LOKESH MACHINES LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To
The Members of
LOKESH MACHINES LIMITED,
HYDERABAD.
1. We have audited the attached Balance Sheet of LOKESH MACHINES LIMITED,
HYDERABAD (A.P) as at 31st March, 2012 and also the Statement of Profit and
Loss and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the Company`s
Management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors` Report) Order, 2003 (as
amended), issued by the Central Government of India in terms of sub-section
(4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4 Further to our comments in the Annexure referred to above, we report
that:
i) We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit.
ii) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those books.
iii) The Balance Sheet, the Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
account.
iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956.
v) On the basis of written representations received from the Directors, as
on 31st March, 2012 and taken on record by the Board of Directors, we
report that, none of the Directors is disqualified as on 31st March, 2012
from being appointed as a Director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956;
vi) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read in conjunction with the
Schedules annexed therewith give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
a) In the case of the balance sheet, of the state of affairs of the Company
as at 31st March, 2012;
b) In the case of the Statement of Profit and Loss, the Profit of the
Company for the year ended on that date; and
c) In the case of cash flow statement, of the cash flows for the year ended
on that date.
For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000513S
(K.S. RAO)
Place: Hyderabad Partner
Date : 14th August, 2012 Membership No. 15850
ANNEXURE TO THE AUDITOR`S REPORT:
Re: LOKESH MACHINES LIMITED, HYDERABAD.
1. a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) As explained to us, the management has physically verified most of the
fixed assets during the year and there is a regular programme of
verification which, in our opinion, is reasonable having regard to the size
of the Company and the nature of the assets. As informed, no material
discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any of the fixed
assets.
2. a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
b) In our opinion, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to the
size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical stocks
and book records were not material.
3. According to the information and explanations given to us, the company
has neither granted nor taken any loans, secured or unsecured from/to
companies, firms or other parties covered in the register maintained under
section 301 of the Companies Act 1956.
4. In our opinion and according to the information and explanations given
to us, there are adequate internal control systems commensurate with the
size of the Company and the nature of its business with regard to purchase
of inventory and fixed assets and with regard to sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control system.
5. a) According to the information and explanations given to us by the
Management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section
b) In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Companies Act,
1956 have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
6. The company has not accepted any deposits from the public. Hence the
provisions of Sections 58A, 58AA and other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975
are not applicable to the Company for the time being.
7. In our opinion, the Company has an internal audit system commensurate
with its size and nature of its business.
8. We have broadly reviewed the books of account relating to materials,
labour and other items of cost maintained by the company pursuant to the
Rules made by the Central Government for the maintenance of cost records
under section 209(1)(d) of the Companies Act, 1956 in respect of
manufacturing of machinery and job works and are of the opinion that prima
facie the prescribed accounts and records have been made and maintained.
9. a) According to the records, the Company is generally regular in
depositing with appropriate authorities undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees` State
Insurance, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other material statutory dues applicable to it.
b) According to the information and explanations given to us, no undisputed
amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty and Cess were in arrears as at March 31, 2012 for a
period of more than six months from the date they became payable.
10. The Company has no accumulated losses as at the end of the financial
year. The Company has not incurred any cash losses during the financial
year covered by our audit and the immediately preceding financial year.
11. In our opinion and according to the information and explanations given
to us, the Company has not defaulted in repayment of dues to any financial
institutions and Banks.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit fund/society.
Therefore, the provisions of clause 4(xiii) of the Companies (Auditor`s
Report) Order, 2003 are not applicable to the Company.
14 The Company is not dealing or trading in shares, securities, debentures
and other investments Therefore, the provisions of clause 4(xiv) of the
Companies (Auditor`s Report) Order, 2003 are not applicable to the Company.
15. According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
16. In our opinion and according to the information and explanations given
to us the term loans were applied for the purpose for which the loans were
raised.
17. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term investment.
18. During the year, the Company has not made any preferential allotment of
shares to parties and Companies covered in the Register maintained under
section 301 of the Companies Act, 1956.
19. During the financial year Company has issued 20,70,000 Secured
Optionally Convertible Debentures (OCDs) of Rs. 45/- each to IFCI Venture
Capital Funds Limited amounting to Rs. 9,31,50,000/-.The company created
the security for the said above.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by public
issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or by
the Company has been noticed or reported during the year.
For BRAHMAYYA & CO.
Chartered Accountants
Firm Regn. No. 000513S
(K.S. RAO)
Place: Hyderabad Partner
Date : 14th August, 2012 Membership No. 15850 |