We have audited the accompanying financial statements of Everest Organics Limited (“the Company”),
which comprise the Balance Sheet as at March 31,2025, the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the
year ended on that date, and Notes to Financial Statements including a summary of the significant
accounting policies and other explanatory information.
QUALIFIED OPINION
In our opinion and to the best of our information and according to the explanations given to us except for the
possible effects of the matter described in the Basis for Qualified Opinion paragraph the aforesaid financial
statements give the information required by the Act as amended in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India including Ind-AS
specified under Section 133 of the Act of the State of Affairs (financial position) of the Company as at March
31, 2025 and its profit (financial performance including other comprehensive income) its cash flows and the
changes in equity for the year ended on that date.
BASIS FOR QUALIFIED OPINION:
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in
the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
i. The revocation order of Telangana State Pollution Control Board (TSPCB) dated 4th February, 2022 in
connection with the closure order dated 22nd Dec 2020, stipulates that, the company cannot exceed
its production capacity indicated in it’s order No. TSPCB/RCP/SRD/CFO& HWA/HO/ 2017-2714, Dt.
22-11-2017. However, the company is operating at a substantially enhanced level of actual production
without necessary approvals from TSPCB in the form of Consent for Establishment (CFE) for starting
the establishment, followed by the consequent Consent for Operation (CFO). Such non-compliance
could impact the going concern status of the company in the form of Closure Order from TSPCB.
According to the explanations given to us, the management of the Company is in the process of
addressing the issue and the Company made application for Consent for Establishment for the
enhancement in capacities and the application is pending approval and the company also obtained
Environmental Clearance Certificate for the proposed enhanced capacity.
Our Opinion is qualified in respect of the above said matter(s).
KEY AUDIT MATTERS:
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to
be communicated in our report.
We draw attention to following matters of the Company.
A) Revenue recognition:
Revenue is recognized when the control over the underlying products has been transferred to the
customer. Due to the Company’s sales under various contractual terms and across the country,
delivery to customers in different regions might take different time periods and may result in
undelivered goods at the period end. We consider a risk of misstatement of the Financial Statements
related to transactions occurring close to the year end, as these transactions could be recorded in the
incorrect financial period (cut-off). Our tests of detail focused on sample of cut-off transactions, to verify
that only revenue pertaining to current year is recognized based on terms and conditions set out in
sales contracts and delivery documents and performing testing on selected statistical samples of
revenue transactions recorded during the year.
B) Raw material Consumption:
Raw material Consumption for the year is recognized based on the product composition at various
stages and the customers requirement for all the products. The estimates relating to the charge are
important given the signiucance of process knowhow and the distinctive terms of arrangement with
customers. These compositions, consumption norms are complex and requires signiucant judgments
and estimation by the Company for establishing the matching concept. An appropriate charge of raw
material consumption and accuracy thereof may deviate due to change in judgments and estimates.
Accordingly, the same has been considered as a key audit matter.
We obtained Management’s calculations for raw material consumption specifications and relied upon
the same.
C) IT Systems and Controls:
We have identified IT Systems and controls over financial reporting as a key audit matter for the
company because it’s financial and reporting system should be integrated and must be fundamentally
reliant on IT systems and controls to process the voluminous data specifically with respect to revenue,
debtors, inventory management and raw material consumption. Automated accounting procedures
and IT environment controls are required to be modified and implemented to operate effectively to
ensure accurate financial reporting to comply with all the reporting requirements under various statues.
We have assessed the management’s position through discussion with the in-house and Management
has initiated steps to integrate all activities in this regard.
Accordingly, the same is considered as a key Audit matter.
D) Capital Work in Progress:
The Company is in the process of executing major project for expansion of its Manufacturing facility.
This project takes a substantial period to get ready for intended use. We considered Capital
expenditure as a key audit matter due to: (a) Significance of amount incurred on such items during the
year ended 31 March 2025. (b) Judgement involved in determining the eligibility of costs including
borrowing cost and other directly attributable costs for capitalization as per the criteria set out in Ind AS
16-Property, Plant and Equipment.
We have obtained an understanding of the Company’s capitalization policy and assessed for
compliance with the relevant accounting standards. We have performed substantive testing on a
sample basis for each element of capitalized costs including inventory issued to contractors for the
purpose of this project and understanding nature of the costs capitalized.
Management maintains that, during the period, the interest cost of funds borrowed for the purpose
amounting to Rs.112.88 Lakhs has been capitalised. (refer Note No.32(xx)).
EMPHASIS OF MATTER:
We draw attention to the following matters disclosed in the notes to the accompanying financial statements,
which, due to their significance, have been considered necessary to bring to the attention of the users of
the financial statements for emphasis not amounting to any qualifications :
1. As Shown above revenue has been recognized in respect of certain sales where goods were
dispatched on or before the end of the Financial Year, although the transfer of ownership and
associated risks and rewards had occurred subsequent to the reporting date, keeping in view the
confirmed delivery to the customer. This accounting treatment, though disclosed by management,
involves an impact on the timing of revenue recognition in the Financial Statements.
2. Note 2.2(Q), which describes that interest payable to Micro, Small and Medium Enterprises (MSMEs),
as required under the Micro, Small and Medium Enterprises Development Act, 2006, has not been
provided for in the books of account. While the company has disclosed this fact in the Financial
Statements. Its significance arises from the potential regulatory and legal implications of non-provision.
3. Note 2.2(P), which describes the company’s accounting policy for recognizing sales commission which
is payable to agents, after the realization of the related credit sales. This approach is consistent with
prevailing business practices in the industry and reflects the substance of the arrangement, wherein
commission is linked to the actual receipt of payments, though this results in deviation from matching
concept wherein the turnover is recognized in one period and the commission payable thereon is
recognized in another period.
Other Information
The Company’s management and Board of Directors are responsible for the other information. The other
information comprises the information included in the company’s annual report but does not include the
financial statements and our auditors’ report thereon. The Company’s annual report is expected to be made
available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we do not express any
assurance and conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance.
MANAGEMENT’S AND BOARD OF DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL
STATEMENTS:
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance, (changes in equity) and cash flows of the
Company in accordance with the accounting principles generally accepted in India, including the
accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets
of the Company and for preventing and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for
overseeing the Company’s financial reporting process.
AUDITORS’ RESPONSIBILITY:
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken based on these
financial statements.
As part of an audit in accordance with standards on auditing we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the company has adequate internal financial controls with
reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management and Board of Directors.
• Conclude on the appropriateness of management and Board of Directors use of the going concern
basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central
Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the “Annexure A”
a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far
as it appears from our examination of those books.
(c) The Balance Sheet, the Profit and Loss Statement, the Statement of Changes in Equity and the
Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of the Companies (Indian Accounting Standards)
Rules, 2015.
(e) On the basis of the written representations received from the directors as on March 31, 2025,
taken on record by the Board of Directors none of the directors are disqualified as on 31st March
2025, from being appointed as a director in terms of sec.164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in
“Annexure-B”.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11
of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of
our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31st March, 2025 on its
financial position in its financial Statements. Refer Note No:32(viii) of the Financial
Statements.
ii. The Company does not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
A) The management has represented that, to the best of its knowledge and belief, other than
as disclosed in the notes to the accounts, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
B) The management has represented, that, to the best of it’s knowledge and belief, other
than as disclosed in the notes to the accounts, no funds have been received by the
company from any person(s) or entity(ies), including foreign entities (“Funding Parties”),
with the understanding, whether recorded in writing or otherwise, that the company shall,
whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
C) Based on audit procedures which we considered reasonable and appropriate in the
circumstances, nothing has come to their notice that has caused them to believe that the
representations under sub-clause (i) and (ii) contain any material mis-statement.
iv. The company has not declared dividend during the year F.Y 2024-25.
v. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is
applicable from 1 April 2023. Based on our examination which included test checks, the
Company have used accounting software for maintaining its books of account, which have a
feature of recording Audit Trail (edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the respective software. Further during the
course of our audit, we did not come across any instance of Audit Trail feature being tampered
with.
3. Further, with respect to the matter to be included in the Auditors’ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by
the company to its directors during the current year is in accordance with the provisions of section 197
of the Act. The remuneration paid to any director is not in excess of the limit laid down under section
197 of the Act.
For P.S.N RAVISHANKER & ASSOCIATES
Chartered Accountants
FRN.003228S
YADAVILLI SAI KARUNAKAR
Partner
Place: Hyderabad, Membership No. 207033
Date: 28-05-2025. UDIN-25207033BMIUZJ6612
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