REPORT OF THE DIRECTORS
A REVIEW OF THE COMPANYS PERFORMANCE OVER FISCAL 2013:
We are presently positioned in an economy that is annually compelled to revise its GDP
growth rates from 9% to 8% and then to 5.6% from 6% with a present low forecast at 5%. If
any company that works within these confines gets overtaken by a marketing obsession to
climb great heights in asset growth it may at best be described as suicidal.
First Leasing despite the odds grew "Total Revenues" to Rs.245 Crores up from
Rs.213 Crores recording a growth of 15% with PBT rising from Rs.48.84 Crores to Rs.51.17
Crores.
The one expense account we were able to compress was our tax bill which fell from
Rs.17.23 Crores to Rs.16.45 Crores as we exhausted almost every other Expense-reduction
possibility. First Leasing controlled what was controllable through exemplary credit
management and for yet another year achieved the extraordinary feat of holding its net
NPAs at zero. The company also successfully closed its first large Real Estate related
lease for land and factory buildings.
Shareholders are understandably concerned that over the years whilst First Leasing
enhanced its Net Worth to a level of Rs.363.94 Crores the company restrained but did not
abstain from dividend payment despite the consideration that the Company over its present
operating life paid dividends of Rs.118.16 Crores which is the equivalent of returning
Shareholder Capital "Five times over". Also its imperative for First Leasing to
build its "Retained Earnings" to balance debt funds committed by our bankers,
which also explains why we remarkably increased the Company’s Capital Adequacy to an
"All time High" of 27.32% against Reserve Bank’s present requirement of
15%, and also successfully completing a subordinated debt issue for Rs.178 Crores
enhancing our Tier II Capital.
| APPROPRIATIONS |
2013 |
2012 |
|
(Rs. in Lacs) |
(Rs. in Lacs) |
| Profit for the year |
3,472.91 |
3,161.83 |
| Surplus brought forward from previous year |
14,613.00 |
12,798.95 |
| Statutory Reserve |
(695.00) |
(633.00) |
| Total |
17,390.91 |
15,327.78 |
| From which the following appropriations are made :- |
|
|
| General Reserve |
261.00 |
238.00 |
| Dividend |
410.23 |
410.23 |
| Corporate Tax on dividend |
69.72 |
66.55 |
| Surplus in Profit and Loss Account |
16,649.96 |
14,613.00 |
| Total |
17,390.91 |
15,327.78 |
REGULATION OF NBFCs:
The Company has complied with applicable regulations as per Reserve Bank of India
Directions to NBFCs. Capital Adequacy Ratio stood at 27.32% (19.24%) as at 31st March 2013
which is much higher than the statutory minimum requirement of 15% stipulated by RBI. Net
Non Performing Assets as at 31st March 2013 stood at 0.00% (0.12% ).
DIVIDEND:
The Board of Directors have recommended a Dividend of Rs.1.80 per share of Rs.10/- each
on the Equity Shares (18%) free of tax for the year ended 31st March 2013.
PUBLIC DEPOSITS:
During the year entire deposits were repaid to its Deposit holders and as such the
amount due to Public towards Public Deposit is Nil. Deposit / Interest which remained
unclaimed to the extent of Rs.50.02 lacs has been transferred to a separate ESCROW Account
for meeting future claims as per RBI’s direction.
DIRECTORATE:
Mr. V Selvaraj, Director of the Company, retires by rotation at this Annual General
Meeting and being eligible offer himself for re-election.
MANAGING DIRECTOR’S COMMISSION:
The Board noted that the Managing Director of the Company expressed his intention to
take a significantly reduced commission of Rs.16,12,433/-for the year ended 31st March
2013 which is equivalent to a normal bonus given to a staff member of the Company instead
of his eligible Commission of Rs. 1,00,65,569/- (i.e.) 2% on the net profits computed
under section 349/ 199 of the Companies Act, 1956 in view of adverse economic conditions
prevailing in the financial industry.
AUDITORS:
The Statutory Auditors M/s. Sarathy & Balu, Chartered Accountants, Chennai
(FRN-03621S), retire at the ensuing Annual General Meeting and are eligible for
re-appointment. Your Directors recommend their re-appointment to hold the office as
statutory auditors till the conclusion of the next Annual General Meeting. The Auditors
have confirmed that the re-appointment, if made, will be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956.
The firm has successfully undergone the Peer Review Process by Peer Review Board (PRB)
of the Institute of Chartered Accountants of India, New Delhi. The firm holds a valid
certificate issued by the Peer Review Board of the said Institute.
COST AUDIT:
The Board of Directors of the Company have approved the appointment of Mr. S.Sundar of
M/s. S.Sundar & Associates, Cost Accountant in practice as Cost Auditor to conduct the
Audit of the Cost records of the Company in respect of its Wind Mill Operations for the
period from 1st April 2013 to 31st March 2014.
CORPORATE GOVERNANCE:
A report on Corporate Governance forms part of this report and a certificate from the
Auditors of your Company regarding compliance of conditions of the Corporate Governance is
attached to this report. A Management Discussion and Analysis Report also forms part of
this report.
UNCLAIMED SHARE CERTIFICATES:
In term of clause 5A II of the Listing Agreement, the Company has sent three reminders
to the shareholders whose share certificates, remains unclimed with the Company. The
Company has transferred the shares comprised in the share certificates into one folio in
the name of Unclaimed Suspense Account (Demat Account). The Company opened Unclaimed
Suspense Account on 4th January 2013. The details of outstanding shares in First Leasing
Company of India Limited Unclaimed Shares Suspense Account is as follows:
| Particulars |
Aggregate Number of shareholders |
Outstanding shares lying in First Leasing Company of India Limited
Unclaimed Shares Suspense Account |
| Opening Balance as on 4th January 2013* |
50 |
1,660 |
| Shareholders approached for transfer / delivery during 2012-13 and Shares transferred
/ delivered during 2012-13 |
Nil |
Nil |
| Balance as on 31st March 2013 |
50 |
1,660 |
*Account opening date.
RATING:
CREDIT RATING AWARDED BY CARE AND BRICKWORK:
• "CARE A1+" (A ONE PLUS) for Commercial Papers
• "CARE AA" (DOUBLE A) for Non-Convertible Debentures
• "CARE AA-" (DOUBLE A Minus) for Subordinated Debt
• "CARE AA" (DOUBLE A) for Long Term Bank facilities
• "BWR AA" (BWR DOUBLE A) for Non-Convertible Debentures
• "BWR AA" (BWR DOUBLE A) for Subordinated Debt
PROVISION ON STANDARD ASSETS:
As per Reserve Bank of India Directive, the Company has provided 0.25% on Standard
Assets aggregating Rs. 36.65 Lacs (previous year Rs. 42.44 Lacs) in the accounts for the
year ended 31st March 2013.
INFORMATION AS PER COMPANIES (DISCLOUSRE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES 1988:
During the year under review, there is no information required to be stated relating to
Energy Conservation and Technology absorption.
Foreign currency expenditure amounting to Rs. 2,160.76 Lacs was incurred during the
year under review. The Company does not have any Foreign Exchange Earnings.
PARTICULARS AS PER THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975:
Particulars of Employees in terms of requirement under Section 217(2A) of the Companies
Act, 1956 are set out in the Annexure forming part of this Report.
DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to the section 217(2AA) of the Companies Act, 1956 the Board of Directors
confirms:
1. That in the preparation of the annual accounts, the applicable accounting standards
had been followed along with proper explanation relating to material departures.
2. That the directors had selected such accounting policies and applied them
consistently and made judgements 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.
3. That the directors had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities.
4. That the directors had prepared the annual accounts on a going concern basis.
CORPORATE SOCIAL RESPONSIBILITY
Your Company in association with NGO’s and Charitable Trusts is involved for the
last 15 years in various community focused activities for improving the health and
hygienic level of the community.
Your Company is also contributing to the development of education and sports facilities
through various sponsorship programme in association with Charitable Trusts.
ACKNOWLEDGEMENT:
The Directors wish to thank the Bankers, Financial Institutions, Customers and
Employees for their assistance and support extended to the Company during the year under
review.
|
For and on behalf of the Board |
| Place : Chennai |
A C MUTHIAH |
| Date : 14th August 2013 |
Chairman |
ANNEXURE TO DIRECTORS’ REPORT
Statement of particulars of employees pursuant to the Provisions of Section 217 (2A) of
the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975
| Name |
Age |
Qualifications / No. of years of Experience |
Date of Employment |
Designation and Nature of Duties |
Remuneration Received (Rs. in Lacs) |
Last employment held |
| Mr. Farouk M Irani |
72 |
Mr. Irani was a Senior Officer of First National City Bank in 1973 when he left the
Bank after ten years. Mr. Irani studied leasing in Hong Kong and Singapore and spent a
further six months developing the leasing concept for acceptability to Indian Companies. |
September 10,1973 |
Managing Director - Entrusted with substantial powers of management including
Managerial functions and all functions relating to its day to day affairs. |
Rs. 108.34 |
Senior Officer - First National City Bank |
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Mr. Irani introduced Corporate Leasing to India in 1973 when he got First Leasing
Company of India Limited operational. Over the last 39 years Mr. Irani is functioning as
the Companys CEO / President / Managing Director and grew First Leasing Company of India
Limited from a fledgling startup Company to one of Indias Premier Leasing organisations. |
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Mr. Irani authored a widely acclaimed book titled, "Inside Leasing"
and has been honoured by being invited to address the World Leasing Convention on six
separate occasions at Washington, Sydney, San Francisco, Istanbul, Dublin, Hong Kong and
the Asian Leasing and Finance Association in Taipei and Taiwan. Mr. Irani was invited by
the World Bank to address a Seminar on Rejuvenation of the Leasing Industries in
Indonesia. |
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Mr. Irani is the Chairman of the Association of Leasing & Financial Services
Company and has shouldered this responsibility for the last Twenty years. |
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Note: 1. Remuneration includes Salary, Commission, Medical Expenses, Leave Travel
Allowance, Motor Car Expenses and contribution to Provident Fund.
2. The nature of the employment of Managing Director is contractual.
3. Mr. Farouk Irani is not related to any Directors of the Company.
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