1.24 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when the Company has a present (legal or constructive) obligation as a result of
past event, it is probable that the Company will be required to settle the present obligation, and reliable
estimate can be made of the amount of the obligation.
Provisions are measured at the present value of the management's best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used to
determine the present value is a current pre-tax rate. The increase in the provision due to passage of time
is recognised as interest expense.
Contingent liabilities are stated separately by way of a note. Contingent liabilities are disclosed when the
Company has a possible obligation arising from past events, unless the probability of outflow of resources
is remote or a present obligation arising from past events where no reliable estimate is possible and it is
not probable that the cash outflow will be required to settle the obligation. Contingent assets are neither
recognized nor disclosed except when inflow of economic benefits are probable.
1.25 Cash and Cash Equivalents
For the purpose of presentation in statement of cash flows, cash and cash equivalents include cash on
hand, deposits held at call with bank and financial institutions, other short term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value and bank overdraft having positive balances.
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.26 Cash Flow Statements
Cash flow statement are reported using the Indirect method, whereby net profit or loss is adjusted for
the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments, and item of income or expense associated with investing or financing cash flows.
1.27 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker (CODM). The operating segments have been identified on the basis of nature of
products/service. The CODM is responsible for allocating resources and assessing the performance of the
operating segments of the Company.
*Deposit amounting to Rs. 75.00 lakhs (March 31, 2024 - Rs. 75.00 lakhs) held on account of guarantee given by the bank in
relation to a legal matter against the Company. (Refer Note No. 4.02(c))
*Deposit amounting to Rs. 388.40 lakhs (March 31, 2024 - Rs. 245.00) held as Security against borrowings from Banks /
Financial Institutions (Refer Note 2.20 (p) (q) (r) & 2.13)
*Deposit amounting to Rs. 11.12 lakhs (March 31, 2024 - Rs. 11.12 lakhs) held as Security for Corporate credit card availed by
the Company
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
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.
Securities premium
Securities premium is the premium on issue of shares. The same is utilised in accordance with provisions of the
Companies Act 2013.
General Reserve
The Company had transferred a portion of the net profit of the Company before declaring dividend to the general
reserve pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve before
declaration of dividend is not required under the Companies Act, 2013
Retained Earnings
Retained earnings are the net profits, the Company has earned till date and is net of amount transferred to other
reserves such as general reserves, etc., amount distributed as dividend and adjustments in terms of Ind AS 101.
i. The Company has offered amounting to Rs. 6,000.00 lakhs through 6,000 Non - Convertible Debenture of
Rs. 1,00,000/- each @ 16% Interest per annum cash coupon, compounded monthly and payable quarterly by
Private Placement to Sundaram Alternative Opp Series - High Yield Secured Debt Fund II. The Debentures is
redeemable in 12 equal Quarterly installments post the Principal Moratorium period of 12 months from the
date of allotment of the debentures. The Loan is fully repaid by November, 2024.
ii. The Company has additionally offered amounting to Rs. 2,000.00 lakhs through 2,000 Non - Convertible
Debenture of Rs. 1,00,000/- each during June 2023 and Rs. 1,500 lakhs through 1,500 Non - Convertible
Debenture of Rs. 1,00,000/- each during January 2024 @ 16% Interest per annum cash coupon, compounded
monthly and payable quarterly by Private Placement to Sundaram Alternative Opp Series - High Yield Secured
Debt Fund II. The Debentures is redeemable in 12 equal Quarterly installments post the Principal Moratorium
period of 12 months from the date of allotment of the debentures.
a. The loan is secured by:
Exclusively first charge by way of mortgage of the following projects:
1) Project Infinys having land of 1.49 acres
2) Approved plots measuring 3,00,000 Sq.Ft in Harmonia Projects
3) 32 acres of free hold katcha land in Sriperumbadur
4) 1,239 sq.ft of undivided share of land and 2,570 sqf.t of super built up area pertaining to apartment no. 302
in Homeleigh Project
5) 4,236.59 sq.ft. of undivided share of land and 11,224 sq.ft of super built up area pertaining to apartment
nos. 101, 102, 201,301 & 501 in Hiranmayi Project.
6) 1,920 sq.ft of undivided share of land and 4,968 sq.ft of super built up area pertaining to apartment nos. 201
& 301 in RathiRupa project
b First charge by way of hypothecation on receivables of developer share of projects through escrow a/c &
Unattested Deeds of Hypothecation pertaining to the Receivables from the Additional Projects
c Personal guarantee of promoter
d The facility shall provide security of atleast two times of the facility outstanding and a cash flow escrow of
atleast two times the facility outstanding at all the times during the tenor of the facility
e Interest Service Reserve Account (ISRA) equivalent to 1 quarter coupon which shall be maintained as a Fixed
Deposit by the Company
i. The total loan sanctioned to the company is amounting to Rs. 2,500.00 lakhs. The tenure of the term loan
not exceeding 48 months including Principal Moratorium of 12 months, is repayable in equated quarterly
installments. Principal repayment has started from March 31,2023 and is repayable by December 31,2026
ii. The term loan from Sundaram Home Finance Limited is secured by: (a) Equitable Mortgage of the project land
in respect of their on-going residential project, "Lumina" situate at Nellikuppam Road, Guduvanchery, Pincode
- 603 202, comprised in Survey Nos. 11/1, 11/2, 11/3, 11/4, 11/5A, 13/1A, 13/1B1, 16/1A1, 16/2A1, 16/2B1,
17/1A1, 17/1A2, 17/1A3, 17/1B1, 17/1B2 and 29/5 in Kayarambedu Village, Chengalpet Taluk, Kancheepuram
District (b) Assignment / Hypothecation of receivables from the project "Lumina Project".
iii. Interest Service Reserve Account (ISRA) equivalent to 1 quarter coupon which shall be maintained as a Fixed
Deposit by the Company
i. The Company has offered amounting to Rs. 6,000.00 lakhs through 6,000 Non - Convertible Debenture of
Rs. 1,00,000/- each @ 16.50% Interest per annum cash coupon, compounded monthly and payable quarterly
by Private Placement to Sundaram Alternative Opp Series - Real Estate Secured Fund IV. The Debentures is
redeemable in 12 equal Quarterly installments post the Principal Moratorium period of 12 months from the
date of allotment of the debentures.
ii. The Company has additionally offered amounting to Rs. 2,500.00 lakhs through 2,500 Non - Convertible
Debenture of Rs. 1,00,000/- each during February, 2025 @ 16.50% Interest per annum cash coupon,
compounded monthly and payable quarterly by Private Placement to Sundaram Alternative Opp Series - Real
Estate Secured Fund IV. The Debentures is redeemable in 12 equal Quarterly installments post the Principal
Moratorium period of 12 months from the date of allotment of the debentures as Co-Terminus with series 1
NCD Investment.
a. The loan is secured by:
1) Mortgage of undivided share of land in Town & Country project
2) Mortgage of undivided share of land in Harmonia & Town & Country Projects
3) Mortgage of the Project Infinys
b. First charge by way of hypothecation on receivables of developer share of projects through escrow a/c &
Unattested Deeds of Hypothecation pertaining to the Receivables from the Additional Projects
c. Personal guarantee of promoter
d. The facility shall provide security of atleast two times of the facility outstanding and a cash flow escrow of
atleast two times the facility outstanding at all the times during the tenor of the facility
e. Interest Service Reserve Account (ISRA) equivalent to 1 quarter coupon which shall be maintained as a
Fixed Deposit by the Company
Pursuant to approval by the shareholders of the Company in Extraordinary General Meeting held on March 27,
2024, during the financial year, the Company has issued 1,22,45,560 number of equity shares on preferential basis
at Rs. 45.30 per share amounting to Rs. 5,547.24 Lakhs. In view of the same, for the purpose of ease of comparison,
EPS for earlier periods have also been recomputed considering weighted average number of equity shares.
On June 28, 2024, pursuant to approval by the shareholders of the Holding Company in Extraordinary General
Meeting held on March 27, 2024, the Nomination and Remuneration Committee of the Board of Directors of the
Group has approved the grant of 8,97,800 stock options convertible to 8,97,800 equity shares of Rs. 2/- each to eligible
employees of the Group under Lancor Holdings Limited Employee Stock Option Scheme 2024 at an exercise price of
Rs.2/- per option. Out of the approved stock options, 3,42,800 options have been renounced by the employees. The
balance options will vest in favour of the grantees over a period of 1 years from the date of grant i.e., June 28, 2024.
4.02 Contingent Liabilities
The Company's pending litigations comprise of claims against the Company primarily by the customers and
proceedings pending with Income Tax / Service Tax / VAT and other government authorities. The Company has
reviewed all its pending litigations and proceedings and has adequately provided for where Provisions are required
and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect
the outcome of these proceedings to have a materially adverse effect on its financial results.
a) In the matter of the Commercial Property, "Menon Eternity" owned by the Company, the arbitrator had issued an
award dated March 16, 2016, invalidating the sales deeds registered in favour of the Company having carrying
value of Rs. 2,834.00 Lakhs. The single bench of the Hon'ble High court of Madras by its judgement delivered on
December 23, 2016, set aside the Award of the Arbitrator, with regard to the invalidation of the Sale deeds and
confirmed the title in favour of the Company. Subsequently, the land owners had gone on appeal before the
division bench in the Hon'ble High Court of Madras and also the company had filed cross objections on certain
matters. The said appeal was decided by the Hon'ble High Court of Madras by restoring the award of the Arbitrator.
The Company has approached the Hon'ble Supreme Court of India by filing a special leave petition and has been
admitted and converted into Civil Appeal. As on the reporting date, the matter is pending for hearing.
b) In view of the premature termination of the lease by one of the Lessees in the Menon Eternity Building, a dispute
had arisen between the Company and the said lessee. Therefore, the Company had forfeited the Rental Deposit.
The lessee had demanded a refund of the rental deposit of Rs. 218.36 lakhs along with interest and damages. A
suit has been filed by the Lessee before the Hon'ble High Court of Madras. The said suit was decreed in favour of
the Lessee, by payment of an amount of Rs. 424.15 Lakhs along with interest. The Company has filed an appeal
before the Division Bench of the Hon'ble High Court of Madras and the same is pending.
c) 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 lakhs has been furnished by way of a bank guarrantee renewed periodically. The
said writ petition has been disposed off as prayed by the Company. The CMDA has filed an appeal against the
order and is pending before the division bench of the Hon'ble High Court of Madras. In view of the management
the increased demand is based on the revision in the gudieline value which was not prevailing at the time of
approval, accordingly the claims are not acknowledged as debt.
d) The service tax department has raised a demand of Rs. 156.10 lakhs towards penalty on Lancor GST Developements
Limited (merged with Lancor Holdings Limited with an appointed date, April 1, 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. 39.03 lakhs 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 utilising the same.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the Defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the Defined benefit obligation has
been calculated using the projected unit credit method at the end of the reporting period, which is the same
method as applied in calculating the Defined benefit obligation as recognised in the balance sheet.
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 company's defined benefit
gratuity plan is a final salary plan for employees. Gratuity is paid from company as and when it becomes due and is
paid as per company scheme for Gratuity.
Risks associated with defined benefit plan
Gratuity is a defined benefit plan and entity is exposed to the Following Risks:
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 than assumed level will increase the plan's liability.
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.
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. 29.76 lakhs (March 31, 2024: Rs. 22.77 lakhs)
represents the contribution payable to these plans by the Company at the rates specified in the rules of the plan.
ii) Equity Settled Share Based Payments Employee Stock Option Plan
On June 28, 2024, pursuant to approval by the shareholders of the Company in Extraordinary General Meeting
held on March 27, 2024, the Nomination and Remuneration Committee of the Board of Directors of the Company
has approved the grant of 8,97,800 stock options convertible to 8,97,800 equity shares of Rs. 2/- each to eligible
employees of the Company under Lancor Holdings Limited Employee Stock Option Scheme 2024 at an exercise
price of Rs.2/- per option.
(i) Methods & assumption 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 parties, other than in a forced or liquidation sale.
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
including unbilled revenue, cash and cash equivalents, Bank Balances other than cash and cash equivalents,
other Current Financial Assets (like Security Deposits, interest accrued, loan to employees), Deposits with
Banks, trade payables, short term borrowings from Banks, Financial Institutions, Related Parties and Others,
Other Financial Liabilities (like Interest accrued Security & Rental Deposits, Refund due to Customers, and
other payables) are considered to be the same as their fair values.
b) The fair values for long term loans given to various parties, and remaining non current financial assets (like
Earnest Money paid to Landowners) were calculated based on cash flows discounted using a effective
interest lending rate. This is classified as level 3 fair values in the fair value hierarchy due to the inclusion of
unobservable inputs.
c) The fair values of non-current borrowings are based on discounted cash flows using a current borrowing
rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable
inputs.
d) For financial assets and financial 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:
Level 1: unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and
Level 3: inputs which are not based on observable market data
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The
Company's financial risk management policy is set by the Board of Directors.
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 establishment and oversight of the Company's risk
management. The below mentioned notes explains various sources of risk Company is exposed to & the manner in
which it manages such risk and its impact on the financial statements.
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 Company's exposure to credit risk arises mainly from the trade receivables
including unbilled revenue, loans provided to various parties, earnest money deposit paid to land owners and
other deposits including balances and deposits with the banks.
The Company is exposed to credit risk with respect to contract entered into with the customers for sale of residential
units. The Contract with customer includes milestone payment to be made by the customer. The possession of the
property is handed over to the customers only on collection of entire payment. Similarly, the handing over of the
property to the landowners where Company enters into agreement for joint development are also made only on
collection of earnest money deposit given earlier. Accordingly, the Company does not expect any expected credit
loss. During the financial year, the Company has not made any write-offs of trade receivables.
The trade receivables on account of maintenance income are typically un-secured and derived from services
provided to large number of independent customers. As the customer base is distributed economically there is no
concentration of credit risk. The credit period provided by the Company to its end use customers generally ranges
from 0 to 7 days.
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 the lifetime ECL allowance for trade receivables,
the Company uses a provision matrix which comprise a very large number of small balances grouped into
homogenous groups and assessed for impairment collectively. Individual trade receivables are written off when
management deems them not recoverable. Based on the industry practices and business environment in which
the Company operates, management considers that the trade receivables are in default if the payment are more
than 12 months past due.
Trade receivables consist of mainly customer balances relating to real estate and its allied activities with no
significant concentration of credit risk. The outstanding trade receivables are regularly monitored, and appropriate
action is taken for collection of overdue receivables.
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 includes, at all times to 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 Company's senior management monitors the Company's 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.
Maturities of Financial Liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities at the
reporting date based on contractual undiscounted payments.
The Company has sufficient sanctioned line of credit from its bankers / other financiers; commensurate to its
business requirements. The Company reviews its line of credit available with bankers and other financiers 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 receivables, as well as to
optimise accounts payable with the support of banking arrangements to mobilise funds.
c) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Companies exposure in relation to market risk is primarily in relation to Interest rate risk.
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.
4.20 Disclosure in relation to utilisation of borrowed funds
(a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign
entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).
The Company has not received any fund from any party(s) (Funding Party) with the understanding that the
Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on
behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(b) No funds have been received by the company from any person(s) or entity(ies), including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall,
whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
4.21 The Company migrated to a new accounting software with effect from April 1,2024, for maintaining its books
of account. The new accounting software has a feature of recording an audit trail (edit log), and the same was
enabled and operated throughout the financial year for all relevant transactions recorded in the software.
The audit trail functionality is available for changes made through the application interface; however, the
software does not have the feature to capture direct changes, if any, made at the database level. Except for
the periods of previous financial year where the audit trail feature was not enabled for accounting software
and its databases, the Company has preserved the audit trail in accordance with statutory record retention
requirements.
4.22 The Board of Directors of the Company at its meeting held on 1st March, 2024 had approved a Scheme
of Merger of Lancor Maintenance and Services Limited, the wholly owned subsidiary, with the Company
pursuant to the sections 230 to 232 and other applicable provisions of Companies Act, 2013. The Company
filed a Application for Scheme of Amalgamation on 2nd February, 2025 with National Company Law Tribunal
(NCLT). The appointed date of the Scheme is 1st April, 2024 and it will come into force on the Effective Date,
i.e. the date of filing of NCLT's order with the Registrar of Companies, Chennai.
4.23 The additional regulatory information detailed in clause 6L, of general instructions give in Part 1 of division II
of Schedule III to the Companies Act are furnished to the extent applicable to the Company
As per our report of even date attached
For G.M. Kapadia & Co. For and on behalf of Board of Directors
Chartered Accountants
Firms Registration No: 104767W
Satya Ranjan Dhall R V Shekar S. Sridharan
Partner Managing Director Director
Membership No. 214046 DIN: 00259129 DIN: 01773791
J.M. Chandrasekar K Prakash Kaushani Chatterjee
Chief Executive Officer Chief Financial Officer Company Secretary
Place: Chennai Place: Chennai Place: Chennai Place: Chennai
Date: 30th May, 2025 Date: 30th May, 2025 Date: 30th May, 2025 Date: 30th May, 2025
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