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A Oneindia Venture

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Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Lokesh Machines Ltd.

Mar 31, 2025

Your directors are pleased to present the 41 ^stAnnual Report of the company along with the Audited financial Statements for the
financial year ended March 31,2025.

1. FINANCIAL RESULTS AND STATE OF COMPANY''S AFFAIRS

(Rs in Lakhs)

Particulars	2024-25	2023-24
Revenue from Operations	2 2,832.16	29,353.99
Other Income	147.31	168.18
Total Income	2 2,979.47	29,522.17
Total Expenses	22890.46	27,466.84
Profit beforeTaxes	89.01	2,055.33
Tax Expenses:
(i) Current Tax	-	372.13
(ii) Provision for earlier tax	-	103.68
(iii) Deferred Tax	35.33	194.73
Profits/ (Loss) after Taxes	53.68	1,384.79
Earnings Per Equity Share:
Basic	0.28	7.68
Diluted	0.28	7.68

Note:The above figures are extracted from the audited financial statements of the Company prepared as per the
Indian Accounting Standards (Ind AS).

2. PERFORMANCE REVIEW

During the financial year ended on March 31,2025, the Company recorded Revenue from Operations of Rs.22,832.16/-
lacs, as compared to Rs. 29,353.99/- lacs in 2023-24.Furthermore, during the financial year, the company has made profit
after tax of Rs. 53.68 lacs as compared to Rs. 1384.79 lacs in 2023-24.

Furthermore, on October 30, 2024, the Company was sanctioned by United States Office of Foreign Control Assets
("OFAC Sanctionsâ). Because of OFAC Sanctions, the Company''s turnover has decreased to the extent of 22.18 % as
compared to the last financial year.

Furthermore, starting from October 30, 2024, the Company was unable to enter into any foreign currency transactions.

In view of the OFAC sanctions and challenging macro-economic conditions, the company has taken a certain cost cutting
initiative and as a result of which, the Company is able to minimize the impact of sanctions on the operations of the
Company.

Furthermore, the Company has undertaken renewed strategic initiatives aimed at recouping the business. These
measures have begun to yield positive outcomes, evidenced by the emergence of new opportunities and the on boarding
of new customers

Further, the Company is in the process of getting its name removed from the sanction list of the United State Department
of Treasury for which the Company through a US based lawyer firm filed an application before Office of Foreign Assets
Control, U.S. Department of the Treasury ("OFACâ) for expedited removal/reconsideration of Designation on the list of
Specially Designated Nationals and Blocked Persons on January 31,2025 (EST).

3. DIVIDEND

Currently, your company is prioritizing its expansion plans, and a significant portion of 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 ending March 31,2025.

4. TRANSFER TO GENERAL RESERVE

The Company does not propose transferring any amount to General Reserve for the financial year 2024-25.

5. SHARE CAPITAL

The Authorized share capital of the Company is Rs. 22,00,00,000 (Rupees Twenty-Two Crore Only) divided into
2,20,00,000 (Two Crore Twenty Lakhs Only) equity shares of Rs.10/- (Rupees Ten Only).

During the previous financial year ended on March 31,2024, the Company has issued & allotted 6,00,000 Equity Shares of
Rs 10/- each at a premium of Rs. 233.25/- on Preferential basis to non-promoters.

In addition to above, the company has also issued & allotted 15,00,000 convertible warrants of Rs. 10/- each at a premium
of Rs. 233.25/- on Preferential basis to the members of promoters/promoters group.

During the financial year ended on March 31,2025, 8,53,562 warrants have been converted into equity shares by the
members of promoters/promoters group and because of that paid up equity share capital of the Company has increased
by 8,53,562 equity shares.

Furthermore, till date, remaining 6,46,438 warrants have also been converted into equity shares and because of that paid
up equity share capital of the Company has increased by 6,46,438 equity shares.

As on March 31,2025, the paid-up equity Share Capital of the company is Rs. 1,935.03 and paid-up equity share capital on
a fully diluted basis is Rs. 1999.67 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

As on March 31,2025, the Company''s Board of Directors comprises of 9 directors. Four are Executive Directors and
three are Independent Directors and two are Non-Executive Directors including one Women Director.

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 Directors.

During the year, Mr. Likhitha Mullapudi, a Non-Executive Director of the company, is due to retirement by rotation at
the ensuing Annual General Meeting and is also eligible for re-appointment.

The second term for Mr. B.R. Mahesh was concluded on September 29, 2024. Further, on the recommendation of
the Nomination and Remuneration Committee, the Board has recommended the appointment of Mr. Meka
Yugandhar as an Independent Director of the Company at the Annual General Meeting effective from September
29, 2024, to September 28, 2029.

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.

Subsequent to the end of the financial year, Mr. Raman Sekharipuram Seshadri, an Independent Director on the
Board of the Company resigned w.e.f. April 29, 2025

As mandated by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed
information and profiles of the director''s seeking appointment and re-appointment are provided in the notice and
explanatory statement of the 41^st Annual General Meeting.

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 28,2025, 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. Meka Yugandhar, Mr. D. Balaji 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.

Change in Key Managerial Personnel (KMP)

Subsequent to the end of the financial year, Mr. Gurprit Singh resigned as Company Secretary and Key Managerial
Personnel of the Company w.e.f. August 14, 2025. Mr. P. Kodanda Rami Reddy, appointed as Company Secretary,
Compliance Officer & Key Managerial Personnel (KMP) of the Company w.e.f 15.08.2025.

Appointment of Chief Operating Officer(COO)

Subsequent to the end of the financial year, Mr. Sandeep Avinash Dorle was appointed as Chief Operating Officer
(COO) of the Company w.e.f. July 10, 2025. He is also designated as Senior Management Personnel under the SEBI
(LODR) Regulations, 2015.

9. BOARD MEETINGS

During the year, a total of 7 meetings of the Board of Directors were convened. Comprehensive information regarding
these meetings is provided in the Corporate Governance Report, which is enclosed as Annexure D.

10. COMPANY''S POLICY RELATING TO DIRECTORS'' APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF
THEIR DUTIES.

In accordance with 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 qualifications, their positive
attributes, the assessment of Director independence, and other pertinent subjects as stipulated by Section 178(3) of the
Companies Act, 2013. The details of Board and committee composition, tenure of directors, areas of expertise and other
details are available in the corporate overview section that forms part of this Integrated Annual Report. This policy has
been made accessible on the Company''s 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 43 rd Annual General Meeting at such remuneration of Rs. 5,00,000/- per
annum plus reimbursement of out-of-pocket, travelling expenses, if any.

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 qualifications, reservations, or adverse remarks or disclaimer in their
report for the financial year ended on March 31,2025,furthermore, no instances of fraudulent activities have been
reported by the Auditors to the Company''s Audit Committee during financial year under review.

b) Cost Auditors:

The Board, during its meeting on May 28, 2025, has appointed M/s Naval & Associates, Cost Accountants (Firm
Registration: 002419), to perform the audit of cost records for various segments of the Company for the fiscal year
2025-26, 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 forthcoming Annual General Meeting (AGM) to seek
ratification of the remuneration proposed for the aforementioned Cost Auditors.

c) Secretarial Auditors:

As per the provisions of section 204 of Companies Act, 2013, Regulation 24A of SEBI (Listing Obligation and
Disclosure Requirements) Regulation, 2015 read with the SEBI (Listing Obligations and Disclosure Requirements)
(Third Amendment) Regulations, 2024, and subject to the approval of the share holders of the Company at the
ensuing Annual General Meeting, the Board, at its meeting held on May 28, 2025, recommended the appointment of
M/s L.D. Reddy & Co. Practicing Company Secretaries for the period of 5 years (Five years) starting from April 01,
2025, to March 31,2030.

The Secretarial Audit Report issued by M/s L.D. Reddy & Co. Practicing Company Secretaries for the financial year
2024-25 is annexed as Annexure A to this report. Further more, the Secretarial Auditors have not made any
qualifications, reservations, or adverse remarks or disclaimer in their report for the financial year ended on March
31,2025.

Furthermore, in accordance with regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, ("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 2024-25.

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 time frame. A copy of
this report has been attached as Annexure AI to this report.

12. INTERNAL AUDIT, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board, in its meeting on May 28, 2025, has appointed M/s K. S. Rao & Co., Chartered Accountants, Hyderabad having
Firm Reg. No. 003109S as the Internal Auditors of the Company for the financial year ended on March 31,2025.

The responsibility of Internal Auditors inter-alia includes conducting the Internal Audit for the year ending on March 31,
2025. The role of the Internal Auditors encompasses assessing the efficiency and effectiveness of the Company''s
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.

Furthermore, the Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its
business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of fraud,
error-reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable
financial disclosures. For more details, refer to the ''Internal control systems and their adequacy'' section in the
Management discussion and analysis report, which forms part of this Annual Report as Annexure B.

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. P. Kodanda Rami Reddy, Company
Secretary, as Compliance Officer w.e.f. August 15, 2025, who is responsible for setting forth procedures and
implementation of the code for trading in Company''s securities. During the year under review, there has been due
compliance with the said code of conduct for the 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 the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 as amended from time to time regarding submission of Business
Responsibility Report is not applicable to your Company.

17. ANNUAL RETURN

The Annual Return of the 2024-25 filed by the Company is available on the Company''s 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, 2025 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 the 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. COMPLIANCE UNDER POSH ACT, 2013

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, details of the complaints are mentioned below:

Particulars	Details
Number of complaints received during the year	NIL
Number of complaints at the beginning of the year	NIL
Number of complaints at the end of the year	NIL

22. PERFORMANCE ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES
AND INDIVIDUAL DIRECTORS

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.

The Independent Directors of the Company had also convened a separate Meeting for this purpose on March 28, 2025.
The results from this evaluation process have been informed to the Chairman of the Board of Directors.

23. LISTING

The equity shares of the Company are listed with BSE Limited, 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 31,2025.

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 31,2025 and of the profit of the 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. CORPORATEGOVERNANCEREPORT

A report on compliance with the requirements of Corporate Governance has been attached as Annexure D. The certificate
on compliance with the conditions of Corporate Governance is attached as Annexure D2.

26. FUND RAISING AND UTILIZATION

Your Company raised funds by issuing Equity Shares and Warrants by way of preferential allotment in accordance with
the provisions of the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

The details of amount raised, and utilization of such funds are as follows:

Details of amount raised (In Crore)

Type of Security	Total amount raised	Already received towards subscription	Pending receipt
Equity Share	14.59	14.59	-
Warrants	36.49	36.49	-
Total	51.08	51.08	-

Details of amount spent (In Crore)

Objects specified in Offer Letter	Amount Spent	Deviation
Towards repayment of unsecured loans	9.00	No
Towards capital expenses	27.00	No
Towards working capital	15.08	No
Total	51.08	No

27. CERTIFICATE FROM COMPANY SECRETARY IN 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 dis-qualified from
being appointed or continuing as director of companies by the SEBI/ Ministry of Corporate Affairs or any such statutory
authority. The certificate is enclosed as Annexure D1.

28. NOMINATION AND REMUNERATION 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, positive attributes, and 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. The Policy can be accessed at https://www.lokeshmachines. com/investment-
center.php?key=policy.

29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
provided in the Annexure E forming part of this report.

Further, the disclosure required under section 197(14) of the Companies Act, 2013, is not applicable as the Company do
not have any Holding or Subsidiary Company.

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.

30. BOARD''S RESPONSE ON AUDITOR''S QUALIFICATION, 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.

31. INSURANCE

The Company takes a very pragmatic approach towards insurance. Adequate cover has been taken for all movable and
immovable assets to minimize the impact of various types of risks.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There is no significant material orders passed by the Regulators/Courts/ Tribunals which would impact on the going
concern status of the Company and its future operations.

33. 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 31,2025, to which the financial statements relate and the date of signing of this
Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis Report for the financial year ending on March 31, 2025, is enclosed as
Annexure B to this report.

35. CONSERVATION OF ENERGY, TECHNOLOGY 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 as Annexure F to this report.

36. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the company. The Policy of the company on risk
management is discussed as a part of the Management Discussion and Analysis Report.

The Company has developed and implemented a risk management policy for the company including identification
therein of elements of risks, which in the opinion of the Board may threaten the existence of the company.

37. VIGIL MECHANISM

In pursuant to the provisions of section 177 of the Companies Act, 2013 read with regulation 22 of SEBI (LODR)
Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns has been established. All
employees of the Company are covered under the Whistle Blower Policy. The Policy can be accessed at
https://www.lokeshmachines.com/investment-center.php?key=policy.

38. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

During the year under review, the company has not accepted any deposits. Furthermore, detailed disclosure is as
mentioned below:

S.No.	Particulars	Details
a)	Accepted during the year;	NIL
b)	Remained unpaid or unclaimed as at the end of the year	NIL
c)	Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved	No default during the financial year.
	(i) At the beginning of the year;	NIL
	(ii) Maximum during the year;	NIL
	(iii) At the end of the year;	NIL
	(vi) The details of deposits which are not in compliance with the requirements of Chapter V of the Act;	NIL

39. RELATED PARTY TRANSACTIONS:

Related party transactions entered during the financial year under review are disclosed in Note No.40 of the Financial
Statements of the Company. These transactions entered were at an arm''s length basis and in the ordinary course of
business. There were no materially significant related party transactions with the Company''s Promoters, Directors,
Management or their relatives, which could have had a potential conflict with the interests of the Company. The Audit
Committee granted approval as and when required and subsequently noted by the Board of Directors. As required under
the Act, the prescribed Form AOC-2 is enclosed as Annexure G to this report.

40. 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 Hon''ble National Company Law Tribunal or other Court.

41. COMPLIANCE WITH THE PROVISIONS OF MATERNITY BENEFIT ACT 1961

During the year under review, the company has complied with the provisions of the Maternity Benefit Act 1961.

42. 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.

For and on behalf of the Board of Directors

Sd/- Sd/-

Mullapudi Lokeswara Rao Mullapudi Srinivas

^{Place: Hyderabad} Managing Director Whole-time Director

^{Date: August} I^2,2025 Din: 00989447 DIN: 00917565

Mar 31, 2024

Your directors are pleased to present the 40th Annual Report of the Company along with the Audited Financial Statements for the financial year ended March 31,2024.

1. FINANCIAL HIGHLIGHTS AND STATE OF COMPANY''S AFFAIRS.

'' in Lakhs
Particulars	(2023-24)	(2022-23)
Revenue from Operations	29,353.99	24,030.24
Other Income	168.18	420.82
Total Income	29,522.17	24,451.06
Total Expenses	27,466.84	23,159.55
Profit before Taxes	2,055.33	1,450.65
Tax Expenses Less:
(i) Current Tax	372.13	287.89
(ii) Provision for earlier tax	103.68	-
(iii) Deferred Tax	194.73	195.41
Profits/ (Loss) after Taxes	1,384.79	967.35
Earnings Per Equity Share:
Basic	7.68	5.41
Diluted	7.68	5.41
Note: The above figures are extracted from the audited financial statements of the Company prepared as per the Indian Accounting Standards (Ind AS).

2. PERFORMANCE REVIEW

During the year, the total income increased by approximately 20.74% while PAT increased by almost 43.15%.

During the financial year 2023-24, the Company recorded revenue from operations through Net Sales of '' 29,353.99/- Lakhs, compared to '' 24,030.24/- Lakhs in 2022-23, reflecting an increase of about 22.15 %.

The overall increase in turnover and profit can be attributed to the focused approach of the Companyâs management in improving productivity, capacity utilisation and growth. The Company is consistently striving towards meeting its sales and profit targets, and your directors are confident that these objectives will be realised as planned.

Furthermore, we request that shareholders to refer Management Discussion and Analysis Report also which forms part of this Report as Annexure B.

3. DIVIDEND

Currently, your Company is prioritising its expansion plans, and a significant portion of the profit is being reinvested back into the business with the focus on creating shareholders value. Therefore, your directors

did not recommend any dividend for the financial year ended March 31,2024.

4. TRANSFER TO GENERAL RESERVE

The Company does not propose transferring any amount to the General Reserve for 2023-24.

5. SHARE CAPITAL

During the year under review, the Company has increased its authorised share capital from 20,00,00,000 (Rupees Twenty Crore Only) divided into 2,00,00,000 (Two Crore Only) equity shares of ''10/- (Rupees Ten Only) to '' 22,00,00,000 (Rupees Twenty-Two Crore Only) divided into 2,20,00,000 (Two Crore Twenty Lakhs Only) equity shares of ''10/- (Rupees Ten Only).

Furthermore, the Company issued and allotted 6,00,000 (Six Lakh) Equity shares at '' 243.25/- each (including premium of '' 233.25/-) preferential allotment and 15,00,000 (Fifteen Lakh) warrants convertible into equity shares of the Company at '' 243.25/- each (including premium of '' 233.25/-) by way of preferential allotment.

As on March 31,2024, the paid-up equity share capital of the Company is '' 1,849.67 Lakhs and paid-up equity share capital on fully diluted basis is '' 1,999.67 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 PERSONNELa) Composition

The Companyâs Board currently comprises 9 directors: four Executive Directors, three Independent Directors, and two Non-Executive Directors, including one Woman Director.

Mr. Mullapudi 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. Mullapudi Srivias, Mr. Mullapudi Srikrishna, and Mr. Bollienei Kishore Babu hold the office of Whole-time Directors.

In accordance with the provisions of Companies Act, 2013, the tenure of Mr. Mullapudi Lokeswara Rao, Managing Director, Mr. Bollineni Kishore Babu, Mr. Mullapudi Srinivas, Mr. Mullapudi Srikrishna, Wholetime Directors will expire on September 30, 2024.

The Board at its meeting held on August 14, 2024, has recommended their re-appointment to the Shareholders at the ensuing AGM.

The appointment of Mr. K. Krishna Swamy, Non-Executive Director of the company, is due for retirement by rotation at the ensuing Annual General Meeting and he is eligible for re-appointment. The Board recommends his re-appointment to the shareholders.

The second term of Mr. B. R. Mahesh, Independent Director of the Company will conclude on September 29, 2024. The Board of Directors extends its heartfelt appreciation for Mr. Maheshâs valuable contributions and dedication throughout his tenure with the Company. His impact over the years has been greatly appreciated.

Further, on the recommendation of the Nomination and Remuneration Committee, the Board has recommended the appointment of Mr. Meka Yugandhar as an Independent Director of the Company at the ensuing Annual General Meeting effective from September 29, 2024 to September 28, 2029.

Mr. Dorairajan Balaji, Independent Director of the Company was appointed as an Independent Director of the Company at the 35th Annual General Meeting (AGM) held on September 27, 2019. The Board at its meeting held on August 14, 2024, has recommended the re-appointment of Mr. Dorairajan Balaji as an Independent Director of the Company effective from August 14, 2024 till August 13, 2029.

In accordance with the requirements of Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the continuation of appointment of Mr. K. Krishna Swamy, a Non-Executive Director, will be placed before the shareholders at the upcoming Annual General Meeting.

As mandated by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed information and profiles of the directorâs seeking appointment and re-appointment are provided in the notice and explanatory statement of the 40th Annual General Meeting.

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 04, 2024, 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, Mr. D. Balaji 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

During the year, a total of 9 meetings of the Board of Directors were convened and held. Comprehensive information regarding these meetings is provided in the Corporate Governance Report, which is enclosed with this report as Annexure D.

10. COMPANY''S POLICY RELATING TO DIRECTORS'' APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES.

The Company has formulated a comprehensive policy that encompasses various aspects, including the appointment of Directors, remuneration for managerial roles, Director qualifications, their positive attributes, the assessment of Director independence, and other pertinent subjects as stipulated by Section 178(3) of the Companies Act, 2013. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the corporate overview section that forms part of this Annual Report. This policy has been made accessible on the Companyâs website at https://www.lokeshmachines. com/investment-center.php?key=policy.

11. AUDITORSa) 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. Brahamayya & 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 a remuneration of '' 5,00,000/-per annum plus reimbursement of out of-pocket and travelling expenses, if any.

The Statutory Auditorsâ report forms part of the Annual Report. The notes on financial statements referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments.

The Statutory Auditors have not made any qualification, reservations, or adverse remark or disclaimer in their report for the financial year ended on March 31, 2024, furthermore, no instances of fraudulent activities have been reported by the Auditors to the Companyâs Audit Committee during financial year under review.

b) Cost Auditors:

Based on the recommendation of the Audit Committee, the Board at its meeting on May

22, 2024, 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 financial year 2024-25.

In accordance with the provisions outlined in Section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration of cost auditors is placed for ratification by the shareholders of the Company at the 40th AGM.

c) Secretarial Auditors:

The Board, at its meeting held on May 22, 2024, appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for 2024-25. 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 financial year 2023-24 is a part of this report as Annexure A.

Furthermore, the Secretarial Auditors have not made any qualification, reservations, or adverse remark or disclaimer in their report for the financial year ended on March 31,2024.

Furthermore, in accordance with regulation 24A 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 2023-24.

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 AUDIT, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board, at its meeting on May 22, 2024, appointed M/s K. S. Rao & Co., Chartered Accountants, Hyderabad having Firm Reg. No. 003109S as the Internal Auditors of the Company in place of M/s M V Narayana Reddy & Co., Chartered Accountants, (FRN: 002370S) The Board is of the opinion that in order to maintain transparency and good corporate governance it is important to rotate Internal Auditors at regular intervals.

The responsibility of Internal Auditors inter-alia includes conducting the Internal Audit for the year ending on March 31, 2025. The role of the Internal Auditors encompasses assessing the efficiency and effectiveness of the Companyâs 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.

Furthermore, the Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, safeguarding of its assets, prevention and detection of fraud, error-reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the ''Internal control systems and their adequacyâ section in the Management discussion and analysis report, which forms part of this Annual Report as Annexure B.

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 Companyâs securities. During the year under review, there has been due compliance with the said code of conduct for the 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 AND SUSTAINABILITY REPORT

The Provision relating to Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 regarding submission of Business Responsibility and Sustainability Report is not applicable to your Company.

17. ANNUAL RETURN

The Annual Return filed by the Company is available on the Companyâs website at https:// www.lokeshmachines.com/investment-center. php?key=annual-returns06-16-01 and the Annual Return as on March 31, 2024 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 the 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 in CSR Report which forms part of this report as 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. This policy has been made accessible on the Companyâs website at https://www.lokeshmachines.com/investment-center. php?key=policy

21. INTERNAL COMPLAINTS COMMITTEE

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 and there were no pending complaints at the beginning or at the end of the financial year. This policy has been made accessible on the Companyâs website at https://www.lokeshmachines.com/investment-center. php?key=policy.

22. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

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.

The Independent Directors of the Company had also convened a separate Meeting for this purpose on March 04, 2024. The results from this evaluation process have been informed to the Chairman of the Board of Directors.

23. LISTING:

The equity shares of the Company are listed with BSE 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 31,2024.

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, 2024 and of the profit of the 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, 2013 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 concernâ 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 compliance with the requirements of Corporate Governance has been attached as Annexure D. The certificate on compliance with the conditions of Corporate Governance is attached as Annexure D2.

26. FUND RAISING AND UTILISATION OF PROCEEDS FROM PREFERANTIAL ISSUE

During the financial year under review, your Company raised funds by issuing Equity Shares and Warrants through preferential allotment in accordance with the provisions of the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

The details of utilisation of such funds are as follows:
Particulars	In Cr.
Amount raised through issue of Equity Share	14.59
Amount raised through issue of Warrants (Received 25% towards warrants subscription)	9.12
Total Amount raised	23.71
Less: -
Repayment of Unsecured Loans	8.95
Capital Expenditure (CAPEX)	10.54
Working Capital	4.22
Total remaining amount	0.00

Furthermore, the Company has issued and allotted 6,00,000 (Six Lakh) Equity shares at '' 243.25/- each (including premium of '' 233.25/-) and 15,00,000 (Fifteen Lakh) warrants convertible into equity shares of the Company at '' 243.25/- each (including premium of '' 233.25/-) by way of Preferential Allotment.

27. CERTIFICATE FROM COMPANY SECRETARY IN 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. The certificate is enclosed as Annexure D1.

28. 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 directorsâ appointment and remuneration, including criteria for determining qualifications, positive attributes, and 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. This policy has been made accessible on the Companyâs website at https://www.lokeshmachines.com/investment-center. php?key=policy

29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure E forming part of the Annual Report.

Further, the disclosure required under section 197(14) of the Companies Act, 2013, is not applicable as the Company do not have any Holding or Subsidiary Company.

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.

30. BOARD''S RESPONSE ON AUDITOR''S QUALIFICATION, 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.

31. 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.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators /Courts/ Tribunals which would impact the going concern status of the Company and its future operations.

33. 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, 2024, to which the financial statements relates and the date of signing of this Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS:

A brief note on the Management discussion and analysis for the year is enclosed as Annexure B to this report.

35. CONSERVATION OF ENERGY, TECHNOLOGY 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.

36. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the Company. The Policy of the Company on risk management is discussed as a part of the Management Discussion and Analysis Report.

The Company has developed and implemented a risk management policy for the Company including identification therein of elements of risks, which in the opinion of the Board may threaten the existence of the Company.

37. 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 employees of the Company are covered under the Whistle Blower Policy. This policy has been made accessible on the Companyâs website at https://www.lokeshmachines.com/investment-center. php?key=policy

38. PUBLIC DEPOSITS:

The Company has not accepted any deposits from the public.

Further, during the year under review, the Company received unsecured loan amounting to '' 695 lakhs from the Directors of the Company which was subsequently repaid by the Company during the year.

39. RELATED PARTY TRANSACTIONS:

Related party transactions entered during the financial year under review are disclosed in Note No. 40 of the Financial Statements of the Company for the financial year ended March 31,2024. These transactions entered were at an armâs length basis and in the ordinary course of business. There were no materially significant related party transactions with the Companyâs Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. The Audit Committee granted approval as and when required and subsequently ratified by the Board of Directors. As required under the Act, the prescribed Form AOC-2 is appended as Annexure G to the Boardâs report.

40. 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 Honâble National Company Law Tribunal or other Court.

41. 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.

Mar 31, 2018

Dear Share Holders,

The Directors are pleased to present the 34th Annual Report of the company along with the Audited financial Statements for the financial year ended March 31, 2018.

FINANCIAL RESULTS Rs in Lakhs

Particulars	(2017-18)	(2016-17)
Net Sales	17,494.48	13177.82
Other Income	84.05	35.19
Captive Consumption	352.98	1107.24
Total Income	17931.51	14320.24
Profit before Depreciation, Interest and Taxes	2941.66	2815.38
Depreciation	817.28	818.11
Profit before Interest and Taxes	2124.38	1997.27
Interest and Finance Charges	1408.88	1666.12
Profit before Taxes	715.50	331.15
Provision for Taxes	245.03	120.12
Profits after Taxes	470.47	211.03

PERFORMANCE REVIEW:

The turnover increased by 32.75 %, in the year

- The Machine Tool Division has posted significant growth compared to the previous year, primarily lead by the General Purpose machinery division which itself showed a growth of 46.72% as compared to previous year. GPM Machines export sale has also restarted this year with a marginal sale which is expected to be considerably higher in the coming year. Typically SPM movement will start once the economy reaches a reasonable uptick unlike the GPMs which pick up at the start of growth phase itself. Accordingly, the company is witnessing some movement in the SPM division too in the coming years.

- The Component division also had a marginal growth driven by an increased off take from the Connecting Rod business.

FUTURE OUTLOOK

The current market conditions are showing signs of rapid recovery and our capacity utilization is at an increased level today.

Your directors are confident of putting in an improved performance over the previous year.

1. The CNC machines division is expected to post substantial growth with improving market conditions. While the current capacity utilization is at its peak, the company is making significant improvements in productivity improvement and further increase in capacity utilization thus squeezing the assets to the maximum. With Europe showing signs of recovery and situation in Russia easing, there would certainly be an uptick in the Export performance as well.

2. The SPM order book reflects a reasonable growth. Almost all the orders are from the existing customers only for capacity expansion and not for any new products.

3. On the component division front, the Connecting Rod production is in stabilization mode. With a reasonable monsoons prediction, the Tractor industry in particular and the Auto sector in general are expected to do well and thereby help us increase the overall revenues.

DIVIDEND

The Company proposes to retain profits of the current year for companyâs future plans and developments. Hence, your directors have not recommended dividend for the Financial Year 2017-2018.

TRANSFER TO GENERAL RESERVE

The Company does not propose to transfer any amount to General Reserve.

DIRECTORS

Mr. M. Krishna Swamy, Director of the company retires by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for re-appointment.

The following Directors are proposed to be re-appointed as Directors of the company under Companies act 2013

1. Mullapudi Lokeswara Rao - Managing Director

2. Bollineni Kishore Babu - Whole time director

3. Mullapudi Srinivas - Whole time director

4. Mullapudi Srikrishna - Whole time director

The detailed profile of the above directors is given at Notice calling the Annual General Meeting.

All Independent Directors have given declaration that they meet the criteria of independence as laid under section 149(6) of the Companies Act 2013 and SEBI (LODR) Regulations, 2015. A separate meeting of Independent Directors of the Company, without the attendance of Non-Independent Directors, was held during the year, as required under Schedule IV to the Companies Act, 2013 (Code for Independent Directors) and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the directors of the Company have disclosed their interest to the Company pursuant to Sec 184(1) of Companies Act, 2013.

As required by SEBI (LODR) Regulations, 2015 with the Stock Exchanges, the information on the particulars of the Directors seeking re-appointment are given in the notice to the AGM.

AUDITORS Statutory Auditors

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 reenactment thereof, for the time being in force) and pursuant to recommendation of the Audit Committee and the Board of Directors, M/s. K.S.Rao & Co., Chartered Accountants, Hyderabad, (ICAI Firm Regn. No.003109S) be and are hereby appointed as Statutory Auditors of the Company for a term of five years from conclusion of 33^rd Annual General Meeting till the conclusion of 38^th 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.â

Cost Auditors:

The Board has appointed M/s. DZR&Co, Cost Accountants for conducting the audit of cost records of the Company for various segments for the financial year 2017-18 as recommended by the Audit Committee. As required under section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution is being placed at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.

Secretarial Auditors:

M/s. L.D. Reddy & Co., Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18, as required under Section 204 of the Companies Act, 2013 and Rule 9 there-under. The secretarial audit report for FY 2017-18 forms part of this Report as Annexure.

Reply to the observations of Secretarial auditor:

Your company is law abiding entity, and filed the necessary forms & returns with the authorities. However, there was some delay filings occured during the year. Management is taking measures to avoid the delay filings in future.

CONSERVATION OF ENERGY, TECHNOLOGY 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, Annexure .

DEVELOPEMNT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the company policy of the company on risk management is provided elsewhere in this Annual Report in Management Discussion and Analysis.

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.

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 directorsâ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance.

FORMAL ANNUAL 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 Board approved the evaluation results as collated by the nomination and remuneration committee.

None of the independent directors are due for re-appointment

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

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directorsâ confirm that:

In preparation of annual accounts for the financial year ended 31 st March, 2018 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 31 st March, 2018 and of the profit of the Company for the financial year;

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;

i. The Directors had prepared the annual accounts on a âgoing concernâ basis;

ii. 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

iii. 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.

OTHER DISCLOSURES:

Board Meetings

During the year under review, Six Board Meetings were held on 30^th May, 2017, 31^st August, 2017; 13^th Sep 2017; 13^th December, 2017, 27^th December, 2017 and 9^th February, 2018.

Committees of Board

Your company has the following committees namely:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

The constitution of all the committees is as per the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The details of the Constitution of Committees are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Corporate Governance Report

Your Company has complied with the requirements of Regulation 34(3) read with Schedule V of SEBI (LODR), Regulations, 2015 and provisions of the Companies Act, 2013, Report on Corporate Governance including Auditorâs Certificate on compliance with the code of Corporate Governance.

Change in Key Managerial Personnel

Mr. D. Raghavendrarao regisned from the office of Company Secretary with effect from close of business hours of 18^th October, 2017 and the Board has appointed Mr. Matru Prasad Mishra as the Company Secretary of the Company with effect from 14^th December, 2017.

Boardâs response on Auditorâs qualification, reservation or adverse remarl or disclaimer made:

During the year, there were no instances of frauds reported by auditors under Section 143(12) of the Companies Act, 2013.

Management Discussion and Analysis

A brief note on the Management discussion and analysis for the year is enclosed as Annexure to this report Vigil Mechanism:

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.

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

B Kishore Babu M Lokeswara Rao

(Executive Director) (Managing Director)

Mar 31, 2016

Dear Stakeholders,

The Directors submit the 32nd Annual Report of the company along with the Audited financial Statements for the financial year ended March 31, 2016.

FINANCIAL RESULTS

Rs in Lakhs

Particulars	(2015-16)	(2014-15)
Net Sales	12107.33	11,814.24
Other Income	90.87	128.12
Captive Consumption	1139.61	128.75
Total Income	13337.81	12071.12
Profit before Depreciation, Interest and Taxes	2628.81	2939.24
Depreciation	740.83	867.90
Profit before Interest and Taxes	1887.98	2071.34
Interest and Finance Charges	1535.87	1817.78
Profit before Taxes	352.11	253.56
Provision for Taxes	138.30	178.95
Profits after Taxes	213.81	74.61

PERFORMANCE REVIEW:

The turnover increased by 2.48%, and The Earnings per Share increased from Rs. 0.63 in the previous year to Rs 1.45 in the year under report.

- The General Purpose machinery division could post a marginally higher sale domestically and could more on less hold on to the export sales.

- There was a substantial fall in the SPM sale due to the protracted recessionary condition and as no major project was taking off at our regular SPM customers. Typically SPM movement will start once the economy reaches a reasonable uptick unlike the GPMs which pick up at the start of growth phase itself.

- The job work revenue increased compared to the previous year due to start of new projects in the last quarter.

- The New Connecting Rod Manufacturing line had commenced production in the second half of last year further adding to the Component Division revenues.

FUTURE OUTLOOK

The current market conditions are showing signs of recovery, but not at a comfortable pace. There is still an air of cautious optimism and customers are conservative in their growth plans.

However, your directors are confident of putting in an improved performance over the previous year.

1) The SPM order book reflects a reasonable growth. Almost all the orders are from the existing customers only for capacity and not for any new products.

2) The CNC machines division is expected to post substantial growth with improving market conditions. The delivery lead times of these machines is less than 3 months and hence any improvement in the market brings in an immediate demand. However since rest of Europe and Russia continues to be in a state of recession, the exports could be same as last year. However, we hope for some improvement in the coming quarter which could reflect in increased export dispatches in the last quarter.

3) On the component division front, the Connecting Rod production is in a ramp up mode. With a reasonable monsoons prediction, the Tractor industry in particular and the Auto sector in general are expected to do well and thereby help us increase the overall revenues.

DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of 5% on equity shares of the company for the financial year 2015-16, amounting to Rs 0.50/- per equity share.

The dividend on the equity shares, if declared as above, would involve an outflow of Rs.79,32,867/- towards dividend and Rs. 1615,132 /- towards dividend tax, resulting in a total outflow of Rs. 95,47,999./-.

TRANSFER TO GENERAL RESERVE

The Company does not propose to transfer any amount to General Reserve.

DIRECTORS

Mr. M. Krishna Swamy, Director of the company retires by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for re-appointment.

Revision in the remuneration of Directors re-appointed as on 28-09-2015 as follows :

1. Mullapudi Lokeswararao - Managing Director

2. Bollineni Kishore Babu - Whole Time Director

3. Mullapudi Srinivas - Whole Time Director

4. Mullapudi Srikrishna - Whole Time Director

5. A. Vijay Kumar - Independent Director

The detailed profile of the above directors are given at Notice calling the Annual General Meeting.

All Independent Directors have given declaration that they meet the criteria of independence as laid under section 149(6) of the Companies Act 2013.

AUDITORS Statutory Auditors

At the Annual General Meeting(AGM) held on September 30, 2014, M/s. Brahmayya & Co, Chartered Accountants, were appointed as Statutory Auditor of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Brahmayya & Co, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Cost Auditors:

The Board has appointed M/s. DZR&Co, Cost Accountants for conducting the audit of cost records of the Company for various segments for the financial year 2016-17 as recommended by the Audit Committee. As required under section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution is being placed at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.

Secretarial Auditors:

M/s. S Chidambaram, Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rule 9 there-under. The secretarial audit report for FY 2015-16 forms part of this Report as Annexure- C.

CONSERVATION OF ENERGY, TECHNOLOGY 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, Annexure - A

DEVELOPEMNT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the company policy of the company on risk management 4is provided elsewhere in this Annual Report in Management Discussion and Analysis.

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 directorsâ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance.

FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

LISTING:

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directorsâ confirm that:

In preparation of annual accounts for the financial year ended 31st March, 2016 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 31st March, 2016 and of the profit and loss of the Company for the financial year;

i. The Directors had prepared the annual accounts on a âgoing concernâ basis;

ii. 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

iii. 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.

Reply to the observations of Secretarial auditor :

Your company is law abiding entity, and filed the necessary forms & returns with the authorities. However, there were few non-complianceâs which the management ensures to comply the same in time in future.

OTHER DISCLOSURES:

Board Meetings

During the year under review, six Board Meetings were held on 11th May, 2015; 30th May, 2015;12th June, 2015; 14th August, 2015; 14th November, 2015 and 13th February, 2016.

Committees of Board

Your company has the following committees namely:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

The constitution of all the committees are as per the Companies Act, 2013 and Listing Agreement with Stock Exchanges. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Independent Directors Declaration

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

Evaluation of Boardâs Performance

Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations (including any statutory modifications or re-enactments for the time being in force), the processor valuation of the annual performance of the Directors / Board / Committees was carryout out. The criteria applied in the evaluation process are detailed in the Corporate Governance report which forms part of this report. Corporate Governance Report

Your Company has complied with the requirements of Regulation 34 of the SEBI (LODR) Regulations, 2015 entered with the Stock Exchanges and provisions of the Companies Act, 2013, Report on Corporate Governance including Auditorâs Certificate on compliance with the code of Corporate Governance.

Management Discussion and Analysis

A brief note on the Management discussion and analysis for the year is enclosed as Annexure B to this report

Vigil Mechanism:

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.

ACKNOWLEDGEMENTS

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

B Kishore Babu M Lokeswara Rao

(Executive Director) (Managing Director)

Mar 31, 2015

Dear Members,

The Directors submit the 31st Annual Report of the company along with the Audited financial Statements for the financial year ended March 31,2015.

FINANCIAL RESULTS

Rs in Lakhs

Particulars (2014-15) (2013-14)

Net Sales 11,814.25 11,179.90

Other Income 128.12 86.52

Captive Consumption 128.75 140.60

Total Income 12071.12 11407.02

Profit before Depreciation, Interest and 2939.24 2907.66 Taxes

Depreciation 867.90 897.00

Profit before Interest and Taxes 2071.34 2010.66

Interest and Finance Charges 1817.78 1905.10

Profit before Taxes 253.56 105.56

Provision for Taxes 178.95 59.86

Profits after Taxes 74.61 45.70

PERFORMANCE REVIEW:

The turnover increased by 6%, and the Profit before Interest and Taxes increased by 1% compared to the previous year. The Earnings per Share increased from Rs. 0.39 in the previous year to Rs 0.63 in the year under report.

The offtakes in the component division had come down due to a severe fall in the Commercial Vehicles and Tractors last year. There has been a fall in the Job Work Charges, the General Purpose machinery division could hold on to a respectable sale although it was Higher than the previous year. The SPM division performed much better than the previous years due to some major projects being undertaken by the OEMs. Though the market conditions were not significantly great, the OEMs still went ahead and completed their projects thereby ensuring that the machines on order with us were lifted.

FUTURE OUTLOOK

The current market conditions are slow at the moment and there has been a sizeable shrinkage in the general business. However, your directors we are pleased to inform you that we will be able to sail through this year

1) We are comfortable on our Special Purpose Machinery Order book and we are more or less booked for the entire year. These are project orders from the OEs which could be for their Greenfield or expansion projects and they will go ahead and execute these projects regardless of the temporary market conditions.

2) The CNC machines division is also expected to maintain the performance as we have had a breakthrough in the Russian market and have already successfully delivered a few machines. There are repeat orders from Russia which should help offset reduction in regular order flows. The company is exploring other new overseas markets to shore up export revenues.

3) On the component division front, we have already made a significant investment in new machining lines in the Pune plant. These lines are expected to commence production in the last quarter of this year and thereby add to our revenues.

With slowdown reaching unprecedented levels, there is a turnaround due now and the government is expected to announce some measures to provide the momentum to the overall growth in the general economic activity which the Directors are hopeful would help further in the current year.

DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of 5% on equity shares of the company for the financial year 2014-15, amounting to Rs 0.50/- per equity share.

The dividend on the equity shares, if declared as above, would involve an outflow of Rs.7,022,034/- towards dividend and Rs. 14,29,521/- towards dividend tax, resulting in a total outflow of Rs. 84,51,555/-.

TRANSFER TO GENERAL RESERVE

The Company does not propose to transfer any amount to General Reserve.

DIRECTORS

Mr. M. Krishna Swamy, Director of the company retires by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for re-appointment.

The following Directors are proposed to be appointed / re-appointed as Directors of the company under Companies act 2013

1. Mullapudi Lokeswararao - Managing Director

2. Bollineni Kishore Babu - Whole time director

3. Mullapudi Srinivas - Whole time director

4. Mullapudi Srikrishna - Whole time director

The detailed profile of the above directors are given at Notice calling the Annual General Meeting.

All Independent Directors have given declaration that they meet the criteria of independence as laid under section 149(6) of the Companies Act 2013 and clause 49 of the Listing Agreement.

As required by clause 49 of the Listing Agreement with the Stock Exchanges, the information on the particulars of the Directors seeking re-appointment was given in the notice to the AGM.

AUDITORS

Statutory Auditors

At the Annual General Meeting(AGM) held on September 30, 2014, M/s. Brahmayya & Co, Chartered Accountants, were appointed as Statutory Auditor of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Brahmayya & Co, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Cost Auditors:

The Board has appointed M/s. DZR&Co, Cost Accountants for conducting the audit of cost records of the Company for various segments for the financial year 2015-16 as recommended by the Audit Committee. As required under section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution is being placed at the ensuing AGM for ratification of remuneration payable to said Cost Auditors.

Secretarial Auditors:

M/s. S Chidambaram, Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rule 9 there-under. The secretarial audit report for FY 2014-15 forms part of this Report as Annexure- C.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure - A

DEVELOPEMNT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the company policy of the company on risk management is provided elsewhere in this Annual Report in Management Discussion and Analysis.

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.

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, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance.

FORMAL ANNUAL 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 Board approved the evaluation results as collated by the nomination and remuneration committee.

None of the independent directors are due for re-appointment 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

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 31st March, 2015 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 31st March, 2015 and of the profit and loss of the Company for the financial year;

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;

i. The Directors had prepared the annual accounts on a 'going concern' basis;

ii. 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

iii. 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.

OTHER DISCLOSURES:

Board Meetings

During the year under review, five Board Meetings were held on 30th May, 2014; 14th August, 2014; 14th November, 2014 and 14th February, 2015 and 04th March 2015.

Committees of Board

Your company has the following committees namely:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

The constitution of all the committees are as per the Companies Act, 2013 and Listing Agreement with Stock Exchanges. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report.

Corporate Governance Report

Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges and provisions of the Companies Act, 2013, Report on Corporate Governance including Auditor's Certificate on compliance with the code of Corporate Governance.

Management Discussion and Analysis

A brief note on the Management discussion and analysis for the year is enclosed as Annexure B to this report Vigil Mechanism:

In pursuant to the provisions of section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement a Vigil Mechanism for directors and employees to report genuine concerns has been established.

Particulars of Employees

The information required under section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below :

i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Name of the Director Ratio to Median remuneration

M Lokeswararao 20.04

B Kishore Babu 10.02

M Srikrishna 10.02

K Krishna Swamy 3.15

ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name of the Director/Chief Financial Percentage of increase Officer/Chief Executive Officer in remuneration /Company Secretary/Manager

M Lokeswararao Â

B Kishore Babu Â

M Srikrishna Â

K Krishna Swamy Â

V Sudhakara Reddy Â

D Raghavendrarao Â

iii) The percentage increase in the median remuneration of employees in the financial year; 5%

iv) The number of permanent employees on the rolls of company; 378

v) The explanation on the relationship between average increase in remuneration and company performance;

On an average, employees received an annual increase of 5%. The individual increments varied from 5% to 15% based on individual performance

In order to ensure that remuneration reflects Company performance, the performance pay is also linked to organization performance, apart from an individual's performance.

vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company;

Aggregate remuneration of key Managerial Personnel(KMP) 109.80

in FY 2015 (Rs. Lakhs)

Total Revenue (Rs.Lakhs) 12071.12

Remuneration of KMP(as % of revenue) 0.91%

Profit before Tax (PBT) (Rs.Lakhs) 253.56

Remuneration of KMP(as % of PBT) 43.30%

vii) Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31,2015 March 31,2014 % Change

Market Capitalisation 83,56,06,530 27,67,68,900 201.91% (Rs. Lakhs)

Price Earning Ratio 112.62 71.21 58.15

Percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer:

Particulars March 31,2015 IPO Price % Change

Market Price (BSE) 70.95 140 50.68%

Market Price (NSE) 70.90 140 50.68%

viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company;

Mr M Mr.M. Mr.B. M.K Krishna Lokeswara Srikrishna Kishore Swamy rao Babu

Remuneration 42.00 21.00 21.00 6.60 in FY 15 (Rs. Lakhs)

Total Revenue (Rs. Lakhs) 12071.12 12071.12 12071.12 12071.12

Remuneration as % of Revenue 0.35 0.17 0.17 0.05

Profit Before Tax(PBT) (Rs. Lakhs) 253.56 253.56 253.56 253.56

Remuneration (as % of PBT) 16.56 8.28 8.28 2.60

Mr. V. Sudhakara Mr. D. Reddy Raghavendrarao

Remuneration 15.00 4.20 in FY 15 (Rs. Lakhs)

Total Revenue (Rs. Lakhs) 12071.12 12071.12

Remuneration as % of Revenue 0.12 0.03

Profit Before Tax(PBT) (Rs. Lakhs) 253.56 253.56

Remuneration (as % of PBT) 5.92 1.66

x) The key parameters for any variable component of remuneration availed by the directors;

None

xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

None

xii) Affirmation that the remuneration is as per the remuneration policy of the company:

The Company affirms that the remuneration is as per the remuneration policy of the Company.

SUBSIDIARY COMPANY:

The company does not have any Subsidiary company either in India or abroad.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of the Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review.

PUBLIC DEPOSITS:

The Company has not accepted any deposits from the public.

RELATED PARTY TRANSACTIONS:

Related party transactions entered during the financial year under review are disclosed in Note No.27 of the Financial Statements of the Company for the financial year ended 31st March, 2015. These transactions entered were at an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company.

The Company has not entered into any related party transactions covered under Section 188(1) of the Companies Act, 2013.

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

B Kishore Babu M Lokeswara Rao (Executive Director) (Managing Director)

Mar 31, 2014

Dear Stakeholders,

The Directors submit the 30th Annual Report of the company along with the Audited financial Statements for the financial year ended March 31, 2014.

Financial Results Rs in Lakhs

Particulars (2013-14) (2012-13) Net Sales 11,179.90 14,026.53 Other Income 86.52 46.09

Captive Consumption 140.60 290.12 Total Income 11407.02 14362.74 Profit before Depreciation, Interest and Taxes 2907.66 3195.69 Depreciation 897.00 961.15 Profit before Interest and Taxes 2010.66 2234.54 nterest and Finance Charges 1905.10 2083.92 Profit before Taxes 105.56 150.62 Provision for Taxes 59.60 44.34 Profits after Taxes 45.96 106.28 PERFORMANCE REVIEW:

The turnover decreased by 20.29%, and the Profit before Interest and Taxes decreased by 10.02% compared to the previous year.The Earnings per Share decreased from Rs.0.90 in the previous year to Rs 0.39 in the year under report.

The offtakes in the component division had come down due to a severe fall in the Commercial Vehicles and Tractors last year. There has been a fall in the General purpose machinery sale too, due to a slump in the automotive market. However with support from an improved export performance, the General Purpose machinery division could hold on to a respectable sale although it was lower than the previous year. The SPM division performed much better than the previous years due to some major projects being undertaken by the OEMs. Though the market conditions were not significantly great, the OEMs still went ahead and completed their projects thereby ensuring that the machines on order with us were lifted.

FUTURE OUTLOOK

The current market conditions are slow at the moment and there has been a sizeable shrinkage in the general business. However, your directors we are pleased to inform you that we will be able to sail through this year as;

1) We are comfortable on our Special Purpose Machinery Order book and we are more or less booked for the entire year. These are project orders from the OEs which could be for their Greenfield or expansion projects and they will go ahead and execute these projects regardless of the temporary market conditions.

2) The CNC machines division is also expected to maintain the performance as we have had a breakthrough in the Russian market and have already successfully delivered a few machines.There are repeat orders from Russia which should help offset reduction in regular order flows. The company is exploring other new overseas markets to shore up export revenues.

3) On the component division front, we have already made a significant investment in new machining lines in the Pune plant. These lines are expected to commence production in the last quarter of this year and thereby add to our revenues.

With slowdown reaching unprecedented levels, there is a turnaround due now and the government is expected to announce some measures to provide the momentum to the overall growth in the general economic activity which the Directors are hopeful would help further in the current year.

DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of 0.5% on equity shares of the company for the financial year 2013-14, amounting to Re. 0.50/- per equity share.

The dividend on the equity shares, if declared as above, would involve an outflow of Rs.58.88.700/- towards dividend and Rs. 10,00,785 /- towards dividend tax, resulting in a total outflow of Rs. 68,89,485./-.

TRANSFER TO GENERAL RESERVE

The Company does not propose to transfer any amount to General Reserve.

DIRECTORS

Mr. M.Srinivas, Director of the company retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for re-appointment.

The following Directors are proposed to be appointed as Independent Directors of the Company under Section 149 of the Companies Act, 2013 read with rules made thereunder.

1. B.R Mahesh

2. R.Mohan Reddy

3. M.Hariprasada Rao

Mr. K. Krishna Swamy was proposed to be re-appointed as Wholetime Director of the Company for a period three years.

As required by clause 49 of the Listing Agreement with the Stock Exchanges, the information on the particulars of the Directors seeking re-appointment was given in the notice to the AGM.

PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposit) Rules, 1975.

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.

DIRECTORS''RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) ofthe Companies Act, 1956, the Directors of your Company confirm:

I. That all applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures

II. That the directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2014 and of the profit of the Company for the year ended on that date.

III. That directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

IV. That the Directors prepared the annual accounts on a going concern basis.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS &OUTGO:

Particulars of conservation ofenergy, technology absorption and foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is annexed as Annexure ''A'' to this Report.

PARTICULARS OF EMPLOYEES

Particulars of employees whose information is to be annexed to this report pursuant to sec-217(2A) of the Companies Act, 1956 are not applicable since the company has not employed any such employees. MANAGEMENT DISCUSSIONANDANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause-49 of the Listing Agreement entered with the Stock Exchanges is annexed as Annexure ''B'' to this Report. CORPORATE GOVERNANCE

As per Clause-49 of the Listing Agreement entered with the Stock Exchanges, a detailed report on Corporate Governance together with the declaration by the Managing Director and Certificate issued by the Statutory Auditors'' of the company confirming the compliance of conditions of corporate governance are annexed as Annexure ''C''

SUBSIDIARY COMPANY:

The company does not have any Subsidiary company either in India or abroad.

AUDITORS & AUDITORS''REPORT:

M/s. Brahmayya & Co, Chartered Accountants, the statutory auditors of the Company retire at the conclusion of this ensuing Annual General Meeting and have expressed their willingness to act as statutory auditors of the Company, if appointed and have confirmed that the said appointment would be in conformity with the provisions of 139 of the Companies Act, 2013.

The notes on accounts referred to in the Auditors'' Report are self explanatory and therefore does not require any further comments.

Board Committees

The Board of Directors at its meeting held on 30th May, 2014 has rechristened the existing Remuneration Committee as Nomination and Remuneration Committee and Investors Grievance Committee as Stakeholders Relationship Committee under the Companies Act, 2013 and Clause 49 of the amended Listing Agreement with the Stock Exchanges.

NEW MANUFACTURING UNITS AND EXPANSION:

The construction work is in progress at the 50.00 acres of land located at Automotive Park, Toopran Mandal, Medak District, Telangana to setup an auto component and machine tool manufacturing unit. The Commercial production is expected to be initiated shortly.

After implementing of Cylinder Blocks and Cylinder Heads plant at Ranjangoan, the company now has planned to expand further and enter into the manufacturing field of Connecting Rod as there is an interest evinced by our clients. For this new Connecting Rod projects, the company will be setting up a new unit and the machines are been sourced from and equipped by German technology 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

Place: Hyderabad. B Kishore Babu M Lokeswara Rao Date: August 14, 2014 (Executive Director) (Managing Director)

Mar 31, 2012

The Directors have pleasure in presenting the Twenty Eighth Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2012.

FINANCIAL RESULTS Rs in Lakhs

Particulars (2011-12) (2010-11)

Net Sales 16,296.57 14639.63

Other Income 185.92 400.94 Captive consumption 438.66 583.10

Total Income 16921.15 15623.67

Profit before Depreciation, 3605.38 3074.25 Interest and Taxes

Depreciation 845.73 741.36

Profit before Interest and Taxes 2759.65 2332.89

Interest and Finance Charges 1512.23 1223.21

Profit before Taxes 1247.42 1109.68

Provision for Taxes 487.59 401.16

Profits after Taxes 759.83 708.52

PERFORMANCE REVIEW:

Your Directors are pleased to report that the Company could maintain an all round growth in the operations. The turnover increased by 11.3 %, and the Profit before Interest and Taxes increased by 18.3% compared to the previous year. The Earnings per Share increased from Rs. 6.2 in the previous year to Rs 6.45 in the year under report.

FUTURE OUTLOOK

With the turnaround providing the momentum to the overall growth in the general economic activity, your Directors are hopeful for a better performance in the current year.

DIVIDEND

Your Directors are pleased to recommend for approval of the Members a dividend of 5% on equity shares of the company for the financial year 2011-12, amounting to Re. 0.50/- per equity share.

The dividend on the equity shares, if declared as above, would involve an outflow of Rs.58,88,700/- towards dividend and Rs. 9,55,295 /- towards dividend tax, resulting in a total outflow of Rs. 68,43,995./-. TRANSFER TO GENERAL RESERVE

The Company does not propose to transfer any amount to General Reserve.

DIRECTORS

Mr. B R Mahesh and Mr. R Mohan Reddy, Directors of the company retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for re-appointment.

As required by clause 49 of the Listing Agreement with the Stock Exchanges, the information on the particulars of the Directors seeking re-appointment was given in the notice to the AGM.

PUBLIC DEPOSITS:

During the year, the company has not accepted any deposits from the public and is therefore not required to furnish information in respect of outstanding deposits under Non-Banking Non-Financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposit) Rules, 1975.

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.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company confirm:

I. That all applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures

II. That the directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31,2012 and of the profit of the Company for the year ended on that date.

III. That directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

IV. That the Directors prepared the annual accounts on a going concern basis.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO:

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is annexed as Annexure 'A' to this Report.

PARTICULARS OF EMPLOYEES

Particulars of employees whose information is to be annexed to this report pursuant to sec-217(2A) of the Companies Act, 1956 are not applicable since the company has not employed any such employees.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause-49 of the Listing Agreement entered with the Stock Exchanges is annexed as Annexure 'B' to this Report.

CORPORATE GOVERNANCE

As per Clause-49 of the Listing Agreement entered with the Stock Exchanges, a detailed report on Corporate Governance together with the declaration by the Managing Director and Certificate issued by the Statutory Auditors' of the company confirming the compliance of conditions of corporate governance are annexed as Annexure 'C'

SUBSIDIARY COMPANY:

The company does not have any Subsidiary company either in India or abroad.

AUDITORS & AUDITORS' REPORT:

M/s. Brahmayya & Co, Chartered Accountants, the statutory auditors of the Company retire at the conclusion of this ensuing Annual General Meeting and have expressed their willingness to act as statutory auditors of the Company, if appointed and have confirmed that the said appointment would be in conformity with the provisions of Sec-224(1B) of the Companies Act, 1956.

The notes on accounts referred to in the Auditors' Report are self explanatory and therefore does not require any further comments.

NEW MANUFACTURING UNITS AND EXPANSION:

The construction work is in progress at the 50.00 acres of land located at Automotive Park, Toopran Mandal, Medak District, Andhra Pradesh to setup an auto component and machine tool manufacturing unit. The Commercial production is expected to be initiated shortly.

After implementing of Cylinder Blocks and Cylinder Heads plant at Ranjangoan, the company now has planned to expand further and enter into the manufacturing field of Connecting Rod as there is an interest evinced by our clients. For this new Connecting Rod projects, the company will be setting up a new unit and the machines are been sourced from and equipped by German technology.

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

B Kishore Babu M Lokeswara Rao

(Executive Director) (Managing Director)

Place: Hyderabad.

Date: August 14, 2012

Mar 31, 2010

The Directors have pleasure in presenting the Twenty Sixth Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2010.

FINANCIAL RESULTS

Rs in Lakhs

PARTICULARS (2009-10) (2008-09)

Net Sales 9682.90 7404.36

Other Income 131.32 123.27

Total Income 9814.22 7527.63

Profit before Depreciation, Interest and Taxes 2663.58 1631.45

Depreciation 707.34 646.87

Profit before Interest and Taxes 1556.24 984.58

Interest and Finance Charges 916.07 880.92

Profit before Taxes 640.17 103.66

Provision for Taxes 235.54 66.12

Profit after Taxes 404.63 37.54

After the severe recession during the previous year in the auto and engineering industry, there have been signs of recovery towards the second half of the period under report. The turnover increased by 30.77 %, and the Profit before Interest and Taxes increased by 58.06 % compared to the previous year. The Earnings per share increased from Rs. 0.32 in the previous year to Rs 3.44 in the year under report. Your company has nearly matched the pre-recession performance.

FUTURE OUTLOOK

With the turn around providing the momentum to the overall growth in the general economic activity, your Directors are hopeful for a better performance in the current year.

MANUFACTURING FACILITY AT PUNE

Your company is setting up a manufacturing facility at Ranjangaon, Pune to exclusively cater to the requirements of Mahindra & Mahindra Ltd. for cylinder blocks. This unit, being set up at a project cost of Rs. 25 crores is expected to commence commercial operations from December 2010. Your company has started getting enquiries from other auto majors, and hopes to expand its operations in the near future.

DIVIDEND

Based on the companys performance, your Directors are pleased to recommend for approval of the members a dividend of 10 %, amounting to Re. 1.00/- per equity share of Rs.10/- each. The dividend on the equity shares, if declared as above, would involve an outflow of Rs.11,777,400/- towards dividend and Rs. 2,001,569 /- towards dividend tax, resulting in a total outflow of Rs. 13,778,969/-.

Out of the profits the Directors propose to transfer an amount of Rs 2,500,000 to the General Reserves.

DIRECTORS

Mr. K Krishna Swamy and Dr. Y Satyanarayana, Directors retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

Your Board has reappointed Mr. K. Krishna Swamy as Wholetime Director from June 29, 2010 for a period of 5 years.

Mr. M Lokeswara Rao has been reappointed as Managing Director by the Board with effect from October 1, 2010 for a period of 5 years.

Mr. B Kishore Babu and Mr. M Srikrishna have been reappointed by the Board, as Wholetime directors with effect from October 1, 2010 for a period of five years.

As required by clause 49 of the Listing Agreement with the Stock Exchange, brief resumes of the above directors are included in the Notice convening the Annual General Meeting. Appropriate Resolutions are being proposed at the forthcoming Annual General Meeting for obtaining your approval to the above reappointment of directors.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors of your Company confirm:

I. That all applicable accounting standards have been followed in the preparation of annual accounts and that there are no material departures.

II. That the directors selected such accounting policies and applied them consistently and made judg- ments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2010 and of the profit of the Company for the year ended on that date.

III. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

IV That the Directors prepared the annual accounts on a going concern basis.

ADDITIONAL PARTICULARS

Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, is annexed as Annexure ÃA to this Report.

PARTICULARS OF EMPLOYEES

The details of employees as envisaged by Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is annexed as Annexure ÃB to this Report.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance together with the Auditors Certificate on its compliance is annexed as Annexure ÃC

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report is annexed as Annexure ÃD to this Report.

AUDITORS

M/s. Brahmayya & Co, Chartered Accountants, the auditors of the Company retire at the conclusion of this Annual General Meeting and are eligible for re-appointment. Appropriate Resolution is being proposed at the ensuing Annual General Meeting for the reappointment of the Auditors.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the support and co-operation extended by the State Bank of Hyderabad, State Bank of Indore, Punjab National Bank, Barclays Bank PLC., Indusind Bank Limited, business constituents and shareholders.

Your Directors also wish to place on record their appreciation of the excellent enthusiastic support received from the team of dedicated employees in the activities of your Company.

On behalf of the Board

B Kishore Babu M Lokeswara Rao

(Director) (Managing Director)

Place: Hyderabad.

Date: August 14, 2010

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