2.18 Provisions, contingent liabilities and contingent
assets

Provisions involving substantial degree of estimation in
measurement are recognised when there is a present
obligation as a result of past events and it is probable that there
will be an outflow of resources. Contingent liabilities / assets
are not recognised but are disclosed in the notes to financial
statements when an inflow of economic benefits is probable.
Provisions, contingent liabilities are reviewed at each balance
sheet date and adjusted to reflect the current best estimate.

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 is the present value
of those cash flows (when the effect of the time value of money
is material).

Present obligations, legal or constructive, arising under onerous
contracts are recognised and measured as provisions.

An onerous contract is considered to exist where the company
has a contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic
benefits expected to be received from the contract.

Provisions for the expected cost of warranty obligations are
recognised at the date of sale of the relevant products, at the
management's best estimate of the expenditure required to
settle the company's obligation.

2.19 Cash Flow Statement and Cash and Cash equiv¬
alents

Cash Flows are reported using Indirect method, whereby profit
before tax is adjusted for the effects of transactions of non-cash
nature, any deferrals or accruals of past or future operating
cash receipts or payments and items of income or expense
associated with investing or financing cash flows. Cash and
cash equivalents include cash on hand and balances with banks
in current and deposit accounts.

2.20 Segment Reporting

An operating segment is a component of the company that
engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate
to transactions with any of the company's other components,
and for which discrete financial information is available. All
operating segments' operating results are reviewed regularly
by the company's Chief Executive Officer (CEO), who is the

Chief Operating Decision Maker (CODM), to make decisions
about resources to be allocated to the segments and assess
their performance. Information reported to the CODM for the
purpose of resource allocation and assessment of segment
performance focuses on the type of goods or services delivered
or provided.

The company has three reportable segments, viz., Textile
Machinery Division, the Machine Tool Division / Foundry and
the Advanced Technology Centre, which are the company's
strategic business units. These business units offer different
products and services and are managed separately because
they require different technology and marketing strategies.
For each of these business units, the company's CODM reviews
internal management reports. Performance is measured
based on segment profit before tax, as included in the internal
management reports, that are reviewed by the company's
CODM. Segment profit is used to measure performance as
management believes that such information is the most
relevant in evaluating the results of certain segments relative
to other entities that operate within these industries. Inter¬
segment pricing is determined on arm's length basis.

2.21 Leases

The company as a Lessee

The Company's lease asset class primarily consists of leases for
land and buildings. The Company assesses whether a contract
contains a lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right
to control the use of an identified asset, the Company assesses
whether:

i) the contract involves the use of an identified asset

ii) the lessee has substantially all of the economic benefits
from use of the asset through the period of the lease and

iii) the lessee has the right to direct the use of the asset.

At the date of commencement of the lease, the Company
recognises a right-of-use asset ("ROU") and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short-term and low
value leases, the Company recognises the lease payments as
an operating expense on a straight-line basis over the term of
the lease.

If lease arrangements include the options to extend or
terminate the lease before the end of the lease term, then
ROU assets and lease liabilities include these options when it is
reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement
date using written down value method. Right of use assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to
sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are
largely independent of those from other assets. In such cases,
the recoverable amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortised cost at the
present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if
not readily determinable, using the incremental borrowing rates
in the country of domicile of these leases. Lease liabilities are re¬
measured with a corresponding adjustment to the related right
of use asset if the Company changes its assessment if whether it
will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in
the Balance Sheet and lease payments have been classified as
financing cash flows.

In case of short-term leases or leases for which underlying asset
is of low value, the Company recognises the lease payments as
an expense on a straight-line basis over the lease term.

The Company as a lessor

Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.

When the Company is an intermediate lessor, it accounts for
its interests in the head lease and the sublease separately. The
sublease is classified as a finance or operating lease by reference
to the right of-use asset arising from the head lease.

For operating leases, rental income is recognised on a straight¬
line basis over the term of the relevant lease.

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.

In financial year 2025-26, on 14.08.2025 a dividend of C30 per share (Total dividend C32.05 Crores) was paid to the holders of fully
paid equity shares.

In respect of the year ended 31^st March 2026 the directors propose that a dividend of C35 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 C37.39 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.

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 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.

30.5 Exceptional Items

Exceptional items represents

a. Compensation towards Voluntary Retirement Scheme opted by Employees C1.68 Crores (Previous year C Nil)

b. Statutory impact of New Labour Codes:Effective from 21^st November 2025, the Government of India has consolidated
multiple existing labour laws into a unified framework comprising four Labour codes collectively referred to as 'New Labour
Codes'. Under Ind AS 19 and as per the guidance issued by the ICAI, changes to employee benefit plans arising from legislative
amendment constitute a plan amendment, requiring recognition of past service cost immediately in the statement of profit
and loss. The New Labour Codes has resulted in estimated one time increase in provision for employee benefits of C 11.50

1 Purchase of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd, China C0.32 Crores (Previous Year C0.06 Crores); LMW
Global FZE, UAE C Nil (Previous Year C7.72 Crores); Lakshmi Electrical Control Systems Limited C162.76 Crores (Previous Year
C161.10 Crores); Lakshmi Electrical Drives Private Limited C38.69 Crores (Previous Year C38.59 Crores); Lakshmi Life Sciences
Private Limited C57.71 Crores (Previous Year C55.64 Crores) & Other related parties-Associates C69.76 Crores (Previous Year
C81.24 Crores)

2 Sale of Goods includes LMW Textile Machinery (Suzhou) Co. Ltd, China C0.13 Crores (Previous Year C22.67 Crores); LMW Global
FZE, UAE C142.85 Crores (Previous Year C81.44 Crores); Lakshmi Electrical Control Systems Limited C9.30 Crores (Previous
Year C9.5 Crores); Lakshmi Life Sciences Private Limited C7.24 Crores (Previous Year C5.3 Crores); Super Sales India Limited
C13.76 Crores (Previous Year C11.61 Crores); Lakshmi Precision Technologies Limited C6.12 Crores (Previous Year C6.62 Crores);
Adwaith Lakshmi Industries Private Limited C 9.20 Crores (Previous Year C Nil) & Other related parties - Associates C1.56 Crores
(Previous Year C0.89 Crores)

3 Purchase of Fixed Assets includes Revantha Services Private Limited C8.33 Crores (Previous Year C26.95 Crores); GKD Charity
Trust C 18.30 Crores (Previous Year C Nil)

4 Sale of Fixed Assets includes LMW Textile Machinery (Suzhou) Co. Ltd, China C Nil (Previous Year C0.37 Crores); Lakshmi Life
Sciences Private Limited C4.85 Crores (Previous Year C0.004 Crores); Chakradhara Aerospace and Cargo Private Limited C3.25
Crores (Previous Year C Nil); Revantha Services Private Limited C7.19 Crores (Previous Year C Nil); Super Sales India Limited-C Nil
(Previous Year C0.065 Crores)

5 Rendering of Services includes travel and other cost reimbursement amounting to C5.72 Crores incurred by the company
on behalf of the group entity and recovered at actuals. It includes LMW Textile Machinery (Suzhou) Co. Ltd, China C0.09
Crores (Previous Year C1.13 Crores); LMW Global FZE, UAE C5.73 Crores (Previous Year C0.06 Crores); Super Sales India Limited
C0.17 Crores (Previous Year C0.3 Crores); Chakradhara Aerospace and Cargo Private Limited C0.39 Crores (Previous Year C0.51
Crores); Lakshmi Life Sciences Private Limited C0.37 Crores (Previous Year C0.55 Crores); Petrus Technologies Private Limited
C0.37 Crores (Previous Year C0.37 Crores) & Other related parties-Associates C0.24 Crores (Previous Year C0.06 Crores)

6 Receiving of Services includes LMW Global FZE, UAE C Nil (Previous Year C1.11 Crores); Chakradhara Aerospace and Cargo
Private Limited C85.86 Crores (Previous Year C80.97 Crores); Revantha Services Private Limited C40.20 Crores (Previous Year
C39.16 Crores); Petrus Technologies Private Limited C20.37 Crores (Previous Year C30.92 Crores) & Other related parties-
Associates C29.73 Crores (Previous Year C30.07 Crores)

7 Contribution to Gratuity Fund includes LMW Limited Employees' Gratuity Fund C15 Crores (Previous Year C3.68 Crores)

8 Agency arrangement includes Super Sales India Limited C11.70 Crores (Previous Year C12.98 Crores)

9 Managerial Remuneration includes amount paid to Chairman and Managing Director, Sri. Sanjay Jayavarthanavelu C15.77
Crores (Previous Year C7.59 Crores); Sri. Jaidev Jayavarthanavelu CNil (Previous Year C0.56 Crores); Mr. M.Sankar, Director
Operations C1.61 Crores (Previous Year C1.74 Crores); Mr. V.Senthil, Chief Financial Officer C0.78 Crores (Previous Year C0.82
Crores); Mr. C R Shivkumaran, Company Secretary C0.57 Crores (Previous Year C0.54 Crores)

10 Investment in shares-LMW Holding Limited,UAE (WOS) C171.51 Crores (Previous Year C205.85 Crores)

11 Sale of Investment in shares of Super Sales India Limited includes sale to Chairman and Managing Director, Sri. Sanjay
Jayavarthanavelu C7 Crores (Previous Year CNil); Ms. Shivali Jayavarthanavelu C5 Crores (Previous Year CNil); Quattro
Engineering India Private Limited C3 Crores (Previous Year C Nil) & Revantha Services Private Limited C6.75 Crores (Previous

Year C Nil). Sale of Investment in Shares of wholly owned subsidiary includes LMW Textile Machinery (Suzhou) Co., Ltd. China
CNil (Previous Year C106.50 Crores) & LMW Global FZE, UAE CNil (Previous Year C95.36 Crores)

12 Outstanding Payables include LMW Textile Machinery (Suzhou) Co. Ltd, China C3.88 Crores (Previous Year C3.56 Crores); LMW
Global FZE, UAE C5.20 Crores (Previous Year C6.20 Crores); Lakshmi Electrical Control Systems Limited C53.93 Crores (Previous
Year C40.92 Crores); Super Sales India Limited C14.87 Crores (Previous Year C16.92 Crores); Chakradhara Aerospace and Cargo
Private Limited C18.61 Crores (Previous Year C8.45 Crores); Chairman and Managing Director - Sri. Sanjay Jayavarthanavelu
C8.94 Crores (Previous Year C5.09 Crores) & Other related parties-Associates C45.69 Crores (Previous Year C45.06 Crores)

13 Outstanding Receivables include LMW Textile Machinery (Suzhou) Co. Ltd, China C12.91 Crores (Previous Year C20.74 Crores);
LMW Global FZE, UAE C109.79 Crores (Previous Year C58.32 Crores); Adwaith Lakshmi Industries Private Limited C4.56
Crores (Previous Year CNil); Lakshmi Electrical Control Systems Limited C6.11 Crores (Previous Year C4 Crores); Chakradhara
Aerospace and Cargo Private Limited C10 Crores (Previous Year C3.25 Crores); Lakshmi Precision Technologies Limited C3.94
Crores (Previous Year C1.21 Crores) & Other related parties - Associates C9.72 Crores (Previous Year C11.32 Crores)

Gratuity is applicable to all employees of the company as per New Labour Code 2025. 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 C5.00 Crores (as at 31^st March, 2026: C15 Crores) to the defined benefit plans
during the next financial year.

30.10 Segment information

Products and services from which reportable segments derive their revenues

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

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

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

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such,
an increase in the salary of the plan participants will increase the plan's liability.

Notes :

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

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

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

Information about major customers

There is no single customer contributing to 10% or more to the company's revenue for both 2025-26 and 2024-25.

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

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

30.14 Financial Risk Management Objectives

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

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.

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 on cash and cash equivalents is considered negligible as the company generally invests in fixed deposits with reputable
banks. They are not impaired or past due for each of the reporting dates.

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

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

Liquidity risk - Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The company's principal source of liquidity is from cash and cash equivalent and the cash flow from operations. The company does
not have any external borrowings from banks or any other financial institution. The company believes that the working capital
through internal accruals is sufficient to meet its current requirements and hence the Company does not perceive any such risk.

Market risk

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 2026 and 31^st March 2025 was C267.44 Crores and C315.89 Crores respectively.

A 5% change in equity price as of 31^st March 2026 and 31^st March 2025 would result in an impact of C 13.37 Crores and C 15.79
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 C45.59 Crores
(FY 2024-25 C47.12 Crores) and for Machine Tool Division amounting to C13 Crores (FY 2024-25 C7.77 Crores) has been
charged to Statement of Profit and Loss and Capital expenditure relating to Research and Development for Textile
Machinery Division amounting to C0.01 Crores (FY 2024-25 C1.63 Crores) and for Machine Tool Division amounting to
C Nil (FY 2024-25 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 are pending against the company for holding benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

ii) Wilful Defaulter

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

iii) Relationship with struckoff companies - Nil

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.