Our Company Was incorporated as Franklin Leasing and Finance Private Limited on March
16, 1992 under the Companies act, 1956, bearing registration No. 048028 having its
registered office at Delhi. Subsequently the company became the Public Limited Company
pursuant to a special resolution passed by the members of the company at the EGM held on
September 10, 2013 and the name of the company was changed to Franklin Leasing and Finance
Limited. A fresh Certificate of Incorporation consequent to a public Limited Company was
issued on February 13, 2014 by ROC, Delhi.
Our Company is NBFC Registered with RBI to carry NBFC activities under section 45 -IA
of the Reserve Bank of India Act, 1934 bearing Registration No. B-14.02383 dated May 22,
2001.
The year 2019-20 began with several changes on the macroeconomic front, including
rising inflation, dwindling industrial output and a falling rupee. The enactment of the
GST legislation has been a milestone reform that will create a win-win environment for all
stakeholders and heralds an integrated and productive economy, and is expected to further
boost economic growth. However, there could be temporary transition challenges during the
cut-over.
This section of the Annual Report has been included in adherence to the spirit
enunciated in the Code of Corporate Governance approved by the Securities and Exchange
Board of India. Shareholders and Readers are cautioned that in the case of data and
information external to the Company, though the same are based on sources believed to be
reliable, no representation is made on its accuracy or comprehensiveness. Further, utmost
care has been taken to ensure that the opinion expressed therein contain its perceptions
on most of the important trends having a material impact on the Companys operations.
We are a Non- Deposit taking Non- Systematically Important Non- Banking Finance Company
(NBFC-ND- NSI) engaged primarily in the business of advancing loans and investing/trading
in securities. The Company undertakes no obligation to publicly update or revise any of
the opinions or forward-looking statements expressed in his report, consequent to new
information, future events, or otherwise. Estimation and expectation made in the Report
may differ from actual performance due to various Economic conditions, Government Policies
and other related factors. We have been running on a modest operating scale till the mid
of 2022-23. However the company from now onwards has commenced a process of improving our
internal systems including but not limited to allocation strategies, Financial Discipline
and better utilizations of our fund based portfolio.
Goods & Services Tax (GST) will stand to benefit as entertainment tax will fall
under the ambit of GST and input credits will be available to all segments across the
board.
The keen emphasis laid by the central government on the ease of doing business and
“Make in India” initiative led to higher FDI inflows. However, economic growth
in 2022-2023 is expected to be higher which augurs well for our industry.
INDUSTRY DEVELOPMENT:
The NBF Cs show moderation growth in asset management, rising delinquency resulting in
higher provisionary thereby impacting profitability. However, comfortable capitalization
level and conservative liquidity management continues to provide comfort to the credit
profile of NBFCs inspire of the impact of the profitability.
GOODS AND SERVICE TAX
Goods and Services Tax (GST) is a landmark reform which will have a lasting impact on
the economy and on businesses. Implementation of a well-designed GST model that applies to
the widest possible base at a low rate can provide significant growth stimulus to the
business and contribute to the Prime Ministers mission of ‘Make in India. Your
Company has been preparing for migrating to GST for the past year; changes across IT
systems, Supply Chain and operations have been made keeping in mind the sweeping changes
that GST would bring in. While there are a few areas that need to be addressed, the
Government has announced an intention to go live on GST on 1st July, 2018 and your Company
will be ready for this transformative reform. There were some big positives in India too
that would lay the foundation for future growth. The biggest among them being the growing
consensus between all parties to roll out the combined Goods & Services Tax (GST).
With the Constitution Amendment Bill for Goods and Services Tax being approved by the
President of India post its passage in the Parliament, India moved a step closer to
creating a unified taxation structure. GST is bound to usher in efficiencies in the system
via ease of doing business (one tax rate subsuming all other taxes), thereby leading to an
improved business environment. It will help curtail the cascading effect of multiple taxes
and enable faster movement of goods across the country. Moreover, GST implementation is
likely to have some temporary impact due to probable down stocking in the trade channels
and likely conversion from unorganized to organized.
BUSINESS STRENGTH:
Well Qualified and Experienced Promoter
Our Company is backed by a well qualified and experienced promoter. We believe that the
past experience and industry networks of our promoter/ director will help us in achieving
our key business strategies.
Long Standing Track-record and Established relationships
Our Company received its NBFC Registration in the year 2001. Hence, the company has
been in the business of providing short term as well as longer durations loan and
advances in the North Indian region for around a decade. Our newly induced Promoter/
Director- Mr. Jagannath Jha along with our other directors proposes to utilize the readily
available database of clients as well as long standing relationships with capital Market
Players to ensure effective utilization of our assets and improve the overall operational
and financial efficiencies of the company.
BUSINESS STRATEGY:
Improve the Investment process
Our Company has in the past made losses while investing and trading in securities. The
Company will continue to trade and invest in stock Markets and other avenues; however, we
intend to improve our internal systems and processes in order to maximize the risk
adjusted returns of the available assets. Further we intend to assess better market
opportunities for loans and advances and aim at diversifying the customer base in order to
reduce per account risks.
Increase Our Client Database
The Company believes that business is a by-product of relationship. Since, most of our
loans are short term as well as unsecured in nature, this business model is heavily
reliant on client relationship that are established over period of time. The company
believes that a long term client relationship with large client fetches better dividends.
The company intends to establish strategic alliances and share risk with companies whose
resources, skills and strategies are complementary to the companys business and are
likely to enhance its opportunities.
The company wants to expand its portfolio of products and services by introducing
products such as Loans against Property, IPO Funding, Financial and management Consultancy
in addition with the existing products of Unsecured ICD Loans and personal loans. We plan
to continue to sell our products and services to our existing corporate client base and
further target other High Net worth Individuals and firms with impeccable credit track
record to whom the company may advance funds both secured/unsecured based on the risk
profile and as envisaged in the loan policy of the company.
Focus on other geographical areas and key cities to increase our market share
Our company intends to extend its financing services in other geographical areas in
India and target the cities that are financial centres. In line with the strategic
objective, we have recently opened our new full time office in Kolkata. Further as and
when the opportunities arise we shall explore opening of offices/ centres at other
financial centres such as Delhi, Ahmadabad & Chennai.
OPPORTUNITIES:
FRANKLIN LEASING & FINANCE LIMITED, being a financial Company, is exposed to
specific risks that are particular to its business and environment within which it
operates including its interest rate volatility, investment cycle, credit risk, market
risk and operational risk. The measurement, monitoring management of risk remains key
focus areas for the company. The company has laid down stringent credit norms through the
Lending Policy Framework approved by the Board. It maintains a conservative approach and
manages the credit risk through prudent selection of clients, delegation of appropriate
lending powers and by stipulating various prudential limits. In retail loan businesses
like ours, overall portfolio diversification and reviews also facilitate mitigation and
management. The enactment of the GST legislation has been a milestone reform that will
create a win-win environment for all stakeholders and heralds an integrated and productive
economy, and is expected to further boost economic growth. However, there could be
temporary transition challenges during the cut-over.
THREATS:
Growth of the Companys asset book, quality of assets and ability to raise funds depend
significantly on the economy. Unfavourable events in the Indian economy can affect
consumer sentiment and in turn impact consumer decision to purchase financial products.
Competition from a broad range of financial services providers, unstable political
environment and changes in Government policy / regulatory framework could impact the
Companys operations.
OUTLOOK:
The markets will continue to grow and mature leading to differentiation of products and
services. Each financial intermediary will have to find its niche in order to add value to
consumers. The Company is cautiously optimistic in its out look for the year 2022-23.
Asset quality of NBFC Sector:
The GNPA of the NBFC sector as a percentage of total assets increased in March. Capital
Adequacy:
As per the extant guidelines, NBF Cs are required to maintain a minimum capital
consisting of Tier-l and Tier-Il capital, of not less than 15 percent of their aggregate
risks-weighted assets.
RESPONSIBILITY FOR THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Board of Directors have reviewed the Management Discussion and Analysis prepared by
the Management, and the Independent Auditors have noted its contents. Statement in this
report of the Companys objective, projections, estimates, exceptions, and predictions are
forward looking statements subject to the applicable laws and regulations. The statements
may be subjected to certain risks and uncertainties. Companys operations are affected by
many external and internal factors which are beyond the control of the management. Thus
the actual situation may differ from those expressed or implied. The Company assumes no
responsibility in respect of forward looking statements that may be amended or modified in
future on the basis of subsequent developments, information or events.
BUSINESS OVERVIEW & INDUSTRY DEVELOPMENTS
The company was incorporated as Franklin Leasing And Finance Limited on March 16, 1992
under the companies act, 1956 bearing Registration No. 048028 having its registered office
in Delhi. Our Company is NBFC registered with RBI to carry on NBFC activities under
section 45-1A of the Reserve Bank Of India Act, 1934 bearing registration No. B-14.02383
dated May 22, 2001. We are Deposit taking Non- Systematically Important Non- Banking
Finance Company (NBFC-ND-NSI) engaged primarily in the business of advancing loans and
investing/trading in securities. The main object of the company is to cater to the growing
industry for increasing its investment strategy. The company is planning to increase its
investment strategy for the growth of the business. As regards developments in the
industry and your companys performance for the year under review in relation to those
developments, the same has been explained in greater details in Directors Report under
Performance Review.
RISKS AND CONCERNS
Risk is an inherent part of any business. There are various types of risks, which
threat the existence of a company like Credit Risk, Market Risk, Operational Risk,
Liquidity Risk, Interest Rate Risk, Strategic Risk, Regulation Risk etc. Your Company aims
at enhancing and maximizing shareholders value by achieving appropriate trade-off between
risk &returns.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has a proper and adequate internal control system to ensure that all assets
are safeguarded and protected against loss from unauthorized use or disposition and that
all transactions are authorized, recorded and reported correctly. The internal control is
supplemented by an extensive program of internal audits, review by management and
documented policies, guidelines and procedures. The internal control is designed to ensure
that financial and other records are reliable for preparing financial statements and other
data and for maintaining accountability of assets.
DISCUSSIONS ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Financial Performance of the company for the year under review is disclosed in the
Directors report. Please referto Directors Report for the detail study on the performance
review of the company.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The industrial relations remained cordial throughout the year. The employees of the
Company have extended a very productive cooperation in the efforts of the management to
carry the Company to greater heights. Continuous training down the line is a normal
feature in the Company to upgrade the skills and knowledge of the employees and workmen of
the Company. Your Company has been a thought leader in the area of big data and analytics
as a tool to drive sustainable growth. The Company uses intelligent analytics at the back
end, to deliver better on-shelf availability in stores. Your Company continues to
strengthen this capability to stay ahead of the competition. In FY 2019-20, a GST
Awareness Campaign was driven through the social learning platform and was provided to
19000+ employees, to build knowledge around Goods and Services Tax and how it impacts
citizens of India and the businesses
FORTH COMING STATEMENT
The statements made above may be construed as Forward Looking Statements within the
meaning of the applicable laws and regulations. Actual performance of the Company may vary
substantially depending upon the business structure and model from time to time. Important
external and internal factors may force a downtrend in the operations of the Company.
Recently, take-out financing arrangement has been permitted through ECB, under the
approval route, for refinancing of rupee loans availed from domestic bank be eligible
borrowers in the port, airport, roads including bridges and power sectors for development
of new projects. To conclude, concrete policy and regulatory measure need to be
undertaken. Some of the most important include measures taken to increase the breadth and
the depth of the corporate bond markets in India.
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