ACCOUNTINGPOLICIES

a) Basis of brparation:

The company follows the mercantile system of accounting and recognizes incomes and expenses on accrual basis. The accounts are brpared on historical cost basis and as a going concern. These financial statements of Everest Organics Limited have been brpared and brsented in accordance with Accounting Principles (IGAAP) generally accepted in India. IGAAP comprises of accounting standards notified by the Central Government of India under Section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014, other pronouncements of Institute of Chartered Accountants of India, the relevant provisions of Companies Act, 2013 and guidelines issued by Securities and Exchange Board of India (SEBI). The financial statements are brsented in Indian rupees rounded off to the nearest rupee

Accounting policies not referred to herein otherwise are consistent with Generally Accepted Accounting Principles in India.

b) Use of estimates

The brparation of the financial statements in conformity with IGAAP requires management to make estimates of useful life of tangible and intangible assets, assessment of recoverable amounts of deferred tax assets, provision for obligations relating to employees, provisions against litigations and impairment of assets. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year.

c) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognized on dispatch (in respect of exports on the date of the bill of lading or airway bill) which coincides with transfer of significant risks and rewards to customer and is net of trade discounts, sales returns and sales tax, where applicable. Excise duty deducted from revenue (gross) is the amount that is included in revenue (gross).

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Export entitlements are recognised and shown under the head "other income" when the same is received / right to receive, as per the terms and conditions of the scheme, is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

d) Current and non-current classification

All the assets and liabilities have been classified as current or noncurrent as per the Company normal operating cycle and other criteria set out in the Schedule-III to the Companies Act, 2013.

i) Assets:

An asset is classified as current when it satisfies any of the following criteria:

a) it is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be realised within 12 months after the reporting date; or

d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

ii) Liabilities:

A liability is classified as current when it satisfies any of the following criteria:

a) it is expected to be settled in the Company's normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is due to be settled within 12 months after the reporting date; or

d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current assets / liabilities include the current portion of non current financial assets / liabilities respectively.

All other assets / liabilities are classified as non-current.

e) Fixed Assets :

Tangible fixed assets are carried at the historical cost of acquisition or construction less accumulated debrciation arrived at taking into Schedule II of the Companies Act, 2013. The cost of tangible fixed assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

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

Subsequent expenditure related to an item of tangible fixed asset is capitalised only if it increases the future benefits from the existing assets beyond its brviously assessed standards of performance.

However, during the year there is no such interest expenditure which is capitalized.

Advances paid towards acquisition of tangible fixed assets outstanding at each balance sheet date are shown under short-term loans and advances. Cost of assets not ready for intended use, as on the balance sheet date, is shown as capital work-in-progress.

Gains or losses from disposal of tangible fixed assets are recognised in the statement of profit and loss.

f) Debrciation:

Debrciation on fixed assets is provided as per useful lives specified in the Schedule II of the Companies Act, 2013 for the actual period of the usage of the assets on prorate basis, with Plant & Machinery considered to be coming under the category of "continuous processing machinery", as against the straight line method rates applied till 31-03-2014 under the CompaniesAct, 1956.

g) Inventories :

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

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

h) Research & Development Expenditure :

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

i)Employee Benefits :

Contributions to defined contribution retirement benefit schemes are generally recognized as an expense when employees have rendered services entitling them to contributions. Accordingly company provided for payment of Gratuity. However, the company has not provided for leave encashment of about Rs.30.70 lakhs as at 31-03-2015 (brvious year Rs. 22.81 lakhs). The company has not made any contribution/deposited the money to the employees towards gratuity liability and has made only a provision in this regard. The provision made or calculated is as per the assessment of the management, but not as per the actuarial valuation as required under AS-15 on Employee Benefits.

j) Income Tax Expense:

Income tax expense comprises of current tax and deferred tax charge or credit.

A) Current Tax:

The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company. As the company has accumulated losses as on 31-03-2015, under the Income Tax Act, the tax calculation under the Minimum Alternative Tax is made and provided for.

B) Deferred Tax:

Deferred tax expense or benefit is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. However the company is having brought forward losses. Hence there would arise a deferred tax asset, and on conservative principle, the same is not recognized.

k) Impairment of Assets:

The Company assesses, from year to year, as to whether there is any indication that an asset is impaired. However, in the opinion of the management, based on engineer's valuation report, there has been no impairment loss during the year.

6. Investment:

Of the total investments of Rs.8.45 lakhs part of the same is rebrsented by the fully paid Equity Shares of M/s.Patancheru Envirotech Limited made as contribution for utilizing their services of common Effluent Treatment Plant set up by the M/s. Patancheru Envirotech Ltd to the tune of Rs.8.15 lakhs (Unquoted 81540 No.of equity shares of Rs.10/- each fully paid up- Market value as on 31.03.2015 & 31.03.2014 are not available and part of the investment is rebrsented by shares of State Bank of Travancore amounting to Rs.0.30 lakhs (50 Shares of Rs. 10 each fully paid up and the same are valued at cost. (Market Value as on 31-03-2015 & 3 1-03-2014 being Rs.436 per share and Rs.421 per share respectively).

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