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Everest Organics Ltd.

BSE: 524790 Sector: Health care
NSE: N.A. ISIN Code: INE334C01029
BSE 00:00 | 24 Feb 125.75 -2.60
(-2.03%)
OPEN

134.00

HIGH

134.50

LOW

124.20

NSE 05:30 | 01 Jan Everest Organics Ltd
OPEN 134.00
PREVIOUS CLOSE 128.35
VOLUME 171
52-Week high 245.00
52-Week low 116.00
P/E 12.77
Mkt Cap.(Rs cr) 101
Buy Price 124.20
Buy Qty 1.00
Sell Price 134.75
Sell Qty 101.00
OPEN 134.00
CLOSE 128.35
VOLUME 171
52-Week high 245.00
52-Week low 116.00
P/E 12.77
Mkt Cap.(Rs cr) 101
Buy Price 124.20
Buy Qty 1.00
Sell Price 134.75
Sell Qty 101.00

Everest Organics Ltd. (EVERESTORGANICS) - Auditors Report

Company auditors report

TO THE MEMBERS OF

EVEREST ORGANICS LIMITED.

REPORT ON THE FINANCIAL STATEMENTS

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

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 asamended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

AUDITORS' RESPONSIBILITY

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

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

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Board of Directors as well as evaluating the overallpresentation of the financial statements.

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

BASIS FOR QUALIFIED OPINION :

a) As stated in Note 28 (1)(L) to the financial statements of the Company as at 31March 2018 under report the outstanding provision made in connection with liability forpayment of Gratuity stands at Rs.70.31 Lakhs. As against the said liability of Rs.70.31Lakhs the company has deposited Rs.5.00 Lakhs only in a Fund. As per the requirement ofthe Indian Accounting Standard-19 on Employee

Benefits such liability should have been deposited in total in a fund as against apartial sum. Our audit opinion on the financial statements for the year ended 31 March2018 is qualified in respect of this matter.

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

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

QUALIFIED OPINION :

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid financial statements give the informationrequired by the Act in the manner so required and give a true and fair view inconformitywith the accounting principles generally accepted in India including Ind-AS specifiedunder Section 133 of the Act of the state of affairs (financial position) of the Companyas at 31 March 2018 and its profit (financial performance including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

OTHER MATTERS OF EMPHASIS :

a) We draw attention to the Company's outstanding liability for the provision ofbalance Leave Encashment of the employees to be provided as at the end of the year underreport. The management is of the opinion that the policy on leave encashment is underreview and hence the liability in this regard is not ascertained. Hence we are not in aposition to ascertain the impact of the same on the profit and loss account of thecompany for the year and the Balance Sheet of the Company as on 31 March 2018. Ouropinion is not qualified in respect of this matter.

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS :

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

As required by Section 143(3) of the Act we report that :

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Profit and Loss Statement the Cash Flow Statement and theStatement of Changes in Equity dealt with by this Reportare in agreement with the books ofaccount.

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

e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164(2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure-B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous :

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements as referred to Para 14 of Note No.28to the FinancialStatements.

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

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

For SURYAM & CO
Chartered Accountants
FRN : 012181S
(SRINIVAS OLETI)
Place : Hyderabad Partner
Date : 30-05-2018. ICAI M.No.206457

ANNEXURE - A to the Independent Auditors' Report dt. 30-05-2018 issued to the membersof

Everest Organics Limited

Statement on the matters specified in Paragraphs 3 & 4 of the Companies (AuditorsReport)Order 2016

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

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

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

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

The discrepancies that were noticed have been properly dealt with in the books ofaccount.

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

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

(v) According to the information and explanations given to us the Company has notaccepted deposits to which the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 or the other relevant provisions of the Companies Act andthe rules framed there under wherever applicable from the public.

However there are certain unsecured loans accepted from Directors and their relativesand also in the form of employee security deposits amounting to Rs.164.70 lakhs as at31-03-2018 (Rs.173.19 lakhs as at 31-03-2017) which still outstanding in the books ofaccount of the Company after the restructuring has taken place in the previous year.

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

(vii) a) As per the information and explanations furnished to us by the managementaccording to the records of the Company undisputed statutory dues including ProvidentFund Employees' State Insurance Income Tax(Except FBT of Rs.8.55 lakhs) Sales TaxService Tax duty of Customs Duty of Excise Value Added Tax Cess and other statutorydues have been generally deposited with the appropriate authorities with delays. Howeveraccording to the information and explanations given to us no other undisputed amountspayable in respect of the aforesaid dues were outstanding as at 31-03-2018 for a period ofmore than six months from the date they became payable.

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

(viii) As per the information and explanations given to us the company has notdefaulted in repayment of loansor borrowings to the Banks or Government. The company hasnot made any borrowings from the financial institutions or debenture holders.

(ix) During the year the company has not raised money by way of initial public offer orfurther public offer (including debt instruments). As per the information and explanationsgiven to us the term loans raised during the year were applied for the purposes for whichthe same were raised.

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

(xi) As per the information and explanations given to us by the management themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.

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

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

(xiv) During the year the company has made the preferential allotment of 11720 fullypaidequity shares of Rs.10/- each with a premium of Rs.8/- per share totally amounting toRs.210960 to an NBFC an Associate Company and the shareholding of these preferentialallottee as at 31.03.2018 has gone up to 48.57%(Previous year 48.62%) respectively. Thecompany made this allotment in compliance with the requirement of section 42 of theCompanies Act 2013. The amount raised has been used for the purpose for which the fundswere raised.

(xv) As per the information and explanations and based on examination the company hasnot entered into any non-cash transactions with directors or persons connected with them.

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

For SURYAM & CO
Chartered Accountants
FRN : 012181S
(SRINIVAS OLETI)
Place : Hyderabad Partner
Date : 30-05-2018. ICAI M.No.206457

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") :

We have audited the internal financial controls over financial reporting of EverestOrganics Limited ("the Company") as of 31 March 2018 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by the Institute ofChartered Accountants of India and deemed to be prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth issued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2)provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion :

In our opinion the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2018 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India. However the following internal financial controls are essential anddesirable.

a) The system of physical verification of fixed assets tagging of fixed assets andcomputerization of records needs to be improved to be commensurate with the size of thecompany & level of operations.

b) The system of physical verification of inventories tagging of inventoriesrecognition & valuation of inventories needs to be further improved to be commensuratewith the size of company &level of operations.

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

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

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

For SURYAM & CO
Chartered Accountants
FRN : 012181S
(SRINIVAS OLETI)
Place : Hyderabad Partner
Date : 30-05-2018. ICAI M.No.206457