DIRECTORS' REPORT

THE MEMBERS,

1.Your Directors have pleasure in presenting their 19th Annual Report along with Audited Financial Statements on the business and operations of the Company for the Financial Year ended 31st March, 2015.

a) Consolidated operations

Revenue from the consolidated operations of the Company for the year was Rs. 8,482.68Lacs.It is 87.15% more than Rs. 4,532.67 Lacs in the previous year. Overall operational expenses for the year was Rs. 2,023.33 Lacs, against Rs. 976.62 Lacs in the previous year. Profit after Tax for the year at Rs. 5,534.86 Lacs, was higher by 78.16% over Rs. 3,106.71 Lacs, in the previous year.

Due to the new provisions in the Companies Act 2013, the number of subsidiaries whose accounts were consolidated with the company during the year, increased to fourteen from only one company in the previous year. As a result, the consolidated figures of the previous year have been re-casted.

b) Standalone operations

Revenue from the standalone operations of the Company for the year was Rs. 2,030.06 Lacs, 27.98% more than Rs. 1,586.12 Lacs in the previous year. Overall operational expenses for the year was Rs. 805.18 Lacs, against Rs. 207.87 Lacs in the previous year. Profit after tax for the year stood at Rs. 999.85 Lacs, lower by 12.41 % over Rs. 1,141.53 Lacs, in the previous year.

2. Dividend

Your Directors recommend a Dividend of Rs. 2.50/- per equity share aggregating to Rs. 648 Lacs to the Equity shareholders of your Company for the Financial year 2014-15. The dividend shall be subject to tax on dividend to be paid by your Company. The Dividend tax amounts to Rs. 131.91 Lacs.

3. Reserves

The Board proposes to carry an amount of Rs. 199.97 Lacs to Statutory Reserve and Rs. 100 Lacs to General Reserve as per the existing provisions of the Companies Act, 2013 and rules there under read with the NBFC Prudential Norms, 2007.

4. Brief description of the Company's working during the year

Your Company is a Non-Banking Financial Company registered with the Reserve Bank of India. The Business model of the Company comprises of Lending and Acquisition / Investments in Shares and Securities including Mutual Funds etc.

5. Change in the nature of business

During the year under review, there was no change in the nature of the business of the Company.

6. Material changes and commitments

There were no material changes and commitments affecting the financial position of the company which have occurred after the close of financial year 31st March, 2015.

7. Details of significant and material orders passed by the regulators or courts or tribunals

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

8. Adequacy of internal financial controls with reference to the Financial Statements

The Company is having adequate internal financial control which is commensurate with the nature of its size and business. Your Board confirms the following:

1. Systems have been laid to ensure that all transactions are executed in accordance with management's general and specific authorization.

2. Systems and procedures exist to ensure that all transactions are recorded as is necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for aspects.

3. Access to assets is permitted only in accordance with management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

4. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to any differences, if any.

Based on the above, your Board is of the view that adequate internal financial controls exist in the Company.

There has been no change in the number of subsidiaries or in the nature of business of the subsidiaries, during the year under review.

The statement in Form AOC-1 containing the salient features of the financial statement of your Company's subsidiaries and associates pursuant to first proviso of sub section (3) of Section 129 of the Companies Act, 2013 forms part of the Annual Report and hence not repeated here for the sake of brevity.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, alongwith its Standalone and the Consolidated financial statements have been posted on the website of the Company, www.lnbgroup.com . Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company's registered office. The same were also available on the website of the Company www.lnbgroup.com .

During the year under review, the Company had no joint ventures.

Policy for determining 'Material' Subsidiaries

During the year under review, the Company has adopted a Policy on Material Subsidiaries as approved by the Board. It has been posted on the website of the Company at its weblink <http://lnbgroup.com/kiran/reports/> POLICY-FOR-DETERMINING-MATERIAL-SUBSIDIARIES.pdf. More details are given in the Corporate Governance Report annexed hereto.

10. Deposits

Your Company is a NBFC "Non Deposit Taking Systematically Important Company" registered with Reserve Bank of India. During the year under review, your Company has not accepted any deposits from the public within the meaning of the provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 and Chapter V of the Companies Act, 2013.

11. Statutory Auditors

M/s. Agarwal Maheswari & Co.,(FRN 314030E) Chartered Accountants, Kolkata have shown their unwillingness to continue as Statutory Auditors of the Company pursuant to Section 139(9) of the Companies Act, 2015.In view of this, the Company needs to appoint Statutory Auditors and, therefore, the Company has sent a proposal to M/s. Walker Chandiok & Co. LLP. (FRN 001076N/N500013), Chartered Accountants for appointing them as Statutory Auditors of the Company to hold office for the period of 5 (Five) consecutive years from 19th Annual General Meeting until the conclusion of the 24th Annual General Meeting of the Company (subject to ratification by shareholders at every Annual General Meeting), at such remuneration and other terms and conditions as may be fixed by the Board of Directors of the Company.

The Company has received consent letter dated August 1, 2015 from M/s. Walker Chandiok & Co. LLP, (FRN 001076N/N500013) and a Certificate stating that their appointment if made, would be in compliance with Section 139 and 141 of the Companies Act, 2013 and allied rules framed thereunder.

The Board now recommends the appointment of M/s. Walker Chandiok & Co. LLP, (FRN: 001076N/N500013) to hold officeas Statutory Auditors of the Company for the period of 5 (Five) consecutive years from 19th Annual General Meeting till the conclusion of the 24th Annual General Meeting, subject to approval by the shareholders at the ensuing Annual General Meeting of the Company.

12. Auditors' Report

The notes on financial statements referred to in the Auditors report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

13. Share Capital

During the year under review, your Company has neither issued and allotted any fresh equity shares nor has granted any stock options and sweat equity. As on March 31, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

14. Extract of Annual Return

Extract of Annual Return in Form MGT-9 as per Section 134(3)(a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules, 2014 and Rule 12 of Companies (Management and Administration) Rules, 2014 is annexed hereto and forms part of this report as "Annexure A".

15. Energy Conservation, Technology Absorption and Foreign Earning/Outgo

As your Company is a Non-Banking Financial Company and does not own any manufacturing unit, there are no particulars with regard to disclosure under Section 134 of the Companies Act, 2013 with regard toconservation of energy, technology absorption etc.

During the year under review, there is no foreign exchange earnings however there is an foreign exchange outgo of Rs. 5.93 Lacs.

16. Directors and Key Managerial Personnel:

A) Changes in Directors and Key Managerial Personnel

Mr. Yogesh Bangur, (DIN 02018075) has resigned as a Director of the Company w.e.f. March 27, 2015 due to his other engagements. Your Directors place on record their sincere appreciation for the valuable contributions made by him in the growth of the Company during his tenure as a Director of the Company.

During the year under review, the Board of Directors has appointed Ms. Sheetal Bangur (DIN 00003541) as an Additional Director in the category of Non-Executive with effect from March 27, 2015. By virtue of the provisions of Articles of Association and Section 161 of the Companies Act, 2013, Ms. Bangur will vacate office at the ensuing Annual General Meeting (AGM) of the Company. Your directors at its meeting held on August 3, 2015 have recommended for the approval of the members towards the appointment of Ms. Sheetal Bangur as Non-Executive Director of the Company, liable to retire by rotation, with effect from the date of the ensuing AGM of your Company. Ms. Sheetal Bangur is not disqualified from being appointed as a Director as specified in terms of section 164 of the Companies Act, 2013.

The Company has received notice under Section 160 of the Companies Act, 2013 from a member signifying intention to propose the candidature of Ms. Sheetal Bangur for appointment as Director of the Company. A brief profile of Ms. Sheetal Bangur is appearing in the Notice convening the 19th Annual General Meeting of your Company.

In accordance with the Articles of Association of the Company and the provisions of the Companies Act, 2013, Mr. Lakshmi Niwas Bangur (DIN: 00012617) retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.Brief profile of Mr. Bangur who is to be re-appointed, as stipulated under Clause 49 of the Listing Agreement is furnished in the Notice of the ensuing Annual General Meeting. The Board of Directors of your Company recommends the re-appointment of Mr. Bangur at the ensuing Annual General Meeting.

During the year under review, Mr. Sajjan Kumar Kedia was appointed as the Chief Financial Officer of the Company with effect from March 2, 2015 in place of Mr. Ajay Sonthalia who resigned as Chief Financial Officer of the Company w.e.f. February 22, 2015. The Nomination and Remuneration Committee and the Audit Committee of the Board has recommended the said appointment to the Board of Directors.

B) Declaration by Independent Directors

The Company has received declaration fromthe Independent Director(s) of the Company declaring that they meet the criteria of independence both,as under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. Based on the declaration / confirmation received from the Independent Directors and on evaluation of the relationships disclosed, the following Non-executive Directors are Independent Directors in terms of the Listing Agreement and section 149(6) of the Companies Act, 2013.

1. Mr. Amitav Kothari

2. Mr. Rajiv Kapasi

3. Mr. Bhaskar Banerjee

C) Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, your Company has adopted the Remuneration Policy with comprehensive procedure on performance evaluation.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, ethics and compliances, financial reporting process and monitoring activities.

Performance parameters for the Board as a collective body, included parameters like qualification and diversity of Board members, method and criteria for selection of independent directors to ensure independence, availability, appropriateness, clarity of understanding on risk scenarios faced by the Company, existence, sufficiency and appropriateness of policy on dealing with potential conflicts of interest, involvement of Board members in long -term strategic planning etc. Based on these criteria, the performance of the Board, various Board Committees, Chairman and Individual Directors (including Independent Directors) was found to be satisfactory.

Independent Directors have reviewed the performance of Board, its Committee, Chairman and Individual Directors, in their separate held meeting without the participation of other Non-Independent Directors and members of management. Based on their review, the Independent Directors, hold an unanimous opinion that the Non-Independent Directors, including the Chairman to the Board are experts with sufficient knowledge in their respective field of activities.

17. Familiarization Programme for Board members

The Company is required to conduct the familiarization programme for Independent Directors (IDs) in terms of Clause 49(II)(B)(7) of the Listing Agreement, to familiarize them about the Company and their roles, rights responsibilities in the Company. The Familiarization Programme is stated in the Corporate Governance Report forming part of this Annual Report. The details of such Familiarization Programme for Directors may be referred to, at the website of the Company at its weblink <http://lnbgroup.com/kiran/reports/Familiarization-Programme->for-IDs.pdf.

18. Consolidated Financial Statements

In accordance with the requirements of sub section (3) of Section 129 of the Companies Act, 2013 and other allied rules thereof and as per Clause 32 of the Listing Agreement, your Company has prepared Consolidated Financial Statements in accordance with Accounting Standard 21- "Consolidated financial Statements" and Accounting Standard 23- "Accounting for Investments in Associates" issued by The Institute of the Chartered Accountants of India. The Consolidated Financial Statements forms part of the Annual Report.

19. Number of meetings of the Board of Directors

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. However, in case of a special and urgent business need, the Board's approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting.

The notice of Board meeting is given well in advance to all the Directors. Meetings of the Board are held in Kolkata. The Agenda of the Board / Committee meetings is circulated at least a week prior to the date of the meeting. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision.

The detailed information chart showing the date of the meeting of the Board and its various Committees as well as details of the Directors who attended the meeting is given in the Corporate Governance Report forming part of the Annual Report.

20. Committees of the Board

During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees and also formed a Corporate Social Responsibility Committee. There are presently 8 (eight) Committees of the Board as given below:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Loan and Investment Committee

7. Asset Liability Management Committee

8. Grievance Redressal Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the Corporate Governance Report, forming a part of this Annual Report.

21. Audit Committee

The composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report as annexed hereto. All the recommendations made by the Audit Committee during the year were accepted by the Board.

22. Stakeholders Relationship Committee

The composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report forming part of this Annual Report.

23. Nomination and Remuneration Committee

The composition, terms of reference and other details of the Committee forms part of the Corporate Governance Report forming part of this Annual Report.The Nomination and Remuneration Policy is also posted on the website of the Company at its weblink viz.,<http://lnbgroup.com/kiran/reports/Nomination> and Remuneration Policy.pdf.

24. Corporate Social Responsibility (CSR) Committee

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee was constituted by the Board of Directors of the Company at its meeting held on May 29, 2014. The Annual Report on CSR activities including, the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year, as required by the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in the Annexure 'B' to this Report. The Corporate Social Responsibility Policy has been posted on the website of the Company www.lnbgroup.com . The weblink is <http://lnbgroup.com/kiran/reports/CORPORATE->

SOCIAL-RESPONSIBILITY-POLICY.pdf.

25. Vigil Mechanism / Whistle Blower Policy

The Board of Directors of the Company has established a Vigil Mechanism for Directors and employees and adopted the Whistle Blower Policy in terms of Section 177 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement to report concerns about unethical behavior, wrongful conduct and violation of Company's Code of conduct or ethics policy. The details of which have been given in the Corporate Governance Report annexed to this Report and also posted on the website of the Company at its weblink <http://lnbgroup.com/>

kiran/reports/WHISTLER-BLOWER-POLICY.pdf

26. Particulars of Loans, Guarantees or Investments outstanding during the Financial Year

Particulars of the Loans/guarantee/advances/ and Investments outstanding during the financial year are fully disclosed in the notes attached to the annual accounts which are attached with this report.

27. Related Party Transactions

All contracts or arrangements or transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis and are reviewed by the Audit Committee of the Board.

During the year under review, the Company has not entered into contracts or arrangements or transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, no transactions are reported in Form no. AOC - 2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts), Rules, 2014.

The Policy on Related Party transactions as approved by the Board has been posted on the website of the Company at its weblink<http://lnbgroup.com/kiran/reports/POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf>

28. Particulars of employees and related disclosures

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details are annexed as "Annexure C" to the Annual Report.

Further, in accordance with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees in the Company drawing remuneration in excess of the limits set out in the said rules.

29. Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2015, the Board of Directors of the Company has appointed M/s Vinod Kothari & Co, Practising Company Secretaries, to conduct the Secretarial Audit. The Secretarial Audit Report for the Financial Year ended 31st March, 2015 is appended to this Report as "Annexure D" which is self explanatory.

30. Management Discussion and Analysis Report

The Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is annexed to this report.

31. Corporate Governance

The Company is committed to maintaining the premier standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is also published elsewhere in this Annual Report.

Further, declaration by Mr. Shreeyash Bangur, Managing Director stating that the Board members and SMPs have complied with the Code of Conduct and the same has been annexed along with this Report.

32. CEO & CFO certification

Certificate from Mr. Shreeyash Bangur, Managing Director and Mr. Sajjan Kumar Kedia, Chief Financial Officer, pursuant to provisions of Clause 49(V) of the Listing Agreement, for the year under review was placed before the Board of Directors of the Company at its meeting held on August 3, 2015.

A copy of the certificate on the financial statements for the Financial Year ended March 31, 2015 is annexed along with this Report.

33. Risk Management

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks that may impact key business objectives of your Company.

In order to ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated and managed, to establish a framework for the company's risk management process and to ensure company wide implementation, to ensure systematic and uniform assessment of risks related with giving loans and making investment business, to enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices and to assure business growth with financial stability.

Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

34. Directors' Responsibility Statement

In terms of the provisions on the Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Director's confirm that—

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 of the Company for that period;

(c) the directors had 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 had prepared the annual accounts on a going concern basis; and

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

35. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company is committed to provide safe and conducive work environment to its employees and has formulated "Policy for Prevention of Sexual Harassment" to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment. During the year under review, no case of sexual harassment was reported.

36. RBI Regulations - Compliance

Your Company continues to carry on its business of Non-Banking Financial Company as a Non Deposit taking Company and follows prudent financial management norms as applicable. Your Company appends a Statement containing particulars as required in terms of Paragraph 13 of Non-Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 in schedule annexed to the Balance Sheet and additional disclosures required as per Paragraph 10(5)for NBFCs-ND-SI issued by the Reserve Bank of India.

37. Acknowledgements

Your Directors would like to record their appreciation of the hard work and commitment of the Company's employees and are grateful for the co-operation and support extended to the Company by the Bankers, Statutory Authorities, Financial Institutions(s) and all other establishments connected with the business of the Company.

For and on behalf of the Board of Director

Lakshmi Niwas Bangur (DIN 00012617) Chairman

Shreeyash Bangur (DIN 00012825) Managing Director

Place: Kolkata

Date: 03.08.2015