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Lancor Holdings Directors Report, Lancor Holdings Reports by Directors
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Lancor Holdings
BSE: 509048|ISIN: INE572G01025|SECTOR: Construction & Contracting - Housing
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« Mar 10
Directors Report Year End : Mar '11
The Directors have great pleasure in presenting the Twenty Sixth
 Annual Report on the business and operations of your Company together
 with Audited Accounts of the Company for the year ended 31st March 2011
 and the Auditors report thereon.
 
 Financial Results
 
 The stand-alone financial results of Lancor Holdings Limited for the
 year ended March 31, 2011 are presented below:-
 
                                                   (Amount In Rs. Lacs)
 
 Particulars                                 2010-2011        2009-2010
 
 Income from Operations                      12,589.99        10,281.79
 
 Profit before interest, 
 depreciation and taxes                       4,562.62         3,048.45
 
 Less: Interest                                 553.29           484.19
 
 Depreciation                                   249.82           276.93
 
 Profit/(Loss) before Tax                     3,759.51         2,287.33 
 
 Less: Provision for
 Current Tax                                    721.41           687.38
 
 Deferred Tax                                     3.99             0.15
 
 Profit/(Loss) after Tax                      3,034.11         1,599.80
 
 Add: balance brought forward 
 from previous year                           4,174.99         3,209.06
 
 Less: Prior year adjustments -                      —             0.07
 
 Available for appropriation                  7,209.10         4,808.79
 
 Interim Dividend                                    —           202.50
 
 Dividend - Final                               405.00           202.50
 
 Tax on Dividend                                 67.27            68.82
 
 Transfer to General reserve                    303.41           159.97
 
 Balance carried to Balance sheet             6,433.42         4,174.99
 
 The consolidated financial results of the Company and its Subsidiaries
 for the year ended March 31, 2011 are presented below:- (Amount In Rs.
 Lacs)
 
 Particulars                                 2010-2011       2009-2010
 
 Income from operations                      19,719.44       11,840.31
 
 Profit before interest, 
 depreciation and taxes                       5,462.74        3,375.89
 
 Less: Interest                                 553.71          484.44
 
 Depreciation                                   260.27          292.32
 
 Profit/(Loss) before Tax                     4,648.76        2,599.13 
 
 Less: Provision for Current Tax                814.31          784.29
 
 Deferred Tax                                     9.50          (5.66)
 
 Profit/(Loss) after Tax                      3,824.94        1,820.15
 
 Short / Excess Provision of tax 
 for previous years                             599.78               —
 
 Add: balance brought forward from 
 previous year                                4,787.16        3,600.81
 
 Available for appropriation                  8,011.77        5,420.96
 
 Interim Dividend                                    —          202.50
 
 Dividend - Final                               405.00          202.50
 
 Tax on Dividend                                 67.27           68.83
 
 Transfer to General reserve                    303.40          159.97
 
 Balance carried to Balance sheet             7,236.10        4,787.16
 
 BUSINESS OUTLOOK FOR LANCOR HOLDINGS LIMITED, ITS SUBSIDIARIES AND
 ASSOCIATE:
 
 Your Directors Have Great pleasure In Presenting The Twenty Sixth
 Annual Report On The Business And Operations Of Your Company Together
 With Audited Accounts Of The Company For The Year Ended 31st March,
 2011 And The Auditors Report There On.
 
 CNBC CRISIL CREDAI REAL ESTATE AWARD 2010:
 
 It is very gratifying to report that the Company received the CNBC
 AWAAZ CRISIL CREDAI REAL ESTATE AWARDS 2010, under the category BEST
 CONSUMER PROTECTION for our project THE CENTRAL PARK WEST, at a
 function held in Singapore in April, 2011.
 
 CAPITAL RAISING EFFORTS - PROGRAMME FOR RAISING ADDITIONAL CAPITAL
 
 The Directors felt on the basis of advice given by Merchant banks that
 it would be better to defer the programme for raising additional
 capital for the time being and wait for opportune time for the
 sentiments to improve concerning property development business.
 
 Accordingly the company has decided to defer the programme and look for
 alternative means of financing acquisition of new lands for the
 development to improve the volume of business.
 
 PROPERTY DEVELOPMENT BUSINESS:
 
 RESIDENTIAL SEGMENT: Last year the company had outlined a bright future
 for Residential property development and the performance had been
 gratifying. However the events in the last 6 months namely, the very
 disturbed political conditions has reverberated to the property
 development business negatively and until we have more stable political
 and economic situation, the outlook for the property business is not
 going to be rosy as one would have expected.
 
 The considerable inflation seen in the economy has lead to stringent
 monetary management by the RBI resulting in steep increase in interest
 rates both to the company and to its customers who are mainly housing
 loan applicants.
 
 Inflation has also brought negative consequences on construction cost
 while local government controls on supply and movement of essential
 items namely sand, bricks etc has disturbed the equilibrium resulting
 increase in prices.
 
 Your company has acquired more projects for development in the last 5-6
 months which gives a very positive business outlook.
 
 Your company has acquired 92 acres of land for development both on
 outright and joint venture basis in Sriperumbudur which is thought of
 as destination of future. This is quite possible with the new
 international Airport to be situated in the vicinity and most of the
 manufacturing units namely Automobile companies, Auto Ancillary Units,
 Tyre Companies, Electronic & Telecom Industry set up being part of the
 Sriperumbudur, Oragadam area. Sriperumbudur is already becoming a
 strong case for being developed into a satellite township.
 
 The company has also positioned itself for future development on the
 GST Road. The new parcel of land for residential project is within 4 to
 5 kms of Abode Valley project and is expected to produce outstanding
 results.
 
 The company has 2 projects to its pipeline in the Old Mahabalipuram
 Road area and it has successfully completed construction of 550
 apartments known as The Central Park in this area.
 
 In terms of development in the suburbs, these various projects would
 give a constructable space of nearly 7 million sq.ft.
 
 NON-RESIDENTIAL SEGMENT:
 
 Your Company has opportunity to develop 2 or 3 city non residential
 locations and the proposals for development of such plots are under
 consideration with the owners. The continued policy of the company in
 the matter of development of non residential city projects is not to
 dispose of such developed non residential project to book profit but to
 retain them for rental income and capital appreciation. As can be seen
 from recent commercial developments by the company namely Menon
 Eternity and Roma, though such investment strain the companys finance
 in the initial stage, the longer term benefits of steady rental income
 and capital appreciation need not be overemphasized. It is expected
 that in the next 5 years the companys holding of non residential
 property would have doubled in stock from 134,000 sq.ft to 250,000
 sq.ft.
 
 Although whatever has been stated above gives a healthy outlook for the
 future, the immediate future mainly for the year 2011-2012 is not
 expected to be bright since the company is experiencing difficulties in
 starting of various projects because of delay in obtaining sanction
 from various government departments. The main reason for this delay in
 action by the Government is due to election held in the State of
 Tamilnadu followed by total change of government and also reshuffle of
 officials in various departments. Due to the above circumstances the
 companys turnover for the current year may just be around Rs.150
 Crores instead of Rs.250 crores that is originally thought of as
 achievable.
 
 SUBSIDIARY COMPANIES:
 
 LANCOR MAINTENANCE & SERVICES LIMITED (LMSL) :
 
 Over the next few years the number of apartments which LMSL will
 maintain is expected to cross 3000 in all which will boost revenues of
 the company. Significant contributions are also expected from the
 commercial properties that are owned by the company and maintained by
 LMSL. As operations increase, but remain within the geographical
 territory of Chennai, it is quite likely that services provided by LMSL
 will broaden beyond the parent companys projects to projects developed
 by others. The breadth of services rendered are also likely to get
 expanded. Special emphasis is being made for training of employees and
 for this purpose a training centre is proposed in the vicinity of one
 of the projects.
 
 LANCOR REALTY LIMITED (LRL) :
 
 The outlook for LRL continues to remain bright in view of developed
 property volumes made by the parent company increase from year to year.
 Opportunity for third party transactions coupled with increased
 commercial property placements, no doubt is a bright spot for the
 future. Strengthening of the companys management is being given
 serious attention and hopefully more energetic team will be in place
 soon.
 
 LANCOR PROJECTS LIMITED (LPL):
 
 Last year has been relatively difficult period for LPL in view of
 severe challenges on construction cost management, labour productivity
 and major supply chain issues covering supply of very essential items
 like sand, bricks etc. The LPL senior management is now seized in
 finding solution for these difficulties and challenges while at the
 same time improving contracting practices at more acceptable prices.
 
 LANCOR GUDUVANCHERY DEVELOPMENTS LIMITED (LGDL):
 
 The outlook for LGDL is bright, since it proposes to develop, the 8.15
 acres of land purchased in the name of the company as a residential
 development with very good margin. On the basis of allowable FSI on
 this land, LGDL can build approximately 7.25 lakhs sq.ft of super built
 up area which would facilitate construction and maintenance of 600
 apartments of 1200 sq.ft of average size for which good demand exists
 at a reasonable price. LGDL also proposes to purchase another 7 acres
 of adjoining land, which would yield further development of another
 approximately 550 apartments leading to the companys continued
 presence in Guduvanchery for a minimum period of 5 years.
 
 DIVIDEND:
 
 Your Directors are now pleased to recommended 100% Dividend on the
 paidup share capital of the Company i.e., Rs.2/- per equity share of
 Rs.2/- each.
 
 FIXED DEPOSITS, LOANS & ADVANCES
 
 Your Company has not accepted any deposit from the public or its
 employees during the year under review.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with accounting standard AS-21 on Consolidated Financial
 Statements read with Accounting Standard AS-23 on Accounting for
 Investment in Associates and AS-27 on Financial Reporting of Interest
 in Joint Ventures, the audited Consolidated Financial Statements are
 provided in the Annual Report.
 
 SUBSIDIARY COMPANIES AND ASSOCIATE:
 
 Further to strengthen Companys presence in sub-urban areas like
 GUDUVANCHERY, EGATOOR AND SRIPERUMBUDUR your Company has incorporated
 three subsidiaries viz. LANCOR GUDUVANCHERY DEVELOPMENTS LIMITED,
 LANCOR EGATOOR DEVELOPMENTS LIMITED and LANCOR SRIPERUMBUDUR
 DEVELOPMENTS LIMITED and obtained Certificate of commencement of
 business from Registrar of Companies, Chennai respectively on
 02.12.2010, 09.04.2011 and 22.04.2011.
 
 As required under Section 212 of the Companies Act, 1956 the statement
 pursuant to section 212 of the Companies Act, 1956 along with the
 Audited Balance Sheet and Profit and Loss Account along with the
 respective reports of the Board of Directors and the Auditors Reports
 thereon of the Subsidiary companies viz, LANCOR MAINTENANCE & SERVICES
 LIMITED, LANCOR REALTY LIMITED, LANCOR PROJECTS LIMITED and LANCOR
 GUDUVANCHERY DEVELOPMENTS LIMITED for the year ended March 31, 2011 are
 attached.
 
 STATUTORY STATEMENTS
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Lancor Holdings Limited does not carry on any manufacturing activities
 and accordingly the provision to furnish information as per Section 217
 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure
 of Particulars in the report of Board of Directors) Rules, 1988,
 particulars relating to Conservation of energy, Research and
 Development and Technology Absorption is not applicable.
 
 Foreign Exchange Earnings: Rs.  Nil.
 
 Foreign Exchange Outgo:    Rs.  1,73,36,709-
 
 PARTICULARS OF EMPLOYEES
 
 Industrial relations have remained cordial throughout the year in the
 Company. During the year under review there were no employees covered
 under section 217(2A) of the Companies Act, 1956.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement u/s 217(2AA) of the Companies Act, 1956
 with respect to Directors Responsibility Statement your Directors to
 the best of their knowledge and belief confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 Accounting Standards and given proper explanation relating to material
 departure;
 
 (ii) they have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give true and fair view of the state of affairs of the
 Company at the end of the financial year and of the profit of the
 Company for that period;
 
 (iii) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Act so as to safeguard the assets of the Company and to prevent and
 detect fraud and other irregularities; and
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 INTERNAL CONTROLS AND THEIR ADEQUACY:
 
 The internal control systems are commensurate to the size of the
 operations of the Company. Whenever it is required, the systems and
 procedures are upgraded to suit the changing business needs.
 
 STATEMENT PURSUANT TO LISTING AGREEMENT
 
 The Companys securities are listed with Bombay Stock Exchange Limited,
 Mumbai and it has paid the annual listing fees up-to-date and there are
 no arrears.
 
 CORPORATE GOVERNANCE
 
 A detailed report on Corporate Governance as updated with the
 particulars of this financial year, as per the directions from SEBI is
 annexed to this report (Annexure A) together with Report of the
 Auditors on the compliance with the said Code and a Report of
 Management discussion and Analysis is also annexed separately.
 
 DIRECTORATE
 
 In compliance with the provisions of the Companies Act, 1956 in
 accordance with the Article 86 of the Companys Articles of
 Association, Mr.Jayesh N Thakkar, retires at this Annual General
 Meeting and being eligible, offers himself for re-appointment.
 
 The Board of Directors at their meeting held on 02-12-2010 had
 appointed Mrs.Sangeetha Shekar as an Additional Director pursuant to
 the provisions of section 260 of the Companies Act, 1956, read with
 Article No.86 of the Articles of Association of the Company to hold
 office as such till the conclusion of the ensuing Annual General
 Meeting. In terms of Section 257 of the Companies Act, the Company has
 received a notice in writing from a member signifying his intention to
 propose the candidature of Mrs.Sangeetha Shekar for the office of
 Director of the Company. Your Directors recommend the resolution as set
 out in item No.5 of the notice convening annual general meeting for
 approval of the shareholders
 
 Brief resume of the Directors, seeking re-appointment, nature of their
 expertise as stipulated under clause 49 of the listing agreement with
 the Bombay Stock Exchange Limited, is appended to the notice convening
 the Annual General Meeting.
 
 DISCLOSURES OF PARTICULARS OF CONSTITUTING GROUP PURSUANT TO
 REGULATION 3(1)(E) OF THE SEBI(SUBSTANTIAL ACQUISITION OF SHARES &
 TAKEOVERS) REGULATIONS, 1997.
 
 Pursuant to an information from the promotes, the name of the promoters
 and entities comprising group as defined under Monopolies and
 Restrictive Trade Practice (MRTP) Act, 1969, are as under for the
 purpose of the SEBI(Substantial Acquisition of Shares & Takeovers)
 Regulations, 1997.
 
 1) R.V.Shekar, 2) Shyamala Shekar, 3) Swetha Shekar and 4) Sangeetha
 Shekar.
 
 AUDITORS
 
 The retiring auditors, M/s.G.M.Kapadia & Co., Chartered Accountants
 have expressed their willingness to continue in office, if appointed.
 They have furnished to the Company a Certificate of their eligibility
 for appointment as auditors, pursuant to section 224 (1B) of the
 Companies Act, 1956.
 
 The Audit committee and the Board of Directors recommend the
 re-appointment of M/s.G.M.Kapadia & Co., Chartered Accountant as
 Auditors for a further period of one year and to fix their
 remuneration.
 
 The Auditors Report to the Members does not contain any qualification
 or adverse remarks.
 
 FINANCIAL INFORMATION OF SUBSIDIARY COMPANIES
 
                                         (Figures in Indian Currency)
 
 Sl.  Name of the Subsidiary   Reporting                      Total
 No-  Company                  Currency  Capital   Reserves   Assets
 
 1.  Lancor Maintenance &
     Services Ltd              INR       2,517,500 32,526,249 35,043,749
 
 2.  Lancor Realty Ltd         INR         500,000 19,747,576 20,247,576
 
 3.  Lancor Projects Ltd       INR         500,000 32,781,622 33,281,622
 
 4.  Lancor Guduvanchery
     Developments Ltd          INR         500,000  Nil      100,784,316
 
 Sl.   Total                            Turnover/   Provision 
 No.   Liabilities     Investments      Total       for after 
                                        Income      Taxation 
 
 1.    35,043,749      29,356,920     69,280,170    3,429,344  
 
 2.    20,247,576      13,021,768     18,319,740    2,164,177 
 
 3.    33,281,622      10,652,867     29,554,860    4,102,109 
 
 4.   100,784,316             Nil            Nil       16,365
 
 Sl.  Profit        Proposed    Country
 No.  after         Dividend
      Taxation
 
 1.   8,002,179        N.A.      INDIA
 
 2.   5,243,672        N.A.      INDIA
 
 3.  5,924,022         N.A.      INDIA
 
 4.    (64,339)        N.A.      INDIA
 
 
 ACKNOWLEDGEMENT
 
 The Directors take this opportunity to thank our Banker Catholic Syrian
 Bank, HDFC Limited, State Government, other statutory bodies for their
 unstinted and consistent support to the Company. Your Directors place
 on the record their appreciation of the dedicated service of the
 employees of the Company at all levels for the growth of the Company.
 
                       For and on behalf of the Board of Directors of 
                                              LANCOR HOLDINGS LIMITED
 
                                R Sankaranarayanan        R.V. Shekar
                                         Director   Managing Director
 
 Place : Chennai
 
 Dated : 10th day of June 2011
 
Source : Dion Global Solutions Limited
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