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Notes to Accounts of Lakshmi Mills Company Ltd.

Mar 31, 2015

NOTE 1 : ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

1.1 Contingent liabilities and commitments (to the extent not provided for)

Contingent liabilities

Letters of Credit 1,333.16 1,323.00

Bills discounted with banks 476.84 599.81

Central Excise / Service tax disputed demands 5.63 8.42

Disputed Electricity charges 49.22 102.58

Sub Total 1,864.85 2,033.81

Commitments

Estimated amount of contracts unexecuted - - on capital account

Sub Total - -

Total 1,864.85 2,033.81

b) Details of securities on Long Term and Short Term borrowings from banks

Term loans from Central Bank of India, Canara Bank and Indian Overseas Bank are secured by first charge on relevant assets of Kovilpatti and Palladam units purchased under Project Loan.

Term Loan from Indian Overseas Bank and Canara Bank is secured by pari passu first charge on the fixed assets at Coimbatore.

Working capital loans from banks are secured by charge on book debts and hypothecation of inventories and pari passu second charge on the fixed assets at Coimbatore, Kovilpatti and Palladam.

1.2 The information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of the information available with the Company. There are no overdues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

1.3 a) The net deferred tax assets carried over as at the end of the year comprises of the following :

b) In the opinion of the Company, with the proposed profitable alternate use of lands rendered surplus which have been converted into stock in trade, it is virtually certain to result in realisation of deferred tax assets on account of unabsorbed depreciation and unabsorbed business losses against future taxable income.

1.4 Discontinued Operations

As part of over all restructuring plans for economising operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The profit on sale of machinery during the financial year is Rs. Nil lakhs (Previous year Rs. 3.82 lakhs).The land rendered available for development and converted into stock in trade has a carrying amount of Rs. 10607.93 lakhs (Previous year Rs. 10607.93 lakhs).

1.5 Segment Reporting

The present operations of the company are under a single broad segment "Textile Intermediary products". These in the context of Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India are considered as one single primary segment.

1.6 Disclosure of related parties and related party transactions Related Parties

Associates

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Looms Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

5. Sans Craintes Knitters Key Management Personnel

1. Sri S. Pathy - Chairman & Managing Director

2. Sri Aditya Krishna Pathy - Whole Time Director (Rs. in lakhs)

Note: Related party relationships are as identified by the management

Disclosure in respect of Material Related Party Transactions during the year:-

1. Purchase of goods/assets includes Lakshmi Card Clothing Mfg. Co. Pvt Ltd Rs. 48.98 lakhs; (Previous year Rs. 27.59 lakhs).

2. Sale of Goods / assets include Lakshmi Card Clothing Mfg. Co.P.Ltd Rs.1.07 Lakhs. (Previous year Rs. 1.21 Lakhs).

3. Receiving of Services include Balakumar Shipping & Clearing Agency P.Ltd Rs. 42.28 lakhs (Previous year Rs. 21.69 Lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 33.65 lakhs (Previous year Rs. 27.01 lakhs) and Others Rs. 4.95 lakhs (Previous year Rs. 2.34 lakhs).

4. Rendering of Services include Lakshmi Card Clothing Mfg. Co. Pvt Ltd Rs. 10.53 lakhs (Previous year Rs. 7.99 Lakhs); Lakshmi Automatic Loom Works Ltd Rs. 9.80 lakhs (Previous year Rs. Nil lakhs) and Sans Craintes Knitters Rs. 1.97 lakhs (Previous year Rs. Nil lakhs);

5. Managerial Remuneration includes Sri. S. Pathy Rs. 74.35 Lakhs (Previous year Rs. 49.95 Lakhs) and Sri. Aditya Krishna Pathy Rs. 32.04 Lakhs (Previous year Rs. 28.69 Lakhs).

6. Interest includes Sri. Aditya Krishna Pathy Rs. 0.28 Lakhs (Previous year Rs. 0.28 Lakhs).

7. Amount Receivable includes Lakshmi Automatic Loom Works Ltd Rs. 2.91 lakhs (Previous year Rs. 4.98 lakhs) and Balakumar Shipping & Clearing Agency P Ltd Rs. 56.18 lakhs (Previous year Rs. 56.44 lakhs).

8. Amount payable include Lakshmi Card Clothing Mfg. Co. Pvt Ltd Rs. 103.36 lakhs (Previous year Rs. 73.39 lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 3.61 Lakhs (Previous year Rs.1.27 Lakhs) and Sri. Aditya Krishna Pathy Rs. Nil lakhs (Previous year Rs. 0.77 lakhs).

1.7 As per the requirement of the provisions of Schedule II of the Companies Act, 2013, the management has adopted the useful lives as per Part C of Schedule II of the Act, with effect from 1st April 2014 for all its fixed assets. Accordingly, an additional depreciation for the year ending 31st March 2015 of Rs. 151.29 lakhs has been recognised in the Statement of Profit and Loss. Pursuant to such adoption, in accordance with the transistional provisions under Schedule II of the Act, an amount of Rs. 34.56 lakhs (net of deferred tax of Rs. 16.60 lakhs) has been recognised in the opening retained earnings, pertaining to assets whose balance useful life as on 1st April 2014 was NIL.

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


Mar 31, 2013

1 CORPORATE INFORMATION

The Lakshmi Mills Company Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing of Yarn and trading in cloth and garments. The company caters to both domestic and international markets.

2.1 The information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of the information available with the Company. There are no overdues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

2.2 Discontinuing Operations

As part of over all restructuring plans for economising operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The profit on sale of machinery during the financial year is Rs. 174.61 lakhs (Previous year Rs.1.30 lakhs). The land rendered available for development and converted into stock in trade has a carrying amount of Rs. 10607.93 lakhs (Previous year Rs. 10607.93 lakhs).

2.3 Segment Reporting

The present operations of the company are under a single broad segment "Textile Intermediary products". These in the context of Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India are considered as one single primary segment.

2.4 Disclosure of related parties and related party transactions: Related Parties Associates

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Looms Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited Key Management Personnel

1. Sri S. Pathy

2. Sri Aditya Krishna Pathy

2.5 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.

2.6 Effective from 1.4.2012, the Company has with retrospective effect changed its method of depreciation on Plant / Electrical Equipment from SLM to WDV method of depreciation. The company has recognized an additional depreciation charge of Rs. 1914.94 lakhs relating to period upto 31.3.2012 which has been disclosed as an exceptional item. Had the company continued to use the earlier method of depreciation, the profit after tax for the current year would have been lower by Rs.93.22 lakhs.

2.7 a) The company does not have any derivatives, financial instruments either for hedging or for speculation purpose outstanding as on the Balance Sheet date.

b) Details of foreign currency exposures that are not hedged by any derivative instrument or otherwise are

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


Mar 31, 2012

1 CORPORATE INFORMATION

The Lakshmi Mills Company Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing of Yarn and trading in cloth and garments. The company caters to both domestic and international markets.

Particulars 31.3.2012 31.3.2011

(Rs. in lakhs)

NOTE 2 : ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

2.1 Contingent liabilities and commitments (to the extent not provided for)

Contingent liabilities

Letters of Credit 361.56 77.72

Bills discounted with banks 50.03 -

Central Excise / Service tax disputed demands 8.71 7.71

Income tax disputed demand - 70.01

Sub Total 420.30 155.44

Commitments

Estimated amount of contracts unexecuted on capital account - 146.40

Sub Total - 146.40

Total 420.30 301.84

b) Details of securities on Long Term and Short Term borrowings from banks

Term loans from Central Bank of India and Canara Bank are secured by first charge on fixed assets of Kovilpatti and Palladam units.

Term Loan from Indian Overseas Bank and Canara Bank is secured by pari passu first charge on the land at Coimbatore.

Working capital loans from banks are secured by charge on book debts and hypothecation of inventories and pari passu second charge on the fixed assets at Coimbatore, Kovilpatti and Palladam.

Demand loan from banks are secured by fixed deposits with bank.

2.2 The information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of the information available with the Company. There are no overdues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

b) In the opinion of the Company, with the proposed profitable alternate use of lands rendered surplus which have been converted into stock in trade, it is virtually certain to result in realisation of deferred tax assets on account of unabsorbed depreciation and unabsorbed business losses against future taxable income.

2.3 Discontinuing Operations

As part of over all restructuring plans for economising operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The profit on sale of machinery during the financial year is Rs. 1.30 lakhs (Previous year Rs. 155.56 lakhs). The land rendered available for development and converted into stock in trade has a carrying amount of Rs. 10607.93 lakhs (Previous year Rs. 10607.93 lakhs).

2.4 Segment Reporting

The present operations of the company are under a single broad segment "Textile Intermediary Products". These in the context of Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India are considered as one single primary segment.

2.5 Disclosure of related parties and related party transactions: Related parties Associates

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Loom Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

Key Management Personnel

1. Sri S. Pathy

2. Sri Aditya Krishna Pathy

Note: Related party relationships are as identified by the management

Disclosure in respect of Material Related Party Transactions during the year:-

1. Purchase of goods/assets includes Lakshmi Card Clothing Manufacturing Company P Ltd Rs. 30.63 lakhs; (Previous year Rs. 46.93 lakhs).

2. Sale of Goods / assets include Lakshmi Automatic Loom Works Ltd Rs. 0.46 lakh (Previous year Rs. 4.58 lakhs); Others Rs. 0.67 lakh (Previous year NIL).

3. Receiving of Services include Balakumar Shipping & Clearing Agency P Ltd Rs. 21.79 lakhs (Previous year Rs. 14.29 lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 12.84 lakhs (Previous year Rs. 10.22 lakhs) and Others Rs.1.74 Lakhs (Previous year Rs. 0.72 lakh).

4. Rendering of Services include Lakshmi Card Clothing Manufacturing Company P Ltd Rs. 0.18 lakhs (Previous year Rs. 8.85 lakhs); Lakshmi Automatic Looms Works Limited Rs. NIL (Previous year Rs. 3.52 lakhs).

5. Managerial Remuneration includes S. Pathy Rs.40.70 lakhs (Previous year Rs.41.10 lakhs); Adithya Krishna Pathy Rs.22.20 Lakhs (Previous year Rs. 13.90 lakhs).

6.1. Interest includes Adithya Krishna Pathy Rs. 0.28 lakh (Previous year Rs. 0.28 lakhs).

6.2. Dividend includes S. Pathy Rs.9.35 lakhs (Previous year Rs.9.20 lakhs); Adithya Krishna Pathy Rs.4.82 lakhs (Previous year Rs.4.54 lakhs); Lakshmi Card Clothing Manufacturing Company P Ltd Rs.3.75 lakhs (Previous year Rs.3.75 lakhs).

7. Amount Receivable includes Lakshmi Automatic Loom Works Ltd Rs. 33.55 lakhs (Previous year Rs. 81.87 lakhs) and Others Rs.2.93 lakhs (Previous year Rs.2.95 lakhs).

8. Amount payable include Lakshmi Card clothing Manufacturing Company Pvt Ltd Rs. 261.24 lakhs (Previous year Rs. 44.17 lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 1.49 lakhs (Previous year Rs. 1.13 lakhs).

2.6 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.

2.7 The revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has 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 Contingent Liability

a) Excise duty/Service tax on appeals Rs.7.71 lakhs (Previous Year Rs. 13.63 Lakhs)

b) Income tax disputed dues Rs.70.01 lakhs (Previous Year Rs.70.01 Lakhs)

2 The information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of the information available with the Company. There are no overdues to parties on account of principal amount and / or interest and accordingly no additional disclosures have been made.

b) In the opinion of the Company, the restructured operations coupled with profitable alternate use of lands rendered surplus which have been converted into stock in trade, is virtually certain to result in realisation of deferred tax assets on account of unabsorbed depreciation and unabsorbed business losses against future taxable income.

3 The landed properties of a decommissioned unit of the company have been converted into stock in trade of the property development division during the previous accounting year at net book value.

4 Discontinuing Operations: As part of over all restructuring plans for economising operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The profit on sale of such machinery during the financial year is Rs. 155.56 lakhs (Previous year Rs. 125.87 lakhs) The land rendered available for development and converted into stock in trade has a carrying amount of Rs.10607.93 lakhs (Previous year Rs.10607.93 lakhs).

5 Segment Reporting

The operations of the company are under a single broad segment "Textile Intermediary products". These in the context of Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India are considered as one single primary segment.

6 Disclosure of related parties and related party transactions:

Related parties Associates :-

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Loom Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

Key Management Personnel

1. Sri S. Pathy

2. Sri Aditya Krishna Pathy

Disclosure in respect of Material Related Party Transactions during the year:-

1. Purchase of goods/assets includes Lakshmi Card Clothing Manufacturing Company Private Limited Rs.46.93 Lakhs (Previous year Rs. 91.42 Lakhs).

2. Sale of goods/assets includes Lakshmi Automatic Looms Works Limited Rs. 4.58 Lakhs (Previous year Rs. 0.29 Lakhs).

3. Receiving of services includes Balakumar Shipping & Clearing Agency Private Limited Rs. 14.29 Lakhs (Previous year Rs. 31.63 Lakhs), Aloha Tours & Travels (India) Private Limited Rs. 10.22 Lakhs (Previous year Rs.10.97 Lakhs).

4. Rendering of services includes Lakshmi Card Clothing Manufacturing Company Private Limited Rs. 8.85 Lakhs (Previous year Rs.7.69 Lakhs), Lakshmi Automatic Looms Works Limited Rs.3.52 Lakhs (Previous year Rs.Nil)

5. Amount receivable includes Lakshmi Automatic Looms Works Limited Rs. 81.87 Lakhs (Previous year Rs.59.98 Lakhs).

6. Amount payable includes Lakshmi Card Clothing Manufacturing Company Private Limited Rs. 44.17 Lakhs (Previous year Rs.34.31 Lakhs).

7 In opinion of the Board of directors, all current assets, Loans & advances have a realisation in the ordinary course of a sum of atleast equal to the amount at which they are realised.

8 a) The company does not have any derivatives financial instrument either for hedging or for speculation purpose outstanding as on the Balance Sheet date.

9 As in the Balance Sheet the figures in the Profit & Loss Account have been expressed in terms of rupees in lakhs.

10 Comparative figures for previous year have been re-classified and re-grouped wherever necessary to conform to this year's classifications.


Mar 31, 2010

1 Contingent Liability

a) Excise duty/Service tax on appeals Rs. 13.63 lakhs (Previous Year Rs.24.47 Lakhs)

b) Income tax disputed dues Rs.70.01 lakhs (Previous Year Rs. 100.74 Lakhs)

b) Consequent to completion of substantial modernisation in one of its units and discontinuation of manufacturing operations in a unit, in the opinion of the management, the restructured operations coupled with profitable alternate use of lands rendered surplus is virtually certain to result in realisation of deferred tax assets on account of unabsorbed depreciation and unabsorbed business losses against future taxable income.

2 The company is examining various options available in regard to development of landed properties of the decommissioned Coimbatore unit and has in the meantime decided to convert these assets in to Stock in Trade, at net book value, of the Property Development division aggregating to Rs.9098.03 Lakhs and to capitalise and carry forward the VRS compensation paid for making such land available for development and other expenditure incidental to development of these assets amounting to Rs. 1509.90 Lakhs (Including reversal of Rs.480.31 Lakhs of such VRS compensation written off in earlier years). Accordingly an amount aggregating to Rs. 10607.93 Lakhs consisting of net book value of these assets and the aforesaid expenditure capitalised and carried forward have been shown under " Stock in trade of Land under development" in the inventory schedule-7.

3 Discontinuing Operations: As part of overall restructuring plans for economising operations, the company had decommissioned one of its plants at Coimbatore during the previous year. The viable and productive machinery were relocated at other units. Substantial part of machinery rendered surplus in this process have been disposed

4 Segment Reporting

The operations of the company are under a single broad segment "Textile Intermediary products".

These in the context of Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India are considered as one single primary segment.

5 Disclosure of related parties and related party transactions: Related parties

Associates :-

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Loom Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Pvt. Ltd Key Management Personnel

1. Sri. K. Sundaram

2. Sri. S. Pathy

Note: The salary escalation considered in acturial valuation takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

The details of experience adjustment arising on account of plan assets and liabilities as required by paragraph 120(n)(ii) of AS-15 (Revised) on Employee Benefits are not readily available in the valuation report and hence are not furnished.

 
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