Directors' report To, The Members Lead Financial Services Limited Your Directors have pleasure in presenting the 21st Annual Report with Audited Statement of Accounts of the company for the year ended 31st March, 2014. PERFORMANCE REVIEW: During the year under review, your company achieved total income of Rs. 43.31 Lacs as compared to Rs.49.79 Lacs in the previous year. Net profit for the year is Rs. 14.24 Lacs as compared to net profit of Rs. 6.54 Lacs in the previous year. Your directors are undertaking the initiatives to improve the financial results in the coming years. MANAGEMENT DISCUSSION AND ANALYSIS: Industrial Structure and Development India is facing a difficult economic situation on the growth, asset quality, inflation and fiscal deficit fronts. Growth is estimated to have bottomed, but recovery is predicated upon clarity of policy matters and decision making by the Government, both factors out of the control of private enterprise. The Government's first GDP estimate for FY 2013-14 estimates growth at 4.9%, largely in line with market expectations. The Interim budget which was the last budget of the UPA-II Government was "not" biased towards populist measures but focused on growth measures, like reduction in excise duties on capital and consumer goods and maintaining the fiscal deficit target within limits. The key to a higher growth would be reviving investments (initially by revival of stalled projects), especially in the private sector and higher domestic savings, especially financial savings, by containing inflation and positive real return. The year ahead will be challenging on the interest rate and credit quality front, however, stability of Government, can improve the asset quality and return growth. Outlook, Risk and Concern The Company is exposed to specific risks that are particular to its business and the environment within which it operates including Credit risk (Corporate & Retail lending), Market risk (Liquidity and Interest rate risk) and Operational risk. A comprehensive and integrated risk management framework forms the basis of all the de-risking efforts of the Company. Reporting and control mechanisms ensure timely information availability and facilitate proactive risk management. We recognise that risk is inherent in our business and the markets in which we operate. As such the Company is committed to the creation and maintenance of strong risk management as well as rigorous control standards throughout the organization. The Company's risk management policies encompass structured reporting and strict controls to ensure smooth running of the business and security of client's data. Opportunities and Threats The NBFC segment of Industry has witnessed considerable growth in the last few years due to implementation of innovative marketing strategies, customer-oriented services, attractive rates of return on deposits and simplified procedures, etc. NBFCs have been at the forefront of catering to the financial needs and creating livelihood sources of the so-called unbankable masses in the rural and semi-urban areas. A shakeout in the non banking finance sector, has resulted into the disinterest of public. The public is not willing to park its fund with NBFC due to low rate of interest offered by them for deposits. AdecyBacy of Internal Control System The Company maintains a system of well established policies and procedures for internal control of operations and activities, and these are continually reviewed for effectiveness. The internal control system is supported by qualified personnel and a continuous program of internal audit. The prime objective of such audits is to test the adequacy and effectiveness of all internal control systems laid down by the management and to suggest improvements. We believe that the Company's overall system of internal control is adequate given the size and nature of operations and effective implementation of internal control self assessment procedures. The Company encourages and recognizes improvements in work practices. The internal control system of the Company is also reviewed by the Audit Committee periodically. SEGMENT WISE PERFORMANCE Company operates only in one segment. DIVIDEND: Your Directors regret their inability to recommend any dividend in view of deploying the funds for expansion of business during the year under review. FIXED DEPOSITS: Your Company has not accepted any deposits from public. There are no unclaimed or unpaid deposits as on 31st March, 2014. DIRECTORS: 0 Mr. P. C. Bindal, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment 0 Appointment of Mr. Pradeep Kumar Jain & Mr. Sanjay Kumar Agarwal as Independent Directors for five consecutive years with effect from the conclusion of the forthcoming Annual General Meeting upto 28th September, 2019. 0 The Board recommends the confirmation for the appointment of Mr. Vijay Kumar as the Manager of the Company for a period of five years with effect from 21st December, 2013 at remuneration of Rs.15, 000/- per month. 0 The Board recommends the appointment of Ms. Kusha Bindal as Woman Director. 0 Mr. Manushree Bindal, who was appointed as an Additional Director on 15.05.2014 to hold the office till 21st AGM i.e. 29.09.2014. The Board did not recommend his regularisation as ordinary director in the ensuing Annual General Meeting. MATERIAL CHANGES: There are no material changes and commitments, affecting the financial position of the company between the end of financial year of your company and the date of Director's Report. AUDITORS: M/s. G.C. Sharda & Co., Chartered Accountants, the Auditors of the company retires at the forthcoming Annual General Meeting and is eligible for re-appointment. The Audit Committee and your Board recommend their reappointment as Auditors of the Company. The company has received letter from them to the effect that their appointment, if made would be within prescribed limit under Section 224(1 B) of the Companies Act, 1956. AUDITOR'S REPORT: The observations in the Auditor's Report are dealt in the notes forming part of accounts at appropriate places and the same being self explanatory, no further comment is considered necessary. DEMATERIALISATION OF SHARES: — As the members are aware, your company's shares are tradable compulsory in electronic form. Accordingly, your company has established connectivity with both the depositories i.e. National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL). Members may avail the facility of dematerialization of company's shares on either of the Depositories as aforesaid. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed: i) That in the preparation of the accounts for the financial year ended 3181 March, 2014; the applicable accounting standards have been followed along with proper explanation relating to material departures. ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a 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 the year under review. iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) That the Directors have prepared the accounts for the financial year ended 3151 March, 2014 on 'going concern' basis. PARTICULARS OF EMPLOYEES: There is no employee whose particulars are required to be furnished in terms of Sec. 217(2A) of the Companies Act, 1956 and rules made there under. PERSONNEL: The Board wishes to place on record their deep appreciation of all employees of the company for their endeavor and cooperation. The relations with employees continued to be cordial throughout the year. CORPORATE GOVERNANCE: A report on Corporate Governance appears in this Annual Report and the certificate from M/s. G.C. Sharda & Co., Chartered Accountants, Statutory Auditors with regard to Compliance of the Corporate Governance code by your Company is annexed hereto as Annexure and forms part of this report. ACKNOWLEDGEMENT: We thank our clients, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. We thank the Government of India, particularly the Securities and Exchange Board of India (SEBI), Stock Exchanges, the State Governments, and other government agencies/authorities for their support, and look forward to their continued support in future. Your Company's employees are the keys for its attaining new heights. Your Directors place on record their deep appreciation of the commitment and professionalism displayed by them. We also value the support provided by the Company's Shareholders and we look forward to your continuing future support. FOR AND ON BEHALF OF THE BOARD For Lead Financial Services Limited P.C. BINDAL DIRECTOR DIN: 00004769 MANUSHREE BINDAL DIRECTOR DIN: 03620670 Place ; New Delhi Date: 20.08.2014 |