14. Provisions and Contingent Liabilities

Provisions are recognized when the company has a present obligation (legal or constructive) as
a result of past event, it is probable that the company will be required to settle the obligation and
reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the end of reporting period, taking into the account the risks and uncertainties
surrounding the obligation. When provision is measured using the cash flow estimated to settle the
present obligation, its carrying amount is the present value of those cash flows (when the effect of
time value money is material).

Contingent liabilities are disclosed in the financial statements by way of notes to accounts, unless
possibility of an outflow of resources embodying economic benefit is remote. Contingent Liabilities
are possible obligations that arises from past events and whose existence will be confirmed only
when occurrence or non-occurrence of one or more future events not wholly within the control of
the company. Where it is not probable that an outflow of economic benefits will be required, or the
amount cannot be estimated reliably the obligations are disclosed as contingent liabilities, unless
the probability of outflow of economic benefits is remote. Contingent assets are not recognized but
disclosed in the financial statements when an inflow of economic benefits is probable.

15. Foreign Currency Transactions

The Company translates all foreign currency transactions at Exchange Rates prevailing on the date
of transactions. Exchange rate differences resulting from foreign exchange transactions settled during
the year are recognized as income or expenses in the period in which they arise. Monetary current
assets and monetary current liabilities that are denominated in foreign currency are translated at the
exchange rate prevalent at the date of the balance sheet. Gains and losses arising on settlement
and restatement of foreign currency denominated monetary assets and liabilities are recognized in
the profit and loss account.

16. taxes on income

Income Tax expense comprises current tax and deferred tax.
current tax

Current Tax is the expected tax payable on taxable income for the year, using tax rates (tax laws)
enacted or substantively enacted by the end of reporting period and includes adjustment on the
account of tax in respect of previous year.

Deferred tax

Deferred tax is recognized using balance sheet method, providing for temporary difference between
the carrying amount of asset or liability in the balance sheet and its tax base. Deferred tax is
measured at the rate that are expected to apply when the temporary differences are either realized
or settled, based on the laws that have been enacted or substantively enacted by the end of

reporting period. A deferred tax asset is recognized to the extent that it is probable that future
taxable profit will be available against which the temporary difference can be utilized. The carrying
amount of Deferred tax assets are reviewed at each reporting period and are reduced to the extent
that it is no longer probable that the related tax benefit will be realized.

Minimum alternate tax (MAT) is recognized as an asset only when and to the extent there is
convincing evidence that the company will pay normal income tax during the specified period. Such
asset is reviewed at each balance sheet date and the carrying amount of MAT credit is written down
to the extent there is no longer a convincing evidence to the effect that the company will pay normal
income tax during the specified period.

Current and Deferred Tax for the year

Income tax expense is recognized in the statement of profit or loss account except to the extent
that it relates to items recognized in other comprehensive income.

17. Financial instruments

Financial assets and financial liabilities are recognized when Company becomes a party to the
contractual provisions of the Instruments.

Financial assets and financial liabilities are initially measured at fair value, except when the effect
is immaterial. Transaction costs that are directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets and financial liabilities at fair value through
profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value through profit or loss are recognized immediately
in the Statement of profit and loss.

Financial Assets

Cash and Cash equivalents

The company considers all highly liquid financial Instruments, which are readily convertible into
known amounts of cash that are subject to an insignificant risk of change in value and having
original maturity of three months or less from the date of purchase, to be cash equivalents. Cash
and cash equivalents consist of cash on hand and cash balances with banks which are unrestricted
for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at amortized cost using the effective interest method,
except when the effect of applying it is immaterial, if these financial assets are held within a
business whose objective is to hold these assets in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

financial assets at fair value through other comprehensive income

Financial assets are subsequently measured at fair value through other comprehensive income if
these financial assets are held within a business whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.

The Company, on initial application of IND AS 109 Financial Instruments, has made an irrevocable
election to present subsequent changes in fair value of equity instruments not held for trading in
other comprehensive income.

Financial assets at fair value through Profit or Loss

Financial assets at fair value through profit or loss are measured at fair values at the end of each
reporting period, with any gains or losses arising on re-measurement recognized in Profit or loss.

investment in Associates

Investment in Associates is measured at cost in separate financial statements. Dividend income from
subsidiaries is recognised when the Company receives dividend.

Derivative financial instruments and hedge accounting

The Company uses foreign currency forward contracts / options to hedge its risks associated with
foreign Currency fluctuations relating to certain forecasted transactions. The Company designates
some of these forward contracts / options as hedge instruments and account for as cash flow
hedges applying the recognition and measurement principles set out in the Ind AS 109.

The counter party to the Company’s foreign currency forward contracts is generally a bank. The
Company does not use derivative financial instruments for speculative purposes. Foreign currency
forward contract/option derivative instruments are initially measured at fair value and are re-measured
at subsequent reporting dates. Changes in the fair value of these derivatives that are designated
and effective as hedges of future cash flows are recognised in other comprehensive income and
accumulated under effective portion of cash flow hedges.

Amounts previously recognised in other comprehensive income and accumulated in effective portion
of cash flow hedges are reclassified to the Statement of Profit or Loss in the same period in which
gains/losses on the item hedged are recognised in the Statement of Profit or Loss. However when
the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously recognised in other comprehensive income and accumulated
in effective portion of cash flow hedges are transferred from effective portion of cash flow hedges
and included in the initial measurement of the cost of the nonfinancial asset or non-financial liability.
Profit or loss arising on cancellation or renewal of a forward exchange contract is recognised as
income or as expense in the period in which such cancellation or renewal occurs. Changes in the
fair value of derivative financial instruments that do not qualify for hedge accounting are recognized
in the Statement of Profit and Loss as they arise.

Impairment of financial assets

The Company assesses at each balance sheet date whether a financial asset or a group of financial
assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss
allowance. The Company recognizes lifetime expected losses for all contract assets and all trade
receivables that do not constitute a financing transaction. For all other financial assets, expected
credit losses are measured at an amount equal to 12 month expected credit losses or at an amount
equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly
since initial recognition.

De-recognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the
asset expire or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. On de-recognition of a financial asset in its entirety, (except
for equity instruments designated as FVTOCI), the difference between the asset’s carrying amount
and the sum of the consideration received and receivable is recognized in statement of profit and
loss.

Financial liabilities and equity instruments
Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or
as equity in accordance with the substance of the contractual arrangements and the definitions of
a financial liability and an equity instrument.

Financial liabilities at amortized cost

Financial liabilities are subsequently measured at amortized cost using the effective interest method,
except when the effect of applying it is immaterial.

Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the company after
deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue cost.

De-recognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are
discharged, cancelled or have expired. The difference between the carrying amount of the financial
liability derecognized and the consideration paid and payable is recognized in profit or loss.

Effective interest method

The effective Interest method is a method of calculating the amortized cost of a debt Instrument
and of allocating interest Income over the relevant period. The effective Interest rate is the rate that
exactly discounts estimated future cash receipts through the expected life of the debt instrument, or,
where appropriate, a shorter period, to the net carrying amount on initial recognition.

Financial Guarantee contracts

Financial guarantee contracts issued by the Company are initially measured at fair value and
subsequently measured at the higher of the amount of loss allowance determined in accordance
with impairment requirements of Ind AS 109; and the amount initially recognised less, when
appropriate, the cumulative amount of income recognised in accordance with the principles of Ind
AS 18 Revenue.

18. inventories

Inventories are valued at lower of cost and net realisable value after providing for obsolescence
wherever necessary. Cost is determined on weighted average basis. Net realisable value is the
estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.

19. Statement of cash flows

Cash Flows are reported using indirect method, whereby profit/(loss) before tax is adjusted for
the effect of transactions of non-cash nature, any deferrals or accruals of past or future operating
cash receipts or payments and item of income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and financing activities of the company are
segregated.

20. Leases

The Company enters into agreements, comprising a transaction or series of related transactions
that does not take the legal form of lease but conveys the right to use the asset in return for
payment of rent or series of rent payments. In case of such arrangements, the Company applies
the requirements of Ind AS 116 - Leases/Rent payments to the lease element of the arrangement.

For the purpose of applying the requirements under Ind AS 116-Leases, payments and other
consideration required by the arrangement are separated at the inception of the arrangement into
those for rent and those for other elements.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Rental expense from operating leases is generally recognized on a straight-line basis over the term
of the relevant lease.

However, where the rentals are structured solely to increase in line with expected general inflation
to compensate for the lessor’s expected inflationary cost increases, such increases are recognized
in the year in which such benefit accrue, Contingent rentals, if any, arising under operating leases
are recognized as an expense in the period in which they are incurred.

21. Earnings Per share

Basic Earnings per share are computed by dividing the profit/loss after tax by the weighted average
number of equity shares outstanding during the year. Diluted earnings per share is computed by
dividing profit/loss after tax as adjusted for dividend, interest and other charges to expense or
income relating dilutive potential equity share, by the weighted number of equity shares considered
for deriving basic earnings per share and the weighted average number of equity shares which could
have been issued on the conversion of all dilutive potential equity.

22. Current vs Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current
classification.

An asset is treated as current when it is:

1. Expected to be realised or intended to be sold or consumed in normal operating cycle, or

2. Held primarily for the purpose of trading, or

3. Expected to be realised within twelve months after the reporting period, or

4. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

1. It is expected to be settled in normal operating cycle, or

2. It is held primarily for the purpose of trading, or

3. It is due to be settled within twelve months after the reporting period, or

4. There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation
in cash and cash equivalents.

23. segment reporting

An operating segment is a component of the group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the group’s other components, and for which discrete financial information is available.
Operating Segments are identified based on the nature of products and services. For reporting, the
business has been split into two segments-Engineering and Textiles.

a) State Bank of India - Term Loan for Rooftop Solar Project-Sanctioned Rs.320 lakhs, Interest rate 1 % over MCLR
effective 9% on date of sanction. Repayable in 120 equal monthly installments starting from 1.10.2020. Outstanding
as at 31.03.2025 Rs173.89 lakhs. Rs.32 lakhs repayable within next 12 months classifed as current liability. The
Loan has been used for the Rooftop Solar Project.

b) State Bank of India - Covid GECL 1.0 extension loan Rs.109.00 lakhs. Interest EBLR 75bps-effective 7.40%. Re¬
payable in 35 monthly installments of Rs.311429/- each starting from January 2024.Outstanding as at 31/03/2025
Rs.60.57Lakhs.Rs.37.37 Lakhs classified as current liability.

c) Bank of Baroda - Additional working capital term loan Covid BGLES1.0 Rs.69.70 lakhs. Rate of intererst BRLLR plus
2.50% effective 6.5%. Repayable in 36 months (35 monthly installments of Rs. 193611/- each and last instalment
Rs. 193615/-) starting from February 2024.Outstanding as at 31/03/2025 Rs.42.59 Lakhs. 23.23 lakhs is classified
as current liability.

d) Indian Overseas Bank - Working capital Term Loan under Covid ECLGS 1.0 Extension scheme Rs.60 lakhs.
RLLR 1% effective 7.85%. Repayable in 36 months (35 instalments of Rs.166700/- each and last instalment of
Rs.165500/- ) starting from March 2023. Outstanding as at 31.03.2025 Rs.18.32 lakhs. Rs.18.32 lakhs repayable
within next 12 months classified as current liability.

e) GECL, CCECL and GECL extension loans have been utilised for the working capital requirements.

All loans are secured by a charge on factory land and building, Plant, Equipment and current assets of the Company. No

default in repayment of term loan or payment of interest

Financial Risk Management Objectives and Policies

The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, which may
adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial
environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

The company is exposed to the following risks from its use of financial instruments

- Market Risk

- Credit Risk

- Liquidity Risk

The company’s Board of directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. This note presents information about the risks associated with its financial instruments, the
company’s objectives, policies and processes for measuring and managing risk, and the Company’s management
of Capital.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. The Company’s exposure to market risk is primarily on account of foreign currency
exchange rate risk.

a) Foreign Currency Exchange Rate Risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and
other comprehensive income and equity, where any transaction references more than one currency or where assets
/ liabilities are denominated in a currency other than the functional currency of the respective entities. The risks
primarily relate to fluctuations in US Dollar, Euro, Great Britain Pound, and Japanese Yen against the respective
functional currencies of Veejay Lakshmi Engineering Works Limited.

The following analysis has been worked out based on the net exposures for Veejay Lakshmi Engineering Works
Limited as of the date of statements of financial position which could affect the Statements of profit or loss and other
comprehensive income and equity.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary Liabilities at
the end of the reporting period are as follows:

credit Risk

The company is exposed to credit risk as a result of risk of counterparties defaulting on their obligations. The
company’s exposure to credit risk primarily relates to Cash and Cash Equivalents, other bank balances, trade
receivables, loans and other financial assets.

The customer’s credit risk is managed by the Company’s established policy, procedures and control relating to
customer credit risk management.

Credit quality of a customer is assessed based on the individual credit limits that are defined in accordance with
the assessment and outstanding customer receivables are regularly monitored. The company monitors and limits its
exposure to credit risk on a continuous basis.

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and
financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

Liquidity Risk

The company is exposed to liquidity risk related to its ability to fund its obligations as they become due. The company
monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements.
The company monitors cash balances daily. In relation to Company’s liquidity risk, the company’s policy is to ensure, as
far as possible that it will always have sufficient liquidity to meet its liabilities when due , under both normal and stressed
conditions as they fall due while minimizing finance costs without incurring unacceptable losses or risking damage to
Company’s reputation.

The Company’s principle source of liquidity is cash and cash equivalents and the cash flow is generated from operations.
The Company believes that the working capital is sufficient to meet its current requirements and accordingly, no risk is
perceived.

Other Statutory information

1. The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

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2. The Company has not advanced or loaned or invested funds to any persons or entities, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

3. The company did not undertake transactions that were not recorded in the books of accounts and which have been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

4. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies
(ROC) beyond the statutory period.

5. The Company has not made investments in more than one layer of body corporate in accordance with provisions
of clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers)
Rules, 2017.

6. The Company has not been declared a Wilful Defaulter by its lenders.

7. No proceedings have been initiated against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

8. The company has not traded in cryptocurrencies or virtual currencies during the year.

9. The Company has not entered into transactions with Companies that have been struck off the Registrar of Companies
u/s 248 of the Companies Act, 2013 during the financial year.

10. The details of quarterly statements of stock and book debts filed by the Company with the banks have been given
below together with the reason for the differences

11. The borrowings availed by the company during the financial year have been used for the specific purposes for which
they were availed.

As per our report of even date

For and on behalf of the Board of Directors of For N.R.D. Associates

Veejay Lakshmi Engineering Works Limited Chartered Accountants, FRN No. 005662S

(SD/-) V.J. jayaraman (sd/-) j. anand (sd/-) d. ranganathan (sd/-) v.k. swaminathan t.m. malavika

Chairman Managing Director Whole-Time Director Company Secretary Partner

DIN No:00137340 DIN No: 00137425 DIN No:00137566 M.No: 231017

Place : Coimbatore
Date : 29.05.2025