Notes to Accounts of Lancor Holdings Ltd.
Mar 31, 2018
1.01 Corporate information
Lancor Holdings Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Compnies Act, 1956. It''s equity share are listed in the BSE Ltd (Bombay Stock Exchange) in India. The Company is engaged in the business of real estate development and leasing of commercial properties.
1.02 Authorization of standalone financial statements
The standalone financial statements were authorized for issue in accordance with a resolution of the directors on May 14, 2018.
* Restriction in title of the property
* Investment properties has been pledged as security for borrowings, refer note no 2.18 and 2.23 for details.
Capitalised borrowing cost
The borrowing cost capitalised during the year ended 31st March 2018 was Nil; (31st March 2017: Nil and 1st April 2016 : Rs. 523.30 lakhs )
Fair value hierarchy and valuation technique
a) The fair valuation of one of the property "Menon eternity" investment property has been determined by an independent valuer, who holds a recognised and professional qualification, and has recent experience in the location & category of the investment being valued. The said property is under litigation and the matter is pending at the Honorable High court of Madras. (Refer note no. 4.02(a))
b) For other investment properties the comparable market price or selling price wherever properties have been sold during the reporting period has been considered for the determination of the fair value.
* All the investments in equity shares of subsidiaries are measured as per Ind AS 27 ''Separate Financial Statements''.
** As per the deed of partnership, the Classic Farms (Chennai) Limited and Lancor Maintenance & Services Limited had guaranteed profits in the projects "The Central Park West" and "The Central Park South". Apart from the said two projects, the partners other than Lancor Holdings Limited (the Company) do not have any interest in the profits/loss of the entity.
A During the year ended 31st March 2018; the company has capitalised borrowing cost to the extent of Rs 1693.01 lakhs (31st March 2017: Rs 1141.53 lakhs and 1st April 2016: Rs 1414.65 lakhs ) to the cost of real estate project under development inventories have been pledged as security for borrowings, refer note no 2.18 for details
Note: No amount is receivable from any directors or officers of the Company, severally or jointly with any other person, or from firms where such director is a partner or from private companies where such director is a member
* The receivables have been pledged as security for borrowings, refer note no 2.18 for details
b. 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 any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature and purpose of reserves Securities premium reserve
Securities premium reserve is used to record the premium on issue of shares. The reserve will be utilised in accordance with provisions of the Act. Revaluation Reserve
Revaluation Reserve is created on account of revaluation of the Investment Property.
General Reserve
The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserves.
Retained Earnings
Retained earnings are the profits, the Company has earned till date.
i. The total amount of loan sanctioned to the Company is amounting to Rs. 800 lakhs. The loan is repayable with current EMI of Rs,22.12 lakhs(with 6% increase in monthly instalments). The repayment schedule is based on monthly rental from BNP Paribas & Sun Edison in respect of Menon Eternity Building at 165, St. Mary''s Road, Alwarpet, Chennai. The tenure of the loan is 55 months effective
ii. Term Loan I from Catholic Syrian Bank Limited is secured by 1) "Westminster" a commercial building, situated at No. 108/22, Dr Radhakrishnan Salai, Mylapore, Chennai 4 2nd & 8th floors of the building measuring 7,977.5 sq. ft of built-up area. 2) "Menon Eternity" a commercial building, situated at No. 165, St Mary''s Road, RA Puram, Chennai 28 - 2nd, 3rd, 4th, 5th floors and a part of 10th floor measuring 93,051 sq. ft of built up area. 3) Land measuring 10.99 acres at Sriperumbudur owned by the Company.
i. The total amount of loan sanctioned to the Company is amounting to Rs. 3,450 lakhs.The tenure of the loan is 60 months effective April, 2015.
ii. The Term loan II from Catholic Syrian Bank Limited is secured by
1) "Westminster" a commercial building, situated at No. 108/22, Dr Radhakrishnan Salai, Mylapore, Chennai 4 2nd & 8th floors of the building measuring 7,977.5 sq. ft of built-up area. 2) "Menon Eternity" a commercial building, situated at No. 165, St Mary''s Road, RA Puram, Chennai 28 - 2nd, 3rd, 4th, 5th floors and a part of 10th floor measuring 93,051 sq. ft of built up area. 3) Land measuring 5.98 acres at Sriperumbudur owned by the Company
i. The total amount of loan sanctioned to the Company is amounting to Rs. 3450 lakhs. The tenure of the loan is 60 months effective April, 2015.
ii. Term Loan III from Catholic Syrian Bank Limited is secured by 1) "Westminster" a commercial building, situated at No. 108/22, Dr Radhakrishnan Salai, Mylapore, Chennai 4 ''- 2nd & 8th floors of the building measuring 7,977.5 sq. ft of built-up area. 2) "Menon Eternity" a commercial building, situated at No. 165, St Mary''s Road, RA Puram, Chennai 28 - 2nd, 3rd, 4th, 5th floors and a part of 10th floor measuring 93,051 sq. ft of built up area. 3) Land measuring 5.98 acres at Sriperumbudur owned by Lancor Holdings Limited.
i. The total amount of loan sanctioned to the Company was amounting to Rs. 10 crore. The Loan is repaid during the year.
ii. Term loan I from City Union Bank Limited is secured by mortgage of 1) commercial property having a built up area of 6,122 sqft on the IV Floor at "CITI TOWER" building owned by the company 2) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company.
i. The total amount of loan sanctioned to the Company was amounting to Rs. 1350 lakhs. The loan is repayable in 120 equal monthly installments at Rs.20.1y6 lakhs from September 2015.
ii. As on March 31, 2018
Term loan II from City Union Bank Limited is secured by mortgage of 1) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company. 2) All that piece and parcel of Non residential super structures (Elcot Avenue , Lancor sports & Recreation centre) of a built up area of 20,572 sq.ft inclusive of common areas together with 9,583 sq.ft of undivided share of land out of the total extent of 1,59,423 sq.ft situated in "The Central Park South" in Sholinganallur village, Tambaram Taluk, Kancheepuram district.
As on March 31, 2017
Term loan II from City Union Bank Limited is secured by mortgage of 1) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company. 2) commercial property having a built up area of 6,122 sqft on the IV floor at "CITI TOWER" building owned by the company
As on April 1, 2016
Term loan II from City Union Bank Limited is secured by mortgage 1) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company. 2) commercial property having a built up area of 6,122 sqft on the IV floor at "CITI TOWER" building owned by the company. 3) commercial property having a built up area of 6,954 sqft on II & III floorat ROMA building
i. The Loan is repayable by a term of 42 months including moratorium of 12 months from the date of first disbursement.
Term loan from Axis Bank Limited is secured by Equitable mortgage of residential project "Lumina" Block D, G & H2 situated at Nellikuppam Road, Kayarambedu Village, Guduvanchery. Charge is created on the total loan amount.
i- There is a moratorium of 18 months from February, 2015 to July, 2016. Repayment of Rs. 55 lakhs is required from August, 2016 onwards up to January, 2018. EMI of Rs. 55 lakhs, is based on first tranche of Rs. 10 Crores drawn from HDFC Limited,
ii. The Term Loan-1 from HDFC Limited is secured by Town & Country, Lakeview Gardens, Ramapuram, Sriperumbudur measuring about 26.25 acres of land.
i. The total loan sanctioned to the company is amounting to Rs.3000 lakhs. The term of the loan is 36 months including moratorium of 18 months. Repayment of Rs. 170 lakhs is required from August, 2016. The last EMI payable in February, 2018 is Rs. 110 lakhs.
ii- The housing loan taken from LIC Housing Finance Limited is secured by (March 31, 2017: 15, April 1, 2016:17) apartments having a built up area of (March 31, 2017: 35,460, April 1, 2016: 41,747sq.ft) of our project, "Kiruba Cirrus" at Valasaravakkam, Chennai.
i. The total loan sanctioned to the company is amounting to Rs.2300 lakhs.The term loan is repayable in 36 months from the date of first disbursement starting from December, 2016 including moratorium period of 12 months. The monthly EMI is Rs.63.89 lakhs.
ii. The term loan from Tata Capital Housing Finance Limited is secured by (March 31, 2017: 27, April 1, 2016: 35) apartments, in The Central Park Lake Front Project located at Sholinganalur, Chennai admeasuring saleable area of (March 31, 2017: 45,500 sq. ft, April 1, 2016: 59,195 sq. ft).
i. The total loan sanctioned to the company is amounting to Rs.4700 lakhs/-.The term loan is repayable in 10 quarterly installments of Rs. 470 lakhs /- commencing from March 31, 2019 including moratorium period of 18 months.
ii. The term loan from Axis Finance Limited is secured by Unsold apartments of the projects Kiruba cirrus- 13 apartments of 31,307 Sq.ft, The Central Park Lake front -20 apartments of 34,035 Sq.ft , Townsville (A, B, C &D Blocks)- 31 apartments of 35,070 Sq. Ft, Lumina ( E, F & G Blocks)- 53 apartments of 59,847 Sq. Ft (March 31, 2017: Nil; April 1, 2016: Nil).
i. The facility is obtained for the working capital.
The facility is secured by a) All that Piece and parcel of land located at Sriperumbudur Village ,Kancheepuram district aggregating to 14.08 acres out of 22.38 acres, b) Project Altura Blocks -A, B,C,D & E Super Built-up Area aggregating to 3,56,301 Sq. Ft and UDS of 1,39,603 Sq. Ft
a) The amount sanctioned to the Company amounting to Rs. 500 lakhs.
As on March 31, 2018
Term loan II from City Union Bank Limited is secured by mortgage of 1) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company. 2) All that piece and parcel of Non residential super structures (Elcot Avenue , Lancor sports & Recreation centre) of a built up area of 20,572 sq.ft inclusive of common areas together with 9,583 sq.ft of undivided share of land out of the total extent of 1,59,423 sq.ftsituated in "The Central Park South" in Sholinganallur village, Tambaram Taluk, Kancheepuram district.
As on March 31, 2017
Term loan II from City Union Bank Limited is secured by mortgage of 1) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company. 2) commercial property having a built up area of 6,122 sqft on the IV floor at "CITI TOWER" building owned by the company
As on April 1, 2016
Term loan II from City Union Bank Limited is secured by mortgage of 1) commercial building having a built up area of 5,122 sqft on II Floor at "VTN Square" building owned by the company. 2) commercial property having a built up area of 6,122 sqft on the IV floor at "CITI TOWER" building owned by the company. 3) commercial property having a built up area of 6,954 sqft on II & III floorat ROMA building owned by the company
1.03 Contingent liabilities
The Companyâs pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Service Tax / VAT and other
a) In the matter of the Commercial Property, âMenon Eternityâ owned by the Company, the arbitrator had issued an award dated March 16, 2016, invalidating the sales
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
c) Other claims other than the details as mentioned above for leases not acknowledged as debt is Rs. 45.04 lakhs (excluding interest) where the Company has furnished a
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
e) The service tax department has raised a demand of Rs.223.27 lakhs along with interest and penalty for the period February 2009 to June 2010.The Company has paid
f) The service tax department has raised a demand of Rs. 156.10 lakhs and also a penalty of equal amount on Lancor GST Developments Limited (merged with Lancor
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Characteristics of defined benefit plan
The Company has a defined benefit gratuity plan in India which is unfunded. The companyâs defined benefit gratuity plan is a final salary plan for employees, which.
Risks associated with defined benefit plan
Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future Interest rate risk
A fall in the discount rate which is linked to the Government security rate will increase the present value of the liability requiring higher provision.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more Asset-liability Matching Risk
The plan faces the ALM risk as to the matching cash flow. Company has to manage pay-out based on pay as you go basis from own funds.
Mortality risk
Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
During the year, there were no plan amendments, curtailments and settlements.
b) Defined contribution plans
The Company operated defined benefits contribution retirement benefit plans for all qualifying employees.
The total expenses recognised in the statement of profit & loss is Rs. 24,00,063 (March 31, 2017: 27,82,414) represents the contribution payable to these plans by the
1.04 Disclosures as required by Ind AS 108 Operating segments
As permitted by the paragraph 4 of the Indian Accounting Standard (Ind AS 108), ''Operating segment'', if a single financial report contains both consolidated financial
1.05 Leases
a) Operating leases (As lessee)
a) The Company has entered into commercial leases on office building. The lease has a life of one year with renewal option included in the contracts. There are no
b) The company has also entered into non-cancellable lease of residential property having a lease term up to 36 months. Rental expenses debited to the Statement of
b) Operating leases (As lessor)
a) The company has entered into leasing of residential property having a lease term up to 11 months. Rental income credited to statement of profit & loss amounting to
b) The Company has entered into commercial property leases on its constructed premises. These non-cancellable leases range for a period between three to fifteen
1.06 Capital management
The Companyâs objective while managing capital is to maintain stable capital structure to support business stability and growth, ensure adherence to the covenants and The Companyâs capital requirement is mainly to fund its business expansion by developing various residential and commercial projects and repayment of borrowings The Company has adhered to material externally imposed conditions relating to capital requirements and there has not been any delay or default during the period The Company monitors its capital using gearing ratio, which is net debt divided to total equity.
1.07 Financial instruments
(i) Methods & assumption that all used to estimates the fair values
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing The following methods and assumptions were used to estimate the fair values:
a) The carrying amounts of receivables and payables which are short term in nature such as trade receivables, other receivables, other bank balances, deposits, loans,
b) The fair values for long term loans given and remaining non current financial assets were calculated based on cash flows discounted using a effective interest lending
c) The fair values of long term security deposits taken and non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified
d) For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
(ii) Categories of financial instruments
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
(iii) Fair value of financial instruments measured at amortised cost
1.08 Financial risk management
The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set The Company activities expose it to financial risks namely credit risk, liquidity risk and market risk. The board of directors of the Company has overall responsibility for the
a) Credit risk:
Credit risk arises from the possibility that counter party will cause financial loss to the company by failing to discharge its obligation as agreed. The Companyâs exposure Real estate business
The Companyâs trade receivables does not have any expected credit loss as the company does not have any possession until all dues receivables as received from the customers. During the periods presented, the Company has not made any write-offs of trade receivables.
Rental business
The Company follows a simplified approach (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables. For the purpose of measuring Trade receivables consist of mainly customer balances relating to real estate and rental business with no significant concentration of credit risk. The outstanding trade
b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from banks at an optimised cost. In addition, processes and policies related to such risks are overseen by senior management. The Companyâs senior management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows. The Company takes into account the liquidity of the market in which they operate.
Financing arrangements
The Company has sufficient sanctioned line of credit from its bankers / financiers; commensurate to its business requirements. The Company reviews its line of credit available with bankers and lenders from time to time to ensure that at all point of time there is sufficient availability of line of credit.
The Company pays special attention to the net operating working capital invested in the business. In this regard considerable work has been performed to control and reduce collection periods for trade and other receivables, as well as to optimise accounts payable with the support of banking arrangements to mobilise funds.
c) Market risk
Market risk comprises of two types of risks. They are interest risk and other price risk i.e. equity risk.
i) Interest risk
The Company has both floating & fixed rate borrowings which are carried at amortised cost. The fixed rate borrowings are not subject to interest rate risk considering the future cash outflows will not fluctuate because of any change. The variable interest rate borrowings are subject to interest rate risk. The interest rate risk is managed by the Company by monitoring monthly cash flow which is reviewed by management to prevent loss.
ii) Equity price risk
The Company''s non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages such risk within acceptable parameters set by the Board of directors.
1.09 Expenditure towards corporate social responsibility (CSR) activities
During the year the Company has contributed Rs. 34,89,022 /- (March 31, 2017: Rs. 39,34,963 /-) to a trust formed by it in the name of Lancor Foundation. Out of the contributed amount Rs. 40,00,000 has been paid as advance by Lancor Foundation towards purchase of land for the purpose of establishment of skill training centre to promote education and employment enhancing vocation skills with pursuant to the Schedule VII of the Companies Act 2013
1.10 Disclosure as per Section 186 of the Companies Act, 2013:
The operations of the Company are classified as ''infrastructure facilities'' as defined under Schedule VI of the Act. Accordingly, the disclosure requirements specified in sub section 4 of Section 186 of the Act in respect of loans given or guarantee given or security provided and the related disclosures on purposes/ utilization by recipient companies, are not applicable to the Company except details of investment made during the year as per section 186(4) of the Act.
The Company has made investments in the following body corporates:
Lancor Guduvanchery Developments Limited-Nil (March 31, 2017: Nil, April 1, 2016: Nil)
Lancor Sriperumbudur Developments Limited-Nil (March 31, 2017: Nil, April 1, 2016: Nil)
Lancor Egtoor Developments Limited- 5,00,000 (March 31, 2017: 5,00,000, April 1, 2016: 5,00,000)
Lancor Maintenance & Services Limited- 1,00,000 (March 31, 2017: 1,00,000, April 1, 2016:1,00,000)
1.11 "There is an unclaimed dividend of Rs 69,940 required to be transferred to Investor Education and Protection Fund (IEPF). The Company is in process of transferring such amount to IEPF, in accordance with the provisions of section 125 of the Companies Act, 2013 and relevant rules thereunder.
1 .12 The Board of Directors at their board meeting held on May 14, 2018, have recommended a final dividend of Rs 0.20 per equity share of Rs 2/- each fully paid for the financial year 2017-18 aggregating to Rs 81 lakhs . The payment is subject to the approval of shareholders in the ensuing Annual General Meeting. The same has not been recognised as liability.
Foot notes for Ind AS adjustments
i) Property, plant and equipment
The Company has availed the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment''s and Intangibles recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
ii) Investment property
Under the previous GAAP, investment properties were presented as part of property, plant and equipment. Under Ind AS, investment properties are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or profit as a result of this adjustment.
iii) Investment in subsidiaries
Under Ind AS, a first- time adopter can measure investments at cost determined in accordance with Ind AS 27 or at deemed cost. The deemed cost of the investment can be the fair value of the investment at the transition date or the previous IGAAP carrying amount. The Company has opted to measure its investments in subsidiary at the IGAAP carrying amount as its deemed cost on the date of transition.
iv) Investment in equity of other companies
Under the previous GAAP, long term investment were measured at cost. Under Ind AS, the company has opted to measure its investment in other equities at fair value through profit or loss. This has resulted in increase or decrease in fair value of investment with corresponding increase or decrease in provision for gain/loss on fair valuation of investment.
v) Security deposit
Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the company has fair valued these security deposits under Ind AS and the difference between the fair value and the transaction value of the security deposit has been recognised as prepaid rent.
vi) Defined benefit plans
Under previous GAAP, actuarial gains and losses were recognised in Statement of Profit and Loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss.
vii) Loan to subsidiary (partnership firm)
Under previous GAAP, interest free loans given to subsidiaries are accounted at their transaction value. Under Ind AS, the Company has discounted the interest free loans given to subsidiaries with corresponding increase in the investment.
viii) Loan to employees
Under previous GAAP interest free loans were given to employees, under Ind AS the Company discounted the interest free loans given to employees with corresponding increase in employee benefits.
ix) Proposed dividend
Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.
x) Past Business Combination
We refer to note no. 1.26(B) in relation to past business combination, as per Ind AS, as the business combination has happened between Companies under the common control, accordingly the assets and liabilities after inter company elimination of the Company has been restated and has been given effect on transition date i.e. April 1, 2016
xi) Deferred tax
GAAP requires deferred tax accounting using income statement approach, which focuses on differences between taxable profits and accountable profits for the period. Ind AS 12 requires entities to account deferred tax using balance sheet approach which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under GAAP.
In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such difference. Deferred tax adjustments are recognised in correlation to the underlying transaction in component of equity.
xii) Other comprehensive income
Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, items of income or expense that are not recognised in statement of profit and loss are recognised as âother comprehensive incomeâ which includes remeasurement of defined benefit plans.
Mar 31, 2016
b. 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, 2016, the amount of dividend per share recognized as distribution to equity shareholder was Rs.1 (March 31, 2015: Rs.2).
The above share holding is as per the records of the Company, including its register of share holders/members.
d. Details of aggregate number of shares issued as bonus for the preceding five years from the end of the reporting period:
The Company has allotted 2,02,50,000(Previous Year: NIL) fully paid up equity shares of Rs.2 each, pursuant to the bonus issue approved by the shareholders through a postal ballot.
1 Notes on Scheme of Amalgamation with Lancor Gudvanchery Developments Limited and Lancor Sriperumbudur Developments Limited
The Board of Directors of the Company at its meeting held on May 7, 2015, has approved the Scheme of Amalgamation of two of its wholly owned subsidaries M/S.Lancor Guduvanchery Developments Limited (Transferor Co.) and Lancor Sriperumbdur Developments Limited (Transferor Co.). As the transferor companies are wholly owned subsidiary companies, no equity shares or other shares would be allotted in lieu or in exchange for holding of the shares in the transferor companies by the transferee company. The petition relating to the merger has been admitted by the Hon''ble High Court of Judicature of Madras and is pending for approval.
Basic earning per share amounts is calculated by dividing profit for the year attributable to the equity share holders by the weighted average number of equity share outstanding during the year. As there are no dilutive instruments outstanding, basic and dilutive earning per shares are identical.
b) The slow down in the property development activity on plot of land at Sriperumbudur and especially due to drop in demand is considered as part of operating cycle in the real estate sector. Accordingly, the borrowing cost incurred during such period on entire project is capitalized. The management is of the opinion that having considered various factors relating to development including preparatory work carried out for intended development and market value of property , the net realizable value in case of projects undertaken for development would be higher than its book value. The auditor''s have relied upon managementâs opinion.
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 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.
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.15,11,922 (March 31, 2015: Rs.34,42,170)
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 fifteen years. Most of the leases are renewable for a further period on mutually 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
4 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 accounting standards notified under section 133 of the Companies Act, 2013, read together with rule 7 of the Companies (Accounts) Rules, 2014, 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, 2016 ( March 31, 2015) 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.10,02,283(Previous Year: 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.
5 Segment information
As permitted by paragraph 4 of Accounting Standard -17 (AS 17), '' Segment Reporting'', as specified under section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 if a single financial report contains both consolidated financial statements and the separate financial statements of the parent, segment information need to be presented only on the basis of the consolidated financial statements. Therefore disclosures required by AS 17 are given in the consolidated financial statements.
Joint Ventures
a) Central Park West Venture
Key Management Personnel (KMP) & relatives
a) R.V. Shekar (upto 1st October 2014)
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:
6 Assets Held for Sale
The board of directors has decided in its meeting held on March 23, 2016 to dispose off certain immovable properties for which, subsequent to the date of balance sheet it has obtained necessary approval from the members. The Company has been able to dispose off certain immovable properties at a price greater than the book value. The management is hopeful of disposing other identified immovable properties having book value of Rs.97,693,068/- at a price greater than the book value.â
7 Contingent liabilities
a)In respect of one of the Commercial Properties owned by the Company, âMenon Eternityâ having carrying value of Rs.36,66,29,353/- there were disputes with the land owner(s). The Company has challenged arbitration award dated 16/03/2016, which had set aside the sale deed pertaining to land, before the Honorable High Court of Madras for setting aside the award under section 34 of the Arbitration and Reconciliation Act, 1996 and the matter is pending. In view of the management, no provision is considered necessary, as the Company has been granted stay from operation of the arbitration award.
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 Honâble High court of Madras has not granted interim injunction in respect to interim application filed by the lessee. Aggrieved 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 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 Honâble High Court of Madras. As per the interim direction of the Honâble 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 management 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 Febâ09 to Junâ10.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 Developements Limited (merged with Lancor Holdings Limited with an appointed date, April 1st, 2013) for wrong availment of Cenvat Credit. The erstwhile holding Company of Lancor GST Developements 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.
8 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. The Company has spent Rs.45,600/ -(Previous Year:11,16,275) on its own and has contributed Rs.38,43,095/-(Previous Year: 26,62,120) to the trust established by it to carry out the activities as prescribed in the Schedule VII of the Act 2013.
Note: No loans have 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.
9 Previous year figures
Previous year figures have been regrouped, reclassified and recasted wherever considered necessary so as to confirm with the current year''s figures.
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.
Mar 31, 2010
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 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 (P.Y
à Nil)
3. Capital commitment à 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:
5. The Company has circulated letter to all its suppliers requesting
them to confirm whether they are covered under the Micro, Small and
Medium Enterprises Act, 2006 (MSMED). None of the enterprises have
responded till date regarding their status under the said Act and the
confirmations are still awaited.
6. 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 31,2010.
7. Borrowing costs amounting to Rs.25,137,232 (Previous Year à Rs.
63,281,883) have been capitalized as part of respective qualifying
assets.
8. 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.
9. 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
2. Joint Ventures a) Central park West Venture
10. 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. The
Company has taken rent deposits equivalent to 12 to 15 months rent.
These arrangements are cancelable in nature and are for initial period
of 3 years or more and renewable based on mutual understanding.
b) The Cost of building includes buildings given on lease estimated at
Rs. 433,325,606 (previous year Rs. 407,360,316) and Accumulated
Depreciation Rs.18,365,420 (previous year Rs. 11,219,349). There is no
impairment in respect of these assets.
11. 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 con- trolled entity (Partnership Firm).
As stated above, the Company is also partner in one partnership firm
which is formed in India.
12. 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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