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Lokesh Machines Ltd.

BSE: 532740 Sector: Engineering
NSE: LOKESHMACH ISIN Code: INE397H01017
BSE 13:43 | 22 Jan 69.80 -1.30
(-1.83%)
OPEN

71.30

HIGH

71.30

LOW

69.75

NSE 13:16 | 22 Jan 70.25 -0.75
(-1.06%)
OPEN

70.35

HIGH

71.60

LOW

70.05

OPEN 71.30
PREVIOUS CLOSE 71.10
VOLUME 19243
52-Week high 109.70
52-Week low 66.30
P/E 43.09
Mkt Cap.(Rs cr) 119
Buy Price 69.80
Buy Qty 81.00
Sell Price 70.00
Sell Qty 98.00
OPEN 71.30
CLOSE 71.10
VOLUME 19243
52-Week high 109.70
52-Week low 66.30
P/E 43.09
Mkt Cap.(Rs cr) 119
Buy Price 69.80
Buy Qty 81.00
Sell Price 70.00
Sell Qty 98.00

Lokesh Machines Ltd. (LOKESHMACH) - Auditors Report

Company auditors report

TO THE MEMBERS OF LOKESH MACHINES LIMITED HYDERABAD.

Report on the Financial Statements

We have audited the accompanying financial statements of LOKESH MACHINES LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant 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 the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting 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.

Auditor's 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 the Rules made thereunder.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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial 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 Directors as well as evaluating the overall presentationof 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 aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its Profit and its cash flows 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 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 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 it appears from our examination of those books (c) The Balance Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this Reportare in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. (e) On the basis of the written representations received from thedirectors as on 31st March 2017 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2017 from being appointed as a director interms of Section 164 (2) of the Act. f) With respect of adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure B". g) With respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: i) The Company does not haveany pending litigations which would impact its financial position. ii) The Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii) There has been no delay in transferring amountsrequired to be transferred to theInvestor Education and Protection Fund by the Company.iv) The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember2016 to 30th December2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with thebooks of account maintained by the Company and as produced to us by the Management –Refer Note 27 (B) (8) to the Financial Statements.

For BRAHMAYYA & CO
Chartered Accountants
Firm Registration No. 000513S
(K. SHRAVAN)
Place: Hyderabad. Partner
Date: 30.05.2017 Membership No. 215798

Annexure A to the Auditor's Report

The Annexure referred to in Para 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of LOKESHMACHINES LIMITED HYDERABAD for the year ended March 312017. 1. a. The Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets. b. As explained to us the management has physically verifiedthe fixed assets during the year and there is a regular programme of physical verificationwhich in our opinion is reasonable having regard to the size of the Company and thenature of the assets. No discrepancies were noticed on such verification. c. According tothe information and explanation given to us and on the basis of our examination of therecords of the Company the title deeds of immovable properties are held in the names ofthe Company.

2. As explained to us the inventories have been physically verified by the managementat reasonable intervals during the year. In our opinion the frequency of verification isreasonable. The discrepancies noticed on physical verification between the physical stocksand book records were not material.

3. a. During the year the Company has not granted any loans secured or unsecured toCompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act 2013. b. In view of our comments inpara (a) above Clause (III) (a) (b) and (c) of paragraph 3 of the aforesaid order arenot applicable to the Company.

4. In our opinion and according to the information and explanation given to us theCompany has not advanced any loan to any Director and no investments were made during theyear as referred to in sections 185 and 186 of the Act. Therefore the provisions ofParagraph 3(iv) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany

5. The Company has not accepted any deposits from the public. Hence the provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under do not apply to this Company.

6. We have broadly reviewed the cost records maintained by the Company pursuant tosub-section (1) of section 148 of the Companies Act 2013 and are of the opinion thatprime facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or Complete.

7. a. According to the records the company is not regular in depositing undisputedstatutory dues including provident fund employees ‘state insurance Income-taxSales-tax Service tax Duty of customs Duty of excise Value added tax Cess and allother statutory dues with the appropriate authorities and there were no arrears ofoutstanding statutory dues as at the last day of the financial year for a period more thansix months from the date they became payable. b According to the records of the Companyand the information and explanations given to us there were no dues of income tax orsales tax or service tax or duty of customs or duty of excise or value added tax have notbeen deposited on account of any dispute.

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to any financialinstitutions and Banks except an amount of Rs. 374.03 Lacs is due to IFCI as at the yearend.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instrument) and term loans during the year. Accordingly theprovisions of paragraph 3 (ix) of the Companies (Auditor's Report) Order 2016 are notapplicable.

10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

12. 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 Companies (Auditor'sReport) Order 2016 is not applicable. 13. According to the information and explanationsgiven to us and based on our examination of the records of the Company transactions withrelated parties are in compliance with sections 177 and 188 of the Act where applicableand details of such transactions have been disclosed in the financial statements asrequired by the applicable accounting standards.

14. During the year under review the Company during the year has made preferentialallotment of Equity shares and requirements of Section 42 and other provisions of theCompanies Act 2013 have been complied with.

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 him. Accordingly paragraph 3(xv) ofthe Companies (Auditor's Report) Order 2016 is not applicable. 16. The Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For BRAHMAYYA & CO
Chartered Accountants
Firm Registration No. 000513S
(K. SHRAVAN)
Place: Hyderabad. Partner
Date: 30.05.2017 Membership No. 215798

Annexure - B to the Auditor's 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 LOKESHMACHINES LIMITED HYDERABAD ("the Company") as of 31st March 2017 inconjunction with our audit of the financial statements of the Company for the year endedon 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.

Auditor's 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 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material aspects.

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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud and error.

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

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 preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditure of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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 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
(K. SHRAVAN)
Place: Hyderabad. Partner
Date: 30.05.2017 Membership No. 215798