Thanks for your reply David.
We were trying a few tests and it seems that if we boot a guest with VT-x disabled in BIOS, 'cat /proc/cpuinfo | grep lm' in the guest has no output. This means that ESX doesnt pass the lm flag to the vcpu when VT-X is disabled in BIOS. However, for a guest running when VT-x enabled in BIOS, 'cat /proc/cpuinfo | grep lm' in the guest does show the lm flag.