We have audited the accompanying financial statements of Lloyds
Engineering Works Limited (“the Company” / “LEWL”), which
comprise the Balance Sheet as at 31st March, 2026, the Statement
of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flows
for the year ended on 31st March, 2026, and a summary of the
significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements
give the information required by the Companies Act, 2013 (“the
Act”) in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed
under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and
other accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March, 2026, the profit
and total comprehensive income, changes in equity and its cash
flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are independent
of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013
and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the
matters described below to be the key audit matters to be
communicated in our report.
1. Right Issue
Board of Directors of LEWL approved a Rights Issue of equity
shares vide the board resolution dated 30th July 2024.
During the year, the Company received Share Allotment
Money aggregating to Rs. 493.63 Crores on 5th June 2025
against the aforesaid right issue in respect of the allotment of
30,85,17,476 rights equity shares issued at a price of Rs. 16/-
per share i.e. (Re.0.50 per share towards Face Value and
Rs.15.50 per share as premium).
Further, the Company received an aggregate amount of
Rs. 363.59 Crores towards First and Final Call by 11th March,
2026 against 22,72,47,052 equity shares.
As at the reporting date, an aggregate amount of Rs. 130.03
Crores remains outstanding and is classified as Calls in
Arrears, representing the portion of the call money yet to be
realized from the respective allottees.
The Rights Issue involved significant amounts, multiple
stages of share capital collection including application
money and call money accounting for share capital and
securities premium, and compliance with the provisions of the
Companies Act, 2013 and Regulation 33 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, as amended ('Listing Regulations’). Accordingly, this
matter was considered to be a Key Audit Matter.
How the matter was addressed
Our audit procedures in respect of the Rights Issue included,
among others, the following:
1. ) We obtained and reviewed the Board Resolution
approving the Rights Issue, including the terms of issue,
application money, and first and final call money.
2. ) We reviewed the Rights Issue offer documents and
related communications issued to shareholders, as well
as the regulatory filings submitted to the BSE Limited
and the National Stock Exchange of India Limited.
3. ) We reviewed the filings, disclosures and correspondence
submitted with the Securities and Exchange Board of
India in connection with the Rights Issue.
4. ) We verified, on a sample basis, the receipt of share
application money and first and final call money with
reference to bank statements and books of account.
5. ) We verified the number of shares applied, allotted, and
on which call money was received.
6. ) We reviewed the accounting treatment for share
application money share capital, and securities premium,
calls in arrears and excess call money received/refunded
to ensure compliance with Schedule III of the Companies
Act, 2013, and the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
7. ) We assessed compliance with the relevant provisions
of the Companies Act, 2013 and Regulation 33 of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended ('Listing Regulations’).
Accordingly, this matter was considered to be a Key
Audit Matter in respect of the Rights Issue.
8. ) We evaluated the adequacy and appropriateness of
disclosures made in the financial statements relating to
the Rights Issue, share capital, calls in arrears, excess
amount refunded, and securities premium.
2. Proposed Scheme of Merger
The Board of Directors of the Company in their meeting
dated December 29, 2025 has approved the draft Scheme of
Merger by Absorption.
Further on January 16, 2026, the Company filed formal
applications seeking approval under Regulation 37 of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, with both the BSE Limited (BSE) and the
National Stock Exchange of India Limited (NSE).
The scheme involves the merger of Lloyds Infrastructure
& Construction Limited (Transferor Company 1), Metalfab
Hightech Private Limited (Transferor Company 2), and
Techno Industries Private Limited (Transferor Company
3) into Lloyds Engineering Works Limited (Transferee
Company). The Company has certified that the accounting
treatment provided in the Scheme is in compliance with all
applicable Accounting Standards for a listed entity. We have
identified this as a Key Audit Matter due to the complexity
of the merger process, the significance of the valuation and
share entitlement ratios, and the potential impact of the
accounting treatment on the future financial statements
once the necessary regulatory approvals from the Stock
Exchanges and the National Company Law Tribunal (NCLT)
are obtained.
How the matter was addressed in our audit:
1. ) We inspected the minutes of the meeting of the Board
of Directors and Board Resolution dated December 29,
2025, to verify the formal approval of the draft Scheme of
Merger by Absorption.
2. ) We verified the formal applications submitted by the
Company on January 16, 2026, to the BSE Limited and
the National Stock Exchange of India Limited, confirming
compliance with the initial filing requirements under
Regulation 37 of the SEBI (LODR) Regulations, 2015.
3. ) We verified that the Company has made the necessary
disclosures regarding the merger in its financial
statements and to the regulatory authorities as of the
reporting date.
3. Investment in Subsidiaries
(Refer Note No. 7 of the standalone financial statements)
I. Investment in Equity Shares of Techno Industries
Private Limited (“TIPL”)
As at March 31, 2025, LEWL held 77% equity stake
in TIPL. During the year ended March 31, 2026, the
Company acquired the remaining equity stake in TIPL in
two tranches, pursuant to which TIPL became a wholly
owned subsidiary of the Company.
The details regarding the tranches are as follows:
i. First Tranche: On July 1, 2025, the Company
acquired an additional 11% stake (13,75,000 equity
shares) for a consideration of Rs. 25.00 Crores,
increasing its holding from 77% to 88%.
ii. Second Tranche: On December 26, 2025, the
Company acquired the remaining 12% stake
(14,99,999 equity shares) for a consideration of
Rs. 22.70 Crores.
How the matter was addressed in our audit:
1) We inspected the minutes of the Board of
Directors’ meetings and the corresponding Board
Resolutions to confirm that the acquisitions were
duly authorized and conducted as per the approved
terms. Furthermore, we verified that the necessary
shareholders’ approval was obtained, ensuring the
transactions were executed in compliance with
statutory requirements.
2) We examined the Share Purchase Agreements
(SPAs) and transfer forms to verify the date of
acquisition, the number of shares transferred, and
the agreed-upon consideration.
3) We have verified the payment for purchase
through inspection of bank statements and other
supporting documents.
4) We assessed the adequacy of the disclosures in the
financial statements, particularly the summarized
financial information for subsidiaries with material
NCI, ensuring compliance with the relevant financial
reporting framework.
II. Incorporation of Lloyds Advance Defence Systems
Limited (LADS) as wholly owned subsidiary
a) During the financial year 2025-26, the Company
strategically expanded its corporate structure
through the incorporation of LADS as a wholly
owned subsidiary.
b) As a subscriber to the Memorandum of
Association (MoA), the Company committed to
and subsequently infused the initial equity capital
comprising 6,00,000 equity shares of Rs. 1 each,
aggregating to Rs. 6,00,000. Consequently, the
Company holds 100% of the equity share capital
and exercise full control over the subsidiary from the
date of incorporation.
How the matter was addressed in our audit:
1. ) We examined the minutes of the Meeting of the
Board of Directors and the corresponding Board
Resolutions to verify the formal approval for the
incorporation of the wholly owned subsidiary and
the authorized investment limits.
2. ) We inspected the Certificate of Incorporation of
LADS issued by the Registrar of Companies (ROC)
to confirm the legal existence of the subsidiary and
further inspected the and the Memorandum and
Articles of Association of LADS submitted with the
ROC to verify the nature of its business, the Capital
clause and the Subscribers to the Memorandum,
besides other relevant information.
3. ) We verified the subscription to the 6,00,000 equity
shares by reviewing the share certificates or the
Register of Members. We traced the payment of
the aggregate consideration of Rs. 6,00,000 to the
bank statements to ensure the transaction was
completed as per the terms of the incorporation.
4. ) We have verified that the accounting policies
for investments in the wholly owned subsidiary
are recorded at cost in the Standalone Financial
Statements, in accordance with the provisions of
Ind AS 27 (Separate Financial Statements).
5. ) We evaluated the adequacy of the disclosures made
in the notes to the financial statements regarding
the subsidiary and the proportion of ownership
interest held by the Company.
III. Acquisition of Equity Stake in Metalfab Hightech
Private Limited (“Metalfab”)
During the financial year ended March 31, 2026, the
Company acquired a 76% equity stake in Metalfab for
a total purchase consideration of Rs. 28,40,50,000
(21,85,000 equity shares at Rs. 130 per share). This
transaction resulted in the Company acquiring control,
thereby establishing Metalfab as a subsidiary of
the Company.
How the matter was addressed in our audit:
1. ) We examined the Board approval dated May
20, 2025, along with the corresponding Board
Resolutions and the Share Purchase Agreement,
to verify the formal terms and conditions of the
acquisition. Our review focused on confirming the
purchase consideration and the specific date of
obtaining control.
2. ) We evaluated the independent valuation report
commissioned by the management to determine
the fair value of the assets acquired and
liabilities assumed.
3. ) We have verified the payment of the Purchase
consideration through inspection of bank
statements and other supporting documents.
4.) We reviewed the disclosures in the financial
statements related to the purchase of shares to
ensure they are complete and accurate, providing
sufficient information for users to understand the
transaction and its financial impact.
4. Property, Plant and Equipment
(Refer Note No. 4 of the standalone financial statements)
During the year, the Company recorded significant additions
and certain deletions in Property, Plant and Equipment (PPE)
in the normal course of business. The Gross Value of PPE
as at F.Y. 2025-26 stood at Rs. 142.16 Crores (Previous year:
Rs. 105.53 Crores). Additions during the year amounted
to Rs. 45.42 Crores, while deletions/disposals amounted
to Rs. 8.79 Crores. Given the value and nature of these
transactions, there are inherent challenges in ensuring
appropriate recognition, measurement, capitalization,
depreciation, and derecognition of PPE in accordance with
Ind AS 16 - Property, Plant and Equipment.
How the matter was addressed in our audit:
Our audit procedures in respect of Property, Plant and
Equipment (PPE) included the following:
1. We verified additions and deletions of Property, Plant,
and Equipment (PPE) on a sample basis by examining
supporting documentation, including invoices, contracts,
and disposal records. Furthermore, we conducted
physical verification of selected assets to confirm their
existence and condition at the site. These procedures
were performed to ensure that the movements in the
fixed asset register are accurately reflected in the
financial statements and comply with the Company’s
capitalization policies.
2. We assessed whether the expenditure capitalized and
assets derecognized comply with the requirements of
Ind AS 16 - Property, Plant and Equipment.
3. We verified the accuracy of depreciation, including the
useful lives and methods applied to Property, Plant and
Equipment (PPE), and also reviewed the accounting
treatment and computation of profit / loss on sale or
disposal of fixed assets, as well as the assessment of
impairment indicators and impairment of assets.
4. We evaluated the adequacy of disclosures relating to
PPE in the financial statements.
5. Capital Work in Progress
(Refer Note No. 4 of the standalone financial statements)
During the financial year 2025-26, the Company undertook
significant capital expenditure for the expansion of its
manufacturing capabilities, resulting in the accumulation of
costs for assets currently under construction. We verified
that these expenditures are classified as Capital Work-in¬
Progress, as the underlying projects had not reached the
stage of being ready for their intended use by the reporting
date. Consequently, the investment is recorded at cost,
reflecting the ongoing nature of these projects as of March
31, 2026, pending their capitalization upon completion and
commissioning. The company had Capital Work in Progress
(CWIP) of Rs. 65.86 Crores as at March 31, 2026 (previous
year was Rs 62.96 Crores).
How the matter was addressed in our audit:
Our audit procedures to assess the accounting for CWIP
included the following.
1. Evaluation of the completeness and accuracy of the
project cost capitalized as CWIP This includes reviewing
invoices, contracts, and other supporting documentation.
2. Ensuring the cost capitalized meets the recognition
criteria as per IND AS 16 'Property, Plant and Equipment’.
3. Evaluation of effectiveness of internal controls over
capitalization of project costs.
4. Reviewing the disclosure requirements for CWIP in the
financial statements including the ageing schedule.
6. Guarantees Issued to Group Company
During the Financial Year 2025-26 Lloyds Engineering Works
Limited has issued/given a corporate guarantee of Rs.109.00
crores to HDFC Bank Limited (Lender) for financial facilities
and borrowings of its wholly owned subsidiary Techno
Industries Private Limited (TIPL).
How the matter was addressed in our audit:
Our audit procedures to assess the accounting for Corporate
Guarantees included the following.
1. Review contractual agreements: Obtained and reviewed
the agreement that outline the terms and conditions of
the guarantees issued by the company in favour of
Lender for their financial facilities provided to TIPL.
2. Assess the nature of the guarantee: Determine if the
guarantee is a corporate guarantee, a performance
guarantee, or a related party guarantee since different
types may require different accounting treatment
and disclosure.
3. We evaluated the appropriateness of management’s
classification of financial guarantees as short-term by
verifying that the underlying contractual obligations did
not extend beyond twelve months from the reporting
date. This included reviewing bank sanction letters, which
indicated validity periods of less than one year. Based on
this assessment and in accordance with Ind AS 109, the
guarantees have been considered short-term in nature,
and accordingly, no recognition or measurement has
been made in the financial statements by the Company.
4. We verified that the nature of these guarantees and
the rationale for their measurement were adequately
disclosed as contingent liabilities in the notes to the
financial statements.
Information Other than the Standalone Financial
Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the
preparation of the other information. The other information
comprises the information included in the Management
Discussion and Analysis, Board’s Report including Annexure
to Board’s Report, Business Responsibility and Sustainability
Report, Corporate Governance Report and Shareholder’s
Information but does not include the financial statements
and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained during the course of our audit or otherwise appears
to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
Management’s Responsibility for the Financial
Statements
The Company’s Board of Directors is responsible for the
matters stated in section 134(5) of the Companies Act, 2013
(“the Act”) with respect to the preparation of these financial
statements that give a true and fair view of the financial
position, financial performance, (changes in equity) and cash
flows of the Company in accordance with the accounting
principles generally accepted in India, including the Indian
Accounting Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and
presentation of the financial statement that give a true and
fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are also responsible for overseeing
the Company’s financial reporting process.
Auditor’s Responsibility
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has
adequate internal financial controls system in place and
the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We
consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating
the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order,
2020 (“the Order”) issued by the Central Government
of India in terms of sub-section (11) of section 143 of
the Companies Act 2013, we give in the 'Annexure B’, a
statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purpose of
our audit.
b. In our opinion proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books;
c. The Company has no branch office and hence the
company is not required to conduct audit under
section 143 (8) of the Act;
d. The Balance Sheet, the Statement of Profit and
Loss, the Cash flow statement dealt with by this
Report are in agreement with the books of account;
e. In our opinion, the aforesaid Ind AS financial
statements comply with the Indian Accounting
Standards (Ind AS) prescribed under Section
133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014 (As amended);
f. In our opinion, no financial transactions or matters
have any adverse effect on the functioning of
the company;
g. On the basis of the written representations received
from the directors as on 31st March, 2026 taken
on record by the Board of Directors, none of the
directors is disqualified as on 31st March, 2026 from
being appointed as a director in terms of Section
164 (2) of the Act;
h. We do not have any qualification, reservation or
adverse remark relating to the maintenance of
accounts and other matters connected therewith.
i. In our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the year is in accordance with the provisions
of section 197 of the Act.
j. With respect to the adequacy of the internal
financial controls over financial reporting of the
Company and the operating effectiveness of such
controls, refer to our separate report in “Annexure
A.” Our report expresses an unmodified opinion
on the adequacy and operating effectiveness of
the Company’s Internal Financial Controls over
financial Reporting;
k. With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
in our opinion and to the best of our information
and according to the explanations given to us (As
amended):
i. The Company has disclosed the pending
litigations which may impact its financial
position in Note 22 of the financial statements.
ii. The Company did not have any long¬
term contracts including derivative
contracts for which there were any material
foreseeable losses.
iii. During the year, no amounts were required
to be transferred to the Investor Education
and Protection Fund by the Company. So, the
question of delay in transferring such sums
does not arise.
iv. a) The management has represented that, to
the best of its knowledge and belief, other
than as disclosed in the notes to accounts
to the standalone Ind AS financial
statements, no funds have been advanced
or loaned or invested (either from borrowed
funds or share premium or any other
sources or kind of funds) by the Company
to or in any other person or entity including
foreign entities (“Intermediaries”), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, whether, 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 provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
b) The management has represented that,
to the best of its knowledge and belief, no
funds have been received by the Company
from any person or entity, including
foreign entities (“Funding Parties”), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, whether, 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 provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries; and
c) Based on such audit procedures
performed that have been considered
reasonable and appropriate in the
circumstances, nothing has come to
our notice that has caused us to believe
that the representations under sub
clause (a) and (b) contain any material
misstatement.; and
v. (a) The final dividend paid by the Company
during the year, in respect of the same
declared for the previous year is in
accordance with Section 123 of the Act to
the extent it applies to payment of dividend.
(b) As stated in note 38 of the standalone
financial statements, the Board of
Directors of the Company has proposed
final dividend at the rate of 25% i.e. 0.25
Paise, per equity share of Face value
Re.1/- for the year which is subject to the
approval of the members at the ensuing
Annual General Meeting. The dividend
declared is in accordance with Section
123 of the Act to the extent it applies to
declaration of dividend.
vi. Based on our examination, the Company has
used accounting softwares for maintaining its
books of account for the financial year ended
March 31,2026 which has a feature of recording
audit trail (edit log) facility and the same has
operated throughout the year for all relevant
transactions recorded in the softwares. Further,
during the course of our audit we did not come
across any instance of the audit trail feature
being tampered with.
For S Y Lodha & Associates
Chartered Accountants
ICAI Firm Reg No. - 136002W
Shashank Lodha
Partner
Date: May 5, 2026 M. No.: 153498
Place: Mumbai UDIN.: 26153498KZTRFG4266
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