NOTE NO.1 : CORPORATE INFORMATION
First Leasing Company of India Limited (FLCI) is a Public Company
incorporated in India, in the year 1973, under the Companies Act, 1956
and having its Shares listed in Madras, Mumbai and National Stock
Exchanges. FLCI is classified as Deposit Accepting Asset Finance
Company by the Reserve Bank of India. FLCI is primarily engaged in the
business of Leasing / Hire Purchase and also granting loans to
Corporate and other entities. It also earns income from the activity of
Electricity generation from Wind Energy.
NOTE NO.2 : BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The Company maintains its books of account and prepares the Financial
Statements on accrual basis following the historical cost convention in
accordance with generally accepted accounting principles (GAAP) and
in compliance with provisions of the Companies Act, 1956 and the
Accounting Standards as specified in the Companies (Accounting
Standard) Rules, 2006 prescribed by the Central Government to the
extent applicable to this Company.
The Company follows Capital adequacy norms besides prudential norms for
income recognition and provisioning for Non-Performing and Standard
Assets as prescribed by Reserve Bank of India for Non-Banking Financial
Companies from time to time.
a. Terms / Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs.10/- per share. Each holder of equity shares is entitled to one vote
per share. The company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing annual general meeting.
During the year ended 31st March 2012, a dividend of Rs. 1.80 per
Share, is recommended by Board of Directors (Previous year - Rs. 2.00
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after payment of preferential amounts. The distribution will be in
proportion to the number of equity shares held by the Shareholders.
a) Term Loans obtained from other parties (Financial Institutions) are
secured by hypothecation of Equipments hired out and assignment of
rentals thereof and repayable in 41 instalments.
b) Deposits from public and Share holders carry interest ranging
between 8.00% and 9.96%. No deposit is accepted with a maturity period
of less than 12 months period and more than 36 months. Rs. 1,373.81
Lacs out of the Long Term Public Deposit is repayable within one to two
years and the balance of Rs. 842.98 Lacs is repayable after two years
from the reporting date.
c) Inter Corporate Deposits are accepted for short term period of not
more than 180 days with interest rate ranging from 9.50% to 14.00%
d) There are no loans taken from related party during the current year.
(Rs. 821.85 Lacs)
e) The Company has not defaulted in repayment of any Loan or Deposit
and interest thereon.
II AS - 17 - SEGMENT REPORTING:
The Company is primarily engaged in Hire Purchase/Lease Finance. There
is no reportable segment other than primary segment, in terms of the
above accounting standard.
III AS - 18 - RELATED PARTY DISCLOSURE:
(i) List of Related party where control exists:
Key Management Personnel: Mr. Farouk Irani - Managing Director
(ii) Related Party Transactions
Remuneration - Rs. 104.59 Lacs (Rs. 177.95 Lacs)
Interest paid on Fixed Deposits - Rs. Nil (Rs. 54.77 Lacs)
IV AS - 19 - LEASE / HIRE PURCHASE TRANSACTIONS:
(I) Aggregate of Minimum lease payments - Rs. 23,096.87 Lacs (Rs.
(ii) Net carrying amount - Rs. 18,849.81 Lacs (Rs. 19,991.96 Lacs)
(iii) Maturity pattern of Gross / Net receivable:
(iv) Unearned Finance income - Rs. 4,247.06 Lacs (Rs. 6,097.75 Lacs)
(v) All initial direct costs are recognised as expenses in the Profit
and Loss statement at the inception of the lease.
(vi) Accumulated provision for uncollectible minimum lease payments
receivable Rs. 32.50 Lacs (Rs. 181.88 Lacs)
(2) Stock on Hire:
(i) Aggregate of Minimum Hire Rentals - Rs 1,64,924.59 Lacs (Rs.
(ii) Net carrying amount - Rs 1,42,154.68 Lacs (Rs. 1,23,145.02 Lacs)
(iii) Maturity pattern of Gross / Net receivable
(iv) Unearned Finance income - Rs. 22,769.91 Lacs (Rs 14,047.36 Lacs)
(v) Accumulated provision for uncollectible hire payments receivable is
Rs. 72.07 Lacs (Rs.167.39 Lacs)
VI AS - 22 - ACCOUNTING FOR TAXES ON INCOME:
Rs. 604.96 Lacs (Rs. 1,111.97 Lacs) is recognised towards the current
year provision, arising out of timing differences, as per the
Accounting Standard - 22.
VII AS - 28 - IMPAIRMENT OF ASSETS:
Assets have been reviewed at balance sheet date for impairment, as per
the above Accounting Standard
VIII AS - 29 - CONTINGENT LIABILITIES & ASSETS
(i) Pending contracts to be executed
Particulars As at 31.03.2012 As at 31.03.2011
Estimated amount of contracts
remaining to be executed on
Capital Account/Lease & H.P.
Disbursements not provided for 821.28 620.72
(ii) Claims against the Company not acknowledged as debts:
Tax Demands against the Company not acknowledged as Debts
(a) Income Tax demand of Rs. 1,841.29 Lakhs (Rs. 1,879.12 Lacs) against
the Company in respect of which appeals have been preferred and are
pending with Appellate Authorities. However the Company has paid under
protest Rs. 858.44 Lacs besides a refund of Rs. 63.50 Lacs due from and
adjusted by the department (Rs. 955.91 Lacs) and balance demand has
been stayed by the Appellate authorities. Based on expert legal
opinion, the Company is of the view that it has fair chances of success
in the appeal and entitled for refund of the amount paid.
(b) Interest Tax demand of Rs. 48.93 Lakhs (Rs. 48.93 Lacs) has been
contested in appeal proceedings. The Company has paid Rs. 39.13 Lacs
(Rs. 39.13 Lacs). The Company is of the view that it has a fair chance
of success in the appeal and hence no provision has been made for the
balance amount of Rs. 9.80 Lacs in the books of account.
(c) Liability towards Fringe Benefit Tax of Rs. 22.58 Lacs (Rs. 22.58
Lacs) has not been provided for in the accounts as the Company has
challenged the validity of such a levy before the Hon''ble Supreme Court
of India. There is no liability to be provided in this regard with
effect from 1st April, 2009 in view of the repeal of the levy.
(d) Sales Tax demands of various states aggregating to Rs. 1,644.72
Lacs (Rs. 1,224.41 Lacs) have been contested before different Appellate
authorities including the Hon''ble Supreme Court. These demands have
been stayed by respective Appellate Authorities. The company is
confident of successful outcome in the appeals and in the event of any
liability arising the same would devolve upon the ultimate hirers
/lessees and hence no provision has been made in the books of account.
The Company has furnished Bank Guarantees amounting to Rs. 49.17 Lacs
(Rs. 49.17 Lacs) and its own guarantee of Rs. 993.93 Lacs (Rs. 51.53
IX NON CURRENT LIABILITIES
Long term borrowings
Long Term borrowings include Loans availed from Banks, Financial
Institutions and as Public Deposits which are due beyond 12 months from
the reporting date.
X CURRENT LIABILITIES
a. Short Term Borrowings
Short Term Borrowings include loans, Commercial Papers, Public Deposits
and Cash Credit facilities availed from various Banks that are due and
payable in the next 12 months from the reporting date.
The maximum amount outstanding towards borrowing under Commercial Paper
at any point of time, during the year is Rs. 20,000 Lacs (Rs. 20,000
Lacs) and the outstanding as at 31st March 2012 is Rs. 8,000 Lacs (Rs.
14, 500 Lacs)
As per the directions of the Reserve Bank of India, the Company has
created a floating charge in favour of IDBI Trusteeship Services Ltd.,
the Trustee, on the Statutory Liquid Assets maintained by the Company.
b. Other Current Liabilities
There is no amount due and payable to Micro and Small Enterprises , in
terms of sec.22 of the Micro, Small, Medium Enterprises Development
Act, 2006. The information has been determined on the basis of the
information available with the Company.
The figures stated under the unpaid Dividends, Unpaid matured Deposits
and unpaid interest do not include any amount due to be credited to
Investors Education & Protection Fund.
XI NON CURRENT ASSETS
a. Intangible Asset:
Computer Software is grouped under Intangible Asset and is being
depreciated @40% under written down value method.
b. Long Term Loans & Advances:
In the opinion of the Board of Directors, the Long Term Loans and
Advances will have value, on realisation in the ordinary course of
business, at least equal to the amounts at which they are stated in the
XII CURRENT ASSETS
Confirmation of balances from parties listed under Trade Receivable, is
Figures have been re-grouped, re-arranged and re-classified wherever
necessary to conform to the revised Schedule VI Format under the
Companies Act, 1956. The figures in brackets relate to the year ended
31st March 2011.