Mar 31, 2023
1 Purchase of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd B30.85 Lakhs (Previous Year B108.24 Lakhs); LMW Middle East FZE B 7,046.78 Lakhs (Previous Year BNil); Lakshmi Electrical Control Systems Limited B29,929.60 Lakhs (Previous Year B21,265.36 Lakhs); Lakshmi Electrical Drives Private Ltd B9,359.66 Lakhs (Previous Year B6,478.21 Lakhs); Lakshmi Life Sciences Private Limited B 13,953.17 Lakhs (Previous Year B9,465.13 Lakhs); Lakshmi Precision Technologies Limited B7,557.80 Lakhs (Previous Year B5,327.76 Lakhs) & Other related Parties-Associates B 10,657.23 Lakhs (Previous Year B7,284.53 Lakhs)
2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd B10,998.99 Lakhs (Previous Year B 11,949.23 Lakhs); LMW Middle East FZE B9,721.67 Lakhs (Previous Year BNil); Lakshmi Electrical Control Systems Limited B 1,607.37 Lakhs (Previous Year B 1,084.62 Lakhs); Lakshmi Life Sciences Private Limited B759.97 Lakhs (Previous Year B599.64 Lakhs); Lakshmi Precision Technologies Limited B 1,709.82 Lakhs (Previous year B791.64 Lakhs); Super Sales India Limited B1,224.66 Lakhs (Previous Year B 1,637.61 Lakhs); The Lakshmi Mills Company Limited B875.24 Lakhs (Previous Year B119.17 Lakhs) & Other related Parties - Associates B265.99 Lakhs (Previous Year B370.10 Lakhs)
3 Purchase of Fixed Assets includes Revantha Services Private Limited B2,013.05 Lakhs (Previous Year B260.16 Lakhs)
4 Sale of Fixed Assets includes LMW Middle East FZE B21.59 Lakhs (Previous Year BNil); Lakshmi Life Sciences Private Limited B45 Lakhs (Previous Year B28.60 Lakhs); Super Sales India Ltd B10 Lakhs (Previous Year B6 Lakhs) & Other related Parties - Associates B7.22 Lakhs (Previous Year BNil)
5 Rendering of Services includes LMW Textile Machinery (Suzhou) Co. Ltd B600.55 Lakhs (Previous Year B501.58 Lakhs); Super Sales India Limited B40.73 Lakhs (Previous Year B34.99 Lakhs); Chakradhara Aerospace and Cargo Private Ltd B34.03 Lakhs (Previous Year B 19.87 Lakhs); Lakshmi Life Sciences Private Limited B13.73 Lakhs (Previous Year B16.18 Lakhs) & Others - Other Related Parties-Associates B31.81 Lakhs (Previous Year B6.04 Lakhs)
6 Receiving of Services includes Chakradhara Aerospace and Cargo Private Ltd B15,376.80 Lakhs (Previous Year B 12,419.13 Lakhs); Revantha Services Private Ltd B2,654.19 Lakhs (Previous Year B1,914.07 Lakhs) & Other Related Parties-Associates B4,711.64 Lakhs (Previous Year B2,971.99 Lakhs)
7 Contribution to gratuity fund includes Lakshmi Machine Works Limited Employees'' Gratuity Fund B78.87 Lakhs (Previous Year B2,425 Lakhs)
8 Agency arrangement includes Super Sales India Limited B2,176.20 Lakhs (Previous Year B 1,414.72 Lakhs)
9 Managerial Remuneration includes amount paid to Chairman and Managing Director, Sri Sanjay Jayavarthanavelu B2,252.95 Lakhs (Previous Year B968.31 Lakhs); Sri. K.Soundhar Rajhan,Director Operations B 155.51 Lakhs (Previous Year B 182.45 Lakhs); Sri. V. Senthil,
Chief Financial Officer B75.42 Lakhs (Previous Year B66.22 Lakhs); Sri. C.R Shiv Kumaran, Company Secretary B48.25 Lakhs (Previous Year B 44.50 Lakhs)
10 Outstanding Payables include LMW Textile Machinery (Suzhou) Co. Ltd B326 Lakhs (Previous Year B295.15 Lakhs); LMW Middle East FZE B2,201.73 Lakhs (Previous Year BNil); Lakshmi Electrical Control Systems Limited B3,360.27 Lakhs (Previous Year B3,067.31 Lakhs); Lakshmi Electrical Drives Private Limited B1,000.32 Lakhs (Previous Year B 1,034.75 Lakhs); Super Sales India Limited B2,083.13 Lakhs (Previous Year B 1,285.90 Lakhs); Sri.Sanjay Jayavarthanavelu B 1,995.56 Lakhs (Previous Year B761.25 Lakhs) & Other Related parties-Associates B3,051.22 Lakhs (Previous Year B2,824.02 Lakhs)
11 Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd B5,437.46 Lakhs (Previous Year B7,290.04 Lakhs); LMW Middle East FZE B3,850.45 Lakhs (Previous Year BNil); Lakshmi Electrical Control Systems Limited B 1,003.49 Lakhs (Previous Year BNil); Lakshmi Precision Technologies Limited B794.50 Lakhs (Previous year BNil); & Others - Other Related Parties - Associates B418.83 Lakhs (Previous Year B15.17 Lakhs)
The salary escalation considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
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.
The company expects to make a contribution of B500.00 Lakhs (as at 31st March, 2023: B78.87 Lakhs) to the defined benefit plans during the next financial year.
The above sensitivity analysis are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance sheet.
J. Brief description of the plans & risks
These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
The present value of the defined benefit plan liability is calculated using a discount which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, other debt instruments and equity shares of listed companies.
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt investments, if any.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Products and services from which reportable segments derive their revenues.
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The company has chosen to organise the company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the company.
1) The accounting policies of the reportable segments are the same as the company''s accounting policies. Inter Segment transfers are accounted on cost plus basis vis-a-vis at competitive market price charged to Unaffiliated customers for similar goods.
2) Segment profit represents the profit before tax earned by each segment without allocation of unallocable expenses, finance costs and unallocable income. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
3) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
The company derives revenue primarily from the sale of Textile Machinery, machine tools, castings and aero space parts.
Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Arrangements with customer for sale of above-mentioned products or services are on fixed price. Revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration entity expects to be entitled in exchange for those goods or services.
Revenue on fixed price contract are recognised at the time of dispatch of goods. Till then the consideration received is accounted as ''Advance received'' shown under financial liabilities. Control over the goods passed to the customer at the time of dispatch of the goods at the company''s factory.
The expected cost of warranty issued is accounted as provision. The contract with customer are entered between the company and the end customer. The company is primarily responsible for honouring the contract entered with customer. Since the company acts as a "Principal" for the contracts entered into through selling agent the revenue is to be recognised in gross by the company.
Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.
30.14 Financial Risk Management Objectives
The Company''s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial risks relating to the operations of the Company through internal risk reports which analyses exposures by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation of risk or to minimise the potential adverse effects on the financial performance of the Company. The Company does not enter into any derivative financial instruments to hedge risk exposures.
The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD and balance in EUR, purchases from overseas suppliers are in various foreign currencies. The exposure at the end of the reporting period does not reflect the transaction during the year and there is a natural hedge in the currency for USD and EUR. The exchange rate between INR and other currency does have an impact on the business. The company is a net exporter and export realisation combined with a depreciating INR has given the company a net foreign exchange gain.
The sensitivity analysis for equity price risk is conducted by assuming a range of equity price changes, which involves a 5% increase or decrease in equity prices. Additionally, we take into account other relevant factors such as changes in equity prices for different equity markets and individual equity securities, correlations between these markets and securities, and the holding period.
Credit risk - Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents and outstanding receivables.
Credit risk on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates.
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. The company applied simplified approach of estimated credit loss for trade receivable, which provide for expected credit loss based on life-time expected losses. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The company''s principal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does not have any external borrowings from banks or any other financial institution. The company believes that the working capital through internal accruals is sufficient to meet its current requirements and hence the Company does not perceive any such risk.
Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
Equity Price risk is related to the change in market reference price of the investments in equity securities. The fair value of some of the Company''s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company''s investment in quoted equity securities as of 31st March 2023 and 2022 was B16,977.40 Lakhs and B16,446.92 Lakhs respectively.
A 5% change in equity price as of 31st March 2023 and 2022 would result in an impact of B848.87 Lakhs and B822.35 Lakhs respectively.
(Note: The impact is indicated on equity before consequential tax impact, if any).
Capital management - The company''s objective is to safeguard its financial stability, financial independence and its ability to continue as a going concern in order to generate returns for the shareholders and benefits for the other stake holders. The company incentivise the shareholders by paying optimum and regular dividends.
The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans. The funding requirements are met through internally generated funds . The Company does not have any borrowings in its capital portfolio.
30.15 Revenue Expenditure on Research & Development of Textile Machinery Division amounting to B3,594.52 Lakhs (FY 2021-22 B 1,805.97 Lakhs) and for Machine Tool Division amounting to B 1,589.64 Lakhs (FY 2021-22 B398.83 Lakhs) has been charged to Statement of Profit and Loss and Capital expenditure relating to Research and Development for Textile Machinery Division amounting to B431.15 (FY 2021-22 BNil ) and for Machine Tool Division amounting to BNil (FY 2021-22 BNil) has been included in Fixed Assets.
30.16 Additional regulatory information required by Schedule III
i) Details of benami property held
No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
ii) Wilful Defaulter
The company had not been declared a wilful defaulter by any bank or Financial Institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines of the wilful defaulter issued by the Reserve Bank of India.
iv) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
v) Compliance with approved scheme(s) of arrangements
No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013.
vi) Utilisation of borrowed funds
The Company does not have borrowed funds.
vii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
viii) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
ix) Valuation of Property, Plant & Equipment, intangible asset and investment property
The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.
Mar 31, 2022
Concentration of Risk
In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counter party or any group of counter parties having similar characteristics. Trade receivables consists of a large number of customers in various industries and geographical areas. Based on historical information about customer default rates management considers the credit quality of trade receivables that are not past due or impaired to be good. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
The company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows.
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
The company has elected to recognise changes in fair value of investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI reserve which represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off.
In financial year 2021-22, on 09.08.2021, a dividend of H10 per share (Total dividend H1,068.30 Lakhs) was paid to the holders of fully paid equity shares.
In respect of the year ended March 31, 2022, the directors propose that a dividend of H40 per share be paid on fully paid equity shares. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend payable is H4,273.20 Lakhs.
The provision for employee benefits include provision for gratuity. For detailed disclosure on the same, please refer note no. 31.9
The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. The provision for warranty claims represents the present value of the Management''s best estimate of the future outflow of economic benefits that will be required under the company''s obligations for warranties under sale of goods legislations. The estimate has been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality. The timing of the outflows is expected to be within a period of one year.
31.4 Financial Instruments Capital Management
The company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders. The capital structure of the company consists of only total equity and no debts. The company is not subject to any externally imposed capital requirements. Net debt to equity ratio or gearing ratio is not applicable since the company has no external debts.
iii) Fair Value of financial assets and liabilities measured at amortised cost
The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short term and settlement on demand nature.
For all other financial assets and liabilities measured at amortised cost, the Company considers that their carrying amounts approximates their fair values. The fair value of investments in equity shares and mutual funds are marked to an active market.
Exceptional items represents compensation towards Voluntary Retirement Scheme opted by Employees H 1,716.98 Lakhs (Previous year H2,211.54 Lakhs)
Alampara Hotels and Resorts Private Limited, Chakradhara Aerospace and Cargo Private Limited, Chakradhara Agro Farms Private Limited, Dhanajaya Agro Farms Private Limited, Dhanuprabha Agro Private Limited, Eshaan Enterprises Private Limited, Harshni Textiles Private Limited, Hermes Academy of Training Private Limited, Lakshmi Caipo Industries Limited, Lakshmi Card Clothing Mfg Co. Private Ltd, Lakshmi Cargo Company Limited, Lakshmi Electrical Control Systems Limited, Lakshmi Electrical Drives Private Limited, Lakshmi Energy and Environment Designs Private Limited, Lakshmi Life Sciences Private Limited, Lakshmi Precision Technologies Limited, Lakshmi Ring Travellers (CBE) Private Limited, LCC Cargo Holdings Limited, Lakshmi Technology and Engineering Industries Limited, Mahalakshmi Engineering Holdings Private Limited, Petrus Techonologies Private Limited, Quattro Engineering India Private Limited, Rajalakshmi Engineering, Revantha Agro Farms Private Limited, Revantha Services Private Limited, Shri Kara Engineering Private Limited, Sowbarnika Enterprises Private Limited, Sri Dwipa Properties Private Limited, Sri Kamakoti Kamakshi Enterprises Private Limited, Starline Travels Private Limited, Sudhasruthi Agro Private Limited, Super Sales India Limited, Supreme Dairy Products India Private Limited, The Lakshmi Mills Company Limited, Titan Paints & Chemicals Private Limited, Venkatavaradha Agencies Private Limited, Waterfield Financial and Investment Advisors Private Limited.
1 Purchase of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd H108.24 Lakhs (Previous Year H454.29 Lakhs); Lakshmi Electrical Control Systems Limited H21,265.36 Lakhs (Previous Year H10,727.41 Lakhs); Lakshmi Electrical Drives Private Limited H6,478.21 Lakhs (Previous Year H2,634.81 Lakhs); Lakshmi Life Sciences Private Limited H9,465.13 Lakhs (Previous Year H4,709.25 Lakhs); Lakshmi Precision Technologies Limited H5,327.76 Lakhs (Previous Year H2,219.98 Lakhs); Other related Parties-Associates H7,284.53 Lakhs (Previous Year H2,784.99 Lakhs)
2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd H11,949.23 Lakhs (Previous Year H4,189.99 Lakhs); Lakshmi Electrical Control Systems Limited H1,084.62 Lakhs (Previous Year H723.84 Lakhs); Lakshmi Life Sciences Private Limited H599.64 Lakhs (Previous Year H224.46 Lakhs); Lakshmi Precision Technologies Limited H791.64 Lakhs (Previous year H46.70 Lakhs); Super Sales India Limited H1,637.61 Lakhs (Previous Year H647.91 Lakhs) & Other related Parties - Associates H489.27 Lakhs (Previous Year H199.88 Lakhs)
3 Purchase of Fixed Assets includes Revantha Services Private Limited H260.16 Lakhs (Previous Year H8.70 Lakhs)
4 Sale of Fixed Assets includes Lakshmi Life Sciences Private Limited H28.60 Lakhs (Previous Year H0.25 Lakhs); Super Sales India Ltd H6.00 Lakhs (Previous Year HNil)
5 Rendering of Services includes LMW Textile Machinery (Suzhou) Co. Ltd H501.58 Lakhs (Previous Year H168.29 Lakhs); Super Sales India Limited H34.99 Lakhs (Previous Year H31.53 Lakhs); Chakradhara Aerospace and Cargo Private Ltd H 19.87 Lakhs (Previous Year H27.11 Lakhs); Lakshmi Life Sciences Private Limited H16.18 Lakhs (Previous Year H5.26 Lakhs) & Others - Other Related Parties-Associates H6.04 Lakhs (Previous Year H8.77 Lakhs)
6 Receiving of Services includes Chakradhara Aerospace and Cargo Private Ltd H12,419.13 Lakhs (Previous Year H6,388.20 Lakhs, Revantha Services Private Ltd H1,914.07 Lakhs (Previous Year H2,041.48 Lakhs), Other Related Parties-Associates H2,971.99 Lakhs (Previous Year H2,105.04 Lakhs)
7 Agency arrangement includes Super Sales India Limited H1,414.72 Lakhs (Previous Year H650.82 Lakhs)
8 Contribution to gratuity fund includes Lakshmi Machine Works Limited Employees'' Gratuity Fund H2,425 Lakhs (Previous Year H400 Lakhs)
9 Managerial Remuneration includes amount paid to Chairman and Managing Director, Sri. Sanjay Jayavarthanavelu H968.31 Lakhs (Previous Year H501.61 Lakhs); Sri. K. Soundhar Rajhan,Director Operations H182.45 Lakhs (PY H127.85 Lakhs); Sri. V.Senthil, Chief Financial Officer H66.22 Lakhs (Previous Year H38.03 Lakhs); Sri. C R Shivkumaran, Company Secretary H44.50 Lakhs (Previous year H23.18 Lakhs)
10 Outstanding Payables include LMW Textile Machinery (Suzhou) Co. Ltd H295.15 Lakhs (Previous Year H186.91 Lakhs); Chakradhara Aerospace and Cargo Private Ltd H1,545.60 Lakhs (Previous Year H1,056.07 Lakhs); Lakshmi Electrical Control Systems Limited H3,067.31 Lakhs (Previous H2,245.43 Lakhs); Lakshmi Electrical Drives Private Limited H1,034.75 Lakhs (Previous Year H644.58 Lakhs); Super Sales India Limited H1,285.90 Lakhs (Previous Year H1,069.61 Lakhs); Sri.Sanjay Jayavarthanavelu H761.25 Lakhs (Previous Year H318.83 Lakhs) & Other Related parties-Associates H 1,278.42 Lakhs (Previous Year H1,326.64 Lakhs)
11 Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd H7,290.04 Lakhs (Previous Year H3,152.48 Lakhs); Petrus Technologies Private Limited H15.17 Lakhs (Previous Year HNil); Starline Travels Private Limited HNil (Previous Year H4.37 Lakhs); Lakshmi Card Clothing Mfg Co P Ltd H Nil (Previous Year H3.39 Lakhs) & Others - Other Related Parties - Associates H Nil (Previous Year H0.56 Lakhs)
The salary escalation considered in actuarial valuation, takes account of inflation, seniority promotion and other relevant factors such as supply and demand in the employment market.
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
The company expects to make a contribution of H400.00 Lakhs (as at March 31, 2022: H2,425 Lakhs) to the defined
benefit plans during the next financial year
The above sensitivity analysis are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance sheet.
J. Brief description of the Plans & risks
These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
The present value of the defined benefit plan liability is calculated using a discount which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, other debt instruments and equity shares of listed companies.
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt investments, if any.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Products and services from which reportable segments derive their revenues
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The company has chosen to organise the company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the company.
1) The accounting policies of the reportable segments are the same as the company''s accounting policies. Inter Segment transfers are accounted on cost plus basis vis-a-vis at competitive market price charged to Unaffiliated customers for similar goods.
2) Segment profit represents the profit before tax earned by each segment without allocation of unallocable expenses, finance costs and unallocable income. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
3) Segment Revenue,Results,Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
The company derives revenue primarily from the sale of Textile Machinery, machine tools, spares and job work charges.
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Arrangements with customer for sale of above-mentioned products or services are on fixed price. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration entity expects to be entitled in exchange for those goods or services.
Revenue on fixed price contract are recognized at the time of dispatch of goods. Till then the consideration received is accounted as ''Advance received'' shown under financial liabilities. Control over the goods passed to the customer at the time of dispatch of the goods at the company''s factory.
The expected cost of warranty issued is accounted as provision. The contract with customers are entered between the company and the end customer. The company is primarily responsible for honouring the contract entered with customer. Since the company acts as a âPrincipal" for the contracts entered into through selling agent the revenue is to be recognized in gross by the company.
Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.
31.14 FINANCIAL RISK MANAGEMENT OBJECTIVES
The Company''s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial risks relating to the operations of the group through internal risk reports which analyses exposures by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation of risk or to minimise the potential adverse effects on the financial performance of the Company. The Company does not enter into any derivative financial instruments to hedge risk exposures.
The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD and balance in EUR, purchases from overseas suppliers are in various foreign currencies. The exposure at the end of the reporting period does not reflect the transaction during the year and there is a natural hedge in the currency for USD and EUR. The exchange rate between INR and other currency does have an impact on the business. The company is a net exporter and export realisation combined with a depreciating INR has given the company a net foreign exchange gain.
Credit risk - Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents and outstanding receivables.
Credit risk on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates.
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. The company applied simplified approach of estimated credit loss for trade receivable, which provide for expected credit loss based on life-time expected losses. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The company''s principal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does not have any external borrowings from banks or any other financial institution. The company believes that the working capital through internal accruals is sufficient to meet its current requirements and hence the Company does not perceive any such risk.
Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
Equity Price Risk is related to the change in market reference price of the investments in equity securities. The fair value of some of the Company''s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company''s investment in quoted equity securities as of March 31, 2022 and 2021 was H 16,446.92 Lakhs and H12,203.43 Lakhs respectively.
A 5% change in equity price as of March 31, 2022 and 2021 would result in an impact of H822.35 Lakhs and H610.17 Lakhs respectively.
(Note: The impact is indicated on equity before consequential tax impact, if any).
Capital management - The company''s objective is to safeguard its financial stability financial independence and its ability to continue as a going concern in order to generate returns for the shareholders and benefits for the other stake holders. The company incentivise the shareholders by paying optimum and regular dividends.
The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans. The funding requirements are met through internally generated funds . The Company does not have any borrowings in its capital portfolio.
31.15 Revenue Expenditure on Research & Development of Textile Machinery Division amounting to H 1,805.97 Lakhs (FY 2020-21 H 1,944.54 Lakhs) and for Machine Tool Division amounting to H398.83 Lakhs (FY 2020-21 H275.08 Lakhs) has been charged to Statement of Profit and Loss and Capital expenditure relating to Research and Development for Textile Machinery Division amounting to H Nil (FY 2020-21 H 92.39 Lakhs) and for Machine Tool Division amounting to HNil (FY 2020-21 HNil) has been included in Fixed Assets.
Mar 31, 2019
Purchase of Goods includes LMW Textile Machinery (Suzhou) Co.Ltd ''1,783.38lakhs (Previous year ''735.02 Lakhs), Lakshmi Electrical Control Systems Limited ''16,186.24 Lakhs (Previous Year ''16,728.30 Lakhs), Lakshmi
1 Life Sciences Limited* ''6,783.33 Lakhs (Previous year ''6,812.50 Lakhs),Lakshmi Electrical Drives Limited ''3,378.45 Lakhs (Previous year ''4,154.39 Lakhs), Other Related Parties- Associates ''6,222.80 Lakhs (Previous Year ''7,134.95 Lakhs)
Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd ''1,972.26 Lakhs (Previous Year ''5,842.25
2 Lakhs), Lakshmi Electrical Control Systems Limited ''829.82 Lakhs (Previous Year ''2,709.57 Lakhs) Super Sales India Ltd ''2,152.15 Lakhs (Previous Year ''1,001.58 Lakhs) and Other related Parties - Associates ''672.44 Lakhs (Previous Year ''939.45 Lakhs)
3 Purchase of Fixed Assets includes Lakshmi Life Sciences Limited * ''Nil Lakhs (Previous Year ''26.98 Lakhs)
Sale of Fixed Assets includes Super Sales India Limited ''2.48 Lakhs (Previous Year '' 28.10 Lakhs),Star line Travels
4 Limited ''9.90 Lakhs(Previous Year ''Nil Lakhs) and Other Related Parties-Associates ''0.29 Lakhs (Previous Year ''18.10 Lakhs)
Rendering of Services includes , LMW Textile Machinery (Suzhou)Co. Ltd ''199.59 Lakhs (Previous Year '' 358.06
5 Lakhs), Chakradhara Aerospace and Cargo P Ltd **''83.48 Lakhs (Previous year ''72.53 Lakhs) ,Super Sales India Limited ''23.62 Lakhs (Previous Year ''20.95 Lakhs) Others - Other Related Parties-Associates '' 10.05 Lakhs(Previous Year ''5.89 Lakhs)
Receiving of Services include LMW Textile Machinery (Suzhou)Co. Ltd ''161.43 Lakhs (Previous Year ''Nil Lakhs)
6 Chakradhara Aerospace and Cargo P Ltd **''10,24774 Lakhs (Previous year ''7,829.77 Lakhs) Revantha Services Ltd ''3,501.89 Lakhs (Previous year ''4298.53 Lakhs) and Other Related Parties - Associates ''2,749.10 Lakhs (Previous Year ''2,470.05 Lakhs)
7 Agency arrangement includes Super Sales India Limited ''882.28 Lakhs (Previous Year ''1,135.31 Lakhs)
8 Contribution to gratuity fund includes Lakshmi Machine Works Limited Employees'' Gratuity Fund ''.400 Lakhs (Previous Year ''251.57 Lakhs)
Managerial Remuneration includes amount paid to Sri Sanjay Jayavarthanavelu, Chairman and Managing
9 Director ''854.77 Lakhs (Previous Year ''855.33 Lakhs), Sri K.Soundhar Rajhan, Director Operations ''146.59 Lakhs *(PY ''.53.42 Lakhs), Sri C. B. Chandrasekar, Chief Financial Officer ''61.94 Lakhs (Previous year ''51.85 Lakhs), Sri C. R. Shivkumaran, Company Secretary ''32.80 Lakhs (Previous year ''2748 Lakhs)
Outstanding Payables include LMW Textile Machinery (Suzhou) Co.Ltd ''1,253.49 Lakhs (Previous year Nil Lakhs Chakradhara Aerospace and Cargo P Ltd **'' 616.90 Lakhs (Previous year ''728.50 Lakhs) Lakshmi Electrical
10 Control Systems Limited ''1,080.50 Lakhs (Previous Year ''1,938.89 Lakhs), Super Sales India Limited '' 1,234.75 Lakhs (Previous Year ''88772 Lakhs) Sri. Sanjay Jayavarthanavelu ''636.36 Lakhs (Previous year ''621.94 Lakhs) Lakshmi Life Sciences Limited ''483.80 Lakhs (Previous Year ''539.08 Lakhs), and Other Related Parties -Associates ''562.07 Lakhs (Previous Year ''1,727.97 Lakhs),
Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd ''1,309.28 Lakhs (Previous Year '' 2,710.75 Lakhs), Revantha Services Limited ''6.08 Lakhs (Previous Year'' Nil Lakhs) , The Lakshmi Mills Company Limited ''19.50 Lakhs (Previous Year ''1.59 Lakhs) Others - Other Related Parties - Associates ''2.82
11 Lakhs (Previous Year ''145.70 Lakhs)
* During the year the operating units of Lakshmi Life Sciences Limited (LLS) has been de-merged to Quattro Engineering India Limited (QEL). Thereafter, the names of LLS and QEL were swapped as per NCLT order.
** During the year the operating units of Lakshmi Technology and Engineering Industries Limited (LTE) and Lakshmi Cargo Company Limited (LCC) have been de-merged to Chakradhara Aerospace and Cargo P Ltd.
The salary escalation considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 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.
The company expects to make a contribution of ''1000 Lakhs (as at 31st March, 2018: ''600.00 Lakhs) to the defined benefit plans during the next financial year.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognized in the balance sheet.
Brief description of the Plans & risks
These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability is calculated using a discount which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is amix of investments in government securities, other debt instruments and equity shares of listed companies.
Interest risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt investments, if any.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
31.10 Segment information
Products and services from which reportable segments derive their revenues
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The company has chosen to organize the company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the company.
Specifically, the Company is organized into three main reportable segments viz.,(1) Textile Machinery Division
(2) Machine Tool Division & Foundry Division and (3) Advanced Technology Centre for Aero Space-Parts & Components
31.13 REVENUE RECOGNITION
The company derives revenue primarily from the sale of Textile Machinery, machine tools, spares and job work charges.
Effective from 1st April 2018 the company has adopted Ind AS 115 "Revenue from Contracts with Customers", using Modified retrospective approach. In accordance with Ind AS 115, the comparatives have not been retrospectively adjusted. The following is the summary of new and / or revised significant accounting policies related to revenue recognition. Refer note No.2.12 "Significant Accounting Policies" in the company''s 2018 annual report for the policies in effect for revenue prior to 01.04.2018. The effect of adoption of Ind AS 115 was insignificant
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Arrangements with customer for sale of above-mentioned products or services are on fixed price. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration entity expects to be entitle in exchange for those goods or services.
Revenue on fixed price contract are recognized at the time of dispatch of goods. Till then the consideration received is accounted as ''Advance received'' shown under financial liabilities. Control over the goods passed to the customer at the time of dispatch of the goods at the company''s factory.
The expected cost of warranty issued is accounted as provision. The contract with customer are entered between the company and the end customer. The company is primarily responsible for honoring the contract entered with customer. Since the company acts as a "Principal" for the contracts entered into through selling agent the revenue is to be recognized in gross by the company.
Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.
Foreign Currency Risk
The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD and balance in EUR, purchases from overseas suppliers are in various foreign currencies. The exposure at the end of the reporting period does not reflect the transaction during the year and there is a natural hedge in the currency for USD and EUR. The exchange rate between INR and other currency does have an impact on the business. The company is a net exporter and export realization combined with a depreciating INR has given the company a net foreign exchange gain.
Interest rate risk - The Company holds interest bearing assets in the form of fixed deposits with banks. The variation in interest risks is managed by distributing deposits among wide base of banks and financial institutions.
The company do not have any debts and therefore any fluctuation in market interest rates may not affect the cash flow/profitability position of the company in terms of debts servicing.
Price risk - Holding marketable financial assets expose the company to risk of price fluctuation. Price escalations will have insignificant impact on carrying amounts of respective financial assets. However, the Company is exposed to equity price risks from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes.
Credit risk - Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents, and outstanding receivables.
Credit risk on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. The company applied simplified approach of estimated credit loss for trade receivable, which provide for expected credit loss based on life-time expected losses. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The company''s principal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does not have any external borrowings from banks or any other financial institution. The company believes that the working capital through internal accruals is suffcient to meet its current requirements and hence the Company does not perceive any such risk.
Capital management - The company''s objective is to safeguard its financial stability, financial independence and its ability to continue as a going concern in order to generate returns for the shareholders and benefits for the other stake holders. The company incentivize the shareholders by paying optimum and regular dividends.
The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans. The funding requirements are met through internally generated funds . The Company does not have any borrowings in its capital portfolio.
31.15
Revenue Expenditure on Research & Development of Textile Machinery Division amounting to Rs,2,201.09 Lakhs (FY 2017-18 Rs,1,949.79 Lakhs, FY 16-17 Rs,1,933.51 Lakhs) and for Machine Tool Division amounting to Rs,341.30 Lakhs (FY 2017-18 Rs,275.90 Lakhs, FY 16-17 Rs,224.56 Lakhs has been charged to Statement of Profit and Loss (included in other expenses) and Capital expenditure relating to Research and Development for Textile Machinery Division amounting to Rs,104.52 Lakhs (FY 17-18 Rs,129.73 Lakhs, FY 16-17 Rs,3,59.44 Lakhs) and for Machine Tool Division amounting to Rs,Nil Lakhs (FY 17-18 Rs,Nil Lakhs, FY 16-17 Rs,Nil Lakhs) has been included in Fixed Assets
31.16
Further, previous years'' figures have been regrouped / reclassified, wherever necessary, to conform with the current period presentation.
Mar 31, 2018
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION OF UNCERTAINTY
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in note. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Information about such estimates and judgments are included in the relevant notes together with the basis of calculation for relevant line item in the financial statements. Estimates and judgments are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances.
Concentration of Risk
In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. Trade receivables consists of a large number of customers in various industries and geographical areas. Based on historical information about customer default rates management considers the credit quality of trade receivables that are not past due or impaired to be good. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
Before accepting any new customer, the company uses an external credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed twice a year.
There are no repatriation restrictions with regard to cash and cash equivalents as at the end of the reporting period and prior periods.
The company has elected to recognize changes in fair value of investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI reserve which represents the the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off.
In financial year 2017-18, on 17th August 2017, a dividend of RS,35 per share (Total dividend RS,3834.43 Lakhs) was paid to the holders of fully paid equity shares
In financial year 2016-17 the dividend paid was RS,40 per shares (Total amount RS,4,506.60 Lakhs)
In respect of the year ended March 31, 2018, the directors propose that a dividend of C40 per share be paid on fully paid equity shares. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is RS,4,382.20 Lakhs.
The provision for employee benefits include provision for gratuity and leave encashment. For detailed disclosure on the same, please refer note no. 31.9.
The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. The provision for warranty claims represents the present value of the Management''s best estimate of the future outflow of economic benefits that will be required under the company''s obligations for warranties under sale of goods legislations. The estimate has been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality. The timing of the outflows is expected to be within a period of one year.
31.3 DISCLOSURE AS PER SCHEDULE III
As defined under Micro, Small and Medium Enterprises Development Act, 2006, the disclosure in respect of the amounts payable to such enterprises as at the end of the year has been made in the financial statements based on information received and available with the Company.
31.4 FINANCIAL INSTRUMENTS Capital Management
The company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders. The capital structure of the company consists of only total equity and no debts. The company is not subject to any externally imposed capital requirements. Net debt to equity ratio or gearing ratio is not applicable since the company has no external debts.
iii) Fair Value of financial assets and liabilities measured at amortized cost
The carrying amounts of trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short term and settlement on demand nature.
For all other financial assets and liabilities measured at amortized cost, the Company considers that their carrying amounts approximates their fair values
31.5 EXCEPTIONAL ITEMS
Exceptional items represents compensation towards Voluntary Retirement Scheme opted by Employees RS,402.69 Lakhs (Previous year RS,470.14 Lakhs)
CSR Expenditure during the year on construction/acquisition of an asset is RS, Nil Lakhs. CSR Expenses relating to gross amount required to be spent for the year and the actual amount spent by the Company during the year is furnished as Annexure to the Board of Directors'' Report.
31.8 RELATED PARTY TRANSACTIONS Related Party Relationships Key Management Personnel
Sri. Sanjay Jayavarthanavelu, Chairman and Managing Director Sri. K. Soundhar Rajhan, Director -Operations Sri. C.B.Chandrasekar -Chief Financial Officer Sri. C.R. Shivkumaran - Company Secretary
Wholly Owned Subsidiary :
LMW Textile Machinery (Suzhou) Co. Ltd
Post employment benefit plans
Lakshmi Machine Works Limited Employees'' Gratuity Fund
Other related parties
Dhanuprabha Agro P Ltd; Eshaan Enterprises Limited; Harshini Textiles Limited; Hermes Academy of Training Limited; Lakshmi Card Clothing Mfg Co. P Ltd; Lakshmi Cargo Company Limited; LCC Cargo Holdings Limited;Lakshmi Caipo Industries Ltd; Lakshmi Energy & Environmental 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; Mahalakshmi Engineering Holdings Limited; Quattro Engineering India Limited; Rajalakshmi Engineering; Revantha Holdings Limited; Revantha Services Ltd; Revantha Agro Farms P Ltd; Sowbarnika Enterprises Ltd; Sowbarniha Resorts Private Limited; Sri Kamakoti Kamakshi Enterprises P Ltd; Sudhasruti Agro P Ltd; Super Sales India Limited; Supreme Dairy Products India Ltd; Starline Travels Limited;Titan Paints
& Chemicals Limited; The Lakshmi Mills Company Limited; Venkatavaradha Agencies P Limited; Walzer Hotels P Ltd; Alampara Hotels and Resorts Private Ltd; Chakradhara Aerospace & Cargo Private Ltd; Chakradhara Agro Farms Private ltd; Dhanajaya Agro Farms Private Ltd
1 Purchase of Goods includes LMW Textile Machinery (Suzhou) Co.Ltd RS,735.02 Lakhs (Previous year RS,23.85 Lakhs) Lakshmi Electrical Control Systems Limited RS,16,728.30 Lakhs (Previous Year RS,14,401.16 Lakhs), Lakshmi Electrical Drives Limited RS,4,154.39 Lakhs (Previous Year RS,3,209.01 Lakhs); Quattro Engineering India Limited RS,5,735.80 Lakhs (Previous Year RS,4,319.81 Lakhs); Super Sales India Ltd RS,2,607.09 Lakhs (Previous Year RS,2,841.85 Lakhs) and Other Related Parties- Associates RS,5,629.53 Lakhs (Previous Year RS,5,451.74 Lakhs)
2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd RS,5,842.25 Lakhs (Previous Year RS,2,143.33 Lakhs), Lakshmi Electrical Control Systems Limited RS,2,709.57 Lakhs (Previous Year RS,2,649.78 Lakhs), Quattro Engineering India Limited RS,505.75 Lakhs (Previous Year RS,559.85 Lakhs) Super Sales India Ltd RS,1,001.58 Lakhs (Previous Year RS,1,016.19 Lakhs) and Other related Parties - Associates RS,433.70 Lakhs (Previous Year RS,174.52 Lakhs)
3 Purchase of Fixed Assets includes Super Sales India Limited RS, Nil Lakhs (Previous year RS,37.00 Lakhs); Lakshmi Energy and Environments Designs Limited RS,2.60 Lakhs (Previous year RS,27.61 Lakhs); Quattro Engineering India Limited RS,26.98 Lakhs (Previous Year RS, Nil Lakhs); Other Related Parties- Associates RS, Nil Lakhs (Previous Year RS, Nil Lakhs)
4 Sale of Fixed Assets includes LMW Textile Machinery (Suzhou) Co. Ltd RS, Nil Lakhs (Previous Year RS,109.03 Lakhs); Quattro Engineering India Ltd RS,18.10 Lakhs (Previous year RS,238.89 Lakhs); Lakshmi Cargo Company Limited RS, Nil Lakhs (Previous Year RS, Nil Lakhs); Super Sales India Limited RS,28.10 Lakhs (Previous Year RS, Nil Lakhs); and Other Related Parties-Associates RS, Nil Lakhs (Previous Year RS, Nil Lakhs)
5 Rendering of Services includes, LMW Textile Machinery (Suzhou) Co. Ltd RS,358.06 Lakhs (Previous Year RS,185.61 Lakhs), Super Sales India Limited RS,20.95 Lakhs (Previous Year RS,20.35 Lakhs); Lakshmi Technology & Engineering Industries Ltd. RS,71.11 Lakhs (Previous year RS,69.41 Lakhs) Quattro Engineering India Limited RS,0.22 Lakhs (previous Year RS,14.06 Lakhs) and Others - Other Related Parties-Associates RS,7.09 Lakhs (Previous Year RS,14.77 Lakhs)
6 Receiving of Services include Lakshmi Ring Travellers (CBE) Limited RS,520.92 Lakhs (Previous Year RS,548.00 Lakhs); Lakshmi Cargo Company Limited C7815.81 Lakhs (Previous Year C6,168.44 Lakhs); Revantha Services Ltd RS,4,298.53 Lakhs (Previous year RS,3,294.85 Lakhs); Super Sales India Limited RS,956.68 Lakhs (Previous Year RS,673.36 Lakhs) and Other Related Parties - Associates RS,1,006.41 Lakhs (Previous Year RS,963.73 Lakhs)
7 Agency arrangement includes Super Sales India Limited RS,1,135.31 Lakhs (Previous Year RS,1,208.08 Lakhs)
8 Investment in shares include Super Sales India Limited RS, Nil Lakhs (Previous Year RS,926.66 Lakhs)
9 Contribution to gratuity fund includes Lakshmi Machine Works Limited Employees'' Gratuity Fund RS,251.57 Lakhs (Previous Year RS,560.60 Lakhs)
10 Managerial Remuneration includes amount paid to Chairman and Managing DireRs,tor RS,855.33 Lakhs (Previous Year RS,768.99 Lakhs); Mr. K.Soundhar Rajhan, Director Operations RS,53.42 Lakhs *(Previous Year - Not applicable since appointed as Director Operations w.e.f 1st November, 2017); Mr. C.B.Chandrasekar, Chief Financial Officer RS,51.85 Lakhs (Previous Year RS,47.56 Lakhs); Mr. C. R. Shivkumaran, Company Secretary RS,27.48 Lakhs (Previous Year RS,10.60 Lakhs)*
11 Outstanding Payables include Lakshmi Cargo Company Limited RS,728.5 Lakhs (Previous Year RS,544.87 Lakhs); Lakshmi Precision Tools Limited RS,520.23 Lakhs (Previous Year RS,415.72 Lakhs); Lakshmi Electrical Drives Limited RS,618.71 Lakhs (Previous Year RS,430.89 Lakhs); Lakshmi Electrical Control Systems Ltd RS,1,938.89 Lakhs (Previous year RS,949.01 Lakhs); Super Sales India Limited RS,887.72 Lakhs (Previous Year RS,134.98 Lakhs) Sri. Sanjay Jayavarthanavelu RS,621.94 Lakhs (Previous year RS,559.05 Lakhs) and Other Related Parties -Associates RS,1,128.42 Lakhs (Previous Year RS,379.38 Lakhs);
12 Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd RS,2,710.75 Lakhs (Previous Year RS,2,644.93 Lakhs), Revantha Services Limited RS, Nil (Previous Year RS,85.88 Lakhs); Lakshmi Technology and Engineering Industries Limited RS,144.53 Lakhs (Previous Year RS,124.79 Lakhs); Quattro Engg India Ltd RS, Nil Lakhs (Previous Year RS,101.55 Lakhs) and Others - Other Related Parties - Associates RS,2.76 Lakhs (Previous Year RS,41.47 Lakhs)
The salary escalation considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
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.
The company expects to make a contribution of RS,1,000.00 Lakhs (as at 31st March 2017: RS,600.00 Lakhs) to the defined benefit plans during the next financial year.
The above sensitivity analyses are based on change in an assumption while holding all other assumptions constant. In practice, this is is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognized in the balance sheet.
J Brief description of the Plans & risks
These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability is calculated using a discount which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, other debt instruments and equity shares of listed companies.
Interest risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt investments, if any.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
31.10 SEGMENT INFORMATION
Products and services from which reportable segments derive their revenues
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The company has chosen to organise the company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the company.
Specifically, the Company is organised into three main reportable segments viz.,(1) Textile Machinery Division (2) Machine Tool Division & Foundry Division and (3) Advanced Technology Centre for Aero Space-Parts & Components
* Revenue from Textile Machinery Division for year ended 31.03.2018 includes Excise duty of RS,5,300 Lakhs as against RS,17,800 Lakhs for year ended 31.03.2017
Notes :
1) The accounting policies of the reportable segments are the same as the company''s accounting policies. Inter Segment transfers are accounted on cost plus basis vis-a-vis at competitive market price charged to Unaffliated customers for similar goods.
2) Segment profit represents the profit before tax earned by each segment without allocation of unallocable expenses, finance costs and unallocable income. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
3) Segment Revenue,Results,Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
Information about major customers
There is no single customer contributing to 10% or more to the company''s revenue for both 2017-18 and 2016-17.
31.11 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved for issue by the Board of directors on 25th May 2018.
31.13 FINANCIAL RISK MANAGEMENT OBJECTIVES
The Company''s activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial risks relating to the operations of the group through internal risk reports which analyses exposures by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation of risk or to minimize the potential adverse effects on the financial performance of the Company. The Company does not enter into any derivative financial instruments to hedge risk exposures.
Foreign Currency Risk
The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD and balance in EUR, purchases from overseas suppliers are in various foreign currencies. The exposure at the end of the reporting period does not reflect the transaction during the year and there is a natural hedge in the currency for USD and EUR. The exchange rate between INR and other currency does have an impact on the business. The company is a net exporter and export realization combined with a depreciating INR has given the company a net foreign exchange gain.
Interest rate risk - The Company holds interest bearing assets in the form of fixed deposits with banks. The variation in interest risks is managed by distributing deposits among wide base of banks and financial institutions.
The company do not have any debts and therefore any fluctuation in market interest rates may not affect the cash flow/ profitability position of the company in terms of debts servicing.
Price risk - Holding marketable financial assets expose the company to risk of price fluctuation. Price escalations will have insignificant impact on carrying amounts of respective financial assets. However, the Company is exposed to equity price risks from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes.
Credit risk - Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents, and outstanding receivables.
Credit risk on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. The company applied simplified approach of estimated credit loss for trade receivable, which provide for expected credit loss based on life-time expected losses. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
"Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The company''s principal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does not have any external borrowings from banks or any other financial institution. The company believes that the working capital through internal accruals is suffcient to meet its current requirements and hence the Company does not perceive any such risk."
Capital management - The company''s objective is to safeguard its financial stability, financial independence and its ability to continue as a going concern in order to generate returns for the shareholders and benefits for the other stake holders. The company incentivize the shareholders by paying optimum and regular dividends.
The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans. The funding requirements are met through internally generated funds . The Company does not have any borrowings in its capital portfolio.
31.14
Previous years'' figures have been regrouped / reclassified, wherever necessary, to conform with the current period presentation.
Mar 31, 2017
1 EXCEPTIONAL ITEMS
Exceptional items represents compensation towards Voluntary Retirement Scheme opted by Employees RS,470.14 Lakhs (Previous year RS, 106.80 Lakhs); Investments in Pugoda Textiles Lanka Limited written off RS, Nil Lakhs (Previous year RS,391.57 Lakhs]. In respect of shares of Pugoda Textiles Lanka Ltd vested with the Government of Sri lanka for compensation, the carrying amount of investment net of compensation awarded by the Compensation Tribunal of Sri lanka has been written off and the compensation receivable of RS,92.26 Lakhs is recognized as income receivable. However the company has appealed for higher compensation.
2 RELATED PARTY TRANSACTIONS
Related Party Relationships Key Management Personnel
Sri. Sanjay Jayavarthanavelu, Chairman and Managing Director Sri. C.B.Chandrasekar, Chief Financial Officer Sri. C.R. Shivkumaran, Company Secretary
Wholly Owned Subsidiary :
LMW Textile Machinery (Suzhou) Co. Ltd.
Post employment benefit plans
Lakshmi Machine Works Limited Employeesâ Gratuity Fund Other related parties
Dhanuprabha Agro P Ltd; Eshaan Enterprises Limited; Harshini Textiles Limited; Hermes Academy of Training Limited; Lakshmi Card Clothing P Ltd; Lakshmi Cargo Company Limited; LCC Cargo Holdings Limited;Lakshmi Caipo Industries Ltd; Lakshmi Energy & Environmental 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; Mahalakshmi Engineering Holdings Limited; Quattro Engineering India Limited; Rajalakshmi Engineering; Revantha Holdings Limited; Revantha Services Ltd; Revantha Agro FarmsP Ltd; Sowbarnika Enterprises Ltd; Sowbarniha Resorts Private Limited; Sri Kamakoti Kamakshi Textiles P Ltd; Sri Lakshmi Vishnu Plastics; Sudhasruti Agro P Ltd; Super Sales India Limited; Supreme Dairy Products India Ltd; Starline Travels Limited;Titan Paints & Chemicals Limited; The Lakshmi Mills Company Limited; Venkatavaradha Agencies P Limited; Walzer Hotels P Ltd.
1 Purchase of Goods includes LMW Textile Machinery (Suzhou) Co.Ltd C23.85 Lakhs (Previous year Nil) Lakshmi Electrical Control Systems Limited RS,14401.16 Lakhs (Previous Year RS,16897.90 Lakhs), Lakshmi Electrical Drives Limited RS,3209.01 Lakhs (Previous Year RS,3899.07 Lakhs); Quattro Engineering India Limited RS,4319.81 Lakhs ((Previous Year RS,2515.83 Lakhs);Super Sales India Ltd RS,2841.85 Lakhs (Previous Year RS,2543.41 Lakhs) and Other Related Parties- Associates RS,5451.74 Lakhs (Previous Year RS,7198.67 Lakhs)
2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd RS,2143.33 Lakhs (Previous Year RS,5158.01 Lakhs), Lakshmi Electrical Control Systems Limited RS,2649.78 Lakhs (Previous Year RS,2561.85 Lakhs) , Quattro Engineering India Limited RS,559.85 Lakhs (Previous Year RS,325.56 Lakhs) Super Sales India Ltd RS,1016.19 Lakhs (Previous Year RS,1236.79 Lakhs) and Other related Parties -Associates RS,174.49 Lakhs (Previous Year RS,321.51 Lakhs)
3 Purchase of Fixed Assets includes Super Sales India Limited RS,37.00 Lakhs (Previous year RS, Nil Lakhs); Lakshmi Energy and Environments Designs Limited RS,27.61 Lakhs (Previous year RS, Nil Lakhs); Quattro Engineering India Limited RS, Nil Lakhs (Previous Year RS,127.12 Lakhs); Other Related Parties- Associates RS, Nil Lakhs (Previous Year RS,9.49 Lakhs)
4 Sale of Fixed Assets includes LMW Textile Machinery (Suzhou) Co. Ltd RS,109.03 Lakhs (Previous Year RS, Nil Lakhs); Quattro Engineering Ltd RS,238.89 Lakhs (Previous year RS,14.71 Lakhs ); Lakshmi Cargo Company Limited RS, Nil Lakhs (Previous Year RS,385.89Lakhs);Super Sales India Limited RS, Nil Lakhs (Previous Year RS,184.90 Lakhs); and Other Related Parties-Associates RS, Nil Lakhs (Previous Year RS,0.03 Lakhs)
5 Rendering of Services includes , LMW Textile Machinery (Suzhou)Co. Ltd RS,185.61 Lakhs (Previous Year RS,423.88 Lakhs), Super Sales India Limited RS,20.35 Lakhs (Previous Year RS,32.33 Lakhs); Lakshmi Technology & Engineering Industries Ltd. RS,69.41 Lakhs (Previous year RS,60.91 Lakhs) Quattro Engineering India Limited RS,14.06 Lakhs (previous Year RS,0.03 Lakhs) and Other Related Parties-Associates RS,14.77 Lakhs (Previous Year RS,19.27 Lakhs)
6 Receiving of Services include Lakshmi Ring Travellers (Cbe) Limited RS,548.00 Lakhs (Previous Year RS,547.23 Lakhs); Lakshmi Cargo Company Limited RS,6168.44 Lakhs (Previous Year RS,6659.06 Lakhs); Revantha Services Ltd RS,3294.85 Lakhs (Previous year RS,2345.63 Lakhs); Super Sales India Limited RS,673.36 Lakhs (Previous Year RS,669.92 Lakhs) and Other Related Parties - Associates RS,963.73 Lakhs (Previous Year RS,1291.15 Lakhs)
7 Agency arrangement includes Super Sales India Limited RS,1208.08 Lakhs (Previous Year RS,1383.76 Lakhs)
8 Investment in shares include Super Sales India Limited RS,926.66 Lakhs(Previous Year RS,564.41 Lakhs)
9 Contribution to gratuity fund includes Lakshmi Machine Works Limited Employeesâ Gratuity Fund RS,560.60 Lakhs (Previous Year RS,682.67 Lakhs)
10 Managerial Remuneration includes amount paid to Chairman and Managing Director RS,768.99 Lakhs (Previous Year RS,899.74 Lakhs); Chief Financial Officer RS,47.56 Lakhs (Previous year RS,26.78 Lakhs*); Company Secretary RS, 10.60 Lakhs* (Previous year RS,28.31 Lakhs)
11 Outstanding Payables include Lakshmi Cargo Company Limited RS,544.87 Lakhs (Previous Year RS,450.56 Lakhs); Lakshmi Precision Tools Limited RS,415.72 Lakhs (Previous Year RS,384.44 Lakhs); Lakshmi Electrical Drives Limited RS,430.89 Lakhs (Previous Year RS, Nil Lakhs); Lakshmi Electrical Control Systems Ltd RS,949.01 Lakhs (Previous year RS,1140.17 Lakhs); Super Sales India Limited RS,134.98 Lakhs (Previous Year RS,808.82 Lakhs) Sri. Sanjay Jayavarthanavelu RS,559.05 Lakhs (Previous year RS,687.60 Lakhs) and Other Related Parties -Associates RS,379.38 Lakhs (Previous Year RS,423.10 Lakhs);
12 Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd RS,2644.93 Lakhs (Previous Year RS,3459.96 Lakhs), Revantha Services Limited RS,85.88 Lakhs ( Preivous Year RS,173.28 Lakhs); Lakshmi Technology and Engineering Industries Limited RS,124.79 Lakhs (Previous Year RS,63.87 Lakhs); Quattro Engg India Ltd RS,101.55 Lakhs (Previous year RS,458.06 Lakhs) and Other Related Parties - Associates RS,41.47 Lakhs (Previous Year RS,117.32 Lakhs)
* For part of the year
The salary escalation considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
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.
The company expects to make a contribution of RS,300 Lakhs (as at 31st March 2016: RS,700 Lakhs; as at 31st March 2015 RS,800 Lakhs) to the defined benefit plans during the next financial year.
The above sensitivity analysis are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
J Brief description of the Plans & risks
These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk. Investment risk
The present value of the defined benefit plan liability is calculated using a discount which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, other debt instruments and equity shares of listed companies.
Interest risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the planâs debt investments, if any.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
13SEGMENT INFORMATION
Products and services from which reportable segments derive their revenues
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The company has chosen to organise the company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the company. Specifically, the Company is organised into three main reportable segments viz.,(1) Textile Machinery Division (2) Machine Tool Division & Foundry Division and (3) Advanced Technology Centre for Aero Space-Parts & Components
Notes:
1) The accounting policies of the reportable segments are the same as the companyâs accounting policies. Inter Segment transfers are accounted on cost plus basis vis-a-vis at competitive market price charged to Unaffliated customers for similar goods.
2) Segment profit represents the profit before tax earned by each segment without allocation of unallowable expenses, finance costs and unallocable income. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
3) Segment Revenue ,Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
Information about major customers
There is no single customer contributing 10% or more to the companyâs revenue for both 2016-17 and 2015-16. Included in revenues of RS,2,35,587.87 Lakhs, are revenues approximately RS,6,535.55 Lakhs [Previous year RS, 17,771.41 Lakhs] which arose from sale to the companyâs largest customer.
14 FINANCIAL RISK MANAGEMENT OBJECTIVES
The companyâs activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial risks relating to the operations of the group through internal risk reports which analyses exposures by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation of risk or to minimize the potential adverse effects on the financial performance of the Company. The Company does not enter into any derivative financial instruments to hedge risk exposures.
Foreign Currency Risk
The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD and balance in EUR, purchases from overseas suppliers are in various foreign currencies. The exposure at the end of the reporting period does not reflect the transaction during the year and there is a natural hedge in the currency for USD and EUR. The exchange rate between INR and other currency does have an impact on the business. The company is a net exporter and export realization combined with a depreciating INR has given the company a net foreign exchange gain.
Interest rate risk - The Company holds interest bearing assets in the form of fixed deposits with banks. The variation in interest risks is managed by distributing deposits among wide base of banks and financial institutions.
The company do not have any debts and therefore any fluctuation in market interest rates may not affect the cash flow/profitability position of the company in terms of debts servicing.
Price risk - Holding marketable financial assets expose the company to risk of price fluctuation. Price escalations will have insignificant impact on carrying amounts of respective financial assets. However, the Company is exposed to equity price risks from equity investments. Certain of the Companyâs equity investments are held for startegic rather than trading purposes.
Credit risk - Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents, and outstanding receivables.
Credit risk on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable banks. They are not impaired or past due for each of the reporting dates
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. The company applied simplified approach of estimated credit loss for trade receivable, which provide for expected credit loss based on life-time expected losses. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.
The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The companyâs pricincipal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does not have any external borrowings from banks or any other financial institution. The company believes that the working capital through internal accruals is sufficient to meet its current requirements and hence the Company does not perceive any such risk.
Capital management - The companyâs objective is to safeguard its financial stability, financial independence and its ability to continue as a going concern in order to generate returns for the shareholders and benefits for the other stake holders. The company incentivize the shareholders by paying optimum and regular dividends.
The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans. The funding requirements are met through internally generated funds . The Company does not have any borrowings in its capital portfolio.
Notes to reconciliation
1. Under previous GAAP, long terms investments were measured at cost less diminution in value which is other than temporary. Under IND AS, these financial assets have been classified as FVTOCI. On the date of transition to IND AS, these financial assets have been measured at their fair value which is higher than the cost as per previous GAAP, resulting in an increase in the carrying amount by RS,2,312.53 Lakhs as at March 31st, 2016 and by RS,503.52 Lakhs as at April 1st, 2015. There is no deferred tax liability recognized considering that there will be no tax liability in the future. The net effect of these changes is an increase in total equity as at March 31, 2016 of RS,2,816.05 Lakhs (RS,503.52 Lakhs as at April 1, 2015). These changes do not affect profit before tax or total profit for the year ended March 31, 2016 because the investments have been classified as FVTOCI.
2. Under previous GAAP, dividends on equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under IND AS, such dividends are recognized when declared by the members in a General Meeting. The effect of this change is an increase in total equity as at March 31, 2016 of RS,5,424.14 Lakhs (RS,5,085.14 Lakhs as at April 1, 2015), but does not affect profit before tax and total profit for the year ended March 31, 2016.
3. Under previous GAAP, actuarial gains and losses were recognized in profit or loss. Under IND AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognized in Other comprehensive income. Consequently, the tax effect of the same has also been recognized in Other comprehensive income under IND AS instead of profit or loss. Actuarial losses for the year ended March 31, 2016 were RS,85.01 Lakhs and the tax effect thereon is RS,27.20 Lakhs. The effect of this change is increase in profit by RS,85.01 Lakhs and equity by C57.81Lakhs.
4. Under the previous GAAP, provision for doubtful debts on trade receivables were carried on the basis of an incurred loss model. As per Ind AS, the Company is required to apply expected credit loss model for recognizing the allowance for doubtful debts. As a result there is an increase in the amount of allowance for doubtful debts and corresponding deferred tax has also been recognized. The net effect of this change is a decrease in total equity as at March 31, 2016 of RS,44.14 Lacs (RS,595.67 Lacs as at April 1, 2015) and decrease in total profit for the year ended March 31, 2016 of RS,44.14 Lacs
5. Under the previous GAAP, the company recorded revenue based on the delivery of the finished product. However under IND AS, revenue needs to be recognized on the basis of POCM relating to the job work services done by the company. The effect of this change is an increase in total equity as at March 31, 2016 of RS,92.77 Lacs (RS,112.76 Lacs as at April 1, 2015) 31.15
Previous yearsâ figures have been restated to comply with IND AS to make them comparable with the current period. Further, previous yearsâ figures have been regrouped / reclassified, wherever necessary, to conform with the current period presentation.
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.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article