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Notes to Accounts of Lakshmi Machine Works Ltd.

Mar 31, 2014

(Rs.in Lakhs)

Year ended Year ended

31st March, 2014 31st March, 2013

1 ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

1.1 Contingent Liabilities and Commitments, to the extent not provided for

Letters of Credit 2,722.62 3,147.41

Bank Guarantee 1,687.05 1,471.69

Central Excise Demand 472.63 443.99

Income Tax Demand 653.26 513.05

Disputed tax dues are appealed before concerned appellate authorities.

The Company is advised that the cases are likely to be disposed off in favour of the Company and hence no provision is considered necessary therefor.

Estimated balance of committed share subscription to wholly owned subsidiary company, Rs.2,343.61 LMW Textile Machinery (Suzhou) Limited [USD Nil million]; (previous year USD 4.50 million)]

Estimated amount of contracts remaining to be executed on capital account not provided 436.60 529.80 for 24.14 Provision for Excise duty amounting T206.03 Lakhs (Previous year T229.66 Lakhs) for the uncleared stock of finished goods has been reckoned in the value of Finished Goods.

1.2 In the opinion of the Board of Directors, assets otherthan fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

1.3 Related Party Disclosures

1) Related Party Relationships

Key Management Personnel:

Sri. Sanjay Jayavarthanavelu, Chairman and Managing Director Sri. R. Rajendran, Director Finance

Wholly Owned Subsidiary:

LMW Textile Machinery (Suzhou) Co. Ltd

Other related parties-Associates

Dhanuprabha Agro P Ltd

Eshaan Enterprises Limited

Harshini Textiles Limited

Hermes Academy of Training Limited

Lakshmi Cargo Company Limited

LCC Cargo Holdings Limited

Lakshmi Caipo Industries Ltd

Lakshmi Engg & Environment Designs Ltd

Lakshmi Electrical Drives Limited

Lakshmi Technology & Engg. Industries Ltd

Lakshmi Ring Travellers (CBE) Limited

Lakshmi Electrical Control Systems Limited

Lakshmi Precision Tools Limited

Lakshmi Life Sciences Limited

Lakshmi Vignesh Corporate Services Ltd

Mahalakshmi Engineering Holdings Limited

Quattro Engineering India Limited

Revantha Holdings Limited

Revantha Builders Ltd

Revantha Agro Farms P Ltd

Sowbarniha Resorts Private Limited

Sri Kamakoti Kamakshi Textiles P Ltd

Sri Lakshmi Vishnu Plastics

Sudhsruti Agro P Ltd

Super Sales India Limited

Supreme Dairy Products India Ltd

Starline Travels Limited

Titan Paints & Chemicals Limited

Venkatavaradha Agencies Limited

Walzer Hotels Limited

Note : Related party relationships are as identified by the Management

Disclosure in respect of Material Related Party Transaction during the year:

1 Purchase of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd TNil Lakhs (Previous Year Rs.6.64 Lakhs); Lakshmi Electrical Control Systems Limited Rs.14,544.07 Lakhs (Previous Year Rs.2,079.66 Lakhs), Lakshmi Electrical Drives Limited Rs.3,399.10 Lakhs (Previous Year Rs.2,970.74 Lakhs); Super Sales India Limited Rs.2,759.05 Lakhs (Previous year Rs.,046.67 Lakhs) and Other Related Parties- Associates Rs.5,531.43 Lakhs (Previous Year XI, 161 Lakhs)

2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd Rs.4,738.24 Lakhs (Previous Year Rs.5,282.01 Lakhs), Lakshmi Electrical Control Systems Limited Rs.7,831.52 Lakhs (Previous Year Rs.6,656.68 Lakhs) and Other related Parties - Associates Rs.1,407.72 Lakhs (Previous Year Rs.501.99 Lakhs)

3 Purchase of Fixed Assets includes Quattro Engineering India Limited T68.95 Lakhs (Previous Year Rs.Nil Lakhs)

4 Sale of Fixed Assets includes Super Sales India Ltd Rs.23.81 Lakhs(Previous Year Rs.99.44 Lakhs); Revantha Builders Ltd Rs.Nil Lakhs (Previous yearRs.231.00 Lakhs); Quattro Engineering P Ltd Rs.1,935.00 Lakhs (Previous year Nil); and Other Related Parties-Associates Rs.5.50 Lakhs (Previous Year Rs.22 Lakhs)

5 Rendering of Services includes , LMW Textile Machinery (Suzhou)Co. Ltd Rs.338.35 Lakhs (Previous Year Rs. 71.41 Lakhs), Super Sales India Limited Rs.27.50 Lakhs (Previous Year Rs.23.54 Lakhs); Lakshmi Technology & Engineering Industries Ltd. T30.10 Lakhs (Previous yearRs.32.87 Lakhs); Lakshmi Electrical Control Systems Limited Rs.Nil Lakhs(Previous Year 0.61 Lakhs) and Others - Other Related Parties- Associates Rs.10.95 Lakhs (Previous Year Rs.36.84 Lakhs)

6 Receiving of Services include Lakshmi Ring Travellers (CBE) Limited Rs.624.38 Lakhs (Previous Year Rs.573.51 Lakhs); Lakshmi Cargo Company Limited Rs.5,568.08 Lakhs (Previous Year Rs.4,180.71 Lakhs); Revantha Builders Ltd Rs.635.51 Lakhs (Previous year Rs.898.20 Lakhs) and Other Related Parties - Associates Rs.572.21 Lakhs (Previous Year Rs.982.14 Lakhs)

7 Agency arrangement includes Super Sales India Limited Rs.262.25 Lakhs (Previous Year Rs.270.09 Lakhs)

8 Managerial Remuneration includes amount paid to Sri. Sanjay Jayavarthanavelu Rs.731.15 Lakhs (Previous Year Rs.521.22 Lakhs) Sri.R.Rajendran Rs.99.45 Lakhs (Previous year Rs.95.66 Lakhs)

9 Investment in Shares includes LMW Textile Machinery (Suzhou) Co. Limited Rs.2,563.86 Lakhs (Previous Year Rs.625.20 Lakhs)

10 Loan received back includes Lakshmi Ring Travellers (CBE) Ltd -T200.00 Lakhs ( Previous Year T200.00 Lakhs)

11 Interest receipts include Lakshmi Ring Travellers (CBE) Limited Rs.57.84 Lakhs (Previous year T77.82 Lakhs)

12 Outstanding Payables include Lakshmi Cargo Company Limited Rs.428.44 Lakhs (Previous Year Rs.234.43 Lakhs); Lakshmi Precision Tools Limited Rs. 25.75 Lakhs (Previous Year Rs.35.76 Lakhs); Lakshmi Electrical Drives Ltd Rs.400.75 Lakhs (Previous year Rs.253.35 Lakhs) Super Sales India Limited Rs. ,333.47 Lakhs (Previous Year Rs.318.05 Lakhs) Sri. Sanjay Jayavarthanavelu Rs.506.13 Lakhs (Previous year Rs.320.61 Lakhs) and Other Related Parties -Associates Rs. 59.18 Lakhs (Previous Year Rs. 48.17 Lakhs)

13 Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd Rs.2,997.75 Lakhs (Previous Year Rs.2.200.58 Lakhs), Lakshmi Electrical Control Systems Limited Rs., 125.30 Lakhs (Previous Year Rs.,021.1 5 Lakhs, Lakshmi Technology and Engineering Industries Limited Rs. 67.30 Lakhs (Previous Year Rs.556.36 Lakhs); Lakshmi Ring Travellers (CBE) Ltd. Rs.546.34 Lakhs (Previous year Rs. ,276.64 Lakhs) and Others - Other Related Parties - Associates T406.95 Lakhs (Previous Year Rs. 73.32 Lakhs)

1.4 (a) The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provisions made at the end represents the amount of expected cost of meeting such obligations of rectification/ replacements. The timing of the outflows is expected to be within a period of one year.

1.5 Revenue Expenditure on Research S Development amounting to Rs.1,298.32 Lakhs (Previous Year Rs.1,032.73 Lakhs) has been charged to Statement of Profit and Loss (included in Miscellaneous expenses) and Capital expenditure relating to Research and Development amounting to Rs.350.38 Lakhs (Previous Year Rs.Nil Lakhs) has been included in Fixed Assets

1.6 (a) There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date.

1.7 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

NOTE : 1. CORPORATE INFORMATION

Lakshmi Machine Works Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The company is engaged in the manufacturing and selling of Textile Spinning Machinery, CNC Machine Tools, Heavy Castings and parts and components for Aero space industry. The company caters to both domestic and international markets.

2.1. As defined under Micro, Small and Medium Enterprises Development Act, 2006, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2013 has been made in the financial statements based on information received and available with the Company.

2.2. Provision for Excise duty amounting Rs. 229.66 Lakhs (Previous year Rs. 174.38 Lakhs) for the uncleared stock of finished goods has been reckoned in the value of Finished Goods.

2.3. In the opinion of the Board of Directors, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

2.4. Related Party Disclosures

1) Related Party Relationships Key Management Personnel

Sri. Sanjay Jayavarthanavelu, Chairman and Managing Sri. R. Rajendran, Director Finance Director

Wholly Owned Subsidiaries:

LMW Textile Machinery (Suzhou) Co. Ltd

Other Related Parties-Associates

Eshaan Enterprises Limited Harshini Textiles Limited Hermes Academy of Training Limited Integrated Electrical Controls Limited Lakshmi Cargo Company Limited LCC Cargo Holdings Limited Lakshmi Electrical Drives Limited Lakshmi Technology & Engg. Industries Ltd Lakshmi Ring Travellers (CBE) Limited Lakshmi Electrical Control Systems Limited Lakshmi Precision Tools Limited Lakshmi Life Sciences Limited

LMW Machinery Limited [from 16.8.2011 to 31.3.2012]

Lakshmi Vignesh Corporate Services Ltd

Mahalakshmi Engineering Holdings Limited

Quattro Engineering India Limited

Revantha Holdings Limited

Revantha Builders P Ltd

Sri Kamakoti Kamakshi Textiles P Ltd

Sri Lakshmi Vishnu Plastics

Super Sales India Limited

Starline Travels Limited

Titan Paints & Chemicals Limited

Venkatavaradha Agencies Limited

Walzer Hotels Limited

Disclosure in respect of Material Related Party Transaction during the year :

1 Purchase of Goods includes Rieter LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 5.58 lakhs ), LMW Textile Machinery (Suzhou) Co. Ltd Rs. 16.64 lakhs (Previous Year Rs. Nil lakhs ) LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 508.65 lakhs), Lakshmi Electrical Control Systems Limited Rs. 12,079.66 lakhs (Previous Year Rs. 16,123.10 lakhs), Lakshmi Electrical Drives Limited Rs. 2,970.74 lakhs (Previous Year Rs. 4,002.76 lakhs) and Other related parties- Associates Rs. 3,236.52 lakhs (Previous Year Rs. 4,180.02 lakhs).

2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd Rs. 5,282.01 lakhs (Previous Year Rs. 7,382.24 lakhs), Rieter LMW Machinery Limited Rs. Nil lakhs (Previous year Rs. 490.55 lakhs) LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 2,794.20 lakhs), Lakshmi Electrical Control Systems Limited Rs. 6,656.68 lakhs (Previous Year Rs. 9,351.36 lakhs) and Other related Parties - Associates Rs. 513.15 lakhs (Previous Year Rs. 800.55 lakhs).

3 Purchase of Fixed Assets includes Lakshmi Precision Tools Ltd. Rs. Nil lakhs (Previous year Rs. 193.98 lakhs), Quattro Engineering India Limited Rs. Nil lakhs (Previous Year Rs. 117.60 lakhs), Lakshmi Cargo Company Limited. Rs. Nil lakhs (Previous year Rs. 311.64 lakhs) and Super Sales India Ltd. Rs. Nil lakhs (Previous year Rs. 179.41 lakhs).

4 Sale of Fixed Assets includes LMW Machinery Limited Rs. Nil lakhs (Previous year Rs. 13.46 lakhs) , Super Sales India Ltd Rs. 99.44 lakhs(Previous Year Rs. 0.26 lakhs), Starline Travels Limited Rs. Nil lakhs (Previous year Rs. 7.90 lakhs), Revantha Builders P Ltd Rs. 231.00 lakhs (Previous year Rs. Nil lakhs), Lakshmi Vignesh Corporate Services Ltd Rs. Nil lakhs (Previous year Rs. 150 lakhs), and Other Related Parties-Associates Rs. 1.22 lakhs (Previous Year Rs. Nil lakhs).

5 Rendering of Services includes Rieter LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 0.10 lakhs), LMW Textile Machinery (Suzhou)Co. Ltd Rs. 171.41 lakhs (Previous Year Rs. 25.11 lakhs), Super Sales India Limited Rs. 23.54 lakhs (Previous Year Rs. 49.20 lakhs), LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 18.76 lakhs) Lakshmi Technology & Engineering Industries Ltd. Rs. 32.87 lakhs (Previous year Rs. 44.64 lakhs), Lakshmi Electrical Control Systems Limited Rs. 0.61 lakhs(Previous Year Rs. Nil lakhs) and Other Related Parties-Associates Rs. 37.70 lakhs (Previous Year Rs. 22.59 lakhs).

6 Receiving of Services include Lakshmi Ring Travellers (CBE) Limited Rs. 573.51 lakhs (Previous Year Rs. 693.05 lakhs), Lakshmi Cargo Company Limited Rs. 4,180.71 lakhs (Previous Year Rs. 5,072.96 lakhs), Revantha Builders P Ltd Rs. 898.20 lakhs (Previous year Rs. 418.58 lakhs) and Other Related Parties - Associates Rs. 1,989.94 lakhs (Previous Year Rs. 1,903.63 lakhs).

7 Agency arrangement includes Super Sales India Limited Rs. 1,270.09 lakhs (Previous Year Rs. 1,389.95 lakhs).

8 Managerial Remuneration includes amount paid to Sri. Sanjay Jayavarthanavelu Rs. 521.22 lakhs (Previous Year Rs. 348.29 lakhs), Sri. R. Rajendran Rs. 95.66 lakhs (Previous year Rs. 88.76 lakhs).

9 Dividends paid to includes Lakshmi Technology and Engineering Industries Limited Rs. 333.55 lakhs (Previous Year Rs. 200.13 lakhs), Lakshmi Cargo Company Limited Rs. 461.86 lakhs (Previous Year Rs. 247.12 lakhs), Other Related Parties - Associates Rs. 276.47 lakhs (Previous Year Rs. 251.87 lakhs), Sri Sanjay Jayavarthanavelu Rs. 71.15 lakhs (Previous Year Rs. 39.70 lakhs) , Dr. D. Jayavarthanavelu Rs. Nil lakhs (Previous Year Rs. 3.00 lakhs), Sri R. Rajendran Rs. 1.22 lakhs (Previous year Rs. 0.74 lakhs).

10 Investment in Shares includes LMW Textile Machinery (Suzhou) Co. Limited Rs. 1,625.20 lakhs (Previous Year Rs. Nil lakhs), LMW Machinery Limited Rs. Nil lakhs (Previous year Rs. 5,400 lakhs).

11 Loan received back includes Lakshmi Ring Travellers (CBE) Ltd - Rs. 200 lakhs (Previous Year Rs. 150 lakhs), Rieter LMW Machinery Limited Rs. Nil lakhs (Previous year Rs. 1,250 lakhs).

12 Loan given : Lakshmi Ring Travellers (CBE) Ltd- Rs. Nil lakhs (Previous Year Rs. 1,000 lakhs).

13 Interest receipts include Rieter LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 33.26 lakhs) and Lakshmi Ring Travellers (CBE) Limited Rs. 77.82 lakhs (Previous year Rs. 74.14 lakhs).

14 Outstanding Payables include Lakshmi Cargo Company Limited Rs. 234.43 lakhs (Previous Year Rs. 726.76 lakhs), Lakshmi Precision Tools Limited Rs. 85.76 lakhs (Previous Year Rs. 136.73 lakhs), Lakshmi Electrical Drives Ltd Rs. 253.35 lakhs (Previous year Rs. Nil lakhs) Super Sales India Limited Rs. 918.05 lakhs (Previous Year Rs. 905.15 lakhs) and Other Related Parties -Associates Rs. 148.17 lakhs (Previous Year Rs. 135.89 lakhs), Sri. Sanjay Jayavarthanavelu Rs. 320.61 lakhs (Previous year Rs. 228.41 lakhs).

15 Outstanding Receivables include LMW Machinery Limited Rs. Nil lakhs (Previous Year Rs. 1,205.99 lakhs), LMW Textile Machinery (Suzhou) Co. Ltd Rs. 2,200.58 lakhs (Previous Year Rs. 1,543.52 lakhs), Lakshmi Electrical Control Systems Limited Rs. 1,021.15 lakhs (Previous Year Rs. 428.46 lakhs), Lakshmi Technology and Engineering Industries Limited Rs. 556.36 lakhs (Previous Year Rs. 554.28 lakhs), Lakshmi Electrical Drives Ltd. Rs. Nil lakhs (Previous year Rs. 516.97 lakhs), Lakshmi Ring Travellers (CBE) Ltd. Rs. 1,276.64 lakhs (Previous year Rs. 1,961.37 lakhs) and Others - Other Related Parties - Associates Rs. 173.32 lakhs (Previous Year Rs. 20.55 lakhs).

2.5 (a) The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provisions made at the end represents the amount of expected cost of meeting such obligations of rectification/replacements. The timing of the outflows is expected to be within a period of one year.

(b) Disclosures in terms of Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets"

2.6 Revenue Expenditure on Research & Development amounting to Rs. 1032.73 lakhs (Previous Year Rs. 943.07 lakhs) has been charged to Statement of Profit and Loss (included in Miscellaneous expenses) and Capital expenditure relating to Research and Development amounting to Rs. Nil Lakhs (Previous Year Rs. 570.35 Lakhs) has been included in Fixed Assets.

2.7 (a) There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date.

(b) Foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under:

2.8 a) Pursuant to the Scheme of Amalgamation sanctioned by the Hon''ble Madras High Court, LMW Machinery Limited, (LMW ML) a wholly owned subsidiary company, has been amalgamated with the company with effect from 01.04.2012 and the assets and liabilities of the erstwhile LMW ML were transferred to and vested in the company with effect from 01.04.2012 (appointed date). The amalgamating company was engaged in the manufacture of textile spinning machinery.

b) The amalgamation is accounted for under the "Pooling of Interest" method as prescribed by Accounting Standard 14 "Accounting for amalgamations". Accordingly, the assets and liabilities and other reserves of the erstwhile LMW Machinery Limited as on 01.04.2012 have been taken over at their book values subject to adjustments made for the differences in accounting policies between the two companies.

c) As provided in the Scheme of Amalgamation, 2,50,00,000 equity shares held by the company in LMW ML stands cancelled. Since LMW ML was a wholly owned subsidiary, no shares were issued pursuant to the amalgamation.

d) Consequent to the amalgamation, an amount of Rs. 2,933.62 lakhs (inclusive of Rs. 1,371.64 lakhs on account of difference in accounting policies relating to depreciation of LMW ML and the company) is debited to goodwill account which has subsequently been fully adjusted against the General Reserve Account as per Scheme of amalgamation sanctioned by the Madras High Court.

e) Provision for taxation for the year has been reckoned taking into account the effect of amalgamation.

f) In view of the amalgamation with effect from 01.04.2012, the figures for the current year are not comparable with those of the previous year.

g) Current tax expense for the year is reckoned after considering the MAT credit entitlement of Rs. 336.80 lakhs of the amalgamating company.

2.9 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

Note: 1. CORPORATE INFORMATION

Lakshmi Machine Works Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The Company is engaged in the manufacturing and selling of Textile Spinning Machinery, CNC Machine Tools, Heavy castings and parts and components for Aero space industry. The company caters to both domestic and international markets.

2.1. Contingent Liabilities and Commitments, to the extent not provided for (RS.in Lakhs)

As at As at

March 31, 2011 March 31, 2010

Bills discounted with banks 509.75 -

Letters of Credit 2,180.00 7,070.14

Bank Guarantee 2,030.67 862.40

Central Excise Demand 385.59 440.58

Income Tax Demand 274.51 342.56

Disputed tax dues are appealed before concerned appellate authorities. The Company is advised that the cases are likely to be disposed off in favor of the Company and hence no provision is considered necessary there for.

Estimated balance of committed share subscription to wholly owned subsidiary company, LMW Textile

Machinery (Suzhou) Co., Limited [USD 7.50 million; (previous year USD 7.50 million)] 3,906.02 3,404.84

Estimated amount of contracts remaining to be executed on capital account not provided for 1,282.00 2,009.42

2.2. Provision for Excise duty amounting Rs174.38 Lakhs (Previous year Rs89.15 Lakhs) for the nucleated stock of finished goods has been reckoned in the value of Finished Goods.

2.3. In the opinion of the Board of Directors, assets other than fixed assets and noncurrent investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

Gratuity is applicable to all permanent and full time employees of the company.

Gratuity payment is based on last drawn basic salary and dearness allowance at the time of termination or retirement. The Scheme takes into account each completed year of service or part thereof in excess of six months. The entire contribution is borne by the company.

Leave encashment benefits are provided as per the Rules of the Company. The liabilities on account of defined benefit obligations are expected to be contributed within the next financial year.

Notes:

1) The Company is organized into two main Business Segments viz., Textile Machinery Segment comprising of Spinning Preparatory Machinery; Yarn Making machinery; Accessories & Parts and Other Segments comprising of Machine Tools, Foundry Division and Advanced Technology Centre.

2) The Secondary Geographical Segments considered for disclosure are Revenue from Customers located within India (Domestic Segment) and Revenue from customers located outside India (Export Segment).

3) Inter Segment transfers are accounted at weighted average cost, vis-a-vis at competitive market price charged to Unaffiliated customers for similar goods

4) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

Disclosure in respect of Material Related Party Transaction during the year:

1 Purchase of Goods includes Rieter LMW Machinery Limited Rs5.58 Lakhs (Previous year Rs Nil) Lakshmi Electrical Control Systems Limited Rs16,123.10 Lakhs (Previous year Rs14,354.71 Lakhs), Lakshmi Electrical Drives Limited Rs4,002.76 Lakhs (Previous year Rs4,089.43 Lakhs), LMW Machinery Limited Rs508.65 Lakhs (Previous year Rs Nil) and Other Related Parties- Associates Rs4,694.25 Lakhs (Previous year Rs3,360.67 Lakhs)

2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co., Ltd Rs7,382.24 Lakhs (Previous year Rs9,147.62 Lakhs); Rieter LMW Machinery Limited Rs490.55 Lakhs (Previous year Rs761.68 Lakhs) LMW Machinery Limited Rs2,794.20 Lakhs (Previous year Rs Nil), Lakshmi Electrical Control Systems Limited Rs9,351.36 Lakhs (Previous year Rs6,199.78 Lakhs) and Other related Parties - Associates Rs796.43 Lakhs (Previous year Rs1,611.37 Lakhs)

3 Purchase of Fixed Assets includes Lakshmi Precision Tools Ltd. Rs193.98 Lakhs (Previous year Rs Nil); Quattro Engineering India Limited Rs117.60 Lakhs (Previous year Rs66.42 Lakhs); Lakshmi Cargo Company Limited Rs311.64 Lakhs (Previous year Rs27.66 Lakhs) and Super Sales (India) Ltd. Rs179.41 Lakhs (previous year Rs Nil).

4 Sale of Fixed Assets includes LMW Machinery Limited T13.46 Lakhs (Previous year Rs Nil Lakhs); Super Sales (India) Ltd T0.26 Lakhs (Previous year Rs921.61 Lakhs); Titan Paints & Chemicals Ltd. T7.90 Lakhs (Previous year Rs Nil) and Other Related Parties-Associates Rs Nil (Previous year Rs42 Lakhs)

5 Rendering of Services includes Rieter LMW Machinery Limited Rs0.10 Lakhs (Previous year Rs 0.72 Lakhs), LMW Textile Machinery (Suzhou) Co., Ltd Rs25.11 Lakhs (Previous year Rs35 .35 Lakhs), Super Sales (India) Limited Rs49.20 Lakhs (Previous year Rs209.44 Lakhs); LMW Machinery Limited Rs1 8.76 Lakhs (Previous year Rs Nil) Lakshmi Technology & Engineering Industries Ltd. Rs44.64 Lakhs (Previous year Rs Nil) and Others - Other Related Parties-Associates Rs22.69 Lakhs (Previous year Rs37.54 Lakhs)

6 Receiving of Services include LMW Textile Machinery (Suzhou) Co., Ltd Rs Nil (Previous year Rs0.10 Lakhs); Lakshmi Ring Travellers (Cbe) Limited Rs693.05 Lakhs (Previous year Rs585.93 Lakhs); Lakshmi Cargo Company Limited Rs5,070.39 Lakhs (Previous year Rs3,890.28 Lakhs) and Other Related Parties - Associates Rs1,289.87 Lakhs (Previous year Rs1,020.97 Lakhs)

7 Agency arrangement includes Super Sales (India) Limited Rs1,389.95 Lakhs (Previous year Rs1,221.60 Lakhs)

8 Managerial Remuneration includes amount paid to Dr. D. Jayavarthanavelu Rs Nil (Previous year Rs117.79 Lakhs), Sri. Sanjay Jayavarthanavelu Rs348.29 Lakhs (Previous year Rs364.76 Lakhs) Sri.R. Rajendran Rs88.76 Lakhs (Previous year Rs13.43 Lakhs for part of the year)

9 Dividends paid to includes Lakshmi Technology and Engineering Industries Limited Rs200.13 Lakhs (Previous year Rs100.06 Lakhs); Lakshmi Cargo Company Limited Rs247.12 Lakhs (Previous year Rs123.56 Lakhs); Other Related Parties - Associates Rs251.88 Lakhs (Previous year Rs102.01 Lakhs), Dr. D. Jayavarthanavelu T3.00 Lakhs (Previous year Rs6.44 Lakhs), Sri Sanjay Jayavarthanavelu T39.70 Lakhs (Previous year Rs14.90 Lakhs)

10 Investment in Shares includes LMW Textile Machinery (Suzhou) Co., Limited Rs Nil (Previous year Rs558.75 Lakhs), LMW Machinery Limited Rs5,400 Lakhs (Previous year Rs Nil)

11 Loan received back includes Lakshmi Ring Travellers (CBE) Ltd - Rs150 Lakhs (Previous year Rs Nil); Rieter LMW Machinery Limited Rs1,250 Lakhs (Previous year Rs Nil)

12 Loan given : Lakshmi Ring Travellers (CBE) Ltd- Rs1,000 Lakhs (Previous year Rs Nil).

13 Interest receipts include Rieter LMW Machinery Limited Rs33.26 Lakhs (Previous year Rs100 Lakhs) and Lakshmi Ring Travellers (CBE) Limited Rs74.14 Lakhs (Previous year Rs Nil)

14 Outstanding Payables include Lakshmi Cargo Company Limited Rs726.76 Lakhs (Previous year Rs443.51 Lakhs); Lakshmi Electrical Drives Limited Rs Nil (Previous year Rs433.74 Lakhs); Lakshmi Precision Tools Limited Rs136.73 Lakhs (Previous year Rs1 57.1 5 Lakhs), Super Sales (India) Limited Rs905.15 Lakhs (Previous year Rs Nil), Lakshmi Ring Travellers (Cbe) Limited Rs Nil (Previous year Rs160.73 Lakhs) and Other Related Parties - Associates Rs135.89 Lakhs (Previous year Rs49.11 Lakhs)

15 Outstanding Receivables include LMW Machinery Limited Rs1,205.99 Lakhs (Previous year Rs Nil), Rieter LMW Machinery Limited Rs Nil (Previous year Rs1,372.47 Lakhs), LMW Textile Machinery (Suzhou) Co., Ltd Rs1,543.52 Lakhs (Previous year Rs2,997.18 Lakhs), Lakshmi Electrical Control Systems Limited Rs428.46 Lakhs (Previous year Rs706.53 Lakhs), Lakshmi Technology and Engineering Industries Limited Rs554.28 Lakhs (Previous year Rs478.85 Lakhs), Super Sales (India) Limited Rs Nil (Previous year Rs495.17 Lakhs), Lakshmi Electrical Drives Ltd. Rs516.97 Lakhs (Previous year Rs Nil); Lakshmi Ring Travelers Ltd. Rs1,961.37 Lakhs (Previous year Rs Nil) and Others - Other Related Parties - Associates Rs20.55 Lakhs (Previous year Rs98.36 Lakhs)

2.3. a) The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provisions made at the end represents the amount of expected cost of meeting such obligations of rectification/replacements.

The timing of the outflows is expected to be within a period of one year.

2.4. Revenue Expenditure on Research & Development amounting to Rs943.07 Lakhs (Previous year Rs1,195.05 Lakhs) has been charged to Statement of Profit and Loss (included in Miscellaneous expenses) and Capital Expenditure relating to Research and Development amounting to Rs570.35 Lakhs (Previous year 81.80 Lakhs) has been included in Fixed Assets.

2.5. The revised Schedule VI has become effective from 1 st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

1. As defined under Micro, Small and Medium Enterprises Development Act, 2006, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2011 has been made in the financial statements based on information received and available with the Company.

2. Provision for Excise duty amounting Rs.8,914,590/-(Previous year Rs.8,581,085/-) for the uncleared stock of finished goods has been reckoned in the value of Finished Goods.

3. In the opinion of the Board of Directors, the Current Assets, Loans and Advances have atleast the value as stated in the Balance Sheet and will be realised in the ordinary course of business.

4. Contingent Liabilities: (Amount in Rs.)

2010-11 2009-10

Letters of Credit 707,013,989 171,823,467

Bank Guarantee 86,239,859 95,746,731

Central Excise Demand 44,057,958 58,496,042

Income Tax Demand 34,255,650 -

Disputed tax dues are appealed before concerned appellate authorities. The Company is advised that the cases are likely to be disposed off in favour of the Company and hence no provision is considered necessary therefor.

5. Estimated amount of Contracts remaining to be executed on Capital account and not provided for net of advances is Rs.200,942,474/-.(Previous Year Rs.487,330,735/-)

6. a) The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provisions made at the end represents the amount of expected cost of meeting such obligations of rectification/replacements. The timing of the outflows is expected to be within a period of one year.

7. Revenue Expenditure on Research & Development amounting to Rs. 119,505,728/- (Previous Year Rs. 124,903,253/-) has been charged to Profit and Loss Account and Capital expenditure relating to Research and Development amounting to Rs. 18,180,108/- (Previous Year Rs.25,217,506/-) has been included in Fixed Asset

8 .The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

Related Party Disclosures

1) Related Party Relationships

Key Management Personnel:

Dr. D. Jayavarthanavelu, Chairman and Managing Director (Upto 10.06.2010)

Sri. R. Venkatrangappan, Chairman (Since 10.09.2010)

Sri. Sanjay Jayavarthanavelu, Managing Director (Since 10.09.2010)

Joint Ventures:

Rieter LMW Machinery Limited

Wholly Owned Subsidiary:

LMW Textile Machinery (Suzhou) Co. Ltd

Other related parties-Associates:

Annur Satya Textile Limited

Eshaan Enterprises Limited

Harshini Textiles Limited

Hermes Academy of Training Limited

Integrated Electrical Controls Limited

Lakshmi Cargo Company Limited

LCC Cargo Holdings Limited

Lakshmi Electrical Drives Limited

Lakshmi Technology & Engg. Industries Ltd

Lakshmi Ring Travellers (Cbe) Limited

Lakshmi Electrical Control Systems Limited

Lakshmi Precision Tools Limited

Lakshmi Life Sciences Limited

Mahalakshmi Engineering Holdings Limited

Quattro Engineering India Limited

Sri Kamakoti Kamakshi Textiles P Ltd

Super Sales India Limited

Starline Travels Limited

The Kuppuswamy Naidu Charity Trust for Education and Medical Relief

Titan Paints & Chemicals Limited

Venkatavaradha Agencies Limited

Walzer Hotels Limited


Mar 31, 2010

1. Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

2. Cash Flow Statements

Cash Flows are reported using the Indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows. Cash and cash equivalents include cash on hand and balances with banks in current and deposit accounts with necessary disclosure of cash and cash equivalent balances that are not available for use by the Company.

3. Segment Reporting

Segment accounting policies are in line with the accounting policies of the Company, except that segment revenue includes sales and other income directly identifiable or allocable to the segment including inter-segment revenue.

Business segments are identified on the basis of the nature of products / services, the risk-return profile of individual businesses, the organizational structure and the internal reporting system of the Company.

Segment revenue, segment expenses, segment assets and liabilities include those directly identifiable with the respective segments. Income, expenses, assets and liabilities which are not identifiable with or allocable to a separate segment on a reasonable basis but are related to the Company as a whole are shown as unallocated items.

Inter-segment transfers are accounted for on weighted average cost basis.

4. Impairment of assets

An asset is treated as impaired when the carrying amount of the asset exceeds its estimated recoverable value. Carrying amounts of fixed assets are reviewed at each balance sheet date to determine indications of impairment, if any, of those assets. If any such indication exists, the recoverable amount of the asset is estimated and an impairment loss equal to the excess of the carrying amount over its recoverable value is recognized as an impairment loss. The impairment loss, if any, recognized in prior accounting period is reversed if there is a change in estimate of recoverable amount.

5. Leases

Assets given on leases where substantial risks and rewards incident to ownership of the asset are not transferred to the lessee are classified as operating leases. Lease income from such operating leases is recognized on straight line basis over the lease term. Depreciation on such leased assets is charged as per the normal depreciation policy of the Company for similar assets. Initial direct costs incurred specifically in relation to such operating leases is recognized as expense in the period in which they are incurred.

6. As defined under Micro, Small and Medium Enterprises Development Act, 2006, the disclosure in respect of the amounts payable to such enterprises as at March 31, 2010 has been made in the financial statements based on information received and available with the Company.

7. (a) There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date. (b) Foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under:

Disputed tax dues are appealed before concerned appellate authorities. The Company is advised that the cases are likely to be disposed off in favour of the Company and hence no provision is considered necessary therefor.

8. Estimated amount of Contracts remaining to be executed on Capital account and not provided for net of advances is Rs.487,330,735/-.(Previous Year Rs.34,171,753/-)

9. (a) The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provisions made at the end represents the amount of expected cost of meeting such obligations of rectification/replacements. The timing of the outflows is expected to be within a period of one year.

(b) Disclosures in terms of Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets"

10. Revenue Expenditure on Research & Development amounting to Rs. 12.49 crores (Previous Year Rs.9.47 Crores) has been charged to Profit and Loss Account and Capital expenditure relating to Research and Development amounting to Rs.2.52 Crores (Previous Year Rs.5.35 Crores) has been included in Fixed Assets

11. Amounts due from Subsidiary Company: Rs.56,918,287/-(Previous Year: Nil)

12. The previous years figures have been regrouped, rearranged and reclassified wherever necessary.

 
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