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First Leasing Company of India Ltd.

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  • BSE Code: 500145
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  • NSE Code: FIRSTLEASE
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First Leasing Company of India Ltd. Accounting Policy

REPORT ON CORPORATE GOVERNANCE

Your company is furnishing the report on Corporate Governance for Twelfth financial year in succession. The Board of Directors are happy to state that your Company has been conforming with all applicable mandatory requirements stipulated in the listing agreement from time to time.

COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:

First Leasing's philosophy on code of Corporate Governance is to:-

• Ensure benefits to all stakeholders and creation of shareholders wealth.

• Maintain transparency with professionalism.

• Comply with all statutory regulations.

• Maintain steady growth.

• Ensure responsibility and accountability.

• Maintain a sound system of management control.

The Company believes that by adhering to its philosophy it can attain higher growth in business and optimize profitability

1. BOARD OF DIRECTORS:

a) COMPOSITION & CATEGORY:

The Board at present comprises of four Directors. All the Directors excepting the Managing Director are Non Executive Directors. Since the Chairman is a Non-Executive Director, one-half of the Board comprises of Independent Directors which is as per the requirement of Listing Agreement.

b) ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS DURING THE YEAR AND THE LAST ANNUAL GENERAL MEETING:

d) NUMBER OF BOARD MEETINGS HELD WITH DATES:

The number of Board meetings held during the year from 1st April 2012 to 31st March 2013 is five. The dates of meeting

are given below:

1) 28th May 2012 2) 14th August 2012 (at 3.00 p.m) 3) 14th August 2012 (at 4.15 p.m) 4) 5th November 2012 5) 1st February 2013

The time gap between any two meetings did not exceed four months.

The compliance report in respect of laws applicable to the Company has been periodically reviewed by the Board of Directors of the Company.

e) CODE OF CONDUCT:

The Company has framed and adopted the Code of Business Conduct and Ethics for Directors and Senior Management which has been approved by the Board of Directors at its meeting held on 29th December 2005. This Code is applicable to the Directors and Senior Management personnel of the Company. The Code has also been posted on the Website of the Company

2. DISCLOSURES REGARDING RE-APPOINTMENT OF DIRECTORS:

A) At the ensuing Annual General Meeting, Mr. V Selvaraj, Director retiring by rotation is proposed to be re-appointed. Brief particulars of the director are as under:

Mr. Selvaraj holds a Post Graduate Degree - Master of Arts in Economics, from Loyola College where he studied for 6 years (i.e.) from 1955 to 1961.

He joined the Indian Administrative Service and was posted to serve in Tamil Nadu in 1964.

He served the Government of India in various capacities such as :

Director of Industries and Commerce, Chairman of the Madras Port Trust for a period of 6 years and was responsible for the construction of the First System-based Container Terminal in India and was the earliest to introduce the concept of Container Freight Stations and Inland Container Depots. The new container terminal was declared open by Shrimathi Indira Gandhi, the then Prime Minister of India, during this period.

Secretary to Government, Industries Department: In his capacity as Industries Secretary, he contributed immensely to the Industrial Development of Tamil Nadu, was responsible for the setting up of Madras Export Processing Zone and was in committees and decision taking bodies with Government of India in Trade and Commerce.

Director in the Board of Madras Refineries for more than 10 years. Secretary to Government of Tamil Nadu, Housing and Urban Development in which capacity he was the Chief of the Negotiating Team with the World Bank and successfully negotiated for a large scale funding for Tamil Nadu Urban Infrastructure.

After retiring from the I.A.S, he is serving in a number of corporate Groups as Advisor and as a Director in their Boards and his corporate consultancy experience of more than 20 years covers a vast area ranging from Shipping, Industrial Development, Formation of Joint Ventures, Hospital Administration, Power Generation, Information Technology and Education.

NAMES OF COMPANIES IN WHICH MR. V SELVARAJ HOLDS DIRECTORSHIP:

• First Leasing Company of India Limited

• National Trust Housing Finance Limited

• Cherrytech Intelisolve Limited

• Radaan Media Works India Ltd

• Natronix Semiconductor Technology Limited

MR. V SELVARAJ IS A MEMBER OF AUDIT COMMITTEE IN THE

FOLLOWING COMPANIES -

• First Leasing Company of India Limited

SHAREHOLDING:

Mr. V Selvaraj does not hold any shares in First Leasing Company of India Limited.

B) At the ensuing Annual General Meeting Mr. Farouk Irani is proposed to be re-appointed as Managing Director of the Company for the period of five years with effect from 18th June 2013. Brief particulars of the director are as under.

Mr. Faoruk Irani introduced Corporate Leasing to India during September 1973, when he pioneered First Leasing Company of India Limited. Mr. Farouk Irani worked towards ensuring the interest of the Leasing Industries by being instrumental in incorporating the Association of Leasing and Financial Services Companies. He is the Chairman of the Association of Leasing and Financial Services Company and has shouldered these responsibilities for the last twenty years.

Over the last thirty nine years Mr. Farouk Irani has been functioning as the Company's CEO / President / Managing Director and groomed the First Leasing Company of India Limited from a fledgling start up Company to one of India's Premier Leasing organisations.

Mr. Farouk 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 and Hong Kong, Taipei, Taiwan. Mr. Irani was invited by the World Bank to address a Seminar on Rejuvenation of the Leasing Industry in Indonesia.

NAMES OF COMPANIES IN WHICH Mr. FAROUK IRANI HOLDS

DIRECTORSHIP :

• First Leasing Company of India Limited

• Association of Leasing and Financial Services Company

NAMES OF COMPANIES IN WHICH Mr. FAROUK IRANI HOLDS

MEMBERSHIP IN AUDIT COMMITTEE:-

Mr. Farouk Irani is the member of Audit Committee in First Leasing Company of India Limited.

SHAREHOLDING:

Mr. Farouk Irani holds 79,591 equity shares of Rs. 10/- each in the capital of the Company.

3. AUDIT COMMITTEE:

a) BRIEF DESCRIPTION OF TERMS OF REFERENCE:

The terms of reference of the Audit Committee are in accordance with those specified in Clause 49 of the Listing Agreement as amended from time to time and also conform to the requirements of Section 292A of the Companies Act, 1956.

b) COMPOSITION, NAMES OF MEMBERS AND CHAIRPERSON:

During the year Audit Committee comprised of the following members viz.: 1.Mr. V Selvaraj

2. Mr. Farouk Irani

3. Mr. N Ramakrishnan

4. Mr. A Satish Kumar *

5. Mr. M B Sridharan **

Except Mr. Farouk Irani, the other two are non-executive and independent Directors. Mr. V Selvaraj was the Chairman of the Audit Committee during the year under review.

The Internal Auditors and Statutory Auditors attend the Audit Committee Meetings of the Company. The responsibility of the Audit Committee includes review of quarterly and Annual Financial Results and interaction with Statutory and Internal Auditors and heads of Finance regarding Internal Control Systems etc.

4. REMUNERATION TO DIRECTORS:

No remuneration is paid to Non Executive Directors. However a sitting fee of Rs. 10,000/- is paid to all Directors except Managing Director for each meeting of the board and such payment is in accordance with provisions of the Companies Act, 1956. However no sitting fee is paid to the Non-Executive Directors for attending other Committee Meetings.

None of the Directors has been given any Stock option during the year under review. No sitting fee is paid to Managing Director.

The nature of the employment of Managing Director is contractual. The terms do not contain any provision for payment of severance fees other than normal entitlements.

5. SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE: COMPOSITION, NAMES OF THE MEMBERS AND CHAIRPERSON:

The Committee consisted of the following Directors viz.

1. Mr. V Selvaraj 2. Mr. Farouk Irani

3. Mr. N Ramakrishnan

4. Mr. A Satish Kumar*

5. Mr. M B Sridharan**

• Ceased to be the Director with effect from 8th August 2012 ** Ceased to be the Director with effect from 14th August 2012

• Mr. V Selvaraj Non-Executive Director was the Chairman of the Committee during the year under review.

• Ms. Sheetal R, Company Secretary, is the Compliance Officer.

• The Committee held four meetings during the year.

• Number of shareholders' complaints received from 1st April 2012 to 31st March 2013 - 10.

• Number of Complaints resolved to the satisfaction of shareholders - 10.

• Number of Complaints unresolved - Nil

• No Complaint pending for a period exceeding one month.

SHARE TRANSFER COMMITTEE:

The power to approve the transfers,transmissions etc. in respect of shares in physical form is entrusted by the Board of Directors to Share Transfer Committee of the Company. Share Transfer Committee considers all the requests for transfer, transmission, consolidation, split, issue of duplicate certificates once in a fortnight and after the Committee gives its approval in the meeting, physical share certificates are dispatched by Registered post.

However, the shares in Electronic form are being transferred through the respective Depository Participants of the seller / buyer through the share registry maintained by the Company's Registrars and Share Transfer Agents. Details of share transfers are placed before the Share Transfer Committee periodically

REGISTRARS & TRANSFER AGENTS

M/s. Cameo Corporate Services Limited, Subramanian Buildings, No.1 Club House Road, Chennai 600002 are the Registrars and Transfer agents of the Company w.e.f 1st April 2003. The Company has renewed their appointment for a further period of two years from 31st March 2013 to 30th March 2015.

6.  DISCLOSURES:

During the year there were no materially significant related party transactions with the promoters, directors or the management or relatives which have potential conflict with the interests of the Company at large. The details of transactions with the related parties for the year 2012-2013 are disclosed in the Notes on Accounts forming part of the Annual Report. Hence, no separate disclosure is made here.

There are no instances of non-compliance by the Company and no penalties or strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets during the last three years.

The Company has complied with all the requirements of the listing agreement with the Stock Exchanges as well as regulations and guidelines of SEBI from time to time.

The Company has no Subsidiary as on 31st March 2013.

8. ACCOUNTING STANDARDS:

The Company has complied with all applicable Accounting Standards in the preparation of Financial Statements.

9. CEO / CFO CERTIFICATION

As required by Clause 49 (V) of the Listing Agreement, the Managing Director and the Chief Financial Officer of the Company have given necessary certificate to the Board.

10. NON-MANDATORY REQUIREMENTS:

REMUNERATION COMMITTEE:

A Remuneration Committee has been in place to recommend to the Board the remuneration package payable for the Managing Director of the Company. The Remuneration Committee met once on 8th May 2012.

The Committee at present comprises of following Directors as members:

1. Mr. V Selvaraj

2. Mr. N Ramakrishnan

3. Mr. A Satish Kumar *

4. Mr. M B Sridharan **

* Ceased to be the Director with effect from 8th August 2012 ** Ceased to be the Director with effect from 14th August 2012

Mr. V Selvaraj was the Chairman of the Remuneration Committee during the period under review.

WHISTLE BLOWER POLICY:

The Company at present does not have a specific and a formal Whistle Blower Policy. However, all the employees of the Company have free access to meet senior level Management personnel and report on any points of concern.

The Company is in the process of evaluating ways and means for implementation of the other non mandatory requirements as per Annexure I D of the Clause 49 of the Listing Agreement over a period of time.

11. MEANS OF COMMUNICATION:

The half-yearly, quarterly & Annual financial results of the Company are published in newspapers both in English and in Regional language. The results in English version are published in "Financial Express" and the results in Tamil version are published in "Makkal Kural".

The results are also displayed in the Company's website viz., www.firstleasingindia.com

No presentation has been made to Analysts / Institutional Investors.

12. A MANAGEMENT DISCUSSION AND ANALYSIS REPORT FORMS PART OF THE REPORT OF DIRECTORS.

13. GENERAL SHAREHOLDER INFORMATION:

a) 39th AGM is scheduled to be held on

Wednesday,

18th September 2013 3.00 p.m. at Sathguru Gnananandha Hall 254, T.T.K Road, Alwarpet, Chennai-600 018.

b) FINANCIAL CALENDAR - FOR THE YEAR 2013 - 2014

First Quarter results will be published On or before 14th August 2013

Second Quarter results will be published On or before 14th November 2013

Third Quarter results will be published On or before 14th February 2014

Results for the year ending 31st March 2014 will be published On or before 30th May 2014

c) Dates of Book Closure :

From 11th September 2013 to 18th September 2013 (both days inclusive)

d) Date of Posting of Annual Report

Between 15th August 2013 and 24th August 2013.

Date of payment of Dividend

On or before 17th October 2013

e) THE EQUITY SHARES OF THE COMPANY ARE LISTED IN THE

FOLLOWING STOCK EXCHANGES

Name of Stock Exchange

Stock Code

Date of Payment of Listing Fees 2012-2013

Madras Stock Exchange Ltd.

FLS (Physical Form) INE 492B01019 (D-mat)

24th April 2012

Bombay Stock Exchange Ltd.

500145

24th April 2012

National Stock Exchange of India Ltd.

FIRSTLEASE

24th April 2012

j) PLANT LOCATION :

WIND POWER PROJECTS AT:

Gujarat

Village Suthri

Tehsil Abdasa

District Kutch

State Gujarat

Wind Mill at Ghatnandre Village, Sangli district, Maharashtra was sold during the year under review.

k) DEMATERIALIZATION OF SHARES & LIQUIDITY:

As on 31st March 2013, 2,10,06,657 equity shares being 92.17% of total equity shares issued have been dematerialized. Shares of the Company are actively traded in National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd. and hence have good liquidity.

ADDRESS FOR CORRESPONDENCE :

Company

First Leasing Company of India Limited

Secretarial Department

749, Anna Salai, Chennai 600 002

E-mail address: share@flcindia.com <mailto:share@flcindia.com>

For redressal of Investor Complaints :

investors@flcindia.com <mailto:investors@flcindia.com>

Registrars & Transfer Agent

Cameo Corporate Services Ltd.

"Subramanian Buildings" No.1, Club House Road, Chennai - 600 002

E-mail address: cameo@cameoindia.com <mailto:cameo@cameoindia.com>

There are no outstanding GDRs / ADRs / Warrants or any convertible instruments issued by the Company.