Auditor Report of Everest Organics Ltd.

Mar 31, 2025

We have audited the accompanying financial statements of Everest Organics Limited (“the Company”),
which comprise the Balance Sheet as at March 31,2025, the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the
year ended on that date, and Notes to Financial Statements including a summary of the significant
accounting policies and other explanatory information.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us except for the
possible effects of the matter described in the Basis for Qualified Opinion paragraph the aforesaid financial
statements give the information required by the Act as amended in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India including Ind-AS
specified under Section 133 of the Act of the State of Affairs (financial position) of the Company as at March
31, 2025 and its profit (financial performance including other comprehensive income) its cash flows and the
changes in equity for the year ended on that date.

BASIS FOR QUALIFIED OPINION:

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in
the Auditors’ Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 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.

i. The revocation order of Telangana State Pollution Control Board (TSPCB) dated 4th February, 2022 in
connection with the closure order dated 22nd Dec 2020, stipulates that, the company cannot exceed
its production capacity indicated in it’s order No. TSPCB/RCP/SRD/CFO& HWA/HO/ 2017-2714, Dt.
22-11-2017. However, the company is operating at a substantially enhanced level of actual production
without necessary approvals from TSPCB in the form of Consent for Establishment (CFE) for starting
the establishment, followed by the consequent Consent for Operation (CFO). Such non-compliance
could impact the going concern status of the company in the form of Closure Order from TSPCB.
According to the explanations given to us, the management of the Company is in the process of
addressing the issue and the Company made application for Consent for Establishment for the
enhancement in capacities and the application is pending approval and the company also obtained
Environmental Clearance Certificate for the proposed enhanced capacity.

Our Opinion is qualified in respect of the above said matter(s).

KEY AUDIT MATTERS:

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to
be communicated in our report.

We draw attention to following matters of the Company.

A) Revenue recognition:

Revenue is recognized when the control over the underlying products has been transferred to the
customer. Due to the Company’s sales under various contractual terms and across the country,
delivery to customers in different regions might take different time periods and may result in
undelivered goods at the period end. We consider a risk of misstatement of the Financial Statements
related to transactions occurring close to the year end, as these transactions could be recorded in the
incorrect financial period (cut-off). Our tests of detail focused on sample of cut-off transactions, to verify
that only revenue pertaining to current year is recognized based on terms and conditions set out in
sales contracts and delivery documents and performing testing on selected statistical samples of
revenue transactions recorded during the year.

B) Raw material Consumption:

Raw material Consumption for the year is recognized based on the product composition at various
stages and the customers requirement for all the products. The estimates relating to the charge are
important given the signiucance of process knowhow and the distinctive terms of arrangement with
customers. These compositions, consumption norms are complex and requires signiucant judgments
and estimation by the Company for establishing the matching concept. An appropriate charge of raw
material consumption and accuracy thereof may deviate due to change in judgments and estimates.
Accordingly, the same has been considered as a key audit matter.

We obtained Management’s calculations for raw material consumption specifications and relied upon
the same.

C) IT Systems and Controls:

We have identified IT Systems and controls over financial reporting as a key audit matter for the
company because it’s financial and reporting system should be integrated and must be fundamentally
reliant on IT systems and controls to process the voluminous data specifically with respect to revenue,
debtors, inventory management and raw material consumption. Automated accounting procedures
and IT environment controls are required to be modified and implemented to operate effectively to
ensure accurate financial reporting to comply with all the reporting requirements under various statues.
We have assessed the management’s position through discussion with the in-house and Management
has initiated steps to integrate all activities in this regard.

Accordingly, the same is considered as a key Audit matter.

D) Capital Work in Progress:

The Company is in the process of executing major project for expansion of its Manufacturing facility.
This project takes a substantial period to get ready for intended use. We considered Capital
expenditure as a key audit matter due to: (a) Significance of amount incurred on such items during the
year ended 31 March 2025. (b) Judgement involved in determining the eligibility of costs including
borrowing cost and other directly attributable costs for capitalization as per the criteria set out in Ind AS
16-Property, Plant and Equipment.

We have obtained an understanding of the Company’s capitalization policy and assessed for
compliance with the relevant accounting standards. We have performed substantive testing on a
sample basis for each element of capitalized costs including inventory issued to contractors for the
purpose of this project and understanding nature of the costs capitalized.

Management maintains that, during the period, the interest cost of funds borrowed for the purpose
amounting to Rs.112.88 Lakhs has been capitalised. (refer Note No.32(xx)).

EMPHASIS OF MATTER:

We draw attention to the following matters disclosed in the notes to the accompanying financial statements,
which, due to their significance, have been considered necessary to bring to the attention of the users of
the financial statements for emphasis not amounting to any qualifications :

1. As Shown above revenue has been recognized in respect of certain sales where goods were
dispatched on or before the end of the Financial Year, although the transfer of ownership and
associated risks and rewards had occurred subsequent to the reporting date, keeping in view the
confirmed delivery to the customer. This accounting treatment, though disclosed by management,
involves an impact on the timing of revenue recognition in the Financial Statements.

2. Note 2.2(Q), which describes that interest payable to Micro, Small and Medium Enterprises (MSMEs),
as required under the Micro, Small and Medium Enterprises Development Act, 2006, has not been
provided for in the books of account. While the company has disclosed this fact in the Financial
Statements. Its significance arises from the potential regulatory and legal implications of non-provision.

3. Note 2.2(P), which describes the company’s accounting policy for recognizing sales commission which
is payable to agents, after the realization of the related credit sales. This approach is consistent with
prevailing business practices in the industry and reflects the substance of the arrangement, wherein
commission is linked to the actual receipt of payments, though this results in deviation from matching
concept wherein the turnover is recognized in one period and the commission payable thereon is
recognized in another period.

Other Information

The Company’s management and Board of Directors are responsible for the other information. The other
information comprises the information included in the company’s annual report but does not include the
financial statements and our auditors’ report thereon. The Company’s annual report is expected to be made
available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any
assurance and conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the 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.

MANAGEMENT’S AND BOARD OF DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL
STATEMENTS:

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance, (changes in equity) and cash flows of the
Company in accordance with the accounting principles generally accepted in India, including the
accounting Standards specified under section 133 of the Act. 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 financial statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

In preparing the financial statements, management is 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 management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for
overseeing the Company’s financial reporting process.

AUDITORS’ RESPONSIBILITY:

Our objectives are to obtain reasonable assurance about whether the 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 SAs 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 based on these
financial statements.

As part of an audit in accordance with standards on auditing we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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.

• Obtain an understanding of internal control relevant to the audit 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 with
reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management and Board of Directors.

• Conclude on the appropriateness of management and 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 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.

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

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.

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.

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditors’ 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:

1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central
Government of India in terms of sub-section (11) of Section 143 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.

2. As required by Section 143(3) of the Act, we report 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 purposes of our audit;

(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 Balance Sheet, the Profit and Loss Statement, the Statement of Changes in Equity and the
Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of the Companies (Indian Accounting Standards)
Rules, 2015.

(e) On the basis of the written representations received from the directors as on March 31, 2025,
taken on record by the Board of Directors none of the directors are disqualified as on 31^st March
2025, from being appointed as a director in terms of sec.164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in
“Annexure-B”.

(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 has disclosed the impact of pending litigations as at 31^st March, 2025 on its
financial position in its financial Statements. Refer Note No:32(viii) of the Financial
Statements.

ii. The Company does not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.

A) The management has represented that, to the best of its knowledge and belief, other than
as disclosed in the notes to the accounts, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other person(s) or entity(ies), including foreign entities
(“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 (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;

B) The management has represented, that, to the best of it’s knowledge and belief, other
than as disclosed in the notes to the accounts, no funds have been received by the
company from any person(s) or entity(ies), including foreign entities (“Funding Parties”),
with the understanding, whether recorded in writing or otherwise, that the company shall,
whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

C) Based on audit procedures which we considered reasonable and appropriate in the
circumstances, nothing has come to their notice that has caused them to believe that the
representations under sub-clause (i) and (ii) contain any material mis-statement.

iv. The company has not declared dividend during the year F.Y 2024-25.

v. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is
applicable from 1 April 2023. Based on our examination which included test checks, the
Company have used accounting software for maintaining its books of account, which have a
feature of recording Audit Trail (edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the respective software. Further during the
course of our audit, we did not come across any instance of Audit Trail feature being tampered
with.

3. Further, with respect to the matter to be included in the Auditors’ Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by
the company to its directors during the current year is in accordance with the provisions of section 197
of the Act. The remuneration paid to any director is not in excess of the limit laid down under section
197 of the Act.

For P.S.N RAVISHANKER & ASSOCIATES

Chartered Accountants

FRN.003228S

YADAVILLI SAI KARUNAKAR

Partner

Place: Hyderabad, Membership No. 207033

Date: 28-05-2025. UDIN-25207033BMIUZJ6612

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Mar 31, 2024

We have audited the accompanying financial statements of Everest Organics Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and Notes to Financial Statements including a summary of the significant accounting policies and other explanatory information.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph the aforesaid financial statements give the information required by the Act as amended in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind-AS specified under Section 133 of the Act of the state of affairs (financial position) of the Company as at March 31, 2024 and its profit (financial performance including other comprehensive income) its cash flows and the changes in equity for the year ended on that date.

BASIS FOR QUALIFIED OPINION:

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 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.

I. The revocation order of Telangana State Pollution Control Board (TSPCB) dated 4th February 2022 in connection with the closure order dated 22nd Dec 2020, stipulates that, the company cannot exceed its production capacity indicated in it''s order No. TSPCB/RCP/SRD/CFO& HWA/HO/ 20172714, Dt. 22-11-2017. However, the company is operating at a substantially enhanced level of actual production without necessary approvals from TSPCB in the form of Consent For Establishment (CFE) for starting the establishment, followed by the consequent Consent For Operation (CFO). Such non-compliance could impact the going concern status of the company in the form of Closure Order from TSPCB. According to the explanations given to us, the management of the Company is in the process of addressing the issue. Refer to Note No.32(viii)(a).

ii. During the year under report, certain sales are made by the company on or before 31st March, 2024 for which control over the goods have not been passed on to the respective customers though dispatches were made on or before the aforesaid date and the same is not in accordance with Ind-AS 115 on Income Recognition. Considering the corresponding effect of the previous year 2022-23, the impact on Net Profit after tax for the year ended 31.03.2024 and reserves and surplus under Balance sheet have been overstated by Rs.194.73 Lakhs and the net turnover for the year ended

31.03.2024 have been overstated by Rs.609.45 Lakhs.

iii. In respect of Ind AS-19 Employee Benefits, there is a non-compliance as under

(a) . As stated in the notes to the financial statements of the company, the company has not revised

the provision for the liability on account of gratuity payable which was made in earlier period based on the management''s own assessment instead of actuarial valuation and the gratuity liability is shown at 31.03.2024 under report, the liability for payment of gratuity has been shown at Rs. 162.17 Lakhs. As per the valuation obtained from LIC the gratuity liability is coming to Rs.247.03 Lakhs as on 31.03.2024. Thus, there is an understatement of liability and expenditure to the extent of Rs.84.86 Lakhs in the financial statements.

(b) . As per LIC Fund account statement, fund balance as on 31.03.2024 is coming to Rs.191.17

Lakhs, which is shown as Rs.162.17 Lakhs in the financial statements. Thus, the Other Comprehensive Income and reserves are understated by Rs.29.99 Lakhs.

(Refer Note No.32(xii)(a)(ii).

iv. The company has made a turnover of Rs.19,724.13 Lakhs for the year ended 31st March 2024. The sundry debtors as at 31st March, 2024 stood at Rs.10,008.55 Lakhs and out of which in respect of the Sundry debtors outstanding at Rs.2,869.26 Lakhs only confirmations were obtained at any time during the year.

v. During year 2022-23, the company has capitalised expenditure incurred on R&D to the extent of Rs. 209.65 lakhs under the head Intangible Assets-Products under Development instead of treating it as revenue expenditure and charging it in the Statement of Profit & loss Account. Out of this an amount of Rs.41.93 Lakhs has been amortised to profit and loss a/c and balance amount of Rs.167.72 Lakhs has been carried in the balance sheet under the head Intangible Assets-Products under Development. The nature of such expenditure shall be substantiated with tangible basis for certainty of corresponding future revenues against the expenditure being continued in the balance sheet at Rs.167.72 Lakhs. The expenditure shall also be identified and ascertained against each product under development. As the same was not furnished to us, we are of the opinion that the treatment of such expenditure as capital in nature is not in accordance with IND-AS 1 on Presentation of Financial Statements.

Based on the above the financial statements of the Company are not in compliance with the requirements of Ind AS 36, ''Impairment of Assets,'' and Ind AS 38, ''Intangible Assets.

vi. The company has adopted cash basis of accounting, as regards Sales commission payable to the sales agents. Hence the impact on the profit for the year and the consequential impact on the Reserves and Surplus of the Company as on the balance sheet date are not ascertainable.

vii. During the Financial Year 2023-24 there were delays in making payments to the small and micro enterprises. The company is liable to pay interest for the delays in making Payments to these small and Micro enterprises to the tune of Rs.42 Lakhs. Also, this amount of interest payable is not provided in the financial statements.

Our Opinion is modified in respect of the above said matters.

KEY AUDIT MATTERS:

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

separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

We draw attention to following matters of the Company.

A) Revenue recognition:

Revenue is recognized when the control over the underlying products has been transferred to the customer. Due to the Company''s sales under various contractual terms and across the country, delivery to customers in different regions might take different time periods and may result in undelivered goods at the period end. We consider a risk of misstatement of the Financial Statements related to transactions occurring close to the year end, as these transactions could be recorded in the incorrect financial period (cut-off). Our tests of detail focused on sample of cut-off transactions, to verify that only revenue pertaining to current year is recognized based on terms and conditions set out in sales contracts and delivery documents and performing testing on selected statistical samples of revenue transactions recorded during the year.

B) IT Systems and Controls:

We have identified IT Systems and controls over financial reporting as a key audit matter for the company because it''s financial and reporting system should be integrated and must be fundamentally reliant on IT systems and controls to process the voluminous data specifically with respect to revenue, debtors, inventory management and raw material consumption. Automated accounting procedures and IT environment controls are required to be modified and implemented to operate effectively to ensure accurate financial reporting to comply with all the reporting requirements under various statues. We have assessed the management''s position through discussion with the in-house experts and the Management has informed that they are making efforts to integrate all activities in this regard.

Accordingly, the same is considered as a key Audit matter.

C) Capital Work-in-Progress:

The Company is in the process of executing major project for expansion of its Manufacturing facility. This project takes a substantial period to get ready for intended use. We considered Capital expenditure as a key audit matter due to: (a) Significance of amount incurred on such items during the year ended 31st March, 2024. (b) Judgement involved in determining the eligibility of costs including borrowing cost and other directly attributable costs for capitalization as per the criteria set out in Ind AS 16-Property, Plant and Equipment.

We have obtained an understanding of the Company''s capitalization policy and assessed for compliance with the relevant accounting standards. We have performed substantive testing on a sample basis for each element of capitalized costs including inventory issued to contractors for the purpose of this project and understanding nature of the costs capitalized.

Management maintains that, during the period, the interest cost of funds borrowed for the purpose amounting to Rs.113.20 Lakhs has been capitalised. (Refer Note No.32(xix)).

Other Information

The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the company''s annual report but does not include the financial statements and our auditors'' report thereon. The Company''s annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we do not express any assurance and conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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.

MANAGEMENT''S AND BOARD OF DIRECTORS'' RESPONSIBILITY FOR THE FINANCIAL STATEMENTS:

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, (changes in equity) and cash flows of the Company in accordance with6 the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. 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 financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

AUDITORS'' RESPONSIBILITY:

Our objectives are to obtain reasonable assurance about whether the 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 SAs 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 based on these financial statements.

As part of an audit in accordance with standards on auditing we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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.

• Obtain an understanding of internal control relevant to the audit 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 with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management and Board of Directors.

• Conclude on the appropriateness of management and 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 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.

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

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.

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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' 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:

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 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.

2. As required by Section 143(3) of the Act, we report 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 purposes of our audit;

(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 Balance Sheet, the Profit and Loss Statement, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Indian Accounting

Standards) Rules, 2015 except with regard to the compliance requirements under, “IND AS-19-Employee Benefits”, IND AS-36 Impairment of Assets, IND AS-38 Intangible Assets, Ind As-115 Revenue Recognition as stated in Basis for qualified opinion Para.

e) On the basis of the written representations received from the directors as on March 31, 2024, taken on record by the Board of Directors none of the directors are disqualified as on March 31, 2024, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure-B”.

(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 has disclosed the impact of pending litigations as at 31st March, 2024 on its financial position in its financial Statements. Refer Note No: 32(viii) of the Financial Statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv.

A) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

B) The management has represented, that, to the best of it''s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

C) Based on audit procedures which we considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

v. The company has not declared dividend during the year F.Y. 2023-24.

vi. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1 April 2023. Based on our examination which included test checks, the Company have

used accounting software for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further during the course of our audit, we did not come across any instance of audit trial feature being tampered with.

The statutory requirement regarding retention of Audit Trail is not applicable since it is the first year of implementation of Audit Trail.

3. Further, with respect to the matter to be included in the Auditors'' Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under section 197 of the Act.

For P.S.N RAVISHANKER & ASSOCIATES

Chartered Accountants FRN.003228S

YADAVILLI SAI KARUNAKAR

Partner

Place: Hyderabad, Membership No. 207033

Date: 27-05-2024. UDIN. 24207033BKETWW9540

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Mar 31, 2023

We have audited the accompanying financial statements of Everest Organics Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and Notes to Financial Statements including a summary of the significant accounting policies and other explanatory information.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph the aforesaid financial statements give the information required by the Act as amended in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind-AS specified under Section 133 of the Act of the state of affairs (financial position) of the Company as at March 31, 2023 and its profit (financial performance including other comprehensive income) its cash flows and the changes in equity for the year ended on that date.

BASIS FOR QUALIFIED OPINION:

i The revocation order of Telangana State Pollution Control Board (TSPCB) dated 4th February 2022 in connection with the closure order dated 22nd Dec 2020, stipulates that, the company cannot exceed its production capacity indicated in it''s order No. TSPCB/RCP/SRD/CFO& HWA/HO/ 20172714, Dt. 22-11-2017. However, the company is operating at a substantially enhanced level of actual production without necessary approvals from TSPCB in the form of Consent For Establishment (CFE) for starting the establishment, followed by the consequent Consent For Operation (CFO). Such non-compliance could impact the going concern of the company in the form of Closure Order from TSPCB. According to the explanations given to us, the management of the Company is in the process of addressing the issue. Refer note no.25(C)(xii)

ii. During the period under report, certain sales are made by the company on or before 31st March, 2023 for which control over the goods have not been passed on to the respective customers though dispatches were made on or before the aforesaid date and the same is not in accordance with IND-AS 115 on Income Recognition. Considering the corresponding effect of the earlier period i.e. 202122, the impact on Net Profit after tax for the year ended 31.03.2023 and reserves and surplus under Balance sheet have been overstated by Rs. 70.65 Lakhs and the net turnover for the year ended 31.03.2022 have been overstated by Rs. 394.76 Lakhs.

iii. During the year, the company has received Keyman Insurance claim on demise of Mr. SK Srihari Raju, Ex-CMD, amounting to Rs. 500 lakhs which was shown under Other Income instead of Exceptional items in Statement of Profit & Loss Account. Accordingly, the impact on Operational Profit (Earnings Before Interest & Tax) was overstated by Rs. 500 lakhs resulting in the present Operational Profit (Earnings Before Interest & Tax) of Rs.496.12 lakhs instead of operating loss of Rs. 3.88 lakhs there being no impact on the overall Net Profit of the company for FY 2022-23.

iv. As stated in the note no.25(C) (xvi) (a)(ii) to the financial statements of the company as at

March,31st 2023 under report, the liability for payment of gratuity stands at Rs. 166.72 Lakhs calculated as per the management assessment, but not as per actuarial valuation as required under the Indian Accounting Standard. As against the said liability of Rs. 166.72 Lakhs the company has deposited Rs.163.07 Lakhs. As per the requirement of Ind-AS-19 on Employee Benefits, such liability should have been deposited in total as against a partial sum. Further, the company has not obtained any confirmation from the Life Insurance Corporation of India in this regard during the past one year. Hence the impact on the profit for the year and the consequential impact on the Reserves and Surplus of the company as on the balance Sheet date are not ascertainable.

v. The company is in the process of ascertaining the market value of the Investments held by the company as on the date of the report. The difference between the Cost and such market value shall be dealt upon completion of such exercise.

vi. The company has made a turnover of Rs.18,304.84 Lakhs for the year ended 31st March 2023. The sundry debtors as at 31st March, 2023 stood at Rs. 7,795.71 Lakhs. Against this outstanding balance of Sundry Debtors confirmations were received only for Rs. 2,995.19 lakhs by this date.

vii. The Debtors balance outstanding for more than 3 years for which provision for doubtful debts was not made is amounting to Rs. 36.73 lakhs as at 31st March 2023. As there were no active business transactions with those parties, provision should be made for entire amount of Rs. 36.73 lakhs for 2022-23. The impact on Net Profit after tax for the year ended 31.03.2023 and Reserves and surplus under Balance sheet have been overstated by Rs. 27.48 lakhs (Rs 36.73 lakhs Less Rs. 36.75 lakhs x 25.168%).

viii. During the year, the company has capitalised expenditure incurred on R&D to the extent of Rs. 209.65 lakhs under the head Intangible Assets-Products under Development instead of treating it as revenue expenditure and charging it in the Statement of Profit & loss Account. The nature of such expenditure shall be substantiated with tangible basis for certainty of corresponding future revenues against the same. The expenditure shall also be identified and ascertained against each product under development. As the same was not furnished to us, we are of the opinion that the treatment of such expenditure as capital in nature is not in accordance with IND-AS 1 on Presentation of Financial Statements. Accordingly, the Profit before tax for the year ended 31.03.2023 have been overstated by Rs 209.65 lakhs.

ix. The company has adopted cash basis of accounting, as regards sales Commission payable to the sales agents. Hence the impact on the profit for the year and the consequential impact on the Reserves and Surplus of the company as on the balance Sheet date are not ascertainable.

Our Opinion is qualified in respect of the above said matter(s). .

KEY AUDIT MATTERS:

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

We draw attention to following matters of the Company.

A) Revenue recognition:

Revenue is recognized when the control over the underlying products has been transferred to the customer. Due to the Company''s sales under various contractual terms and across the country,

delivery to customers in different regions might take different time periods and may result in undelivered goods at the period end. We consider a risk of misstatement of the Financial Statements related to transactions occurring close to the year end, as these transactions could be recorded in the incorrect financial period (cut-off). Our tests of detail focused on sample of cut-off transactions, to verify that only revenue pertaining to current year is recognized based on terms and conditions set out in sales contracts and delivery documents and performing testing on selected statistical samples of revenue transactions recorded during the year.

B) Raw material Consumption:

Raw material Consumption for the year is recognized based on the product composition at various stages and the customers requirement for all the products. The estimates relating to the charge are important given the significance of process knowhow and the distinctive terms of arrangement with customers. These compositions, consumption norms are complex and requires significant judgments and estimation by the Company for establishing the matching concept. An appropriate charge of raw material consumption and accuracy thereof may deviate due to change in judgments and estimates. Accordingly, the same has been considered as a key audit matter.

We obtained Management''s calculations for raw material consumption specifications and relied upon the same.

C) IT Systems and Controls:

We have identified IT Systems and controls over financial reporting as a key audit matter for the company because it''s financial and reporting system should be integrated and must be fundamentally reliant on IT systems and controls to process the voluminous data specifically with respect to revenue, debtors, inventory management and raw material consumption. Automated accounting procedures and IT environment controls are required to be modified and implemented to operate effectively to ensure accurate financial reporting to comply with all the reporting requirements under various statues. We have assessed the management''s position through discussion with the in-house and external experts. Management has initiated steps to integrate all activities in this regard.

Accordingly, the same is considered as a key Audit matter.

D) Capital Work in Progress:

The Company is in the process of executing major project for expansion of its Manufacturing facility. This project takes a substantial period of time to get ready for intended use. We considered Capital expenditure as a key audit matter due to: (a) Significance of amount incurred on such items during the year ended 31 March 2023. (b) Judgement involved in determining the eligibility of costs including borrowing cost and other directly attributable costs for capitalization as per the criteria set out in Ind AS 16-Property, Plant and Equipment.

We have obtained an understanding of the Company''s capitalization policy and assessed for compliance with the relevant accounting standards. We have performed substantive testing on a sample basis for each element of capitalized costs including inventory issued to contractors for the purpose of this project and understanding nature of the costs capitalized.

Management maintains that, during the period, the interest cost of funds borrowed for the purpose amounting to Rs.95.05 Lakhs (Refer Note No. 25(C) (xxv) has been capitalised. .

Other Information

The Company''s management and Board of Directors are responsible for the other information. The other

information comprises the information included in the company''s annual report but does not include the financial statements and our auditors'' report thereon. The Company''s annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we do not express any assurance and conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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.

MANAGEMENT''S AND BOARD OF DIRECTORS'' RESPONSIBILITY FOR THE FINANCIAL STATEMENTS:

The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance. Changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Management and 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 intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process..

AUDITORS'' RESPONSIBILITY:

Our objectives are to obtain reasonable assurance about whether the 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 SAs 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 based on these financial statements.

As part of an audit in accordance with standards on auditing we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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.

• Obtain an understanding of internal control relevant to the audit 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 with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management and Board of Directors.

• Conclude on the appropriateness of management and 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 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.

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

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.

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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' 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:

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 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.

2. As required by Section 143(3) of the Act, we report 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 purposes of our audit;

(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 Balance Sheet, the Profit and Loss Statement, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015 except with regard to the compliance to certain disclosure requirements under, “IND AS-19-Employee Benefits”, such non-disclosure does not have any impact on the Financial Statements of the company.

e) On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, Shri KRK Raju Independent Director of the Company, is also a Director on the Board of another company, whose name has been struck off from the register of companies by the Ministry of Company Affairs. On a writ petition filed in this regard, the Honourable High court of Telangana has passed an order on 22nd Jan 2020, consequently the DIN of Mr KRK Raju is active as on date. As per the said order, the same order holds good for active companies. Subject to the above, none of the directors are disqualified as on March 31,2023, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure-B”.

(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 has disclosed the impact of pending litigations as at 31st March, 2023 on its financial position in its financial Statements. Refer Note No:25(C) (xii) of the Financial Statements.

ii. The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv.

A) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

B) The management has represented, that, to the best of it''s knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the company

from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

C) Based on audit procedures which we considered reasonable and appropriate in the circumstances, nothing has come to their notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

v. The dividend declared in the FY 2021-22 and paid by the Company during FY 2022-23 is in accordance with section 123 of the Company Act 2013 to the extent it applies to payment of dividend.

3. Further, with respect to the matter to be included in the Auditors'' Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under section 197 of the Act.

For P.S.N RAVISHANKER & ASSOCIATES

Chartered Accountants

FRN.003228S

YADAVILLI SAI KARUNAKAR

Partner

Place: Hyderabad, Membership No. 207033

Date: 27-05-2023. UDIN. 23207033BGXYPL4357

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Mar 31, 2018

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Everest Organics Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss(including Other Comprehensive Income), the Cash Flow Statement and the Statement of changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted the audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

BASIS FOR QUALIFIED OPINION :

a) As stated in Note 28 (1)(L) to the financial statements of the Company as at 31 March 2018 under report, the outstanding provision made in connection with liability for payment of Gratuity stands at Rs.70.31 Lakhs. As against the said liability of Rs.70.31 Lakhs the company has deposited Rs.5.00 Lakhs only in a Fund. As per the requirement of the Indian Accounting Standard-19 on Employee Benefits, such liability should have been deposited in total in a fund as against a partial sum. Our audit opinion on the financial statements for the year ended 31 March 2018 is qualified in respect of this matter.

The management is of the opinion, the entire liability in this regard has been provided and hence does not have any impact on the profit and loss account of the company for the year and the Balance Sheet of the Company as on 31st March, 2018.

b) Note No.4 to the Balance Sheet of the Financial Statements, regarding the advances extended to employees of the Company. The said advances outstanding as at the year-end under report is Rs.88.05 lakhs, of which Rs.6.16 lakhs is the implied impairment loss for which no provision has been made in the books of account. Accordingly the Profit for the year is overstated by Rs.6.16 lakhs and the Reserves and Surplus as at 31.03.2018 has also been overstated by the same amount. Our audit opinion on the financial statements for the year ended 31 March 2018 is qualified in respect of this matter.

QUALIFIED OPINION :

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including Ind-AS specified under Section 133 of the Act of the state of affairs (financial position) of the Company as at 31 March 2018 and its profit (financial performance including other comprehensive income) its cash flows and the changes in equity for the year ended on that date.

OTHER MATTERS OF EMPHASIS :

a) We draw attention to the Company’s outstanding liability for the provision of balance Leave Encashment of the employees to be provided as at the end of the year under report. The management is of the opinion that the policy on leave encashment is under review and hence the liability in this regard is not ascertained. Hence, we are not in a position to ascertain the impact of the same, on the profit and loss account of the company for the year and the Balance Sheet of the Company as on 31^stMarch, 2018. Our opinion is not qualified in respect of this matter.

b) The comparative financial information of the Company for the Financial Year ended 31^st March, 2017, prepared with Indian Accounting Standards, included in the aforesaid Financial Statements under report, have been audited by the previous auditors. The Report of the previous auditors on such Comparative Financial Information dated 29-05-2017 is unmodified.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS :

As required by the Companies (Auditors’ Report) Order, 2016 (“The Order”), issued by the Central Government of India in terms of sub-section 11 of Section 143 of the Act, we give in the Annexure-A a Statement on the matters specified in Paragraph 3 and 4 of the Order, to the extent applicable.

As required by Section 143(3) of the Act, we report 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 purposes of our audit;

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 Balance Sheet, the Profit and Loss Statement, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Reportare in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified underSection 133 of the Act, read with Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015;

e) On the basis of the written representations received from the directors as on March 31, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure-B”.

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 has disclosed the impact of pending litigations on its financial position in its financial statements as referred to Para 14 of Note No.28to the Financial Statements.

(ii) The Company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE - A to the Independent Auditors’ Report dt. 30-05-2018 issued to the members of Everest Organics Limited Statement on the matters specified in Paragraphs 3 & 4 of the Companies (Auditors Report)Order, 2016

(i) a) The Company has maintained proper records showing broad particulars including quantitative details and situation of fixed assets, on the basis of available information. However, the fixed assets register is to be updated. We are informed by the management that the company is in the process of compiling and reconstructing the Fixed Assets Register to show full particulars including quantitative details and situation of Fixed Assets.

b) As per the information and explanations furnished to us by the management, majority of the fixed assets have been physically verified in a broad manner by the management in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. We are informed that no material discrepancies were noticed on such verification, pending adjustment.

c) As per the information and explanations furnished to us by the management, the title deeds of immovable properties are held in the name of the company.

(ii) The physical verification of inventories has been conducted during the year by the management, in respect of majority of the high value items at reasonable intervals. In our opinion, the frequency of such verification is reasonable.

The discrepancies, that were noticed have been properly dealt with in the books of account.

(iii) As per the information and explanations furnished to us by the management and as per the books of account and other documents examined by us, the company has not granted any loans secured or unsecured to companies, firms, limited partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) As per the information and explanations furnished to us by the management and as per the books of accounts and other documents examined by us, the company has not given any loans, made investments, given guarantees, securities to the parties to which provisions of Sections 185 and 186 of the Companies Act, 2013 are applicable.

(v) According to the information and explanations given to us the Company has not accepted deposits, to which the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or the other relevant provisions of the Companies Act, and the rules framed there under, wherever applicable, from the public.

However, there are certain unsecured loans, accepted from Directors and their relatives and also in the form of employee security deposits, amounting to Rs.164.70 lakhs as at 31-03-2018 (Rs.173.19 lakhs as at 31-03-2017), which still outstanding in the books of account of the Company after the restructuring has taken place in the previous year.

(vi) As per the information and explanations furnished to us, prima facie, it appears that the company broadly meets the requirement prescribed by the Central Government under section 148(1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014. We have however, not made a detailed examination of the cost records.

(vii) a) As per the information and explanations furnished to us by the management, according to the records of the Company, undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax(Except FBT of Rs.8.55 lakhs), Sales Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues have been generally deposited with the appropriate authorities, with delays. However, according to the information and explanations given to us, no other undisputed amounts payable in respect of the aforesaid dues were outstanding as at 3103-2018 for a period of more than six months from the date they became payable.

(b) As per the information and explanations furnished to us by the management, there are no dues of income tax, sales tax or service tax or duty of customs or duty of excise or value added tax that have not been deposited on account of any dispute.

(viii) As per the information and explanations given to us, the company has not defaulted in repayment of loansor borrowings to the Banks or Government. The company has not made any borrowings from the financial institutions or debenture holders.

(ix) During the year the company has not raised money by way of initial public offer or further public offer (including debt instruments). As per the information and explanations given to us, the term loans raised during the year were applied for the purposes for which the same were raised.

(x) During the year under review, no fraud by the company or on the company by its officers or employees has been noticed or reported.

(xi) As per the information and explanations given to us by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

(xii) The Company is not a Nidhi company. Hence Clause (xii) is not applicable to the company.

(xiii) As per the information and explanations given to us and based on our audit, in our opinion, the transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements, etc., as required by the applicable accounting standards.

(xiv) During the year the company has made the preferential allotment of 11,720 fully paidequity shares of Rs.10/- each with a premium of Rs.8/- per share, totally amounting to Rs.2,10,960 to an NBFC, an Associate Company and the shareholding of these preferential allottee as at 31.03.2018 has gone up to 48.57%(Previous year 48.62%) respectively. The company made this allotment in compliance with the requirement of section 42 of the Companies Act, 2013. The amount raised has been used for the purpose for which the funds were raised.

(xv) As per the information and explanations and based on examination, the company has not entered into any non-cash transactions with directors or persons connected with them.

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure-B to the Independent Auditors’ Report of even date on the Financial Statements of Everest Organics Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) :

We have audited the internal financial controls over financial reporting of Everest Organics Limited (“the Company”) as of 31^stMarch, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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. 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 its business, including adherence to 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 Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing issued by the Institute of Chartered Accountants of India and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. 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 over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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 system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes 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 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 financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion :

In our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^stMarch, 2018, based on the internal control over financial reporting 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. However the following internal financial controls are essential and desirable.

a) The system of physical verification of fixed assets, tagging of fixed assets, and computerization of records needs to be improved to be commensurate with the size of the company & level of operations.

b) The system of physical verification of inventories, tagging of inventories, recognition & valuation of inventories needs to be further improved to be commensurate with the size of company &level of operations.

c) The system of obtaining periodical confirmation of balances from Debtors, Creditors, Advances, Deposits, etc. needs to be improved to be commensurate with the size of company.

d) The system of obtaining comparative quotations from different independent parties and keeping them on record needs to be further strengthened to be commensurate with the size of the company and nature of operations of the Company.

e) The method of customer evaluation needs to be further improved for extending credit to the customers.

For SURYAM & CO

Chartered Accountants

FRN : 012181S

(SRINIVAS OLETI)

Place : Hyderabad, Partner

Date : 30-05-2018. ICAI M.No.206457

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Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Everest Organics Limited ("the Company") which comprises the balance sheet as at 31 March, 2014, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the companies Act 2013 in terms of the General Circular 15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs) and in accordance with the Accounting principles generally accepted in India. This responsibility includes the design implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2014;

(b) in the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order"), as amended, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that :

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the balance sheet, the statement of profit and loss and the cash flow statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the companies Act 2013 in terms of the General Circular 15/ 2013 dated 13-09-2013 of the Ministry of Corporate Affairs); and

(e) on the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2014, from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Act.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. In respect of the company''s Fixed Assets

a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the fixed assets and the fixed assets register requires to be updated. We are informed by the management that the company is in the process of compiling and reconstructing the Fixed Assets Register to show full particular including quantitative details and situation of fixed assets.

b) According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management in accordance with a regular programme of verification, which provides for physical verification of the fixed assets at regular intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

C) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the company and such disposal has, in our opinion, not affected status as the going concern of the company.

2. In respect of the company''s Inventories :

a) As explained to us, Physical verification of inventory has been conducted at reasonable intervals by the management during the year in respect of majority of the high value items.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management appear to be generally reasonable and adequate in relation to the size of the company and the nature of its business.

a) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories in a broad manner and we are informed that no material discrepancies were noticed on physical verification.

3. a) As per the information and explanations furnished to us by the management the Company

has not granted any loans, secured or unsecured, to the parties coming under the provision of Sec.301 of the Companies Act, 1956. However, the remuneration drawn by the promoter directors in excess of the limits specified in the Schedule-XIII of the Companies Act, 1956 is to be regularized, amounting to Rs30.30 lakhs.

b) As per the information and explanations furnished to us by the management, out of the total unsecured loans amount, outstanding at Rs.884.20 lakhs as at 31-03-2014 (Previous Year Rs.781.28 lakhs-Rs.700 lakhs shown under Share Application Money and Rs.81.28 lakhs shown under unsecured loans), taken by the company an amount of Rs.247.21 lakhs (Previous Year Rs.134.17 lakhs) is from the Directors and their relatives and an amount of Rs.346.97 lakhs (Previous Year Rs.286.56 lakhs) is from an NBFC in which two of the directors of that company are the relatives of the Managing Director of the company, and accordingly are covered in the register maintained under section 301 of the Act. It is explained to us that there is no specific repayment programme has been fixed in this regard. As explained to us, out of the total unsecured loans of Rs.884.20 lakhs, an amount of Rs.33.86 lakhs carry interest @18% p.a. and the remaining amount of unsecured loans do not carry interest. The rate of interest and other terms and conditions of unsecured loans taken by the company do not, prima facie, appear to be prejudicial to the interest of the company.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory, Fixed Assets and for the sale of goods, may be further strengthened commensurate with the size of the company and the nature of the business, more particularly in respect of procedures for requisitioning, placing orders, purchasing and making payment of items referred to above and for sale of goods.

5. As per the information and explanations given to us by the management, the transactions that need to be entered into a register in pursuance of the section 301 of the Act have been so entered (Refer to Note No.9 for the details of purchase and sale transactions with the Firm in which the Executive Director has become interested, his spouse being one of the Partners- Related Party Transactions). Each of these transactions appear to have been made at prices, which are reasonable having regard to the prevailing market prices at that relevant time.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply

However, the company has taken / accepted / held unsecured loans totally amounting to Rs.884.20 lakhs as at 31-03-2014 (Previous Year Rs.781.28 lakhs-Rs.700 lakhs shown under Share Application Money and Rs.81.28 lakhs shown under unsecured loans), out of which an amount of Rs.247.21 lakhs (Previous Year Rs.134.17 lakhs) is from the Directors and their relatives and an amount of Rs.346.97 lakhs (Previous Year Rs.286.56 lakhs) is from an NBFC and Rs.19.85 lakhs in the form of Security Deposits from Employees, all stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has explained to us that the unsecured loans (Previous year share application money) were earlier brought into the company to meet the then financial obligations of the company to the then Financial Institutions/Banks.

7. The Company does not have formal internal audit system during the year, however it''s internal control procedures involve reasonable internal checking of its financial records.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company, prima facie, appear to meet the specifications given by the Central Government U/s.209(1)(d) of the Companies Act, 1956 in a broad manner. However, the contents of these accounts and records have not been examined by us in detail.

9. The undisputed dues including Provident fund, Employees State Insurance, Income-Tax, Sales- Tax, Excise-Duty, Cesses and other statutory dues have been deposited by the company during the year with the appropriate authorities with some delays. FBT to the tune of Rs.8.55 Lakhs, Service Tax of Rs.2.33 lakhs were outstanding as at 31st March, 2014 for a period of more than 6 months from the date they became payable.

10. The accumulated losses of the company as on 31.03.2014 amounts to Rs.511.81 lakhs (previous year Rs.598.56 lakhs). The accumulated losses at the end of the financial year are not less than fifty percent of its net worth. During the year 2013-14 and the immediately preceding financial year the company has not incurred cash losses.

11. The company has taken loans from a bank and the company, prima facie, does not appear to have defaulted in making the repayment of dues to the Bank. The company has not raised any loans from debenture holders.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments during the year.

14. As per the information and explanations furnished to us by the management during the year, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans raised, prima facie, appear to have been applied for the purpose for which the loans were obtained.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes. Due to this reason, the net working capital / Net Current Assets is negative to the tune of Rs.1025.99 lakhs as on 31-03-2014 (Previous year Rs.1502.20 lakhs).

17. As per the information and explanations furnished to us, during the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures and hence not created any securities.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported to us by the management.

21. The company is governed by the Companies Act, and no other special statute is applicable to the company.

22. The other particulars of this order are not applicable to the company.

For P.S.N.RAVISHANKER & ASSOCIATES

Chartered Accountants

Place : Hyderabad, Sd/-

Date : 31-05-2014. (P. RAVI SHANKER)

Partner

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Mar 31, 2012

We have audited the attached Balance Sheet of M/s. Everest Organics Limited as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

i. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section(4A) of section 227 of the Companies Act,1956, we have enclosed in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order.

ii. Further to our statement referred to in paragraph I above, we report that:

a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, the company as referred by law has kept proper books of accounts so far as it appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on 31.03.2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2012

ii) In the case of the Statement of Profit & Loss, of the profit of the company for the year ended on that date; and

iii) In the case of the Cash flow statement, of the cash flows of the company for the year ended as on that date.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the fixed assets and the fixed assets register is to be updated.

b) According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management at reasonable intervals and we are informed that no material discrepancies were noticed on such verification.

b) During the year the company has not disposed of substantial part of fixed assets.

2. a) As explained to us, Physical verification of inventory has been conducted at reasonable intervals by the management during the year in respect of majority of the high value items..

b) The procedures of physical verification of inventory followed by the Management appear to be generally reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory in a broad manner and we are informed that no material discrepancies were noticed on physical verification.

3. a) As per the information and explanations furnished to us by the management the Company has not granted any loans, secured or unsecured, to the parties coming under the provision of Sec. 301 of the Companies Act, 1956.

b) During the year the company has taken unsecured loans of Rs. 77.42 lakhs from 7 parties (Previous year Rs. 149.60 Lakhs from 5 parties) covered in the register maintained under Sec.301 of the Companies Act, 1956. The total outstanding in these accounts at the end of the year stood at Rs. 40.37 lakhs (Previous year end 141.68 lakhs). Some of the unsecured loans carry interest @ 18% p.a. and some of the unsecured loans are interest free. It is explained to us that no specific repayment program has been fixed in this regard. Accordingly, the rate of interest and other terms and conditions of the unsecured loans taken by the company, prima facie, do not appear to be prejudicial to the interest of the company.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory, Fixed Assets and for the sale of goods, needs to be further strengthened commensurate with the size of the company and the nature of the business.

5. As per the information and explanations given to us, during the year, there are no such contracts or arrangements that are required to be entered in to the register in pursuance of section 301 of the Act.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply. However, the Company has taken/accepted the unsecured loans, outstanding at 31.03.2012 at Rs. 49.12 lakhs (PY Rs. 401.96 lakhs) and share application money (pending allotment outstanding on 31.03.2012 and on 31.03.2011 at Rs. 700 lakhs and Rs. 388.81 lakhs) from various parties stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has been explained to us that unsecured loans/share application money have been brought into the company to meet the financial obligations of the company to the Financial Institutions/Banks. Out of the total unsecured loans received by the company during the earlier years an amount of Rs. 311.19 lakhs has been transferred to Share Application Money as on 31 -03-2012 (PY NIL).

7. The Company does not have formal internal audit system during the year. As per information & explanations furnished to us by the management the existing control procedures covers some of the internal audit aspects.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company broadly meet the specifications given by the Central Government U/s.209(1 )(d) of the Companies Act, 1956. However, the contents of these accounts and records have not been examined by us in detail.

9. a) The undisputed dues including Provident fund, Employees State Insurance, Income- Tax, Sales-Tax, Excise-Duty, Cesses and other statutory dues have been deposited by the company during the year with the appropriate authorities with some delays. Provident Fund dues to the tune of Rs. 8.16 Lakhs, FBT to the tune of Rs. 8.55 Lakhs, Income-Tax to the tune of Rs. 19.49 lakhs, Tax Deducted at Source to the tune of Rs. 12.90 lakhs were outstanding as at 31st March, 2012 for a period of more than 6 months from the date they became payable.

b) We are informed that there are no dues in respect of Sales tax/Customs tax/Excise duty/ Cess which have not been deposited on accounts of any disputes.

10. The accumulated losses of the company as on 31.03.2012 amounts to Rs. 671.61 lacs (previous year Rs. 777.58 lakhs). The accumulated losses at the end of the financial year are not less than fifty percent of its net worth. During the year 2011-12 and the immediately preceding financial year the company has not incurred cash losses.

11. The company has taken loans from a bank, and the company, prima facie, does not appear to have defaulted in making the repayment of dues to the Bank. The company has not raised any loans from debenture holders.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments during the year.

14. As per the information and explanations furnished to us by the management during the year, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans raised, prima facie, appear to have been applied for the purpose for which the loans were obtained.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes.

17. As per the information and explanations furnished to us, during the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures and hence not created any securities.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported to us by the management.

21. The company is governed by the Companies Act, 1956 and no other special statute is applicable to the company.

22. The other particulars of this order are not applicable to the company.

For P.S.N. RAVI SHANKER & ASSOCIATES Chartered Accountants

Sd/- P. RAVI SHANKER Partner

Place: Hyderabad, Date : 31.05.2012.

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Mar 31, 2011

We have audited the attached Balance Sheet of M/s. Everest Organics Limited as at 31st March, 2011, the Profit and Loss Account and the cash flow statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

I. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section(4A) of section 227 of the Companies Act,1956, we have enclosed in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order.

II. Further to our statement referred to in paragraph I above, we report that:

a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, the company as referred by law has kept proper books of accounts so far as it appears from our examination of those books.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on 31.03.2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

(f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2011

ii) In the case of the Profit & Loss Account, of the profit of the company for the year ended on that date; and

iii) In the case of the Cash flow statement, of the cash flows of the company for the year ended as on that date.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the assets and the fixed assets regis ter is to be updated.

According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management and we are informed that no material discrepancies between the book records and the inventory have been noticed, which may be documented.

b) There was no disposal of a substantial part of fixed assets.

2. a) As explained to us, Physical verification of inventories has been conducted by the management during the year in respect of majority of the high value items at reasonable intervals.

b) The procedures of physical verification of inventory followed by the Management appear to be generally reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and we are informed that there were no material discrepancies noticed on physical verification and the discrepancies noticed on such verification have been properly dealt with.

3. a) During the year the company has taken unsecured loans from 3 parties at Rs.149.60 lakhs (Previous year Rs.59.24 Lakhs from 6 parties) covered in the register maintained under Sec.301 of the Companies Act, 1956. The total outstandings in these accounts at the end of the year stood at Rs.141.68 lakhs (Previous year end 144.73 lakhs). The Company has not granted any loans secured or unsecured or provided any guarantees to parties coming under the provision of Sec.301 of the Companies Act, 1956.

b) The unsecured loans taken are interest free and other terms and conditions of unsecured loans taken by the company are, prima facie, do not appear to be prejudicial to the interest of the company.

c) As per information and explanations furnished to us, no specific repayment program has been fixed for the unsecured loans.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory and Fixed Assets and for the sale of goods, prima facie, appear to be commensurate with the size of the company and the nature of its business.

5. As per the information and explanations given to us, during the year, there are no such contracts or arrangements that are required to be entered in to the register in pursuance of section 301 of the Act.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply. However, the Company has taken/ accepted the unsecured loans (outstanding at 31.03.2011 to the tune of Rs.401.96 lakhs and outstanding as on 31.03.2010 at Rs.395.20 lakhs) and share application money (pending allotment outstanding on 31.03.2011 and on 31.03.2010 at Rs.388.81 lakhs) from various parties stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has been explained to us that unsecured loans/ share application money have been brought into the company to meet the financial obligations of the company to the Financial Institutions/Banks.

7. The Company does not have formal internal audit system from the external agency. As per the information and explanations furnished to us by the management the existing internal control procedures covers some of the internal audit aspects.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company broadly meet the specifications given by the Central Government U/s.209(1)(d) of the Companies Act, 1956. However, the contents of these accounts and records have not been examined by us in detail.

9. a) The undisputed dues including Provident fund, Employees State Insurance, Income-Tax, Sales-Tax, Excise-Duty, Ceases and other statutory dues have been deposited by the company during the year with the appropriate authorities with delays. Provident Fund dues to the tune of Rs. NIL, FBT to the tune of Rs.8.55 Lakhs, Income-Tax to the tune of Rs.22.57 lacs, Tax Deducted at Source to the tune of Rs.6.77 lacs were outstanding as at 31st March, 2011 for a period of more than 6 months from the date they became payable.

b) We are informed that there are no dues in respect of Sales tax/Customs tax/Excise duty/Cess which have not been deposited on accounts of any disputes.

10. The accumulated losses of the company as on 31.03.2011 amounts to about Rs.777.58 lacs (previous year Rs.875.01 lakhs). The accumulated losses at the end of the financial year are not less than fifty percent of its net worth. During the year 2010-11 and the immediately preceding financial year the company has not incurred cash losses.

11. During the year the company, prima facie, appears to have not defaulted in repayment of dues to the Financial Institutions/Banks.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments.

14. As per the information and explanations furnished to us, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans were applied for the purpose for which the loans were obtained.However, during the year, the company has not availed any new term loans.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes.

17. As per the information and explanations furnished to us, during the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported by the management.

21. The company is governed by the Companies Act, 1956 and no other special statute is applicable to the company.

22. The other particulars of this order are not applicable to the company.

For P.S.N. RAVI SHANKER & ASSOCIATES Chartered Accountants

Sd/- P. RAVI SHANKER Partner

Place : Hyderabad Date : 31.05.2011

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Mar 31, 2010

We have audited the attached Balance Sheet of M/s. Everest Organies Limited as at 31st March, 2010, the Profit and Loss Account and the cash flow statement of the company for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

I. As required by the Companies (Auditors Report) Order, 2003, issued by Government of India in terms of sub-section(4A) of section 227 of the Companies Act, 1956, we have enclosed in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said order.

II. Further to our statement referred to in paragraph I above, we report that:

a) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, the company as referred by law has kept proper books of accounts so far as it appears from our examination of those books.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on 31.03.2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the Gase of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010

ii) In the case of the Profit & Loss Account, of the profit of the company for the year ended on that date; and

iii) In the case of the Cash flow statement, of the cash flows of the company for the year ended as on that date.

STATEMENT REFERRED TO IN THE AUDIT REPORT

1. a) The records maintained by the company show broad particulars including quantitative details and situation in respect of the assets and the fixed assets register is to be updated.

According to the information and explanations furnished to us, the fixed assets of the company have been broadly verified during the year by the management and we are informed that no material discrepancies between the book records and the inventory have been noticed, which may be documented.

b) There was no dispersal of a substantial part of fixed assets.

2. a) As explained to us, Physical verification of inventories has been conducted by -the

management during the year in respect of majority of the high value items at reasonable intervals.

b) The procedures of physical verification of inventory followed by the Management appear to be generally reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and we are informed that there were no material discrepancies noticed on physical verification and the discrepancies noticed on such verification have been properly dealt with.

3. a) During the year the company has taken unsecured loans from 3 parties at Rs.59.24

lakhs (Previous year Rs.93.03 Lakhs from 5 parties) covered in the register maintained under Sec.301 of the Companies Act, 1956. The total outstandings in these accounts at the end of the year stood at Rs. 144.73 lakhs (Previous year end 85.48 lakhs). The Company has not granted any loans secured or unsecured or provided any guarantees to parties coming under the provision of Sec.301 of the Companies Act, 1956.

b) The unsecured loans taken are interest free and other terms and conditions of unsecured loans taken by the company are, prima facie, do not appear to be prejudicial to the interest of the company.

c) As per information and explanations furnished to us,*no specific repayment program has been fixed for the unsecured loans.

4. In our opinion and according to the information and explanations given to us, the internal control procedures existing in the company with regard to purchase of Inventory and Fixed Assets and for the sale of goods, prima facie, appear to be commensurate with the size of the company and the nature of its business.

5. As per the information and explanations given to us, during the year, there are no such contracts or arrangements that are required to be entered in to the register in pursuance of section 301 of the Act.

6. As per the information and explanations furnished to us, the Company has not accepted any deposits from the Public during the year to which the directives issued by the Reserve Bank of India and the provisions of Sec.58A and Sec.58AA of the Companies Act, 1956 and Rules framed there under apply. However, the Company has taken/accepted the unsecured loans (outstanding at 31.03.2010 to the tune of Rs.395.20 lakhs and outstanding as on 31.03.2009 at Rs.313.99 lakhs) and share application money(pending allotment outstanding on 31.03.2010 and on 31.03.2009 at Rs.388.81 lakhs) from various parties stated to be coming under the category of promoters, their friends, relatives, employees and sister concerns and it has been explained to us that unsecured loans/share application money have been brought into the company to meet the financial obligations of the company to the Financial Institutions/Banks.

7. The Company does not have formal internal audit system from the external agency. As per the information and explanations furnished to us by the management the existing internal control procedures covers some of the internal audit aspects.

8. In our opinion and as per the information and explanations given to us, the stock records maintained by the company broadly meet the specifications given by the Central Government U/s.209(1)(d) of the Companies Act, 1956. However, the contents of these accounts and records have not been examined by us in detail.

9. a) The undisputed dues including Provident fund, Employees State Insurance, Income- Tax, Sales-Tax, Excise-Duty, Ceases and other statutory dues have been deposited by the company during the year with the appropriate authorities with delays. Provident Fund dues to the tune of Rs.19.18 Lacs, FBT to the tune of Rs.8.55 Lakhs, Income- Tax to the tune of Rs.22.57 lacs, Tax Deducted at Source to the tune of Rs.7.65 lacs were outstanding as at 31 St March, 2010 for a period of more than 6 months from the date they became payable.

b) We are informed that there are no dues in respect of Sales tax/Customs tax/Excise duty/Cess which have not been deposited on accounts of any disputes.

10. The accumulated losses of the company as on 31.03.2010 amounts to about Rs.875.01 lacs (previous year Rs.990.61 lakhs). The accumulated losses at the end of the financial

year are not less than fifty percent of its net worth. During the year 2009-10 and the immediately preceding financial year the company has not incurred cash losses.

11. During the year the company, prima facie, appear to have not defaulted in repayment of dues to the Financial Institutions/Banks.

12. As per the information and explanations furnished to us, during the year the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. As per the information and explanations furnished to us, the company has not dealt with or traded in shares, securities, debentures or other investments.

14. As per the information and explanations furnished to us, the company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

15. The terms loans were applied for the purpose for which the loans were obtained. However, during the year, the company has not availed any new term loans.

16. The examination of the Financial Statements, prima facie, indicates that some of the short term funds raised by the company appear to have been used for long term purposes.

17. As per the information and explanations furnished to us, during the year the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

18. The company has not raised any funds in the form of debentures.

19. The company has not raised any funds during the year in the form of public issue.

20. According to the information and explanations furnished to us, during the year, there was no fraud on or by the company that has been noticed or reported by the management

21. The company is governed by the Companies Act, 1956 and no other special statute is applicable to the company.

22. The other particulars of (his order are not applicable to the company.

For P.S.N. RAVI SHANKER & ASSOCIATES Chartered Accountants

Place : Hyderabad P. RAVI SHANKER

Date: 27.05.2010 Partner