The Hindu Business Line : First Leasing net down 6%; pays Rs 2.25 dividend

Chennai June 20 First Leasing Company of India has reported a lower net profit for the year 2006-07 over the previous year, but that was only because of a first-time `deferred tax liability'.

The Chennai-based NBFC has reported a net profit of Rs 25.36 crore compared with Rs 27.10 crore.

In 2006-07, there was a deferred tax liability of Rs 8.15 crore that was not there in the previous year. The reason was First Leasing was among the companies that contested the `AS-22'. On April 19, all the petitions contesting the standard were dismissed by the Kolkata High Court.

"Technically, the deferred tax liability would apply to us only from the current year," Mr Dilli Raj, Chief Financial Officer, First Leasing, told Business Line today, adding that the company voluntarily applied the accounting standard for 2006-07.

AS-22 came into force in 2001-02. Mr Raj said that for the previous year, First Leasing would provide for deferred tax liability out of the reserves.

The company's board of directors today recommended a dividend of Rs 2.25 per share.

First Leasing focuses on funding the corporate sector, for any kind of assets that companies may require finance. As at March 31, the company had an outstanding loan book of Rs 920 crore, up from Rs 799 crore in the previous year. The company expects a 15 per cent growth in the current year, Mr Dilli Raj said.

Close to 45 per cent of the company's lendable resources come from bank borrowings.

First Leasing borrows from a consortium of 16 banks, State Bank of India being the leader. Its cost of borrowing in 2006-07 was 9.08 per cent.

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