Lead Financial Services Limited
Your Directors have immense pleasure in presenting their 25thAnnual Reporton the business and operations of the Company and Audited Accounts for the Financial Yearended March 31 2018.
1. Financial Performance (Standalone)
The Financial results of the Company during the period ended on 31st March2018 are as under:
(Rs in Lacs)
|PARTICULARS ||CURRENT YEAR ||PREVIOUS YEAR |
| ||(2017-18) ||(2016-17) |
|1. Total Income ||119.04 ||408.40 |
|Less: i) Operating Administrative & other Exp. ||42.23 ||354.63 |
|2. Earnings before interest and depreciation || || |
|Less: i) Interest ||0.02 ||3.12 |
|ii) Depreciation ||0.42 ||0.37 |
|3. Profit before Extra-ordinary item ||76.37 ||50.27 |
|Add: Extra-ordinary item ||- ||- |
|3. Profit before Tax ||76.37 ||50.27 |
|Less: provision for Tax || || |
|i) Current ||14.81 ||9.96 |
|ii) Deferred ||0.23 ||(2.61) |
|iii) Earlier year Tax ||(0.03) ||- |
|iv) MAT Credit ||(0.72) ||- |
|4. Profit after Tax ||62.08 ||42.92 |
|Add: Balance of Profit as per last Balance Sheet ||135.07 ||100.74 |
|Less: Adjustment of depreciation on account of change in estimated life of fixed assets ||- ||- |
|Less: Transfer to Statutory Reserve ||(12.41) ||(8.59) |
|5. Balance available for appropriation ||226.55 ||164.47 |
|6. Equity Capital ||330.00 ||330.00 |
|7. Earnings Per Share ||1.88 ||1.30 |
Your Directors regret their inability to recommend any dividend in view of requirementof the funds for expansion of business during the financial year under review.
3. Reserves and surplus
Reserves and Surplus as at 31st March 2018 is Rs. 22654708/-. TheCompany has transferred an amount of Rs1241570/- to the Statutory Reserve during theyear under review.
4. Management and Discussion Analysis Industrial Structure and Development
As the fastest growing major economy in the world India is expected to emerge as oneof the top three economic powers of the world over the next 10-15 years as per CentralStatistics Organisation (CSO) and IMF (International Monetary Fund). Moody's upgradationof India's sovereign rating after 14 years from Baa3 (lowest investment grade) to Baa2also underlines the strength of its economic fundamentals.
After a temporary slowdown triggered by demonetisation and GST (Good Services Tax) theeconomy started showing signs of recovery in the second half of the year. The revival inpositivity was reflected in the pick-up of industrial production and a decline in retailinflation (as measured by the CPI) after a period of negativity. The third quarter of thefinancial year saw India record its fastest growth in five quarters at 7.2% to overtakeChina which grew at 6.8% in this period. The farm manufacturing and services sectorspropelled this growth which is expected to sustain in the coming year.
India's GDP registered a growth of 6.7% in financial year 2017-18 as per the latestestimates from CSO. The World Bank however has projected India's growth at 7.3% infinancial year 2018-19 and 7.5% in financial year 2019-20 (Source: World Bank Indiareport March 2018). The Government's continuing reforms agenda is expected to infusedynamism into the national economy contributing to its growth momentum.
The Government continued with its reform agenda with the most notable ones beingdynamic fuel pricing (June 2017) Goods and Service Tax (July 2017) Banking Regulation(Amendment) Bill 2017 (August 2017) and announcement of PSU bank recapitalisation plan(October 2017) selling of stake and public listing under disinvestment scheme launchedin 2016 and liberalisation of FDI policy. Demonetisation along with various measurestaken to promote digital payment boosted transactions through systems such as debit andcredit cards prepaid wallets UPI mobile banking etc.
Outlook Risk and Concern
The Outlook of the Company for the year ahead is to diversify risk and stabilize itsasset quality. Credit risk Market risk Operational risk and Liquidity risk are the keyrisks faced by the Company. The Company takes risk management seriously and in process toset the procedures and policies in the area for the assessment and management ofindividual risk categories. Except for some unforeseen and extreme event the Company iswell placed on the liquidity front and appropriate policies exist for underwriting creditrisk. The Company endeavors to continuously learn and modifies its policies to manage theaforementioned risks.
Opportunities and threats
The NBFC sector in India is large with significant growth potential and hasconsistently created value for its shareholders. The NBFC sector has a double digit creditmarket share and has consistently gained market share from banks over the last 10 years.The growth in the sector appears sustainable as India has a low GDP to credit penetration.
The RBI constantly issues new regulations and / or modifies existing regulationsendeavouring to balance the multiple objectives of financial stability consumer anddepositor protection and regulatory arbitrage concerns. The RBI however implements majorchanges in a structured manner providing companies operating in the sector adequate timeto adapt and adjust.
Adequacy of Internal Control System
The Company has put in place an adequate internal control system to safeguard all itsassets and ensure operational excellence. The system also meticulously records alltransaction details and ensures regulatory compliance. The Company also has a team ofinternal auditors to conduct internal audit which ensure that all transactions arecorrectly authorised and reported. The reports are reviewed by the Audit Committee of theBoard. Wherever necessary internal control systems are strengthened and correctiveactions initiated.
During the Financial year under review your company achieved total income of Rs.119.04 Lacs as compared to Rs. 408.40 Lacs in the previous year. Net profit (after tax)for the year is Rs. 62.08 Lacs as compared to net profit of Rs. 42.92 Lacs in the previousyear. Your directors are undertaking new initiatives for long term growth of the Company.
Segment wise Performance:
Company operates only in one segment.
Material developments in Human Resources / Industrial Relations front including numberof people employed. The Company considers people as its most valued assets. During theyear focus was to ensure that the rewards and recognition are commensurate withperformance. Further the Company focuses on widening organisational capabilities andimproving organisational effectiveness by having a competent and engaged workforce.
The Company had 4 permanent employees on the rolls of the Company as at March 31 2018.
5. Material Changes:
There are no material changes and commitments affecting the financial position of thecompany between the end of financial year of your Company and the date of Director'sReport.
6. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements:
The Company has in place adequate internal financial controls with reference tofinancial statements. During the Financial year such controls were checked and noreportable material weaknesses were observed.
7. Details of Subsidiary/Joint Ventures/Associate Companies
|The names of companies which have become or ceased to be its Subsidiaries joint ventures or associate companies during the year. ||Not Applicable |
|Performance & Financial position of each of the subsidiaries associates and joint venture companies included in the consolidated financial statement. ||Not Applicable |
The Company did not hold any public deposits at the beginning of the year nor has itaccepted any public deposits during the year under review.
M/s B G G & Associates Chartered Accountants (ICAI Firm Registration Number:016874N) New Delhi were appointed as statutory auditors of the company to hold officefor a period of 5 years commencing from the conclusion of the 24th Annual General Meeting("AGM") held on 28th September 2017 till the conclusion of the 29thAGM of the Company to be held in the year 2022 subject to ratification of theirappointment by the Members at every AGM as may be applicable.
Therefore ratification of the re-appointment of Statutory Auditor M/s B G G &Associates being eligible is being sought from the members of the Company at the ensuingAGM for financial year 2018-19.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Pooja Anand & Associates Company Secretaries to undertake thesecretarial audit of the company.
Ms. Seema Gupta Chartered Accountant performs the duties of internal auditors of theCompany and their report is reviewed by the audit committee from time to time
10. Auditors' Report
The observations in the Auditor's Report are dealt in the notes forming part ofaccounts at appropriate places and the same being self explanatory no further comment isconsidered necessary.
11. Secretarial Audit Report
A Secretarial Audit Report in Form_MR-3 given by Mr. Mukul Tyagi of M/s Pooja Anand& Associates Company Secretary in whole time practice is annexed with the report inAnnexure 1'.
Regarding the remarks of Secretarial Auditor the Board of the Company explained thatit is in process to appoint suitable Key Managerial Person(s) in compliance withprovisions of Section 203 of Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
A) Changes in Directors and Key Managerial Personnel
Mr. Padam Chandra Bindal Director of the Company retires by rotation at theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.
Mr. Chetan Sharma has resigned as a Company Secretary and Compliance Officer ofthe Company w.e.f. 29.04.2017.
Ms. Suman has been appointed as a Company Secretary and Compliance Officer ofthe Company w.e.f. 16.10.2017.
The Board proposed the Appointment of Mr. Jitender Kumar Sharma as IndependentDirector for five consecutive years with effect from the conclusion of the forthcomingAnnual General Meeting upto 28th September 2023.
The Board recommends the re-appointment of Mr. Vijay Kumar as the Manager of theCompany for a period of three years with effect from 21st December 2018 atremuneration of Rs. 20000/- per month.
B) Declaration by an Independent Director(s) and re- appointment if any
At the 21st Annual General Meeting of the company held on 29th September2014 the company had appointed the existing Directors Mr. Pradeep Kumar Jain (DIN00303976) and Mr. Sanjay Kumar Aggarwal (DIN 00832074) as independent directors under theCompanies Act 2013 for 5 consecutive years for a term upto 28th September2019.
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).
C) Evaluation of the Board its Committees and Individual Directors
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the non-executive directors and executive directors. Pursuant to theprovisions of the Act and the corporate governance requirements as prescribed bySecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations") the Board has carried out anannual evaluation of its own performance the individual Directors (including theChairman) as well as an evaluation of the working of all Board Committees. The Board ofDirectors was assisted by the Nomination and Remuneration Committee. The performanceevaluation was carried out by seeking inputs from all the Directors/Members of theCommittees as the case may be and discussions with the Directors by the Chairman of theNRC.
13. Number of meetings of the Board of Directors
During the year Seven(7) Board Meetings and one independent directors' meeting washeld. The details of which are given in Corporate Governance Report. The provisions ofCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 were adhered to while considering the time gapbetween two meetings.
14. Committee of the Board
|A. Audit Committee || |
|i. Composition of Audit Committee ||: The Audit Committee comprises two Independent Directors namely Mr. Pradeep Kumar Jain (Chairman) Mr. Sanjay Kumar Agarwal and Mr. Padam Chandra Bindal Non-executive as other members. |
|ii. Reasons for not accepting the recommendations of the Audit Committee if any ||: All the recommendations made by the Audit Committee were accepted by the Board. |
B. Nomination & Remuneration Committee
The nomination and remuneration committee of the Company is constituted in line withthe provisions of Regulation 19 of SEBI Listing Regulations read with Section 178 of theAct.
The policy on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under sub-section (3) of section 178 is available on our website i.e.www.leadfinancialservices.in.
The broad terms of above mentioned policy have also been disclosed in the corporategovernance report which forms part of this report.
15. Vigil Mechanism and Whistle Blower Policy:
The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal or unethical behaviour. The Company has a Vigilmechanism and Whistle blower policy under which the employees are free to reportviolations of applicable laws and regulations and the Code of Conduct. Employees may alsoreport to the Chairman of the Audit Committee. During the financial year no employee wasdenied access to the Audit Committee.
16. Particulars of Loans Guarantees or Investments under section 186
The provisions of Section 186 of the Act pertaining to granting of loans to any personsor bodies corporate and giving of guarantees or providing security in connection with theloan to any other bodies corporate or persons are not applicable to the Company as theCompany is a Non Banking Financial Company.
17. Corporate Social Responsibility (CSR)
Section 135 of the Companies Act 2013 is not applicable to the company.
18. Related Party Transactions :
Particulars of Contracts or Arrangements with Related parties referred to in Section188(1) are mentioned in Form AOC- 2 (Annexure 2)
19. Share Capital
The paid-up Equity Share Capital of the Company as on March 31 2018 was Rs.33000000/- There was no change in the Authorised or Paid-up Capital or SubscribedCapital during FY 2017-18.
20. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
|A) Conservation of energy: || |
|(i) the steps taken or impact on conservation of energy; ||N.A. |
|(ii) the steps taken by the company for utilising alternate sources of energy; ||N.A. |
|(iii) the capital investment on energy conservation equipments; ||N.A. |
|B) Technology absorption: || |
|(i) the efforts made towards technology absorption; ||N.A. |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution; ||N.A. |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- ||N.A. |
|(a) the details of technology imported; ||N.A. |
|(b) the year of import; ||N.A. |
|(c) whether the technology been fully absorbed; ||N.A. |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and ||N.A. |
|(iv) the expenditure incurred on Research and Development. ||N.A. |
|(C) Foreign exchange earnings and Outgo: || |
|1. Activities relating to exports; initiative taken to increase exports; development of new export markets for products services and export plans. ||NIL |
|2. Total foreign exchange used and earned. ||NIL |
|The information of foreign exchange earnings and outflow is furnished in notes to accounts. || |
21. Extract of the annual return
Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the Companies(Management and Administration) Rules 2014 an extract of annual return in MGT 9 isannexed (Annexure- 3) 22. Regulatory Action:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and operations of the Company in future.
23. Managerial Remuneration:
The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is mentionedin (Annexure 4) No employees is in receipt of remuneration as specified undersection 197(12) of the Act read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
24. Corporate Governance And Shareholders Information:
Your Company has taken adequate steps to adhere to all the stipulations laid down inprovisions of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI Listing Regulation). A report on CorporateGovernance is included as a part of this Annual Report.
Certificate from the Statutory Auditors of the company confirming the compliance withthe conditions of Corporate Governance is enclosed to this report.
25. Directors' Responsibility Statement
The Directors' Responsibility Statement referred to in clause (c) of sub-section(3) of Section 134 of the Companies Act 2013 confirm that
(a) in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;
(b) the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
(c) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis;and
(e) the directors have laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
We thank our clients investors and bankers for their continued support during theyear. We place on record our appreciation of the contribution made by employees at alllevels. We thank the Government of India particularly the Securities and Exchange Boardof India (SEBI) Stock Exchanges and other government agencies/authorities for theirsupport and look forward to their continued support in future.
Your Company's employees are the keys for its attaining new heights. Your Directorsplace on record their deep appreciation of the commitment and professionalism displayed bythem.
We also value the support provided by the Company's Shareholders and we look forward toyour continuing future support.
| ||For and on behalf of the Board |
| ||For Lead Financial Services Limited |
| ||PADAM CHANDRA BINDAL ||KUSHA BINDAL |
|Place : New Delhi ||CHAIRMAN ||DIRECTOR |
|Date : 13.08.2018 ||DIN: 00004769 ||DIN: 06952708 |