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Notes to Accounts of Lancor Holdings Ltd.

Mar 31, 2015

1.Notes on Scheme of Amalgamation with Lancor GST Developments Limited and Lancor Realty Limited

The Scheme of Amalgamation of Lancor GST Developments Limited (LGSTDL) and the Lancor Realty Limited (LRL) with the Company was sanctioned by the High Court of Judicature of Madras vide its order dated March 31, 2015. The Appointed Date of the amalgamation is April 1, 2013, while it became effective on April 15, 2015.

A) Amalgamation of Lancor GST Developments Limited (LGSTDL) with the Company

a) LGSTDL was engaged in the business of real estate development and was a wholly owned subsidiary of the Company.

b) Pursuant to the Scheme of Amalgamation in accordance with section 391 - 394 of the Companies Act, 1956 as approved by the shareholders of the Company and subsequently sanctioned by the High Court of Judicature of Madras vide their order dated March 31, 2015, LGSTDL has been amalgamated and all assets and liabilities are transferred to and vested in the Company with effect from April 1, 2013 (the Appointed Date).

c) During the transition period i.e. from the Appointed Date to the Effective Date, LGSTDL carried on the aforesaid business activities including all statutory compliances in "trust" in its own name but for and on behalf of the Company. The transactions carried out by LGSTDL during the aforesaid period have been incorporated in the books of the Company on sanctioning of the said Scheme.

d) The said scheme has been given effect to in the accounts under the "Pooling of Interest Method" as prescribed by the Accounting Standard 14 on Amalgamation as prescribed under section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies Accounts (Rules), 2014.

e) In accordance with the scheme, the assets and liabilities, securities premium and revaluation reserve of LGSTDL as at April 1, 2013 along with subsequent additions and deletions up to March 31, 2014 have been recorded at their book values. In terms of Scheme of amalgamation, as the LGSTDL is a wholly owned subsidiary of the Company, it has not issued any shares. Accordingly, equity share capital of LGSTDL and investments in equity shares of LGSTDL has been adjusted and the resultant balance amount of Rs. 87,50,349 has been adjusted to general reserve of the Company. Similarly the contingent liability as on appointed date also for the period appointed date to March 31, 2014 is disclosed.

f) The profit or loss of LGSTDL from appointed date April 1, 2013 to March 31, 2014 have been trans- ferred to Surplus/(deficit) in the statement of profit and loss of the Company. The operations of the LGSTDL during the year April 1, 2014 to March 31, 2015 have been accounted for in the current year's statement of profit and loss of the Company. The debit balance in the Surplus/(deficit) in the statement of profit and loss of LGSTDL as at April 1, 2014 amounting to Rs. 20,50,96,903 has been included in the Surplus/(deficit) in the statement of profit and loss of the Company.

g) The Company is in the process of transferring the documents, agreements, title deeds for the proper- ties, balance in staff benefit schemes etc. in its own name.

B) Amalgamation of Lancor Realty Limited (LRL) with the Company

a) LRL was engaged in the business of brokerage from sale or renting of immovable property and was a wholly owned subsidiary of the Company.

b) Pursuant to the Scheme of Amalgamation in accordance with section 391 - 394 of the Companies Act, 1956 as approved by the shareholders of the Company and subsequently sanctioned by the High Court of Judicature of Madras vide their order dated March 31, 2015, LRL has been amalgamated and all assets and liabilities are transferred to and vested in the Company with effect from April 1, 2013 (the Appointed Date).

c) During the transition period i.e. from the Appointed Date to the Effective Date, LRL carried on the aforesaid business activities including all statutory compliances in "trust" in its own name but for and on behalf of the Company. The transactions carried out by LRL during the aforesaid period have been incorporated in the books of the Company on sanctioning of the said Scheme.

d) The said scheme has been given effect to in the accounts under the "Pooling of Interest Method" as prescribed by the Accounting Standard 14 on Amalgamation as prescribed under section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies Accounts (Rules), 2014.

e) In accordance with the scheme, the assets and liabilities of LRL as at April 1, 2013 along with subsequent additions and deletions up to March 31, 2014 have been recorded at their book values. In terms of Scheme of amalgamation, as the LRL is a wholly owned subsidiary of the Company, it has not issued any shares. Accordingly, equity share capital of LRL and investments in equity shares of LRL has been adjusted and as the resultant difference amount is zero, no amount has been adjusted to general reserve of the Company. Similarly the contingent liability as on appointed date also for the period appointed date to March 31, 2014 is disclosed.

f) The general reserve and the profit or loss of LRL from appointed date April 1, 2013 to March 31, 2014 have been transferred to general reserve and Surplus/(deficit) in the statement of profit and loss of the Company respectively. The operations of the LRL during the year April 1, 2014 to March 31, 2015 have been accounted for in the current year's statement of profit and loss of the Company. The general reserve balance and credit balance in the Surplus/(deficit) in the statement of profit and loss of LRL as at April 1, 2014 amounting to Rs. 3,20,511 and Rs. 2,82,69,109 respectively has been included in the general reserve and Surplus/(deficit) in the statement of profit and loss of the Company.

g) The Company is in the process of transferring the documents, agreements, title deeds for the proper- ties, balance in staff benefit schemes etc. in its own name.

2. Gratuity benefit plans

(i) The Company has one defined benefit plan with respect to gratuity for its employees. Under the gratuity plan, every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the payment of Gratuity Act, 1972 and the same is payable at the time of separation from the Company or retirement whichever is earlier.

(ii) The present value of the defined benefit obligations and the related current service cost were measured using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date.

(iii) The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

3. Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on office building. The lease has a life of five years with renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases. Rental expenses debited to Statement of profit & loss amounting to Rs 34,42,170 (March 31, 2014: Rs.38,20,076)

Operating lease: Company as less or

The Company has entered into commercial property leases on its constructed premises. These non-cancellable leases range for a period between three to fifteen years. Most of the leases are renewable for a further period on mutually agreeable terms and also include escalation clauses.

a) The share of contingent liability of the Company for which it is contingently liable in relation to its interest in the partnership firm is Rs. 10,02,283 and an equal amount of penalty.

b) The Company has not entered in to any capital commitments in relation to its interest in the partnership firm.

4. Segment information

Pursuant to enactment of the Companies Act, 2013, the Company has evaluated internal financial controls and risk management systems and as a result has revamped internal reporting system and the organization's structure. The group's operation is predominantly in the development of residential, commercial and allied activities like property rental, maintenance of property and brokerage on account of sale and leasing of properties. Based on above exercise, the management is of the view that property rental and other activities which were considered as a separate segment in the previous financial year are related to the main activity and are not to be construed as an independent segment. Accordingly, there are no primary reportable segments as per Accounting Standard. 17 As the group is primarily operates in India, it is considered as a single geographical segment.

5. Related party disclosures

Names of related parties and related party relationship

Subsidiaries

a) Lancor Maintenance & Services Limited

b) Lancor Guduvanchery Developments Limited

c) Lancor Egatoor Developments Limited

d) Lancor Sriperumbudur Developments Limited

e) Lancor Realty Limited (refer note no. 4.01)

f) Lancor GST Developments Limited (refer note no. 4.01)

Joint Ventures

a) Central Park West Venture

Key Management Personnel (KMP) & relatives

a) R.V. Shekar

b) Sangeetha Shekar

c) Shwetha Shekar

6. Contingent liabilities

a) The Arbitration proceeding on the "Menon Eternity" is still pending. In this regard the Company has made a claim of Rs.

9,98,47,408 while the land owners have made counter claim of Rs. 62,97,55,352, which the Company has refuted by filing a rejoinder. As per the interim order dated October 20, 2010 of the sole arbitrator the Company has given possession of the area belonging to the land onwers on receipt of Rs. 4.82 Crores being refundable deposits from them along with the bank guarrantee of Rs. 1.66 Crores to the arbitrator. In view of the management, the claims are frivolous and are not sustainable. Accordingly the company does not acknowledge claims of the land owners.

b) The Company has certain dispute with a lessee which has arisen on termination of lease agreement by the lessee within the lock in period. In terms of the lease agreement the Company has forfeited the deposit amount. The lessee has demanded refund of rental deposit of Rs. 2,18,35,938 along with interest and damages amounting to Rs. 2,55,78,657. The Hon'ble High court of Madras has not granted interim injunction in respect to interim application filed by the lessee. Aggrived by the order of the single judge , the lessee has filed an appeal before the larger bench and same is pending. Further the main suit is also pending. In view of the management, the claim of lessee is not sustainable and accordingly, claims are not acknowledged as debt.

c) Other claims other than the details as mentioned above for a leases not acknowledged as debt is Rs. 45,04,320 (excluding interest). The Company has furnished a bank guarantee in this regard.

d) In pursuance to the increased demand on premium FSI and OSR charges by the Chennai Metropolitan Develop- ment Authority (CMDA) over and above the normal FSI charges paid by the Company as per the guideline value prevailing at the time of filing the application with respect to one of the project, the Company has filed a writ petition before the Hon'ble High Court of Madras. As per the interim direction of the Hon'ble court the differential amount of Rs. 74,84,000 has been furnished by way of a bank guarantee and the matter is pending. In view of the manage- ment the increased demand is based revision in the guideline value which was not prevailing at the time of initial approval, accordingly the claims are not acknowledged as debt.

e) The service tax department has raised a demand of Rs.2,23,27,853 along with interest and penalty for the period Feb'09 to Jun'10. The Company has paid the demanded amount except for interest and penalty and it has filed an appeal before the CESTAT dated May 10, 2012 stating that amount received from the customers are not chargeable to service tax prior to July 1, 2010 under various grounds. The matter is pending before the Appellate Tribunal.

f) The service tax department has raised a demand of Rs. 15,610,334 and also a penalty of equal amount on Lancor GST Developments Limited (refer note no. 4.01) for wrong a ailment of Cenvat Credit. The erstwhile holding Company of Lancor GST Developments Limited has undertaken to reimburse to the Company to the extent of Rs. 3,902,584 in the event the Company is made liable to pay the demand. The matter is pending before the Appellate Tribunal. The Company has been advised that these proceedings are not likely to result into any liability as the Company had reversed it without utilizing the same.

7. As per section 135 of the Companies Act, 2013, to carry out CSR Activities as specified under Schedule VII of the act, the Company formed a trust in the name of Lancor Foundation during this year. The Company has spent Rs. 11,16,275/- on its own and has contributed Rs. 26,62,120/- to the trust established by it to carry out the activities as prescribed in the Schedule VII of the Act 2013.

8. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Company is in the process of compiling the relevant information from its creditors about their coverage under Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED'). None of the enterprises have responded till date regarding their status under the said Act.

9. Previous year figures

Previous year figures have been regrouped, reclassified and recanted wherever considered necessary so as to confirm with the current year's figures.


Mar 31, 2014

1.01 Corporate information

Lancor Holdings Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on one stock exchange in India. The Company is engaged in construction and sale of residential properties, construction and leasing of commercial properties.

1.02 Basis of preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, on the basis of going concern under the historical cost convention and also on accrual basis. These financial statements comply, in all material aspects, with the provisions of the Companies Act, 1956 and the Companies Act, 2013 (to the extent applicable) and also accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006, which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as less than 12 months for the purpose of current – non current classification of assets and liabilities.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.03 Gratuity benefit plans

(i) The Company has one defined benefit plan with respect to gratuity for its employees. Under the gratuity plan, every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the payment of Graturity Act, 1972 and the same is payable at the time of separation from the Company or retirement which ever is earlier.

(ii) The present value of the defined benefit obligations and the related current service cost were measured using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date.

(iii) The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

Statement of profit and loss Net employee benefit expense recognized in the employee cost 4.05 Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on office building. The lease has a life of five years with renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases. Rental expenses debited to Statement of profit & loss amounting to Rs 38,20,076 (March 31, 2013: Rs.39,36,014)

Operating lease: Company as lessor

The Company has entered into commercial property leases on its constructed premises. These non-cancellable leases range for a period between three to nine years. Most of the leases are renewable for a further period on mututally agreeable terms and also include escalation clauses.

The future minimum lease rental has been considered above based on the lock in period as per lease agreement entered between the Company and lessee.

Note: Details of debits/credits in the nature of reimbursements are not included in the above

1.04 Interest in a joint venture

In compliance with the Accounting Standard relating to ''Financial Reporting of Interest in Joint Ventures'' (AS 27), as prescribed in the Companies Accounting Standard Rules, 2006, the Company has interest in a jointly controlled entity (Partnership Firm).

The Company holds 100% interest in Central Park West Venture(firm), a jointly controlled entity which is involved in construction and sale of residential properties.

The Company''s share of the assets, liabilities, revenues and expenses of the jointly controlled entity for the year ended March 31, 2014 ( March 31, 2013) are as follows: (before inter Company elimination)

1.05 Segment information

As permitted by paragraph 4 of Accoutning Standard -17 (AS 17), '' Segment Reporting'', as prescribed in the Companies Accounting Standard Rules, 2006 if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Therefore disclosures required by AS 17 are given in the consolidated financial statements.

1.06 Related party disclosures

Names of related parties and related party relationship Subsidiaries

a) Lancor Maintenance & Services Limited

b) Lancor Realty Limited

c) Lancor Guduvanchery Developments Limited

d) Lancor Egatoor Developments Limited

e) Lancor Sriperumbudur Developments Limited

f) Lancor GST Developments Limited

Joint Ventures

a) Central Park West Venture

Key Management Personnel (KMP) & relatives

a) R.V. Shekar

b) Sangeetha Shekar

c) Shwetha Shekar

d) Mallika Ravi

Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

1.7 Contingent liabilities

a) The Arbitration proceeding on the "Menon Eternity" is still pending. In this regard the Company has made a claim of Rs. 9,98,47,408 while the land owners have made counter claim of Rs. 62,97,55,352, which the Company has refuted by filing the a rejoinder. As per the interim order dated October 20, 2010 of the sole arbitrator the Company has given possession of the area belonging to the land onwers on receipt of Rs. 4.82 Crores being refundable deposits from them along with the bank guarrantee of Rs. 1.66 Crores to the arbitrator. In view of the management, the claims are frivolous and are not sustainable. Accordingly the company does not acknowledge claims of the land owners.

b) The Company has certain dispute with a lessee which has arisen on termination of lease agreement by the lessee within the lock in period. In terms of the lease agreement the Company has forfeited the deposit amount. The lessee has demanded refund of rental deposit of Rs. 2,18,35,938 along with interest and damages amounting to Rs. 2,55,78,957. The Hon''ble High court of Madras has not granted interim injunction in respect to interim application filed by the lessee. Aggrived by the order of the single judge , the lessee has filed an appeal before the larger bench and same is pending. Further the main suit is also pending. In view of the management, the claim of lessee is not sustainable and accordingly, claims are not acknowledged as debt.

c) Other claims other than the details as mentioned above for a leases not acknowledged as debt is Rs.45,04,320 (excluding interest). The Company has furnished a bank guarrantee in this regard.

d) In pursuance to the increased demand on premium FSI and OSR charges by the Chennai Metropolitan Development Authority (CMDA) over and above the normal FSI charges paid by the Company as per the guideline value prevailing at the time of filing the application with respect to one of the project, the Company has filed a writ petition before the Hon''ble High Court of Madras. As per the interim direction of the Hon''ble court the differential amount of Rs. 74,84,000 has been furnished by way of a bank guarrantee and the matter is pending. In view of the management the increased demand is based revision in the gudieline value which was not prevailing at the time of initial approval, accordingly the claims are not acknowledged as debt.

1.8 Details of dues to micro and small enterprises as defined under the MSMED Act, 2006.

The Company is in the process of compiling the relevant information from its creditors about their coverage under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED''). None of the enterprises have responded till date regarding their status under the said Act.

1.9 Previous year figures

Previous year figures have been regrouped, reclassified and recasted whereever considered necessary so as to confirm with the current year''s figures.


Mar 31, 2013

1.01 Notes on Scheme of Amalgamation with Lancor Projects Limited

a) Pursuant to the Scheme of Amalgamation in accordance with section 391 - 394 of the Companies Act, 1956 sanctioned by the High Court of Judicature of Madras vide their order dated May 17, 2013, Lancor Projects Limited (LPL) a wholly owned subsidiary of the Company in the business of property management has been amalgamated and all assets and liabilities are transferred to and vested in the Company with effect from April 1, 2012 (the Appointed Date).

b) During the transition period i.e. from the Appointed Date to the Effective Date i.e., May 20, 2013, LPL carried on the aforesaid business activities including all statutory compliances in "trust" in its own name but for and on behalf of the Company. The transactions carried out by LPL during the aforesaid period have been incorporated in the books of the Company on sanctioning of the said Scheme.

c) The said scheme has been given effect to in the accounts under the "Pooling of Interest Method" as prescribed by the Accounting Standard 14 on Amalgamation. Accordingly, all assets and liabilities as at April 1, 2012 have been recorded at their respective book values. All the employees and other rights, privileges, benefits attributable to the LPL have been transferred to and vested in the Company retrospectively with effect from April 1, 2012. Similarly, Contingent Liabilities as on the Appointed Date is disclosed.

d) In accordance with the Scheme, the Company''s existing investment in the equity share Capital of LPL amounting to Rs. 500,000 stands cancelled on amalgamation and the difference between the investment of the Company and the amount of share capital of the LPL has been adjusted in the reserves of the Company.

e) The Company is in the process of transferring the documents, agreements, title deeds for the properties, balance in staff benefit schemes etc. in its own name.

1.02 Gratuity beneft plans

(i) The Company has one defined benefit plan with respect to gratuity for its employees. Under the gratuity plan, every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the payment of Gratuity Act, 1972 and the same is payable at the time of separation from the Company or retirement whichever is earlier.

(ii) The present value of the defined benefit obligations and the related current service cost were measured using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date.

(iii) The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

1.03 Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on office building. The lease has a life of five years with renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases. Rental expenses debited to Statement of profit & loss amounting to Rs.39,36,014 (March 31, 2012: Rs.26,67,817).

Operating lease: Company as lessor

The Company has entered into commercial property leases on its constructed premises. These non- cancellable leases range for a period between three and nine years. Most of the leases are renewable for a further period on mutually agreeable terms and also include escalation clauses.

1.04 Interest in a joint venture

In compliance with the Accounting Standard relating to ''Financial Reporting of Interest in Joint Ventures'' (AS 27), as prescribed in the Companies Accounting Standard Rules, 2006, the Company has interest in a jointly controlled entity (Partnership Firm)

The Company holds 100% interest in Central Park West Venture(firm), a jointly controlled entity which is involved in construction and sale of residential properties.(Refer note No 2.10)

The Company''s share of the assets, liabilities, revenues and expenses of the jointly controlled entity for the year ended March 31, 2013 ( March 31, 2012) are as follows: (before inter Company elimination)

1.05 Segment information

As permitted by paragraph 4 of Accounting Standard -17 (AS 17), ''Segment Reporting'', as prescribed in the Companies Accounting Standard Rules, 2006 if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Therefore disclosures required by AS 17 are given in the consolidated financial statements.

1.06 Related party disclosures

Names of related parties and related party relationship Subsidiaries

a) Lancor Maintenance & Services Limited

b) Lancor Realty Limited

c) Lancor Guduvanchery Developments Limited

d) Lancor Egatoor Developments Limited

e) Lancor Sriperumbudur Developments Limited

f) Lancor GST Developments Limited

Joint Ventures

a) Central Park West Venture

Key Management Personnel (KMP) & Relatives

a) R.V. Shekar

b) Sangeetha Shekar

c) Shwetha Shekar

d) Mallika Ravi

1.07 Contingent liabilities

a) The Arbitration proceeding on the "Menon Eternity" project is pending, where the Company has made a claim of Rs. 9,98,47,408, while the land owners have made counter claim of Rs. 62,97,55,352, which the Company has refuted by filing a rejoinder. As per the interim order dated 20.10.2010 of sole arbitrator the Company has given the possession of the area belonging to the land owners on receipt of Rs.4.82 Crores being refundable deposits from them along with the bank guarantee of Rs.1.66 crores to the Arbitrator. In view of the managment, the claims are frivolous and are not sustainable, accordingly the claims are not acknowledged as debt.

b) The Company has certain dispute with a lessee which has arisen on termination of lease agreement by the lessee within the lock in period. In terms of the lease agreement the Company has forfeited the deposit amount. The lessee has demanded refund of rental deposit of Rs. 2,18,35,938 along with interest and damages amounting to Rs. 2,55,78,957. The Hon''ble High Court of Madras has not granted the interim application filed by the lessee and has dismissed the same. However, the main suit is pending. Aggrieved by the order of the single Judge, the lessee has filed an appeal before the larger bench and the same is pending. In view of the management, the claim of lessee is not sustainable and accordingly, claims are not acknowledged as debt.

c) Other claims other than the details as mentioned above for a leases not acknowledged as debt is Rs. 24,99,898.

1.08 Details of dues to micro and small enterprises as def ned under the MSMED Act, 2006

The Company has not received any relevant information from its creditors about their coverage under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED''). Accordingly no disclosure is made u/s 22 of the Act.

1.09 Previous year fgures

Previous year figures have been regrouped, reclassified and recast wherever considered necessary so as to confirm with the current year''s figures.


Mar 31, 2012

1.01 Corporate information

Lancor Holdings Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on one stock exchange in India. The Company is engaged in construction and sale of residential properties, construction and leasing of commercial properties.

1.02 Basis of preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956 notified by MCA vide its notification no. 447(E) dated February 28, 2011. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as less than 12 months for the purpose of current - non current classification of assets and liabilities.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

a. Rights, preference and restrictions attached to shares: Equity shares

The Company has only one class of equity shares having a par value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by the share holders.

During the year March 31, 2012, the amount of dividend per share recognised as distribution to equity shareholder was Rs.2 (March 31, 2011: Rs.2).

2.01 Gratuity benefit plans

(i) The Company has one defined benefit plan with respect to gratuity for its employees. Under the gratuity plan, every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the payment of Gratuity Act, 1972 and the same is payable at the time of separation from the Company or retirement which ever is earlier.

(ii) The present value of the defined benefit obligations and the related current service cost were measured using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date.

(iii) The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the respective plans.

The estimates of future salary increases considered in actuarial valuation takes in to account of inflation, seniority, promotions and other relevant factors, such as supply and demand in the employment market.

2.02 Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on office building. The lease has a life of five years with renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases. Rental expenses debited to statement of profit & loss account amounted to Rs 26,67,817 (March 31, 2011: Rs 25,95,042)

Operating lease: Company as lessor

The Company has entered into commercial property leases on its constructed premises. These non-cancellable leases range for a period between three to nine years. Most of the leases are renewable for a further period on mutually agreeable terms and also include escalation clauses.

2.03 Interest in a joint venture

In compliance with the Accounting Standard relating to 'Financial Reporting of Interest in Joint Ventures' (AS 27), as prescribed in the Companies Accounting Standard Rules, 2006, the Company has interest in a jointly controlled entity (Partnership Firm)

The Company holds 93.23 % interest in Central Park West Venture(firm), a jointly controlled entity which is involved in construction and sale of residential properties.

The Company's share of the assets, liabilities, revenues and expenses of the jointly controlled entity for the year ended March 31, 2012 (PY March 31, 2011) are as follows: (before inter Company elimination)

a) The share of contingent liability of the Company for which it is contingently liable in relation to its interest in the partnership firm is Rs. 10,02,000.

b) The Company has not entered in to any capital commitments in relation to its interest in the partnership firm.

2.04 Segment information

As permitted by paragraph 4 of Accounting Standard -17 (AS 17), ' Segment Reporting', as prescribed in the Companies Accounting Standard Rules, 2006 if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Therefore disclosures required by AS 17 are given in the consolidated financial statements.

2.05 Related party disclosures

Names of related parties and related party relationship Subsidiaries

a) Lancor Maintenance & Services Limited

b) Lancor Realty Limited

c) Lancor Projects Limited

d) Lancor Guduvanchery Developments Limited

e) Lancor Egatoor Developments Limited

f) Lancor Sriperumbudur Developments Limited

Joint Ventures

a) Central park West Venture Key Management Personnel (KMP) & relatives

a) R.V. Shekar

b) Sangeetha Shekar

c) Shwetha Shekar

Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

2.6 Contingent liabilities

a) The Arbitration proceeding on the "Menon Eternity" is still pending. It appears that the respective counsel will conclude the final arguments within the next one month. The company had completed the construction of the building as per the terms of Joint Development Agreement and the owners have taken possession of their share. Informatively the owners have also leased their share to various private parties. As stated in the previous report a part of the amount due to the company has been paid by the owners as per orders of the Arbitration court and the company is waiting the judgment of the Arbitration court to receive the balance. The company therefore feels that the claims of the land owner are perplex and unsustainable. Accordingly the company does not acknowledge claims of the land owners.

b) (i) The Company has certain dispute with a lessee which has arisen on termination of lease agreement by the lessee within the lock in period. In terms of the lease agreement the Company has forfeited the deposit amount. The lessee has demanded refund of rental deposit of Rs. 2,18,35,938 along with interest and damages amounting to Rs. 2,55,78,957. The Hon'ble High court of Madras has not granted interim injunction to the lessee and the matter is pending. In view of the management, the claim of lessee is not sustainable and accordingly, claims are not acknowledged as debt.

c) Other claim other than the details as mentioned above for a leasees not acknowledged as debt is Rs. 17,06,120

2.7 Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Company is in the process of compiling the relevant information from its creditors about their coverage under Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED'). None of the enterprises have responded till date regarding their status under the said Act.

Note: No loans has been granted by the Company to any person for the purpose of investing in the shares of Lancor Holdings Limited or any of its subsidiaries.

2.8 Previous year figures

Till the year ended March 31, 2011, pre-revised Schedule VI to the Companies Act 1956 was being used for preparation and presentation of financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. Accordingly, the Company has reclassified previous year figures to confirm to this year's classification. On adoption of the revised Schedule VI, there has been no significant impact on recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1. Certain disputes have arisen with the owners of land with whom the Company has entered into a joint venture agreement in respect of Menon Eternity Project. The land owners have filed criminal complaint before the Metropolitan Magistrate against the Company, the Managing Director and certain officials of the Company. The Madras High Court has stayed the matter. The land owners have also filed a civil suit and interim applications. The Madras High Court has dismissed all the interim applications and the main suit is pending. The High Court has appointed single retired judge of the Madras High Court as the sole Arbitrator. The Company has made claim of Rs. 99,847,408 while the land owners has made a counter claims aggregating to Rs. 629,755,353 which has been refuted by the Company by filing a rejoinder. Subsequently as per the interim order of the sole Arbitrator the Company has given the possession of area belonging to the land owners on receipt of Rs.4.82 crores being refundable deposits from them along with a bank guarantee of Rs.1.66 crores to be deposited with Arbitrator and the matter is pending. In view of the management, the claims of the land owners are frivolous and are not sustainable. Accordingly claims are not acknowledged as debts.

2. CONTINGENT LIABILITIES

a) Outstanding Letter of Credit Rs. Nil. (Previous year Rs. Nil)

b) Claims against the Company not acknowledged as debt is Rs.Nil (Previous year Rs.Nil)

3. Capital commitment - Nil (Previous Year Nil)

4. The Company is in the business of Property Development. The details required to be disclosed as per para 4C and para 4D of Part II of the Companies Act, 1956 have been furnished to the extent applicable to the Company:

6. The Company is in the process of compiling the relevant information from its creditors about their coverage under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED). None of the enterprises have responded till date regarding their status under the said Act.

7. EMPLOYEE BENEFITS

The present value of the defined benefit obligations and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. The following table provides the disclosures in accordance with Revised AS 15 for the year ended and as at March 31, 2011.

8. Borrowing costs amounting to Rs. 23,586,411 (Previous Year - Rs. 25,186,282) have been capitalized as part of respective qualifying assets.

9. SEGMENT REPORTING

As permitted by paragraph 4 of Accounting Standard-17 (AS - 17), Segment Reporting, if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. Therefore, disclosures required by AS 17 are given in consolidated financial statements.

11. RELATED PARTY DISCLOSURES

As per the Accounting Standard 18 Related Party Disclosures, issued by the Institute of Chartered Accountants of India, the Companys related parties and transactions are disclosed below:

A. Under the control of the Company:

1. Subsidiaries: a) Lancor Maintenance & Services Limited

b) Lancor Realty Limited

c) Lancor Projects Limited

d) Lancor Guduvanchery Developments Limited

2. Joint Ventures a) Central park West Venture

12. Leases

In the Capacity as a Lessor

a) The significant lease arrangements in terms of AS 19 entered into by the Company are in respect of constructed premises which have been given on rental and office premises which have been taken on lease.

12. Leases

In the Capacity as a Lessor

b) The Cost of building includes buildings given on lease estimated at Rs.433,542,231 (previous year Rs. 433,325,606) and Accumulated Depreciation Rs.25,527,337(previous year Rs. 18,365,420). There is no impairment in respect of these assets.

c) The Cost of other assets given on lease is given below. There is no impairment in respect of these assets.

In the Capacity as a Lessee

Rental Expenses debited to Profit & Loss Account amounted to Rs. 2,545,042(Previous Year - Rs. 2,694,022).

14. DEFERRED TAX ASSETS / (LIABILITIES) (NET)

Pursuant to Accounting Standard 22 ~ "Accounting for Taxes on Income" as prescribed in Companies Accounting Standard Rules, 2006, the Company has recorded the cumulative net Deferred Tax Asset as at 31st March 2011 of Rs. 1,980,083 and Rs.398,898 has been debited to the profit & Loss account.

16. In compliance with the Accounting Standard relating to Financial Reporting of Interest In Joint Ventures (AS 27), as prescribed in Companies Accounting Standard Rules, 2006, the Company has interest in a jointly controlled entity (Partnership Firm).

As stated above, the Company is also partner in one partnership firm which is formed in India.

Financial interest of the Company in the jointly controlled entities is as under, (before inter Company eliminations)

17. Disclosure as required by clause 32 of listing agreement with the stock exchange

Note: No loans have been granted by the Company to any person for the purpose of investing in the shares of the Lancor Holding Limited or any of its subsidiaries.

18. Previous years figures have been regrouped, reclassified and recast wherever considered necessary so as to confirm with the current years figures.

 
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