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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 Ind AS financial statements

We have audited the accompanying Ind AS financial statements of JOCIL Limited ('theCompany') which comprise the Balance Sheet as at March 31 2017 the statement of Profitand Loss (including Other Comprehensive Income) the statement of Cash flows and theStatement of changes in equity for the year then ended and a summary of significantaccounting 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 of these IndAS financial statements that give a true and fair view of the financial positionfinancial performance including Other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133ofthe Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. In conducting our audit we have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS financial statements are free from material misstatement. An audit involvesperforming procedures to obtain audit evidence about the amounts and disclosures in theInd AS financial statements. The procedures selected depend on the auditors' judgmentincluding the assessment of the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of the Ind ASfinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's board of directors as well as evaluating the overallpresentation of the Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS of the financialposition of the company as at 31st March 2017 its financial performance including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of section 143 of the Act wegive in the Annexure-A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 Cash Flow Statement and Statementof changes in equity dealt with by this report are in agreement with the books of account;

d) In our opinion the aforesaid Ind AS financial statements comply with the Accountingstandards specified under section 133 of the Act read with relevant rule issuedthereunder;

e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 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. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the company's internal financial controls over financialreporting.

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 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 Ind AS financial statements.

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

iii) there has been no delay in transferring amounts required to be transferred to theInvestor Education Protection Fund by the company and

iv) the company has provided requisite disclosures in its Ind AS financial statementsas to holdings as well as dealings in specified bank notes as defined in the NotificationS.O. 3407(E) dt. 8th November 2016 of the Ministry of Finance during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures performed and therepresentations provided to us by the management we report that the requisite disclosuresrelated to permitted and non-permitted transactions as stated in Note 35 to the Ind ASfinancial statements are in accordance with the books of accounts maintained by thecompany.

For Brahmayya & Co
Chartered Accountants
Firm Registration No. 000513S
(Karumanchi Rajaj)
Place: Hyderabad Partner
Date : 24th May 2017 ICAI Membership No: 202309

Annexure-A ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

Annexure-A referred to in our report to the members of JOCIL Limited("Company") for the year ended March 31 2017.

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) The company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner. In accordance with the said programmecertain fixed assets were verified during the year and no material discrepancies werenoticed on such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size 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 theprescribed accounts and records have been made and maintained. However we have notcarried out a detailed examination of the cost records with a view to determine whetherthey are accurate or complete.

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 Service tax Customs dutyExcise duty Cess and any other statutory dues applicable to it. There were no undisputedstatutory dues in arrears as at the date of the Balance Sheet under report for a periodof more than six months from the date they became payable.

b) According to the information furnished to us the following amounts of Income taxValue added tax Excise duty service tax and Customs duty have been disputed by theCompany and hence were not remitted to the authorities concerned at the date of theBalance Sheet under report.

Name of the Statute Nature of Dues Amount (Rs.) (net of amounts Period to which it relates paid under protest) 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 (Appeals) Guntur
961550
4067510 Asst.yr 2013-14
Central Excise Act1944 Duty on valuation of Fa Soap Duty on captive consumption 8897229 2008 CESTAT Bangalore
165900 2008 Commissioner of Customs and Central Excise(Appeals) Guntur
AP VAT Availment of Input tax credit 1040037 2005-06 STAT Vizag
224341 2006-07
43650 2007-08
Customs Act 1962 Classification of goods imported 3203124 2012-13 CESTAT Chennai
Service Tax Service tax and penalty 92700 2012-13 to 2013-14 Commissioner of Customs and Central Excise (Appeals) Guntur

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) during the year. In respect of term loan borrowed frombank during the year the proceeds were applied for the purpose for which it was received.

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 course of our audit.

11. According to the information and explanation given to us and based on examinationof the records of the company the company has paid/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 Ind AS financial statements as required by theapplicable accounting 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 duringthe year.

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 : 24th May 2017 ICAI Membership No: 202309

Annexure-B

Independent Auditors' Report

Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 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 2017 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. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

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 2017 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 : 24th May 2017 ICAI Membership No: 202309