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Franklin Leasing & Finance Ltd.

BSE: 539839 Sector: Financials
NSE: N.A. ISIN Code: INE399S01010
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NSE 05:30 | 01 Jan Franklin Leasing & Finance Ltd
OPEN 19.65
PREVIOUS CLOSE 19.65
VOLUME 8000
52-Week high 41.25
52-Week low 18.20
P/E 163.75
Mkt Cap.(Rs cr) 31
Buy Price 18.50
Buy Qty 4000.00
Sell Price 19.70
Sell Qty 8000.00
OPEN 19.65
CLOSE 19.65
VOLUME 8000
52-Week high 41.25
52-Week low 18.20
P/E 163.75
Mkt Cap.(Rs cr) 31
Buy Price 18.50
Buy Qty 4000.00
Sell Price 19.70
Sell Qty 8000.00

Franklin Leasing & Finance Ltd. (FRANKLINLEASING) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting their 25 th Annual Report together with theAudited Accounts of the Company for the Year ended March 31 2017.

FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY

The Standalone Financial results are summarized below:

(Amount in Lacs.)
Particulars March 31 2017 March 31 2016
Total Income 427.24 181.68
Total Expenditure 391.26 158.42
Profit Before Tax 35.97 23.26
Provision for Tax 11.11 7.19
Profit after Tax 24.85 16.07
Transfer to Statutory Reserves 4.97 3.21
Profit available for appropriation 0.79 0.15
Provision for Proposed Dividend

-

-

Provision for Dividend Tax

-

-

Balance Carried to Balance Sheet 19.09 12.71

TRANSFER TO RESERVE

The Company has not transferred any amount to General Reserve.

BRIEF DESCRIPTION OF THE COMPANY'S STATE OF AFFAIR

The highlights of Company's performance are as under:

• Revenue from operations increased from Rs. Rs. 181.68 lacs. to Rs. 427.24 lacs.

• Profit before taxation stood at Rs. 35.97 Lacs against Rs.23.26 in the previousyear.

• The net Profit of the Company for the year under review was Rs. 24.85 as againstNet Profit of Rs. 16.07 in the previous year.

DIVIDEND

Your Directors feel that it is prudent to plough back the profits for future growth ofthe Company and do not recommend any dividend for the year ended 31st March 2017.

SHARE CAPITAL

The paid up equity capital as on March 31 2017 was Rs. 115584000. During the yearunder review no issue of equity shares with differential voting rights was completed.Further the Company has not issued any sweat equity nor granted any employee stockoptions.

CHANGES IN THE NATURE OF BUSINESS

During the year there has been no Change in the nature of the Business of the Company.

No material changes and commitments have occurred between the end of the financial yearand date of report.

INITIAL PUBLIC OFFERING

The Company has spent/utilized the proceeds of the fund raised under the IPO forincreasing the capital base as well as growing the operational scale with respect to ourNBFC activities. Further we expect to receive the benefits of listing on the SME platformof BSE LTD.

BOARD MEETING

The Board of Directors duly met 6 (Six) times on 20.05.2016 21.07.2016 09.08.201612.11.2016 13.02.2017 and 28.03.2017 and in respect of which meetings proper noticeswere given and the proceedings were properly recorded and signed in the Minutes Bookmaintained for the purpose

PUBLIC DEPOSITS

Your Company has not accepted any deposits in terms of Section 73 to 76 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and no amounton account of principal or interest on deposits from public was outstanding during theyear under review as on the date of the balance sheet.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The company has not given loans or guarantees but has invested in the Equity Shares ofthe other Companies. The details of the investments made by company during the year underreview is given in the financial statements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls system with reference tofinancial statements. The scope of work includes review of process for safeguarding theassets of the Company review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas. During the yearsuch controls were tested and no reportable weakness in the design or operation wasobserved.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

In accordance with the requirements of the provisions of section 135 of the Act theCompany has constituted a Corporate Social Responsibility ("CSR") Committee. Thecomposition and terms of reference of the CSR Committee is provided in the CorporateGovernance Report.

Since your Company do not have the net worth of Rs. 500 Crore or more or turnover ofRs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The required information as per rule 8(3) of the companies (Accounts) Rules 2014 isprovided hereunder:

A. Conservation of Energy:

Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D): NIL

2. Technology absorption adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

1. Foreign Exchange Earnings: NIL

2. Foreign Exchange Outgo: NIL.

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE

1. Scope:

This policy sets out the guiding principles for the Nomination & RemunerationCommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent Directors ofthe Company.

2. Terms and References:

2.1 "Director" means a director appointed to the Board of a Company.

2.2 "Nomination and Remuneration Committee means the committee constituted inaccordance with the provisions of Section 178 of the Companies Act 2013 and clause 49 ofthe Equity Listing Agreement.

2.3 "Independent Director" means a director referred to in sub-section (6) ofSection 149 of the Companies Act 2013 and Clause 49(II)(B) of the Equity ListingAgreement.

3. Policy:

Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee and the Board shall review on annualbasis appropriate skills knowledge and experience required of the Board as a whole andits individual members. The objective is to have a board with diverse background andexperience that are relevant for the Company's operations.

3.1.2 In evaluating the suitability of individual Board member the NR Committee maytake into account factors such as:

> General understanding of the company's business dynamics global business andsocial perspective;

> Educational and professional background

> Standing in the profession;

> Personal and professional ethics integrity and values;

> Willingness to devote sufficient time and energy in carrying out their duties andresponsibilities effectively.

3.1.3 The proposed appointee shall also fulfill the following requirements:

> shall possess a Director Identification Number;

> shall not be disqualified under the companies Act 2013;

> shall Endeavour to attend all Board Meeting and Wherever he is appointed as aCommittee Member the Committee Meeting;

> shall abide by the code of Conduct established by the company for Directors andsenior Management personnel;

> shall disclose his concern or interest in any company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;

> Such other requirements as may be prescribed from time to time under thecompanies Act 2013 Equity listing Agreements and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual withthe objective of having a group that best enables the success of the company's business.

3.2 criteria of independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence ofDirectors at time of appointment/ re-appointment and the Board shall assess the sameannually. The Board shall re-assess determinations of independence when any new interestor relationships are disclosed by a Director.

3.2.2 The criteria of independence shall be in accordance with guidelines as laid downin companies Act 2013 and Clause 49 of the Equity Listing Agreement.

3.2.3 The Independent Director shall abide by the "Code for Independent Directors"as specified in Schedule IV to the companies Act 2013.

3.3 Other Directorships/ Committee Memberships

3.3.1 The Board members are expected to have adequate time and expertise and experienceto contribute to effective Board performance Accordingly members should voluntarily limittheir directorships in other listed public limited companies in such a way that it doesnot interfere with their role as Director of the company. The HRNR Committee shall takeinto account the nature of and the time involved in a Director Service on other Boardsin evaluating the suitability of the individual Director and making its recommendations tothe Board.

3.3.2 A Director shall not serve as director in more than 20 companies of which notmore than 10 shall be public limited companies.

3.3.3 A Director shall not serve an indepent Director in more than 7 listed companiesand not more than 3 listed companies in case he is serving as a whole-time Director in anylisted company.

3.3.4 A Director shall not be a member in more than 10 committee or act chairman ofmore than 5 committee across all companies in which he holds directorships.

For the purpose of considering the limit of the committee Audit committee andstakeholder's relationship committee of all public limited companies whether listed ornot shall be included and all other companies including private limited companiesforeign companies and companies under section 8 of the Companies Act 2013 shall beexcluded.

Remuneration policy for Directors key managerial personnel and other employees

1. Scope:

1.1 This policy sets out the guiding principles for the Nomination and Remunerationcommittee for recommending to the Board the remuneration of the directors key managerialpersonnel and other employees of the company.

2. Terms and Reference:

In this policy the following terms shall have the following meanings:

2.1 "Director" means a Director appointed to the Board of the company.

2.2 "key managerial personnel" means

(i) The Chief Executive Office or the managing director or the manager;

(ii) The company secretary;

(iii) The whole-time director;

(iv) The chief finance Officer; and

(v) Such other office as may be prescribed under the companies Act 2013

2.3 "Nomination and Remuneration Committee" means the committee constitutedby Board in accordance with the provisions of section 178 of the companies Act 2013 andclause 49 of the Equity Listing Agreement.

3. Policy:

3.1 Remuneration to Executive Director and Key Managerial Personnel

3.1.1 The Board on the recommendation of the Nomination and Remuneration (NR) committeeshall review and approve the remuneration payable to the Executive Director of the companywithin the overall approved by the shareholders.

3.1.2 The Board on the recommendation of the NR committee shall also review and approvethe remuneration payable to the key managerial personnel of the company.

3.1.3 The Remuneration structure to the Executive Director and key managerial personnelshall include the following components:

(i) Basic pay

(ii) Perquisites and Allowances

(iii) Stock Options

(iv) Commission (Applicable in case of Executive Directors)

(v) Retrial benefits

(vi) Annual performance Bonus

3.1.4 The Annual plan and Objectives for Executive committee shall be reviewed by theNR committee and Annual performance Bonus will be approved by the committee based on theachievement against the Annual plan and Objectives.

3.2 Remuneration to Non - Executive Directors

3.2.1 The Board on the recommendation of the Nomination and Remuneration Committeeshall review and approve the remuneration payable to the Non - Executive Directors of theCompany within the overall limits approved by the shareholders as per provisions of thecompanies act.

3.2.2 Non - Executive Directors shall be entitled to sitting fees attending themeetings of the Board and the Committees thereof. The Non- Executive Directors shall alsobe entitled to profit related commission in addition to the sitting fees.

3.3. Remuneration to other employees

3.3.1. Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.

DECLARATION BY INDEPENDENT DIRECTORS

The independent directors of the Company (SUNITHA GUPTA) have given declarations thatthey meet the all criteria of independence as laid down under section 149(6) of theCompanies Act 2013 and Regulation 25 of SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015.

CEO/CFO/MD CERTIFICATION

The Chief Financial Officer (CFO) have issued certificate pursuant to the provisions ofRegulation 27(2) of the LODR certifying that the Financial Statements do not contain anymaterially untrue statement and these statements represent a true and fair view of theCompany's affairs and the same forms a part of this report

FORMAL ANNUAL EVALUATION

As per section 149 of the Companies Act 2013 read with clause VII (1) of the scheduleIV and rules made there under the independent directors of the company had a meeting on01.02.2017 without attendance of non-independent directors and members of management. Inthe meeting the following issues were taken up:

(a) Review of the performance of non-independent directors and the Board as a whole;

(b) Review of the performance of the Chairperson of the company taking into accountthe views of executive directors and non-executive directors;

(c) Assessing the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

The meeting also reviewed and evaluated the performance of non-independent directors.The company has 2 (Two) non-independent directors namely:

i) Mr. Ramesh Kumar Dalmia - Non- Independent & Executive

ii) Mr. Pawan Dalmia - Non- Independent & Executive

The meeting was recognized for shaping up of the company and putting the company onaccelerated growth path. They devoted more time and attention to bring up the company tothe present level.

The meeting also reviewed and evaluated the performance the Board as whole in terms ofthe following aspects:

• Preparedness for Board/Committee meetings

• Attendance at the Board/Committee meetings

• Guidance on corporate strategy risk policy corporate performance andoverseeing acquisitions and disinvestments.

• Monitoring the effectiveness of the company's governance practices

• Ensuring a transparent board nomination process with the diversity ofexperience knowledge perspective in the Board.

• Ensuring the integrity of the company's accounting and financial reportingsystems including the independent audit and that appropriate systems of control are inplace in particular systems for financial and operational control and compliance withthe law and relevant standards.

Mr. Pawan Dalmia chairman of the company has performed exceptionally well by attendingboard meetings regularly by taking active participation in the discussion of the agendaand by providing required guidance from time to time to the company for its growth etc.

It was noted that the Board Meetings have been conducted with the issuance of propernotice and circulation of the agenda of the meeting with the relevant notes thereon.

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2016-17.Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.

(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There are no materially significant related party transactions made by the company withPromoters Key Managerial Personnel or any other related parties as defined under theCompanies Act 2013 which may have potential conflict with interest of the company.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary or Joint Venture.

LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 toThe SME Platform of BSE Limited where the Company's Shares are listed.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In line with the provisions of the Section 177(9) of the Act and the regulation 27(2)of LODR with stock exchanges the Company has adopted Whistle Blower Policy as part ofvigil mechanism to provide appropriate avenues to the Directors and employees to bring tothe attention of the management any issue which is perceived to be in violation of or inconflict with the fundamental business principles of the Company.

This vigil mechanism provides for adequate safeguards against victimization ofemployees and directors who avail of the vigil mechanism and also provide for directaccess to the chairperson of the Audit committee in exceptional cases. The CompanySecretary is the designated officer for effective implementation of the policy and dealingwith the complaints registered under the policy.

AUDITORS' REPORT

The Auditors' Report does not contain any qualification reservation or adverseremarks. Notes to Accounts and Auditors remarks in their report are self-explanatory anddo not call for any further comments.

SECRETARIAL AUDIT REPORT

The Secretarial Audit is not applicable to the company for the year under review.

STATUTORY AUDITOR

M/s. Anil Hariram Gupta & Co. Chartered Accountant having (Membership No. 066306)was appointed as Statutory Auditors of the company retires at the ensuing annual generalmeeting and is eligible for reappointment. As required under the provisions of Section 139of the Companies Act 2013 the Company has received a written consent from the auditorsto their re-appointment and a certificate to the effect that their re-appointment ifmade would be in accordance with the Companies Act 2013 and the rules framed there underand that they have satisfied the criteria provided in Section 141 of the Companies Act2013.

The Board recommends the re-appointment of M/s. Anil Hariram Gupta & Co. as thestatutory auditors of the Company from the conclusion of this Annual General meeting tillthe conclusion of the next Annual General Meeting.

EXTRACTS OF ANNUAL RETURN

As provided under Section 92(3) of the Act the extract of the Annual Return in formMGT-9 is annexed herewith as "Annexure-1".

BUSINESS RISK MANAGEMENT

Your Company has a structured framework to satisfy that sound policies procedures andpractices are in place to manage the key risks under risk framework of the company. Majorrisks identified by the businesses and functions are systematically addressed throughmitigating actions on a continuing basis.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting. If any Member is interestedin obtaining a copy thereof such Member may write to the Company Secretary in this regardand the same will be furnished on request.

Particulars of Employees pursuant to section 134(3)(q) of the Companies Act 2013 readwith rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules2014

1. None of the employees was employed throughout the financial year which was inreceipt of remuneration exceeding Rs. 6000000/- per annum or more. Therefore Rule5(2)(i) of the captioned Rules is not applicable.

2. None of the employees was employed throughout the financial year who was in receiptof remuneration exceeding Rs. 500000/- per month. Therefore Rule 5(2)(ii) of thecaptioned Rules is not applicable.

3. No employee is a relative of any director or Key Managerial personnel of theCompany. Therefore Rule 5(2)(iii) of the captioned Rules is not applicable to anyemployee.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated underRegulation 27(2) of the LODR entered into with the stock exchanges. A separate section oncorporate governance is provided along with a certificate from the auditor confirming thecompliance of conditions of Corporate Governance as stipulated under Regulation 27(2) ofthe LODR entered into with the stock exchanges is annexed and forms part of this report.

MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Management Discussion and Analysis Reports is attached which forms part of thisReport.

POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

The Company has a policy of zero tolerance for sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under.

The following is the summary of sexual harassment complaints received and disposedduring the calendar year.

• No. of complaints received: Nil
• No. of complaints disposed off: Nil

CREDIT & GUARANTEE FACILITIES:

The Company has been availing facilities of Credit and Guarantee as and when requiredfor the business of the Company from the Axis Bank Ltd .

AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report. And during the year under reviewthere were no instances when recommendation of audit committee was not accepted by theboard.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of the directors' report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation of the contribution made bythe employees at all levels to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of businessconstituents banks and other financial institutions and shareholders of the Company likeSEBI BSE NSDL CDSL Axis Bank etc. for their continued support for the growth of theCompany

For and on behalf of the Board
Sd/-
Place: New Delhi Pawan Dalmia
Date: 13/08/2017 Managing Director
DIN: 01541707