Veejay Lakshmi Engineering Works Ltd Directors Report

To share holders

Dear shareholders,

Your directors present the fiftieth annual report and the companys audited financial statements for year ended 31^st march 2025.

1. State of companys affairs, dividend and reserve

I. Financial performance / appropriations / transfer to reserves

The companys financial performance for the year ended march 31, 2025 is summarized below.

( in lakhs)

Particulars	Year ended 31.03.2025	Year ended 31.03.2024
Sales turnover	7964.93	8709.10
Profit/ (loss) before depreciation and taxes	(80.86)	(235.11)
Depreciation	249.44	243.72
Profit / (loss) before taxes	(330.30)	(478.83)
Appropriations/adjustments
Provision for taxes - current tax of prior period	-	-
- deferred tax	1.18	(23.29)
Profit after tax - transferred to retained earnings	(331.48)	(455.54)

The sales turnover for the year is rs.7964.93 lakhs as against rs. 8709.10 lakhs in the previous year. There is fall in turnover in both engineering and textile divisions due to reduced demand for the products of the company. However, the loss has come down. The loss during the year is rs. 331.48 lakhs as against the loss of rs.455.54 lakhs in the previous year. The entire loss has been transferred to retained earnings. No dividend has been considered due to loss.

Ii. Operations:

The performance of the engineering division has been sluggish like previous year, affected by reduced inflow of orders and low capacity utilization. Engineering division has, however, made some profit due to better prices realized in local market and exports. Textile divisions capacity utilization was marginally higher than last year, but the sales turnover is less due to reduced prices for yarn. No profits could be made as the margins were not adequate to cover the costs. More details are provided in the management discussion and analysis report. The total capital expenditure incurred during the year is rs.56.77 lakhs.

Industrial relations:

The relationship with the workmen has been cordial in all the units of the company.

R&d

The existing products of the company are under continuous development to improve productivity, savings in power and reduce cost of production.

Borrowings:

Secured

The company has term loans availed from the banks for capital expenditure and the loans provided during the covid crisis for working capital. The total secured term loans outstanding as at 31/03/2025 is rs.295.38 lakhs.

For working capital, the company has a fund based limit of rs.1500 lakhs with sublimits for non fund based requirements. The total outstanding of working capital limits as at 31/03/2025 is rs.922.77 lakhs. The company has serviced the interest / repayment obligations of all the above loans, in time, without any delay.

Unsecured loans from directors/promoters

The company also has unsecured loans from directors/promoters. The total outstanding loan amount as at 31/03/2025 is rs.1730.69 lakhs. The interest rate is 7.5% pa. Considering the losses for the year, the promoters have waived the interest on this loan upto 31.03.2028. As per the terms stipulated by state bank of india, the unsecured loans cannot be repaid without their approval and the rate of interest should not exceed the rate charged by the bank for the credit facilities given to the company.

The losses during the current year and in previous year have affected the liquidity position of the company and reduction in net working capital. State bank of india has also stipulated a condition that promoters have to infuse additional funds to improve the liquidity / current ratio / net working capital.

2. Annual return

The copy of the annual return is disclosed in the companys website: www.veejaylakshmi.com

3. Number of meetings of the board

Four meetings of the board of directors were held during the year. Further details in this respect and details of meetings of the committees are provided under the report on corporate governance.

4. Directors responsibility statement

Your directors hereby state that

• in preparation of annual accounts for the financial year ended march 31, 2025, the applicable accounting standards have been followed along with proper explanation. There has been no 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 a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for the year ended 31^st march 2025.

• the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

• the directors have prepared the annual accounts for the financial year ending march 31, 2025 on a going concern basis.

• the directors had laid down internal financial controls to be followed by the company and that such internal controls are adequate and are operating effectively.

• the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

5. Nomination and remuneration committee and policy

The appointment of directors and fixation of their remuneration is as per the guidelines laid down in the nomination and remuneration policy of the company formulated in compliance with section 178 of the companies act, 2013 and rules in this respect under the act. The policy lays down the role of the nomination and remuneration committee, the criteria for appointment of managerial personnel and independent directors and other matters as provided under sub-section (3) of section 178 of the act. The nomination and remuneration policy is available on the company website: www.veejaylakshmi.com

6. Declaration by independent directors

The independent directors have submitted their disclosures to the board that they fulfill all the requirements as stipulated in section 149(6) of the companies act, 2013 so as to qualify themselves to be appointed as independent directors under the provisions of the above act and the relevant rules.

7. Auditors and auditors report statutory auditors

M/s. N r d associates., chartered accountants, statutory auditors of the company, hold office till the conclusion of the annual general meeting to be held in 2027. The statutory auditors report does not contain any qualification, reservation or adverse remark. There is no instance of fraud reported by the statutory auditors of the company.

Secretarial auditor

The board has appointed mr k. Duraisami, practicing company secretary to conduct secretarial audit for the financial year 2024-25. The secretarial audit report does not have any adverse observation.

8. Particulars of loans/guarantee/ investments/deposits

The company has not provided any inter-corporate loans/ guarantees. Details of other loans/advances and investments of the company in the shares of other companies are provided under note 5 and 8(e) of notes to balance sheet appearing elsewhere in this annual report. The amount of investment made by the company does not exceed the limits as specified in section 186 of the companies act, 2013.

The company has not accepted any deposits from public during the year and there are no deposits from the public as at 31.3.2025. The company has unsecured loans from promoters / directors.

9. Contracts and arrangements with related parties

All contracts / arrangements / transactions entered by the company during the financial year with related parties were in the ordinary course of business and were on arms length basis. During the year, the company had not entered into any contract / arrangement / transaction with related parties which could be considered material. Your directors draw attention of the members to note no.31 to the financial statement which sets out related party disclosures.

10. Material changes and commitments after 31/03/2025

No significant changes in the working of the company from 31/03/2025 till the date of the report.

11. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under the act, are provided in annexure-3 to this report.

12. Risk management

The company follows a comprehensive and integrated risk appraisal, mitigation and management process. The identified elements of risk and risk mitigation measures are periodically reviewed and revised by the board of directors. The companys risk management policy, approved by the board is posted on the website of the company. The listing regulations in this respect (reg.21(5) is not applicable to the company.

13. Evaluation of board performance

The nomination and remuneration committee of the company has formulated the criteria for evaluation of the performance of each director, board of directors, committees of the board and independent directors. Based on this and the guidelines in this regard issued by sebi the performance evaluation has been undertaken. A separate meeting of independent directors has been convened for this purpose during the year.

14. Additional information as per rule 8(5) of companies (accounts) rules, 2014

Sl. No. Particulars	Related disclosures
The financial summary or highlights	The financial highlights including state of affairs of the company, dividend and reserve have been provided elsewhere in this report
Ii The change in the nature of business	The business of the company is manufacture of cotton yarn, knitted fabric, two for one twisting machines and assembly winders. There was no change in the business of the company.
Iii. The details of directors or key managerial personnel who were appointed or have resigned during the year	Three new independent directors have been coopted effective from 25.09.2024 on retirement of previous incumbents, who ceased to be directors of the company with effect from 25-09-2024. The board of directors are of the opinion that their integrity, expertise and experience is satisfactory.
Iv. The names of the companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year	Nil
V. The details relating to deposits, covered under chapter v of the act	The company has not accepted any amount which falls under the purview of chapter v of the act.
Vi. The details of deposits which are not in compliance with the requirements of chapter v of the act.	Na
Vii. The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.	No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status of the company.
Viii. The details in respect of adequacy of internal controls with reference to the financial statements	The company has adequate internal financial controls in place with reference to financial statements. During the year such controls were reviewed and ensured that it had no material weakness. The financial statements are prepared in accordance with the indian accounting standards issued by the ministry of corporate affairs
Ix. Maintenance of cost records under subsection (1) of section 148 of the companies act, 2013	The company has duly made and maintained the cost records.
X. Insolvency & bankruptcy code, 2016	No application is made, or any proceeding is pending under the insolvency & bankruptcy code, 2016 during the year under review.
Xi. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.	Not applicable - there was no instance of one-time settlement with any bank or financial institution.
Xii. A statement by the company with respect to the compliance to the provisions relating to the maternity benefit act ,1961	Complied with.

15. Directors

Sri. V.j. Jayaraman, director will retire by rotation at the ensuing annual general meeting and being eligible he offers himself for reappointment.

16. Audit committee and vigil mechanism

The audit committee as at end of the year comprises independent directors sri k. Narendra (chairman), sri t.s.v. Rajagopal, sri r. Gurubatham, smt. Sasirekha vengatesh and whole time director cum chief financial officer sri d.ranganathan. All the recommendations made by the audit committee were accepted by the board.

The vigil mechanism of the company also incorporates whistle blower policy stipulated under the listing regulations. Execution of the responsibility in terms of the policy has been entrusted to the audit committee. Protected disclosures can be made by a whistle blower through an e-mail, or over telephone or by a letter to the chairman of the audit committee.

The policy on vigil mechanism and whistle blower may be accessed on the companys website: www. Veejaylakshmi.com

17. Prevention of sexual harassment at work place

As per the provisions of sexual harassment of women at workplace (prevention, prohibition and redressal) act, 2013, the company has constituted a complaints committee within hr department. No complaints were received by the committee during the year 2024-25.

18. Equity capital / listing

The companys equity shares continue to be listed at bse limited and we confirm that listing fee for the financial year 2024-25 has been paid. There is no change in the paid-up share capital during the year.

19. Particulars relating to remuneration of directors/employees

Disclosure under sub rule (2) of rule (5) of companies (appointment & remuneration of managerial personnel) rules, 2014:

A. Ratio of remuneration of each director to the median remuneration of the employees of the company for the financial year ended march 31, 2025 and the percentage increase in remuneration of each director, chief financial officer, chief executive officer, company secretary or manager in the financial year ended march 31, 2025:

Median remuneration of employees in the financial year 2024-25. : rs. 143856/- pa.

B. There has been about 6% increase in the median remuneration of the employees over that during the financial year 2023-24.

C. Number of employees on the rolls of company as on 31^st march, 2025 : 454

D. 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:

Average percentile increase in remuneration other than managerial personnel is 27.88% and average percentile increase / (decrease) in remuneration for managerial personnel is 1.97%.

E. Affirmation that the remuneration is as per the remuneration policy of the company:

Your directors affirm that the remuneration is as per the nomination and remuneration policy of the company.

F. Details of top ten employees in terms of gross remuneration:

Details given in annexure 4.

G. There are no employees who are paid remuneration in excess of rs.102 lakhs per annum or rs.8.5 lakhs per month

20. Corporate governance

The report on corporate governance as stipulated under the listing regulations forms an integral part of this report. The requisite certificate from the practicing company secretary confirming compliance with the conditions of corporate governance is attached to the report on corporate governance.

21. Particulars of contracts and arrangements

The prescribed form aoc-2 in this respect is attached as annexure 2.

22. Corporate social responsibility

Not applicable to the company under the relevant provisions of the companies act, 2013.

23. Associate company

The company holds 26.2% shares in m/s veejay sales and services limited which falls under the category of associate company as per the provisions of the companies act. The main income of the company is from generation of power through wind mills and the details are furnished separately in this report under annexure-i.

24. Acknowledgement

The board of directors wishes to place on record their sincere appreciation to the customers, suppliers, business partners and group companies and shareholders for their support. The directors would like to thank the bankers as well. The directors would take this opportunity to express their appreciation for the dedicated efforts of the employees and their contribution which is deeply acknowledged.

	For and on behalf of the board of directors
Coimbatore	(sd/-) v.j. Jayaraman
May 29, 2025	Chairman