5 Provisions and contingencies
Provisions: A provision is recognised when
the Company has a present obligation as a
result of past events and it is probable that an
outflow of resources will be required to settle
the obligation, in respect of which a reliable
estimate can be made.
The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account the risks
and uncertainties surrounding the obligation.
When a provision is measured using the cash
flows estimated to settle the present obligation,
its carrying amount in the present value of those
cash flows (when the effect of time value of
money is material).
Contingent Liabilities: Contingent liabilities are
disclosed when there is a possible obligation
arising from past events, the existence of which
will be confirmed only by the occurrence or non
occurrence of one or more uncertain future
events not wholly within the control of the
company or a present obligation that arises from
past events where it is either not probable that
an outflow of resources will be required to settle
or a reliable estimate of the amount cannot be
made.
Contingent Asset: A contingent asset is a
possible asset that arises from past events and
whose existence will be confirmed only by the
occurrence or non-occurrence of one or more
uncertain future events not wholly within the
control of the entity. Contingent assets are
disclosed in the Financial Statements by way of
notes to accounts when an inflow of economic
benefits is probable.
6 Leases - Arrangements in the nature of Lessee
The Company, at the inception of a contract,
assessess whether the contract is a lease or not
lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of
an identified asset for a time in exchange for
a consideration. This policy has been applied to
contracts existing and entered into on or after
April 1, 2019.
The Company recognises a right-of-use asset
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured
at cost, which comprises the initial amount
of the lease liability adjusted for any lease
payments made at or before the commencement
date, plus any initial direct costs incurred and
an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying
asset or the site on which it is located, less any
lease incentives received.
The right-of-use asset is subsequently
depreciated using the straight-line method from
the commencement date to the end of the lease
term.
The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the Company’s incremental borrowing
rate. It is remeasured when there is a change
in future lease payments arising from a change
in an index or rate, if there is a change in the
Company’s estimate of the amount expected to
be payable under a residual value guarantee,
or if the Company changes its assessment of
whether it will exercise a purchase, extension
or termination option. When the lease liability
is remeasured in this way, a corresponding
adjustment is made to the carrying amount of
the right-of-use asset, or is recorded in profit or
loss if the carrying amount of the right-of-use
asset has been reduced to zero.
The Company has elected not to recognise right-
of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or
less and leases of low-value assets. The Company
recognises the lease payments associated with
these leases as an expense over the lease term.
In the comparative period, leases under which
the Company assumes substantially all the
risks and rewards of ownership are classified as
finance leases. When acquired, such assets are
capitalized at fair value or present value of the
minimum lease payments at the inception of the
lease, whichever is lower. Lease payments and
receipts under operating leases are recognised
as an expense and income respectively, on a
straight line basis in the statement of profit and
loss over the lease term except where the lease
payments are structured to increase in line with
expected general inflation.
7 Cash and cash equivalents
Cash comprises cash on hand and demand
deposits with banks. Cash equivalents are short¬
term balances (with an original maturity of three
months or less from the date of acquisition)
and highly liquid investments that are readily
convertible into known amounts of cash and
which are subject to insignificant risk of changes
in value.
For the purposes of the cash flow statement,
cash and cash equivalents include cash on hand,
in banks and demand deposits with banks.
8 Trade receivables
Trade receivables are recognised initially at
fair value unless they do not carry a significant
financing component, in which case they
are recognized at the transaction price. The
Company generally determines the allowance
for expected credit losses based on historical
loss experience adjusted to reflect current and
estimated future economic conditions. The
Company considered current and anticipated
future economic conditions relating to industries
the company deals with and the countries where
it operates. In calculating expected credit loss,
the Company has also considered credit reports
and other related credit information for its
customers to estimate the probability of default
in future.
9 Trade Payables
For trade and other payables maturing within one
year from the balance sheet date, the carrying
amounts approximate fair value due to the short
maturity of these instruments.
10 Cash Flow statement
Cash flows are reported using the indirect
method, whereby profit / (loss) before
extraordinary items and tax is adjusted for
the effects of transactions of non-cash nature
and any deferrals or accruals of past or future
cash receipts or payments. The cash flows from
operating, investing and financing activities
of the Company are segregated based on the
available information. Cash and cash equivalents
include cash on hand, cash 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.
11 Earning Per Share
Basic earnings per share have been computed by
dividing the net income by the weighted average
number of shares outstanding during the year.
Diluted earnings per share has been computed
using the weighted average number of shares
and diluted potential shares, except where the
result would be anti-dilutive.
12 Dividends
Final dividends on shares are recorded on the
date of approval by the shareholders of the
Company.
The Company’s investment properties consist of properties at Coimbatore and Palladam in the nature of land and
buildings, Electrical Plant & Equipment and Office Equipment in India. As at March 31,2025 and March 31,2024,
the fair values of the investment properties are ' 376.01 Crores and ' 302.00 Crores respectively These fair values
are based on valuations performed by registered valuer as defined under Rule 2 of Companies (Registered Valuers
and Valuation) Rules 2017. The fair value hierarchy is at level 2. (Refer note 33.2B for note on fair value hierarchy).
There are no restrictions on the realizability of the Investment Properties.
Details of securities for borrowings
Term Loans from Central Bank of India and Canara Bank are secured by first charge on relevant assets of
Coimbatore, Kovilpatti and Palladam units created under respective Project/Term Loans.
Working Capital and Term Loans from Canara Bank and Central Bank of India are secured by pari passu first charge
on the fixed assets at Coimbatore, Kovilpatti and Palladam Units.
Working Capital Loans from Canara Bank and Central Bank of India are further secured by first charge on book
debts and hypothecation of inventories.
Canara Bank rental loan is secured by the relevant land and buildings of the company.
note 27 - segment INFORMATION
The Chairman & Managing Director of the company has been identified as the Chief Operating Decision Maker
(CODM) as defined by Ind AS 108 Operating Segments. The CODM evaluates the Company’s performance and
allocates resources based on an analysis of various performance indicators by industry classes. Accordingly,
segment information has been presented.
The Company is structured into two reportable business segments - “Textiles” and “Rental Services”. Textiles
consists of manufacturing and sale of yarn and trading in fabrics. Rental services consist of letting out of
properties. The reportable business segments are in line with the segment wise information which is being
presented to the CODM.”
Each segment item reported is measured at the measure used to report to the chief operating decision maker
for the purposes of making decisions about allocating resources to the segment and assessing its performance
Geographic information is based on business sources from that geographic region. Accordingly the geographical
segments are determined as Domestic ie., within India and External ie., Outside India.
Income and direct expenses in relation to segments are categorized based on items that are individually
identifiable to that segment, while the remainder of costs are apportioned on an appropriate basis. Certain
expenses are not specifically allocable to individual segments as the underlying services are used interchangeably.
The management therefore believes that it is not practicable to provide segment disclosures relating to such
expenses and accordingly such expenses are separately disclosed as “unallocated” and directly charged against
total income.
Disputed tax dues are under consideration before the concerned appellate & assessing 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.
note 31 - employee benefit plans
(a) Defined Contribution Plan
The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions
which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required
to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised
' 118.99 Lakhs (Previous year: ' 104.81 Lakhs) as contribution to Provident Fund, ' 27.80 lakhs (Previous
year ' 24.58 lakhs) as contribution to Superannuation Fund and ' 40.55 Lakhs (Previous year: ' 35.45 Lakhs)
as contribution to Employee State Insurance (ESI) in the Statement of Profit and Loss. These contributions
have been made at the rates specified in the rules of the respective schemes and has been recognised in the
Statement of Profit and Loss under the head Employee Benefits Expense.
(b) Defined Benefit Plans:
Gratuity
The Company has partly funded its gratuity obligations. The following table sets out the status of the defined
benefit schemes and the amount recognised in the financial statements as per the Actuarial Valuation done
by an Independent Actuary:
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 plan liability is calculated by reference to the future salaries of
plan participants. As such, an increase in the salary of the plan’s participants will increase the plan’s liability.
Market risk: Market risk is a collective term for risks that are related to the changes and fluctuations of the
financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate
reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of
the plan benefits & vice versa. This assumption depends on the yields on the corporate / government bonds and
hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.
Legislative risk: Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due
to change in the legislation /regulation. The government may amend the Payment of Gratuity Act thus requiring
the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined
Benefit Obligation. The new labour code is a case in point and the same will have to be recognized immediately
in the year when any such amendment is effective.
Liquidity risk: Employees with high salaries and long durations of service or those higher in hierarchy, accumulate
significant level of benefits. If some of such employees resign / retire from the company there can be strain on
the cash flows.
Disclosure in respect of Related Party Transactions during the year:
1. Purchase of goods/assets includes Lakshmi Card Clothing Manufacturing Company P Ltd ' 31.23 Lakhs;
(Previous year ' 26.82 Lakhs); LMW Ltd ' 19.51 lakhs (Previous year ' 1253.03 lakhs); Rajshree Biosolutions
LLP ' 1.07 lakhs (Previous year ' 0.75 lakhs)
2. Sale of Goods / assets include Lakshmi Card Clothing Mfg. Co.P.Ltd ' 0.89 Lakhs. (Previous year ' 1.04 Lakhs);
Petal Home LLP ' 1.68 Lakhs.(Previous year ' 5.98 Lakhs); Premier Spg and Wvg Mills Pvt Ltd ' 49.73 lakhs
(Previous year ' 54.51 lakhs); Rajshree Sugars and Chemicals Ltd ' 10.13 lakhs (Previous Year ' 11.06 lakhs)
3. Receiving of Services include Balakumar Shipping & Clearing Agency P.Ltd ' 11.45 Lakhs (Previous year ' 21.28
Lakhs); Aloha Tours & Travels (India) Private Ltd ' 25.36 Lakhs (Previous year ' 35.45 Lakhs); Lakshmi Card
Clothing Manufacturing Company P Ltd ' 3.06 Lakhs (Previous year ' 3.36 Lakhs); Chakradhara Aerospace &
Cargo P.Ltd ' 6.91 Lakhs (Previous year ' 13.38 Lakhs); Lakshmi Engineering and Warehousing Ltd ' 22.93
Lakhs (Previous year ' 18.95 Lakhs); Major Corporate Services (India) LLP ' 28.60 lakhs (Prevoius year ' 19.58
Lakhs) ; Petal Home LLP ' Nil lakhs (Previous year ' 9.44 lakhs) ;Super sales India Ltd ' 0.44 lakhs (previous
year ' 14.06 Lakhs)
4. Sitting fees paid to Directors - Sri.R.Santharam ' 1.90 lakhs (Previous Year ' 1.55 Lakhs), Sri.Sanjay
Jayavarthanavelu ' 1.25 lakhs (Previous Year ' 0.75 lakhs), Sri.D.Rajendran ' 0.70 lakhs (Previous year
' 1.70 lakhs), Sri.Satish Ajmera ' 1.05 lakhs (Previous Year ' 1.85 lakhs), Smt.Suguna Ravichandran
' 2.05 lakhs (Previous year ' 1.05 lakhs), Sri. Vijay Venkataswamy ' 0.60 lakhs (previous year ' 0.60 lakhs),
Sri.Aswin Chandran ' 0.95 lakhs (previous year ' Nil) Sri.K.Murali Mohan ' 1.35 lakhs.(previous year ' Nil),
Sri.R.Varadarajan ' 1.10 lakhs(previous year ' Nil)
5. Rendering of Services include Lakshmi Card Clothing Manufacturing Company P.Ltd ' 18.62 Lakhs (Previous
year ' 17.86 Lakhs); Lakshmi Engineering and Warehousing Ltd ' 32.96 Lakhs (Previous year ' 31.39 Lakhs)
; Petal home LLP ' 0.88 lakhs (Previous year ' 0.92 Lakhs);Rajshree Biosolutions LLP ' 0.38 lakhs (Previous
year ' 0.36)
6. Remuneration to Key Managerial Personnel includes Sri. S. Pathy ' 112.15 Lakhs (Previous year ' 99.22 Lakhs);
Sri Aditya Krishna Pathy ' 76.47 Lakhs (Previous year ' 68.29 Lakhs); Sri N.Singaravel ' 16.21 Lakhs (Previous
year ' 15.65 Lakhs); Sri A.Doraisamy ' 18.14 Lakhs (Previous year ' 17.62 Lakhs).
7. Contribution to Gratuity Fund includes Sri.S.Pathy ' 2.34 Lakhs (Previous year ' 2.22 Lakhs) ; Sri.Aditya
Krishna Pathy ' 0.95 lakhs (Previous Year ' 0.86 lakhs) ; Sri.N.Singarvel ' 0.34 Lakhs (Previous year ' 0.29
lakhs)
8. Contribution to Superannuation Fund includes Sri.S.Pathy ' 16.09 Lakhs (Previous year ' 14.34 Lakhs) ;
Sri.Aditya Krishna Pathy ' 9.91 lakhs (Previous Year ' 8.81 lakhs).
9. Amount Receivable from other related parties includes Lakshmi Engineering and Warehousing Ltd ' 1.52
Lakhs (Previous year ' 1.38 Lakhs);, Lakshmi Card Clothing Mfg.Co.P.Ltd ' 8.20 Lakhs (Previous year ' 12.63
Lakhs) Petal Home LLP ' Nil (Previous year ' 2.43 Lakhs); Premier Spg and Wvg Mills Pvt Ltd ' Nil (Previous
year ' 4.64 lakhs); Rajshree Bio Solutions LLP ' 0.03 lakhs (Previous year ' 0.03 lakhs)
10. Amount payable for Post retirement employee benefit plan includes The Lakshmi Mills Co. Ltd. Employees
Gratuity Fund ' 585.00 Lakhs (Previous year ' 591.93 Lakhs).
11. Amount payable to other related parties include Aloha Tours & Travels (India) Private Ltd ' 7.22 Lakhs
(Previous year ' 5.91 Lakhs); Lakshmi Engineering and Warehousing Ltd ' Nil (Previous year ' Nil); Balakumar
Shipping & Clearing Agency P.Ltd ' 2.82 Lakhs (Previous year ' 2.71 lakhs); Major Corporate Services (India)
LLP ' 4.74 Lakhs (Previous Year ' 2.64 lakhs); Chakadhara aerospace & Cargo P Ltd ' Nil (Previous year ' 1.38
lakhs), Lakshmi Card Clothing Manufacturing Company Ltd ' 11.82 lakhs (Previous year ' Nil). Super Sales
India Ltd ' 0.11 lakhs (previous year ' 0.20 lakhs)
12. a) Capital Advance ' NIL (Previous year ' 35.80 lakhs) paid to related party LMW Ltd for supply of Machinery,
(b) Commitments (Net of Advances): ' NIL (Previous year ' 36.32 lakhs) to related party LMW Ltd
note 33 - financial INSTRUMENTS
33.1 Capital management
The Company’s capital management objectives are:
- to ensure the Company’s ability to continue as a going concern
- to create value for shareholders by facilitating the meeting of long term and short term goals of the Company.
The Company determines the amount of capital required on the basis of annual business plan coupled
with long term and short term strategic expansion plans. The funding needs are met through equity, cash
generated from operations, long term and short term bank borrowings.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile
of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and
cash equivalents and other bank balances (including non-current earmarked balances).
33.2 Categories of Financial instruments
This section gives an overview of the significance of financial instruments for the Company and provides
additional information on balance sheet items that contain financial instruments. The details of significant
accounting policies, including the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised in respect of each class of financial asset, and financial liability are
disclosed in Note 2C (7) of Material Accounting Policies.
B. Fair value hierarchy
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial
instruments by valuation techniques. The three levels are defined based on the observability of
significant inputs to the measurement, as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
33.3 Financial risk management objective
The Company’s activities expose it to certain financial risks. The Company’s primary focus is to foresee the
unpredictability of such risks and seek to minimize potential adverse effects on its financial performance.
The Company has a risk management process and framework in place. This process is coordinated by the
Board, which meets regularly to review risks as well as the progress against the planned actions. The Board
seeks to identify, evaluate business risks and challenges across the Company through such framework.
These risks include market risks, credit risk and liquidity risk.
The risk management process aims to:
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- identify risk accumulations
- provide management with reliable information on the Company’s risk situation
- improve financial returns
Market risk - Foreign exchange
The Company undertakes transactions denominated in foreign currencies and thus it is exposed to exchange
rate fluctuations. The Company actively manages its currency rate exposures, arising from transactions
entered and denominated in foreign currencies, through its finance division and uses derivative instruments
such as foreign currency forward contracts to mitigate the risks from such exposures. The use of derivative
instruments is subject to limits and regular monitoring by Management.
The Company, as its policy, does not undertake any trading in derivatives financial instruments for
speculation purpose.
(ii) Assets:
The Company’s financial assets are carried at amortised cost and are at fixed rate only. They are, therefore,
not subject to interest rate risk since neither the carrying amount nor the future cash flows will fluctuate
because of a change in market interest rates.
Credit Risk
Credit risk is the risk that a customer or counterparty to a financial liability will fail to perform or pay
amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with
banks, security deposits, loans and advances principally from credit exposures to customers relating to
outstanding receivables. The Company’s maximum exposure to credit risk is limited to the carrying amount
of financial assets recognised at reporting date.
Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and
derived from revenue earned from customers in India and abroad. 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 receivables, which provide for expected credit loss based on life-time
expected losses.
The Company evaluates the credit risk assocaited with each party on a regular basis and provides for
impairment wherever required. The credit risk for cash and cash equivalents, bank deposits and security
deposits is considered negligible, since the counterparties are reputable organisations with high quality
credit ratings.
Liquidity risk
The Company requires funds both for short-term operational needs as well as for long-term expansion
programmes. The Company remains committed to maintaining a healthy liquidity ratio, deleveraging and
strengthening the balance sheet. The Company manages liquidity risk by continuously monitoring forecast
and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Company’s finance department is responsible for liquidity, funding as well as settlement management.
In addition, processes and policies related to such risks are overseen by senior management.
The Company’s financial liability is represented significantly by long term and short term borrowings from
banks and trade payables. The maturity profile of the Company’s short term and long term borrowings and
trade payables based on the remaining period from the date of balance sheet to the contractual maturity
date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the
equity price risk
Equity Price Risk is related to the change in market reference price of the investments in quoted equity
securities. The fair value of some of the Company’s investments in quoted shares 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, 2025 and March 31, 2024 was ' 83,915.79 Lakhs and ' 79,619.03 Lakhs
respectively.
A 5% change in equity price as of March 31, 2025 and March 31,2024 would result in an impact of ' 4,195.79
Lakhs and ' 3,980.95 Lakhs respectively
34.10 OTHER STATUTORY INFORMATION
1 The Company has not received any fund from any persons or entities, including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company
shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
2 The Company has not advanced or loaned or invested funds to any persons or entities, including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
3 The company did not undertake transactions that were not recorded in the books of accounts and
which have been surrendered or disclosed as income during the year in the tax assessments under
the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income
Tax Act, 1961).
4 The Company does not have any charges or satisfaction which is yet to be registered with Registrar
of Companies (ROC) beyond the statutory period.
5 The Company has not made investments in more than one layer of body corporate in accordance
with provisions of clause (87) of section 2 of the Companies Act, 2013 read with the Companies
(Restriction on number of Layers) Rules, 2017.
6 The Company has not been declared a Wilful Defaulter by its lenders.
7 No proceedings have been initiated against the company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
8 The company has not traded in cryptocurrencies or vitual currencies during the year.
9 The Company has not entered into transactions with Companies that have been struck off the
Register of Companies u/s 248 of the Companies Act, 2013 during the financial year.
10 The fair valuation of the investment property as disclosed in Note 4 has been done by a registered
valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.
11 The details of quarterly statements of stock and book debts filed by the Company with the banks
have been given below together with the reason for the differences
34.11 All figures have been rounded off to Lakhs unless stated otherwise. Discrepancies, if any, in between
the totals and the sum of the items forming part of such totals are due to rounding off in the financial
statements. Wherever, figures are indicated as 0.00 lakhs, it represents value less than ' 0.01 lakhs due to
rounding off to the nearest lakhs.
34.12 The financial statements of Lakshmi Mills Company Limited were approved by the Board of Directors and
authorised for issue on 28th May 2025.
For and on behalf of the Board in terms of our report of even date
For Subbachar & Srinivasan
S. Pathy R. Santharam
3 Firm Registration No. 004083S
Chairman & Managing Director Vice Chairman
Chartered Accountants
DIN: 00013899 DIN: 00151333
T.S.V.Rajagopal
Place : Coimbatore N. Singaravel A.Doraiswamy Partner
Date : 28th May 2025 Company Secretary Chief Financial Officer Membership No. 200380
|