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Notes to Accounts of JK Agri Genetics Ltd.

Mar 31, 2016

1. There is no change in the Share Capital during the year and no Bonus / Right Buy-back in the preceding five years.

2. Terms/right attached to equity shares:

a. The Company has only one class of equity shares having par value of ''10 per share. Each holder of equity shares is entitled to one vote per share.

b. In the event of winding up the equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportionate to the number of equity shares held by the shareholders.

c. The Dividend proposed by the Board of Directors is subject to the approval of share holders in the ensuing Annual General Meeting except in the case of interim dividend.

Notes:

1. a) Term Loan of Rs. Nil (Previous year Rs.19.19 lacs) taken from bank is secured against first charge of the assets purchased there under, Hypothecation of entire intangible assets, second charge on entire current assets viz stock and book debts etc., both present and future, of the company and is further secured by extension of equitable mortgage on land at Ranpur, Kota (Rajasthan). Charge been vacated.

b) Term Loan of Rs. Nil (Previous year Rs. 642.86 lacs) taken from bank is secured by subservient charge on entire current and movable fixed assets (both Present and future). Charge been vacated.

c) Corporate loan of Rs. 1350 lacs (Previous year Rs. 1350 lacs) taken from bank is secured by second charge on the entire current assets of the company viz., stocks & book debts, etc., both present and future, first charge on the entire fixed assets of the Company including land at Dundigal village, Telangana and Land at Ranpur, Kota Rajasthan, excluding certain specified assets. It is further secured by Hypothecation of entire intangible assets of the Company including the Brand and Patents. It is repayable in 3 years, 4 Quarterly installments of Rs. 100 lacs each in FY 2017, 4 equal installments of Rs.125 lacs each in FY 2018 and 3 equal installments of Rs.150 lacs each in FY 2019.

2. Term loan of Rs. 139.09 lacs (Previous year Rs. 96.60 lacs) taken from Biotechnology Industry Research Assistance Council (BIRAC) is secured by First Charge on movable properties of the Company including its movable Plant and Machinery, spares, tools and accessories and other movables, both present and future (Except Book debts) and is repayable in 10 equal half yearly installments of Rs. 13.90 lacs each commencing from October, 2017.

3. a) Unsecured loan of Rs. 442.08 lacs (Previous year Rs. 515.75 lacs) taken from CSIR is repayable in 6 equal yearly installments of Rs. 73.68 lacs each.

b) Unsecured loan of Rs. 250 lacs (Previous year Rs. 500 lacs) taken from Bengal & Assam company Ltd. (A Related Party) is repayable in April, 2016. Since paid.

c) Unsecured loan of Rs. 1000 lacs (Previous year Rs.Nil) taken from Bengal & Assam company Ltd. (A Related Party) is repayable in May, 2017.

3. Pursuant to the Scheme of Arrangement and Demerger transfer of authorized Capital of Rs. 4250 lacs divided into 50,00,000 preference share capital of '' 85/- each is pending for transfer from Florence Investech Limited to the Company as authorized capital divided into 4,25,00,000 unclassified shares of Rs. 10 each as per the Scheme.

4. Estimated amount of contracts net of advances amounting to Rs.19.93 lacs (Previous year Rs. 1.85 lacs) remaining to be executed on capital account.

5. (A) Contingent liabilities, not provided for in respect of :

(i) Claims by certain parties against the company not accepted and not provided for Rs.120.72 lacs (Net of Rs. 99.00 lacs indemnified by another party) (Previous Year Rs. 126.58 lacs (Net of Rs. 99.00 lacs indemnified by another party)).

(ii) Pending export obligation against import of capital goods under EPCG Scheme (Guarantee given Rs. 129.24 lacs): Rs. Nil (Previous year Rs. Nil).

(iii) Income Tax (matters in appeals) of Rs. 606.95 lacs (Previous year Rs. 581.30 lacs) & Sales tax (Matters in appeals) of Rs.7.25 lacs (Previous year Rs. 6.90 lacs).

In respect of certain disallowances and additions made by the Income Tax authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

(B) Company acted as a facilitator and has extended gurantees to Yes Bank Limited Rs. 2859.33 lacs (Previous year Rs.3040.44 lacs) and ICICI Bank Ltd Rs. Nil lacs (Previous year Rs. 130.03 lacs) for loans provided to the farmers.

6. The Company has challenged the notice of the Income Tax assessing officer for reopening of the income tax assessment order for the year ended 31.03.2009 (Assessment year 2009-10), in High Court of Calcutta. Hon’ble High court of Calcutta vide its order dated 26.03.2015 has granted interim stay.

7. (a) In terms of disclosure requirements stated in Accounting Standard on Intangible Assets (AS-26) notified by the Companies (Accounting Standards) Rules, 2006 the management considered it appropriate to amortize “J.K.SEEDS” brand over a period of 20 years (balance 6 years as on Balance Sheet date) from the date of its acquisition, considering nature of business, life cycle of brand, its inherent value and expected future benefits. The carrying amount of “J.K.SEEDS” brand as on 31st March, 2016 is Rs. 810 lacs which is to be amortized in over the balance period of 6 years.

(b) Software is amortized over a period of 5 years from the year of installation.

8. a) Debtors over six months are net of provision made for doubtful Debts of Rs. 131.19 lacs (Previous year Rs.101.19 Lacs).

Overdue Receivables exceeding six months includes Rs.2422.19 lacs from state governments (Including Rs. 1938.23 lacs from Rajasthan Government along with Security Deposit given amounting to Rs.121.68 lacs included in the heading “Deposit with Government Authorities and other” in Note no.17 and where part payment been received). In view of the fact that the materials supplied having met all the quality specifications and accepted by the governments, these receivable are considered good and fully receivable.

b) Advance to suppliers are net of provision made for Doubtful advances of Rs.40.53 lacs (Previous year Rs. 40.53 lacs).

c) Some of the balances of debtors, loans & advances and current liabilities are in the process of confirmation/ reconciliation.

9. a) Income tax calculation has been made considering certain expenses/adjustments available as assessed by the management.

b) The Company has filed a Writ Petition before the Hon’ble High Court of Calcutta seeking directions for acceptance of revised Income Tax returns by the Income Tax Department, (“the Department”) for the Financial years 2005-06 to 2010-11, which had been treated as Nonest by the department vide its Notice dated 17th February, 2014. The above revised returns were filed by the Company with the Department pursuant to the Scheme of Arrangement and Demerger (the Scheme) approved by Hon’ble High court of Calcutta on 17th October, 2012, giving impact of the Scheme from 1st April , 2005, during the financial year 2012-13.

10. Foreign Currency exposure not hedged as at Balance sheet date:

Foreign Currency exposure unhedged net receivable Rs. 183.15 lacs - US $ 276100 (Previous year Rs. 4.38 lacs - US $ 7000) and net payable Rs. 0.50 lacs - US $ 753 (Previous year Rs. 37.63 lacs - US $ 60125)

36. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent information available with the Company are as under: (i) Principal & Interest amount due and remaining unpaid as at 31.03.2016: Nil (Previous year: Nil) (ii) Payment made beyond the appointed day during the year: Nil (Previous Year: Nil) and (iii) Interest accrued and unpaid as at 31.03.2016: Nil (Previous year: Nil).

Note:

a) Defined Benefit Plans

Amounts recognized as expense and included in the Note 23:

Item “Salaries, Wages, Allowance, etc” includes Rs. 43.16 lacs (Previous year Rs.39.71 lacs) for gratuity Rs. 33.44 lacs (Previous year Rs. 38.19 lacs) for leave encashment.

b) Defined Contribution Plans

Amount recognized as an expense and included in the Note 23 “Contribution to Provident and other Funds” of Statement of Profit & Loss Rs.116.64 lacs (Previous year Rs. 111.04 lacs).

c) The estimates of future salary increase considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

11. There is only one business segment - Agri & Allied products.

12. Impairment of Assets:

The Company carries out a periodic review of all its assets with a view to identify any impairment. Impairment of assets, if any, identified on the basis of such review is accounted for in the books as required by the Accounting Standard on Impairment of Assets (AS-28) issued by the Institute of Chartered Accountants of India. There is no Impairment of assets which has not been accounted.

13. Leases

Operating Lease

Factory Premises and Vehicles have been obtained on lease. Lease rentals in case of factory premises on cancellable lease have escalation clause while there is no escalation in case of Vehicles except for change in taxes, if any. There are no significant restrictions imposed by Lease agreements. There are no sub leases.

14. CSR expenses amounting to Rs.22.44 lacs (Previous Year Rs.18.07 lacs) have been included in Miscellaneous Expenses under the head “Other Expenses” in note no. 25.

15. Previous year’s figures have been re-grouped/re-classified/recast wherever necessary.

16. Figures less than Rs.500/- has been shown at actual in Bracket.


Mar 31, 2015

1.1 There is no change in the Share Capital during the year and no Bonus / Right Buy-back in the preceding five years.

1.2 Terms/rights attached to equity shares:

a. The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share.

b. I n the event of winding up the equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c. The Dividend proposed by the Board of Directors is subject to the approval of share holders in the ensuing Annual General Meeting except in the case of interim dividend.

1. a) Term loan of Rs. Nil (Previous year Rs. 44.46 lacs) taken from bank was secured against first charge of the assets purchased thereunder, hypothecation of entire intangible assets, second charge on the entire current assets viz stocks and book debts etc., both present and future, of the company and was further secured by way of first Charge on entire fixed assets including land at Dundigal Village, Telangana of the Company excluding certain specified Assets. Charge been vacated.

b) Term Loan of Rs. 19.19 lacs (Previous year Rs. 60.19 lacs) taken from bank is secured against first charge of the assets purchased thereunder, Hypothecation of entire intangible assets, second charge on entire current assets viz stock and book debts etc., both present and future, of the company and is further secured by extension of equitable mortgage on land at Ranpur, Kota (Rajasthan). Balance amount of term loan is repayable in one Quarterly installments of Rs. 10.25 lacs and another Quarterly installment of Rs. 8.94 lacs.

c) Term Loan of Rs. 642.86 lacs (Previous year Rs. 1500.00 lacs) taken from bank is secured by subservient charge on entire current and movable fixed assets (both Present and future) and repayable in 2 equal Quarterly installments of Rs. 214.29 lacs and one Quarterly installment of Rs. 214.28 lacs.

d) Corporate loan of Rs. 1350 lacs (Previous year Rs. Nil) taken from bank is secured by second charge on the the entire current assets of the company viz., stocks & book debts, etc., both present & future, First charge on the entire fixed assets of the Company including land at Dundigal village, Telangana and Land at Ranpur, Kota Rajasthan, excluding certain specified assets. It is further secured by Hypothecation of entire intangible assets of the Company including the Brand and Patents. It is repayable in 4 years with 3 Quarterly Installment of Rs. 50 lacs each in FY 2016, 4 Quarterly installment of Rs. 100 lacs each in FY 2017, 4 equal installment of Rs. 125 lacs each in FY 2018 and 2 equal installment of Rs. 150 lacs each in FY 2019.

2 Term loan of Rs. 96.60 lacs (previous year Rs. 96.60 lacs) taken from Biotechnology Industry Research Assistance Council (BIRAC) (earlier department of Bio-technology (DBT)) is secured by first charge on the Assets created out of the loan, Pari Passu second charge on the entire fixed Asset of the Company including the land at Dundigal village, Telangana and excluding certain specified assets & Pari Passu second charge on the current assets and is repayable in 10 equal half yearly installments of Rs. 9.66 lacs each commencing from March, 2016.

3 a) Unsecured loan of Rs. 515.75 lacs (Previous year Rs. 589.43 lacs) taken from CSIR is repayable in 7 equal yearly installments of Rs. 73.68 lacs each.

b) Unsecured loan of Rs. 500 lacs (Previous year Nil) taken from Bengal & Assam company Ltd. (A Related Party) is repayable in 2 equal yearly installments of Rs. 250 lacs each, starting from April, 2015.

# Working Capital borrowing is Secured by hypothecation of entire current assets viz stocks and book debts etc., both present and future, of the Company and by a second pari passu charge on entire fixed assets of the Company including land at Dundigal village, Telangana and land at Ranpur, Kota, (Rajasthan) and excluding certain specified fixed assets.

4. Pursuant to the Scheme of Arrangement and Demerger transfer of authorized Capital of Rs. 4250 lacs divided into 50,00,000 preference share capital of Rs. 85/- each is pending for transfer from Florence Investech Limited to the Company as authorized capital divided into 4,25,00,000 unclassified shares of Rs. 10 each as per the Scheme.

5. Estimated amount of contracts net of advances amounting to Rs. 1.85 lacs (Previous year Rs. 2.74 lacs) remaining to be executed on capital account.

6. (A) Contingent liabilities, not provided for in respect of :

(i) Claims by certain parties against the company not accepted and not provided for Rs. 126.58 lacs (Net of Rs. 99.00 lacs indemnified by another party) (Previous Year Rs. 164.30 lacs (Net of Rs. 99.00 lacs indemnified by another party)).

(ii) Pending export obligation against import of capital goods under EPCG Scheme (Guarantee given Rs. 129.24 lacs): Rs. Nil (Previous year Rs. 0.37 lacs).

(iii) Income Tax (matters in appeals) of Rs. 581.30 lacs (Previous year Rs. 512.89 lacs) & Sales tax (Matters in appeals) of Rs. 6.90 lacs (Previous year Rs. 6.90 lacs).

In respect of certain disallowances and additions made by the Income Tax authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

(B) Company acted as a facilitator and has extended a gurantee to Yes Bank Limited Rs. 3040.44 lacs (Previous year Rs. 1752.94 lacs) and by ICICI Bank Ltd Rs. 130.03 lacs (Previous year Rs. 1,000.38 lacs) for loans that these banks have provided to the farmers.

7. The Company has challenged the notice of the Income Tax assessing officer for reopening of the income tax assessment order for the year ended 31.03.2009 (Assessment year 2009-10), in High Court of Calcutta. Hon''ble High court of Calcutta vide its order dated 26.03.2015 has granted interim stay.

8. (a) In terms of disclosure requirements stated in Accounting Standard on Intangible Assets (AS-26) notified by the Companies (Accounting Standards) Rules, 2006 the management considered it appropriate to amortize "J.K.SEEDS" brand over a period of 20 years (balance 7 years as on Balance Sheet date) from the date of its acquisition, considering nature of business, life cycle of brand, its inherent value and expected future benefits. The carrying amount of "J.K.SEEDS" brand as on 31st March, 2015 is Rs. 945 lacs which is to be amortized in over the balance period of 7 years.

(b) Software is amortized over a period of 5 years from the year of installation.

Cost audit fees Rs. 0.45 lacs pertaining to previous year (Previous year Rs. 1.24 lacs); Rs. Nil (Previous Year Rs. 0.27 lacs) lacs towards Certification and other charges and Rs. 0.35 lacs (Previous year Rs. 0.18 lacs) towards reimbursement of expenses.

9. (a) Debtors over six months are net of provision made for doubtful Debts of Rs. 101.19 lacs (Previous year Rs. 101.19 Lacs) and are after bad debts of Debtors Rs. Nil (Previous year Rs. 16.14 lacs).

Overdue Receivables exceeding six months includes Rs. 1938.23 lacs from Rajasthan state government along with Security Deposit given amounting to Rs. 121.68 lacs included in the heading "Deposit with Government Authorities and other" in Note no.16. In view of the fact that the materials supplied having met all the quality specifications, and part payments has also been received, the receivable is considered good.

(b) Advance to suppliers are net of provision made for Doubtful advances of Rs. 40.53 lacs (Previous year Rs. 40.53 lacs and are after bad loans of Rs. Nil lacs (Previous year Rs. 7.58 lacs).

(c) Some of the balances of debtors, loans & advances and current liabilities are in the process of confirmation/reconciliation.

10. (a) Income tax calculation has been made considering certain expenses/adjustments available as assessed by the management.

(b) The Company has filed a Writ Petition before the Hon''ble High Court of Calcutta seeking directions for acceptance of revised Income Tax returns by the Income Tax Department, ("the Department") for the Financial years 2005-06 to 2010-11, which had been treated a Nonest by the department vide its Notice dated 17th February, 2014. The above revised returns were filed by the Company with the Department pursuant to the Scheme of Arrangement and Demerger (the Scheme) approved by Hon''ble High court of Calcutta on 17th October, 2012, giving impact of the Scheme from 1st April , 2005, during the financial year 2012-13.

11. Foreign Currency exposure not hedged as at Balance sheet date:

Foreign Currency exposure unhedged net receivable Rs. 4.38 lacs - US $ 7000 (Previous year Rs. 6.61 lacs - US $ 11000) and net payable Rs. 37.63 lacs - US $ 60125 (Previous year Rs. 79.59 lacs - US $ 64032 & EURO 49780)

12. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent information available with the Company are as under: (i) Principal & Interest amount due and remaining unpaid as at 31.03.2015: Nil (Previous year: Nil) (ii) Payment made beyond and appointed day during the year: Nil (Previous Year: Nil) and (iii) Interest accrued and unpaid as at 31.03.2015: Nil (Previous year: Nil).

Note: a) Defined Benefit Plans

Amounts recognized as expense and included in the Note 22: item "Salaries, Wages, Allowance, etc" includes Rs. 39.71 lacs (Previous year Rs. 30.81 lacs) for gratuity,Rs. 38.19 lacs (Previous year, Rs. 28.71 lacs) for leave encashment.

b) Defined Contribution Plans

Amount recognized as an expense and included in the Note 22 "Contribution to Provident and other Funds" of Statement of Profit & Loss Rs. 111.04 lacs (Previous year Rs. 125.45 lacs).

c) The estimates of future salary increase considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

d) Experience Adjustment:

13.Related Parly :

A). Relationships

Key Management Personnel : Shri Sanjay Kumar Gupta, President & Whole Time Director

: Shri Amit Agarwal, Chief Financial Officer

: Shri Anoop Singh Gusain, Company Secretary

Associates : Florence Investech Ltd (FIL)

: Bengal & Assam Company Ltd (BACL) Pursuant to the Companies Act, 2013

I. The following transactions were carried out with related parties in the ordinary course of business:

14. Impairment of Assets:

The Company carries out a periodic review of all its assets with a view to identify any impairment. Impairment of assets, if any, identified on the basis of such review is accounted for in the books as required by the Accounting Standard on Impairment of Assets (AS-28) issued by the Institute of Chartered Accountants of India. There is no Impairment of assets which has not been accounted.

15. Leases Operating Lease

Factory Premises and Vehicles have been obtained on lease. Lease rentals in case of factory premises on cancellable lease have escalation clause while there is no escalation in case of Vehicles except for change in taxes, if any. There are no significant restrictions imposed by Lease agreements. There are no sub leases.

c) The percentage increase in the median remuneration of employees in the financial year: 10%

d) The number of permanent employees on the rolls of company:- 445

e) The explanation on the relationship between average increase in remuneration and company performance: Increments are given keeping in view the overall performance of the employees, Company''s growth, economic scenario, prevailing conditions in the market and industry trends etc.

f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:

h) Percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer: The Company has not come out with any public offer since its inception. Pursuant to the Scheme of Arrangement and Demerger sanctioned by the Hon''ble High Court of Calcutta, the equity shares of the Company were listed and permitted for trading on BSE Limited w.e.f. 30th September 2013.

i) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

k) No variable component of remuneration was availed by the directors during the financial year ended 31st March 2015.

l) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None

m) The Company affirms that the remuneration is as per the remuneration policy of the company.

n) The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company during working hours. Any member interested in obtaining a copy of the same may write to the Company Secretary.


Mar 31, 2014

1. There is no change in the Share Capital during the year and no Bonus / Right Buy-back in the preceding five years. (Read with note no.25)

2. Terms/right attached to equity shares:

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

3. In the event of winding up the equity shareholders will be entittled to receive remaining assets of the Company, after distribution of all preferencial amounts. The distribution will be in proportionate to the number of equity shares held by the shareholders.

4. The Dividend proposed by the Board of Directors is subject to the approval of share holders in the ensuing Annual General Meeting except in the case of interim dividend.

Notes:

1. a) Term loan of Rs. 44.46 lacs (Previous year Rs. 444.46 lacs) taken from bank is secured against first charge of the assets purchased thereunder, hypothecation of entire intangible assets, parri passu second charge on the entire current assets viz stocks and book debts etc., both present and future, of the company and is further secured, by way of first charge on land at Dundigal village (AP) and on entire movable fixed assets of the Company. This is further secured by second Pari Passu charge on the entire fixed assets financed by Department of Biotechnology (DBT). Balance Term loan is repayble in 1 Installment of Rs. 44.46 lacs.

b) Term Loan of Rs. 60.19 lacs (Previous year Rs. 101.19 lacs) taken from bank is secured against first charge of the assets purchased thereunder, Hypothecation of entire intangible assets, parri passu second charge on entire current assets viz stock and book debts etc., both present and future, of the company and is further secured by extension of equitable mortgage on land at Ranpur, Kota (Rajasthan). This is further secured by second Pari Passu charge on the entire fixed assets financed by DBT and balance amount of term loan is repayable in 5 equal Quarterly installments of Rs. 10.25 lacs each and 6th installment of Rs. 8.94 lacs.

c) Term Loan of Rs. 1500.00 lacs (Previous year Rs. 1500.00 lacs) taken from bank is secured by subservient charge on entire current and movable assets (both Present and future) and repayable in 6 equal Quarterly installments of Rs. 214.29 lacs and one quarterly installments of Rs. 214.26 lacs commencing from July 2014.

2. Term loan of Rs. 96.60 lacs (Previous year Rs. 59.61 lacs) taken from Department of Bio-Technology (DBT) is secured by First Charge on the Assets created out of the loan, Pari Passu second charge on the entire fixed Asset of the Company including the land at Dundigal village, Ranga Reddy District (AP) and excluding land at ICICI Knowledge Park & Pari Passu second charge on the current assets and is repayable in 10 equal half yearly installments of Rs. 9.66 lacs each commencing from March, 2016.

3. Unsecured loan of Rs. 589.43 lacs (Previous year Rs. 663.11 lacs) taken from CSIR is repayable in 8 equal yearly installments of Rs. 73.68 lacs each

# Working Capital borrowings are Secured by hypothecation of current assets viz stocks and book debts etc., both present and future, of the Company and by a second charge on entire fixed assets of the Company including land at Dundigal village (AP) and Ranpur, Kota, (Rajasthan).

# Includes gross value as at 31.03.2014 of Building Rs. 273.09 lacs (Previous year Rs. 268.05 lacs) and Plant & Equipments Rs. 1290.49 lacs (Previous Year Rs. 1288.80 lacs) {WDV Rs. 177.37 lacs (Previous year Rs. 180.21 lacs ) and Rs. 1034.27 lacs (Previous year Rs. 1098.09 lacs respectively)} on leasehold premises.

$ Includes Capital Subsidy of Rs. 50 lacs under Reform Link Investement Scheme on certain processing plant and machinery at Hyderabad which has been adjusted from the cost of respective Machinery.

* Note No. 4

# Deferred tax assets on unabsorbed depreciation and business losses have been recognized based on management''s opinion that there is virtual certainty and sufficient taxable income will be generated / available against which such deferred tax assets can be realized.

5. Scheme of Arrangement and Demerger (The Scheme) between the Company {JK Agri Genetics Limited (JKAGL) (formerly Florence Alumina Limited) (FAL) (Transferee)} and Florence Investech Limited (formerly JK Agri Genetics Limited)(Transferor) has been Sanctioned by the Hon''ble High Court at Calcutta vide its order dated 17th October, 2012 and the Scheme became effective on 2nd November 2012, operative from 1st April 2005, the Appointed Date. Accordingly impact was given in the accounts for the year ended 31.03.2013.

6. i. Name of the Company had been changed from Florence Alumina Limited to JK Agri Genetics Limited

ii. Pursuant to the Scheme transfer of authorized Capital of Rs. 4250 lacs divided into 50,00,000 preference share capital of Rs. 85/- each is pending for transfer from Florence Investech Limited to the Company as authorized capital divided into 4,25,00,000 unclassified shares of Rs. 10 each as per the Scheme.

iii. Certain fixed assets, licences, approval, charges on secured loans are pending for transfer in the name of the Company.

7. Estimated amount of contracts net of advances amounting to Rs. 2.74 lacs (Previous year Rs. 3.77 lacs) remaining to be executed on capital account.

8. (A) Contingent liabilities, not provided for in respect of :

(i) Claims by certain parties against the company not accepted and not provided for Rs. 164.30 lacs (Net of Rs. 99.00 lacs indemnified by another party) (Previous Year Rs. 157.84 lacs(Net of Rs. 99.00 lacs indemnified by another party)).

(ii) Pending export obligation against import of capital goods under EPCG Scheme (Guarantee given Rs. 129.24 lacs): Rs. 0.37 lacs (Previous year Rs. 160.68 lacs).

(iii) Income Tax (matters in appeals) of Rs. 512.89 lacs (Previous year Rs. 371.62 lacs) & Sales tax (Matters in appeals) of Rs. 6.90 lacs (Previous year Rs. 6.90 lacs).

(B) In respect of certain disallowances and additions made by the Income Tax authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

(C) Company acted as a facilitator and has extended a gurantee to Yes Bank Limited Rs. 1752.94 lacs (Previous year - Nil) and by ICICI Bank Ltd Rs. 1,000.38 lacs (Previous year Nil) for loans that these banks have provided to the farmers.

9. MAT Credit Entitlement (Net of Provision for Taxation) amounting to Rs. 43.63 lacs accrued and accounted for. (Refer Note no.25)

10. (a) In terms of disclosure requirements stated in Accounting Standard on Intangible Assets (AS-26) notified by the Companies (Accounting Standards) Rules, 2006 the management considered it appropriate to amortize "J.K.SEEDS" brand over a period of 20 years (balance 8 years as on Balance Sheet date) from the date of its acquisition, considering nature of business, life cycle of brand, its inherent value and expected future benefits. The carrying amount of "J.K.SEEDS" brand as on 31st March, 2014 is Rs. 1080 lacs which is to be amortized in over the balance period of 8 years.

(b) Software is amortized over a period of 5 years from the year of installation.

11. Research and Development Revenue expenses as assessed and ascertained by the management are amounting to Rs. 1089.18 lacs (Previous Year Rs. 1152.98 lacs) and the same have been included in respective revenue heads of accounts.

Excludes provision for Gratuity and Leave Encashment where the actuarial valuation has been done on overall Company basis.

@ for the period 23rd October, 2013 to 31st March, 2014. Appointment and payment to a Whole Time Director is subjected to the approval in the ensuing General Meeting.

# Transferred from Florence Investech Limited formerly (JKAGL){Excludes Rs. 71.82 lacs Pertaining to period 1st October, 2011 to 31st March, 2012.}

$ for the period 1st April, 2012 to 1st November, 2012.

$ Excludes Rs. 2.90 lacs transferred from Florence Investech Limited (formerly JKAGL) for the period 1st October, 2011 to 31st March, 2012

Cost Auditors: 2013-14 2012-13

Cost Audit Fees 1.24 -

Cost audit fees includes Rs. 0.27 lacs towards Certification and other charges and Rs.0.18 lacs towards reimbursement of expenses.

12. a) Debtors over six months are net of provision made for doubtful Debts of Rs. 101.19 lacs (Previous year Rs. 96.67 Lacs) and are after bad debts of Debtors Rs. 16.14 lacs (Previous year nil). Overdue Receivables exceeding six months includes Rs. 19.38 Crores from Rajasthan state government. In view of the fact that the materials supplied having met all the quality specifications, and part payments has also been received, the receivable is considered good.

b) Advance to suppliers are net of provision made for Doubtful advances of Rs. 40.53 lacs (Previous year Rs. 21.85 lacs and are after bad loans of Rs. 7.58 lacs (Previous year nil)

c) Some of the balances of debtors, loans & advances and current liabilities are in the process of confirmation/reconciliation.

13. Income tax calculation has been made considering certain expenses/adjustments available as assessed by the management.

*Since the Forex Liability is crystallized to the extent advances given & received, these exposure are not required to be hedged.

14. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent information available with the Company are as under: (i) Principal & Interest amount due and remaining unpaid as at 31.03.2014: Nil (Previous year: Nil) (ii) Payment made beyond and appointed day during the year: Nil (Previous Year: Nil) and (iii) Interest accrued and unpaid as at 31.03.2014: Nil (Previous year : Nil).

15. Production and Purchase of Seeds & Others Consumed:

43. The disclosures required under Accounting Standard (AS-15) "Employees Benefits" notified in the Companies (Accounting Standards) Rules, 2006 are as given below: Defined Benefits Plans / Long Term Compensated Absences – As per Actuarial Valuation on 31st March, 2014.

Note: a) Defined Benefit Plans

Amounts recognized as expense and included in the Note 22:

Item "Salaries, Wages, Bonus & Retirement Benefits" includes Rs. 30.81 lacs (Previous year Rs. 27.92 lacs) for gratuity, Rs 28.71 lacs (Previous year, Rs. 32.38 lacs) for leave encashment.

b) Defined Contribution Plans Amount recognized as an expense and included in the Note 22 "Contribution to Provident and other Funds" of Statement of Profit & Loss Rs. 125.45 lacs (Previous year Rs. 127.87 lacs).

c) The estimates of future salary increase considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

d) Experience Adjustment

16. There is only one business segment – Agri & Allied products.

17. Related Party : A) Relationships

Key Management Personnel : Shri Sanjay Kumar Gupta, President & Director#

(Appointed on 23rd October, 2013)

# Remuneration: Refer Note no.32 (remuneration to Manager/Director)

47. Impairment of Assets:

The Company carries out a periodic review of all its assets with a view to identify any impairment. Impairment of assets, if any, identified on the basis of such review is accounted for in the books as required by the Accounting Standard on Impairment of Assets (AS-28) issued by the Institute of Chartered Accountants of India. There is no Impairment of assets which has not been accounted.

18. Leases

Operating Lease

Factory Premises and Vehicles have been obtained on lease. Lease rentals in case of factory premises on cancellable lease have escalation clause while there is no escalation in case of Vehicles except for change in taxes, if any. There are no significant restrictions imposed by Lease agreements. There are no sub leases.


Mar 31, 2013

1. Scheme of Arrangement and Demerger (The Scheme) between the Company {JK Agri Genetics Limited (JKAGL) (formerly Florence Alumina Limited) (FAL) (Transferee)} and Florence Investech Limited (FIL) (formerly JK Agri Genetics Limited) (Transferor) has been Sanctioned by the Hon''ble High Court at Calcutta vide its order dated 17th October, 2012 and the Scheme became effective on 2nd November 2012, operative from 1st April 2005, the Appointed Date.

2. Pursuant to the Scheme: (a)

i. Name of the Company has been changed from Florence Alumina Limited to JK Agri Genetics Limited.

ii. The Seed undertaking of Florence Investech Ltd. (formerly JK Agri Genetics Limited) as defined in the scheme has been transferred to and vested in the Company with effect from the said Appointed Date. The Scheme has accordingly been given effect to in these accounts.

iii. The paid up equity share capital of FIL (formerly JKAGL) of Rs. 350.65 lacs has been reorganized and allocated between FIL & the Company in the ratio of 2:3 (i.e. in the ratio 40:60) and accordingly the Share Capital amounting to Rs. 210.39 lacs has been allocated to the Company.

iv. a) An amount of authorised capital of Rs. 1,250 lacs divided into 1,25,00,000 equity shares of Rs. 10 each stands transferred from the share capital of FIL to the authorized capital of the Company.

b) Transfer of authorized Capital of Rs. 4,250 lacs divided into 50,00,000 preference share capital of Rs. 85/- each: will also be transferred in due course from FIL to the Company as authorized capital divided into 4,25,00,000 unclassified shares of Rs. 10 each as per the said Scheme.

v. The Company has issued Rs. 1000 lacs Zero Coupon Non-Convertible Bonds (ZCNCB) to the Bond holders of Florence Investech Ltd as provided in the Part IV of the Scheme. The Bonds have also since been redeemed by the Company, the last date of redemption being April 01, 2010.

vi. The difference of Rs. 2775.94 lacs between assets and liabilities (including ZCNCB of Rs. 1000 Lacs) transferred from FIL (formerly JKAGL) at their book values w.e.f. April 01, 2005 along with Debenture Redemption Reserve of Rs. 472.34 lacs and paid up Equity Capital of Rs. 210.39 lacs has been recorded as General reserve in the books of the company.

(b) Certain fixed assets, licenses, approvals, charges on secured loan are pending for transfer in the name of the Company.

(c) Business of Seed undertaking for the period 1st Apr''2005 till 1st Nov''2012 has been carried out by FIL (formerly JKAGL) for and on account of, and in trust for, the Company.

@ Tax Includes Deferred Tax amounting to Rs. 749.27 Lacs

As stated in the Note no. 26, the Scheme became effective from 2nd November 2012 i.e. subsequent to the adoption of accounts for the year ended 31st March 2012 by the Shareholders of the Company in the Annual General Meeting held on 14th August, 2012. In view of this the results for the period 01.10.2011 to 31.03.2012 are audited by the Statutory Auditors of the Company are as stated above.

The net loss of Rs. 1340.36 lacs net of tax provision as stated above of the period of six months ended 31st March, 2012 have been adjusted against the balance in Statement of Profit and Loss (Read with Note no.3).

3. Estimated amount of contracts net of advances amounting to Rs. 3.77 lacs (Previous year Nil) remaining to be executed on capital account.

4. (A) Contingent liabilities, not provided for in respect of :

(a) Claims by certain parties against the company not accepted and not provided for Rs. 157.84 lacs (Net of Rs. 99.00 lacs to be indemnified by another party) (Previous Year Nil (Net of Nil to be indemnified by another party)).

(b) Pending export obligation against import of capital goods under EPCG Scheme (Guarantee given Rs. 129.24 lacs): Rs. 160.68 lacs (Previous year Nil).

(c) Income Tax (matters in appeals) of Rs. 371.62 lacs (Previous year Nil) & Sales tax (Matters in appeals) of Rs. 6.90 lacs (Previous year Nil).

(B) In respect of certain disallowances and additions made by the Income Tax authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

5. (a) In terms of disclosure requirements stated in Accounting Standard on Intangible Assets (AS-26) notified

by the Companies (Accounting Standards) Rules, 2006 the management considered it appropriate to amortize "J.K. SEEDS" brand over a period of 20 years (balance 9 years as on Balance Sheet date) from the date of its acquisition, considering nature of business, life cycle of brand, its inherent value and expected future benefits. The carrying amount of "J.K.SEEDS" brand as on 31st March, 2013 is Rs. 1215 lacs which is to be amortized in over the balance period of 9 years.

(b) Software is amortized over a period of 5 years from the year of installation.

6. Research and Development Revenue expenses as assessed and ascertained by the management amount to Rs. 1152.98 lacs (Previous Year Rs. Nil). The same have been included in respective revenue heads of accounts.

7. a) Debtors over six months and Advances are net of Provisions made for doubtful Debts of Rs. 96.67 lacs and Advances Rs. 21.85 lacs (Previous year Nil).

b) Some of the balances of debtors, loans & advances and current liabilities are in the process of confirmation/reconciliation.

8. Income tax calculation has been made considering certain expenses/adjustments available as assessed by the management for the current year as well as for the period post appointed date.

9. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent information available with the Company are as under: (i) Principal & Interest amount due and remaining unpaid as at 31.03.2013: Nil (Previous year: Nil) (ii) Payment made beyond and appointed day during the year: Nil (Previous Year: Nil) and (iii) Interest accrued and unpaid as at 31.03.2013 : Nil (Previous year : Nil).

10. The disclosures required under Accounting Standard (AS-15) "Employees Benefits" notified in the Companies (Accounting Standards) Rules, 2006 are as given below: Defined Benefits Plans / Long Term Compensated Absences – As per Actuarial Valuation on 31st March, 2013.

a) Defined Benefit Plans

Amounts recognized as expense and included in the Note 23:

Item "Salaries, Wages, allowances, etc." includes Rs. 27.92 lacs (Previous year Nil) for gratuity, Rs. 32.38 lacs

(Previous year Nil) for leave encashment.

b) Defined Contribution Plans

Amount recognized as an expense and included in the Note 23 "Contribution to Provident and other Funds" of Statement of Profit & Loss Rs. 127.87 lacs (Previous year Nil).

c) The estimates of future salary increase considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

11. There are no separate reportable segments as per Accounting Standard 17 "Segment Reporting" pursuant to Scheme of Arrangement and Demerger, hence segment reporting is not being given.

12. Related Party @: (A) Relationships

(a) Wholly Owned Subsidiary : -

(b) Investing Company : -

(c) Key Management Personnel : -

(d) Relative of KMP : -

@ In pursuance of Scheme of Arrangement and Demerger JKAGL (Now FIL) ceased to be 100% Holding Company w.e.f. 1st April,2005. Accordingly, related party transactions have been re-organized.

13. In view of Note No. 27 (read with note no. 28), the company ceased to be Wholly owned Subsidiary (WOS) of the FIL (Formerly JKAGL) with effect from 1st April''2005.

14. Impairment of Assets:

The Company carries out a periodic review of all its assets with a view to identify any impairment. Impairment of assets, if any, identified on the basis of such review is accounted for in the books as required by the Accounting Standard on Impairment of Assets (AS-28) issued by the Institute of Chartered Accountants of India. There is no Impairment of assets which has not been accounted.

15. Leases

Operating Lease

Factory Premises and Vehicles have been obtained on lease. Lease rentals in case of factory premises have escalation clause while there is no escalation in case of Vehicles except for change in taxes, if any. There are no significant restrictions imposed by Lease agreements. There are no sub leases.

16. Previous year''s figures have been re-grouped/re-classified wherever necessary and Previous Year''s figure are not strictly comparable in view of note no. 26.

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