Lancor Holdings Ltd Management Discussions

1_ INDUSTRIAL OVERVIEW

The general industrial outlook has been good as seen from the Government statistics over the last few months, which has considerably improved confidence in the economy.

Demand for property acquisition at all levels have been strong and encouraging.

2_ FUTURE OUTLOOK

The war in Ukraine, which appears to be never ending one, has marginally impacted the Indian economy. It appears, with the possible change in the US Government, the war in Ukraine might end by the middle of next year. The Humanitarian crisis created by Palestine attack on Israel and the consequential Israeli bombardment has been very disturbing but not economically disruptive to the scale of destruction and deaths. However, the obstruction to the sea-lanes caused by attacks on ships has not only driven the cost of transportation but also resulted in supply chain issues and inflation to imported products.

The Indian economy has reasonably well absorbed the foregoing distresses and has consistently grown year after year FY 24 at 7% and above on a cumulative basis. This situation has led to positive future outlook for businesses.

3_ ECONOMIC OVERVIEW

As stated in our previous report the only two sources for funding for land acquisition are; 1) raising of equity capital and usage of retained earnings 2) raising funds from Private Equity funds and to a smaller extent from the Banks and NBFCs.

4_ RESIDENTIAL SEGMENT _ CITY PROJECTS

We are happy to inform you that we have fully completed a large scale residential project named "TCP Altura" at Sholinganallur having 335 apartments and successfully repaid the loan obtained from LIC Housing Finance Ltd before the due date for repayment. The completion of this project has been very much appreciated by the customers, many of whom are now in touch with us to buy an apartment in our new project, "Lancor-Summit" being developed in the vicinity. "Lancor Summit" has obtained all clearances as of date of writing this report. Lancor-Summit is positioned at a luxurious level having basement, stilt and 11 floors with 4 apartments per floor. It is gratifying to report the companys marque project "Infinys" is now nearing completion with over 100 apartments having been handed over to customers while the balance will be delivered before the end of August 2024 in full. The position of the companys city projects is that it is being well absorbed at good prices, this segment is now holding up good promise more particularly projects which are within 20 kms from the city, in the luxury segment. The company is now actively engaged in concluding development of further FIVE projects within the said 20 kms radius which will produce a developed area of at least 1,00,000 sq.ft of upmarket residential residences yielding a sales margin for over 20%.

The risks of investment and development will be very carefully balanced by presales and geographical spread of project(s). The company would have completed and handed over before 31st March 2025 all the current projects under execution namely "Infinys", at Keelkatalai, "Lumina" at Guduvancherry and the 5 small sized luxurious city projects leading to a higher turnover for 2024–25.

RESIDENTIAL SEGMENT _ SRIPERUMBUDUR

We are glad to inform you that the company has settled the commercial dispute between the owners of the land taken up for joint development at Sriperumbudur. This has enabled the company to launch multiple projects of varying sizes to two different interest groups most of it targeting senior citizens and others who are planning relocation to a "green" property. This development is one of the closest residential area to the proposed international airport to be located in a place called Parandur; at a distance of 20 kms, which is going to be served by Metro Rail and 8 lane expressway to conveniently reach Bangalore via the proposed international airport in Chennai.

The Company is holding of a little over 1.15 million sq.ft, of approved plots on which in stage-1 we are planning to construct a little over 100 senior apartments and 60 luxury villas consisting about 1,50,000 sq.ft of land yielding good returns both for the land holding perspective and construction activity profits.

Additionally the company has earmarked 98,000 sq.ft of land for sale as plots targeting high income segments planning their future residences.

The net cash flows on these activities till March 2025 is expected to be about Rs. 25 crores which will go to reduce the debt caused as a result of settlement to this land owners.

The outlook with regard to Sriperumbudur development is very positive as the company is proposing to spend adequate funds for marketing this project via digital marketing, ATL & BTL activities, channel partners and the Press. Needless to mention the opportunities here for the customers will be presented on a global scale targeting Indians in Dubai, Singapore and select cities in the US.

COMMERCIAL SEGMENT

The company at all times is looking at opportunities for commercial development of viable sizes. The demand for commercial properties in the last 12 months has improved and hence good projects in the IT sectors could produce rental returns of about 7 to 8% and a capital appreciation of about 5 to 6%.

GOVERNMENT POLICIES

The "Tamilnadu Apartment Ownership Act 2022 (Tamil Nadu Act 44 of 2022)" passed for redevelopment of residential properties is still languishing for want of notification of rules by the Housing and Urban development department. Had these rules been notified a large number of existing housing complexes would have come for re-development since consent from two-third of the members in the housing society is enough to start a re-development. Our company is exploring options to help Housing societies who have consented with the company for re-development and help them obtain suitable Court/Government orders for the start of the project.

The issue concerning registration of properties met a hurdle due to the requirement of Composite Agreement for Registration of Land and Building, which means registration can only be completed after receipt of the Completion Certificate from the authority for the development. In the interregnum the company will continue to hold the property with itself while not been able to receive total sales proceeds due to inability by the buyer to create security in favour of lenders/Institutions. This has added pressures on the funding for the company while creating needless anxiety in the minds of the buyers.

SALE OF PLOTS

The company has successfully sold 1,41,508 sq.ft of land in the project named "Temple Town" at Sriperumbudur where 9.08 acres of land has been successfully plotted with all the infrastructures having been completed.

Fortunately for the company the employees of the "International Automobile Companys Employees Credit Society" were not willing to meet the price expectations for the properties which resulted in the company having to sell these plots to individual buyers at a higher price with good margins.

REAL ESTATE

The Senior Citizen Homes under the brand "Harmonia" homes had gained traction but unfortunately due to the order of the High Court to stop construction two years ago (the dispute having been settled) a vacuum had been created to the momentum to the marketing of the senior homes. This is going to get reversed in the current year definitely as we would be obtaining good enquiries and closures for sale during the process of marketing activities. The company has also conceived and it is ready to implement the construction of an apartment complex for senior citizens and we are hoping for very good traction for these apartments.

PART "A": SUBSIDIARIES

Reporting Period : April 1, 2023 to March 31, 2024

Reporting Currency : INR

	Name of the subsidiaries
Particulars	Lancor Maintenance and Services Limited	Lancor City Developer Limited (formerly known as Lancor Infinys Limited)
Share Capital	25.18	5.00
Reserves & Surplus	635.31	(1.80)
Other Liabilities	292.34	0.86
Total Liabilities	952.83	4.06
Investments	10.00	-
Turnover	1.34	-
Profit before Tax	(1.01)	(0.85)
Provisions for Tax	(0.29)	-
Profit after Tax	(0.72)	(0.85)
Proposed Dividend	-	-
% of Shareholding	100%	100%

Notes:

1. Lancor City Developer Limited(Formerly known as Lancor Infinys Limited), a wholly owned subsidiary of the Company was incorporated on 28^th August, 2021.

2. No subsidiary has been sold during the year.

PART _ B

Statement pursuant to Section 129(3) of the Companies Act 2013 related to Associate Companies and Joint Ventures

(Rs. In lakhs)

Name of the associates/JV	Central Park West Venture
Latest Audited Balance Sheet Date	31.03.2024
Shares of Associate/JV held by the Company	Not Applicable
Extend of holding	200.00
Description of how they are significant influence	Voting Power
Reason for why the associate/JV is not consolidated	Not Applicable
Networth attributable to shareholding as per latest audited B/s	Rs. 571.47 Lakhs
Profit/Loss for the year	Rs. 12.10 Lakhs
Considered in Consolidation	Yes
Not considered in consolidation	Not Applicable

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arms length basis

Sl No. Particulars	Details
A Name(s) of the related party and nature of relationship
B Nature of contracts/arrangements/transactions
C Duration of the contracts/arrangements/transactions
D Salient terms of the contracts or arrangements or transactions including the value, if any
E Justification for entering into such contracts or arrangements or transactions	Not Applicable
F Date of approval by the Board
G Amount paid as advances, if any
H Date on which the special resolution was passed in General meeting as required under first proviso to section 188

2. Details of material contracts or arrangement or transactions at arms length basis (Rs. In Lakhs)

Sl. No. Particulars		Details
A Name(s) of the related party	Lancor Maintenance & Services Ltd	Mr. R.V. Shekar	Mr. Vasudevan	Mr. Sivaram Sridharan	Mr. Sriram Sridharan	Central Park West Venture
B Nature of relationship	Subsidiary	Control	Control	Relative	Relative	Joint Venture
C Nature of contracts/ arrangements/ transactions	Trade Payables	Interest Expenses	Interest Expenses	Rent Paid	Rent Paid	Loan
D Salient terms of the contracts or arrangements or transactions including the_value, if any: (Rs)	Nil	Nil	0.64	16.13	16.13	360.72
E Duration of the contracts / arrangements/ transactions	2023–24	2023–24	2023–24	2023–24	2023–24	2023–24
F Date(s) of approval by the_Board, if any	Approved on Quarterly basis	Approved on Annual Basis	Approved on Annual Basis	Approved on Annual Basis	Approved on Annual Basis	Approved on Quarterly basis
G Amount paid as advances, if any:	Nil	Nil	Nil	Nil	Nil	Nil

The Board of Directors, Lancor Holdings Limited, Chennai.

Dear Members of the Board,

We, RV Shekar, Managing Director and, Kothandaraman Prakash, Chief Financial Officer of Lancor Holdings Limited, to the best of our knowledge and belief, certify that:

1. We have reviewed the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement of the Company and all the notes on accounts and the Boards report.

2. These statements do not contain any materially untrue statement or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. The financial statements, and other financial information included in this report, present in all material respects a true and fair view of the Companys affairs, the financial condition, results of operations and cash flows of the Company as at and for, the periods presented in the report, and are in compliance with the existing accounting standards and /or applicable laws and regulations.

4. There are no transactions entered into by the Company during the year that are fraudulent, illegal, or violate the Companys Code of Conduct and Ethics, except as disclosed to the Companys auditors and the Companys audit Committee of the Board of Directors.

5. We are responsible for establishing and maintaining disclosure controls and procedures and internal controls with reference to financial statements for the Company, and we have: a. Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. b. Designated such internal control over financial reporting, or caused such internal control with reference to financial statements to be designed under our supervision, to provide reasonable assurance regarding there liability of financial reporting and the preparation of financial statements for external purposes in accordance with the Generally Accepted Accounting Principles (GAAP) in India. c. Evaluated the effectiveness of the Companys disclosure, controls and procedures. d. Disclosed in this report, changes if any, in the Companys internal control financial reporting that occurred during the Companys most recent fiscal year that has materially affected, or is reasonable likely to materially affect, the Companys internal control over financial reporting.

6. We have disclosed, based on our most recent evaluation of the Companys Internal control with reference to financial statements, wherever applicable, to the Companys auditors and the audit committee of the Companys Board (and persons performing the equivalent functions): a. Any deficiencies in the design or operation of internal controls, that could adversely affect the Companys ability to record, process, summarize and report financial data, and have confirmed that there have been no material weaknesses in internal controls with reference to financial statements including any corrective actions with regard to deficiencies.

b. Any significant changes in internal controls during the year covered by this report. c. All significant changes in accounting policies during the year, if any, and the same have been disclosed in the notes to the financial statements d. Any instances of significant fraud of which we are aware, that involve the Management of other employees who have a significant role in the Companys internal control system.

7. We affirm that we have not denied any personnel access to the Audit Committee of the Company (in respect of the matters involving alleged misconduct) and we have provided protection to whistleblowers from unfair termination and other unfair or prejudicial employment practices.

8. We further declare that all Board members and senior management personnel have affirmed compliance with the Code of Conduct and Ethics for the year covered by this report.