LMW Machinery Limited, a wholly-owned subsidiary of Lakshmi Machine Works (LMW), will be merged with it this year.
At a meeting held on Monday, the board of directors of textile machinery manufacturing company LMW approved the scheme of amalgamation for the merger with effect from April 1, 2012, subject to the approval of High Court and such other approvals.
R. Rajendran, Director (Finance) of LMW, told The Hindu that LMW acquired Rieter’s shares in Rieter-LMW Machinery Ltd. (RLM), a 50:50 EoU (export oriented unit) joint venture, in August last year and RLM was known as LMW Machinery Limited from September 2011.
LMW had two subsidiaries — LMW Machinery Limited and LMW Textile Machinery, Suzhou, China. The merger of LMW Machinery was mainly for administrative convenience and to control overhead costs. It would not have any financial impact. The procedures would be completed by the end of this financial year. The subsidiary was a 100 per cent EoU earlier. From April 1, 2012, it was catering to domestic and export markets. It made ring frames mainly for the domestic market and some models of the frame for the export market.
LMW saw the net profit decline to Rs.31 crore during the first three months of this financial year compared to Rs.41.14 crore for the same period last year.