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Everest Organics Ltd.

BSE: 524790 Sector: Health care
NSE: N.A. ISIN Code: INE334C01029
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OPEN 161.90
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VOLUME 7695
52-Week high 168.75
52-Week low 44.45
P/E 62.22
Mkt Cap.(Rs cr) 121
Buy Price 0.00
Buy Qty 0.00
Sell Price 151.20
Sell Qty 157.00
OPEN 161.90
CLOSE 159.15
VOLUME 7695
52-Week high 168.75
52-Week low 44.45
P/E 62.22
Mkt Cap.(Rs cr) 121
Buy Price 0.00
Buy Qty 0.00
Sell Price 151.20
Sell Qty 157.00

Everest Organics Ltd. (EVERESTORGANICS) - Director Report

Company director report

To

The Members

Everest Organics Limited CIN : L24230TG1993015426

Your Directors have pleasure in presenting the 24th Annual Report of the Companytogether with the Audited Statement of Accounts for the year ended 31st March 2017.

1. FINANCIAL STATEMENTS & RESULTS:

a. Financial Results

The Company's performance during the year ended 31st March 2017 as compared to theprevious financial year is summarized below:

Amount in Rs.

Particulars For the Financial Year For the Financial Year
Ended 31.03.2017 Ended 31.03.2016
Total Revenue 1078724925 998420212
Profit Before Financial Cost Depreciation
Extraordinary Item and Tax 69864344 63468358
Less : Financial Cost 27568534 25984201
Profit Before Depreciation Extraordinary Item and Tax 42295810 37484157
Less : Depreciation 24476706 27277799
Profit Before Extraordinary Item and Tax 17819104 10206359
Add/Less : Extraordinary Item 3660420 7976618
Less : Exceptional Item - 25002
Profit Before Tax 21479524 2204739
Less : Tax 4300000 400000
Profit After Tax 17179524 1804740
Add : Brought Forward from Previous Year 26504461 -34647479
Closing Balance of Reserve & Surplus 80883985 26504461

b. OPERATIONS:

During the financial year under review the income from operation was INR 1068.93 mn ascompared to INR 994.76 mn registered in the previous year reflecting a year-on-yearincrease of 7.46%.

Profit before other income finance cost Extraordinary and exceptional item and Taxeswas INR 35.60 mn as compared to INR 32.54 mn in the previous year reflecting a year-onyearincrease of 9.40%.

Whereas Profit After Tax was INR 17.18 mn as compared to INR 1.8 mn in the previousyear registered significant growth in PAT.

Business Updates:

* We please to Inform you that the Company has received USFDA Approval for API Plantand EIR Report.

* New R&D Centre Civil Structure completed and slated for operation in F. Y. 2018.

* New API Under development

* Completed the Corporate Restructuring

* Improvement in long Term Credit Rating from (B- to BB-)

* Add new market for export.

* CEP certification for omeprazole from EDQM ( European Drug Regulator)

* Applied for import Drug License to China FDA for Esomeprazole.

You are hereby informed that there was a fire accident in the factory situated at AroorVillage Sadasivapet Mandal Sanga Reddy District – 502 291 Telangana Indiainvolving a total damage to the Company amounting to Rs. 103.18 Lakhs/-You are againhereby informed that there is adequate insurance coverage for both fixed assets andcurrent assets.

Further the Company got adhoc release of Rs. 25.00 Lakhs on 14-06-2017 as part paymentfrom New India Insurance Company. The remaining balance is expected to release at the endof September 2017. There was no change in nature of the business of the Company duringthe year under review.

c. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:

During the year under review your Company did not have any subsidiary associate andjoint venture company.

d. DIVIDEND:

With a view to conserve resources your Directors have thought it prudent to ploughback the entire profits and regret for not being able to recommend any dividend for thefinancial year under review

. e. TRANSFER TO RESERVES:

The Board of Directors has not recommended transfer of any amount of profit to reservesduring the year under review. Hence the entire amount of profit for the year under reviewhas been carried forward to the Profit and Loss Account.

f. REVISION OF FINANCIAL STATEMENTS:

There was no revision of the financial statements for the year under review.

g. DEPOSITS :

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing of details of deposits which are not in compliance with theChapter V of the Act is not applicable.

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:

No material changes and commitments which could affect the Company's financial positionhave occurred between the ends of the financial year of the Company.

i. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls. The Company maintains appropriate system ofinternal control including monitoring procedures to ensure that all assets aresafeguarded against loss from unauthorized use or disposition. Company policiesguidelines and procedures provide for adequate checks and balances and are meant toensure that all transactions are authorized recorded and reported correctly.

j. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES :

The details of transactions/contracts/arrangements entered into by the Company withrelated party(ies) as defined under the provisions of Section 2(76) of the Companies Act2013 during the financial year under review are furnished in DR - Annexure I and formspart of this Report. The Audit Committee at its Meeting held on 13 February 2017 hasaccorded omnibus approval to pursue related party transactions subject to a maximumthreshold limit of Rs.1 Crore per transaction for Related Party Transactions that arerepetitive in nature for the financial year 2017-18.

k. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:

No loans guarantees investments and securities provided during the financial yearunder review. l. DISCLOSURE UNDER SECTION 43(a)

(ii) OF THE COMPANIES ACT 2013:

The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014.

m. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT 2013:

The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014.

n. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT 2013:

The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1)(b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014.

o. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:

During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014.

p. Allotment of Equity Shares under preferential allotment:

During the year under review the Board of Directors of the Company had allotted4650000 (Forty Six Lakhs Fifty Thousand) Equity Shares of face value of Rs. 10 (Ten)each at a premium of Rs. 8/- (Eight) per share to promoters under preferential allotmentpursuant to conversion of unsecured loan in their meeting held on 30.07.2016 and the sameapproved by the shareholder in the Annual General Meeting to held on 29.08.2016. Andaccordingly the paid up capital of the Company increased to Rs. 79882800/- (RupeesSeven Crore Ninety Eight Lakhs Eighty Two Thousands Eight Hundred Only) and booked totalsecurities premium amounting to Rs. 37200000/- (Rupees Three Crore Seventy Two Lakhsonly).

The Allotment details are mentioned below:

Sl.No. Allotment made on No. of shares Face Value per share Nominal amount Premium per share Total premium
1 08.09.2016 3950000 10/- 39500000 8/- 31600000
2 12.01.2017 (conversion of warrant into Equity Share) 360000 10/- 3600000 8/- 2880000
3 12.01.2017 (conversion of warrant into Equity Share) 340000 10/- 3400000 8/- 2720000
Total 46500000 37200000

All the allotted Equity Shares had been listed to BSE Ltd. as per SEBI (LODR)Regulation 2015.

Allotment of Convertible warrants into equal no. of Equity Shares

Sl.No. Allotment made on No. of Warrants issued Warrant Price Upfront price Total amount received pursuant to allotment
1 08.09.2016 711720 18/- 4.5/- 3202740

Note: the Board of Directors of the Company issued 700000/- (Seven Lakhs) EquityShares upon conversion of 700000/- (Seven Lakhs) warrants after payment had beenreceived amounting to Rs. 9450000/-(Rupees Ninety Four Lakhs Fifty Thousand Only). AndDuring the year under review 11720 (Eleven Thousand Seven Hundred twenty) Convertiblewarrants were outstanding.

DIRECTORS' REPORT

q. Disclosure regarding Unclaimed Shares:

During the year under review pursuant to the provisions of SEBI Guidelines andSecurities Exchange Board of India (Listing Obligation & Disclosures Requirements)Regulations 2015 had transferred 207972 (Two Lakh Seven Thousand Nine Hundred SeventyTwo) unclaimed Equity Shares to Everest Organics Limited-Unclaimed Suspense Account.207612 (Two Lakhs Seven Thousand Six Hundred Twelve) Equity Shares were outstanding in thesaid Account as on 31.03.2017. r. Everest Employee Stock Option Plan:

The Board of Directors in their meeting held on 09.08.2017 has proposed for EmployeeStock Option Scheme subject to approval of Shareholders in ensuing Annual General Meeting.The Board of Directors seeks approval of members for the same. The concerned specialresolution and brief details of the Everest Employee Stock Option – Plan is annexedwith the 24th Annual General Meeting Notice and in Explanatory Statement pursuant tosection 102 of Companies Act 2013.

The necessary Resolution is included in the Notice of AGM for seeking approval ofmembers.

2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL a) BOARD OF DIRECTORS& KEY MANAGERIAL PERSONNEL

1. During the Year under review the Board has recommended in their meeting held on30.07.2016 to reappoint Mr. Sri Kakarlapudi Harikrishna as a Wholetime Director in theCompany with effect from 29.08.2016 and said recommendation were approved by theshareholders in the Annual General Meeting held on 29.08.2016.

2. During the year under review The Board of Directors in their meeting held on30.05.2016 had changed the designation of Ms. Sri Kakarlapudi Sirisha as Non ExecutiveDirector who were appointed as a Whole Time Director by the Board of Directors in theirmeeting held on 22.01.2016.

3. During the year under review the appointment of Mr. Peruri Ramakrishna as a ChiefFinancial Officer of the Company has been ratified by the shareholders in the AnnualGeneral Meeting held on 29.08.2016 who were appointed by the board of Directors in theirmeeting held on 28.09.2015 for 3 years with effect from 28.09.2015.

b ) DECLARATIONS BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors under Section149(6) of the Companies Act 2013 confirming their independence vis--vis the Company. c)RE-APPOINTMENT OF DIRECTORS RETIRE BY ROTATION

As per the provisions of Section 152 of the Companies Act 2013 Mr. Reddy EashwerKanthala (DIN : 02327979) and Mr. Kakarlapudi Sitarama Raju (Din : 02955723) will retireby rotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment.

Your Directors recommend their candidature for approval.

3. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES a. BOARD MEETINGS:

The Board of Directors met 6 times during the financial year ended 31st March 2017 inaccordance with the provisions of the Companies Act 2013 and rules made there under.

The dates on which the Board of Directors met during the financial year under revieware as under:

Sl. No. Day Date
1 Monday 30.05.2016
2 Saturday 30.07.2016
3 Thursday 08.09.2016
4 Tuesday 08.11.2016
5 Thursday 12.01.2017
6 Monday 13.02.2017

 

Sl.No. Name of the Directors No. of Meetings held No. of Meetings Attended Whether Attended the AGM held on 29.08.2016
1 Dr. Sri Kakarlapudi Srihari Raju 6 6 Yes
2 Mr. Ramakrishnam Raju Kounparaju 6 6 Yes
3 Mr. Kakarlapudi Sitaram Raju 6 2 No
4 Mr. Akella Parvatisem 6 6 Yes
5 Mr. Sri Kakarlapudi Harikrishna 6 5 Yes
6 Mr. Reddy Eashwer Kanthala 6 2 No
7 Mr. Swaminathan Venkatesan 6 5 Yes
8 Mr. Sreeramakrishna Grandhi 6 5 No
9 Dr. Sri Kakarlapudi Sirisha 6 6 No

b. DIRECTOR'S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2017 the Board ofDirectors hereby confirms that:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2017 and ofthe profit/loss of the Company for that year;

c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

d. the annual accounts of the Company have been prepared on a going concern basis;

e. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively;

c. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of Directors as constituted by the Board ofDirectors of the Company in accordance with the requirements of Section 178 of the Act.

The composition of the committee is as under:

1. Mr. Ramakrishnam Raju Kounparaju (DIN : 01735481) Director 2. Mr. SwaminathanVenkatesan (DIN : 02810646) Director and 3. Mr. Sreeramakrishna Grandhi (DIN: 06921031)Chairman

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees. The detailedpolicy of Nomination & remuneration Committee is attached as DR-Annexure–ll

During the year under review the Committee met only for 1 time on Monday May 302016.

Members Attendance:

Sl. No. Name of the Directors Independent / No. of No. of Meetings
Executive Director meetings held Attended
1 Mr. Sreeramakrishna Grandhi Independent Director 1 1
2 Mr. Ramakrishnam Raju Kounparaju Independent Director 1 1
3 Mr. Swaminathan Venkatesan Independent Director 1 1

d. AUDIT COMMITTEE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section. The Audit Committee comprises of:

1. Mr. Sreeramakrishna Grandhi (DIN: 06921031) Chairman

2. Mr. Ramakrishnam Raju Kounparaju (DIN : 01735481) Independent Director 3. Mr.Swaminathan Venkatesan (DIN : 02810646) Independent Director and 4. Mr. Akella Parvatisem(DIN: 00910224) Director

The scope and terms of reference of the Audit Committee have been amended in accordancewith the Act and Securities Exchange Board of India (Listing Obligations & DisclosureRequirements) Regulations 2015 entered into with the Stock Exchange.

During the year under review the Board of Directors of the Company had accepted allthe recommendations of the Committee.

During the year under review the Committee met 4 times on the following dates:

Sl. No. Day Dates
1 Monday 30.05.2016
2 Saturday 30.07.2016
3 Tuesday 08.11.2016
4 Monday 13.02.2017

Members Attendance:

Sl. No. Name of the Directors Independent / No. of No. of Meetings
Executive Director meetings held Attended
1 Mr. Sreeramakrishna Grandhi Independent Director 4 3
2 Mr. Ramakrishnam Raju Kounparaju Independent Director 4 4
3 Mr. Swaminathan Venkatesan Independent Director 4 3
4 Mr. Akella Parvatisem Executive Director 4 4

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review pursuant to Section 178 of the Companies Act 2013 theBoard of Directors of the Company has constituted the Stakeholder's RelationshipCommittee comprising Mr. Sri Kakarlapudi Harikrishna Mr. Venkatesan Swaminathan and Mr.Akella Parvatisem Directors of the Company.

Mr. Venkatesan Swaminathan is the Chairman of the Committee. And Ms. Nisha JainCompany Secretary of the Company acts as the Secretary of the Committee.

During the year under review the Committee met 4 times :

Sl. No. Day Dates
1 Saturday 30.07.2016
2 Thursday 08.09.2016
3 Tuesday 08.11.2016
4 Monday 13.02.2017

Members Attendance:

Sl. No. Name of the Directors Independent / No. of No. of Meetings
Executive Director meetings held Attended
1 Mr. Swaminathan Venkatesan Independent Director 4 3
2 Mr. Akella Parvatisem Independent Director 4 4
3 Mr. Sri Kakarlapudi Harikrishna Whole Time Director 4 3

f. SHARE TRANSFER COMMITTEE:

The Share Transfer Committee is formed with Mr. Sri Kakarlapudi Harikrishna Mr.Venkatesan Swaminathan and Mr. Akella Parvatisem as Members and meets as and when requiredat short notice also Mr. Venkatesan Swaminathan acts as Chairman of the Share transferCommittee and Ms. Nisha Jain Company Secretary acts as Secretary to the Committee. Noshare transfers are pending as on date.

The functions of the committee(s) include:

1)Transfer of shares

2) Dividends

3) Dematerialization of shares

4) Replacement of lost/stolen/mutilated share certificates

5) Non-receipt of rights/bonus/split share certificates.

6) Any other related issues

The subcommittee will also focus on strengthening investor relations.

During the year under review the committee met 22 times in total and all the Committeemeeting were attended by all members.

g. VIGIL MECHANISM / WHISTLE BLOWER POLICY FOR THE DIRECTORS AND EMPLOYEES:

The Board of Directors of the Company has pursuant to the provisions of Section 178(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board andits Powers) Rules 2014 framed "Vigil Mechanism Policy" for Directors andemployees of the Company to provide a mechanism which ensures adequate safeguards toemployees and Directors from any victimization on raising of concerns of any violations oflegal or regulatory requirements incorrect or misrepresentation of any financialstatements and reports etc.

The employees of the Company have the right/option to report their concern/grievance tothe Chairman of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations.

h. Risk Management Policy:

The Board formulated and implemented Risk Management Policy for the Company whichidentifies various elements of risks which in its opinion may threaten the existence ofthe Company and measures to contain and mitigate risks. The Company has adequate internalcontrol systems and procedures to combat the risk. The Risk Management procedures arereviewed by the Board on quarterly basis at the time of review of performance of theCompany.

i. Insider Trading :

The Company has put in place the following Codes pursuant to the SEBI (Prohibition ofInsider Trading) Regulations 2015 : a. Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information. b. Code of Conduct to RegulateMonitor and Report Trading.

j. Policy on Board Diversity:

Based on the Company's Policy on Board Diversity as formulated by the Nomination andRemuneration Committee the Board has time and again ensured that optimum diversity onthe Board is attained and maintained.

k. Information under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has constituted an Internal Compliant Committee under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.During the year no complaint was made before the Committee.

l. ANNUAL EVALUATION OF DIRECTORS COMMITTEE AND BOARD:

A formal evaluation mechanism has been adopted for evaluating the performance of theBoard as well as performance of Committees and individual Directors. Performance of allDirectors and the Company has been carried out by way of structured evaluation process.Criteria for evaluation includes attendance and contribution at the meetings preparednessfor the meetings effective decision making ability etc.

m. INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Company'sbusiness size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising policies and procedures are designedto ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedures applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.

n. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:

The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year under review has been marked as DR -Annexure lll.

o. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARYCOMPANIES:

Not Applicable as the Company has no holding or Subsidiary entity.

4. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2017:

The observations made by the Statutory Auditors in their report for the financial yearended 31st March 2017 read with the explanatory notes therein are self-explanatory andtherefore do not call for any further explanation or comments from the Board underSection 134(3) of the Companies Act 2013.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2017:

Provisions of Section 204 read with Section 134(3) of the Companies Act 2013 mandatesto obtain Secretarial Audit Report from Practicing Company Secretary. D. Hanumanta Raju& Co. Company Secretaries of B-13 F-1 P.S. Nagar Vijayanagar Colony Hyderabad– 500 057India had been appointed to issue Secretarial Audit Report for thefinancial year 2016-17.

Secretarial Audit Report issued by D. Hanumanta Raju & Co. Company Secretaries ofB-13 F-1 P.S. Nagar Vijayanagar Colony Hyderabad – 500 057India CompanySecretaries in Form MR-3 for the financial year 2016-17 forms part of this report as DR -Annexure lV. The said report contains the following observation requiring explanation& or comments from the Board under section 134 (3) of the Companies Act 2013. 1. TheCompany has not disclosed the policy formulated by Nomination and remuneration committeepursuant to section 178 of the Companies Act 2013 in Board's report for the year 2016.

Directors' Comments :The Company has adopted the policy in the year 2015 itselfhowever we were under the assumption that there was no requirement to disclose the samefor the year ending 2016. The Board assures that from this year onward will disclose thepolicy adopted pursuant to section 178 of Companies Act 2013 and proper care will betaken to comply with the same.

2. Complete disclosure of changes in Directors and Key Managerial Personnel's (KMP)during the year was not given in Board's Report.

Directors' Comment : We have given the complete disclosure with regard to changes inthe Directors and Key Managerial Personnel's during the year in the Annual Report. Howeverthe same point has been missed at the time of printing.

As it was purely a typographical error we will take full precautions to avoid sucherrors in future.

3. The financial statements were signed by 4 Directors and 2 KMPs whereas the XBRLfiled for the year 2015-16 contains the details of only 3 Directors.

And

4. The details of Company Secretary and Chief Financial Officer were not mentioned inthe XBRL filed for the year 2015-16.

Directors' Comment (for 3 & 4) : This has happened inadvertently and due tooverlook. We further assure that the same will not be repeated and due take care will betaken at the time of filing of the same from the next time.

c. APPOINTMENT OF STATUTORY AUDITORS

: pursuant to mandatory rotation of statutory Auditor as per the provisions ofSection 139 of the Companies Act 2013 and the Companies (Audit and Auditors) Rules 2014and any other provisions of Companies Act 2013 and Companies (Audit & Auditors)Rules 2014 as amended from time to time as may be applicable M/s. Suryam & CO.Chartered Accountants (Firm Registration No. 012181S) be and is hereby appointed as aStatutory Auditor of the Company in place of existing Statutory Auditor M/s. P. S. N.Ravishanker & Associates Chartered Accountants to hold the office for a term of 5(FIVE) Years with effect from the conclusion of 24th Annual General Meeting as theStatutory Auditors of the Company till the conclusion of 29th Annual General Meeting (AGM)to be held in the year 2022 to examine and audit the account of the Company subject toratification by Members at every Annual General Meeting at such remuneration as may bemutually agreed between the Board of Directors of the Company and Auditors."Necessary resolution for appointment of the said Auditors is included in the Notice of AGMfor seeking approval of members.

d. COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications/Circulars issued by the Ministry of Corporate Affairs from time to time dueto pre-occupation of the existing Cost

Auditor. as per the recommendation of the Audit Committee the Board of Directors attheir meeting dated 29.05.2017 appointed "M/s. Vajralingam & Co." CostAccountant of Hyderabad in place of "M/s. Sativada Venkat Rao Cost Accountants asthe Cost Auditors of the Company for the financial year 2017-18 in respect of theCompany's pharma manufacturing units at Aroor Village Sadasivapet Medak DistrictTelangana –502 291. The Cost Audit Report will be filed within the stipulated periodof 180 days from the closure of the financial year subject to the availability ofrespective e-forms at MCA Sites.

5. OTHER DISCLOSURES

Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:

a. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended 31st March 2017 made under the provisionsof Section 92(3) of the Act is attached as DR - Annexure V which forms part of thisReport.

b. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy and technology absorption foreign exchange earnings and outgo etc.are furnished in as per DR - Annexure Vl considering the nature of activities undertakenby the Company during the year under review which forms part of this report.

c. CORPORATE GOVERNANCE: (Applicable to Companies giving remuneration as per Section IIof Schedule V): Amount in Rs.

All elements of remuneration package such as salary benefits
bonuses stock options pension etc. of all the directors Salary INR 5600000/-
Details of fixed component and performance linked incentives Fixed Component
along with the performance criteria Salary – 5600000/-
Service contracts notice period severance fees No Such terms are there.
Stock option details if any and whether the same has been
issued at a discount as well as the period over which accrued
and over which exercisable As may be decided

d. Non Applicability of Corporate Governance Report :

During the Financial year under review as per Regulation 15(2) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Regulation 27 of the saidRegulation is not applicable to the Company as the Company's Paid up capital is less thanRupees Ten Crores and the Net Worth of the Company does not exceed Rupees Twenty FiveCrores as on the last day of previous financial year.

e. Green Initiative :

To support the ‘Green Initiative' in the Corporate Governance taken by theMinistry of Corporate Affairs to contribute towards greener environment and to receiveall documents notices including Annual Reports and other communications of the Companyinvestors should register their e-mail addresses with M/s. Venture Capital & CorporateInvestment Private Ltd. if shares are held in physical mode or with their Depositoryparticipant if the holding is in electronic mode. Electronic Copies of the Annual Reportand Notice of the Annual General Meeting are sent to all members whose e-mail addressesare registered with the Company/ Depository Participant(s).For members who have notregistered their email address physical copies of the Annual Report and Notice of theAnnual General Meeting are sent in the permitted mode.

Members requiring physical copies can send their request to Ms. Nisha Jain CompanySecretary of the Company.

In terms of Section 108 of the Act and Rule 20 of the Company's (Management andAdministration) Rules 2014 the Company is providing remote e-voting facility to all themembers to enable them to cast their votes electronically on all the resolutions set forthin the Notice. f. Personnel:

The Company enjoys a harmonious and healthy relationship with personnel at all levels.

Particulars of employees in terms of the Companies Act 2013 are not applicable as noemployee is drawing salary in excess of limits prescribed by the Companies Act 2013.

6. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company.

For and on behalf of the Board

Everest Organics Limited

Rama Krishnam Raju Kounparaju Dr. Sri Kakarlapudi Srihari Raju
Chairman Managing Director
DIN: 01735481 DIN : 01593620
Dated : 27.08.2017