Lead Financial Services Ltd Directors Report.

To,

The Members

Lead Financial Services Limited

Your Directors are presenting their 26thAnnual Report on the business and operations of the Company and Audited Accounts for the Financial Year ended March 31, 2019.

1. Financial Performance

The Financial results of the Company during the period ended on 31st March, 2019 are as under:

(Rs in Lacs)

PARTICULARS CURRENT YEAR PREVIOUS YEAR
(2018-19) (2017-18)
1. Total Income 17.08 119.04
Less: i) Operating, Administrative & other Exp. 22.02 42.23
2. Earnings before interest and depreciation
Less: i) Interest 1.13 0.02
ii) Depreciation 0.11 0.42
3. Profit/(Loss) before Extra-ordinary item (6.18) 76.37
Add: Extra-ordinary item - -
3. Profit/(Loss) before Tax (6.18) 76.37
Less: provision for Tax
i) Current - 14.81
ii) Deferred (1.76) 0.23
iii) Earlier year Tax 0.24 (0.03)
iv) MAT Credit - (0.72)
4. Profit/(Loss) after Tax (4.67) 62.08
Add: Balance of Profit as per last Balance Sheet 184.74 135.07
Less: Adjustment of depreciation on account of change in estimated life of fixed assets - -
Less: Transfer to Statutory Reserve - (12.41)
5. Balance available for appropriation 221.88 226.55
6. Equity Capital 330.00 330.00
7. Earnings Per Share (0.14) 1.88

2 . Dividend

Your Directors regret their inability to recommend any dividend in view of losses during the financial year under review.

3. Reserves and surplus

Reserves and Surplus as at 31st March, 2019 is Rs. 2,21,88,150/-. The Company has not transferred any amount to the Statutory Reserve, during the year under review.

4. Management and Discussion Analysis

The Management Discussion and Analysis of financial condition and results of operation of the Company for the year under review, as required under Regulation 34 of SEBI (LODR) Regulations, 2015, is given separately under the head "Management Discussion & Analysis Report" in Annual Report as ‘Annexure-1.

5. 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 Directors Report.

6. Details in respect of adequacy of internal financial controls with reference to the Financial Statements:

The Company has in place adequate internal financial controls with reference to financial statements. During the Financial year, such controls were checked and no reportable 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

8. Deposits

The Company did not hold any public deposits at the beginning of the year nor has it accepted any public deposits during the year under review.

9 . Auditors

• STATUTORY AUDITORS

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 office for 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 29th AGM of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at every AGM, as may be applicable. Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May, 2018 amending Section 139 of the Companies Act, 2013 and the applicable Rules, the mandatory requirement for ratification of appointment of Auditors by the Members at every AGM has been omitted and hence the Company has not proposed ratification of appointment of M/ s B G G & Associates, Chartered Accountants, at the ensuing AGM.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they are not disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

• SECRETARIAL AUDITORS

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 has appointed M/s Pooja Anand & Associates, Company Secretaries to undertake the secretarial audit of the company.

• INTERNAL AUDITORS

Ms. Seema Gupta, Chartered Accountant, performs the duties of internal auditor of the Company and her report is reviewed by the audit committee from time to time

10. Auditors Report

The observations in the Auditors 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.

11. Secretarial Audit Report

A Secretarial Audit Report in Form_MR-3 given by Mr. Mukul Tyagi partner of M/s Pooja Anand & Associates, Company Secretary in whole time practice is annexed with the report in ‘Annexure 2.

Regarding the remarks of Secretarial Auditor, the Company has appointed Mr. Atul Vaibhav as Chief Financial Officer (CFO) of the Company w.e.f. 22nd April, 2019, in compliance with provisions of Section 203 of Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

12. Directors:

A) Changes in Directors and Key Managerial Personnel

• Ms. Kusha Bindal, Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible offers herself for re-appointment. The Board recommends her re-appointment for the consideration of the Members of the Company at the Annual General Meeting.

• Mr. Jitender Kumar Sharma was appointed as an Independent Director for five consecutive years with effect from 29th September, 2018.

• Mr. Vijay Kumar was re-appointed as the Manager of the Company for a period of three years with effect from 21st December, 2018 at remuneration of Rs. 20,000/- per month, with approval of shareholders in last Annual General Meeting held on 29.09.2018.

• Mr. Atul Vaibhav was appointed as Chief Financial Officer (CFO) of the Company in the Board meeting held on 22nd April, 2019.

• The Board recommends the re-appointment of Mr. Pradeep Kumar Jain as an Independent Director of the Company for a second term of five consecutive years commencing from 29th September, 2019 to 28th September, 2024.

• Mr. Sanjay Kumar Agarwal was appointed as an Independent Director of the Company to hold office upto 28th September, 2019. However, the Board did not recommend the re-appointment of Mr. Sanjay Kumar Agarwal as an Independent Director of the Company. Due to expiry of his tenure on 28.09.2019, he will ceased to be Independent Director of the Company.

B) Declaration by an Independent Director(s)

The Company has received necessary declaration from all the Independent Directors of the Company confirming that they fulfill the criteria of Independence as prescribed under sub section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

C) Evaluation of the Board, its Committees and Individual Directors

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. Pursuant to the provisions of the Companies Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("Listing Regulations"), the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The Board of Directors was assisted by the Nomination and Remuneration Committee. The performance evaluation was carried out by seeking inputs from all the Directors/ Members of the Committees, as the case may be and discussions with the Directors by the Chairman of the NRC.

13. Number of meetings of the Board of Directors

During the financial year ended March 31, 2019, 06 (Six) meetings of the Board were held, as follows:

S. No. Dates of Board Meeting Board Strength No. of directors present
01. 13th April, 2018 4 4
02. 28th May, 2018 4 4
03. 13th August, 2018 4 4
04. 13th November, 2018 5 5
05. 12th February, 2019 5 5
06. 30th March, 2019 5 5

*The maximum time gap between two meetings was not more than 120 days.

14. Committee of the Board

The Board has constituted three Committees of the Board – the Audit Committee, the Nomination and Remuneration Committee, Stakeholders Relationship Committee. The composition of these Committees, including the number of the meetings held during the financial year are as follows:

A. Audit Committee

The composition, quorum, powers, role and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the SEBI (LODR) Regulations, 2015.

The Audit Committee is responsible for the effective supervision of the financial reporting process, reviewing with the management the financial statements and ensuring their compliance with accounting standards, Listing Regulations and other legal requirements and ensuring compliance with internal controls; reviewing finding of internal audit and ensuring follow up action on significant findings and reviewing quarterly, half yearly and annual accounts. All the recommendations made by the Audit Committee were accepted by the Board.

Six meetings of Audit Committee were held during the year 2018-19, on 13th April, 2018, 28th May, 2018, 13th August 2018, 13th November, 2018, 12th February 2019 and 30th March, 2019.

The composition of Audit Committee as on March 31, 2019 including the attendance of the committee members at the meeting held during financial year is as follows:

Name of Members Category Designation Number of Meetings during the year 2018-19
Held during tenure of Member/Chairman Attended
Mr. Pradeep Kumar Jain Independent Director Chairman 6 6
**Mr. Sanjay Kumar Agarwal Independent Director Member 4 4
*Mr. Jitender Kumar Sharma Independent Director Member 2 2
Mr. P C Bindal Non Executive Director Member 6 6

*Mr. Jitender Kumar Sharma was appointed as an Independent Director of the Company for a term of consecutive 5 years w.e.f. 29.09.2018. The Board of Directors in their meeting held on 12th February, 2019 has reconstituted the Audit Committee and appointed Mr. Jitender Kumar Sharma as member of Audit Committee in place of Mr. Sanjay Kumar Agarwal.

**Mr. Sanjay Kumar Agarwal ceased to be the member of Audit Committee w.e.f. 12th February, 2019.

B. Nomination & Remuneration Committee

The Nomination and Remuneration Committee (N & R Committee) of the Company is constituted in line with the Section 178 of the Companies Act, 2013 and as per provisions of Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Nomination and Remuneration Committee of the Board, inter alia, recommends to the Board of Directors, the compensation terms of Executive Director/ Manager. It also recommends successions and appointments for the membership of the Board and the senior management.

Nomination and Remuneration Policy

The Companys Nomination and Remuneration Policy is driven by the success and performance of the individual employee and the Company. Through its compensation programme, the Company endeavours to attract, retain, develop and motivate a high performance workforce. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process.

The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and commission (variable component) to the Executive Director, if any. Annual increments are decided by the Remuneration Committee within the salary scale approved by the members and are effective from April 1, each year. The Nomination and Remuneration Committee decides on the commission payable to the Executive Director, if any, out of the profits for the financial year and within the ceilings prescribed under the Companies Act, 2013, and amendment thereof based on the performance of the Company as well as that of the each Executive Director.

The Company firmly believes in attracting and retaining high caliber talent. The Nomination and remuneration policy, therefore, takes into account the competitive circumstances so as to attract & retain quality talent.

Moreover, the policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178, is available on our website i.e. www.leadfinancialservices.in.

Three meetings of N & R Committee were held during the year 2018-19, on 16th July, 2018, 13th August 2018, and 30th March, 2019.

The composition of Nomination & Remuneration Committee as on March 31, 2019 including the attendance of the committee members at the meeting held during financial year is as follows:

Name of Members Category Designation Number of Meetings during the year 2018-19
Held during tenure of Member/Chairman Attended
*Mr. Jitender Kumar Sharma Independent Director Chairman 1 1
**Mr. Sanjay Kumar Agarwal Independent Director Member 2 2
Mr. Pradeep Kumar Jain Independent Director Member 3 3
Mr. P C Bindal Non Executive Director Member 3 3

*Mr. Jitender Kumar Sharma was appointed as Independent Director of the Company for a term of consecutive 5 years w.e.f. 29.09.2018. The Board of Directors in their meeting held on 12th February, 2019 has reconstituted the Nomination & Remuneration Committee and appointed Mr. Jitender Kumar Sharma as Chairman of N & R Committee in place of Mr. Sanjay Kumar Agarwal.

**Mr. Sanjay Kumar Agarwal ceased to be the Chairman of N & R Committee w.e.f. 12th February, 2019.

C. Stakeholder Relationship Committee

The Stakeholder Relationship committee of the Company is constituted in line with the Section 178 of the Companies Act, 2013 and as per provisions of Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Stakeholders Relationship Committee is primarily responsible to review all matters connected with the Companys transfer of securities and redressal of shareholders / investors / security holders complaints transposition, issue of duplicate share certificates, approval of demat/ remat of share certificates, issue of duplicate share / debenture certificates. The Committee also monitors the implementation and compliance with the Companys Code of Conduct for prohibition of Insider Trading.

Seven meetings of Stakeholders Relationship Committee were held during the year 2018-19, on 13th April, 2018, 28th May, 2018, 13th August 2018, 13th November, 2018, 26th December, 2018, 12th February 2019 and 30th March, 2019. The composition of Stakeholder Relationship Committee as on March 31, 2019 including the attendance of the committee members at the meeting held during financial year is as follows:

Name of Members Category Designation Number of Meetings during the year 2018-19
Held during tenure of Member/Chairman Attended
*Mr. Jitender Kumar Sharma Independent Director Chairman 2 2
**Mr. Sanjay Kumar Agarwal Independent Director Member 5 5
Mr. Pradeep Kumar Jain Independent Director Member 7 7
Mr. P C Bindal Non Executive Director Member 7 7

*Mr. Jitender Kumar Sharma was appointed as Independent Director of the Company for a term of consecutive 5 years w.e.f. 29.09.2018. The Board of Directors in their meeting held on 12th February, 2019 has reconstituted the Stakeholder Relationship Committee and appointed Mr. Jitender Kumar Sharma as Chairman of Stakeholder Relationship Committee in place of Mr. Sanjay Kumar Agarwal.

**Mr. Sanjay Kumar Agarwal ceased to be the Chairman of Stakeholder Relationship Stakeholder Relationship Committee w.e.f. 12th February, 2019. v During the year under review no investor grievance was received or was pending in the SCORES account of the Company.

There are no pending transfers as on 31st March 2019.

15. Vigil Mechanism and Whistle Blower Policy:

The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. Employees may also report to the Chairman of the Audit Committee. During the financial year, no employee was denied 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 persons or bodies corporate and giving of guarantees or providing security in connection with the loan to any other bodies corporate or persons are not applicable to the Company, as the Company 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 Section 188(1) are mentioned in Form AOC- 2 (Annexure – 3) 19. Share Capital

The paid-up Equity Share Capital of the Company as on March 31, 2019, was Rs. 3,30,00,000/- There was no change in the Authorised or Paid-up Capital or Subscribed Capital during FY 2018-19.

20. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and 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 is annexed (Annexure- 4) 22. Regulatory Action:

There are no significant and material orders passed by the regulators or courts or tribunals 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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is mentioned in (Annexure– 5) No employees are in receipt of remuneration as specified under section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

24. Corporate Governance:

Since, the paid- up capital of the Company is less than Rs10 Crores and Net worth is less than Rs 25 Crores, the provisions of the Corporate Governance (specified in the regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V) as stipulated under Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company. Hence, no separate report on Corporate Governance Report has been given.

However, your Company is complying and doing every effort to comply with the provisions of the Corporate Governance and to see that the interest of the Shareholders and the Company are properly served. It has always been the Companys endeavor to excel through better Corporate Governance and fair & transparent practices, many of which have already been in place even before they were mandated by the law of land.

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 accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. Maintenance of Cost Record

The maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.

27. Risk Management and policy

Your Company being a NBFC is subjected to both Business and Financial risk. While the business risk associated with operating environment, ownership structure, Management, System & Policy, the financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. The company recognizes these risks and makes best effort to mitigate them in time. Risk Management is also an integral part of the Companys business strategy. Business Risk Evaluation and Management is an ongoing process within the Organization.

The Company has a robust risk management framework to identify, monitor and minimize risk as also identify business opportunities.

28. Listing on Stock Exchanges

Your companys shares are listed on the following stock exchanges: (1) BSE Ltd.

Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001

Listing fees including for the year 2019-20 has been paid within due date to the Stock Exchange.

29. Registrar & Share Transfer Agent

The company has appointed Beetal Financial and Computer Services (P) Limited (Beetal) as its Registrar and Share Transfer Agent. The shareholders are advised to approach Beetal on the following address for any share & demat related queries and problem.

Beetal Financial & Computer Services Private Limited,

Beetal House, 3rd Floor,

99, Madangir, B/4, Local Shopping Centre, New Delhi-110062

Tel: 011-29961281, 29961282, Fax: 011-29961284,

E-Mail ID: beetal @ beetalfinancial.com, Website: www.beetalfinancial.com

30. Transfer System

During the year, shares in physical form were processed by the Registrar and Share Transfer Agents within 15 days from the date of receipt, provided the documents are valid and complete in all respects. Beetal Financial and Computer Services (P) Limited, Share Transfer Agents of the Company, is authorized to sign the share certificates on behalf of the Company for expeditious disposal of transfer requests.

SEBI vide its Notification No. SEBI/LAD-NRO/GN/2018/24 dated 8th June, 2018 amended Regulation 40 of SEBI Listing Regulations which mandated transfer of securities only in dematerialised mode from 5th December, 2018. Further, as per SEBI Notification No. SEBI/LAD-NRO/GN/2018/49 dated 30th November, 2018, the date for transfer of securities in physical form was extended from 5th December, 2018 to 1st April, 2019. Accordingly, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialised form with the depository, with effect from 1st April, 2019. In case of shares in electronic form, the transfers are processed by NSDL/CDSL through respective Depository Participants.

31. Dematerialization of Shares

The companys equity shares are eligible for dematerialization. The company has signed agreements with both the depositories namely NSDL and CDSL. The shareholders may therefore hold companys shares in electronic mode.

The companys ISIN No. for both the depositories is INE531D01010. Stock Code for the Equity Shares of the Company at BSE Ltd. is: 531288 As on 31st March, 2019, 53.54 % and 1.81 % of the Equity Shares of the Company are held in dematerialized form with NSDL and CDSL respectively.

32. Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Secretarial Auditors, Internal Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.

33. Disclosure under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013.

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of loading complaints. There is an Internal Complaints Mechanism wherein any wrongful conduct as regards sexual harassment or any discrimination can be reported. The following is a summary of sexual harassment complaints received and disposed of during the year under review-

• No. of complaints received: Nil

• No. of complaints disposed of: NA

• No. of complaints pending: Nil

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, and other government agencies/authorities for their support, and look forward to their continued support in future.

Your Companys 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 Companys Shareholders and we look forward to your 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 : 12.08.2019 DIN: 00004769 DIN: 06952708