But they are writing off previous years non performing assets this year.What do you make of it?

The company has reduced dividends by 45 paise .That saves around one crore for the company.How is that going to help?

Dear Sir,
 
 
We refer to your e-mail dated 28th June, 2009. Accordingly, we give our reply as follows.
 
1) In the earlier years, as per the Reserve Bank of India Directions, the company made provisions for Non-Performing Assets in the Profit and Loss account. This item was not allowed as an allowable expenditure under the Income Tax Act.  In view of this, the amount of non –performing assets are being written off as bad debts in the profit and Loss account and the provisions created in earlier years are being reversed to Profit and Loss Account.
 
2) The company has expanded its operations to Chandigarh .
 
3) The company is at present having its windmill operations at Rajasthan, Maharashtra and Gujarat. The income from the windmill operations for the year ended 31st March, 2009 has increased from Rs. 421.88 Lakhs to 436.26 Lakhs representing an increase of Rs. 14.38 Lakhs over the previous year.
 
4) As you are aware, First Leasing has been in the business of providing Lease, HP Financing etc to Bodies corporate for the past 35 years.  With the consistency in making profits, declaring dividends, efficient professional team and the ability to repay the deposits /debentures to public on due dates since its inception, the company is able to gain confidence in the market. These factors help us in mobilizing the required funds at the competitive rates from the financial market in comparison with other peer companies.
 
5) First Leasing exposure to software Leasing is about 7%of total exposure on lease financing.
 
6) The Board of Directors have recommended a tax free dividend of 18% on the equity shares of the company for the year ended 31-3-2009, in view of the prevailing global recession. The Board felt it necessary to conserve funds for future business operations in this uncertain environment of global economic crises especially at a time when the concept of leverage is under a cloud.
 
With thanks,
 
N.Kumar.