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JK Agri Genetics Ltd.

BSE: 536493 Sector: Others
NSE: N.A. ISIN Code: INE690O01011
BSE 00:00 | 18 May 701.60 8.00
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698.90

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NSE 05:30 | 01 Jan JK Agri Genetics Ltd
OPEN 698.90
PREVIOUS CLOSE 693.60
VOLUME 518
52-Week high 1031.80
52-Week low 490.05
P/E 42.09
Mkt Cap.(Rs cr) 326
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 698.90
CLOSE 693.60
VOLUME 518
52-Week high 1031.80
52-Week low 490.05
P/E 42.09
Mkt Cap.(Rs cr) 326
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JK Agri Genetics Ltd. (JKAGRIGENETICS) - Auditors Report

Company auditors report

TO THE MEMBERS OF JK AGRI GENETICS LIMITED

Report on the Audit of Annual Financial Statements

Opinion

We have audited the accompanying financial statements of JK Agri Genetics Limited("the Company") which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including Other Comprehensive Income) for the year ended onthat date the Statement of Changes in Equity and the Statement of Cash Flows for the yearended on that date and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give a true and fair view in conformitywith Indian Accounting Standards prescribed under section 133 of the Companies Act 2013('the Act') and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 312021 the profit and total comprehensive income forthe year ended on that date changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Act and the Rulesmade there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Information other than the financial statements and auditor's report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including annexure to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the financialstatements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

KEY AUDIT MATTER RESPONSE TO KEY AUDIT MATTER
Trade receivables Principal Audit Procedures
Trade receivables comprise a significant portion of the liquid assets of the Company. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
Accordingly the estimation of the allowance for trade receivables is a significant judgement area and is therefore considered a key audit matter. • Evaluated and tested the controls for managing trade receivables and subsequent recovery.
• Validated the assumptions underlying the Expected Credit Loss policy.
• Assessed the recoverability of long outstanding and made provisions where considered doubtful for recovery.
• Evaluated the status of disputes and possibility of recovery where ever consider doubtful.
• In case of arbitration cases specific letters were sent to the lawyers and based on their reply assessed management's judgment for recoverability.
• Independent confirmations were called and alternate audit procedures applied in case of non replies.
• Assessed the appropriateness and completeness of the related disclosure.
Conclusion: Based on the above procedure performed we did not identify any significant exceptions.
Existence of inventory Principal Audit Procedures
Inventory comprises a significant portion of the liquid assets of the Company. Various procedures are involved in validating inventory quantities across locations. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
• Identified and assessed slow moving material for valuation and the process of revalidation to identify obsolesce.
• Over all Inventory reconciliation.
• Reviewed the policy of physical verification of inventory and its operational implementation.
• Independent and signed confirmations from Carrying & Forwarding agents for physical inventory.
• Assessed the appropriateness and completeness of the related disclosure.
Conclusion: Based on the above procedure performed we did not identify any significant exceptions.
Utilisation of deferred tax assets Principal Audit Procedures
The analysis of the recoverability of deferred tax assets including MAT credit entitlement has been identified as a key audit matter because the assessment process involves judgement regarding the future profitability and the likelihood of the realization of these assets in particular whether there will be taxable profits in future periods that support the recognition of these assets. This requires assumptions regarding future profitability which is inherently uncertain. Accordingly the same is considered as a key audit matter. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
• Obtained discussed and analysed the future projections after vetting the assumptions and bench marking against past trends.
• Obtained evidence of the approval of the budgeted results included in the current year's projections and the reasonableness of the future cash flow projections and the consistency of those projections with those used in other areas of estimation such as those used for assessing the recoverability of assets.
• Assessed the appropriateness and completeness of the related disclosure.
Conclusion: Our procedures did not identify any material exceptions

Emphasis of Matter

We draw attention to the following matter in the Note no. 51.2c to the financialstatements:

Regarding overdue trade receivables Rs.1823.61 lakhs & security deposit Rs.121.68lakhs from Rajasthan State Seeds Corporation where petition filed by the Company forarbitration was adjudged against the Company on grounds of limitation. However theCompany has filed an application u/s 34 of The Arbitration and Conciliation Act with TheLearned Commercial Court Jaipur since the arbitration order was biased withoutconsidering various facts and submissions. The management has taken legal opinion based onwhich they are confident about the realisation / recovery hence no provision is made.

Our opinion is not modified in respect of this matter. Responsibilities of theManagement and Those Charged with Governance for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance total comprehensive income changes in equityand cash flows of the Company in accordance with Indian Accounting Standards and otheraccounting principles generally accepted in India. The Board of Directors of the Companyis responsible for maintenance of the adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements the Board of Directors of the Company isresponsible for assessing the ability of the Company to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors of theCompany is also responsible for overseeing the financial reporting process of the Company.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the annual financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these annual financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances for thepurpose of expressing an opinion on effectiveness of the Company's internal financialcontrols.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Group to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the entity or business activities within the Company to express an opinion on thefinancial statements.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 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 bestof our knowledge and belief were necessary for the purposes of our audit;

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

c. The Balance Sheet the Statement of Profit and Loss Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;

d. In our opinion the aforesaid financial statements read with Note thereto complywith the Indian Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 312021 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2".

g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note no. 35 on Contingent Liabilities to thefinancial statements;

(ii) The Company did not have any long-term contracts including derivative contracts.Hence the question of any material foreseeable losses does not arise;

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirementsRs.In the Independent Auditor's Report of even date to the members of JK AgriGenetics Limited on the financial statements for the year ended March 31 2021]

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The Company has a regular program of physical verification of its property plantand equipment under which they are verified in a phased manner over a block of threeyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us thetitle deeds of immovable properties recorded in the books of account of the Company areheld in the name of the Company.

(ii) The inventory except goods in transit were physically verified by the managementduring the year. In our opinion the frequency of verification is reasonable. As informedno material discrepancies were noticed on physical verification carried out during theyear.

(iii) According to the information & explanations given and verified us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph (a) (b) and (c) of the Order are not applicable tothe Company.

(iv) In our opinion and according to the information and explanation given to us inrespect of loans investments guarantees and securities the Company has complied withthe provisions of Section 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under. We are informed by the management thatno Order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal on the Company in this regard.

(vi) The Central Government of India has not prescribed the maintenance of cost recordsfor any of the products/activities of the Company under sub-section (1) of Section 148 ofthe Act and the rules framed there under.

(vii) (a)The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax value added tax customs duty excise duty cess and any other materialstatutory dues applicable to it.

According to the information and explanations given and as verified by us noundisputed amounts payable in respect of provident fund employees' state insuranceincome tax sales tax service tax value added tax goods\ and services tax customsduty excise duty cess and any other material statutory dues applicable to it wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(b) According to the information and explanation given and verified by us there are nodues in respect of income tax sales tax service tax value added tax goods and servicestax customs duty or excise duty that have not been deposited on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks governments. The company has not issued any debentures.

(ix) The Company has not raised the money by way of initial public issue offer /further public offer. In our opinion and according to information and explanation providedto us money raised through the term loans during the year were utilized for the purposesfor which they were raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.

(xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) In our opinion and according to the information and explanation given to us alltransactions entered into by the Company with the related parties are in compliance withSections 177 and 188 of Act where applicable and the details have been disclosed in theFinancial Statements etc. as required by the applicable accounting standards.

(xiv) The Company has made preferential allotment or private placement of equity sharesduring the year under review and in our opinion and according to the information andexplanations given to us the requirement of Section 42 of the Act has been complied withand the amount raised has been partially utilised during the year. The funds so utilisedwas as per the purposes for which they were raised.

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirementsRs.In the Independent Auditor's Report of even date to the members of JK AgriGenetics Limited on the financial statements for the year ended March 31 2021] Report onthe Internal Financial Controls over Financial Reporting under Clause (i) of Subsection 3of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of JK AgriGenetics Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of theChartered Accountants of India.

For BGJC and Associates LLP
Chartered Accountants
Firm's Registration No.: 003304N/N500056
Darshan Chhajer
Place: New Delhi Partner
Date: May 03 2021 Membership No. 088308
UDIN: 21088308AAAAAP2730

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