Concentration of Risk

In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. Trade receivables consists of a large number of customers in various industries and geographical areas. Based on historical information about customer default rates management considers the credit quality of trade receivables that are not past due or impaired to be good. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

The company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows.

The company has issued only one class of Equity share having a par value of C10 per share. They entitle the holder to participate in dividends, and to share in the proceeds of winding up the company in proportion to the number of and amounts paid on the shares held. Every holder of equity shares present at meeting is entitled to one vote, and each share is entitled to one vote.

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

The company has elected to recognise changes in fair value of investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI reserve which represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off..

In financial year 2023-24, on 10.08.2023 a dividend of C98.50 per share (Total dividend C 105.23 Crores) was paid to the holders of fully paid equity shares.

In respect of the year ended 31^st March 2024 the directors propose that a dividend of C75 per share be paid on fully paid equity shares. This equity dividend is subject to approval by shareholders at the ensuing Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend payable is C80.12 Crores.

The provision for employee benefits include provision for gratuity and leave encashment. For detailed disclosure on the same, please refer note no. 30.9

The Company gives warranties for its products undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. The provision for warranty claims represents the present value of the Management's best estimate of the future outflow of economic benefits that will be required under the company's obligations for warranties under sale of goods legislations. The estimate has been made on the basis of historical warranty trends and may vary as a result of new materials, altered manufacturing processes or other events affecting product quality. The timing of the outflows is expected to be within a period of one year.

Disaggregation of Revenue

Refer note no. 30.10 for disaggregated revenue information. The Management determines that the segment information reported is sufficient to meet the disclosure objective with respect to disaggregation of revenue under Ind AS 115 "Revenue from contracts with customers".

30.3 Disclosure as per Schedule III

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

30.4 Financial Instruments Capital Management

The company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders. The capital structure of the company consists of only total equity and no debts. The company is not subject to any externally imposed capital requirements. Net debt to equity ratio or gearing ratio is not applicable since the company has no external debts.

iii) Fair Value of financial assets and liabilities measured at amortised cost

For trade receivables and trade payables and other assets and payables maturing within one year from the balance sheet date, the carrying amounts approximate the fair value due to the short maturity of these instruments.

Other companies/firms in which directors or their relatives are interested

Alampara Hotels and Resorts Private Limited, Chakradhara Aerospace and Cargo Private Limited, Chakradhara Agro Farms Private Limited, Dhanajaya Agro Farms Private Limited, Dhanuprabha Agro Private Limited, Eshaan Enterprises Private Limited, Harshni Textiles Private Limited, Hermes Academy of Training Private Limited, Lakshmi Caipo Industries Limited, Lakshmi Card Clothing Mfg Co. Private Limited, Lakshmi Cargo Company Limited, Lakshmi Electrical Control Systems Limited, Lakshmi Electrical Drives Private Limited, Lakshmi Energy and Environment Designs Private Limited, Lakshmi Life Sciences Private Limited, Lakshmi Precision Technologies Limited, Lakshmi Ring Travellers (Coimbatore) Private Limited, LCC Cargo Holdings Private Limited, Lakshmi Technology and Engineering Industries Limited, Mahalakshmi Engineering Holdings Private Limited, Petrus Techonologies Private Limited, Quattro Engineering India Private Limited, Rajalakshmi Engineering, Revantha Agro Farms Private Limited, Revantha Services Private Limited, Shri Kara Engineering Private Limited, Sowbarnika Enterprises Private Limited, Sri Dwipa Properties Private Limited, Sri Kamakoti Kamakshi Enterprises Private Limited, Starline Travels Private Limited, Sudhasruthi Agro Private Limited, Super Sales India Limited, Supreme Dairy Products India Private Limited, The Lakshmi Mills Company Limited, Titan Paints & Chemicals Private Limited, Venkatavaradhaa Agencies Private Limited, Waterfield Financial and Investment Advisors Private Limited, CACPL Global Logistics, Imperium Global FZE, Lakshmi Global, Lakshmi Global FZE.

1. Purchase of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd C0.02 Crores (Previous Year C0.31 Crores); LMW Global FZE C90.83 Crores (Previous Year C70.47 Crores); Lakshmi Electrical Control Systems Limited C295.71 Crores (Previous Year C299.30 Crores); Lakshmi Electrical Drives Private Limited C83.51 Crores (Previous Year C93.60 Crores); Lakshmi Life Sciences Private Limited C124.66 Crores (Previous Year C 139.53 Crores); Lakshmi Precision Technologies Limited C73.25 Crores (Previous Year C75.58 Crores) & Other related parties-Associates C82.72 Crores (Previous Year C 106.56 Crores)

2. Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd C23.16 Crores (Previous Year C 109.99 Crores); LMW Global FZE C 155.02 Crores (Previous Year C97.22 Crores); & Other related parties - Associates C81.57 Crores (Previous Year C64.43 Crores)

3. Purchase of Fixed Assets includes Revantha Services Private Limited C22.38 Crores (Previous Year C20.13 Crores)

4. Sale of Fixed Assets includes LMW Global FZE C0.22 Crores (Previous Year C0.22 Crores); Super Sales India Limited C0.11 Crores (Previous Year C0.10 Crores) & Other related parties - Associates C Nil (Previous Year C0.52 Crores)

5. Rendering of Services includes LMW Textile Machinery (Suzhou) Co. Ltd C0.34 Crores (Previous Year C6.01 Crores); Super Sales India Limited C0.24 Crores (Previous Year C0.41 Crores); Chakradhara Aerospace and Cargo Private Ltd C0.34 Crores (Previous Year C0.34 Crores); Lakshmi Life Sciences Private Limited C0.76 Crores (Previous Year C0.14 Crores); Petrus Technologies Private Limited C0.32 Crores (Previous Year C0.18 Crores) & Others - Other related parties-Associates C0.10 Crores (Previous Year C0.13 Crores)

6. Receiving of Services includes LMW Textile Machinery (Suzhou) Co. Ltd C0.22 Crores (Previous Year Nil); Chakradhara Aerospace and Cargo Private Ltd C110.39 Crores (Previous Year C153.77 Crores); Revantha Services Private Ltd C46.39 Crores (Previous Year C26.54 Crores) & Other related parties-Associates C59.85 Crores (Previous Year C47.12 Crores)

7. Contribution to gratuity fund includes Lakshmi Machine Works Limited Employees' Gratuity Fund C4.72 Crores (Previous Year C0.79 Crores)

8. Agency arrangement includes Super Sales India Limited C25.21 Crores (Previous Year C21.76 Crores)

9. Managerial Remuneration includes amount paid to Chairman and Managing Director, Sri Sanjay Jayavarthanavelu C21.75 Crores (Previous Year C22.53 Crores); Sri Jaidev Jayavarthanavelu, Wholetime Director C0.63 Crores (Previous Year C Nil); Mr. M.Sankar, Director Operations w e f: 25^th October 2023 C0.67 Crores (Previous Year C Nil); Mr. K.Soundhar Rajhan, Director Operations (until 31^st

July 2023) C0.58 Crores (Previous Year C 1.56 Crores); Mr. V.Senthil, Chief Financial Officer C0.83 Crores (Previous Year C0.75 Crores); Mr. C R Shivkumaran, Company Secretary C0.51 Crores (Previous year C0.48 Crores)

10. Outstanding Payables include LMW Textile Machinery (Suzhou) Co. Ltd C3.50 Crores (Previous Year C3.26 Crores); LMW Global FZE C 16.34 Crores (Previous Year C22.02 Crores); Lakshmi Electrical Control Systems Limited C51.25 Crores (Previous Year C33.60 Crores); Lakshmi Electrical Drives Private Limited C14.27 Crores (Previous Year C10.00 Crores); Super Sales India Limited C21.50 Crores (Previous Year C20.83 Crores); Lakshmi Life Sciences Private Limited C19.06 Crores (Previous Year C4.74 Crores); Sri.Sanjay Jayavarthanavelu C19.17 Crores (Previous Year C 19.96 Crores) & Other related parties-Associates C33.81 Crores (Previous Year C25.77 Crores)

11. Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd C34.53 Crores (Previous Year C54.38 Crores); LMW Global FZE C46.24 Crores (Previous Year C38.50 Crores); Lakshmi Electrical Control Systems Limited C3.25 Crores (Previous Year C 10.03 Crores); Chakradhara Aerospace and Cargo Private Limited C8.90 Crores (Previous Year C Nil); Lakshmi Life Sciences Private Limited C7.19 Crores (Previous Year C1.37 Crores); Petrus Technologies Private Limited C4.76 Crores (Previous Year C0.07 Crores); Reventha Services Private Limited C3.30 Crores (Previous Year C Nil) & Others - Other related parties - Associates C5.47 Crores (Previous Year C 10.70 Crores)

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

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

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

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

The company expects to make a contribution of C3 Crores (as at 31^st March 2024: C4.72 Crores) to the defined benefit plans during the next financial year.

The above sensitivity analysis are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance sheet.

J. Brief description of the plans & risks

These plans typically expose the company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk

The present value of the defined benefit plan liability is calculated using a discount which is determined by reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, other debt instruments and equity shares of listed companies.

Interest Rate risk

A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan's debt investments, if any.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Products and services from which reportable segments derive their revenues.

Information reported to the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the type of goods or services delivered or provided. The company has chosen to organise the company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the company.

Specifically, the Company is organised into three main reportable segments viz.,(1) Textile Machinery Division (2) Machine Tool Division & Foundry Division and (3) Advanced Technology Centre.

1) The accounting policies of the reportable segments are the same as the company's accounting policies. Inter Segment transfers are accounted on cost plus basis vis-a-vis at competitive market price charged to unaffiliated customers for similar goods.

2) Segment profit represents the profit before tax earned by each segment without allocation of unallocable expenses, finance costs and unallocable income. This is the measure reported to the Chief Operating Decision Maker for the purposes of resource allocation and assessment of segment performance.

3) Segment Revenue, Segment Result, Segment Asset and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

Information about major customers

There is no single customer contributing to 10% or more to the company's revenue for both 2023-24 and 2022-23.

The company operates in two principal geographical area, India (country of domicile) and outside India.

The company's revenue from external customers based on location of customers is as per the table below:

Revenue from contracts with customers are disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company identifies the product lines, amongst others to indicate the factors. The details of revenue from contracts with customers on the basis of various product lines

The company derives revenue primarily from the sale of Textile Machinery, Machine Tools, Accessories and parts, Casting and Aero space Components.

Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.

Arrangements with customer for sale of above-mentioned products or services are on fixed price. Revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services.

Revenue on fixed price contract are recognised at the time of dispatch of goods. Till then the consideration received is accounted as 'Advance received' shown under financial liabilities. Control over the goods passed to the customer at the time of dispatch of the goods at the company's factory.

The expected cost of warranty issued is accounted as provision. The contract with customer are entered between the company and the end customer. The company is primarily responsible for honouring the contract entered with customer. Since the company acts as a "Principal" for the contracts entered into through selling agent the revenue is to be recognized in gross by the company.

Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.

30.14 Financial Risk Management Objectives

The Company's activity exposes itself to variety of financial risk which includes market risk, credit risk, liquidity risk, interest rate risk and price risk. The Company monitors and manages the above financial risks relating to the operations of the company through internal risk reports which analyses exposures by degree and magnitude of risks. The primary focus is to identify risks and take steps for mitigation of risk or to minimise the potential adverse effects on the financial performance of the Company. The Company does not enter into any derivative financial instruments to hedge risk exposures.

Foreign Currency Risk

The Company undertakes transactions denominated in foreign currencies and consequently has exposure to exchange rate fluctuations. The company operates internationally and a major portion of the international sales transaction are in USD and balance in EUR, purchases from overseas suppliers are in various foreign currencies. The exposure at the end of the reporting period does not reflect the transaction during the year and there is a natural hedge in the currency for USD and EUR. The exchange rate between INR and other currency does have an impact on the business. The company is a net exporter and export realisation combined with a depreciating INR has given the company a net foreign exchange gain.

These exchange rate exposures are not hedged by the Company. The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:-

Price risk - Holding marketable financial assets expose the company to risk of price fluctuation. Price escalations will have insignificant impact on carrying amounts of respective financial assets. However, the Company is exposed to equity price risks from equity investments. Certain of the Company's equity investments are held for strategic rather than trading purposes.

Price sensitivity analysis

The sensitivity analysis for equity price risk is conducted by assuming a range of equity price changes, which involves a 5% increase or decrease in equity prices. Additionally, we take into account other relevant factors such as changes in equity prices for different equity markets and individual equity securities, correlations between these markets and securities, and the holding period.

Credit risk - Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents and outstanding receivables.

Credit risk arises from the risk of default on its obligation by the counterparty resulting in financial loss, such as cash and cash equivalents and outstanding receivables.

Credit risk on outstanding receivables is the exposure to billed receivable and are normally unsecured and derived from revenue earned from customer mostly from India. Credit risk is managed by the company through credit approvals and continuously monitoring the credit worthiness of the customer to which the company grants credit in the normal course of business. The company applied simplified approach of estimated credit loss for trade receivable, which provide for expected credit loss based on life-time expected losses. Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The Company does not have any significant credit risk exposure to any single counterparty.

The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.

Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The company's principal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does not have any external borrowings from banks or any other financial institution. The company believes that the working capital through internal accruals is sufficient to meet its current requirements and hence the Company does not perceive any such risk.

Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

Equity Price risk

Equity Price risk is related to the change in market reference price of the investments in equity securities. The fair value of some of the Company's investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company's investment in quoted equity securities as of 31^st March 2024 and 31^st March 2023 was C264.52 Crores and C169.77 Crores respectively.

A 5% change in equity price as of 31^st March 2024 and 31^st March 2023 would result in an impact of C 13.23 Crores and C8.49 Crores respectively.

(Note: The impact is indicated on equity before consequential tax impact, if any).

Capital management

The company's objective is to safeguard its financial stability, financial independence and its ability to continue as a going concern in order to generate returns for the shareholders and benefits for the other stake holders. The company incentivise the shareholders by paying optimum and regular dividends.

The Company determines the amount of capital required on the basis of annual operating plans and other strategic investment plans. The funding requirements are met through internally generated funds . The Company does not have any borrowings in its capital portfolio.

30.15 Revenue Expenditure on Research & Development of Textile Machinery Division amounting to C30.11 Crores (FY 2022-23 C35.95 Crores) and for Machine Tool Division amounting to C 4.86 Crores (FY 2022-23 C15.89 Crores) has been charged to Statement of Profit and Loss and Capital expenditure relating to Research and Development for Textile Machinery Division amounting to C4.98 Crores (FY 2022-23 C4.31 Crores ) and for Machine Tool Division amounting to C Nil (FY 2022-23 C Nil) has been included in Fixed Assets.

30.16 Additional regulatory information required by Schedule III

i) Details of benami property held

No proceedings have been initiated on or pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii) Wilful Defaulter

The company had not been declared a wilful defaulter by any bank or Financial Institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines of the wilful defaulter issued by the Reserve Bank of India.

iv) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

v) Compliance with approved scheme(s) of arrangements

No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013.

vi) Utilisation of borrowed funds

The Company does not have borrowed funds.

vii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

viii) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

ix) Valuation of Property, Plant & Equipment, intangible asset and investment property

The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.