Dear Shareholders,
Your directors are pleased to present the 39thAnnual Report of the Company
along with the Audited financial Statements for the financial year ended March 31, 2023.
1. FINANCIAL RESULTS
|
|
( Rs. in Lakhs) |
| Particulars |
2022-23 |
2021-22 |
| Revenue from Operations |
24,030.24 |
20,183.76 |
| Other Income |
420.82 |
82.20 |
| Total Income |
24,451.06 |
20,265.95 |
| Total Expenses |
23,159.55 |
19,330.72 |
| Profit before Exceptional items & Taxes |
1,291.51 |
935.24 |
| Exceptional Item |
159.14 |
- |
| Tax Expenses |
|
|
| Less: |
|
|
| (i) Current Tax |
287.89 |
156.11 |
| (ii) Provision for earlier tax |
- |
25.30 |
| (iii) Deferred Tax |
195.41 |
119.23 |
| Profits/ (Loss) after Taxes |
967.35 |
634.60 |
| Other Comprehensive Income |
5.54 |
(23.99) |
| Total Comprehensive Income |
972.89 |
610.61 |
| Earnings Per Equity Share: |
|
|
| Basic |
5.41 |
3.55 |
| Diluted |
5.41 |
3.55 |
2. PERFORMANCE REVIEW:
During the year, the total income increased approximately by 20.65 %. During the
financial year 2022-23, the Company recorded Revenue from Operations through Net Sales of
Rs. 24,030.24/- Lakhs, compared to Rs. 20,183.76/- Lakhs in 2021-22, reflecting an
increase of about 19.05%. The overall increase in turnover and profit by the Company can
be attributed to the focused approach of the Companys management in improving and
achieving its targets of productivity, capacity utilisation and growth. The Company is
consistently striving towards meeting its sales and profit are confident that these
objectives will be realised as planned.
3. DIVIDEND
Currently, your Company is prioritising its expansion plans, and all the profit is
being reinvested back into the business with the focus on creating shareholders value.
Therefore, your directors did not recommend any dividends for the financial year ended
March 31, 2023.
4. TRANSFER TO GENERAL RESERVE
The Company does not propose to transfer any amount to General Reserve for the
financial year 2022-23.
5. SHARE CAPITAL
The paid-up Equity Share Capital as on March 31, 2023, was Rs. 1,789.68 Lakhs.
6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
The Company does not have any Subsidiary, Associates or Joint Venture company either in
India or abroad.
7. CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Composition
During the year, Ms. Mullapudi Likhitha, a Non-Executive Director of the Company, is
due to retire by rotation at the ensuing Annual General Meeting and is eligible to offer
herself for re-appointment.
In accordance with the requirements of Regulation 17(1A) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the appointment of Mr. K
Krishna Swamy, a Non-Executive Director, will be placed before the shareholders at the
upcoming Annual General Meeting for continuation on the Board of the Company.
As mandated by the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, detailed information and profiles of the directors seeking appointment and
re-appointment are provided in the notice and explanatory statement of the 39th Annual
General Meeting.
Mr. S.S. Raman was appointed as an Additional cum Independent Director at the board
meeting held on August 11, 2022, and his appointment was subsequently confirmed by the
shareholders at the 38th Annual General Meeting.
In the opinion of Board, Mr. Raman is a person of integrity and has more than 37 years
of Experience in organisations such as TATA Motors, Birla Yamaha Limited, Whirlpool of
India Limited, TVS Electronics Limited. He retired as Managing Director of TVS Electronics
Limited and was Executive Director in Whirlpool of India Limited. He has exposure of
various areas including Sales, Marketing and Service besides core of Manufacturing,
Technology and SCM, exposed to international business and alliance in global procurement.
Due to the untimely demise of Mr. R. Mohan Reddy on May 20, 2022, he ceased to serve as
an Independent Director on the Board of the Company. Mr. M. Lokeswara Rao, Managing
Director; Mr. V. Sudhakara Reddy, Chief Financial Officer; and Mr. Gurprit Singh, Company
Secretary, hold the office of Key Managerial Personnel. Mr. M. Srinivas, Mr. M.
Srikrishna, and Mr. B. Kishore Babu hold the office of Whole-time Director.
Independent Directors
The Independent Directors have fulfilled the criteria of Independence as defined under
Section 149(6) of the Companies Act, 2013, and requisite declarations in terms of Section
149(7) of the Companies Act, 2013, have been received.
During the year under review, a separate meeting of Independent Directors was held on
March 28, 2023, in accordance with Schedule IV to the Companies Act, 2013 (Code for
Independent Directors) and Regulation 25 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. This meeting was convened without the attendance of
Non-Independent Directors.
The meeting was attended by Mr. B.R. Mahesh and Mr. S.S. Raman. Additionally, all
directors of the Company have disclosed their interests to the Company pursuant to Section
184(1) of the Companies Act, 2013.
9. BOARD MEETINGS
In the course of the year, a total of 6 meetings of the Board of Directors were
convened. Comprehensive information regarding these meetings is provided in the Corporate
Governance Report, which is enclosed with this report.
10. COMPANYS POLICY RELATING TO
APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Company adheres to the provisions outlined in Section 178(1) of the Companies Act,
2013, concerning the establishment of a Nomination and Remuneration Committee. As such,
the Company has formulated a comprehensive policy that encompasses various aspects,
including the appointment of Directors, remuneration for managerial roles, Director their
positive attributes, the assessment qualifications, of Director independence, and other
pertinent subjects as stipulated by Section 178(3) of the Companies Act, 2013. This policy
has been made accessible on the Companys website for reference
https://www.lokeshmachines. com/investment-center.php?key=policy.
11. AUDITORS
a) Statutory Auditors
As per the provisions of Section 139, 142 and other applicable provisions, if any, of
the Companies Act, 2013 (the Act), and the Companies (Audit and Auditors) Rules, 2014
(including . any statutory modification(s)or re-enactment thereof, for the time being in
force) and pursuant to recommendation of the Audit Committee and the Board of Directors,
M/s. Brahmayya & Co., Hyderabad (ICAI Firm Regn. No.000513S) were appointed as
Statutory Auditors of the Company at the 38th Annual General Meeting for a term of five
years i.e., from conclusion of 38th Annual General Meeting till the conclusion of 43rd
Annual General Meeting at such remuneration plus reimbursement of out of-pocket,
travelling and living expenses, etc., as may be mutually agreed between the Board of
Directors of the Company and the said Auditors.
The Statutory Auditors report forms part of the Annual Report. The notes on financial
statements referred to in the Auditors Report are self-explanatory and do not call for
any further comments.
The Statutory Auditors have not made any reservations, or unfavorable observations
concerning disclosures in their report. Furthermore, no instances of fraudulent activities
have been reported by the Auditors to the Companys Audit Committee during the reviewed
year.
b) Cost Auditors:
The Board, during its meeting on May 26, 2023, has appointed M/s Naval &
Associates, Cost Accountants (Firm Registration: 002319), to perform the audit of cost
records for various segments of the Company for the fiscal year 2023-24, based on the
recommendation of the Audit Committee.
In accordance with the provisions outlined in Section 148 and Rule 14 of the Companies
(Audit and Auditors) Rules, 2014, a resolution has been prepared for presentation at the
forth coming Annual General Meeting (AGM) to seek ratification of the remuneration
proposed for the aforementioned Cost Auditors.
c) Secretarial Auditors:
The Board, during its meeting held on May 26, 2022, appointed M/s. L.D. Reddy &
Co., Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for
both the financial years 2022-23 and 2023-24. This appointment is in line with the
requirements set out in Section 204 of the Companies Act, 2013, and Rule 9 thereof. The
Secretarial Audit Report for the year 2022-23 has been included in this Report as Annexure
A.
Furthermore, in accordance with regulation 24(A) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, along with relevant circulars and guidelines
issued under these regulations (referred to as "SEBI Listing Regulations"), the
Company has undertaken an audit to ensure compliance with all applicable provisions of the
SEBI Listing Regulations for the financial year 2022-23.
The Annual Secretarial Compliance Report, issued by Mr. L. Dhanamjay Reddy, Practising
Company Secretary based in Hyderabad, has been duly submitted to the Stock Exchanges
within the stipulated timeframe. A copy of this report has been attached as Annexure A2
to this document.
12. INTERNAL CONTROL SYSTEMS AND THEIR
The Board, in its meeting on May 26, 2023, has appointed M/s M. V. Narayana Reddy &
Co., Chartered Accountants located in Ameerpet, Hyderabad, as the Internal Auditors for
the Company. Their responsibility includes conducting the Internal Audit for the year
ending on March 31, 2024.
The role of the Internal Auditors encompasses assessing the efficiency and
effectiveness of the Companys systems and procedures. The Audit Committee plays a vital
role in this process by approving and reviewing the internal audit report issued by the
Internal Auditors.
13. SECRETARIAL STANDARDS
The Directors have devised proper systems and processes for complying with the
requirements of applicable Secretarial Standards issued by the Institute of Company
Secretaries of India and that such systems were adequate and operating effectively.
14. PREVENTION OF INSIDER TRADING:
As per SEBI (Prohibition of Insider Trading) Regulation, 2015 as amended from time to
time, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The
Company has appointed Mr. Gurprit Singh, Company Secretary as Compliance Officer w.e.f.
June 16, 2021, who is responsible for setting forth procedures and implementation of the
code for trading in Companys securities. During the year under review, there has been due
compliance with the said code of conduct for prevention of Insider trading.
15. DIVIDEND DISTRIBUTION POLICY
The Provision relating to Regulation 43A of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding formulation
of Dividend Distribution Policy is not applicable to your Company.
16. BUSINESS RESPONSIBILITY & REPORT
The Provision relating to Regulation 34(2)(f) of theSecurities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from
time to time regarding submission of Business Responsibility & Sustainability Report
is not applicable to your Company.
17. ANNUAL RETURN
The Annual Return of the Company filed by the Company is available on the Companys
website and can be accessed at https://www.lokeshmachines.com/
investment-center.php?key=annual-returns06-16-01 and the Annual Return as on March 31,
2023 shall be uploaded on the website of the Company as & when filed with the
Registrar of Companies, Hyderabad.
18. INDUSTRIAL RELATIONS
The employee relations have remained cordial throughout the year and industrial harmony
was maintained. Measures for the safety, training and development of the employees
continued to receive top priority. The Directors wish to place on record their
appreciation of the valuable contribution made by the employees of the Company at all
levels towards the performance and growth of the Company.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE
COMPANIES ACT, 2013
The Company has not given any loans or guarantees covered under the provisions of
Section 186 of the Companies Act, 2013. The details of the investments made by Company are
given in the financial statements.
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Policy of the Company and details about the initiatives taken by the Company on
CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules,
2014 have been disclosed as part of this report in Annexure C attached hereof.
Further details of composition of the Corporate Social Responsibility Committee and other
details are provided in the Corporate Governance Report which forms part of this report as
Annexure D.
21. INTERNAL COMPLAINT COMMITTEE
The Company has in place a policy for prevention, prohibition and redressal against
sexual harassment of women at workplace to protect women employees and enable them to
report sexual harassment at workplace. An Internal Committee has been constituted
consisting of optimum number of women for the said purpose. During the year under review,
the Company has not received any complaint from any women employees.
22. ANNUAL PERFORMANCE EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS
COMMITTEES AND INDIVIDUAL DIRECTORS
As required under the provisions of Schedule IV of the Companies Act, 2013 the
performance evaluation of independent directors has been done by the entire Board of
Directors, excluding the director being evaluated.
The evaluation of all the directors and the Board as a whole was conducted based on the
criteria and framework adopted by the Board.
The Nomination and Remuneration Committee has defined the evaluation criteria,
procedure, and time schedule for the Performance Evaluation process for the Board, its
Committees and Directors.
Directors were evaluated on aspects such as attendance and contribution at Board/
Committee Meetings and guidance/ support to the management outside Board/ Committee
Meetings.
23. LISTING:
The equity shares of the Company are listed with Bombay Stock Exchange Limited (BSE),
and National Stock Exchange of India Limited (NSE). There are no arrears on account of
payment of listing fees to the said Stock Exchanges.
24. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that: In
preparation of annual accounts for the financial year ended March 31, 2023.
a. The applicable Accounting Standards have been followed along with proper explanation
relating to material departures;
b. The Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give true and
fair view of the state of affairs of the Company at the end of the financial year ended
March 31, 2023, and of the profit Company for the financial year;
c. The Directors have taken proper and sufficient care for their maintenance of
adequate accounting records in accordance with the provisions of the Companies Act for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
d. The Directors had prepared the annual accounts on a ‘going concern basis;
e. The directors had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively; and
f. The directors had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
25. CORPORATE GOVERNANCE REPORT
A report on Corporate Governance including Auditors Certificate on compliance with the
requirements of Corporate Governance has been attached as Annexure D. The
certificate on compliance of conditions of Corporate Governance is attached Annexure D2.
26. CERTIFICATE FROM COMPANY SECRETARY PRATICE
Mr. L. Dhanamjaya Reddy, Practicing Company Secretary has issued a certificate as
required under the Listing Regulations confirming that none of the directors on the Board
of the Company has been debarred or disqualified from being appointed or continuing as
director of companies by the SEBI/ Ministry of Corporate Affairs or any such statutory
authority. material orders passed by The certificate is enclosed as Annexure D1.
27. NOMINATION AND REMUENRATION POLICY
On the recommendation of the Nomination and Remuneration Committee the Board of
Directors has formulated a policy of the Company on directors appointment and
remuneration, including criteria for determining qualifications, independence of a
director and other matters and to frame proper systems for identification,appointment of
directors & KMP, Payment of Remuneration to them and Evaluation of their performance.
28. PARTICULARS OF EMPLOYEES AND
DISCLOSURES
The information required pursuant to Section 197(12) of the Companies Act, 2013 read
with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company are not applicable on your
Company during the financial year under review.
The Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Companies Act, 2013 read with Rule 5(1) of theCompanies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure E
forming part of the Annual Report.
With regard to the provisions of Section 136(1) read with its relevant provision of the
Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent
to the members of the Company. The said information is available for inspection at the
registered office of the Company during working hours and any member interested in
obtaining such information may write to the Company Secretary at cosecy@
lokeshmachines.com.
29. BOARDS RESPONSE ON AUDITORS RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:
During the year, there is no qualification, reservation or adverse remark or disclaimer
made or reported by the auditors under the provisions of the Companies Act, 2013 read with
SEBI Listing regulations.
30.INSURANCE:
The Company takes a very pragmatic approach towards insurance. Adequate cover has been
taken for all movable and immovable assets for various types of risks.
31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant Regulators /Courts/ Tribunals which would impact the going
concern status of the Company and its future operations.
32. MATERIAL CHANGES AND COMMITMENTS
There are no Material changes and commitments affecting the financial position of the
Company which occurred between the financial year ended March 31, positive attributes, and
2023, to which the financial statements relates and the date of signing of this Report.
33. MANAGEMENT DISCUSSION AND ANALYSIS:
A brief note on the Management discussion and analysis for the year is enclosed as Annexure
B to this report.
34. CONSERVATION OF ENERGY, ABSORPTION, FOREIGN EXCHANGE OUTGO
Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule
8 of the Companies (Accounts) 2014, is enclosed herewith as Rules, in Annexure F.
35. DEVELOPEMNT AND IMPLEMENTATION OF A MANAGEMENT POLICY
The Company has been addressing various risks impacting the Company. Policy of the
Company on risk management is discussed as a part of Management Discussion and Analysis
Report.
The Company has developed and implemented a risk management policy for the Company
including identification therein of elements of risk, which in the opinion of the Board
may threaten the existence of the Company.
36. VIGIL MECHANISIM
In pursuant to the provisions of section 177 of the Companies Act, 2013 a Vigil
Mechanism for directors and employees to report genuine concerns has been established. All
permanent employees of the Company are covered under the Whistle Blower Policy.
37. PUB LIC DEPOSITS:
The Company has not accepted any deposits from public.
38. RELATED PARTY TRANSACTIONS:
Related party transactions entered during the financial year under review are disclosed
in Note No.39 of the Financial Statements of the Company for the financial year ended
March 31, 2023. These transactions entered were at an arms length basis and in the
ordinary course of business. There were no materially significant party transactions with
the Companys Promoters, Directors, Management or their relatives, which could have had a
potential conflict with the interests of the Company.
All transactions entered by the Company with Related parties were in the Ordinary
Course of business and Arms Length pricing basis. There are no materially the significant
Company during the year. The Audit Committee granted approval at every quarterly held
meeting and subsequently as per the recommendation of the Audit Committee it has been
ratified by the Board of Directors.
39. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE
FINANCIAL YEAR.
During the year under review, there are no proceedings, either filed by the Company or
filed against Company, pending under the Insolvency and Bankruptcy Code, 2016, before
Honble National Company Law Tribunal or other Court.
40. ACKNOWLEDGEMENTS
Your directors wish to place on record their appreciation for the support and
co-operation extended by the Shareholders, Bankers, Financial Institutions, Government
Authorities, Stock Exchanges, Customers, Suppliers and other associates.
Your directors also wish to place on record their appreciation for the enthusiastic
support received from the team of dedicated employees in the activities of your Company.
|
|
On behalf of the Board |
|
|
For Lokesh Machines Limited |
|
Sd/- |
Sd/- |
| Place: Hyderabad |
M. Srinivas |
M. Lokeswara Rao |
| Date: August 29, 2023 |
(Whole-time Director) |
(Managing Director) |
+91-9892691696
