Notes to Accounts of Lakshmi Mills Company Ltd.

Mar 31, 2025

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 28^th 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 : 28^th May 2025 Company Secretary Chief Financial Officer Membership No. 200380

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Mar 31, 2024

4 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.

5 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.

6 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are shortterm 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.

7 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.

8 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.

9 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.

10 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

11 Dividends

Final dividends on shares are recorded on the date of approval by the shareholders 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 cloth and garments. 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.

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 Rs. 104.81 Lakhs (Previous year: Rs 99.73 Lakhs) as contribution to Provident Fund, Rs. 24.58 lakhs (Previous year Rs. 22.93 lakhs) as contribution to Superannuation Fund and Rs 35.45 Lakhs (Previous year: Rs 30.94 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.

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.

NOTE 32 - RELATED PARTY DISCLOSURES

List of related parties where control exists and also related parties with whom transactions have taken place and relationships

Disclosure in respect of Related Party Transactions during the year:

1. Purchase of goods/assets includes Lakshmi Card Clothing Mfg. Company Private Ltd Rs. 26.82 lakhs; (Previous year Rs. 29.41 Lakhs); Petal Home LLP Rs.NIL Lakhs.(Previous year Rs. 0.15 lakhs) ; Lakshmi Machine Works Ltd Rs.1,253.03 lakhs(Previous year Rs.1,045.94 lakhs);Rajshree Biosolutions LLP Rs.0.75 lakhs (Previous year Rs.0.14 lakhs)

2. Sale of Goods / assets include Lakshmi Card Clothing Mfg. Company Private Ltd Rs. 1.04 Lakhs. (Previous year Rs. 1.14 Lakhs); Petal Home LLP Rs.5.98 Lakhs.(Previous year Rs. 14.13 Lakhs); Lakshmi Automatic Loom Works Ltd Rs.Nil lakhs (Previous Year Rs.265.50 lakhs); Premier Spg and Wvg Mills Pvt Ltd Rs.54.51 lakhs (Previous year Rs.213.78 lakhs); Rajshree Sugars and Chemicals Ltd Rs.11.06 lakhs (Previous Year Rs.10.68 lakhs).

3. Receiving of Services include Balakumar Shipping & Clearing Agency P.Ltd Rs. 21.28 Lakhs (Previous year Rs. 24.16 Lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 35.45 Lakhs (Previous year Rs. 47.22 Lakhs); Lakshmi Card Clothing Mfg. Company Private Ltd Rs. 3.36 Lakhs (Previous year Rs. 4.26 Lakhs); Chakradhara Aerospace and Cargo Private Ltd Rs. 13.38 Lakhs (Previous year Rs.17.43 Lakhs);

Lakshmi Automatic Loom Works Ltd Rs. 18.95 Lakhs (Previou year Rs. 16.09 Lakhs); Major Corporate Services (India) LLP Rs. 19.58 lakhs (Prevoius year Rs. 7.19 Lakhs) ; Petal Home LLP Rs.9.44 lakhs (Previous year Rs.14.16 lakhs) ;

4. Sitting fees paid to Directors- Sri.R.Santharam Rs.1.55 lakhs (Previous Year Rs.1.20 Lakhs), Sri.Sanjay Jayavarthanavelu Rs.0.75 lakhs(Previous Year Rs.0.70 lakhs),Sri.D.Rajendran Rs.1.70 lakhs (Previous year Rs.1.20 lakhs), Sri.Satish Ajmera Rs.1.85 lakhs (Previous Year Rs.1.85 lakhs), Smt.Suguna Ravichandran Rs.1.05 lakhs (Previous year Rs.1.40 lakhs), Sri Vijay Venkataswamy Rs.0.60 lakhs(Previous year Rs.0.55 lakhs)

5. Rendering of Services include Lakshmi Card Clothing Mfg. Company Private Ltd Rs. 17.86 Lakhs (Previous year Rs. 16.35 Lakhs); Lakshmi Automatic Loom Works Ltd Rs. 31.39 Lakhs (Previous year Rs. 29.78 Lakhs) ; Sans Craintes Knitters Rs. Nil Lakhs (Previous year Rs. 2.93 Lakhs); Petal home LLP Rs.0.92 lakhs (Previous year Rs.0.28 Lakhs);Rajshree Biosolutions LLP Rs.0.36 lakhs (Previous year Rs.0.24)

6. Remuneration to Key Managerial Personnel includes Sri S. Pathy Rs. 99.22 Lakhs (Previous year Rs. 93.22 Lakhs); Sri Aditya Krishna Pathy Rs. 68.29 Lakhs (Previous year Rs. 63.22 Lakhs); Sri N.Singaravel Rs. 16.13 Lakhs (Previous year Rs. 15.19 Lakhs); Sri A.Doraisamy Rs. 17.62 Lakhs (Previous year Rs. 16.88 Lakhs).

7. Contribution to Gratuity Fund includes Sri.S.Pathy Rs. 2.22 Lakhs (Previous year Rs. 2.13 Lakhs) ; Sri.Aditya Krishna Pathy Rs.0.86 lakhs (Previous Year Rs.0.83 lakhs) ; Sri.N.Singarvel Rs.0.29 Lakhs (Previous year Rs.0.24 lakhs)

8. Contribution to Superannuation Fund includes Sri.S.Pathy Rs. 14.34 Lakhs (Previous year Rs. 13.44 Lakhs) ; Sri.Aditya Krishna Pathy Rs.8.81 lakhs (Previous Year Rs.8.19 lakhs).

9. Amount Receivable from other related parties includes Lakshmi Automatic Loom Works Ltd Rs. 1.38 Lakhs (Previous year Rs. 1.50 Lakhs); Sans Craintes Knitters Rs. Nil Lakhs (Previous year Rs. 1.31 Lakhs); and Lakshmi Card Clothing Mfg. Company Private Ltd Rs. 12.63 Lakhs (Previous year Rs. 15.19 Lakhs) Petal Home LLP Rs. 2.43 (Previous year Rs. 2.06 Lakhs); Premier Spinning and Weaving Mills Private Ltd Rs.4.64 lakhs (Previous year Rs.0.18 lakhs); Rajshree Sugars and Chemicals Ltd Rs.Nil lakhs (Previous year Rs.0.86) Rajshree Biosolutions LLP Rs.0.03 lakhs (Previous year Rs. Nil lakhs)

10. Amount payable for Post retirement employee benefit plan includes The Lakshmi Mills Co. Ltd. Employees Gratuity Fund Rs. 591.93 Lakhs (Previous year Rs. 526.89 Lakhs).

11. Amount payable to other related parties include Aloha Tours & Travels (India) Private Ltd Rs. 5.91 Lakhs (Previous year Rs. 1.55 Lakhs); Balakumar Shipping & Clearing Agency P.Ltd Rs. 2.71 Lakhs (Previous year Rs.5.51 lakhs); Major Corporate Services (India) LLP Rs. 2.64 Lakhs (Previous Year Rs.Nil lakhs); Chakadhara Aerospace and Cargo Private Ltd Rs. 1.38 lakhs (Previous year Rs.4.17 lakhs)

12. a) Capital Advance Rs.35.80 lakhs (Previous year Rs.332.26 lakhs) paid to related party Lakshmi Machine Works Ltd for supply of Machinery.(b) Commitments (Net of Advances): Rs.36.32 lakhs (Previous year Rs.817.96 Lakhs) to related party Lakshmi Machine Works Ltd.

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.

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

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, 2024 and March 31, 2023 was Rs. 79,619.03 Lakhs and Rs. 52,189.37 Lakhs respectively.

A 5% change in equity price as of March 31,2024 and March 31,2023 would result in an impact of Rs.3,980.95 Lakhs and Rs. 2,609.47 Lakhs respectively.

NOTE - 34: ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS 34.1 Dividend:

The directors have not recommended any dividend for the current year in view of the losses.

34.11 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.

34.12 A litigation arising from the failure to honour the material payment terms by the buyers, as per agreement, in respect of an immovable property of the company, being wrongfully pursued by the buyers as a suit for specific performance against the company, is pending before the appropriate court. The company is legally advised that the case is likely to be disposed off in its favour.

34.13 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 Rs. 0.01 lakhs due to rounding off to the nearest lakhs.

34.14 The financial statements of Lakshmi Mills Company Limited were approved by the Board of Directors and authorised for issue on 28^th May 2024.

For and on behalf of the Board In terms of our report of even date

For Subbachar & Srinivasan

S. Pathy R. Santharam

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 : 28^th May 2024 Company Secretary Chief Financial Officer Membership No. 200380

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Mar 31, 2018

1 CORPORATE INFORMATION

The Lakshmi Mills Company Limited, “the Company”, is a public company domiciled in India and incorporated under the provisions of The Companies Act, 1956. Its shares are listed with BSE Limited, Mumbai. The Company is engaged in the manufacture of Yarn and trading in cloth and garments. The Company caters to both domestic and international markets.

2 EXEMPTIONS AVAILED AND MANDATORY EXCEPTIONS

These are the Company’s first financial statements prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101 - ''First-time Adoption of Indian Accounting Standards’ using transition date as April 1, 2016.

Ind AS 101 requires that all Ind AS be consistently and retrospectively applied for all fiscal years presented. The Company has prepared opening Balance Sheet on the transition date and subsequent financials based on the accounting policies set out in Note-2.

In preparing these financials, the Company has availed following exemptions in the transition from previous GAAP to Ind AS in accordance with Ind AS 101.

(i) Since there is no change in the functional currency, the Company has elected to continue with the carrying value as at 1 April 2016 for all of its property plant & equipment as recognised in its Previous GAAP financial as deemed cost at the transition date.

(ii) Upon an assessment of the estimates made under Indian GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by Indian GAAP.

(c) Rights, preferences and restrictions attached to shares

The company has issued only one class of Equity Share having par value of Rs.100 each. Each holder of Equity share is entitled to one vote per share. The Company declares dividends in Indian Rupees. The dividend proposed by the Board of directors is subject to the approval by the shareholders at the Annual General Meeting. Repayment of share capital on liquidation will be in proportion to the number of equity shares held.

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

Working Capital and Term Loan from Indian Overseas Bank and Canara Bank is secured by pari passu first charge on the fixed assets at Coimbatore. Working Capital and Term Loan from Central Bank of India is secured by first charge on fixed assets at Palldam and Kovilpatti unit.

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

Note: (i) There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 which is on the basis of such parties having been identified by the management and relied upon by the auditors. Hence, disclosures relating to amount unpaid as at year end together with interest paid/payable under this Act have not been given.

(ii) The average credit period on purchases is normally 30 days. No interest is charged on the trade payables. The Company has financial risk management policies in place to ensure that payables are paid within the pre-agreed credit terms.

Future cash flows in respect of the above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities. Management is hopeful of successful outcome in the appellate proceedings.

Disputed tax dues are appealled 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.

NOTE 3 - EMPLOYEE BENEFIT PLANS

(a) Defined Contribution Plan

The Company makes Provident 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 Rs. 129.15 Lakhs (for the year ended March 31, 2017: Rs. 144.06 Lakhs) as contribution to Provident Fund, and Rs. 53.88 Lakhs (for the year ended March 31, 2017 Rs. 53.98 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 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:

The current service cost and the net interest expense for the year are included in the ''Employee benefits expense’ line item in the statement of profit and loss.

The remeasurement of the net defined liability is included in other comprehensive income.

The retirement age of employees of the Company is 58 years.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The mortality rates considered are as per the published rates in the Indian Assured Lives Mortality (2006-08) Ult table.

Sensitivity analysis

The key actuarial assumptions to which the defined benefit plans are particularly sensitive to, are discount rate and full salary escalation rate. The sensitivity analysis below, have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The result of Sensitivity analysis is given below:

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

These plan’s typically expose the Company to actuarial risks such as: longevity risk and salary risk.

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.

Notes to the financial statements for the year ended March 31, 2018

Disclosure in respect of material Related Party Transactions during the year:

1. Purchase of goods/assets includes Lakshmi Card Clothing Manufacturing Company P Ltd Rs. 39.54 Lakhs; (Previous year Rs. 28.41 Lakhs).

2. Sale of Goods / assets include Lakshmi Card Clothing Mfg. Co.P.Ltd '' 0.83 Lakhs. (Previous year Rs. 1.01 Lakhs).

3. Receiving of Services include Balakumar Shipping & Clearing Agency P.Ltd Rs. 36.93 Lakhs (Previous year Rs. 33.24 Lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 22.84 Lakhs (Previous year Rs. 27.83 Lakhs); Major Corporate Services (India) Ltd Nil (Previous year Rs. 49.63 Lakhs); Lakshmi Card Clothing Mfg. Co. P Ltd Rs. 6.13 Lakhs (Previous year Rs. 4.69 Lakhs) and Sans Craintes Knitters '' 0.15 Lakhs (Previous year '' 0.15 Lakhs)

4. Rendering of Services include Lakshmi Card Clothing Mfg. Co. P. Ltd Rs. 12.73 Lakhs (Previous year Rs. 11.88 Lakhs); Lakshmi Automatic Loom Works Ltd Rs. 23.23 Lakhs (Previous year Rs. 21.69 Lakhs) and Sans Craintes Knitters Rs. 3.67 Lakhs (Previous year Rs. 3.45 Lakhs).

5. Remuneration to Key Managerial Personnel includes Sri S. Pathy Rs. 86.93 Lakhs (Previous year Rs. 79.55 Lakhs); Sri Aditya Krishna Pathy Rs. 55.41 Lakhs (Previous year Rs. 50.83 Lakhs); Sri N.Singaravel Rs. 12.62 Lakhs (Previous year Rs. 10.63 Lakhs); Sri V.Kannappan Rs. 24.24 Lakhs (Previous year Rs. 21.77 Lakhs)

6. Contribution to Gratuity Fund Rs. 261.90 Lakhs (Previous year Rs. 50.51 Lakhs).

7. Contribution to Superannuation Fund Rs. 17.09 Lakhs (Previous year Rs. 15.67 Lakhs).

8. Amount Receivable from other related parties includes Lakshmi Automatic Loom Works Ltd Rs. 2.00 Lakhs (Previous year Rs. 2.20 Lakhs); Balakumar Shipping & Clearing Agency P Ltd Rs. 46.25 Lakhs (Previous year Rs. 45.09 Lakhs) and Sans Craintes Knitters '' 0.70 Lakhs (Previous year '' 0.22 Lakhs)

9. Amount payable for Post retirement employee benefit plan includes The Lakshmi Mills Co. Ltd. Employees Gratuity Fund Rs. 217.56 Lakhs (Previous year Rs. 433.85 Lakhs)

10. Amount payable to other related parties include Lakshmi Card Clothing Mfg. Co. Pvt Ltd Rs. 145.59 Lakhs (Previous year Rs. 132.77 Lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 7.50 Lakhs (Previous year Rs. 1.90 Lakhs); Major Corporate Services (India) Ltd Nil (Previous year Rs. 1.29 Lakhs).

Note 4 FINANCIAL INSTRUMENTS

4.1 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)

The table below summarises the capital, net debt and net debt to equity ratio (Gearing ratio) of the Company

4.2 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 2(xvii)

The management assessed that fair values of cash and bank balances, trade receivables, other financial assets, trade payables and other financial liabilities recorded at amortised cost is considered to be a reasonable approximation of fair value.

The following methods and assumptions were used to estimate the fair values:

i) Fair values of the Company’s interest-bearing borrowings are determined by using EIR method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non- performance risk as at March 31, 2018 was assessed to be insignificant.

ii) The Company enters into derivative financial instruments with various counterparties, principally banks with investment grade credit ratings. As at March 31, 2018, the marked-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationship and other financials instruments recognised at fair value.

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). Quantitative disclosures fair value measurement hierarchy

The derivative instruments in designated hedge accounting relationships is measured at fair value at level 1, with valuation technique being use of market available inputs such as foreign exchange rates.

4.3 Financial risk management objective

The Company’s activities expose it to a variety of 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 robust 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

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements:

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 a centralised treasury 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 does not have any derivative financial instruments either for hedging or for speculation purpose.

The details of foreign currency exposures that are not hedged by any derivative instrument or otherwise are:

Foreign currency sensitivity analysis

The following table details the Company’s sensitivity to a 5% increase and decrease in the '' against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit where the '' strengthens 5% against the relevant currency will increase the profit and equity by Rs. 34.08 lakhs. For a 5% weakening of the '' against the relevant currency, there would be an equal and opposite impact on profit and equity.

Market risk - Interest rate

(i) Liabilities:

The Company’s borrowings 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.

(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 instrument will fail to perform or pay amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and 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.

In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. Credit risk on receivables is limited as the nature of the business is cash and carry except for related parties and other large number of individual customers in various geographical areas. The Company has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.

Therefore, the Company does not expect any material risk on account of non performance by any of the Company’s counterparties. The credit risk for cash and cash equivalents, bank deposits, security deposits and loans is considered negligible, since the counterparties are reputable organisations with high quality external 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 maintaining adequate support of facilities from its holding company, and by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

The Company’s treasury 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 Company.

5 First-time Ind AS adoption reconciliation

This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the Balance Sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

Note: Under previous GAAP, total comprehensive income was not reported. Therefore, the above reconciliation starts with profit under the previous GAAP.

5.1 Effect of Ind AS adoption on the statement of cash flows for the year ended March 31, 2017

There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.

5.2 Notes

(i) Under previous GAAP, the Company had adjusted government grant received against the cost of the fixed assets. Under Ind AS, government grants received for capital assets are recognised as deferred income and amortized on a systematic basis in line with Ind AS.

(ii) Under previous GAAP, certain long term borrowings (for aquisition of property, plant and equiment) were considered as intergral and were accordingly accounted. Under Ind AS, borrowings are reckoned as seperate financial liabilities and are measured at amortised cost (using effective interest method) and at fair value respectively. The effect of these (carrying values, finance costs, capitalised exchange differences and depreciation thereon) is reflected in total equity and profit or loss. Further, the effect, in case of all other borrowings measured at amortised cost, is reflected similarly in total equity and profit or loss.

(iii) Under previous GAAP, long term quoted equity investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, such non-current investments are measured at fair value through other comprehensive income. Consequently, the differences, as at the transition date and as at the end of year 2016-17, respectively between carrying value as per previous GAAP and fair value, are reflected in total equity and other comprehensive income.

(iv) Under previous GAAP, revenue is recognised when (i) significant risks and rewards of ownership is transferred (ii) no significant uncertainty exist regarding the amount of consideration and (iii) at the time of performance, it is not unreasonable to expect ultimate collection. Revenue from sale of goods is recognised when seller has transferred the property in goods to the buyer for a consideration - which in most cases results or coincides with transfer of significant risks and rewards of ownership. As per Ind AS, entity should recognise revenue to depict the transfer of promised goods or services to the customers for an amount that reflects the considerations to which the entity expects to be entitled in exchange for those goods or services.

(v) Under previous GAAP, the fixed assets of the Company were revalued and a revaluation reserve was created. Under Ind AS, the Company has adopted previous GAAP carrying value as deemed cost for PPE as on transition date and accordingly revaluation reserve has been transferred to retained earnings.

(vi) In accordance with Ind AS 109 “Financial Instruments”, transaction costs on borrowings from banks and financial institutions are required to be considered at effective finance costs and recognised in the statement of profit and loss using the effective interest rate. Consequently, transaction costs recognised in the statement of profit and loss using a different approach under the Previous GAAP has been reversed and are now recognised through the statement of profit and loss using the effective interest rate.

(vii) Under previous GAAP, Rent advance were recognised at amount paid by lessees. Under Ind AS, Rent advance are carried at amortised cost over the period of deposits.

(viii) Under previous GAAP, lease income was recognised at amount paid by the leaces. Under Ind AS, lease income arising from operating lease is recognized as income over the lease period on a straight line basis except where the periodic increase in lease rentals is in line with expected general inflation.

(ix) Under previous GAAP, proposed dividends were recognised as a provision in the financial statements, even if declared after the balance sheet date. Under Ind AS, dividends are recognised when declared. This resulted in a timing difference and has been reflected in total equity of the relevant financial years.

(x) Under previous GAAP, miminum alternate tax entitlements were classified under other non-current assets. Under Ind AS, it is classified as unused tax credits under deferred tax.

(xi) Under previous GAAP, actuarial gains and losses on employees defined benefit obligations were recognised in profit or loss. Under Ind AS, the actuarial gains and losses on re-measurement of net defined benefit obligations are recognised in other comprehensive income. This resulted in a reclassification between profit or loss and other comprehensive income.

(xii) Under previous GAAP, there was no separate record in the financial statements for Other Comprehensive Income (OCI). Under Ind AS, specified items of income, expense, gains and losses are presented under OCI.

(Xiii) Previous periods figures have been re-grouped / re-classified, wherever necessary to comply with Ind AS accounting.

6.1 Dividend

In respect of the current year, the directors propose that a dividend of Rs. 9 per share be paid subject to approval by shareholders at the Annual General Meeting on 20.09.2018 and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all shareholders on the Register of Members on 13.09.2018. The total estimated equity dividend to be paid is Rs. 62.60 lakhs. The payment of this dividend is estimated to result in payment of dividend tax of Rs. 12.87 lakhs @ 20.56% on the amount of dividends grossed up for the related dividend distribution tax.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

6.2 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

The Company has not given any loans and advances in the nature of loans given to subsidiaries, associates, firms / companies in which directors are interested.

6.3 Discontinued operations

As part of overall restructuring plans for economising operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The loss on sale of machinery during the financial year is Nil (Previous year Nil).The land rendered available for development and converted into stock in trade has a carrying amount of Rs. 10,607.93 Lakhs (Previous year Rs. 10,607.93 Lakhs).

7 The financial statements of Lakshmi Mills Company Limited were approved by the Board of Directors and authorised for issue on 18.05.2018.

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Mar 31, 2017

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

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

Working Capital and Term Loan from Indian Overseas Bank and Canara Bank is secured by pari passu first charge on the fixed assets at Coimbatore. Working Capital and Term Loan from Central Bank of India is secured by first charge on fixed assets at Palldam and Kovilpatti unit.

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

1 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.

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

2 Discontinued Operations

As part of overall restructuring plans for economizing operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The loss on sale of machinery during the financial year is '' Nil (Previous year Rs, 6.80 Lakhs).The land rendered available for development and converted into stock in trade has a carrying amount of '' 10,607.93 Lakhs (Previous year Rs, 10,607.93 Lakhs).

3 Segment Reporting

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

4 Disclosure of related parties and related party transactions Related Parties

Key Management Personnel

1. Sri S. Pathy - Chairman & Managing Director

2. Sri Aditya Krishna Pathy - Deputy Managing Director

3. Sri N.Singaravel - Company Secretary

4. Sri V.Kannappan - Chief Financial Officer Post retirement employee benefit plans

1. The Lakshmi Mills Co. Ltd. Employees Gratuity Fund

2. The Lakshmi Mills Superannuation Fund Other Related Parties

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Looms Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

5. Sans Craintes Knitters

6. Major Corporate Services (India) Ltd

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

6 Details of Specified Bank Notes (SBN) held and transacted during the period 08.11.2016 to 30.12.2016

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

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Mar 31, 2016

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

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

Working Capital and Term Loan from Indian Overseas Bank and Canara Bank are secured by pari passu first charge on the fixed assets at Coimbatore. Working Capital and Term Loan from Central Bank of India are secured by first charge on the fixed assets at Palladam and Kovilpatti units.

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

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

2. Discontinued Operations

As part of over all restructuring plans for economizing operations, the company had decommissioned one of its plants at Coimbatore in the financial year 2008-09. After relocating the viable and productive machinery to other units the substantial part of machinery rendered surplus have been disposed off. The loss on sale of machinery during the financial year is Rs. 6.80 lakhs (Previous year Rs. Nil lakhs).The land rendered available for development and converted into stock in trade has a carrying amount of Rs. 10607.93 lakhs (Previous year Rs. 10607.93 lakhs).

3. Segment Reporting

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

4. Disclosure of related parties and related party transactions Related Parties Key Management Personnel

5. Sri S. Pathy - Chairman & Managing Director

6. Sri Aditya Krishna Pathy - Deputy Managing Director Associates

7. Lakshmi Card Clothing Manufacturing Company Private Limited

8. Lakshmi Automatic Looms Works Limited

9. Balakumar Shipping & Clearing Agency Private Limited

10. Aloha Tours & Travels (India) Private Limited

11. Sans Craintes Knitters

12. Major Corporate Services (India) Ltd

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

13. Purchase of goods/assets includes Lakshmi Card Clothing Mfg. Co. Pvt Ltd Rs.45.98 lakhs; (Previous year Rs.48.98 lakhs).

14. Sale of Goods / assets include Lakshmi Card Clothing Mfg. Co.P.Ltd Rs.1.60 Lakhs. (Previous year Rs. 1.07 Lakhs).

15. Receiving of Services include Balakumar Shipping & Clearing Agency P.Ltd Rs. 20.42 lakhs (Previous year Rs. 42.28 Lakhs); Aloha Tours & Travels (India) Private Ltd Rs. 24.85 lakhs (Previous year Rs. 33.65 lakhs); Major Corporate Services (India) Ltd. Rs. 52.04 lakhs (Previous year Rs. Nil lakhs ) and Lakshmi Card Clothing Manufacturing Company P Ltd Rs. 4.73 lakhs (Previous year Rs. 4.95 lakhs).

16. Rendering of Services include Lakshmi Card Clothing Manufacturing Company P.Ltd Rs. 11.22 lakhs (Previous year Rs. 10.53 Lakhs); Lakshmi Automatic Loom Works Ltd- Rs. 20.34 lakhs (Previous year Rs. 9.80 lakhs) Sans Craintes Knitters Rs. 3.42 lakhs (Previous year Rs. 1.97 lakhs);

17. Managerial Remuneration includes Sri. S. Pathy Rs. 75.39 lakhs (Previous year Rs. 74.35 Lakhs); Sri. Aditya Krishna Pathy Rs. 43.01 lakhs (Previous year Rs. 32.04 Lakhs).

18. Interest includes Sri. Adithya Krishna Pathy Rs. Nil Lakhs (Previous year Rs. 0.28 Lakhs).

19. Amount Receivable includes Lakshmi Automatic Loom Works Ltd - Rs. 2.04 lakhs (Previous year Rs. 2.91 lakhs) and Balakumar Shipping & Clearing Agency P Ltd- Rs. 59.74 lakhs (Previous year Rs. 56.18 lakhs), Sans Craintes Knitters Rs. 0.26 Lakhs (Previous year Rs. Nil lakhs)

20. Amount payable include Lakshmi Card Clothing Manufacturing Company Pvt Ltd -Rs. 131.10 lakhs (Previous year Rs. 103.36 lakhs); Aloha Tours & Travels (India) Private Ltd -Rs. 4.84 Lakhs (Previous year Rs. 3.61 Lakhs); Major Corporate Services (india) Ltd Rs. 0.96 Lakhs (Previous year Rs. Nil Lakhs)

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Mar 31, 2015

NOTE 1 : ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

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

Contingent liabilities

Letters of Credit 1,333.16 1,323.00

Bills discounted with banks 476.84 599.81

Central Excise / Service tax disputed demands 5.63 8.42

Disputed Electricity charges 49.22 102.58

Sub Total 1,864.85 2,033.81

Commitments

Estimated amount of contracts unexecuted - - on capital account

Sub Total - -

Total 1,864.85 2,033.81

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

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

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

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

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

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

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

1.4 Discontinued Operations

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

1.5 Segment Reporting

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

1.6 Disclosure of related parties and related party transactions Related Parties

Associates

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Looms Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

5. Sans Craintes Knitters Key Management Personnel

1. Sri S. Pathy - Chairman & Managing Director

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

Note: Related party relationships are as identified by the management

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

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

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

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

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

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

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

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

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

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

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

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Mar 31, 2013

1 CORPORATE INFORMATION

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

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

2.2 Discontinuing Operations

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

2.3 Segment Reporting

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

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

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Looms Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

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

1. Sri S. Pathy

2. Sri Aditya Krishna Pathy

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

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

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

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

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

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Mar 31, 2012

1 CORPORATE INFORMATION

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

Particulars 31.3.2012 31.3.2011

(Rs. in lakhs)

NOTE 2 : ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

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

Contingent liabilities

Letters of Credit 361.56 77.72

Bills discounted with banks 50.03 -

Central Excise / Service tax disputed demands 8.71 7.71

Income tax disputed demand - 70.01

Sub Total 420.30 155.44

Commitments

Estimated amount of contracts unexecuted on capital account - 146.40

Sub Total - 146.40

Total 420.30 301.84

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

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

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

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

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

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

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

2.3 Discontinuing Operations

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

2.4 Segment Reporting

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

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

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Loom Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

Key Management Personnel

1. Sri S. Pathy

2. Sri Aditya Krishna Pathy

Note: Related party relationships are as identified by the management

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

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

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

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

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

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

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

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

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

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

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

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

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Mar 31, 2011

1 Contingent Liability

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

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

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

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

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

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

5 Segment Reporting

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

6 Disclosure of related parties and related party transactions:

Related parties Associates :-

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Loom Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

4. Aloha Tours & Travels (India) Private Limited

Key Management Personnel

1. Sri S. Pathy

2. Sri Aditya Krishna Pathy

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

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

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

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

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

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

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

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

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

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

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

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Mar 31, 2010

1 Contingent Liability

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

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

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

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

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

4 Segment Reporting

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

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

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

Associates :-

1. Lakshmi Card Clothing Manufacturing Company Private Limited

2. Lakshmi Automatic Loom Works Limited

3. Balakumar Shipping & Clearing Agency Private Limited

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

1. Sri. K. Sundaram

2. Sri. S. Pathy

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

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