Notes to Accounts of Everest Organics Ltd.

Mar 31, 2025

C. Provisions. Contingent liabilities and Contingent assets:

A provision is recognized when the Company has a present obligation as a result of past events
and it is probable that an outflow of resources will be required to settle the obligation in respect of
which a reliable estimate can be made. Provisions are not discounted to its present value and are
determined based on best estimate required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Where no reliable estimates can be made, a disclosure is made as a contingent liability. A
disclosure for contingent liability is also made when there may be a possible obligation or a
present obligation but probably will not require an outflow of resources.

Contingent assets are not recognized in financial statements. A contingent asset is disclosed
where an inflow of economic benefits is probable. If it is virtually certain that an inflow of economic
benefits will arise, the assets and related income are recognized in the period in which the change
occurs.

D. Property. Plant and Equipment:

Items of property, plant and equipment are carried at the historical cost of acquisition or
construction or at the consideration paid less accumulated depreciation arrived at taking into
Schedule II of the Companies Act, 2013. The cost of an item of property, plant and equipment
comprises its purchase price, including import duties and non-refundable purchase taxes, after
deducting trade discounts and rebates and any costs directly attributable to bringing the asset to
the location and condition necessary for it to be capable of operating in the manner intended by
management.

Borrowing costs directly attributable to acquisition or construction of items of property, plant and
equipment which necessarily take a substantial period of time to get ready for their intended use
are capitalized. Borrowing costs are interest and other costs incurred by the Company in
connection with the borrowing of funds.

Subsequent expenditure related to an item of property, plant and equipment is capitalized only if it
enhances the future economic benefits arising from the existing assets beyond its previously
assessed standards of performance.

Advances paid towards acquisition of property, plant and equipment outstanding at each balance
sheet date are shown under short-term loans and advances. Cost of assets not ready for intended
use, as on the balance sheet date, is shown as capital work-in-progress. Gains or losses from
disposal of an item of property, plant and equipment are recognized in the statement of profit and
loss.

E. Depreciation:

Depreciation on property, plant and equipment is provided as per useful lives specified in the
Schedule II of the Companies Act, 2013 for the actual period of the usage of the assets on prorate
basis, with Plant & Machinery considered to be coming under the category of “manufacture of
pharmaceuticals and chemicals” in accordance with clauses 1 & 2 of Section 123 of the
Companies Act, 2013.

F. Research & Development Expenditure:

It is the policy of the company to transfer the Research & Development Expenditure on capital
items to assets and depreciation is charged thereon accordingly at the applicable rates and
Revenue expenditure on Research and development is charged off to Profit & Loss in the year in
which it is incurred. The expenditure to be capitalised include the cost of materials and other costs
directly attributable to preparing the asset for its intended use.

Intangible Assets having indefinite life (or) Intangible Assets under development (or) Goodwill
arisen by way of acquisition are tested for impairment annually, or more frequently when there is
an indication that the assets may be impaired. All other intangible assets are tested for impairment
when there are indications that the carrying value may not be recoverable.

G. Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value
(or) An asset that requires compulsory test for impairment every year. An impairment loss is
charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.
The impairment loss recognized in the prior accounting period is reversed if there has been a
change in the estimate of the recoverable amount. In the opinion of the Management, during the
year there is no impairment loss.

H. Inventories:

Raw materials, packing materials, stores, spares, consumables are valued at cost, after providing
for obsolescence. Work-in-process is valued at cost of raw materials and proportionate
overheads. Finished goods are valued at lower of the cost or market value/net realizable value.
Cost includes all charges incurred in relation to the goods. The goods received on account of sales
returns are valued at cost.

Net Realizable Value (NRV) is the estimated selling price in the ordinary course of the business,
less the estimated costs of completion and the estimated costs necessary to make the sale. Cost
of inventories comprises all cost of purchase, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition. The cost of all categories of
inventory is determined using the weighted average cost method.

I. Cash and cash equivalents, Statement of Cash Flow:

Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting
short-term cash commitments rather than for investment or other purposes and are readily
convertible to known amount of cash.

Statement of Cash Flow

Cash flows are inflows and outflows of cash and cash equivalents. Operating activities are the
principal revenue-producing activities of the entity and other activities that are not investing or
financing activities. Investing activities are the acquisition and disposal of long-term assets and
other investments not included in cash equivalents. Financing activities are activities that result in
changes in the size and composition of the contributed equity and borrowings of the entity.

Statement of Cash Flows are reported using indirect method, whereby profit before tax is adjusted
for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and financing activities of the
company are segregated.

J. Foreign Currency Transactions:

Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions.

Transactions of monetary assets and liabilities denominated in foreign currency are translated at
exchange rates in effect on the Balance Sheet date. The gains or losses resulting from such
translations are included in the statement of profit and loss account. Non-monetary assets and
non-monetary liabilities to be denominated in foreign currency and measured at fair value are
translated at the exchange rate prevalent at the date when the fair value was determined. Non¬
monetary assets and non-monetary liabilities to be denominated in foreign currency are measured
at historical cost and are translated at the exchange rate prevalent at the date of transaction.

Revenue, expense, and cash flow items denominated in foreign currencies are translated using
exchange rates in effect on the date of transaction. Transaction gain or loss realized upon
settlements of foreign currency transactions are included in determining net profit for the period in
which the transaction is settled.

K. Employee Benefits:

Short-term employee benefits:

Short-term employee benefits are expensed as the related service is provided. A liability is
recognized for the amount expected to be paid if the Company has a present legal or constructive
obligation to pay this amount because of past service provided by the employee and the obligation
can be estimated reliably.

Defined Contribution Plans:

Contributions to defined contribution retirement benefit schemes are generally recognized as an
expense in the statement of profit & loss account as and when employees have rendered services
entitling them to contributions.

Defined Benefit Plans:

The Company pays gratuity to the employees who have completed five years of service with the
Company at the time of resignation/superannuation. The gratuity is paid @15 days basic salary for
every completed year of service as per the Payment of Gratuity Act, 1972. The gratuity liability
amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the

employees managed by Life Insurance Corporation of India (LIC).

The liability in respect of gratuity and other post-employment benefits are calculated and the said
amount is spread over the period during which the benefit is expected to be derived from
employees’ services. The current service cost of the defined benefit plan, recognized in the
statement of profit and loss under employee benefit expense, reflects the increase in the defined
benefit obligation resulting from employee service in the current year, benefit changes,
curtailments, and settlements. Past service costs are recognized immediately in the statement of
profit and loss. Remeasurement gains and losses arising from adjustments and changes are
recognized in Other Comprehensive Income in the period in which they occur.

Compensated Absences:

The Company’s current policies permit its employees to accumulate and carry forward their
unutilized compensated leaves and utilize them in future periods or receive cash in lieu thereof.
The balance of such earned leaves in excess of 30 days can be encashed by such individual
employee at the year end. The compensation against such encashment is arrived and disbursed
based on the gross salary drawn by such individual employee as at the year end.

Provident Fund:

Contribution to Provident fund (a defined contribution plan) administered through Regional
Provident Fund Commissioner are recognized is charged to profit and loss account in the same
period, as expense.

L. Earnings per Share:

Basic earnings per share are computed by dividing the net profit after tax available to Equity
Shareholders by the weighted average number of equity shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the
weighted average number of equity shares outstanding for the effects of all dilutive potential
ordinary shares.

M. Income Tax Expense:

Income tax expense comprises of current tax and Deferred Tax. Tax is recognized in the Statement
of Profit and Loss, except to the extent that it relates to items recognized in the Other
Comprehensive Income. In this case, the tax is also recognized in Other Comprehensive Income.

(a) Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date in the country where the
Company operates and generates taxable income.

(b) Deferred Tax:

Deferred tax expense or benefit is recognized on temporary timing differences being the
difference between the carrying amounts of assets and liabilities in the financial statements
and corresponding tax bases used in the computation of taxable profit, that originate in one
period and is likely to reverse in one or more subsequent periods. Accordingly, the company
provided for Deferred Tax on 31-03-2025.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will
be available against which the temporary timing difference can be utilized. Deferred tax
liabilities and assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realized, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting period. The carrying value
of deferred tax assets and liabilities are reviewed at each reporting date.

Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.

(c) Indirect taxes:

In the opinion of the Board and to the best of their knowledge and belief, the Company has
properly complied with the provisions of Goods and Service Tax Act, 2017, The Customs Acts,
1962 and any other indirect taxes, to the extent applicable to the Company. The difference, if
any, between the figures as per books of account and the respective returns, have been
reconciled and would be corrected in next periodic returns and in annual returns. The said
differences, if any, do not have any material impact on standalone financial statements.

N. Segment Accounting Policy:

Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker of the Company is responsible
for allocating resources and assessing the performance of the operating segments. The Company
prepares its segment information in conformity with accounting policies adopted for preparing and
presenting the financial statements of the Company as a whole.

O. FINANCIAL INSTRUMENTS:

I. FINANCIAL ASSETS:

1. Initial Recognition and Measurement:

All Financial Assets are initially recognized at fair value. Transaction costs that are directly
attributable to the acquisition or issue of Financial Assets, which are not at Fair Value through
Profit or Loss, are adjusted to the fair value on initial recognition. Purchase and sale of
Financial Assets are recognized using trade date accounting i.e. the date that the Company
commits to purchase or sell the asset.

After initial measurement, such financial assets are subsequently measured at amortised cost
using the effective interest rate (EIR) method. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in Other Income in the profit or loss. The losses
arising from impairment are recognised in the profit or loss.

2. Subsequent Measurement:

- Financial Assets measured at Amortized Cost (AC):

A Financial Asset is measured at Amortized Cost if

• it is held within a business model whose objective is to hold the asset in order to collect
contractual cash flows and

• the contractual terms of the Financial Asset give rise on specified dates to cash flows that
represent solely payments of principal and interest (SPPI) on the principal amount
outstanding.

- Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI):

A Financial Asset is measured at FVTOCI if

• it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling Financial Assets and

• the contractual terms of the Financial Asset give rise on specified dates to cash flows that
represents solely payments of principal and interest (SPPI) on the principal amount
outstanding.

- Financial Assets measured at Fair Value Through Profit or Loss (FVTPL):

A Financial Asset which is not classified in any of the above categories are measured at
FVTPL. Financial assets are reclassified subsequent to their recognition, if the Company
changes its business model for managing those financial assets. Changes in business model
are made and applied prospectively from the reclassification date which is the first day of
immediately next reporting period following the changes in business model in accordance with
principles laid down under Ind AS 109.

- Investment in Subsidiaries, Associates and Joint Ventures:

The Company accounts for its investments in Subsidiaries, associates, and joint venture at
cost less impairment loss (if any). Investments in preference shares with the right of surplus
assets which are in nature equity in accordance with Ind AS 32 would treated as separate
category of investment and measured as at FVTOCI.

- Other Equity Investments:

All other equity investments are measured at fair value, with value changes recognized in the
Statement of Profit and Loss, except for those equity investments for which the Company has
elected to present the value changes in ‘Other Comprehensive Income’. However, dividend on
such equity investments are recognized in Statement of Profit and loss when the Company’s
right to receive payment is established.

- Impairment of Financial Assets:

In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss’ (ECL) model, for
evaluating impairment of Financial Assets other than those measured at Fair Value Through
Profit and Loss (FVTPL). Expected Credit Losses are measured through a loss allowance at
an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default
events on the financial instrument that are possible within 12 months after the reporting date);
or

• Full lifetime expected credit losses (expected credit losses that result from all possible
default events over the life of the financial instrument).

For Trade Receivables the Company applies ‘simplified approach’ which requires expected
lifetime losses to be recognized from initial recognition of the receivables.

The Company uses historical default rates to determine impairment loss on the portfolio of
trade receivables. At every reporting date, these historical default rates are reviewed and
changes in the forward-looking estimates are analyzed.

For other assets, the Company uses 12-month ECL to provide for impairment loss where
there is no significant increase in credit risk. If there is a significant increase in credit risk full
lifetime ECL is used.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognized (i.e. removed from the Company’s balance sheet)
when:

• the rights to receive cash flows from the asset have expired or

• Both (1) the Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a third
party under a “pass-through” arrangement and (2) either (a) the Company has transferred
substantially all the risks and rewards of the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of
the asset.

II. FINANCIAL LIABILITIES:

1. Initial Recognition and Measurement:

All Financial Liabilities are recognized at fair value and in case of borrowings, net of directly
attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit
and Loss as finance cost.

2. Subsequent Measurement:

Financial Liabilities are carried at amortized cost using the effective interest method. For trade
and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short maturity of these instruments.

A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
or other lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying
amounts is to be recognized in the statement of profit or loss.

III. FINANCIAL RISK MANAGEMENT:

The Company’s activities expose it to variety of financial risks: foreign currency risk, interest rate
risk, credit risk, Commodity price risk and liquidity risk. Within the boundaries of approved Risk
Management Policy framework, the Company manages volatility and minimize the adverse impact
on its financial performance.

a) Foreign Currency Risk:

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will
fluctuate because of changes in foreign currency rates. Exposures can arise on account of the
various assets and liabilities which are denominated in currencies other than Indian Rupee.
The fluctuation in foreign currency exchange rates may have potential impact on the
statement of profit or loss, where any transaction references more than one currency or where
assets / liabilities are denominated in a currency other than the functional currency of the
Company. The Company is subject to foreign exchange risk primarily due to its foreign
currency revenues, expenses and borrowings.

b) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will

fluctuate because of change in market interest rates. The Company is not exposed to any
interest rate risk as the interest rates implicit in all the borrowings are fixed in nature.

c) Credit Risk:

Credit risk is the risk that a customer fails to perform or pay the amounts due causing financial
loss to the Company. Credit risk arises from dealing in derivatives receivable from customers
and other financial instruments. The Company maintains that Credit risk is actively managed
through continuous follow-up with the parties and Credit information is regularly shared
between businesses and finance function, with a framework in place to quickly identify,
respond and recognize cases of credit deterioration.

d) Commodity Price Risk:

Commodity price risk arises due to fluctuation in prices of the major imported raw materials
and other products. The company has a risk management framework headed by the
managing director, aimed at prudently managing the risk arising from the volatility in
commodity prices and freight costs.

e) Liquidity Risk:

Liquidity risk arises from the Company’s inability to meet its cash flow commitments on the
due date. The company’s liquidity is managed centrally with all the departments forecasting
their cash and liquidity requirements. Management monitors rolling forecasts of the
Company’s cash flow position to ensure that the Company is able to meet its financial
obligation.

P. The company has been accounting for Sales Commission payable to the sales agents only after
the realization against the credit sales made against sales agency references. Payments against
the same are made after receiving the invoices thereto.

Q. There were occasional delays in making of payments to certain Micro and Small Enterprises, and
as per the provisions of Section 15 of the MSMED Act, 2006. Liability on account of interest under
section 16 of MSMED Act,2006 on such delayed payments amount to Rs.12.47 Lakhs as on
31-03-2025, and this interest has not been provided in the books of account, andconsequently, the
profit for the year is overstated to that extent.

iii). INVESTMENT:

Out of the total investments of Rs.8.45 lakhs, part of the same is represented by the fully paid
Equity Shares of M/s. Pattancheru Envirotech Limited made as contribution for utilizing their
services of common Effluent Treatment Plant set up by the M/s. Pattancheru Envirotech Ltd. to
the tune of Rs.8.15 lakhs (Unquoted 81540 No. of equity shares of Rs.10/- each fully paid up).
Part of the investment is represented by shares of State Bank of India amounting to Rs.0.30
lakhs.

These investments are intended to be held for more than one year and are accordingly classified
as non-current investments. These investments recorded are measured at cost of investment but
not on fair value. Management is in the process of arriving at the fair value and impairment if
any in this regard. The impact of such impairment shall be dealt with upon completion of such
assessment by the management.

vii) . CONTINGENT LIABILITIES NOT PROVIDED FOR:

1) Letters of Credit established by the HDFC Bank Limited on behalf of the Company-
Rs.549.47 lakhs (Previous year - Rs. 495.03 lakhs).

2) Bank Guarantees issued by the HDFC Bank Limited on behalf of the company-Rs.5.00
lakhs. (Previous year- Rs.5.00 lakhs).

viii) . LITIGATIONS:

a) Closure - Revocation Orders of TSPCB:

A closure order was issued by TSPCB to the Company on 22-12-2020, for stoppage of plant
operations. The company has submitted a total compliance report on 30-04-2021 for the
deviations pointed by TSPCB, consequently, the Company has received the final revocation
order on 04-02-2022.

b) Application for Enhancement of Production Capacities:

TSPCB claims that as per its “operating guidelines” the factory of the company situated at
Aroor(V), Sadashivpet (M), Sangareddy(D), comes under the “Pattancheru-Bollaram
Area(P.B.A)” (Stated to be appearing in the list of polluting industries) and the issue is
pending at various forums from Supreme Court(1989), High Court (2013), National Green
Tribunal(2015) on various issues which are agitated by the Bulk Drugs Manufacturing
Association of India (BDMAI) as well as by the company, which is presently in the stage of
constituting the Fact - Finding Committee. Also, the company further challenged its location
status in the P.B.A. Depending on the outcome of order, a liability may arise in future
towards contribution for the “Pattancheru-Bollaram Environment Relief Fund (PBERF)”
(@0.5% of the Annual Turnover from FY 2016-17), which is contingent in nature. As per the
TSPCB guidelines, enhancement of capacities from the existing 147.50 MT P.A to the
current level of operations can be considered only after the deposit of fees of 1% of the
previous year''s Turnover.

The management is of the view that, suitable decision can be made on payment to PBERF,
based on the decisions of the honorable courts.

c) Note on pending Legal Cases :

a) An application has been filed against the Company under Section 9 of the Insolvency
and Bankruptcy Code, 2016 by a Raw Material Supplier before the Hon''ble National
Company Law Tribunal (NCLT), Hyderabad in May 2024, alleging a default of ?239.79
Lakhs including Interest @20% thereon amounting to Rs.9.17 lakhs for the delay in
payment. The Company already repaid Rs.190 Lakhs and is willing to pay only the

balance outstanding towards the supplies, but without interest thereon as demanded.
Management is of the opinion that the company is not required to pay any interest as
there is no agreement to pay interest and accordingly no provision is made for the
interest in the Financial Statements during the FY 2024-25.

b) Two Legal proceedings have been initiated against the Company under Section 138 of
the Negotiable Instruments Act, 1881 by two suppliers for the amounts of Rs.24.10
lakhs and Rs.41.30 lakhs and the matter is pending before the Hon''ble Judicial
Magistrate Court(s). In the opinion of the management no contingent liability is arising
on these matters and these liabilities are already provided in the books of account.
Against these debts the Company had already substantially paid subsequently and the
outstanding balances reduced substantially and will be cleared soon.

The R &D expenditure reduced as compared to previous year, the Company has been incurring
expenditure on development of various new products which take a time period of 3 to 5 year
gestation for realizing commercial benefit there from. The future economic returns of this product
development activity at large is expected to outweigh the expenditure for such development. To
match the future revenues with corresponding development cost the present expenditure for the
product development is capitalized under the category of “Intangible Asset- Product under
Development Expenses” in Balance Sheet.

The expenditure in R&D being intangible in nature, is being amortized on a Straight Line Method,
considering the 5 years Life Cycle Period for the R&D Expenditure, with the FY 2023-25 being
the Third year of such amortization.

days as the credit period negotiated itself fell beyond 45 days and the price agreed also
accommodates the time value of money for the agreed credit period.

The auditors have relied upon the same.

xi). SEGMENT INFORMATION:

a) Primary Segment:

The company operates in only one reportable primary business segment, i.e. Active
Pharmaceutical Ingredients (API) and their intermediaries. This Segment has been identified and
reported considering the nature of products, risk and returns and the internal financial reporting
system of the Company.

b) Secondary Segment:

Based on the revenue attributable to the individual customers located in various parts of the
world, the company''s business is organized into two key geographical segments Viz., Domestic
and Exports.

Segment Revenue and Results, Assets are as under:

(a) Post-employment obligations - Gratuity:(Defined benefit):

i. The Company provides gratuity for employees as per the Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of 5 years are eligible for gratuity benefit.
The amount of gratuity payable on retirement/termination is the employees'' last drawn basic
salary per month computed proportionately for 15 days'' salary multiplied for the number of
completed years of service. The gratuity plan is a funded plan, and the Company makes
contributions, to recognize funds administered by Life Insurance Corporation of India (Insurer), as
per IRDA guidelines. Category-wise composition of the plan assets, actuarial assumptions and
sensitivity analysis thereto is not available with the company as the same are not shared by the
insurer.

The Company has planned to establish a trust to administer its obligation for payment of Gratuity
to employees. However, at present the company contributes to the scheme administered by the
Life Insurance Corporation of India (Insurer). Every year, the insurer carries out a funding
valuation based on the latest employee data provided by the Company. Any deficit in the assets
arising as a result of such a valuation is to be funded by the Company. The company considers
that the contribution rate set at the last valuation date is sufficient to eliminate the deficit over the
agreed period and that regular contributions, which are based on service costs, will not increase
significantly. The company has not changed the process used to manage the risks from previous
years.

(b) Compensated Absences obligations: (Defined benefit):

During the year 2024-25, the Company has provided compensated absences / leave encashment
benefit of Rs.12.33 Lakhs (Previous year of Rs.13.13 Lakhs) total outstanding amounting to
Rs.66.77 lakhs (Previous year Rs.70.88 lakhs) in which the employee rendered the service that
increases entitlement as per the policy. The liability for leave encashment benefit is calculated
based on the 50% basic salary for leaves earned exceeding 30 days.

(c) Employer Contribution to Provident Fund (Defined Contribution Plan):

All the eligible employees of the Company receive benefits from a provident fund, a defined
contribution plan. Both the employee and employer each make monthly contributions to a
government administered fund equal to 12% of the covered employee’s qualifying salary. The
Company as an employer contributed Rs.64.14 Lakhs to the provident fund during the year 2024¬
25 (previous year of Rs.68.04 lakhs). The Company has no further obligations under the plan
beyond its monthly contributions.

(d) Social Security:

The Code of Social Security, 2020 (‘Code’) relating to employee benefits during employment and
post-employment received Presidential assent in September, 2020. The Code has been published
in the Gazette of India. However, the date on which the Code will come into effect has not been fully
notified and the final rules or interpretation have not yet been issued. The Company will assess the
impact of the Code when it comes into effect and will record any related impact in the period in
which the Code becomes effective.

xiii). CORPORATE SOCIAL RESPONSIBILITY (CSR):

Section 135 of the Companies Act, 2013 relating to CSR Activity is not applicable to the Company
for the Financial Year 2024-25 keeping in view of not meeting the criteria of specified level of profits
of the Company.

xv) . TRADE RECEIVABLES:

Judgments are required in assessing the recoverability of overdue trade receivables and
determining whether a provision against those receivables is required. Factors considered include
the credit rating of the counterparty, the amount and timing of anticipated future payments and any
possible actions that can be taken to mitigate the risk of non-payment. The management is making
an effort to recover the receivables including the time value for any delays thereof.

The company has not dealt in any financial instruments other than trade receivables and payables
during the period under report.

xvi) . UNPAID DIVIDENDS:

The balance in the Unpaid Dividend Payable account relating to the financial years 2018-19, 2019¬
20, 2020-21 and 2021-22 as on 31/03/2024 is Rs. 6.34 Lakhs (Includes Interim Dividend), Rs. 6.04
Lakhs, Rs. 9.39 Lakhs (Includes Interim Dividend) and Rs. 3.01 respectively.

xvii) . TAX ASSESSMENTS:

We hereby confirm that during the financial year ended 31-03-2025, the company has not received
any notice of demand from any statutory authority, including the Income Tax Department, Goods
and Services Tax authorities, or any other regulatory body.

xviii) . APPROVAL OF FINANCIAL STATEMENTS:

The financial statements were approved for issue by the Board of Directors on May 28th, 2025.

xix). OTHER STATUTORY INFORMATION:

• Note on Benami properties:

The Company does not have any Benami Property, where any proceedings has been initiated
or pending against for holding any Benami Property under the Benami transactions
(Prohibition) Act, 1988(45 of 1988) and the rules made thereunder.

• Compliance with approved scheme(s) of arrangements:

The company has not entered into any scheme of arrangements which has an accounting
impact on current and previous financial year.

• Details of Crypto Currency or Virtual Currency:

The company has not traded or invested in crypto currency or virtual currency during the
current year or previous year.

• The Company does not have any charges or satisfaction which is yet to be registered with
ROC beyond the statutory period.

• Undisclosed Income:

There is no income surrendered/disclosed as income during Current/previous year in the tax
assessment under the IT Act, 1961, that has not been recorded in the books of accounts.

• Utilization of borrowed funds and share premium:

The company has not advanced or loaned or invested funds to/with any other person(s) or
entity(ies), including foreign entities (Intermediaries) with the understanding that the
Intermediary shall:

a. 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

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries:

The company has not received any fund from any person(s) or entity(ies), including foreign
entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that
the company shall:

a. 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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

• The Company has not been declared willful defaulter by any bank or financial institution or
government or any government authority.

The company borrowed Term Loan exclusively for the purpose of construction of the Factory
buildings and for acquisition of Plant & Machinery. The process of such development and
acquisition of the assets is still going on as on 31-03-2025. The company has capitalized the
entire interest of Rs.112.88 lakhs of such Term Loan to Civil Works in the nature of Factory
Buildings under Construction and Plant and Machinery.

No general loans were used for the development/acquisition of the Capital assets during the
year 2024-25. Hence the disclosure requirement in respect of application of weighted average
rate of interest on the Loan does not apply.

xxii) . Figures have been re-grouped/re-arranged /re-cast wherever necessary, to confirm the current

year classifications.

xxiii) . The balances outstanding on account of sundry debtors/sundry creditors/advances are subject

to confirmation and reconciliation from the respective parties.

As per our Report of even date For and on behalf of the Board of Directors of

for P.S.N RAVISHANKER & ASSOCIATES EVEREST ORGANICS LIMITED

Chartered Accountants
FRN - 003228S

Sd/- Sd/- Sd/-

YADAVILLI SAI KARUNAKAR P.RAMA KRISHNA Dr. S.K. SIRISHA

Partner Chief Financial Officer Managing Director

ICAI M. No.207033 DIN:06921012

Place: Hyderabad, (Sd/_-

Date: 28-05-2025 VENKATA SATYANARAYANA MURTHY VADALI

Director

DIN:01568277

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Mar 31, 2024

C. Provisions, Contingent liabilities and Contingent assets:

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Where no reliable estimates can be made, a disclosure is made as a contingent liability. A disclosure for contingent liability is also made when there may be a possible obligation or a present obligation, but probably will not require an outflow of resources.

Contingent assets are not recognized in financial statements. A contingent asset is disclosed where an inflow of economic benefits is probable. If it is virtually certain that an inflow of economic benefits will arise, the assets and related income are recognized in the period in which the change occurs.

D. Property, Plant and Equipment:

Items of property, plant and equipment are carried at the historical cost of acquisition or construction or at the consideration paid less accumulated depreciation arrived at taking into Schedule II of the Companies Act, 2013. The cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Borrowing costs directly attributable to acquisition or construction of items of property, plant and equipment which necessarily take a substantial period of time to get ready for their intended use are capitalized. Borrowing costs are interest and other costs incurred by the Company in connection with the borrowing of funds.

Subsequent expenditure related to an item of property, plant and equipment is capitalized only if it enhances the future economic benefits arising from the existing assets beyond its previously assessed standards of performance.

Advances paid towards acquisition of property, plant and equipment outstanding at each balance sheet date are shown under short-term loans and advances. Cost of assets not ready for intended use, as on the balance sheet date, is shown as capital work-in-progress. Gains or losses from disposal of an item of property, plant and equipment are recognized in the statement of profit and loss.

E. Depreciation:

Depreciation on property, plant and equipment is provided as per useful lives specified in the Schedule II of the Companies Act, 2013 for the actual period of the usage of the assets on prorate basis, with Plant & Machinery considered to be coming under the category of “manufacture of pharmaceuticals and chemicals” in accordance with clauses 1 & 2 of Section 123 of the Companies Act, 2013.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

F. Research & Development Expenditure:

It is the policy of the company to transfer the Research & Development Expenditure on capital items to assets and depreciation is charged thereon accordingly at the applicable rates and Revenue expenditure on Research and development is charged off to Profit & Loss in the year in which it is incurred. The expenditure to be capitalised include the cost of materials and other costs directly attributable to preparing the asset for its intended use.

Intangible Assets having indefinite life (or) Intangible Assets under development (or) Goodwill arised by way of acquisition are tested for impairment annually, or more frequently when there is an indication that the assets may be impaired. All other intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable.

G. Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value (or) An asset that requires compulsory test for impairment every year. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in the prior accounting period is reversed if there has been a change in the estimate of the recoverable amount. In the opinion of the Management, during the year there is no impairment loss.

H. Inventories:

Raw materials, packing materials, stores, spares, consumables are valued at cost, after providing for obsolescence. Work-in-process is valued at cost of raw materials and proportionate overheads. Finished goods are valued at lower of the cost or market value/net realizable value. Cost includes all charges incurred in relation to the goods. The goods received on account of sales returns are valued at cost.

Net Realizable Value (NRV) is the estimated selling price in the ordinary course of the business, less the estimated costs of completion and the estimated costs necessary to make the sale. Cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of all categories of inventory is determined using the weighted average cost method.

I. Cash and cash equivalents, Statement of Cash Flow:

Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes and are readily convertible to known amount of cash.

Statement of Cash Flow

Cash flows are inflows and outflows of cash and cash equivalents. Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.

Statement of Cash Flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

J. Foreign Currency Transactions:

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.

Transactions of monetary assets and liabilities denominated in foreign currency are translated at

exchange rates in effect on the Balance Sheet date. The gains or losses resulting from such translations are included in the statement of profit and loss account. Non-monetary assets and non-monetary liabilities to be denominated in foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Nonmonetary assets and non-monetary liabilities to be denominated in foreign currency are

measured at historical cost and are translated at the exchange rate prevalent at the date of transaction.

Revenue, expense, and cash flow items denominated in foreign currencies are translated using exchange rate in effect on the date of transaction. Transaction gain or loss realized upon settlements of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

K. Employee Benefits:

Short-term employee benefits:

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined Contribution Plans:

Contributions to defined contribution retirement benefit schemes are generally recognized as an expense in the statement of profit & loss account as and when employees have rendered services entitling them to contributions.

Defined Benefit Plans:

The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972. The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees managed by Life Insurance Corporation of India (LIC).

The liability in respect of gratuity and other post-employment benefits are calculated and the said amount is spread over the period during which the benefit is expected to be derived from employees'' services. The current service cost of the defined benefit plan, recognized in the statement of profit and loss under employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments, and settlements. Past service costs are recognized immediately in the statement of profit and loss. Remeasurement gains and losses arising from adjustments and changes are recognized in Other Comprehensive Income in the period in which they occur.

Compensated Absences:

The Company''s current policies permit its employees to accumulate and carry forward their unutilized compensated leaves and utilize them in future periods or receive cash in lieu thereof. The balance of such earned leaves in excess of 30 days can be encashed by such individual employee at the year end. The compensation against such encashment is arrived and disbursed based on the gross salary drawn by such individual employee as at the year end.

Provident Fund:

Contribution to Provident fund (a defined contribution plan) administered through Regional Provident Fund Commissioner are recognized is charged to profit and loss account in the same period, as expense.

L. Earnings per Share:

Basic earnings per share are computed by dividing the net profit after tax available to Equity

Shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential ordinary shares.

M. Income Tax Expense:

Income tax expense comprises of current tax and Deferred Tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in the Other Comprehensive Income. In this case, the tax is also recognized in Other Comprehensive Income.

(a) Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the country where the Company operates and generates taxable income.

(b) Deferred Tax:

Deferred tax expense or benefit is recognized on temporary timing differences being the difference between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, that originate in one period and is likely to reverse in one or more subsequent periods. Accordingly, the company provided for Deferred Tax on 31-03-2024.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary timing difference can be utilized. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying value of deferred tax assets and liabilities are reviewed at each reporting date.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(c) Indirect taxes:

In the opinion of the Board and to the best of their knowledge and belief, the Company has properly complied with the provisions of Goods and Service Tax Act, 2017, The Customs Acts, 1962 and any other indirect taxes, to the extent applicable to the Company. The difference, if any, between the figures as per books of account and the respective returns, have been reconciled and would be corrected in next periodic returns and in annual returns. The said differences, if any, do not have any material impact on standalone financial statements.

N. Segment Accounting Policy:

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker of the Company is responsible for allocating resources and assessing performance of the operating segments. The Company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

0. FINANCIAL INSTRUMENTS:

1. FINANCIAL ASSETS:

1. Initial Recognition and Measurement:

All Financial Assets are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of Financial Assets, which are not at Fair Value through Profit or Loss, are adjusted to the fair value on initial recognition. Purchase and sale of Financial Assets are recognized using trade date accounting i.e. the date that the Company commits to purchase or sell the asset.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in Other Income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

2. Subsequent Measurement:

-Financial Assets measured at Amortized Cost (AC):

A Financial Asset is measured at Amortized Cost if

• it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and

• the contractual terms of the Financial Asset give rise on specified dates to cash flows that represent solely payments of principal and interest (SPPI) on the principal amount outstanding.

-Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI): A Financial Asset is measured at FVTOCI if

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and

• the contractual terms of the Financial Asset give rise on specified dates to cash flows that represents solely payments of principal and interest (SPPI) on the principal amount outstanding.

-Financial Assets measured at Fair Value Through Profit or Loss (FVTPL):

A Financial Asset which is not classified in any of the above categories are measured at FVTPL. Financial assets are reclassified subsequent to their recognition, if the Company changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date which is the first day of immediately next reporting period following the changes in business model in accordance with principles laid down under Ind AS 109.

-Investment in Subsidiaries, Associates and Joint Ventures:

The Company accounts for its investments in Subsidiaries, associates, and joint venture at cost less impairment loss (if any). Investments in preference shares with the right of surplus assets which are in nature equity in accordance with Ind AS 32 would treated as separate category of investment and measured as at FVTOCI.

-Other Equity Investments:

All other equity investments are measured at fair value, with value changes recognized in the Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''. However, dividend on such equity investments are recognized in Statement of Profit and loss when the Company''s right to receive payment is established.

-Impairment of Financial Assets:

In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of Financial Assets other than those measured at Fair Value Through Profit and Loss (FVTPL). Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).

For Trade Receivables the Company applies ''simplified approach'' which requires expected lifetime losses to be recognized from initial recognition of the receivables.

The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward-looking estimates are analyzed.

For other assets, the Company uses 12-month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is a significant increase in credit risk full lifetime ECL is used.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company''s balance sheet) when:

• the rights to receive cash flows from the asset have expired or

• Both (1) the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement and (2) either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

II. FINANCIAL LIABILITIES:

1. Initial Recognition and Measurement:

All Financial Liabilities are recognized at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.

2. Subsequent Measurement:

Financial Liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same or other lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is to be recognized in the statement of profit or loss.

III. FINANCIAL RISK MANAGEMENT:

The Company''s activities expose it to variety of financial risks: foreign currency risk, interest rate risk, credit risk, Commodity price risk and liquidity risk. Within the boundaries of approved Risk Management Policy framework, the Company manages volatility and minimize the adverse impact on its financial performance.

a) Foreign Currency Risk:

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee. The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the Company. The Company is subject to foreign exchange risk primarily due to its foreign currency revenues, expenses and borrowings.

b) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Company is not exposed to any interest rate risk as the interest rates implicit in all the borrowings are fixed in nature.

c) Credit Risk:

Credit risk is the risk that a customer fails to perform or pay the amounts due causing financial loss to the Company. Credit risk arises from dealing in derivatives receivable from customers and other financial instruments. The Company maintains that Credit risk is actively managed through continuous follow-up with the parties and Credit information is regularly shared between businesses and finance function, with a framework in place to quickly identify, respond and recognize cases of credit deterioration.

d) Commodity Price Risk:

Commodity price risk arises due to fluctuation in prices of the major imported raw materials and other products. The company has a risk management framework headed by the managing director, aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

e) Liquidity Risk:

Liquidity risk arises from the Company''s inability to meet its cash flow commitments on the due date. The company''s liquidity is managed centrally with all the departments forecasting their cash and liquidity requirements. Management monitors rolling forecasts of the Company''s cash flow position to ensure that the Company is able to meet its financial obligation.

c) Securities Offered:

The above sanctioned loans extended by HDFC Bank and Canara Bank are secured by extending first charge by way of equitable mortgage by deposit of Titles Deeds of the Company''s immovable properties of Land admeasuring Ac. 35-20 Guntas Sy.Nos.38, 39, 40 and 45, with Buildings thereon and situated at Aroor Village, Sadasivpet Mandal, Sangareddy District, Telangana State, hypothecation of stocks, receivables and other current assets on pari passu basis between HDFC Bank and Canara Bank, and also by the personal guarantees of promoter directors and mortgage of the personal immovable properties of the promoters-directors.

The Company has not defaulted in payments of principal and interest during the year for the credit limits availed.

ii). INDIRECT TAXES:

During the year, total eligible GST Input available for the company amounted to Rs.2,728.43 lakhs (Previous Year Rs.2,804.42 lakhs).

iii). INVESTMENT:

Out of the total investments of Rs.8.45 lakhs, part of the same is represented by the fully paid Equity Shares of M/s. Pattancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s. Pattancheru Envirotech Ltd. to the tune of Rs.8.15 lakhs (Unquoted 81540 No. of equity shares of Rs.10/- each fully paid up). Part of the investment is represented by shares of State Bank of India amounting to Rs.0.30 lakhs.

These investments are intended to be held for more than one year and are accordingly classified as non-current investments. These investments recorded are measured at cost of investment but not on fair value. Management is in the process of arriving at the fair value and impairment if any in this regard. The impact of such impairment shall be dealt with upon completion of such assessment by the management.

vii) . CONTINGENT LIABILITIES NOT PROVIDED FOR:

1) Letters of Credit established by the HDFC Bank Limited on behalf of the Company-Rs.495.03 lakhs (Previous year - Rs. 485.98 lakhs).

2) Bank Guarantees issued by the HDFC Bank Limited on behalf of the company-Rs.5.00 lakhs. (Previous year- Rs.5.00 lakhs).

viii) . LITIGATIONS:

a) Closure - Revocation Orders of TSPCB:

A closure order was issued by TSPCB to the Company on 22-12-2020, for stoppage of plant operations. The company has submitted a total compliance report on 30-04-2021 for the deviations pointed by TSPCB, consequently, the Company has received the final revocation order on 04-02-2022.

b) Application for Enhancement of Production Capacities:

TSPCB claims that as per its “operating guidelines” the factory of the company situated at Aroor(V), Sadashivpet (M), Sangareddy(D), comes under the “Pattancheru-Bollaram Area(P.B.A)” (Stated to be appearing in the list of polluting industries) and the issue is pending at various forums from Supreme Court(1989), High Court (2013), National Green Tribunal(2015) on various issues which are agitated by the Bulk Drugs Manufacturing Association of India (BDMAI) as well as by the company, which is presently in the stage of constituting the Fact - Finding Committee. Also, the company further challenged its location status in the P.B.A. Depending on the outcome of order, a liability may arise in future towards contribution for the “Pattancheru-Bollaram Environment Relief Fund (PBERF)” (@0.5% of the Annual Turnover from FY 2016-17), which is contingent in nature. As per the TSPCB guidelines, enhancement of capacities from the existing 147.50 MT P.A to the current level of operations can be considered only after the deposit of fees of 1% of the previous year''s Turnover.

xi). SEGMENT INFORMATION:

a) Primary Segment:

The company operates in only one reportable primary business segment, i.e. Active Pharmaceutical Ingredients (API) and their intermediaries. This Segment has been identified and reported considering the nature of products, risk and returns and the internal financial reporting system of the Company.

b) Secondary Segment:

Based on the revenue attributable to the individual customers located in various parts of the world, the company''s business is organized into two key geographical segments Viz., Domestic and Exports.

xii) . EMPLOYEE BENEFITS:

(a) Post-employment obligations - Gratuity:(Defined benefit):

i. The Company provides gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity benefit. The amount of gratuity payable on retirement/termination is the employees'' last drawn basic salary per month computed proportionately for 15 days'' salary multiplied for the number of completed years of service. The gratuity plan is a funded plan, and the Company makes contributions, to recognize funds administered by Life Insurance Corporation of India (Insurer), as per IRDA guidelines. Category-wise composition of the plan assets, actuarial assumptions and sensitivity analysis thereto is not available with the company as the same are not shared by the insurer.

The Company has planned to establish a trust to administer its obligation for payment of Gratuity to employees. However, at present the company contributes to the scheme administered by the Life Insurance Corporation of India (Insurer). Every year, the insurer carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such a valuation is to be funded by the Company. The company considers that the contribution rate set at the last valuation date is sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly. The company has not changed the process used to manage the risks from previous years.

ii. During the year, the company has, 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 Rs.162.17 Lakhs as on 31.03.2024. However as per the valuation obtained from LIC the gratuity liability is coming to Rs.247.03 Lakhs as on 31.03.2024

(b) Compensated Absences obligations: (Defined benefit):

During the year 2023-24, the Company has provided compensated absences / leave encashment benefit of Rs.13.13 Lakhs (Previous year of Rs.20.70 Lakhs) total outstanding amounting to Rs.70.88 lakhs (Previous year Rs. 57.76 lakhs) in which the employee rendered the service that increases entitlement as per the policy. The liability for leave encashment benefit is calculated based on the 50% basic salary for leaves earned exceeding 30 days.

(c) Employer Contribution to Provident Fund (Defined Contribution Plan):

All the eligible employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and employer each make monthly contributions to a government administered fund equal to 12% of the covered employee''s qualifying salary. The Company as an employer contributed Rs.68.04 Lakhs to the provident fund during the year 2023-24 (previous year of Rs.64.88 lakhs). The Company has no further obligations under the plan beyond its monthly contributions.

(d) Social Security:

The Code of Social Security 2020 (''Code'') relating to employee benefits during employment and postemployment received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules or interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period in which the Code becomes effective.

xiii) . CORPORATE SOCIAL RESPONSIBILITY (CSR):

Section 135 of the Companies Act, 2013 relating to CSR Activity is not applicable to the company from

xv). TRADE RECEIVABLES:

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment. The management is making an effort to recover the receivables including the time value for any delays thereof.

The company has not dealt in any financial instruments other than trade receivables and payables during the period under report.

xvi) . UNPAID DIVIDENDS:

The balance in the Unpaid Dividend Payable account relating to the financial years 2018-19, 2019-20, 2020-21 and 2021-22 as on 31/03/2024 is Rs. 6.34 Lakhs (Includes Interim Dividend), Rs. 6.04 Lakhs, Rs. 9.39 Lakhs (Includes Interim Dividend) and Rs. 3.01 respectively.

xvii) . TAX ASSESSMENTS:

The Company received the Notice of demand for Rs.18.29 Lakhs under section 156 of the Income-Tax Act, 1961 on the Company for the Assessment Year 2018-19. Against the said demand consequent to the order U/s.143(3) of the Companies Act, 1961 the Company preferred an appeal before the CIT appeals.

xviii) . APPROVAL OF FINANCIAL STATEMENTS:

The financial statements were approved for issue by the Board of Directors on May 27, 2024.

xix) . CAPITALIZATION OF INTEREST:

The company borrowed Term Loan exclusively for the purpose of construction of the Factory buildings and for acquisition of Plant & Machinery. The process of such development and acquisition of the assets is still going on as on 31-03-2024. The company has capitalized the entire interest of Rs.113.20 lakhs of such Term Loan to Civil Works in the nature of Factory Buildings under Construction and Plant and Machinery, out of which Rs. 1.72 lakhs interest related to Power Generator related to New Building.

No general loans were used for the development/acquisition of the Capital assets during the year 2023-24. Hence the disclosure requirement in respect of application of weighted average rate of interest on the Loan does not apply.

xx) . OTHER STATUTORY INFORMATION:

i. Note on Benami Properties:

The Company does not have any Benami Property, where any proceedings has been initiated or pending against for holding any Benami Property under the Benami transactions (Prohibition) Act, 1988(45 of 1988) and the rules made thereunder.

ii. Compliance with approved scheme(s) of arrangements:

The company has not entered into any scheme of arrangements which has an accounting impact on current and previous financial year.

iii. Details of Crypto Currency or Virtual Currency:

The company has not traded or invested in crypto currency or virtual currency during the current year or previous year.

iv. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

v. Undisclosed Income:

There is no income surrendered/disclosed as income during Current/previous year in the tax assessment under the IT Act, 1961, that has not been recorded in the books of accounts.

vi. Utilization of borrowed funds and share premium:

The company has not advanced or loaned or invested funds to/with any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. 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

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

a. 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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

vii. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

viii. Relationship with struck off companies:

The company is in the continuous process of ascertaining the details as to whether any of the parties with whom the company is dealing, are appearing in the list of companies struck off under section 248 of the Companies Act,2013 or section 560 of the Companies Act, 1956. The details of such ascertainment are as under:

As per our Report of even date For and on behalf of the Board of Directors of

for P.S.N. RAVISHANKER & ASSOCIATES EVEREST ORGANICS LIMITED

Chartered Accountants FRN - 003228S

Sd/- Sd/- Sd/-

(YADAVILLI SAI KARUNAKAR) (P.RAMA KRISHNA) (Dr. S.K. SIRISHA)

Partner Chief Financial Officer Chief Executive Officer

ICAI M. No.207033 DIN:06921012

Sd/- Sd/-

Place: Hyderabad, (ABDUR RAHMAN) (A. PARVATISEM)

Date: 27-05-2024 Company Secretary Technical Director

DIN: 00910224

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Mar 31, 2023

ii) . PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

A provision is recognized if as a result of a past event the company has a present Legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Where no reliable estimates can be made, a disclosure is made as a contingent liability. A disclosure for contingent liability is also made when there may be a possible obligation or a present obligation, but probably will not require an outflow of resources.

Contingent assets are not recognized in financial statements. A contingent asset is disclosed where an inflow of economic benefits is probable. If it is virtually certain that an inflow of economic benefits will arise, the assets and related income are recognized in the period in which the change occurs..

iii) . PROPERTY. PLANT AND EQUIPMENT:

Items of property, plant and equipment are carried at the historical cost of acquisition or construction or at the consideration paid less accumulated depreciation arrived at taking into Schedule II of the Companies Act, 2013. The cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Borrowing costs directly attributable to acquisition or construction of items of property, plant and equipment which necessarily take a substantial period of time to get ready for their intended use are capitalized.

Borrowing costs are interest and other costs incurred by the Company in connection with the borrowing of funds.

Subsequent expenditure related to an item of property, plant and equipment is capitalized only if it enhances the future economic benefits arising from the existing assets beyond its previously assessed standards of performance.

Advances paid towards acquisition of property, plant and equipment outstanding at each balance sheet date are shown under short-term loans and advances. Cost of assets not ready for intended use, as on the balance sheet date, is shown as capital work-in-progress. Gains or losses from disposal of an item of property, plant and equipment are recognized in the statement of profit and loss.

iv). DEPRECIATION:

Depreciation on fixed assets is provided as per useful lives specified in the Schedule II of the Companies Act, 2013 for the actual period of the usage of the assets on prorate basis, with Plant & Machinery considered to be coming under the category of “manufacture of pharmaceuticals and chemicals” in accordance with clauses 1 & 2 of Section 123 of the Companies Act, 2013.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

During the year the company installed the 1 MW Solar Power Generating equipment. As per the Schedule-II to the Companies Act, 2013 the life of such equipment is stated to be 40 years. However, the supplier of the equipment has given the warranty for the period of 25 years only. Accordingly, the life of the asset is considered as 25 years for the purposes of calculation of Depreciation under the Companies Act, 2013.

v) . INVENTORIES:

Raw materials, packing materials, stores, spares, consumables are valued at cost, after providing for obsolescence. Work-in-process is valued at cost of raw materials and proportionate overheads. Finished goods are valued at lower of the cost or market value/net realizable value. Cost includes all charges incurred in relation to the goods. The goods received on account of sales returns are valued at cost.

Net Realizable Value (NRV) is the estimated selling price in the ordinary course of the business, less the estimated costs of completion and the estimated costs necessary to make the sale. Cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of all categories of inventory is determined using the weighted average cost method..

vi) . CASH AND CASH EQUIVALENTS, STATEMENT OF CASH FLOW:

Cash and Cash Equivalents

CCash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting shortterm cash commitments rather than for investment or other purposes and which are readily convertible to known amount of cash.

Statement of Cash Flow

Cash flows are inflows and outflows of cash and cash equivalents. Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.

Statement of Cash Flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

vii) . RESEARCH & DEVELOPMENT EXPENDITURE:

It is the policy of the company to transfer the Research & Development Expenditure on capital items to assets and depreciation is charged thereon accordingly at the applicable rates and Revenue expenditure on Research and development is charged off to Profit & Loss in the year in which it is incurred.

viii) . FOREIGN CURRENCY TRANSACTIONS:

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.

Transactions of monetary assets and liabilities denominated in foreign currency are translated at exchange rates in effect on the Balance Sheet date. The gains or losses resulting from such translations are included in the statement of profit and loss account. Non-monetary assets and nonmonetary liabilities to be denominated in foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities to be denominated in foreign currency are measured at historical cost and are translated at the exchange rate prevalent at the date of transaction.

Revenue, expense, and cash flow items denominated in foreign currencies are translated using exchange rate in effect on the date of transaction. Transaction gain or loss realized upon settlements of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.

ix) . EMPLOYEE BENEFITS:

Short-term employee benefits:

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined Contribution Plans:

Contributions to defined contribution retirement benefit schemes are generally recognized as an expense in the statement of profit & loss account as and when employees have rendered services entitling them to contributions.

Defined Benefit Plans:

The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972. The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees managed by Life Insurance Corporation of India (LIC).

The liability in respect of gratuity and other post-employment benefits are calculated and the said amount is spread over the period during which the benefit is expected to be derived from employees'' services. The current service cost of the defined benefit plan, recognized in the statement of profit and loss under employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments, and settlements. Past service costs are recognized immediately in the statement of profit and loss. Remeasurement gains and losses arising from adjustments and changes are recognized in Other Comprehensive Income in the period in which they occur.

Compensated Absences:

The Company''s current policies permit its employees to accumulate and carry forward their unutilized compensated leaves and utilize them in future periods or receive cash in lieu thereof. The balance of such earned leaves in excess of 30 days can be encashed by such individual employee at the year end. The compensation against such encashment is arrived and disbursed based on the gross salary drawn by such individual employee as at the year end.

Provident Fund:

Contribution to Provident fund (a defined contribution plan) administered through Regional Provident Fund Commissioner are recognized is charged to profit and loss account in the same period, as expense.

x) . EARNINGS PER SHARE:

Basic earnings per share are computed by dividing the net profit after tax available to Equity Shareholders by the weighted average number of equity shares outstanding during the period.

xi) . INCOME TAX EXPENSE:

Income tax expense comprises of current tax and Deferred Tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in the Other Comprehensive Income. In which case, the tax is also recognized in Other Comprehensive Income.

(a) Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the country where the Company operates and generates taxable income.

(b) Deferred Tax:

Deferred tax expense or benefit is recognized on temporary timing differences being the difference between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit, that originate in one period and is likely to reverse in one or more subsequent periods. Accordingly, the company provided for Deferred Tax on 31-03-2023.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary timing difference can be utilized. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying value of deferred tax assets and liabilities are reviewed at each reporting date.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(c) Indirect taxes:

In the opinion of the Board and to the best of their knowledge and belief, the Company has properly complied with the provisions of Goods and Service Tax Act, 2017, The Customs Acts, 1962 and any other indirect taxes, to the extent applicable to the Company. The difference, if any, between the figures as per books of account and the respective returns, have been reconciled and would be corrected in next periodic returns and in annual returns. The said differences, if any, do not have any material impact on standalone financial statements.

xii) . IMPAIRMENT OF ASSETS:

The Company assesses, from year to year, whether there is any indication that an asset is impaired. However, in the opinion of the management, there has been no impairment loss during the year.

xiii) . SEGMENT ACCOUNTING POLICY:

The Company prepares its segment information in conformity with accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

xiv) . FINANCIAL INSTRUMENTS: a. Financial Assets:

1. Initial Recognition and Measurement:

All Financial Assets are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of Financial Assets, which are not at Fair Value through Profit or Loss, are adjusted to the fair value on initial recognition. Purchase and sale of Financial Assets are recognized using trade date accounting i.e. the date that the Company commits to purchase or sell the asset.

2. Subsequent Measurement:

- Financial Assets measured at Amortized Cost (AC):

A Financial Asset is measured at Amortized Cost if

• it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and

• the contractual terms of the Financial Asset give rise on specified dates to cash flows that represent solely payments of principal and interest on the principal amount outstanding.

- Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI):

A Financial Asset is measured at FVTOCI if

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and

• the contractual terms of the Financial Asset give rise on specified dates to cash flows that represents solely payments of principal and interest on the principal amount outstanding.

- Financial Assets measured at Fair Value Through Profit or Loss (FVTPL):

A Financial Asset which is not classified in any of the above categories are measured at FVTPL. Financial assets are reclassified subsequent to their recognition, if the Company changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date which is the first day of immediately next reporting period following the changes in business model in accordance with principles laid down under Ind AS 109

- Investment in Subsidiaries, Associates and Joint Ventures:

The Company accounts for its investments in Subsidiaries, associates, and joint venture at cost less impairment loss (if any). Investments in preference shares with the right of surplus assets which are in nature equity in accordance with Ind AS 32 would treated as separate category of investment and measured as at FVTOCI.

- Other Equity Investments:

All other equity investments are measured at fair value, with value changes recognized in the Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ''Other Comprehensive Income''. However, dividend on such equity investments are recognized in Statement of Profit and loss when the Company''s

right to receive payment is established.

- Impairment of Financial Assets:

In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of Financial Assets other than those measured at Fair Value Through Profit and Loss (FVTPL). Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).

For Trade Receivables the Company applies ''simplified approach'' which requires expected lifetime losses to be recognized from initial recognition of the receivables.

The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date, these historical default rates are reviewed and changes in the forward-looking estimates are analyzed.

For other assets, the Company uses 12-month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is a significant increase in credit risk full lifetime ECL is used.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company''s balance sheet) when:

• the rights to receive cash flows from the asset have expired or

• Both (1) the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement and (2) either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

b. Financial Liabilities:

1. Initial Recognition and Measurement:

All Financial Liabilities are recognized at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.

2. Subsequent Measurement:

Financial Liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same or other lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is to be recognized in the statement of profit or loss.

xv). FINANCIAL RISK MANAGEMENT:

The Company''s activities expose it to variety of financial risks: foreign currency risk, interest rate risk,

credit risk, Commodity price risk and liquidity risk. Within the boundaries of approved Risk Management Policy framework, the Company manages volatility and minimize the adverse impact on its financial performance.

a) Foreign Currency Risk:

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee.

b) Interest Rate Risk:

The Company is not exposed to any interest rate risk as the interest rates implicit in all the borrowings are fixed in nature.

c) Credit Risk:

Credit risk is the risk that a customer fails to perform or pay the amounts due causing financial loss to the Company. Credit risk arises from dealing in derivatives receivable from customers and other financial instruments. The Company maintains that Credit risk is actively managed through continuous follow-up with the parties and Credit information is regularly shared between businesses and finance function, with a framework in place to quickly identify, respond and recognize cases of credit deterioration.

d) Commodity Price Risk:

Commodity price risk arises due to fluctuation in prices of the major imported raw materials and other products. The company has a risk management framework headed by the managing director, aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

e) Liquidity Risk:

Liquidity risk arises from the Company''s inability to meet its cash flow commitments on the due date. The company''s liquidity is managed centrally with all the departments forecasting their cash and liquidity requirements. Management monitors rolling forecasts of the Company''s cash flow position to ensure that the Company is able to meet its financial obligation

c) Securities Offered:

The above sanctioned loans extended by HDFC Bank and Canara Bank are secured by extending first charge by way of equitable mortgage by deposit of Titles Deeds of the Company''s immovable properties of Land admeasuring Ac. 35-20 Guntas Sy.Nos.38, 39, 40 and 45, with Buildings thereon and situated at Aroor Village, Sadasivpet Mandal, Sangareddy District, Telangana State, hypothecation of stocks, receivables and other current assets on pari passu basis between HDFC Bank and Canara Bank, and also by the personal guarantees of promoter directors and mortgage of the personal immovable properties of the promoters-directors.

The Company has not defaulted in payments of principal and interest during the year for the credit limits availed.

ii) . PROPERTY, PLANT AND EQUIPMENT:

During the year under report, the company has capitalized and made additions to Property, Plant and Equipment to the extent of Rs.997.49 Lakhs (Previous Year Rs.920.00 Lakhs), out of which Rs. 968.27 lakhs have been capitalized from Capital Work-in-Progress to Property, Plant and Equipment.

iii) . INDIRECT TAXES:

During the year, total eligible GST Input available for the company amounted to Rs.2,804.42 lakhs (Previous Year Rs.3,075.32 lakhs).

iv) . INVESTMENT:

Out of the total investments of Rs.8.45 lakhs, part of the same is represented by the fully paid Equity Shares of M/s. Pattancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s. Pattancheru Envirotech Ltd. to the tune of Rs.8.15 lakhs (Unquoted 81540 No. of equity shares of Rs.10/- each fully paid up). Part of the investment is represented by shares of State Bank of India amounting to Rs.0.30 lakhs.

These investments are intended to be held for more than one year and are accordingly classified as non-current investments. These investments recorded are measured at cost of investment but not on fair value. Management is in the process of arriving at the fair value and impairment if any in this regard. The impact of such impairment shall be dealt with upon completion of such assessment by the management.

v) . CASH AND CASH EQUIVALENTS:

Other Cash and Cash Equivalents totally amounting to Rs.82.88 Lakhs comprises of cash in hand of Rs.1.23 lakhs, Cash at Bank in Current Accounts of Rs.26.25 lakhs, Fixed Deposits (held under lien with the banks in the form of Fixed Deposits) amounting to Rs.55.40 lakhs. There are no cash and cash equivalent balances held by the entity that are not available for use by the company.

xvi). EMPLOYEE BENEFITS:

(a) Post-Employment Obligations Gratuity:(Defined benefit):

i. The Company provides gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity benefit. The amount of gratuity payable on retirement/termination is the employees'' last drawn basic salary per month computed proportionately for 15 days'' salary multiplied for the number of completed years of service. The gratuity plan is a funded plan, and the Company makes contributions, to recognize funds administered by Life Insurance Corporation of India (Insurer), as per IRDA guidelines. Category-wise composition of the plan assets, actuarial assumptions and sensitivity analysis thereto is not available with the company as the same are not shared by the insurer.

The Company has planned to establish a trust to administer its obligation for payment of Gratuity to employees. However, at present the company contributes to the scheme administered by the Life Insurance Corporation of India (Insurer). Every year, the insurer carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such a valuation is to be funded by the Company. The company considers that the contribution rate set at the last valuation date is sufficient to eliminate the deficit over the agreed period and that regular contributions, which

are based on service costs, will not increase significantly. The company has not changed the process used to manage the risks from previous years.

ii. During the year, the company has provided Rs.43.75 Lakhs for payment of Gratuity. However, as at 31st March 2023, the company has deposited Rs.159.43 lakhs against the total outstanding amount of Rs.163.08 lakhs as a part of such contribution towards gratuity liability. The Company has made all the outstanding liability as on 31-03-2023. The provision in this regard, is as per the assessment of the management, but not as per the actuarial valuation as required under the Indian Accounting Standard on Employee Benefits. The amount deposited was shown under Non-Current Asset as “Gratuity Fund Deposit” and the liability was shown under Non-Current Liabilities as “Funded Gratuity Liability”.

(b) Compensated Absences obligations: (Defined benefit):

During the year 2022-23, the Company has provided compensated absences / leave encashment benefit of Rs.22.84 Lakhs (Previous year of Rs.16.85 Lakhs) total outstanding amounting to Rs. 57.76 lakhs (Previous year Rs. 37.05 lakhs) in which the employee rendered the service that increases entitlement as per the policy. The liability for leave encashment benefit is calculated based on the 50% basic salary for leaves earned exceeding 30 days.

(c) Employer Contribution to Provident Fund (Defined Contribution Plan):

All the eligible employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and employer each make monthly contributions to a government administered fund equal to 12% of the covered employee''s qualifying salary. The Company as an employer contributed Rs.64.88 Lakhs to the provident fund during the year 2022-23 (previous year of Rs.59.90 lakhs). The Company has no further obligations under the plan beyond its monthly contributions.

(d) Social Security:

The Code of Social Security 2020 (''Code'') relating to employee benefits during employment and post-employment received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules or interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period in which the Code becomes effective.

xvii). CORPORATE SOCIAL RESPONSIBILITY (CSR):

Section 135 of the Companies Act, 2013 relating to CSR Activity is applicable to the company from

the Financial Year 2018-19. The minimum CSR amount required to be spent by the Company, as per

Section 135 of the Companies Act, 2013 read with Schedule VII thereof during the year is as follows:

xix) . TRADE RECEIVABLES/PAYABLES:

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment. The management is making an effort to recover the receivables including the time value for any delays thereof.

The company has not dealt in any financial instruments other than trade receivables and payables during the period under report.

xx) . EVENTS AFTER THE REPORTING PERIOD:

a) The Board of Directors have not recommended any dividend for the financial year 2022-23.

xxi) . UNPAID DIVIDENDS:

The balance in the Unpaid Dividend Payable account relating to the financial year 2018-19, 2019-20, 2020-21 and 2021-22 as on 31/03/2023 is Rs. 6.34 Lakhs (Includes Interim Dividend), Rs. 6.04 Lakhs, Rs. 9.39 Lakhs (Includes Interim Dividend) and Rs. 3.11 respectively.

xxii) . TAX ASSESSMENTS:

During the year the Company received the Notice of demand for Rs.18.29 Lakhs under section 156 of the Income-Tax Act, 1961 on the Company for the Assessment Year 2018-19. Against the said demand consequent to the order U/s.143(3) of the Companies Act, 1961 the Company preferred an appeal before the CIT appeals.

xxiii) . APPROVAL OF FINANCIAL STATEMENTS:

The financial statements were approved for issue by the Board of Directors on May 27, 2023.

xxiv) . STRUCK OFF COMPANIES UNDER COMPANIES ACT:

The Company is in the continuous process of ascertaining the details as to whether any of the parties with whom the company is dealing, are appearing in the list of companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956. The details of such ascertainment are as under:

xxv) . CAPITALIZATION OF INTEREST:

The company borrowed Term Loan exclusively for the purpose of construction of the Factory buildings and for acquisition of Plant & Machinery. The process of such development and acquisition of the assets is still going on as on 31-03-2023. The company has capitalized the entire interest of Rs.95.05lakhs of such Term Loan to Civil Works in the nature of Factory Buildings under Construction, out of which Rs. 4.45 lakhs interest related to Solar Power Generating System it was put to use in the Month of January 2023.

No general loans were used for the development/acquisition of the Capital assets during the year 2022-23. Hence the disclosure requirement in respect of application of weighted average rate of interest on the Loan does not apply.

xxvi) . Paise have been rounded off to the nearest rupee.

xxvii) . Figures have been re-grouped/re-arranged /re-cast wherever necessary, to confirm to the current year classifications

xxviii) . The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation and reconciliation from the respective parties.

As per our Report of even date For and on behalf of the Board of Directors of

for P.S.N. RAVISHANKER & ASSOCIATES EVEREST ORGANICS LIMITED

Chartered Accountants FRN - 003228S

Sd/- Sd/- Sd/-

(YADAVILLI SAI KARUNAKAR) (P.RAMA KRISHNA) (Dr. S.K. SIRISHA)

Partner Chief Financial Officer Chief Executive Officer

ICAI M. No.207033 DIN:06921012

Sd/- Sd/-

Place: Hyderabad, (REKHA SINGH) (A. PARVATISEM)

Date: 27-05-2023 Company Secretary Technical Director

DIN: 00910224

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Mar 31, 2018

1. (i)The Secured Loans from Kotak Mahindra Bank with total credit limits of Rs.2402 lakhs (Fund Based: Rs.1842 lakhs & Non-Fund Based : Rs.560 lakhs) (Note Nos.12 and 14) are secured by the first and exclusive charge by way of equitable mortgage by deposit of Titles Deeds of the Company’s immovable properties of Land admeasuring Ac. 35-20 Guntas Sy.Nos.38, 39, 40 and 45, with Buildings thereon in situated at Aroor Village, Sadasivpet Mandal, Sangareddy District, Telangana State, hypothecation of stocks, receivables and other current assets, and also by the personal guarantees of promoter directors and mortgage of the personal immovable properties of the promoters, directors.

(ii) Secured Loans of Rs.213.18 lakhs from Reliance Capital are secured by the hypothecation of the equipment acquired out of the term loan given by them and also the personal guarantees of two of the promoter directors.

2. The total GST Input available on Raw Materials for the year amounting to Rs.1370.55 lakhs (previous CENVAT available on Raw Materials of Rs. 1014.89 lakhs) has been shown under the “Current Assets” in the Balance Sheet.

3. Investment:

Of the total investments of Rs.8.45 lakhs part of the same is represented by the fully paid Equity Shares of M/s.Patancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s. Patancheru Envirotech Ltd. to the tune of Rs.8.15 lakhs (Unquoted 81540 No. of equity shares of Rs.10/- each fully paid up-Market value as on 31.03.2017 & 31.03.2016 are not available and part of the investment is represented by shares of State Bank of Travancore(SBT) amounting to Rs.0.30 lakhs) [50 shares of Rs.10 each fully paid up and the same are valued at cost. Market value being Rs.607 per share (last traded price on 15-032017), pending receipt of shares of State Bank of India(SBI), post merger of SBT with SBI].

These investments are intended to be held for more than one year and are accordingly classified as non-current investments.

4. Other Cash and Cash Equivalents comprising of cash in hand of Rs.1.10 lakhs, Cash at Bank in Current Accounts of Rs.35.95 lakhs, Fixed Deposits (held under lien with the banks in the form of Fixed Deposits) amounting to Rs 89.93 lakhs with maturity of more than 12 months as on 31-032018.

5. Contingent Liabilities not provided for:

1) Letters of Credit established by the Kotak Mahindra Bank on behalf of the Company Rs. 527.60 lakhs (Previous year Rs. 454.51 lakhs).

2) Bank Guarantees issued by the Kotak Mahindra Bank on behalf of the company Rs.6.50 lakhs. (Previous year- Rs.5.00 lakhs)

6. Fire Accident and Insurance Claim thereon:

During the year the company received the claim amount of Rs.87.05 Lakhs against the fire accidents occurred in prior years, the loss of which was already recorded under the Statement of Profit and Loss in earlier years. Hence, the claim amounts received during the year were entirely taken to the statement of profit and loss.

7. Litigations:

The company simultaneously applied to the Environmental Engineer, TS Pollution Control Board (TSPCB) for the renewal of Consent for Operations (CFO) for a period from FY 2017-18 to FY 202122 and paid the necessary fees for the same. The grant of approval of CFO in this regard is approved from the TSPCB. The necessary fees for CFO was already paid by the company till 3103-2022.

The Company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the company’s results or operations or financial condition.

8. Amount due to small scale industrial undertaking during the year ended 31.03.2018 could not be identified as specific information regarding SSI status is not forthcoming from parties.

7. The company deals in Bulk Drugs, APIs, and thus is treated as dealing in only one segment and hence the information pertaining to the Segmental Reporting is not applicable to the Company.

8. Paise have been rounded off to the nearest rupee.

9. Figures have been re-grouped/re-arranged wherever necessary.

10. The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

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Mar 31, 2013

1. In view of the substantial carried forward losses and unabsorbed depreciation no deferred tax asset has been recognized as provided in the Accounting Standard on Taxes on Income, on a conservative principle.

2. The Secured Loans from Kotak Mahindra Bank (Schedule-C) are secured by the first charge by way of equitable mortgage by deposit of Titles Deeds of the Company''s immovable properties of Land & Buildings admeasuring 32 Acres in Sy.No.38,39 & 40 situated at Aroor Village, Sadasivpet Mandal, Medak District, both present and future and Hypothecation/pledge of Company''s movable properties both present and future, hypothecation of stocks, receivables and other current assets, and also by the personal guarantees of promoter directors and mortgage of the personal immovable properties of the promoter directors.

3. The total CENVAT available on Raw Materials for the year amounting to Rs.725.01 Lacs (previous year Rs.511.70 lacs) has been adjusted in the cost of raw materials and the unavailed CENVAT credit on account of Service Tax, CENVAT on Capital goods, PLA Balances amounting Rs.26.25 lacs (previous year Rs. 12.17 lacs) has been shown under the "Current Assets" in the Balance Sheet.

4. Investment

Investment of Rs.8.45 lacs represents fully paid Equity Shares of M/s.Patancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s. Patancheru Envirotech Ltd. to the tune of Rs.8.15 lacs and shares in the State Bank of Travancore amounting to Rs.0.30 lacs and the same are valued at cost.

5. Contingent Liabilities not provided for:

1) Letters of Credit established by the Kotak Mahindra Bank on behalf of the Company Rs.367.13 lacs (Previous year – Rs.432.42 Lacs).

2) Bank Guarantees issued by the Kotak Mahindra Bank on behalf of the company Rs.10 Lacs. (Previous year- Rs.10 lakhs)

6. Amount due to small scale industrial undertaking during the year ended 31.03.2013 could not be identified as specific information regarding SSI status is not forthcoming from parties.

7. The company deals in Bulk Drugs, APIs, and thus is treated as dealing in only one segment and hence the information pertaining to the Segmental Reporting is not applicable to the Company.

8. Paise have been rounded off to the nearest rupee.

9. Figures have been re-grouped/re-arranged wherever necessary.

10. The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

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Mar 31, 2012

A. Share Capital

Note 1:

a) There are no shares issued in last five years as fully paid up pursuant to contracts without payment being received in cash.

b) There are no shares issued in last five years as fully paid up by way of bonus shares.

c) There are no shares bought back in last five years.

d) There are no calls unpaid.

e) 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, which has been shown partly under Share Application Money and partly under Other Current Liabilities.

B. Long-Term Borrowings

Note:

1. The Term Loans D(a) 1, 2 & 3 above are secured by the first charge by way of equitable mortgage by deposit of Titles Deeds of the Company's immovable properties of Land & Buildings admeasuring 32 Acres in Sy. No. 38, 39, 40 situated at Aroor Village, Sadasivpet Mandal, Medak District, both present and future and Hypothecation/pledge of Company's movable properties both present and future, hypothecation of stocks, receivables and other current assets, and also by the personal guarantees of promoter directors, mortgage of the personal immovable property of the promoters mortgage of the personal immovable properties of the promoter directors.

2. There is no default in repayment of principal of term loan or interest thereon from Kotak Mahindra Bank Ltd., stated above.

C. Other Current Liabilities

Note:

1. There is no default in repayment of principal of term loan or interest thereon.

2. 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 delays. Out of the Statutory dues Provident Fund dues to the tune of Rs. 8.16 Lakhs (previous year -NIL-), FBT to the tune of Rs. 8.55 Lakhs, Income-Tax to the tune of Rs. 19.49 lakhs (previous year Rs. 22.57 Lakhs), Tax Deducted at Source to the tune of Rs. 12.90 lakhs (previous year Rs. 6.77 Lakhs) were outstanding as at 31st March, 2012 for a period of more than 6 months from the date they became payable.

3. In view of the substantial carried forward losses and unabsorbed depreciation no deferred tax asset has been recognized as provided in the Accounting Standard on Taxes on Income, on a conservative principal.

4. The Secured Loans from Kotak Mahindra Bank (Schedule C) are secured by the first charge by way of equitable mortgage by deposit of Titles Deeds of the Company's immovable properties of Land & Buildings admeasuring 32 Acres in Sy.No.38,39 & 40 situated at Aroor Village, Sadasivpet Mandal, Medak District, both present and future and Hypothecation/pledge of Company's movable properties both present and future, hypothecation of stocks, receivables and other current assets, and. also by the personal guarantees of promoter directors mortgage of the personal immovable properties of the promoter directors.

5. The total CENVAT available on Raw Materials amounting to Rs. 511.70 Lacs (previous year Rs. 434.25 lacs) has been adjusted in the cost of raw materials and the unavailed CENVAT credit amounting Rs. 12.03 lacs (previous year Rs. 25.36 lacs) has been shown in the "Current Assets" in the Balance Sheet.

6. Investment

Investment of Rs. 8.45 lacs represents fully paid Equity Shares of M/s. Pattancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s. Pattancheru Envirotech Ltd. to the tune of Rs. 8.15 lacs and shares in the State Bank of Travancore amounting to Rs. 0.30 lacs and the same are valued at cost.

7. Contingent Liabilities not provided for:

a) Letters of Credit established by the Kotak Mahindra Bank on behalf of the Company Rs. 432.42 Lakhs.

b) Bank Guarantees issued by the Kotak Mahindra Bank in favour of Pollution Control Board for Rs. 10.00 Lakhs.

8. Amount due to small scale industrial undertaking during the year ended 31.03.2012 could not be identified as specific information regarding SSI status is not forthcoming from parties.

9. The company deals in Bulk Drugs, APIs, and-thus is treated as dealing in only one segment and hence the information pertaining to the Segmental Reporting is not applicable to the Company.

10. Paise have been rounded off to the nearest rupee.

11. Figures have been re-grouped/re-arranged wherever necessary.

12. The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

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Mar 31, 2011

1. In view of the substantial carried forward losses and unabsorbed depreciation no deferred tax asset liability has been recognized as provided in the Accounting Standard on Taxes on Income, on a conservative principal.

2. The Secured Loans from Kotak Mahindra Bank (Schedule C) are secured by the first charge by way of equitable mortgage by deposit of Titles Deeds of the Company's immovable properties situated at Aroor Village, Sadasivpet Mandal, Medak District, both present and future and Hypothecation/pledge of Company's movable properties both present and future and the working capital limits are secured by the hypothecation of stocks, receivables and other current assets, besides charge on the fixed assets and also by the personal guarantees of promoter directors.

3. The total CENVAT available on Raw Materials amounting to Rs.434.25 Lacs (previous year Rs.281.64 lacs) has been adjusted in the cost of raw materials and the unavailed CENVAT credit amounting Rs.25.36 lacs (previous year Rs.6.27 lacs) has been shown in the "Current Assets" in the Balance Sheet.

4. Investment

Investment of Rs.8.45 lacs represents fully paid Equity Shares of M/s.Pattancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s.Pattancheru Envirotech Ltd. to the tune of Rs.8.15 lacs and shares in the State Bank of Travancore amounting to Rs.0.30 lacs and the same are valued at cost.

5. Contingent Liabilities not provided for – Letters of Credit established by the Kotak Mahindra Bank on behalf of the Company Rs.432.42 Lakhs.

6. Amount due to small scale industrial undertaking during the year ended 31.03.2011 could not be identified as specific information regarding SSI status is not forthcoming from parties.

7. The company deals in Bulk Drugs, APIs, and thus is treated as dealing in only one segment and hence the information pertaining to the Segmental Reporting is not applicable to the Company.

8. Paise have been rounded off to the nearest rupee.

9. Figures have been re-grouped/re-arranged wherever necessary.

10. The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.

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Mar 31, 2010

1. In view of the substantial carried forward losses and unabsorbed depreciation no deferred tax asset has been recognized as provided in the Accounting Standard on Taxes on Income, on a conservative principal.

2. The Secured Loans from Kotak Mahindra Bank (Schedule C) are secured by the first charge by way of equitable mortgage by deposit of Titles Deeds of the Companys immovable properties sitaated at Aroor Village, Sadasivpet Mandal, Medak District, both present and future and Hypothecation/pledge of Companys movable properties both present and future and also by the personal guarantees of prompter directors.

3. The total CEN VAT available on Raw Materials amounting to Rs.281.64 Lacs (previous year Rs. 182.42 lacs) has been adjusted in the cost of raw materials and the unavailed CENVAT credit amoin:ing Rs.6.27 lacs (previous year Rs.6.00 lacs) has been shown in the "Current Assets" in the Balance Sheet.

4. Investment

Investment of Rs.8.45 lacs represents fully paid Equity Shares of M/s.Pattancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s.Pattancheru Envirotech Ltd. to the tune of Rs.8.15 lacs and shares in the State Bank of Travancore amounting to Rs.0.30 lacs and the same are valued at cost.

05. Contingent Liabilities not provided for:-NIL -

6. Amount due to small scale industrial undertaking during the year ended 31.03.2010 could not be identified as specific information regarding SSI status is not forthcoming from parties.

7. The company deals in Bulk Drugs, APIs, and thus deals in only one segment and hence the information pertaining to the Segmental Reporting is not applicable to the Company.

8. Paise have been rounded off to the nearest rupee.

9. Figures have been re-grouped/re-arranged wherever necessary.

10. The balances outstanding on account of sundry debtors/sundry creditors/advances are subject to confirmation from the respective parties.