To

The Members,

Everest Organics Limited CIN : L24230TG1993PLC015426

The Directors have pleasure in presenting the 25^th Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31^st March, 2018.

1. FINANCIAL STATEMENTS & RESULTS:

a. Financial Results

The Company’s performance during the year ended 31^st March, 2018 as compared to the previous financial year, is summarized below:

Amount in Rs.

b. OPERATIONS:

During the financial year under review, the income from operation was INR 1121.71 mn as compared to INR 1068.93 mn registered in the previous year reflecting a year-on-year increase of 4.94%.

Whereas Profit After Tax including other comprehensive income was INR 25.84 mn as compared to INR 17.18 mn in the previous year, registered significant growth in PAT about 50.44% .

There was no change in nature of the business of the Company, during the 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 and joint venture company.

d. DIVIDEND:

With a view to conserve resources, your Directors have thought it prudent to plough back the entire profits and regret for not being able to recommend any dividend for the financial year under review.

e. TRANSFER TO RESERVES:

The Board of Directors do not recommend transfer of any amount of profit to reserves during the year under review. Hence, the entire amount of profit for the year under review has been carried forward to the coming year 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 of provisions of Section 73 of the Companies Act 2013 (“the Act”) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter 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 position have 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 and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls. The Company maintains appropriate system of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances, and are meant to ensure 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 with related party(ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year under review, are furnished in DR - Annexure I and forms part of this Report.

k. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

No loans, guarantees, investments and securities provided during the financial year under 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 information as 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 and hence 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 during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.

Note : The Board of Directors in their meeting held on 09.08.2017 has proposed for Employee Stock Option Scheme and the concerned special resolution and brief details of the Everest Employee Stock Option - Plan, was annexed with the 24^th Annual General Meeting Notice and in Explanatory Statement pursuant to section 102 of Companies Act, 2013. And the same has been approved by the Shareholders in said Annual General Meeting of the Company.

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

During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 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 converted 11720 warrants into Equity Shares and allotted 11720 Equity Shares of face value of Rs.10/- per Equity Shares, at a premium of Rs. 8/- (Rupees Eight only) per Shares which were originally allotted on 08.09.2016 with a upfront price of 25% of Rs.18/- (Rupees Eighteen only) to promoter under preferential allotment pursuant to conversion of unsecured loan in their meeting held on 30.07.2016 and the same approved by the shareholder in the Annual General Meeting held on 29.08.2016. And accordingly the paid up capital of the Company increased to Rs. 8,00,00,000/- (Rupees Eight Crore Only) and booked total securities premium amounting to Rs. 93,760/- (Rupees Ninety Three Thousand Seven Hundred Sixty only).

The Allotment details are mentioned below: Amount In Rs.

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

Note: During the year under review no Convertible warrants were outstanding.

q. Disclosure regarding Unclaimed Shares:

Pursuant to the provisions of SEBI Guidelines and Securities Exchange Board of India (Listing Obligation & Disclosures Requirements) Regulations 2015, the Company had transferred 207972 (Two Lakh Seven Thousand Nine Hundred Seventy Two) unclaimed Equity Shares to Everest Organics Limited- Unclaimed Suspense Account. 2,01,024 (Two Lakhs One Thousand Twenty Four) Equity Shares were outstanding in the said Account as on 31.03.2018.

2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

a ) DECLARATIONS BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company.

b) RE-APPOINTMENT OF DIRECTORS, RETIRE BY ROTATION

As per the provisions of Section 152 of the Companies Act, 2013, Mr. Sri Kakarlapudi Harikrishna (DIN : 01664260) and Mr. Akella Parvatisem (DIN : 00910224), will retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

Your Directors recommend their candidature for approval.

c) Re-appointment of Dr. Sri Kakarlapudi Srihari Raju (DIN : 01593620) the Managing Director of the Company, with effect from 28.09.2018:

The Board of Directors had re-appointed Dr. Sri Kakarlapudi Srihari Raju (DIN : 01593620) as a Managing Director of the Company w.e.f. 28.09.2015 for a period of 3 (Three) Years at their meeting held on 31.08.2015 and for the same accorded the approval of members of the Company at the Annual General Meeting held on 28^th September 2015 . The said re-appointment term is being expired on 28.09.2018. Therefore as per the provisions of Companies Act, 2013, the Company needs to re-appoint him for executing his duty as the Managing Director.

So, the nomination and remuneration committee and the Board of Directors at its meeting held on 27.08.2018, has approved the re-appointment of Dr. Sri Kakarlapudi Srihari Raju as the Managing Director of the Company for a period of 3 (three) years with effect from 28.09.2018.

Your Directors recommend his candidature for approval.

d) Re-appointment of Mr. Peruri Ramakrishna as Chief Financial Officer of the Company :

The Board of Directors of the Company (the ‘Board’), had appointed Mr. Peruri Ramakrishna as Chief Financial Officer of the Company, for a period of 3 (three) years with effect from 28th September, 2015, at accorded the consent of the shareholders at the AGM held on 29^th August, 2016. The said term is being expired on 27^th September 2018. Therefore the Board of Directors of the Company at their meeting held on 27^th August, 2018 re-appointed him as the Chief Financial Officer of the Company w.e.f. 28th September 2018, at a remuneration approved by the Board.

3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES

a. BOARD MEETINGS:

The Board of Directors met 6 times during the financial year ended 31^st March 2018 in accordance 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 review are as under:

b. DIRECTOR’S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31^st March, 2018, the Board of Directors hereby confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards (IND-AS) had been followed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2018 and of the profit/loss of the Company for that year;

c. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company 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 and that such internal financial controls are adequate and were operating effectively;

f. proper systems have been devised to ensure compliance with the provisions of all applicable 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 of Directors 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. Swaminathan Venkatesan (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 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. The detailed policy of Nomination & remuneration Committee is attached as DR-Annexure - ll and is made available at Company’s Website: www.everestorganicsltd.com.

During the year under review, the Committee met only for 1 time on Wednesday, August 09, 2017. Members Attendance:

d. AUDIT COMMITTEE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with 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 accordance with the Act and Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, entered into with the Stock Exchange.

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

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

Members Attendance:

e. STAKEHOLDERS RELATIONSHIP COMMITTEE:

During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of the Company has constituted the Stakeholder’s Relationship Committee, 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 Jain, Company Secretary of the Company, acts as the Secretary of the Committee.

During the year under review the Committee met 1 time :

Members Attendance:

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 required at short notice also Mr. Venkatesan Swaminathan acts as Chairman of the Share transfer Committee and Ms. Nisha Jain, Company Secretary, acts as Secretary to the Committee. No share 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 25 times in total and all the Committee meeting 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 and its Powers) Rules, 2014, framed “Vigil Mechanism Policy” for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.

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

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

h. Risk Management Policy:

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

i. Insider Trading :

The Company has put in place the following Codes pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 :

a. Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information.

b. Code of Conduct to Regulate, Monitor and Report Trading.

j. Policy on Board Diversity:

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

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

The Company has constituted an Internal Compliant Committee under Section 4 of the Sexual 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 the Board as well as performance of Committees and individual Directors. Performance of all Directors and the Company has been carried out by way of structured evaluation process. Criteria for evaluation includes attendance and contribution at the meetings, preparedness for the meetings, effective decision making ability etc.

m. INTERNAL CONTROL SYSTEMS:

Adequate internal control systems commensurate with the nature of the Company’s business, size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

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

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

0. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

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 31^st MARCH 2018:

The observations made by the Statutory Auditors in their report for the financial year ended 31^st March 2018 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013, other than mentioned below:

1. Gratuity provisions made for Rs. 70.31 Lakhs. Paid to the Fund Rs. 5.00 Lakhs only.

Directors’ Comment: Impact on the Current year profit is NIL as the same has already have been provided for. However the payment for the same in Gratuity Fund is yet to be made and the same shall be complied within the following financial year.

2. Long pending advances extended to employees amounting to Rs. 18.50 Lakhs. The implies payment of such advances amounts to Rs. 6.16 Lakhs which is not provided for.

Directors’ Comment: The management has initiated steps to recover the same along with the advances so extended to such employees.

b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31^st MARCH 2018:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to 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 - 500 057,India had been appointed to issue Secretarial Audit Report for the financial year 2017-18.

Secretarial Audit Report issued by D. Hanumanta Raju & Co., Company Secretaries of B-13, F-1, P.S. Nagar, Vijayanagar Colony, Hyderabad - 500 057, India, Company Secretaries in Form MR-3 for the financial year 2017-18, forms part of this report as DR - Annexure IV. The said Report is self explanatory.

c. COST AUDIT REPORT FOR THE YEAR ENDED 31^st MARCH 2018:

The Cost Audit Report for the Financial Year 2017-18, issued by M/s. PKR & Associates, LLP., Cost Auditor, dated 8th August, 2018 are self-explanatory and therefore, do not call for any further explanation or comments from the Board.

d. RE APPOINTMENT OF STATUTORY AUDITORS :

Pursuant to the provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, and any other provisions of Companies Act. 2013 as may be applicable, M/s. Suryam & CO., Chartered Accountants (Firm Registration No. 012181S), retiring auditors , were appointed to hold the office for a term of 5 (FIVE) Years with effect from the conclusion of 24^th Annual General Meeting, as the Statutory Auditors of the Company till the conclusion of 29^th Annual General Meeting (AGM) to be held in the year 2022, to examine and audit the accounts of the Company, subject to ratification by Members at every Annual General Meeting, at such remuneration as may be mutually agreed between the Board of Directors of the Company and Auditors.”

Note : As per the section 40 of the Amendment Act 2017 for the provisions of section 139 (1) of Companies Act, 2013, the requirement of ratification of the appointment of Statutory Auditors, every year by the shareholders of the Company is omitted. Therefore the Company has not incorporated the resolution relating to the ratification of the Statutory Auditor’s Appointment, in the 25^th Notice of the Annual General Meeting if the Company.

e. COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, the Board of Directors at their meeting held on 30.05.2018, appointed “M/s. PKR & Associates LLP.” Cost Accountant of Hyderabad, as the Cost Auditors of the Company for the financial year 2018-19 in respect of the Company’s pharma manufacturing units at Aroor Village, Sadasivapet, Sanga Reddy (Medak) District, Telangana - 502 291.

Note : Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, due to preoccupation of the existing Cost Auditor, and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated 12.02.2018, appointed “M/s. PKR & Associates LLP.” Cost Accountant of Hyderabad, in place of “M/s. Vajralingam & Co., Cost Accountants, as the Cost Auditors of the Company for the financial year 2017-18 in respect of the Company’s pharma manufacturing units at Aroor Village, Sadasivapet, Medak District, Telangana - 502 291.

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 of the Annual Return for the financial year ended 31^st March 2018 made under the provisions of Section 92(3) of the Act, is attached as DR - Annexure V. A copy of Annual Return pursuant to subsection 3 of section 92 of Companies ACt, 2013, is placed at Company’s Website at http://everestorganicsltd.com/share-holder.html.

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

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

c. CORPORATE GOVERNANCE: (Applicable to Companies giving remuneration as per Section II of Schedule V):

Amount in Rs.

d. Non Applicability of Corporate Governance Report :

During the Financial year under review, as per Regulation 15(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, the Regulation 27 of the said Regulation is not applicable to the Company, as the Company’s Paid up capital is less than Rupees Ten Crores and the Net Worth of the Company does not exceed Rupees Twenty Five Crores as on the last day of previous financial year.

e. Green Initiative :

To support the ‘Green Initiative’ in the Corporate Governance taken by the Ministry of Corporate Affairs, to contribute towards greener environment and to receive all documents, notices, including Annual Reports and other communications of the Company, investors should register their e-mail addresses with M/s. Venture Capital & Corporate Investment Private Ltd., if shares are held in physical mode or with their Depository participant, if the holding is in electronic mode. Electronic Copies of the Annual Report and Notice of the Annual General Meeting are sent to all members whose e-mail addresses are registered with the Company/Depository Participant(s).For members who have not registered their email address, physical copies of the Annual Report and Notice of the Annual General Meeting are sent in the permitted mode.

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

In terms of Section 108 of the Act and Rule 20 of the Company’s (Management and Administration) Rules 2014, the Company is providing remote e-voting facility to all the members to enable them to cast their votes electronically on all the resolutions set forth in 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 no employee 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, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments 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: 27.08.2018

Registered Office

Aroor Village, Sadasivapet Mandal,

Sangareddy (Medak) District - 502 291

Telangana, India

CIN L24230TG1993PLC015426

TEL No. 040-23115956 Fax No. 040-23115954

Mail eolcs0405@gmail.com

website: www.everestorganicsltd.com