenue from Specialty Polymers increased by 23.31% in
volumetric terms (from 3376 MT to 4163 MT) and by 11.71%
in value terms (from H58.79 crores to H85.96 crores).

During the year under review, revenue from rPET increased
significantly by 259.36% in volumetric terms (from 1486 MT to
5340 MT) and by 266.93% in value terms (from H6.21 crores to
^59.48 crores). rPET is reported as part of Polyester Films segment.

Revenue from Polyester Chips both in volumetric and
value terms remained almost same as last year. The sales in
volumetric terms increased by 9.34% (from 18556 MT to 20288
MT) and by 0.37% in value terms (from U61.14 crores to
H61.74 crores). Polyester Chips is reported as part of Polyester
Films segment.

Profit before interest, depreciation and tax (PBIDT) including
'Other Income' on a standalone basis reduced significantly
from H33.70 crores in FY 2024-25 to ^85.88 crores in FY 2025¬
26. The company earned net profit after tax of ^4.37 crores
during the year under review as against net profit after tax of
^40.53 crores earned during FY 2024-25.

Performance in terms of EBIT of Polyester Film business was
significantly lower than last year. EBIT of Polyester Film SBU
(including rPET & Polyester Chips) reduced from 9.73% to
5.88% (from ^88.71 crores to ^50.53 crores) mainly on account
of adverse impact of huge Reciprocal & Punitive Trade Tariff
imposed by US on exports originating from India. US Trade
Tariffs were also imposed on various other countries. As a
result, there was aggravated competition in Rest of the World
& domestic territory. This led to dumping of Polyester Films
into India by China & few other countries which exerted
pressure on margins in domestic market.

However, discriminatory Trade Tariffs imposed by US
were held to be illegal by Supreme Court of US and hence
these Trade Tariffs were withdrawn in February 2026. This
immediately resulted in better market scenario for Polyester
Films SBU with significantly better performance during the
quarter ending March 2026.

Polyester Films industry continues to witness robust double¬
digit growth in domestic demand. Growth in demand coupled
with higher proportion of sales of Value Added & Specialty
products will ensure further improvement in operating &
financial performance of Polyester Film SBU.

Implementation of Plastics Waste Management Rules (PWMR)
with effect from 1^st April 2025 (mandating utilization of 10%
recycled content in the flexible packaging laminate), triggered
strong demand acceleration for BOPET Films featuring Post-

Consumer Recycled (PCR) content and recycled PET
(rPET). It is expected to further increase demand for
Polyester Film with conversion taking place from other
substrates to Polyester.

Though EBIT of Specialty Polymers SBU reduced from 36.16%
to 31.70% (from ^57.42 crores to ^58.95 crores), it still remained
at very healthy levels. Imposition of US Trade Tariffs also
impacted performance of Specialty Polymers SBU.

Geo-political disturbance & war in West Asia caused prices
of Crude Oil to rise significantly. Increase in Crude Oil
prices coupled with other internal & external factors caused
devaluation of Indian Rupee against USD, Euro & other major
currencies. This resulted in significant Mark-To-Mark and

Reinstatement losses for the company and its Wholly Owned
Subsidiary, Ester Filmtech Limited.

Production of Polyester Chips was marginally lower
(by 0.72%). Production of Specialty Polymers and
rPET increased by 7.59% and 103.46% respectively. Production
of Polyester Film reduced by 9.44% (from 50,323 MT to 45,570
MT) with capacity utilization standing at 75.95%.

On a consolidated basis, revenue from operations
increased by 7.26% [from ^1,282.14 crores to

^1,375.20 crores]. Revenue from operations in Polyester Film
SBU (including Polyester Chips & rPET) increased by 6.12%
(from ^1,126.95 crores to ^1,195.90 crores). Performance in
terms of EBITDA, PBT and PAT was significantly lower in
Polyester Film due to margin shrinkage caused by reasons
explained above.

In the month of November 2024, the Company
raised ^43.75 crores under Share Warrants issue of
^174.99 crores. Within the statutory time limit of 18 months,
subscribers to Share Warrants have further made payment of
^121.50 crores. Thus, an amount of ^165.25 crores have been
received against issue of Share Warrants. 1,02,53,153 Share
Warrants have now been converted into 1,02,53,153 Equity
Shares while the balance Share Warrants (8,22,788) amounting
to ^9.75 Crores have remained unsubscribed. Raising Equity
(against Share Warrants) from promoters & other investors
was possible because of positive medium to long term
prospects of the Company.

During the year under review, the wholly owned subsidiary,
Ester Filmtech Limited commenced commercial production of
rPET from a plant set up for production of 20 KTPA of rPET in
its existing factory in Hyderabad.

Your company and its Wholly Owned Subsidiary, Ester
Filmtech Limited have been regular with servicing of both
interest on debt and repayment of due installments of term
debt. Both companies continue to enjoy comfortable liquidity
position.

Your Company continues to make investments in
modernization, technical upgrade and debottlenecking
initiatives in all the business segments to improve productivity,
production efficiency and reduce wastages.

On 1^st May 2024, your company entered into a Joint
Venture Agreement with Loop Industries Inc., Canada. This
partnership with Loop is aligned with the objective of moving
from commodity products to innovative & specialty products
through the use of new technologies. Loop's patented
technology to convert all types of Polyester waste into
monomers, namely rDMT and rMEG combined with Ester's
decades of experience in Polymerization will help us achieve

circularity in the true sense and a sustainable future as we
move ahead. The execution of joint venture plans with Loop
Industries is progressing well albeit with some delay. We are
diligently pursuing various activities related to the project's
implementation.

Looking ahead, management remains optimistic regarding
our medium-to-long-term performance prospects. Sustained
regulatory shifts like the PWMR mandate will continue to push
brand owners toward sustainable packaging film solutions.
The Company is actively collaborating with ecosystem
partners to capture this demand. By aggressively focusing
on a premium specialty product mix, embedding sustainable
innovation, and optimizing operational efficiencies, we are
securely positioned to deliver sustainable, profitable growth.

DIVIDEND

Your Directors have recommended a dividend of ^0.25/- per
Equity Share of face value of ?5/- each on the fully paid-up
Equity Shares of the Company for the financial year ended 31^st
March 2026, out of the accumulated profit of the Company,
pursuant to Section 123 of the Act, subject to the approval of
the Members at the ensuing Annual General Meeting.

Mr. Arvind Singhania, Promoter of the Company, has
voluntarily waived his entitlement to receive dividend on his
entire shareholding in the Company.

The dividend payment is based on the parameters outlined in
the Dividend Distribution Policy of the Company which is in
accordance with Regulation 43A of Listing Regulations.

The said Policy is available on the Company's website at
https://www.esterindustries.com/wp-content/themes/
esterindustries/assets/pdf/governance-and-regulatory-
information/codes-and-policies/Dividend-Distribution-
Policy.pdf.

TRANSFER TO RESERVES

Your Company has not transferred any amount
to the General Reserves during the financial year
2025-26.

SHARE CAPITAL

Preferential issue of Share Warrants

During the period under review, the company

has allotted 3544302 equity shares of face value of
?5/- each fully paid-up, at an issue price of ?158/- per equity
share (including premium of ?153/- each), for an aggregate
amount of ^55,99,99,716/- pursuant to the conversion of
35,44,302 fully convertible warrants issued on Preferential
Basis to the 'Promoter & Promoter Group' and 'Non-Promoter
Category' via Board Resolution dated 30^th April 2025. As
a result of such allotment, the issued, subscribed and paid-
up share capital increased from ^47,02,09,445/- (comprising
94041889 equity shares of ?5/- each) to ^48,79,30,955/-
(comprising 97586191 equity shares of ?5/- each). The equity
shares so allotted rank pari-passu with the existing equity
shares of the Company.

Except as mentioned above, the Company has not issued any
other shares or instruments convertible into equity shares
of the Company or with differential voting rights nor has
granted any sweat equity.

After the closure of financial year, the company has further
allotted 67,08,851 equity shares of face value of ?5/- each
fully paid-up, at an issue price of ?158/- per equity share

(including premium of U53/- each), for an aggregate
amount of U05,99,98,458/- pursuant to the conversion of
67,08,851 fully convertible warrants issued on Preferential
Basis to the 'Promoter & Promoter Group' and 'Non¬
Promoter Category' via Board Resolution dated 12^th May
2026. As a result of such allotment, the issued, subscribed
and paid-up share capital increased from ^48,79,30,955/-
(comprising 97586191 equity shares of ?5/- each) to
^52,14,75,210/- (comprising 104295042 equity shares of ?5/-
each). The equity shares so allotted rank pari-passu with the
existing equity shares of the Company.

PUBLIC DEPOSIT

During the year under review, your Company has not
accepted or renewed any amount falling within the purview
of provisions of Section 73 of the Act, read with the Companies
(Acceptance of Deposit) Rules, 2014. There are no outstanding
deposits at the end of the financial year 2025-26. Hence, the
requirement for furnishing details relating to deposits covered
under Chapter V of the Act and the details of deposits which
are not in compliance with the Chapter V of the Act is not
applicable.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

The particulars of loans, investments, guarantees and
securities provided by the Company during the year under
review are given in the notes forming part of the Standalone
Financial Statements of the Company as per section 186 of the
Act.

ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Return as
on 31^st March 2026 prepared in accordance with Section 92(3)
of the Act will be made available on the Company's website
and can be accessed at the following link: https://www.
esterindustries.com/annual-return/.

SUBSIDIARY AND JOINT VENTURE

As on 31^st March 2026, the Company has:

• One (1) unlisted wholly owned material subsidiary,
namely Ester Filmtech Limited; and

• One (1) Joint Venture Company, namely Ester Loop
Infinite Technologies Private Limited.

Mr. Abhay Anant Gupte, Independent Director of the
Company, also serves as a Director on the Board of the
material subsidiary, Ester Filmtech Limited.

There has been no material change in the nature of business of
the material subsidiary during the year under review.

Your Company has formulated a Policy for determining
Material Subsidiaries. The said policy is available on the
Company's website and can be accessed at https://www.
esterindustries.com/wp-content/themes/esterindustries/
assets/pdf/governance-and-regulatory-information/codes-
and-policies/Policy-on-Material-Subsidiary.pdf.

In compliance with Section 129(3) of the Act, read with
applicable rules, a statement containing the salient features of
the financial statements of the Company's subsidiary and joint
venture is provided in the prescribed Form AOC-1, which
forms part of the Consolidated Financial Statements.

Further, in accordance with Section 136 of the Act, the Audited
Standalone and Consolidated Financial Statements, along

with other related documents and the audited accounts of the
subsidiary, are available on the Company's website at https://
www.esterindustries.com/ftnancial-mformation/.

EMPLOYEE STOCK OPTION SCHEMES ADOPTED BY
THE COMPANY

The Company has implemented employee stock option
schemes in compliance with the provisions of the Securities
and Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021, as amended from
time to time ("SEBI (SBEB and SE) Regulations"), with the
objective of attracting, retaining, and motivating employees
by providing them an opportunity to share in the growth of
the Company.

a. Ester Employee Stock Option Plan-2021 ("ESOP-2021")

ESOP-2021 was formulated by the Nomination and
Remuneration Committee and approved by the Board of
Directors at its meeting held on 25^th February 2021. The
scheme was subsequently approved by the Members by
way of a Special Resolution passed at the Extra-Ordinary
General Meeting held on 26^th March 2021, in accordance
with the SEBI (SBEB and SE) Regulations.

> Grants during FY 2025-26

During the financial year under review, no stock
options were granted under ESOP-2021.

> Cumulative Status as on 31^st March 2026:

As at 31^st March 2026, an aggregate of 2,48,179
stock options had been granted under
ESOP-2021 to eligible employees and an Executive
Director, including 1,01,713 stock options granted to
Mr. Pradeep Kumar Rustagi, Executive Director -
Corporate Affairs.

Out of the aforesaid stock options, 87,880 stock
options were exercised and 87,880 equity shares
of face value of ?5/- each were allotted to eligible
grantee during FY 2024-25 in accordance with the
terms of ESOP-2021 and applicable laws. Further,
58,586 stock options granted to an eligible employee
lapsed upon cessation of his employment, as the said
options had not vested as on the date of cessation.

Accordingly, after giving effect to the aforesaid
exercises and lapses, 1,01,713 stock options
remained outstanding as at 31^st March 2026.

Each vested stock option entitles the eligible grantee
to apply for one equity share of the Company at the
applicable exercise price, subject to the terms and
conditions of ESOP-2021.

> Allotment during FY 2025-26

During the financial year under review, no equity
shares were allotted upon exercise of stock options
under ESOP-2021.

b. Ester Employee Stock Option Plan-2024 ("ESOP-2024")

The ESOP-2024 was introduced with a similar objective of
providing competitive remuneration through equity-based
incentives. The scheme was approvedby the Board ofDirectors
at its meeting held on 14^th September 2024 subsequently
approved by the Members by way of Postal Ballot on
16^th October 2024, in accordance with the SEBI (SBEB and
SE) Regulations.

> Grant during FY 25-26

During the financial year under review, the
Nomination and Remuneration Committee, by way
of a resolution passed through circulation, granted
19,188 stock options to eligible employees under
ESOP-2024.

> Cumulative Status as on 31^st March 2026

As at 31^st March 2026, an aggregate of 1,62,930 stock
options had been granted under ESOP-2024 to eligible
employees and an Executive Director, including 27,437
stock options granted to Mr. Pradeep Kumar Rustagi,
Executive Director - Corporate Affairs.

> Allotment during FY 2025-26

During the financial year under review, no equity
shares were allotted upon exercise of stock options
under ESOP-2024.

The certificate from the Secretarial Auditors confirming
that ESOP Schemes have been implemented in accordance
with the SEBI (SBEB and SE) Regulations and Shareholder's
resolutions will be available for inspection.

The Nomination and Remuneration Committee monitors the
compliance of these Schemes. In terms of Regulation 14 of SEBI
(SBEB and SE) Regulations , the disclosures for financial year
2025-26 with respect to all the ESOP Schemes are available on
the Company's website and can be accessed at https://www.
esterindustries.com/esop/.

DIRECTORS AND KEY MANAGERIAL PERSONNEL
(KMP)

As on 31^st March 2026, your Company's Board of Directors
("the Board"), consists of Six Directors comprising of two
Executive Directors, one Non-Executive Non-Independent
Director and three Independent Directors including one
Woman Independent Director. The details of the Board and
Committee composition, tenure of Directors and other details
are available in the Corporate Governance Report, which
forms part of this Annual Report.

Appointment/Re-appointment/Re-designation/Cessation

The following changes took place in the Directorships during
the financial year ended 31^st March 2026, and post closure of
financial year, till the date of this Report:

Appointment/Re-appointment

1. Mrs. Padmaja Shailen Ruparel (DIN: 01383513) was
re-appointed as an Independent Director of the
Company for a second term of 5 (Five) years, w.e.f.
1^st April 2025.

2. Mr. Abhay Anant Gupte (DIN: 00389288) was appointed
as an Independent Director of the Company for a first
term of 5 (Five) years, w.e.f. 6^th May 2025.

The aforesaid re-appointment and appointment were duly
approved by the shareholders vide Special resolutions passed
by way of Postal Ballot on 26^th June 2025.

3. Mr. Arvind Singhania was re-appointed as Managing
Director (designated as Chairman & Chief Executive
Officer) of the Company for a further term of 3 (three)
years effective from 1^st April 2026.

4. Mr. Pradeep Kumar Rustagi was re-appointed as
Whole Time Director (designated as Executive

Director-Corporate Affairs) of the Company for
a further term of 3 (three) years effective from
1^st April 2026.

The aforesaid re-appointments were regularized and duly
approved by the shareholders vide Special resolutions passed
by way of Postal Ballot on 21^st March 2026.

Re-designation

1. Mr. Arvind Singhania (DIN: 00934017) was re-designated
from the position of Managing Director (designated as
Chairman & Chief Executive Officer) to Non-Executive
Non-Independent Director and Chairman of the Board,
w.e.f. closing of business hours on 26^th March 2026.

The aforesaid re-designation was duly approved by the
shareholders vide ordinary resolution passed by Postal Ballot
on 23^rd May 2026.

Cessation

1. Mrs. Archana Singhania (DIN: 01096776), has resigned
from the position of Non-Executive Non-Independent
Director of the Company w.e.f. 30^th April 2025.

2. Mr. Alok Dhir (DIN: 00034335), has resigned from the
position of Non-Executive Independent Director of the
Company w.e.f. 26^th August 2025.

The Board of Directors place on record their deep appreciation
for the wisdom, knowledge and guidance provided by the
aforementioned Directors during their tenure.

Re-appointment of Director retiring by rotation

In accordance with the provisions of Section 152 of the
Act, read with rules made thereunder and Articles of
Association of the Company, Mr. Ayush Vardhan Singhania
(DIN: 05176205), Whole Time Director is liable to retire by
rotation at the ensuing Annual General Meeting ("AGM")
and being eligible, offers himself for re-appointment.

An appropriate resolution for his re-appointment is being
placed for the approval of the Members of the Company at
the ensuing AGM. The brief resume of the Director and other
related information as stipulated under Secretarial Standard-2
and Regulation 36 of the Listing Regulations, is appended as
an Annexure to the Notice of the ensuing AGM.

Declaration by Independent Directors

The Company has, inter alia, received the following declarations
from all the Independent Directors confirming that:

• they meet the criteria of independence as prescribed
under section 149(6) of the Act and Regulation 16(1)(b)
of the Listing Regulations and there has been no change
in the circumstances which may affect their status as
Independent Directors of the Company;

• they have complied with the Code for Independent
Directors prescribed under Schedule IV to the Act; and

• they have registered themselves with the Independent
Director's Database maintained by the Indian Institute of
Corporate Affairs.

In the opinion of the Board, all Independent Directors
possess requisite qualifications, experience, expertise and
hold high standards of integrity required to discharge their
duties with an objective independent judgment and without
any external influence. Details of key skills, expertise and
core competencies of the Board, including the Independent

Directors, are available in the Corporate Governance Report,
which forms part of this Annual Report.

During the year under review, a separate meeting of the
Independent Directors was held on 6^th February 2026.

Key Managerial Personnel (KMP)

During the year under review, pursuant to the recommendation
of Nomination and Remuneration Committee, Mr. Vaibhav
Jha, who was serving as the Deputy Chief Executive Officer
of the Company, was appointed as the Chief Executive Officer
(designated as Key Managerial Personnel) of the Company
w.e.f. 27^th March 2026.

As on 31^st March 2026, the following persons were the Key
Managerial Personnel of the Company in terms of Sections
2(51) and 203 of the Act:

• Mr. Vaibhav Jha, Chief Executive Officer

• Mr. Pradeep Kumar Rustagi, Whole-Time Director
(designated Executive Director-Corporate Affairs)

• Mr. Ayush Vardhan Singhania, Whole-time Director

• Mr. Sourabh Agarwal, Chief Financial Officer

• Ms. Poornima Gupta, Company Secretary
MEETINGS OF THE BOARD

The Board of Directors met 6 (Six) times during the year under
review. The intervening gap between the meetings did not
exceed 120 days, as prescribed under the Act and the Listing
Regulations. The details of board meetings and the attendance
of the Directors are provided in the Corporate Governance
Report, which forms part of this Annual Report.

COMMITTEES OF THE BOARD

As on 31^st March 2026, the Board has constituted the following
Statutory Committees pursuant to the applicable provisions
of the Act and the Listing Regulations:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders' Relationship Committee

• Risk Management Committee

• Corporate Social Responsibility Committee

Details of all the Committees constituted by the Board, are
given in the Corporate Governance Report, which forms part
of this Annual Report.

PERFORMANCE EVALUATION

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

An annual evaluation was carried out of the performance
of the Board, Board's committees, all the directors and
Chairperson pursuant to the provisions of the Act as well as
Listing Regulations.

The following evaluation process has been adopted by the
Company-

1. Independent Directors at their separate meeting without
the presence of Non-Independent Director, had reviewed
the performance of the Chairperson, Non-Independent

Directors and the Board. While evaluating the
performance of the Chairperson, the views of Executive
Directors and Non-Executive Directors were also taken
into account.

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

3. The Board had evaluated its own performance,
performance of its Committees and each Director.

The process of performance evaluation was based on the
criteria prescribed in the Policy on Performance Evaluation
which is available on the Company's website at https://www.
esterindustries.com/wp-content/themes/esterindustries/
assets/pdf/governance-and-regulatory-information/codes-
and-policies/Performance-Evaluation-Policy.pdf.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

Pursuant to the provisions of Section 139 of the Act read
with rules made thereunder, M/ s Walker Chandiok & Co.
LLP, Chartered Accountants (FRN: 001076N/N500013), were
appointed as the Statutory Auditors of the Company at the 36^th
Annual General Meeting (AGM) held on 28^th September 2022,
for a period of five (5) years to hold office till the conclusion
of the 41^st AGM of the Company, to be held in the year 2027.

Statutory Auditors have expressed their unmodified opinion
on the Standalone and Consolidated Financial Statements and
their reports do not contain any qualifications, reservations,
adverse remarks or disclaimers. The notes to the financial
statements referred in the Auditor's Report are self¬
explanatory.

Cost Auditors

During the year under review, the Board of Directors, based
on the recommendation of the Audit Committee, re-appointed
M/s. R. J. Goel & Co., Cost Accountants, as the Cost Auditors
of the Company to audit the cost records for the financial year
2026-27.

In accordance with the provisions of Section 148 of the
Companies Act, 2013, read with the Companies (Audit and
Auditors) Rules, 2014, the remuneration of 14,00,000/-
(Rupees Four Lacs only), excluding applicable taxes and
reimbursement of out-of-pocket expenses, as payable to the
Cost Auditors for the financial year 2026-27, is required to
be ratified by the members at the ensuing Annual General
Meeting. Accordingly, a resolution for ratification of the said
remuneration is being placed before the members for their
approval at the ensuing AGM.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, read
with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, M/ s. Dhananjay Shukla
& Associates, Company Secretaries (ICSI Unique Code:
P2025HR323300), were appointed as the Secretarial Auditors
of the Company at the 39^th Annual General Meeting (AGM)
held on 26^th September 2025, to hold office for a term of 5
(Five) consecutive years i.e. from financial year 2025-26 to
financial year 2029-30.

The Secretarial Audit Report of the Company is appended as
Annexure I. The observations made by the Secretarial Auditor
in his report in Form MR-3, when read with the relevant notes

and explanations provided by the management, are self¬
explanatory and do not require any further clarifications or
comments from the Board.

Secretarial Audit of Material Unlisted Indian Subsidiary

As per the provisions of Regulation 24A of the Listing
Regulations, Ester Filmtech Limited ("EFTL"), which is a
material unlisted subsidiary of the Company, has appointed
Mr. Akash Jain, Company Secretaries in Practice, to undertake
the secretarial audit for FY 2025-26. The secretarial audit report
confirms that the material subsidiary has complied with the
provisions of the Act, rules, regulations and guidelines and
that there were no deviations or non- compliances. The
secretarial audit report of the material subsidiary is appended
as Annexure II.

Reporting of frauds by Auditors

During the year under review, the Statutory Auditors, Cost
Auditors and Secretarial Auditors have not reported to the
Audit Committee or to the Board, any instances of fraud
committed in the Company by its officers or employees under
Section 143(12) of the Act.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to provisions of Section 135 of the Act and rules
made thereunder, the Board of Directors has constituted
a Corporate Social Responsibility (CSR) Committee and
framed a CSR Policy. The details of the CSR Committee are
provided in the Corporate Governance Report, which forms
part of this Annual Report. The CSR Policy is available on
the Company's website at https://www.esterindustries.com/
wp-content/themes/esterindustries/assets/pdf/governance-
and-regulatory-information/codes-and-policies/Corporate-
Social-Responsibility-Policy.pdf.

The Annual Report on CSR activities is appended as
Annexure-IIIto the Board's Report. Further, the Executive
Director - Corporate Affairs and Chief Financial Officer of the
Company have certified that the amount spent on CSR for the
financial year 2025-26 has been utilized for the purposes and
in the manner approved by the Board.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good
Corporate Governance over the years, and it is a continuous
and ongoing process. A detailed Report on Corporate
Governance practices followed by your Company in terms
of the Listing Regulations, together with a Certificate from
the Practicing Company Secretary confirming compliance
with the conditions of Corporate Governance are provided
separately in this Annual Report.

Code of Conduct

In compliance with corporate governance requirements as per
the Listing Regulations, your Company has formulated and
implemented a Code of Conduct which is applicable to all
Directors and Senior Management of the Company, who have
affirmed the compliance thereto. A declaration to this effect
duly signed by Mr. Vaibhav Jha, Chief Executive Officer is
enclosed as a part of the Corporate Governance Report which
forms part of this Annual Report.

The said Code of Conduct is available on the Company's
website at https://www.esterindustries.com/wp-content/
themes/esterindustries/assets/pdf/governance-and-
regulatory-information/codes-and-policies/Code-of-
Conduct-new.pdf.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MDA) Report
for the year under review, as stipulated under the Listing
Regulations, is presented in a separate section forming part of
this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT (BRSR)

In accordance with Regulation 34(2) (f) of the Listing
Regulations, the BRSR is applicable to the top 1,000 listed
entities based on market capitalisation.

Further, pursuant to Regulation 3(2A) read with Regulation
3(2B) of the Listing Regulations, the provisions applicable to
a listed entity on the basis of market capitalisation continue to
apply unless the listed entity remains outside the applicable
threshold for three consecutive years, following which such
provisions cease to apply in accordance with the prescribed
sunset mechanism.

As the Company has remained outside the applicable
threshold for three consecutive years, the requirement to
prepare and include the BRSR under Regulation 34(2)(f) of the
Listing Regulations is not applicable to the Company for the
financial year under review.

INTERNAL FINANCIAL CONTROLS

Your Company maintains a comprehensive, well-documented
Internal Financial Controls (IFC) framework. This framework
extends across the Company and its wholly owned subsidiary,
Ester Filmtech Limited.

Designed to ensure strict adherence to regulatory standards,
internal policies, and operational ethics, these controls provide
reasonable assurance on the following parameters:

• Efficient Operations: Ensuring transparent, streamlined,
and value-driven business operations.

• Asset Protection: Safeguarding corporate assets against
unauthorized use, loss, or disposition.

• Risk Mitigation: Preventing and promptly detecting
fraud, errors, and financial misstatements.

• Data Integrity: Ensuring the accuracy, completeness,
and reliability of accounting records.

• Information Security: Enforcing stringent IT and
cybersecurity controls across all systems.

• Financial Reporting: Ensuring timely, fair, and reliable
preparation of financial statements.

During the year under review, the Company proactively
updated specific controls to align with changing market
dynamics and operational requirements.

The Company follows accounting policies consistent with
the Accounting Standards prescribed under the Companies
(Accounting Standards) Rules, 2006, as applicable under
Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014. These policies strictly align with
Generally Accepted Accounting Principles (GAAP) in India.
To maintain transparency, any modifications to accounting
policies are independently reviewed and approved by the
Audit Committee before implementation.

Independent Internal Auditors conduct regular audits to
evaluate the strength and effectiveness of your Company's
control ecosystem. The Internal Auditors report all significant

findings directly to the Audit Committee. The Committee
rigorously monitors the implementation of corrective actions,
ensuring that business processes remain fully aligned with
established corporate policies.

To minimize manual intervention and secure financial data,
the Company leverages an advanced ERP platform (SAP
S/4 HANA 2021). Integrating this platform into the IFC
framework automates critical system checks, leading to high-
integrity financial reporting.

Furthermore, a structured compliance mechanism is in place
to track statutory requirements. Functional heads provide
regular confirmations regarding compliance with laws
relevant to their operations. These inputs are consolidated
and presented to the Audit Committee & Board of Directors
for rigorous oversight, safeguarding shareholder interests.

In accordance with applicable provisions of the Act, the Board
confirms that the internal financial controls laid down by the
Company are adequate and operated effectively throughout
the year.

This internal assessment is further validated by the Company's
Statutory Auditors. In their independent report, the Statutory
Auditors have evaluated the adequacy and operating
effectiveness of the Company's internal financial controls
over financial reporting, providing objective assurance to our
stakeholders.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions with related parties,
entered into during the financial year under review, were on
an arm's length basis and in the ordinary course of business.
All such contracts or arrangements, wherever required, have
been approved by the Audit Committee and the Board.

During the year under review, your Company has not
entered into any transaction with a related party which could
be considered material in terms of Section 188 of the Act.
Accordingly, the disclosure of related party transactions as
required under Section 134(3)(h) of the Act in Form AOC-2,
is not applicable.

The details of the related party transactions as required under
IND AS 24 have been disclosed in Note no. 37 to the standalone
financial statements forming part of this Annual Report.

The Policy on Related Party Transactions,

is available on the Company's website at

https://www.esterindustries.com/wp-content/themes/
esterindustries/assets/pdf/governance-and-regulatory-
information/codes-and-policies/RPT_Policy.pdf.

POLICIES ADOPTED BY THE COMPANY

a) Vigil Mechanism/Whistle Blower Policy

The Company promotes ethical behavior in all its
business activities and has put in place a mechanism of
reporting illegal or unethical behavior. The Company
has a Vigil Mechanism/Whistle Blower Policy with
a view to provide a mechanism for employees of the
Company to raise concerns of suspected frauds, instances
for leakage or suspected leakage of Unpublished Price
Sensitive Information, any violations of legal/regulatory
requirements or code of conduct/policy of the Company,
incorrect or misrepresentation of any financial statements
and reports, etc. The policy aims to provide an avenue
for employees and directors to raise concerns and
reassure them that they will be protected from reprisals

or victimization for whistle blowing in good faith. The
practice of the Whistle Blower Policy is overseen by the
Audit Committee of the Board and no employee has been
denied access to the Committee.

The Whistle Blower Policy of the Company is also
available on the Company's website at https://
www.esterindustries.com/wp-content/themes/
esterindustries/assets/pdf/governance-and-regulatory-

information/codes-and-policies/Whistle-Blower-

Policy.pdf.

b) Nomination and Remuneration Policy

Nomination and Remuneration Committee has framed
a Nomination and Remuneration policy for determining
criteria of selection and appointment of Directors, Key
Managerial Personnel, Senior Management Personnel
including determining qualifications, positive attributes,
independence of a Director and other matters provided
under Section 178(3) of the Act and Listing Regulations.
The salient aspects covered in the Nomination
and Remuneration Policy, covering the policy on
appointment and remuneration of Directors and other
matters have been outlined in the Corporate Governance
Report which forms part of this Annual Report.

The Policy is available on the Company's website at

https://www.esterindustries.com/wp-content/themes/

esterindustries/assets/pdf/governance-and-regulatory-

information/codes-and-policies/Nomination-and-

Remuneration-Policy.pdf.

c) Risk Management Policy

The Company has a structured Risk Management
Framework, designed to identify, assess and mitigate
risks appropriately. The Board has constituted the Risk
Management Committee (RMC) to frame, implement
and monitor the risk mitigation plan and ensuring its
effectiveness. The Audit Committee has an additional
oversight in the area of financial risks and controls.

The constitution and the terms and reference of the RMC
are given in the Report on Corporate Governance which
forms part of this Annual report.

A detailed note on Risk Management System has been
provided in the MDA Report, which forms part of this
Annual Report.

The Risk Management Policy is available on the
Company's website at https://www.esterindustries.
com/wp-content/themes/esterindustries/assets/pdf/

governance-and-regulatory-information/codes-and-

policies/risk-management-policy.pdf.

d) Prevention of Sexual Harassment (POSH) at workplace

As per the requirement of the Sexual Harassment
of Women at Workplace (Prevention, Prohibition &
Redressal) Act, 2013 and rules made thereunder, the
Company has laid down an Anti-Sexual Harassment
Policy and has constituted Internal Complaints
Committees (ICC), to consider and resolve the complaints
related to sexual harassment. The ICC includes external
member with relevant experience. The Company has
zero tolerance on sexual harassment at the workplace.
The ICC also work extensively on creating awareness
on relevance of sexual harassment issues including
while working remotely. The employees are required

to undergo mandatory training on POSH to sensitize
themselves and strengthen their awareness.

e) Maternity Benefit Act, 1961

The Company is in compliance with the applicable
provisions relating to the Maternity Benefit Act, 1961.

OTHER DISCLOSURES

i) Secretarial Standards

During the year under review, your Company has
complied with all the applicable provisions of the
Secretarial Standards issued by the Institute of Company
Secretaries of India (ICSI).

ii) Change in Registered Office and Nature of Business

There was no change in the Registered Office and nature
of business of the Company during the year under review.

iii) Material changes and commitments affecting the
financial position of the company which have occurred
between the end of the financial year of the company
to which the financial statements relate and the date of
the report

There were no material changes and commitments
affecting the financial position of the Company which
occurred between the end of the financial year to which
this financial statement relates and the date of this Report
except as stated above in this Report.

iv) Disclosure under section 197(12) and Rule 5 of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014

Disclosures with respect to the remuneration of Directors
and employees as required under Section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014
is appended as Annexure-IVto the Board's Report.

Other information on compensation of employees as
required under section 197(12) of the Act read with
Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is
provided in a separate annexure forming part of this
report. However, in terms of Section 136 of the Act, the
Annual Report is being sent to the shareholders and
others entitled thereto, excluding the said annexure
which is available for inspection by the shareholders at
the registered office of the Company during business
hours on working days upto the date of ensuing
Annual General Meeting. Any shareholder interested in
obtaining a copy of the same may write to the Company
Secretary at investor@ester.in.

v) Significant and material orders passed by the Regulators
or Courts

There are no significant and material orders passed by
the Regulators/Courts/Tribunals which would impact
the going concern status of the Company and its future
operations.

vi) Details of unclaimed dividends and equity shares
transferred to the Investor Education and Protection
Fund authority are available in the Corporate Governance
Report, which forms part of this Annual Report.

vii) Neither the Chairman nor the Whole-Time Directors was
in receipt of any remuneration or commission from any
holding/ subsidiary company of your Company for the
financial year 2025-26.

viii) No application has been made and no proceedings are
pending under the Insolvency and Bankruptcy Code,
2016 and there is no instance of one-time settlement with
any Bank or Financial Institution.

ix) The requirement to disclose the details of difference
between the amount of valuation done at the time of a
one-time settlement and the valuation done while taking
loan from banks or financial institutions, along with
the reasons thereof, is not applicable for the year under
review.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
OUTGO

The information on conservation of energy, technology
absorption and foreign exchange earnings and outgo as
prescribed under Section 134(3)(m) of the Act read with Rule
8 of the Companies (Accounts) Rules, 2014 is appended as
Annexure-Vto the Board's Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) read
with Section 134(5) of the Act [including any statutory
modification(s) or re-enactment(s) for the time being in force],
the Directors of your Company, to the best of their knowledge
and ability, state that:-

1. in the preparation of annual financial statements for
the financial year ended 31^st March 2026, the applicable
Accounting Standards have been followed along with
proper explanation relating to material departures, if

^any;

2. they have selected appropriate accounting policies
and applied them consistently and made judgments
and estimates that were reasonable and prudent, so as
to give a true and fair view of the state of the affairs of
the Company at the end of the financial year and of the
Profit and Loss of the Company for that period;

3. proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Act for
safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

4. the annual financial statements of the Company for
the financial year ended on 31^st March 2026 have been
prepared on a going concern basis;

5. they have laid down internal financial controls to
be followed by the Company and that such internal
financial controls are adequate and were operating
effectively; and

6. proper systems have been devised to ensure compliance
with the provisions of all applicable laws and such
systems are adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the co-operation
and assistance received from various departments of the
Central & State Government, Banks and Non-banking finance
companies. Your Directors also express their gratitude and
thanks to Customers, Suppliers and other Business Associates
for their continued co-operation and patronage.

Your Directors also wish to place on record their sincere
appreciation for the dedicated efforts and consistent
contribution made by the workmen, staff and executives of the

Company at all levels to ensure that your Company continues
to grow and excel. Your Directors also thank the shareholders
for their continued support.

For and on behalf of the Board

Sd/-

Arvind Singhania

Place: New Delhi Chairman

Date: 11^th August 2026 (DIN: 00934017)