STRICTLY PRIVATE AND CONFIDENTIAL
(Not for circulation. For the specific use of the Addressee only)
INFORMATION MEMORANDUM FOR PRIVATE PLACEMENT
Of
SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES
AGGREGATING Rs.10 CRORES
Issued by
FIRST LEASING COMPANY OF INDIA LIMITED
Registered Office
749 Anna Salai, P O Box 2747, Chennai - 600002, Tamil Nadu
Telephones: 91-44-2852 1615/0705
HIGHLIGHTS

Present issue is rated F1+ (ind) (Highest Safety) by Fitch.

First Leasing pioneered the corporate leasing industry in India.

Track record of 30 years and excellent brand image on FDs.

First Leasing completed an Infrastructure Lease transaction for Rs.75 crores with Ministry of
Railways. Resultantly 15.97% of First Leasing’s future receivables are to be met by a “sovereign
risk”.

The portfolio is truly diversified and there is no unbalanced sectoral exposure.

Diversified funds base (Fixed Deposits as a % of total liabilities is a mere 12.68%).

First Leasing’s Net NPA of 1.26% is probably the lowest among the top line NBFCs.

Capital adequacy of 23.96% is much above the mandatory 12%

First Leasing enjoys the confidence of the banking system as a whole and operates credit facilities
with major credit grantors, such as State Bank of India, HSBC, UCO Bank, UTI Bank and IDBI
Bank.
PART – A
TERMS AND CONDITIONS OF PRIVATE PLACEMENT
Instrument
Non Convertible Debentures
Style
Private Placement
Issue Size
Rs.10 crores
Subscription requested Rs.10 crores
Minimum subscription Rs.1 crore
Rating
F1+ (ind) (Highest Safety) by Fitch
Coupon
7.5% p.a. payable monthly
Tenor
1 year
Purpose of the issue
The debentures are being issued to augment
short term funds requirements.
Security
The debentures will be secured by
“exclusive first charge” on existing
unencumbered and specific lease /
hirepurchase assets of the company.
Asset cover
1.25 times
Date of allotment
Security creation will be completed within
45 days from the date of allotment.
Interest on application Interest at the coupon rate of 7.5% p.a. will
money
be paid on the “application money” till
allotment.
Certificate
Debentures will be issued in the
“Dematerialised Format” by way of a credit
to the investor’s demat account.
Trustee
UTI Bank Ltd.
Listing
Yes. The debenture will be listed in The
Stock Exchange, Mumbai.
Upfront discount
Nil
Compliance
The issue is in full compliance with SEBI’s
circular no.SEBI/MRD/SE/AT/36/2003/30
/9 dated September 30, 2003 read in
conjunction with SEBI’s clarification
no.SEBI/MRD/SE/AT/46/2003
dated
December 22, 2003
PART – B
INFORMATION ON FIRST LEASING - ISSUER
Fundamental strength of First Leasing

First Leasing pioneered the corporate leasing industry in India.

Our Managing Director, Mr Farouk Irani, as an elder statesman of the
industry and the Chairman of Association of Leasing and Financial Services
Companies (ALFS) made considerable contribution to the “orderly growth of
the Leasing Industry”. Our Managing Director Mr Farouk Irani is the first
Indian (also the first Asian) to be invited to address a World Leasing
Convention and the only Asian who has the distinction of addressing 7 World
Leasing Conventions.

First Leasing completed an Infrastructure Lease transaction for Rs.75 crores
with Ministry of Railways. Resultantly 15.97% of First Leasing’s future
receivables are to be met by a “sovereign risk”.

Fitch Ratings India Pvt. Ltd. (the only International Rating Agency operating
in India) assigned the “Highest Safety” rating to 2 of our debt programmes.

CARE has also assigned the “Highest Safety” rating to 2 of our debt
programmes.

The portfolio is truly diversified and there is no unbalanced sectoral exposure.

There is no concentration in terms of geographical segments or assets or
customer groups.

No unmanaged or unidentified risks such as Foreign Exchange risks, etc.

First Leasing has an impeccable track record of 30 years. First Leasing
operated under many “Business cycles” and successfully turned over more
than 5 credit portfolios.

First Leasing enjoys the full confidence of the Banking System and operates
credit limits aggregating Rs.200 crores from 18 banks. First Leasing privately
placed debt securities of more than Rs.150 crores with the Banking system.

Diversified funds base (Fixed Deposits as a % of total liabilities is a mere
12.68%).

First Leasing’s Gross NPA ratio of 4.35% and the Net NPA of 1.26% are
probably the lowest among the top line NBFCs.

Very high collection efficiency.

Capital adequacy of 23.96% is much above the mandatory 12%.

Strong management (pioneer) and cross-functional board.

Low leverage of 3.11 times offering excellent financial flexibility

High interest cover of 1.93 times

We are a Registered NBFC with RBI. We fully comply with all Prudential
Norms, including the ALM guidelines.

Focused approach, no unrelated diversifications.

No walk-in retail exposure.

Several world-class organisations found First Leasing an acceptable “counter
party” and extended funding and / or associated with First Leasing, after a
thorough “Due Diligence”.
Organisation
US Exim
First International Bank
(FIB)
Commonwealth
Development
Corporation
(CDC)
Guinness Flight – U.K.
Metlife – U.S.
Type of relationship
Guarantee
ECB
Amount
$ 20 mio.
$ 5 mio.
Equity Investment @ a
premium of Rs.83.5 per
share
Joint
Venture
/
collaboration
Buy-out of our stake in
FIAM
GBP 2.5 mio.
Track Record and Goodwill Earned
We tabulate our financial performance over the last twenty nine years:
(Rs / lacs)
Year
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2002
2003
Gross
Revenue
(Rs.)
8.46
19.84
27.11
13.06
47.69
62.72
95.34
133.34
202.76
279.82
388.42
597.02
920.08
1352.19
1800.50
2573.36
3301.57
3698.47
4564.10
5783.61
7617.85
9826.94
11207.61
11772.85
12989.57
14131.11
15590.27
18923.86
13618.01
Profit After
Tax (Rs.)
Cash Profit
(Rs.)
2.35
6.77
8.90
9.37
16.48
22.58
37.43
48.04
71.45
90.04
114.67
139.31
238.01
238.24
$$ 301.10
353.83
457.98
501.77
601.68
763.23
1064.09
1398.84
1400.40
1404.38
1475.34
1858.37
1656.90
1787.90
1910.95
4.23
10.30
14.20
18.67
28.01
40.34
68.47
89.78
130.54
163.77
234.34
324.06
503.99
690.18
1020.93
1449.51
1908.01
2005.35
2168.29
2799.53
3951.75
5094.17
5963.36
6378.77
6951.65
7675.64
7592.79
7842.68
5462.44
Total Asset
Footings
(Rs.)
64.05
89.21
119.10
164.17
181.44
238.18
305.66
464.51
745.91
1102.50
1797.22
2587.71
4874.99
6128.16
7860.94
11040.92
13189.73
15122.71
20334.49
24734.49
30988.14
33728.78
34996.35
39431.43
45957.63
53816.62
64655.81
71013.55
67526.72
Reserves
and Surplus
(Rs.)
2.35
4.26
8.68
13.49
24.26
35.25
63.64
101.70
161.44
211.44
298.40
396.58
732.29
822.41
848.90
929.85
903.19
1165.13
1646.26
1964.87
2462.82
3407.33
5045.14
5250.96
6148.64
7419.72
8493.49
9716.65
11174.69
Dividends ( % )
-18.00
18.00
18.00
18.00
19.00
19.00
20.00
20.00
20.00
21.00
21.00
30.00
$ 25.00
# 26.00
26.00
28.00
28.00
30.00
32.00
35.00
35.00
32.00
32.00
25.00
25.00
25.00
@26.67
20.00
Intrinsic Value
of each Share
(Rs.)
10.94
11.70
13.47
15.40
17.25
18.83
22.70
30.34
40.95
* 31.78
33.47
40.64
** 29.19
31.63
23.47
24.76
24.32
27.56
27.94
32.46
39.07
## 33.53
34.63
33.80
37.75
44.26
50.10
55.86
62.73
*
After a Bonus Issue of 1:3 and a Public Issue of 5,47,464 Shares.
**
After a Rights Issue of 24,80,699 Shares
$$
Dividend of 30% in 1986 was in lieu of a Bonus Issue and
represented a one-time payment. Accordingly, dividend of 25% in
1987 represented a natural progression over the dividend Declared
in earlier years.
$$
Includes writes back of Investment Allowance Reserves (utilised)
plus Development Rebate.
#
On an enhanced capital issue of Rs.6.29 Crores versus Rs.3.79
Crores for the previous year.
##
After conversion of warrant and CCP of 60,00,000 shares.

As recommended by the Board of Directors

After private placement of 20,00,000 Equity Shares
@
16 months period (from Dec 2000 to March 2002)
PART C
CONFIDENTIAL INFORMATION MEMORANDUM
This is a confidential information memorandum setting out the terms and
conditions pertaining to the issue of Secured Redeemable Non-Convertible
Debentures of the face value of Rs. 100/- each to be issued by FLCI. Your
participation and subscription is subject to the completion of the Application Form.
OBJECTS OF THE PLACEMENT:
The proceeds of the placement will be used by FLCI to augment the short-term
resources of the company.
DEEMED DATE OF ALLOTMENT:
The deemed date of allotment of NCD would be the date following the day of
subscription. The date would be intimated to the subscriber on confirmation of
receipt of subscription by FLCI.
INTEREST ON THE DEBENTURES:
The debentures will carry interest at the coupon of 7.5% p.a. from the Deemed
Date of Allotment (subject to deduction of tax at source at rates prevailing from
time to time under the provisions of the Income tax Act, 1961, or any other
statutory modification or re-enactment thereof for which a certificate will be issued
by the company).
PAYMENT OF INTEREST:
The interest will be payable monthly to the registered Debenture holders recorded
in the books of the Company, and in case of joint holders, to the one whose name
stands first in the register of Debenture holders. In the event of the Company not
receiving any notice of transfer along with the original debenture certificates at
least thirty days before the respective due date of payment of interest, the
transferee(s) for the Debentures shall not have any claim against the Company in
respect of interest so paid to the registered Debenture holder(s). Wherever the
signature(s) of such transferor(s) in the intimation sent to the Company is/are not in
accordance with the specimen signature(s) of such transferor(s) available on the
records of the Company, all payments of remaining interest on such Debenture(s)
will be in abeyance by the Company till such time as the Company is satisfied in
this regard. The Company shall pay no penal interest for such period, when the
interest is kept in abeyance.
TAX DEDUCTION AT SOURCE:
Tax as applicable under the Income Tax Act, 1961, or any other statutory
modification or re-enactment thereof will be deducted at source. Tax exemption
certificate/ document, under Section 193 of the income Tax Act, 1961, if any, must
be lodged at the office of the Company, at least 30 days before the interest
payment becoming due.
REDEMPTION:
The Company will redeem the debentures at par the end of 365 days from the
deemed date of allotment.
RIGHT TO ACCEPT OR REJECT APPLICATIONS:
The Company is entitled at its sole and absolute discretion, to accept or reject any
application, in part or in full, without assigning any reason. The application forms,
which are not complete in all respects, are liable to be rejected. The rejected
applicants will be intimated along with the refund warrants within 15 days of
closure of the subscription list. Interest on application money will be paid at the
rate of 7.5%p.a. from the date of realisation of cheque(s)/demand draft(s) till the
date of refund.
LETTER OF ALLOTMENT AND DEBENTURE CERTIFICATE:
The company will make allotment to the investors in due course after verification
of the Application Form, the accompanying documents and on realisation of the
application money. The Company will execute and send Letter of allotment
/Debenture Certificates evidencing the title of the Debentures in favour of the
allottees, not later than 30 days from the date of allotment. In the event of the
Company issuing Letter of Allotment, the same shall be exchanged for Debenture
Certificates, to be issued within three months, or within such further period as may
be permissible, after completion of all formalities. The company is also agreeable
to issue the debentures in a dematerialized form.
DENOMINATION OF THE DEBENTURE CERTIFICATES:
The Company will normally issue a consolidated debenture certificate for the
debentures allotted to the investors. The applicant may request the Company to
issue the certificate in market lots by specifying the same in the Application Form.
If the applicant does not specify/incorrectly specifies the denomination required by
him, the Company will issue one consolidated certificate. Under no circumstances
will any of the certificates be split into denominations of less than 1000 debentures
of face value Rs. 100/- each.
SURRENDER /
DEBENTURES
REPURCHASE
AND
REISSUE
/
RESALE
OF
The Company shall have the right to accept surrender or to repurchase the
Debentures in full or part(s) thereof at any time or prior to the date(s) of
redemption from the secondary markets and reissue/resell them from time to time,
in accordance with the provisions of section 121, of the Companies Act, 1956.
Upon reissue/resale of any Debentures, the new holders of the debentures shall
have and always deemed to have had the same rights and priorities/privileges, as if
the Debentures had never been repurchased/redeemed. The Debentures so reissued or sold shall be covered and secured by the original mortgage deed/trust
deed to be executed by the Company. Where the Company has repurchased any
Debentures comprised in this issue, then the Company shall have and be deemed
always to have had the power to resell/reissue the Debentures, as the case may be,
either by reissuing the same Debentures or by issuing other Debentures in their
place.
HOW TO APPLY:
Applications for the Debentures must be made in the prescribed form, and must be
completed in block letters in English.
Either a demand draft or cheque, drawn or made payable in favour of “First
Leasing Company Of India Limited” and crossed Account Payee only must
accompany application Forms.
RIGHTS OF ALL DEBENTUREHOLDERS:
The Debentureholders will not be entitled to any rights and privileges of
shareholders other than those available to them under statutory requirements. The
Debentures shall not confer upon the holders the right to receive notice, or to
attend and vote at the general meetings of shareholders of the Company. The
principal amount and interest, if any, on the Debentures will be paid to the holder
only, or in the case of joint holders, to the one whose name stands first. The
Debentures shall be issued to the allottee(s) of such debentures by the Company
and also in the Trustee Agreement/trust Deed.
MODIFICATIONS OF RIGHTS:
The rights, privileges, terms and conditions attached to the Debentures may be
varied, modified or abrogated with a written consent of those Debenture holders,
who hold atleast three fourth of the outstanding amount of the Debentures or with
the sanction accorded pursuant to a resolution passed at a meeting of the Debenture
holders, provided that nothing in such consent or resolution modifies or varies the
terms and conditions of the Debentures, if the same are not acceptable to the
Company.
NOTICES:
The notice to the Debenture holders required to be given by the Company or the
trustees shall be deemed to have been given if sent by courier to the sole/first
registered holder of the Debentures, as the case may be.
All notices to be given by the Debenture holders shall be sent by registered post or
by hand delivery to the Company or to such persons at such address as may be
notified by the Company from time to time.
FINANCIAL PERFORMANCE OF THE COMPANY:
The Financial Highlights of the Company are as under:
Fig. In Rs. Crs.
Financial Year
Total Income
Financing Charges
Depreciation
Profit Before Tax
Profit After Tax
Dividend (%)
Equity
Share
Capital
Reserves
&
Surplus
Networth
Total Borrowings
Total Assets
Debt Equity Ratio
(Times)
Book Value (Rs)
6 months
ended
September 30,
2003
57.72
24.83
14.16
11.17
12 months
ended
31.3.2003
(audited)
136.18
58.57
33.10
21.52
16 months
Ended
31.3.2002
(audited)
189.23
83.71
55.88
22.54
Year Ended
30.11.2000
10.31
-21.18
19.11
20.00
21.18
17.88
26.67
21.18
*16.56
25
21.18
122.06
111.75
97.16
84.93
143.24
420.23
690.35
2.93
132.93
413.43
675.27
3.11
118.35
472.19
710.13
3.98
106.11
414.4
645.75
3.90
62.85
62.73
55.86
50.10
(audited)
155.90
59.41
55.10
20.82
* First Leasing registered a Net Profit of Rs.1656.90 lacs for fiscal 2000. The
Return on Networth is an impressive 15.61%. The Net Profit of Rs.18.56 crores
posted by the company for fiscal 1999 included an one time non-recurring, nonoperating revenue of Rs.3.5 crores representing the capital gain on sale of First
Leasing’s equity stake in First India Asset Management Ltd (FIAM). After
adjusting this one time non-recurring, non-operating revenue of Rs.3.5 crores, the
Adjusted PAT for fiscal 1999 computes at Rs.15.08 crores and the reported Net
Profit of Rs.16.56 crores for fiscal 2000 represents an improvement of Rs.148 lacs
over the previous year’s Adjusted PAT.
Financial Highlights & Key Ratios
31-Mar-03
Audited
31-Mar-02 * 30-Nov-00 30-Nov-99 30-Nov-98
Audited
Financial Highlights
Audited
Audited
Audited
Rs / crores
Gross Income
136.18
141.92
155.90
141.31
129.89
Operating Profit
113.20
121.60
135.35
126.92
115.27
PAT
19.10
13.40
16.56
18.58
14.75
Equity
21.18
21.18
21.18
21.18
21.17
132.92
118.34
106.12
95.38
82.66
Operating Profit Margin (%)
83.13
85.68
86.82
89.82
88.74
PAT Margin
14.03
9.44
10.62
13.15
11.36
90.18
63.28
78.19
87.72
69.67
14.37
11.33
15.60
19.48
17.84
Net Worth
Key Ratios
(%)
Return on Equity
(%)
Return on Net Worth
(%)
Current Ratio
(Times)
1.74
1.70
1.71
2.33
2.38
Debt Equity
(Times)
3.11
3.99
3.90
3.74
3.72
Interest Coverage
(Times)
1.93
1.94
2.28
2.53
2.52
(Rs)
9.02
6.33
7.82
8.77
6.97
EPS
* Figures are annualised
Financial Highlights & Key Ratios for 6 months ended Sep. 30, 2003
Rs / crores
6 months
30.9.03
(unaudited)
Financial Highlights
57.72
Gross Income
50.17
Operating Profit
10.31
PAT
21.18
Equity
143.24
Net Worth
Key Ratios
Operating Profit Margin (%)
PAT Margin
Return on Equity
Return on Net Worth
(%)
(%)
(%)
Debt Equity
(Times)
Interest Coverage
(Times)
EPS
* Figures are annualised
(Rs)
86.92
17.86
*97.35
*14.39
2.93
2.02
*9.73