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Jocil Ltd.

BSE: 500561 Sector: Industrials
NSE: JOCIL ISIN Code: INE839G01010
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Jocil Ltd. (JOCIL) - Auditors Report

Company auditors report

TO THE MEMBERS OF JOCIL LIMITED

Report on the financial statements

We have audited the accompanying financial statements of Jocil Limited (‘theCompany’) which comprise the Balance Sheet as at March 31 2016 the Statement ofProfit and Loss and Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management’s responsibility 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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including Accounting standards specified undersection 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility includes maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the company and for prevention anddetection of frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent;design implementation and maintenance of adequate internal financial controls that areoperating 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.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and Rules made there under. We conducted our audit in accordancewith the standards on auditing specified under section 143(10) of the Act. Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors’ judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company’s board ofdirectors as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: a) In the case of Balance Sheet of the state ofaffairs of the Company as at March 31 2016; b) In the case of Statement of Profit andLoss of the profit of the Company for the year ended on that date; and c) In the case ofCash Flow Statement of the cash flows of the Company for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order 2016 (‘theOrder’) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure-A a statement on the matters specified inparagraphs 3 and 4 of the Order.

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 appears from our examination of those books and proper returns adequatefor the purposes of the audit have been received from the branches to the extent notvisited by us;

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account; d) In our opinion the BalanceSheet Statement of Profit and Loss and Cash Flow Statement comply with the accountingstandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014.

e) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of sub-section (2) ofsection 164 of the Act;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure-B and

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the basis of our information and according to the explanations given to us:

i. The company does not have any pending litigations which would impact its financialposition except those which are disclosed in the notes to the financial statements andpara no. 7 in Annexure to our Audit report.

ii. The company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation Protection Fund by the company.

For Brahmayya & Co
Chartered Accountants
Firm Registration No. 000513S
(Karumanchi Rajaj)
Place: Hyderabad Partner
Date : 28th May 2016 ICAI Membership No: 202309

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

The Annexure referred to in our report to the members of JOCIL Limited("Company") for the year ended March 31 2016.

We report that:

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) According to the information and explanations furnished to us the Company has notphysically verified itsfixed assets during the year. However the Company has adopted aphased programme of verification which inour opinion is reasonable having regard to thesize of the Company and the nature of its assets.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.

2. In respect of its inventories:

a) According to the information and explanations furnished to us the Company hasphysically verified its inventories during the year and no discrepancies were noticed onsuch verification. In our opinion the frequency of verification is reasonable.

3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act.Consequently clauses (iii)(a)(b) and (c) of paragraph 3 of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respect tothe loans and investments made.

5. In respect of deposits accepted by the company it has complied with the directivesissued by Reserve Bank of India and the provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed there under. According to theinformation furnished to us no order has been passed on the Company by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal for non-compliance with the provisions of sections 73 to 76 of the Act.

6. We have broadly reviewed the books of account and records maintained by the Companypursuant to the rules made by the Central Government for the maintenance of cost recordsunder section 148(1) of the Act and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not carried out adetailed audit of the same.

7. a) According to the information furnished to us the Company is regular indepositing with appropriate authorities the undisputed statutory dues including ProvidentFund Employees’ State Insurance Income-tax Value added tax Wealth tax Servicetax Customs duty Excise duty Cess and any other statutory dues applicable to it. Therewere no undisputed statutory dues in arrears as at the date of the Balance Sheet underreport for a period of more than six months from the date they became payable. b)According to the information furnished to us the following amounts of Income tax Valueadded tax and Customs duty have been disputed by the Company and hence were not remittedto the authorities concerned at the date of the Balance Sheet under report.

Name of the Statute Nature of Dues Amount (Rs.) (net of amounts paid under protest) Period to which it relates Forum where dispute is pending
Income Tax Act 1961 Treating disputed sale price of power as Income and other additions 2180030 Asst.yr 2012-13 Commissioner of Income Tax
4067510 Asst.yr 2013-14 (Appeals) Guntur
Central Excise Act1944 Duty on valuation of Fa Soap Duty on captive consumption 8897229 2008 CESTAT Bangalore Commissioner of Customs and Central Excise (Appeals) Guntur
165900 2008
AP VAT Availment of Input tax 1040037 2005-06 STAT Vizag
credit
Customs Act Classification of 3203124 2012-13 CESTAT Chennai
1962 goods imported

8. In our opinion and according to the information and explanations furnished to us bythe Company there were no defaults in repayment of dues to banks. However the companyhas not borrowed any loans from financial institutions government or raised any funds byway of issue of debentures.

9. The company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.

10. According to the information and explanations given to us no fraud by the companyor any fraud on the company by its officers or employees has been noticed or reportedduring the year.

11. According to the information and explanation given to us and based on examinationof the records of the company the company has provided remuneration for managerialpersonnel in accordance with the requisite approvals mandated by the provisions of section197 read with schedule V of the Act.

12. The company is not a nidhi company. Accordingly reporting under provisions of para3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on examinationof records of the company transactions with the related parties are in compliance withthe provisions of section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures of thecompany.

15. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv) ofthe Order is not applicable.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Brahmayya&Co
Chartered Accountants
Firm Registration No. 000513S
(Karumanchi Rajaj)
Place : HYDERABAD Partner
Date : 28th May 2016 ICAI Membership No: 202309

Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of JOCILLimited ("the Company") as of 31 March 2016 in conjunction with our audit of thefinancial 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 nd fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of 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 31 March 2016 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 CharteredAccountants of India.

For Brahmayya & Co
Chartered Accountants
Firm Registration No. 000513S
(Karumanchi Rajaj)
Place: Hyderabad Partner
Date : 28th May 2016 ICAI Membership No: 202309