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Lancor Holdings Ltd.
|BSE: 509048||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE572G01025|
|BSE 00:00 | 22 Oct||8.39||
|NSE 05:30 | 01 Jan||Lancor Holdings Ltd|
|Mkt Cap.(Rs cr)||34|
|Mkt Cap.(Rs cr)||33.98|
Lancor Holdings Ltd. (LANCORHOLDINGS) - Director Report
Company director report
TO THE MEMBERS
Your Directors have great pleasure in presenting the Thirty Third (33rd)Annual Report on the business and operations of your Company together with Auditedfinancial statement of the Company including consolidated financial statement of theCompany for the financial year ended March 312018 and the Auditors' report thereon.
FINANCIAL SUMMARY AND HIGHLIGHTS
BUSINESS OUTLOOK FOR LANCOR HOLDINGS LIMITED ITS SUBSIDIARIES AND ASSOCIATE BUSINESSOVERVIEW
There has been no change in the nature of business of the Company.
Your Company has incorporated a new company on April 12 2018 in the name andstyleLancor South Chennai Developments Limited as a wholly owned subsidiaryfor the development of projects at South Chennai.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION BETWEEN THEEND OF THE FINANCIAL YEAR AND THE DATE OF REPORT:
There has been no material changes and commitment effecting the financial position ofthe Company between the end of the financial year and the date of the report except newlyincorporated company.
During the financial year 2017-18 the Company has on a standalone basis registeredtotal revenues of Rs.730670618/- as compared to Rs. 796373617/- in the previousyear. The EBIT for the previous year was Rs. 186292861 whereas the current FY EBIT isRs.67314514 the last year net profit was Rs. 156763243/- whereas the current yearnet profit is Rs.58765102/-
During the financial year 2017-18 the Company has on a consolidated basis registeredtotal revenues of Rs. 772775594/- as compared to Rs. 837386530/- in the previousyear. The total expenditure of Rs. 702616561/- for the FY 2017 - 18 as against thePrevious FY Rs. 650077153 the last year net profit was Rs. 157302162/- whereas thecurrent year net profit is Rs. 59917233.
The Board of Directors at its meeting held on May 14 2018 recommended a final dividendof 0.20 paise per equity share(i.e.10% on Equity Paid up capital) which is subject tothe approval of the members at the ensuing Annual General Meeting of the Company for thefinancial year ended March 312018.
The total dividend is estimated for the current year (excluding dividend distributiontax) is Rs.81 lakhs. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year your Company has transferred Rs.34.89 lakhs to Lancor Foundationtowards meeting of its objective.
Your Company through Lancor Foundation' has started initiative with an objectiveof not only to impart training to the youth at the rural area and also to make thememployable.
Further Lancor Foundation had identified a land situated at Sriperumbudur and paid anadvance amount of Rs. 40 Lakhs towards purchase of land to construct skill training centreto promote education and employment enhancing vocation skills in pursuant to the ScheduleVII of the Companies Act 2013.
The Company's contribution towards CSR is given in detail as Annexure - C
BOARD OF DIRECTORS AND ITS COMMITTEES
A. Composition of the Board of Directors
The Board of Directors of the Company comprises of Non Executive Chairman who is apromoter of the Company along with him other Five Non-Executive Directors including threeIndependent Directors. The Company has one Women Director who is also a Non Executive. Thecomposition of the Board of Directors is in compliance with regulation 17(1)(b) of SEBI(Listing Obligations and Disclosure Obligations) Regulations 2015 and Section 149 of theCompanies Act 2013.
The Company has received necessary declarations from the Independent Directors underSection 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as specified in Section 149(6) of the Companies Act 2013 and as perRegulation of the SEBI (Listing Obligations and Disclosures Requirements) Regulations2015.
The Board of Directors duly met seven (07) times during the year the details of whichare given in the Corporate Governance report that forms part of this annual report. Inrespect of all such meetings proper notices were given and the proceedings were properlyrecorded and signed in the minutes' book maintained for the purpose. The intervening gapbetween any two meetings was within the period prescribed under the Companies Act 2013.
In accordance with the provisions of the Companies Act 2013 a separate meeting of theIndependent Directors of the Company was held on February 07 2018.
C. Re-appointment of Director Retiring by Rotation (1/3 as per AOA no.100)
In terms of Section 152 of the Companies Act 2013 Mr. R.V. Sekhar (DIN-00259129)liable to retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board of Directors based on the recommendation ofNomination and Remuneration Committee has recommended the re-appointment of Mr. R.V.Sekhar (DIN-00259129) retiring by rotation.
Brief resume of the Director proposed to be re-appointed have been provided in the noteto the Notice convening the Annual General Meeting. Specific information about the natureof his expertise in specific functional areas and the names of the companies in which hehold Directorship and membership / chairmanship of the Board Committees as per regulation26 (4) of SEBI (Listing Obligations and Disclosure Obligations) Regulations 2015 havealso been included.
D. Committees of the Board
The constitution and terms of reference of Audit Committee Nomination and RemunerationCommittee Stakeholders Relationship Committee and Risk Management Committee were alsoaligned with the requirements of regulations 18 to 22 of SEBI (Listing Obligations andDisclosure Obligations) Regulations 2015 and the Companies Act 2013. The Company hasalso constituted Corporate Social Responsibility Committee.
A detailed note on the Committees of the Board of Directors is given in the CorporateGovernance Report forming part of the Annual Report.
E. Performance Evaluation
Section 134 of the Companies Act 2013 states that formal evaluation needs to be madeby the Board of its own performance and that of its committees and the individualDirectors. Schedule IV of the Companies Act 2013 and regulation 17(10) of SEBI (ListingObligations and Disclosure Obligations) Regulations 2015 states that the performanceevaluation of Independent Directors shall be done by the entire Board of Directorsexcluding the Directors being evaluated.
Pursuant to the provisions of section 134 (3)(p) of the Companies Act 2013 and SEBI(LODR) Regulations 2015 the Board has carried out an evaluation of its own performancethe Directors individually as well as the evaluation of the working of its Committees. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report. None of the Independent Directors is due for re-appointment.
F. Directors' Responsibility Statement
In terms of the requirements of Section 134(5) of the Companies Act 2013 we onbehalf of the Board of Directors hereby confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis; and
e) the Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively.
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating.
G. Changes in Directors and Key Managerial Personnel
There are no changes in the directorship as well as in the Key Managerial Personnelduring the period of the report.
H. Changes in Subsidiaries Joint Ventures and Associates
The company has incorporated a new company in the name and style "Lancor SouthChennai Development Limited" on April 12 2018 with the objective to promote anddevelop the properties located at South Chennai.
I. Significant or Material Orders Passed by Regulators / Courts
In the matter of the Commercial Property "Menon Eternity"The arbitrator hadissued an award dated March 16 2016 invalidating the sale deeds registered in favour ofthe Company. The single bench of the Hon'ble High court of Madras by its judgmentdelivered on December 23 2016 has set aside the Award of the Arbitrator with regard tothe invalidation of the Sale deeds and hence confirmed the title in favour of theCompany.Subsequently the land owners have gone on appeal before the division bench in theHon'ble High Court of Madras which is being contested by the Company.
There were no any other significant or material orders passed by the Regulators orCourts or Tribunals impacting the going concern status and Company's operations in future.
J. Declaration by Independent Directors
The Company has received necessary declaration from each independent director underSection 149 (7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
K. Details in respect of Frauds
The Company' auditor report does not have any statement on suspected fraud in thecompany operations to explain as per Sec. 134(3)(ca) of the Companies Act 2013.
Audit Related Matters
A. Audit Committee
Pursuant to regulation 18 of SEBI (LODR) Regulations 2015 and the provision of Section177(8) read with Rule 6 of the companies (Meeting of Board and its Powers) Rules 2014 theCompany has duly constituted a qualified and independent Audit Committee. The AuditCommittee of the Board consisting of three "Non-Executive - IndependentDirectors as members having adequate financial and accounting knowledge. Thecomposition procedures powers and role/functions of the audit committee and its terms ofreference are set out in the Corporate Governance Report forming part of the BoardsReport.
During the period under review the suggestions put forth by the Audit Committee wereduly considered and accepted by the Board of Directors. There were no instances ofnon-acceptance of such recommendations.
B. Statutory Auditors
The Company at its 32nd Annual General Meeting held on September 22 2017had appointed M/s. Nayan Parikh & Co. (ICAI Firm Registration No.:107023W) CharteredAccountants as the Statutory Auditor for a term of one year.
Pursuant to Section 139 (2)(b) of the Companies Act 2013 a company can appoint anaudit firm as auditor not more than two terms of five consecutive years.
Since M/s. Nayan Parikh & Co. (ICAI Firm Registration No.:107023W) CharteredAccountants had already been appointed as Statutory Auditors for a term of one year andsubject to the approval of the Members the Audit Committee and Board of Directors of theCompany has recommended to appoint of M/s. Nayan Parikh & Co. (ICAI Firm RegistrationNo.:107023W) Chartered Accountants as the Statutory Auditor of the Company for one moreterm consists of five consective years.
Accordingly the Board recommends the resolution in relation to appointment ofStatutory Auditor for the approval by the shareholders of the Company
C. Secretarial Auditors
Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company has appointed M/s. RabiNarayan and Associates Company Secretaries-in-Practice to undertake the Secretarial Auditof the Company. The Secretarial Audit report in Form No.MR.3 for Financial year 2017-18 isannexed herewith as Annexure- A.
There are no qualifications or adverse remarks in the Secretarial Audit Report whichrequire any explanation from the Board of Directors.
D. Cost Auditor
As per Sec. 148 (6) of Companies Act 2013 and rule 6(6) of the Companies (Cost recordsand audit) Rules 2014 the applicability of Cost audit is based on overall annual turnoverof the company from all its products and services during the immediately precedingfinancial year of rupees one hundred crore or more and the aggregate turnover of theindividual product or products or service or services for which cost records are requiredto be maintained under rule 3 is Rupees thirty five crore or more.
Since your company annual turnover does not exceed the threshold limit as mentionedabove; hence appointment of cost auditor is not applicable for the FY 2017 -18.
E. Internal Financial Controls
There are adequate internal financial controls in place with reference to the financialstatements. During the year under review these controls were evaluated and no significantweakness was identified either in the design or operation of the controls.
F. Internal Audit
The board at its meeting held on May 14 2018 appointed M/s. NVSRS & AssociatesChartered Accountants as internal auditor for the Financial Year 2018 - 19 based on therecommendation of Audit Committee.
A. Nomination and Remuneration Policy
The Company recognizes and embraces the benefits of having a diverse Board of Directorsand sees increasing diversity at the Board level as an essential element in maintaining acompetitive advantage in the complex business that it operates. It is recognized that aBoard comprised of appropriately qualified people with wide range of experience relevantto the business of the Company is important to achieve effective corporate governance andsustained commercial success of the Company. At a minimum the Board of the Company shallconsist of at least one woman Director. All Board appointments are made on merit in thecontext of the skills experience independence knowledge and integrity which the Boardas a whole requires to be effective.
The Nomination and Remuneration Committee of the Directors has formulated a Nominationand Remuneration Policy containing the criteria for determining qualifications positiveattributes and independence of a Director and policy relating to the remuneration for theDirectors key managerial personnel and senior management personnel of the Company. TheNomination and Remuneration Policy is available on the website of the Company at
B. Risk Management Framework
Pursuant to section 134 (3)(n) of the Companies Act 2013 & Regulation 21 ofSEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 the Board ofDirectors of the Company has constituted a Risk Management Committee which is entrustedwith the task of monitoring and reviewing the risk management plan and procedures of theCompany. The Company has developed and implemented a risk management framework detailingthe various risks faced by the Company and methods and procedures for identificationmonitoring and mitigation of such risks. The details of the committee and its terms ofreference are set out in the Corporate Governance Report forming part of the Boardsreport. At present the Company has not identified any element of risk which may threatenthe existence of the Company.
C. Corporate Social Responsibility Policy
The Corporate Social Responsibility Policy as formulated by the Corporate SocialResponsibility Committee and approved by the Board of Directors is available on thewebsite of the Company at http://www.lancor.in/investors/
As reported in the last Annual Report the Company has created a registered Trust underthe name and style of Lancor Foundation a non- profit Trust to pursue the corporatesocial responsibility policy. The Foundation works closely with and supports the Board andthe committee in identifying and implementing CSR activities. The Foundation also assiststhe Board and the committee in reporting progress of deployed initiatives and in makingappropriate disclosures on a periodic basis.
In terms of Section 134 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 Rule 9 of the Companies (Accounts) Rules 2014and Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules 2014 theannual report on Corporate Social Responsibility activities of the Company is given inAnnexure - C to this report.
D. Vigil Mechanism
Pursuant to regulation 22 of SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 and the provision of Section 177(9) read with Rule 7 of the companies(Meeting of Board and its Powers) Rules 2014 the Company has duly established a vigilmechanism for stakeholders Directors and employees to report genuine concerns aboutunethical behavior actual or suspected fraud or violation of the Company's code ofconduct or ethics policy. The Audit Committee of the Company oversees the vigil mechanism.The Company affirms that no personnel have been denied direct access to the Chairman ofthe Audit Committee.
The Policy also provides for adequate protection to the whistle blower againstvictimization or discriminatory practices. The Policy is available on the website of theCompany at http://www.lancor.in/investors/
E. Sexual Harassment Policy
Your Company follows the principle of equal opportunities and is committed to creatinga healthy working environment that enables employees to work without fear of prejudicegender bias and sexual harassment. The Company also believes that all employees of theCompany have the right to be treated with dignity. Sexual harassment at the work place orother than work place if involving employees is a grave offence and is thereforepunishable.
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment.
A Committee has been constituted by the Management to consider and redress complaintsof Sexual Harassment.
The Policy is available on the website of the Company at http://www.lancor.in/investors/
During the year under review the Company has not issued any debentures. As on datethe Company does not have any outstanding debentures.
B. Bonus Shares:
During the year under review the Company has not issued any bonus shares.
The Company has outstanding borrowings of Rs. 1601379481/- during the financial Yearended March 312018.
The Company has not accepted any deposit in terms of Chapter V of the Companies Act2013 read with the Companies (Acceptance of Deposit) Rules 2014 during the year underreview and as such no amount on account of principal or interest on public deposits wasoutstanding as of the balance sheet date.
E. Transfer to Investor Education and Protection Fund
As required under the provisions of Sections 124(5) and 125(2)(c) of the Companies Act2013 both interim and final dividends pertaining to the financial year 2009-10 which werelying unclaimed with the Company for the past seven years was transferred to the InvestorEducation and Protection Fund during the Financial Year 2017-18.
The details of unclaimed dividend transferred to the Investor Education and ProtectionFund has been detailed in the Corporate Governance Report forming part of the AnnualReport which also available in the company's website.
F. Human Resources
Employee relation continues to be cordial and harmonious at all levels and in alldivisions of the Company. The Board of Directors would like to express their sincereappreciation to all the employees for their continued hard work and dedication.
As a part of the policy for Prevention of Sexual Harassment in the organization theCompany has in place an Internal Complaints Committee for prevention and redressal ofcomplaints of sexual harassment of women at work place in accordance with SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andrelevant rules thereunder. No complaints were received by the Committee during the periodunder review.
Number of employees as on March 312018 was 62 which include 10 women employees.
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure - D to the Board's Report.
F. Credit Rating:
CRISIL has re-affirmed its rating of BBB - Stable in respect of company'slong term bank loans.
G. Code of Corporate Governance
In compliance with the requirement of regulations 24 to 27 of SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015 a detailed report on Corporate Governanceis annexed to this report as Annexure - H together a Certificate from Mis. Rab i Narayanan & Associates Company Secretaries-in-Practice affirming compliance with the saidCode.
H. Code of Conduct
In compliance with requirement of regulations 17 of SEB I (Listin g Obligation s andDisclosures Requirements) Regulations 2015 an d Companie s Act 2013 the Company haslaid down a Cod e of Conduct (Code) for aII the Board Members and Senior ManagementPersonnel of the Company. The Code is also posted on the Website of the Companyhttp://www.lancor.in/investors/. All the Board Members and Senior Management Personnelhave affirmed their compliance with the Code for the financial year ended March 31 2018.A declaration to this effect signed by Mrs.Mallika Ravi the Chief Executive Officer ofthe Company forms part of this report.
I. Management Discussion and Analysis Report
In accordance with the requirement of the Listing regulations the ManagementDiscussion and Analysis Report titled as Management Report is presented in a separatesection of the Annual Report.
J. Extract of Annual Return
In terms of Section 134 (3) of the Companies Act 2013 the Extract of the Annual Returnof the Company for the Financial Year 2017 -18 is available in our company's website.
Please click the following link to download the same.
K. Particulars of Loans Guarantees and Investments
In terms of Section 134 of the Companies Act 2013 the particulars of loansguarantees and investments given by th e Company under Sectio n 186 of th e Companies Act2013 is detailed i n (Note No.2.13) Notes to Standalon e Financial Statements.
L. Related Party Transactions
All related party transactions that were entered into during the financial year were atarm's length basis and were in the ordinary course of business. All related partytransactions are placed before the Audit Committee as also the Board for approval onquarterly basis for the transactions which are of a foreseen and repetitive nature. TheBoard of Directors of the Company has with the recommendation of the Audit Committeeadopted a policy to regulate the transactions between the Company an d its related partiesin compliance with the applicable provisions of the Companies Act 2013 and rules madethere under and the Listing Agreement.
During the year the Company has not entered into any contract / arrangement /transaction with a related party which can be considered as material in terms of thepolicy on related party transactions laid down by the Board of Directors. These Policieshave been uploaded on the website of the Company at http://www.lancor.in/investors/ therelated party transactions undertaken during the Financial Year 2017 - 18 are detailed inNotes (Note No.4.09) to Accounts of the Financial Statements.
Particulars of contracts or arrangements with related parties referred to in section188(1) of the Companies Act 2013 in form AOC-2 is appended as Annexure- F to the Board'sReport.
M. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
Lancor Holdings Limited does not carry on any manufacturing activity and accordinglythe provision to furnish information as per section 134(3)(m) of the Companies Act 2013read with the Rule 8(2) of the Companies (Accounts) Rules 2014 particulars relating to(A) Conservation of energy and (B) Technology Absorption is not applicable.
Foreign Exchange Earnings and Outgo
Foreign Exchange Earnings : Nil
Foreign Exchange Outgo : Nil
N. Financial Position and Performance of Subsidiaries Joint Ventures and Associates
As on March 312018 the Company has two subsidiaries and one Joint Venture viz.Lancor Egatoor Developments Limited Lancor Maintenance & Services Limited and a JointVenture Central Park West Venture.
There has been no material change in the nature of the businesses of the subsidiaries.The consolidated financial statement has also been prepared in accordance with therelevant accounting standards and a separate statement containing the salient features ofthe financial statement of its subsidiaries and associate in form AOC - 1 is attachedalong with the financial statement of the Company as Annexure - F
As per the provisions of Section 136 of the Companies Act 2013 the Company has placedseparate audited accounts of its subsidiaries on its website
O. Green initiatives
Electronic copies of the Annual Report 2017-18 and Notice of the Thirty Third AnnualGeneral Meeting are sent to all members whose email addresses are registered with theCompany/ Depository Participant(s). For members who have not registered their emailaddresses physical copies of the Annual Report 2018 and the Notice of the Thirty ThirdAnnual General Meeting are sent in the permitted mode. Members requiring physical copiescan send a request to the Company. Further the soft copy of the Annual Report (in pdfformat) is also available on our website (www.lancor.in)
Pursuant to Section 108 of the Companies Act 2013 Rule 20 of the Companies(Management and Administration) Rules 2014 and Listing Regulations the Company isproviding e-voting facility to all members to enable them to cast their voteselectronically on all resolutions set forth in the notice. The instructions for e-votingare provided in the notice.
P. Details in respect of frauds reported by auditors under sub section (12) of section143 other than those which are reportable to the Central Government
There are no such fraud required to be reported under section 143(12) of the companiesAct 2013
Q. Additional Information to Shareholders
All important and pertinent investor information such as financial results investorpresentations press releases new launches and project updates are made available on theCompany's website (www.lancor.in ) on a regular basis.
The Directors would like to place on record their sincere appreciation to the Company'scustomers vendors and bankers viz. The Catholic Syrian Bank Limited The Axis BankLimited The City Union Bank Limited The Axis Finance Limited and The State Bank of Indiafor their continued support to the Company during the year. The Directors also wish toacknowledge the contribution made by employees at all levels for steering the growth ofthe organization. We thank the Government of India the state government and othergovernment agencies for their assistance and cooperation and look forward to theircontinued support in future.
Finally the Board would like to express its gratitude to the members for theircontinued trust cooperation and support.
For and on behalf of the Board of Directors of LANCOR HOLDINGS LIMITED