To, The Members of Lead Financial Services Limited
The Directors have pleasure in presenting the 19th Annual Report with
Audited Statement of Accounts of the company for the year ended 31s''
Financial results of the company for the year under review are
summarized as below:
(Rs. In Lacs)
Particulars Year Ended Year Ended
Total Revenue 46.35 69.28
Profit Before Depreciation & Tax 15.47 11.71
Depreciation 0.78 0.24
Profit/(Loss) Before Tax 14.68 11.47
Provision for Tax-Current 4.86 4.10
- Deferred (0.047) (0.001)
ProfitV(Loss) after Tax 9.87 7.37
Transfer to Statutory Reserve 1.97 1.47
Surplus Carried to Balance Sheet 49.07 54.96
During the year under review, your company achieved total revenue of
Rs.46.35 Lacs as compared to Rs. 69.28 Lacs in the previous year. Net
profit for the year is Rs.9.87 Lacs as compared to net profit of Rs.
7.37 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
Fiscal 2012 was a challenging year for the global economy. Prolonged
uncertainty around the resolution of the Eurozone sovereign debt
crisis, rating downgrades of sovereigns and slow recovery of the US
economy increased risks to global growth.
The Indian economy saw moderation in economic activity during fiscal
2012, following domestic macroeconomic conditions of high interest
rates and slowdown in investments. India''s gross domestic product (GDP)
grew by 6.9% during the first nine months of fiscal 2012, compared to a
growth of 8.1% in the corresponding period of fiscal 2011.
The Union Budget for fiscal 2013 has projected the government''s fiscal
deficit to come down from an estimated 5.9% of GDP in fiscal 2012 to
5.1% in fiscal 2013. RBI has projected India''s GDP to grow by 7.3% in
fiscal 2013, with credit growth estimated at 17.0% and deposit growth
at 16.0%. RBI has projected inflation to be at 6.5% in March 2013.
Outlook, Risk and Concern
Risk Management Policy of the company provides a summary of company''s
principles regarding risk taking and risk management. The principles
are based on the best practices and designs to avoid conflict of
interests. The company has developed an elaborate risk strategy in
terms of policy guidelines, for managing and monitoring various risks
The primary risks that the Company is exposed to are: Credit risk
(Corporate & Retail lending), Market risk (Liquidity and Interest rate
risk) and Operational risk. The Company''s risk policies outline the
products offered, customer and client categories, credit approval
processes with limits and risk monitoring and reporting.
The Management reviews risk policies from time to time to address
strategy and portfolio/balance sheet risks arising from equity
investments, credit, liquidity movements and interest rate movements
Opportunities and Threats
The performance of capital market is in correlation with the economic
growth of the country as well as global economy, performance of various
sectors, inflation, global market, etc. Instability of any of the
factors may affect the market adversely. The capital market operation
involves inbuilt risk and uncertainty, which carries various
opportunities and threats to the investors
The Financial Stability Report (FSR) by the Financial Stability Unit
constituted by the Reserve Bank stress for institutionalizing the focus
on financial stability and making it an integral part of the policy
framework. The first FSR makes an assessment of the strength of the
financial sector, with particular focus on banks, and has raised some
concerns, including rising inflation, high government borrowings and
likely surge in capital flows, from the financial stability standpoint.
The FSR also emphasised the need for evolving a stronger supervisory
regime for systemically important non-deposit taking non-banking
financial companies (NBFCs-ND-SI)and strengthening the monitoring and
oversight framework for systemically important financial conglomerates.
Overall risk to financial stability was found to be limited. However,
the recent financial turmoil has clearly demonstrated that financial
stability cannot be taken for granted, and that the maintenance of
financial stability requires constant vigilance, especially during
normal times to detect and mitigate any incipient signs of instability.
Adequacy 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.
Operational Results, 2010-11 Versus 2011-12: (Rs. in Lacs)
Particulars 2010-11 2011-12
Total Revenue 69.28 46.35
Interests Financial Charges 1.50 12.32
Expenses 56.07 18.57
Depreciation 0.24 0.78
Total Expenditure 57.82 31.67
Profit before Tax(PBT) 11.47 14.68
Provision for Tax 4.10 4.82
Profit aftertax (PAT) 7.37 9.86
Equity Capital 330 330
Reserves & Surplus 64.30 74.17
Earning per Share 0.22 0.30
Segment wise Performance
Company operates only in one segment.
Your Directors regret their inability to recommend any dividend in view
of deploying the funds for expansion of business during the year under
FIXED DEPOSITS :
Your Company has not accepted any deposits from public. There are no
unclaimed or unpaid deposits as on 31st March, 2012.
Sh. Vijay Kumar, Whole-Time Director of the Company retires by rotation
at the forthcoming Annual General Meeting and being eligible offers
himself for re-appointment.
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.
M/s. G.C. Sharda & Co., Chartered Accountants, the Auditors of the
company retires at the forthcoming Annual General Meeting and are
eligible for re-appointment. The Audit Qommittee 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 dematerialisation of
company''s shares on either of the Depositories as aforesaid.
Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect
to Directors'' Responsibility Statement, it is hereby confirmed:
i) That in thapreparation of the accounts for the financial year ended
31st March, 2012, 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 ofthe 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 ofthe Companies Act, 1956 for safeguarding the assets ofthe
Company and for preventing and detecting fraud and other
iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2012 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
The Board wishes to place on record their deep appreciation of all
employees of the company for their endeavor and co-operation. The
relations with employees continued to be cordial throughout the year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Particulars regarding conservation of energy, technology absorption,
foreign exchange, earning and outgo
Information as required under section 217 (1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the board of Directors) Rules, 1988 for forming part of the
Director''s report for the financial year ended 31s'' March, 2012 is as
1. Conservations of Energy
a. Energy conservation measures taken Not Applicable
b. Additional investment & proposals if any being implemented. Not
c. Impact of measures of a & b above for reduction Not applicable Of
energy consumption and consequent impact
On cost of production
Total energy consumption and energy consumption Not Applicable
Per unit of production as perform ''A of the
Annexure in respect of industries specified in the schedule thereto.
2. Technology Absorption Research and Development (R&D)
1. Specific area in which R & D is carried by the company '' The
company is conducting R & D to make its business more profitable.
2. Benefits derived as a result of the above R &D The awareness of
investor''s benefit has increased.
3. Future plan of action The company would continue R&Ds for more
4. Expenditure on R & D The company has not undertaken any major
i) Capital on R & D
ii) Recurring Total
Total R & D Expenditure as a percentage of total turnover
Technology Absorption, Adaptation and innovation
1. Efforts in brief, made through towards
technology absorption, Not Applicable
adaptation and innovation
2. Benefits derived as a result of the above
efforts, e.g. product Not Applicable
improvement, cost reduction, product development,
import substitution etc.
3. Information regarding imported technology
(a) Technology Imported None
(b) Year of Import Not Applicable
(c) Has the technology been fully absorbed Not Applicable
(d) It not fully absorbed, areas where this has
not taken place, Not Applicable
reasons therefore and future plans of action
3. Foreign Exchange Earnings and Outgo
1. Activities relating to exports; initiative taken to increase
exports; Nil development of new export markets for products, services
and export plans.
2. Total foreign exchange used and earned The information of foreign
exchange earnings and outflow is furnished in notes to accounts.
A report on Corporate Governance appears in this Annual Report and the
certificate from M/s. GC. 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.
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 iook 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
Dated :6th August, 2012 CHAIRMAN
Place : New Delhi DIN: 00004769