This document provides an overview of leasing and hire purchase agreements. It discusses the history and types of lease agreements including financial leases, operating leases, sale and lease back, leveraged leasing, and direct leasing. It outlines the advantages of leasing such as saving capital, flexibility, planning cash flows, and tax advantages. It also discusses the disadvantages of leasing including early termination penalties, higher insurance costs, lack of ownership, and long term expenses. Examples of leasing companies in India are provided. Hire purchase agreements are also introduced as a similar financing method.
The document discusses leasing as an alternative to owning assets. It defines key terms like lessor, lessee, operating lease and financial lease. An operating lease is short-term while a financial lease allows the lessee to purchase the asset at the end. Leasing provides benefits to both lessors and lessees like saving capital upfront, flexibility, tax benefits, and improved cash flows. Lease evaluation involves determining costs and returns for both parties.
This document provides an overview of lease financing. It discusses how lease financing originated in the United States in the 1950s and spread globally. Lease financing started gaining traction in India in the 1970s through companies like First Leasing Company of India. There are two main types of leases: operating leases which are short term, and finance leases which are long term. The document outlines the key parties, terms, types of assets, and advantages/limitations of lease financing. It provides context on the importance and institutions involved in lease financing in India.
The document discusses lease financing and leasing. It defines a lease as a contractual agreement where the owner (lessor) transfers the right to use an asset to the user (lessee) for a period of time in return for rental payments. At the end of the lease period, the asset reverts back to the lessor unless ownership is transferred to the lessee. It distinguishes leases from loans and discusses the key elements of a lease, including the leased asset, lease period, rental payments, residual value, and end-of-term options. The document also describes different types of leases, particularly finance leases which transfer most of the risks and rewards of ownership to the lessee.
This document discusses finance leases as a source of project finance. It defines leasing as a legal agreement where the lessor owns a capital asset and allows the lessee to use it by paying rentals. Leasing provides advantages like preserving lines of credit, improving cash management through lower rental payments compared to loan repayments, and flexibility to upgrade equipment. The main types of leases are finance leases and operating leases, with finance leases transferring substantially all the risks and rewards of asset ownership to the lessee.
The document provides a detailed history of leasing from ancient times to the modern era. It discusses how leasing first emerged to finance equipment for industries like railroads and shipping in the 1700s-1900s. Major developments included the introduction of tax benefits in the 1950s to encourage capital investment, and the investment tax credit in the 1960s, which boosted the leasing industry. Subsequent changes to tax laws and accounting standards in the 1970s-1980s further established leasing as a mainstream financing option used by most large companies.
This ppt is covering lease finance in detail, covering advantages & disadvantages. Types of lease. Instead of doing hard work rely on smart work. Time you devote on copy pasting. Channelize that time in understanding topic via reading it.
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments.
There are different types of leasing agreements that can be used. A financial lease, or full pay out lease, transfers all risks and rewards of asset ownership to the lessee. The lessee's payments are designed to pay off the lessor's initial investment. In contrast, an operating lease does not transfer all ownership risks and rewards, has a shorter term than the asset's life, and may include maintenance from the lessor. Other types include sale-leaseback, direct leases between two or three parties, domestic vs international leases depending on parties' locations, import leases where the supplier is in another country, and leveraged leases where the lessor provides only part of the asset's funding.
The document discusses leasing as an alternative to owning assets. It defines key terms like lessor, lessee, operating lease and financial lease. An operating lease is short-term while a financial lease allows the lessee to purchase the asset at the end. Leasing provides benefits to both lessors and lessees like saving capital upfront, flexibility, tax benefits, and improved cash flows. Lease evaluation involves determining costs and returns for both parties.
This document provides an overview of lease financing. It discusses how lease financing originated in the United States in the 1950s and spread globally. Lease financing started gaining traction in India in the 1970s through companies like First Leasing Company of India. There are two main types of leases: operating leases which are short term, and finance leases which are long term. The document outlines the key parties, terms, types of assets, and advantages/limitations of lease financing. It provides context on the importance and institutions involved in lease financing in India.
The document discusses lease financing and leasing. It defines a lease as a contractual agreement where the owner (lessor) transfers the right to use an asset to the user (lessee) for a period of time in return for rental payments. At the end of the lease period, the asset reverts back to the lessor unless ownership is transferred to the lessee. It distinguishes leases from loans and discusses the key elements of a lease, including the leased asset, lease period, rental payments, residual value, and end-of-term options. The document also describes different types of leases, particularly finance leases which transfer most of the risks and rewards of ownership to the lessee.
This document discusses finance leases as a source of project finance. It defines leasing as a legal agreement where the lessor owns a capital asset and allows the lessee to use it by paying rentals. Leasing provides advantages like preserving lines of credit, improving cash management through lower rental payments compared to loan repayments, and flexibility to upgrade equipment. The main types of leases are finance leases and operating leases, with finance leases transferring substantially all the risks and rewards of asset ownership to the lessee.
The document provides a detailed history of leasing from ancient times to the modern era. It discusses how leasing first emerged to finance equipment for industries like railroads and shipping in the 1700s-1900s. Major developments included the introduction of tax benefits in the 1950s to encourage capital investment, and the investment tax credit in the 1960s, which boosted the leasing industry. Subsequent changes to tax laws and accounting standards in the 1970s-1980s further established leasing as a mainstream financing option used by most large companies.
This ppt is covering lease finance in detail, covering advantages & disadvantages. Types of lease. Instead of doing hard work rely on smart work. Time you devote on copy pasting. Channelize that time in understanding topic via reading it.
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments.
There are different types of leasing agreements that can be used. A financial lease, or full pay out lease, transfers all risks and rewards of asset ownership to the lessee. The lessee's payments are designed to pay off the lessor's initial investment. In contrast, an operating lease does not transfer all ownership risks and rewards, has a shorter term than the asset's life, and may include maintenance from the lessor. Other types include sale-leaseback, direct leases between two or three parties, domestic vs international leases depending on parties' locations, import leases where the supplier is in another country, and leveraged leases where the lessor provides only part of the asset's funding.
This document provides an overview of leasing and lease financing. It defines what a lease is and discusses the key aspects of lease agreements such as rental payments, maintenance clauses, cancellation provisions, renewal and purchase options.
It distinguishes between operating leases and finance/capital leases. Operating leases are typically short-term while finance leases are longer-term and transfer most of the risks and rewards of ownership to the lessee.
The document also covers the different methods of lease financing including sales-leasebacks, direct leases, and leveraged leases. It discusses the advantages and disadvantages of lease financing for both lessees and lessors. Finally, it compares long-term debt versus leasing
Other Financial Services-Leasing and Hire Purchase; Debt Securitization; Hous...Ashish Hande
This document discusses leasing and related financial concepts. It begins by defining leasing as an agreement between two parties, a leasing company and user, for the temporary possession and use of an asset for a specified period in exchange for rental payments. It then covers essential elements of leasing agreements, types of leasing, steps in leasing transactions, advantages and limitations of leasing, contents of lease agreements, and the structure of the leasing industry in India.
Financial management term loans and lease financingmahi50
This document provides information on term loans and lease financing. It defines a term loan as a loan that is repaid with regular payments over a set time period, usually between 1-30 years. Term loans are commonly used for small business loans to finance expanding operations. The document also defines a lease as a contract where the owner of an asset allows another party to use the asset for an agreed period in exchange for rent payments. Various types of leases are described including financial leases, operating leases, and sale-leaseback arrangements. Considerations for term loans like fixed vs floating interest rates are also discussed.
This document discusses problems and prospects of leasing in India. It defines leasing as an agreement where a lessor conveys the right to use an asset to a lessee in exchange for rent payments. Problems of the leasing industry include unhealthy competition, lack of qualified personnel, high taxes, and stamp duties. However, prospects are strong as leasing accounts for 6% of capital investment currently but could reach 15% as the economy grows. Leasing plays an important role in financing infrastructure development in sectors like rail, telecom, and power. Addressing taxation and regulatory issues could further accelerate growth of the leasing industry in India.
Financial Lease document presented definitions of leasing, its history dating back to ancient civilizations, and main types of leases including capital/financial leases, operating leases, sale and leaseback, leveraged leasing, and direct leases. Advantages and disadvantages of leasing for lessees and lessors were discussed. The document also covered Islamic "Ijara" leasing, lease calculations, differences between loans and leases, the leasing market in Egypt with the top companies, and concluded that developing leasing could help spread risks and support Egypt's economy.
This document defines leasing and summarizes the key elements of a lease agreement. It also classifies the main types of leases as follows:
1) Finance leases transfer substantially all risks and rewards of ownership to the lessee. The lease payments cover the asset's cost and provide a return for the lessor.
2) Operating leases do not transfer all ownership risks and rewards. The lease period is shorter than the asset's life and rentals do not cover its full cost.
3) Sales and lease backs involve an owner selling an asset to a lessor and then leasing it back.
4) Direct leases are between the lessee and lessor, while tripart
This document discusses leasing, hire purchase, and merchant banking. It defines leasing as a contractual arrangement where a lessee pays a lessor for use of an asset. There are different types of leases such as operating leases and financial leases. Hire purchase allows goods to be leased with an option to purchase. Merchant banking provides services like underwriting shares and project counseling for a fee and facilitates production and trade.
Leasing is a contractual agreement where a lessor provides an asset to a lessee. There are two main types of leasing: operating leases and financial leases. Operating leases involve short term agreements where costs are paid by the owner, while financial leases cover the asset's cost over the lease period through rentals paid by the lessee. Financial leases can take various forms like sale-leaseback, direct leasing, or leverage leasing. Leasing provides advantages to both lessees through financing flexibility and to lessors through higher profits.
Lease Financing
Terminology
The advantages of leasing
Limitation of leasing
Types of Leasing
Financial lease
Operating lease
Sale and lease back
Leveraged leasing
Direct leasing
Other types
Problems of leasing in India
There are two main types of leasing arrangements: finance (or capital) leases and operating leases. A finance lease involves the lessee selecting an asset that the lessor purchases and the lessee pays rentals to use. The lessee typically has the option to purchase the asset at the end. An operating lease is a short-term rental of an asset where ownership remains with the lessor and maintenance is usually the lessee's responsibility. Hire purchase allows a buyer to obtain goods by paying in installments, with ownership transferring after the final payment. Key differences between leases and hire purchase include who owns the asset, who claims depreciation, duration, and responsibility for repairs.
This document discusses the regulatory framework and key elements of leasing agreements. It notes that a lease involves an owner (lessor) providing an asset to a user (lessee) for a set period of time in exchange for periodic rental payments. The lessor retains ownership of the asset during the lease term. There are two main types of leases: finance leases, which cover most or all of the asset's economic life and transfer ownership; and operating leases, which are shorter term and do not transfer all ownership risks/rewards to the lessee. Key parties, assets, terms, rentals, termination methods, and situations that define a finance lease are described.
The document defines leasing and outlines the key elements and types of leasing agreements. It discusses that a lease involves a lessor providing an asset to a lessee for a specified period of time in exchange for periodic rental payments. The essential elements of a lease include the two parties (lessor and lessee), the asset being leased, and the term and rental payments of the lease. Leases can be classified based on factors such as the transfer of risks and rewards of ownership and the number of parties involved. The main types of leases discussed are finance leases and operating leases.
This document provides an overview of lease financing. It begins with introductions of the group members presenting. It then outlines the learning objectives which are to understand the definition of lease financing, its parties, characteristics, types, advantages and disadvantages, lease agreements, and decision making regarding lease financing. The document proceeds to define lease financing and its key parties. It describes the characteristics, types including finance lease, operating lease, leveraged lease, and sale and leaseback. It also covers the advantages and disadvantages as well as sources of lease financing and components of a lease agreement.
This document provides an overview of leasing. It discusses the history and meaning of leasing, including definitions from experts. It outlines the steps in a typical leasing process and describes various types of leases. The advantages to lessors include assured regular income, preservation of ownership, tax benefits, and high profitability. Advantages to lessees are use of capital goods, tax benefits, cheaper financing, and technical assistance. Disadvantages are also presented, such as inflation risk for lessors and compulsory payments even if the asset is not needed for lessees. In summary, the document defines leasing, outlines the leasing process, and discusses the pros and cons from the perspectives of both lessors and les
Lease financing allows a person to use an asset without owning it by paying rent over time. It has grown as a major financing option globally. A lease financing contract grants a lessee exclusive use of an asset, like equipment, for an agreed period in exchange for regular rental payments. It allows businesses access to assets without large upfront costs.
The document discusses operating and financial leasing, fleet leasing, and the comparative advantages of leasing over purchasing vehicles. It also provides details on PT. Surya NordFinans, their client base, and sample lease documentation including agreements, schedules, and invoices.
Lease financing involves an arrangement where the owner (lessor) of an asset transfers possession and right to use the asset to another party (lessee) for an agreed period of time in exchange for rental payments. There are two main types of leases: finance leases and operating leases. Finance leases typically involve long-term agreements where the lessee takes on most of the risks and benefits of asset ownership, while operating leases are usually shorter term agreements where the lessor retains responsibility for the asset. Lease financing can provide businesses with an alternative to purchasing assets outright and offers tax benefits compared to other forms of financing.
The document discusses different types of car financing options in Pakistan, including personal loans and Islamic financing methods like Ijara. Ijara financing involves renting a car from a lessor and making rental payments instead of interest payments. It does not require providing security for the loan. Personal loans require security and have fixed interest rates. Ijara is more flexible and popular among most Pakistanis due to religious reasons. The document concludes that Ijara is more income-friendly and suitable for the Pakistani market and economy compared to conventional personal loans.
Leasing is a contract where an owner (lessor) provides an asset to a user (lessee) for a fixed period of time in exchange for regular payments (rentals). There are two main types of leases: finance leases, where the lessee is effectively the asset's owner, and operating leases, where the lessor retains ownership. Finance leases typically cover most of an asset's useful life while operating leases are shorter. Other lease types include leveraged leases which involve multiple parties, and sale and leaseback where an asset is sold and then leased back from the buyer.
Growth of indian pharmaceuticals in the world marketumesh yadav
The document provides an overview of the growth of the Indian pharmaceutical industry. It discusses factors that have contributed to the industry's growth, including low production costs, contract manufacturing, and research and development. It also outlines government policies that have supported the industry and notes that the industry is moving towards basic research and exporting generic drugs to markets like the US. While the industry was previously focused on domestic needs, exports now drive much of its growth. The transition to a new patent regime allowing product patents brings both opportunities and challenges to the evolving Indian pharmaceutical sector.
Research project on customer sentiment indexAditya Basu
First of it's kind Project attempted it India , working closely with VP, Innovation ,conceptualizing and devising a framework to gauge Customer Sentiment Index for the Indian Broadband Industry .The deliverable included :-
• Consider customer life-cycle touch-points for a Broadband customer
• Identify & define the relationships between Key determinants of the Broadband services
• Use ACEI Model as the baseline towards the Indian broadband Industry and help understand customer behaviour, their intention to spend, intent to recommend, usage of interactive service, intent to change operator etc
• Help understand key business drivers & their impact on service delivery
• Identify target customer segments for future strategic decisions
Highly appreciated for project completion within 9 months of inception, for first of its kind project attempted in India
Won best Research Project for the Amdocs Innovation Team 2013
Successful Pilot run completion in 2014 displaying huge impact to Amdocs Customer Experience Solutions (CES) Portfolio.
This document summarizes key concepts from the 1981 book "Positioning: The Battle for your Mind" by Al Ries and Jack Trout. It discusses how positioning involves claiming a unique position for a product in the consumer's mind. First movers have an advantage, so a non-first product must find an unoccupied position. Leaders should reinforce their status without boasting and introduce related brands. Followers must find unique positions rather than trying to appeal to everyone. Repositioning competitors or changing perceptions of them can also be effective strategies. The name of a brand is very important in shaping consumer perceptions.
This document provides an overview of leasing and lease financing. It defines what a lease is and discusses the key aspects of lease agreements such as rental payments, maintenance clauses, cancellation provisions, renewal and purchase options.
It distinguishes between operating leases and finance/capital leases. Operating leases are typically short-term while finance leases are longer-term and transfer most of the risks and rewards of ownership to the lessee.
The document also covers the different methods of lease financing including sales-leasebacks, direct leases, and leveraged leases. It discusses the advantages and disadvantages of lease financing for both lessees and lessors. Finally, it compares long-term debt versus leasing
Other Financial Services-Leasing and Hire Purchase; Debt Securitization; Hous...Ashish Hande
This document discusses leasing and related financial concepts. It begins by defining leasing as an agreement between two parties, a leasing company and user, for the temporary possession and use of an asset for a specified period in exchange for rental payments. It then covers essential elements of leasing agreements, types of leasing, steps in leasing transactions, advantages and limitations of leasing, contents of lease agreements, and the structure of the leasing industry in India.
Financial management term loans and lease financingmahi50
This document provides information on term loans and lease financing. It defines a term loan as a loan that is repaid with regular payments over a set time period, usually between 1-30 years. Term loans are commonly used for small business loans to finance expanding operations. The document also defines a lease as a contract where the owner of an asset allows another party to use the asset for an agreed period in exchange for rent payments. Various types of leases are described including financial leases, operating leases, and sale-leaseback arrangements. Considerations for term loans like fixed vs floating interest rates are also discussed.
This document discusses problems and prospects of leasing in India. It defines leasing as an agreement where a lessor conveys the right to use an asset to a lessee in exchange for rent payments. Problems of the leasing industry include unhealthy competition, lack of qualified personnel, high taxes, and stamp duties. However, prospects are strong as leasing accounts for 6% of capital investment currently but could reach 15% as the economy grows. Leasing plays an important role in financing infrastructure development in sectors like rail, telecom, and power. Addressing taxation and regulatory issues could further accelerate growth of the leasing industry in India.
Financial Lease document presented definitions of leasing, its history dating back to ancient civilizations, and main types of leases including capital/financial leases, operating leases, sale and leaseback, leveraged leasing, and direct leases. Advantages and disadvantages of leasing for lessees and lessors were discussed. The document also covered Islamic "Ijara" leasing, lease calculations, differences between loans and leases, the leasing market in Egypt with the top companies, and concluded that developing leasing could help spread risks and support Egypt's economy.
This document defines leasing and summarizes the key elements of a lease agreement. It also classifies the main types of leases as follows:
1) Finance leases transfer substantially all risks and rewards of ownership to the lessee. The lease payments cover the asset's cost and provide a return for the lessor.
2) Operating leases do not transfer all ownership risks and rewards. The lease period is shorter than the asset's life and rentals do not cover its full cost.
3) Sales and lease backs involve an owner selling an asset to a lessor and then leasing it back.
4) Direct leases are between the lessee and lessor, while tripart
This document discusses leasing, hire purchase, and merchant banking. It defines leasing as a contractual arrangement where a lessee pays a lessor for use of an asset. There are different types of leases such as operating leases and financial leases. Hire purchase allows goods to be leased with an option to purchase. Merchant banking provides services like underwriting shares and project counseling for a fee and facilitates production and trade.
Leasing is a contractual agreement where a lessor provides an asset to a lessee. There are two main types of leasing: operating leases and financial leases. Operating leases involve short term agreements where costs are paid by the owner, while financial leases cover the asset's cost over the lease period through rentals paid by the lessee. Financial leases can take various forms like sale-leaseback, direct leasing, or leverage leasing. Leasing provides advantages to both lessees through financing flexibility and to lessors through higher profits.
Lease Financing
Terminology
The advantages of leasing
Limitation of leasing
Types of Leasing
Financial lease
Operating lease
Sale and lease back
Leveraged leasing
Direct leasing
Other types
Problems of leasing in India
There are two main types of leasing arrangements: finance (or capital) leases and operating leases. A finance lease involves the lessee selecting an asset that the lessor purchases and the lessee pays rentals to use. The lessee typically has the option to purchase the asset at the end. An operating lease is a short-term rental of an asset where ownership remains with the lessor and maintenance is usually the lessee's responsibility. Hire purchase allows a buyer to obtain goods by paying in installments, with ownership transferring after the final payment. Key differences between leases and hire purchase include who owns the asset, who claims depreciation, duration, and responsibility for repairs.
This document discusses the regulatory framework and key elements of leasing agreements. It notes that a lease involves an owner (lessor) providing an asset to a user (lessee) for a set period of time in exchange for periodic rental payments. The lessor retains ownership of the asset during the lease term. There are two main types of leases: finance leases, which cover most or all of the asset's economic life and transfer ownership; and operating leases, which are shorter term and do not transfer all ownership risks/rewards to the lessee. Key parties, assets, terms, rentals, termination methods, and situations that define a finance lease are described.
The document defines leasing and outlines the key elements and types of leasing agreements. It discusses that a lease involves a lessor providing an asset to a lessee for a specified period of time in exchange for periodic rental payments. The essential elements of a lease include the two parties (lessor and lessee), the asset being leased, and the term and rental payments of the lease. Leases can be classified based on factors such as the transfer of risks and rewards of ownership and the number of parties involved. The main types of leases discussed are finance leases and operating leases.
This document provides an overview of lease financing. It begins with introductions of the group members presenting. It then outlines the learning objectives which are to understand the definition of lease financing, its parties, characteristics, types, advantages and disadvantages, lease agreements, and decision making regarding lease financing. The document proceeds to define lease financing and its key parties. It describes the characteristics, types including finance lease, operating lease, leveraged lease, and sale and leaseback. It also covers the advantages and disadvantages as well as sources of lease financing and components of a lease agreement.
This document provides an overview of leasing. It discusses the history and meaning of leasing, including definitions from experts. It outlines the steps in a typical leasing process and describes various types of leases. The advantages to lessors include assured regular income, preservation of ownership, tax benefits, and high profitability. Advantages to lessees are use of capital goods, tax benefits, cheaper financing, and technical assistance. Disadvantages are also presented, such as inflation risk for lessors and compulsory payments even if the asset is not needed for lessees. In summary, the document defines leasing, outlines the leasing process, and discusses the pros and cons from the perspectives of both lessors and les
Lease financing allows a person to use an asset without owning it by paying rent over time. It has grown as a major financing option globally. A lease financing contract grants a lessee exclusive use of an asset, like equipment, for an agreed period in exchange for regular rental payments. It allows businesses access to assets without large upfront costs.
The document discusses operating and financial leasing, fleet leasing, and the comparative advantages of leasing over purchasing vehicles. It also provides details on PT. Surya NordFinans, their client base, and sample lease documentation including agreements, schedules, and invoices.
Lease financing involves an arrangement where the owner (lessor) of an asset transfers possession and right to use the asset to another party (lessee) for an agreed period of time in exchange for rental payments. There are two main types of leases: finance leases and operating leases. Finance leases typically involve long-term agreements where the lessee takes on most of the risks and benefits of asset ownership, while operating leases are usually shorter term agreements where the lessor retains responsibility for the asset. Lease financing can provide businesses with an alternative to purchasing assets outright and offers tax benefits compared to other forms of financing.
The document discusses different types of car financing options in Pakistan, including personal loans and Islamic financing methods like Ijara. Ijara financing involves renting a car from a lessor and making rental payments instead of interest payments. It does not require providing security for the loan. Personal loans require security and have fixed interest rates. Ijara is more flexible and popular among most Pakistanis due to religious reasons. The document concludes that Ijara is more income-friendly and suitable for the Pakistani market and economy compared to conventional personal loans.
Leasing is a contract where an owner (lessor) provides an asset to a user (lessee) for a fixed period of time in exchange for regular payments (rentals). There are two main types of leases: finance leases, where the lessee is effectively the asset's owner, and operating leases, where the lessor retains ownership. Finance leases typically cover most of an asset's useful life while operating leases are shorter. Other lease types include leveraged leases which involve multiple parties, and sale and leaseback where an asset is sold and then leased back from the buyer.
Growth of indian pharmaceuticals in the world marketumesh yadav
The document provides an overview of the growth of the Indian pharmaceutical industry. It discusses factors that have contributed to the industry's growth, including low production costs, contract manufacturing, and research and development. It also outlines government policies that have supported the industry and notes that the industry is moving towards basic research and exporting generic drugs to markets like the US. While the industry was previously focused on domestic needs, exports now drive much of its growth. The transition to a new patent regime allowing product patents brings both opportunities and challenges to the evolving Indian pharmaceutical sector.
Research project on customer sentiment indexAditya Basu
First of it's kind Project attempted it India , working closely with VP, Innovation ,conceptualizing and devising a framework to gauge Customer Sentiment Index for the Indian Broadband Industry .The deliverable included :-
• Consider customer life-cycle touch-points for a Broadband customer
• Identify & define the relationships between Key determinants of the Broadband services
• Use ACEI Model as the baseline towards the Indian broadband Industry and help understand customer behaviour, their intention to spend, intent to recommend, usage of interactive service, intent to change operator etc
• Help understand key business drivers & their impact on service delivery
• Identify target customer segments for future strategic decisions
Highly appreciated for project completion within 9 months of inception, for first of its kind project attempted in India
Won best Research Project for the Amdocs Innovation Team 2013
Successful Pilot run completion in 2014 displaying huge impact to Amdocs Customer Experience Solutions (CES) Portfolio.
This document summarizes key concepts from the 1981 book "Positioning: The Battle for your Mind" by Al Ries and Jack Trout. It discusses how positioning involves claiming a unique position for a product in the consumer's mind. First movers have an advantage, so a non-first product must find an unoccupied position. Leaders should reinforce their status without boasting and introduce related brands. Followers must find unique positions rather than trying to appeal to everyone. Repositioning competitors or changing perceptions of them can also be effective strategies. The name of a brand is very important in shaping consumer perceptions.
Hawala is an informal value transfer system that originated in South Asia and is used to transfer money without the actual physical movement of funds. It works through a network of brokers who use a system of credit to transfer funds between parties in different geographic locations. In the example provided, Abdul, a Pakistani living in New York, uses a hawala broker named Yasmeen to transfer $5,000 to his brother Mohammad in Karachi. Yasmeen contacts her associate Ghulam in Karachi who delivers the funds to Mohammad, minus commission. The funds change hands through trust between the brokers rather than official money movement. Hawala provides an inexpensive alternative to traditional banking but is also used for money laundering
Lifestyle is a retail chain that started in India 3 years ago and has found success despite India being a difficult market. It differentiates itself through strategic sourcing - sourcing core items domestically and fillers internationally to provide a varied merchandise mix. This mix of domestic and international goods along with savvy marketing has attracted customers. Lifestyle also works directly with smaller domestic manufacturers and brands to offer more variety and flexibility, but faced challenges in getting them to plan for seasons and meet quality standards, which it has helped to address over time.
The document provides an overview of the history and development of banking in India. It discusses how the banking system has evolved from early banks established during British rule, through periods of crisis and failures, to nationalization and the growth of public sector banks post-independence. It notes how recent reforms since the 1990s have modernized Indian banking through increased privatization, globalization, and technology adoption, leading to strong growth and performance of the banking sector supporting India's rapid economic expansion in recent decades.
Logistics management involves planning and coordinating activities to deliver products and services to customers as efficiently as possible. Key functions of logistics management include information management, inventory control, transportation, warehousing, material handling, and packaging. The goal is to balance low costs with meeting customer needs in terms of speed and consistency of delivery. Logistics integration links an enterprise to customers and suppliers through coordinated information and inventory flows.
Rijo Puliyan Ealias is a marketing and business development professional with over 10 years of experience. He has a proven track record of achievements in client relationship management, new business development, marketing strategy, and team leadership. His most recent role was at The Training Hotline FZ LLC, where he coordinated marketing activities and events. Prior to that, he worked at LG Electronics Gulf FZE as a Senior Trade Marketing Analyst. He has a Master's degree in Strategic Human Resource Management and Marketing from the University of Wollongong in Dubai.
This document provides information about a market scoping and analysis project conducted by Umesh Yadav during his summer internship with India Infoline Finance Limited (IIFL). It includes a title page, declaration by the author, certificate of approval, acknowledgements, executive summary and table of contents. The project aims to analyze IIFL's gold loan products and the gold loan market. IIFL provides gold loans across India, with loan amounts ranging from Rs. 5,000 to Rs. 10,00,000 and tenors of 3-12 months. Customers can pledge gold ornaments to avail loans quickly without income proofs, at lower interest rates than other loans.
The document discusses leasing and hire purchase. It provides definitions of leasing and hire purchase. It outlines the key parties involved in leasing (lessor and lessee) and hire purchase (owner and hirer). It also discusses the history and development of leasing and hire purchase in various regions including India. The document then covers types of leases, guidelines for banks involved in hire purchase business, and factors to consider like customer assessment, purpose, amount, period, repayment, and security."
This document provides an overview of leasing and hire purchase concepts. It discusses:
1) Leasing involves a lessor owning an asset and a lessee making periodic rental payments to use the asset, while hire purchase allows a buyer to pay for goods over time and eventually own them.
2) There are different types of leases - financial leases provide long-term ownership, operating leases are short-term, and leverage leases finance large assets.
3) Hire purchase agreements require a down payment, allow ownership after all payments, and interest payments are tax deductible for buyers.
Leasing and hire purchase are both financial arrangements.Sonam704174
Leasing and hire purchase are both financial arrangements for acquiring assets. Leasing involves renting an asset for a specified period, while hire purchase allows the buyer to use the asset during the payment period with ownership transferring after the final installment.
This document discusses lease financing and hire purchase. It defines lease financing as giving another person the right to use an asset for periodic payments, with ownership remaining with the lessor. It describes different types of leases, including financial leases, operating leases, and sale-leasebacks. The leasing process and advantages/disadvantages of leasing are also summarized. Hire purchase is defined as financing an asset purchase through installment payments, with ownership transferring after the final payment.
This document provides an overview of leasing. It discusses the history of leasing beginning in ancient times and its expansion after World War II. It then defines leasing and outlines different types of leases including financial leases, operating leases, conveyance leases, and sale and leaseback agreements. The document also reviews the advantages of leasing such as liquidity and hidden liabilities, and the disadvantages like the lessee only obtaining use of the asset. Finally, it provides a high-level overview of the leasing process.
This document discusses leasing and hire purchase. It defines leasing as a contract where the owner of an asset grants another party exclusive use of the asset for an agreed period in exchange for rent payments. Hire purchase allows a party to take possession of a good by paying in installments, with ownership transferring after all payments are made. The document outlines the key features, types, advantages and disadvantages of both leasing and hire purchase agreements.
The document discusses lease financing and different types of lease contracts. It defines a lease as an agreement where a lessor allows a lessee to use an asset for a specified period in exchange for rental payments. There are two main types of leases: operating leases and financial leases. An operating lease involves the lessor maintaining ownership of the asset and responsibility for maintenance, while a financial lease transfers most of the risks and rewards of ownership to the lessee. The key differences between the two lease types are also outlined.
This document provides an overview of lease financing, hire purchase, and factoring. It defines lease financing as procuring assets through a lease agreement where the lessor finances the asset and the lessee uses it. Key types of leases include financial leases, operating leases, sale and lease back, and leveraged leasing. Hire purchase allows a purchaser to acquire an asset through installment payments with ownership transferring after full payment. Factoring involves the sale of receivables to a factor who provides financing against receivables and collects on debts.
- Leasing is a commercial arrangement where an equipment owner conveys the right to use equipment to a user (lessee) in return for rental payments. There are different types of lease agreements such as financial leases, operating leases, sale and lease back, leveraged leasing, direct leasing, sub-leasing, and wet/dry leasing.
- Financial leases involve the transfer of risks and benefits of asset ownership to the lessee, who has the option to purchase the asset at the end of the lease. Operating leases give limited use rights and the asset remains with the lessor.
- Leasing provides advantages like saving capital, flexibility, tax benefits, and improved liquidity
This document provides an overview of leasing and hire purchase. It defines leasing as a contract where the lessor gives the lessee the right to use an asset for an agreed period in exchange for lease rentals. The key advantages of leasing are saving capital, flexibility, cash flow planning and improved liquidity, while disadvantages include commitment to the contract period and higher fixed costs. Hire purchase allows a purchaser to pay for goods in installments over time, with ownership transferring once fully paid. The document also discusses various lease and hire purchase terms, the history of leasing in India, accounting treatment and myths about leasing.
This document discusses lease financing as a financial service. It defines leasing as an arrangement between a lessor and lessee where the lessor owns an asset but grants the lessee exclusive right to use it for a period in return for rental payments. Leasing provides financing for equipment modernization and is an important source of finance. The key steps in a leasing transaction are the lessee selecting an asset and supplier, signing a lease agreement with terms, and the lessor purchasing the asset. Advantages of leasing include alternative funds use and flexibility, while disadvantages include higher costs than debt financing.
Leasing & Hire purchase, factoring & forfeiting and venture capitalRohit Kumar
This document discusses accounting standards for leases and provides examples of accounting entries for capital and operating leases. It defines key lease terms and outlines the criteria for classifying a lease as a capital lease from the lessee's perspective. A capital lease exists if ownership transfers to the lessee by the end of the lease term, there is a bargain purchase option, the lease term covers at least 75% of the asset's useful life, or the present value of lease payments equals or exceeds 90% of the asset's fair value. The document provides an example of a capital lease and the corresponding journal entries to record the transaction from the lessee's perspective over the lease term.
This document discusses leasing, which allows one party to use an asset owned by another party. There are two main types of leases: operating/service leases and financial/net leases. Operating leases provide maintenance services while financial leases do not. Leasing offers advantages over ownership like facilitating asset acquisition and improving financial position, but parties must consider tax and ownership implications.
International Transportation and Trade Part 9.pptxSheldon Byron
The document provides an overview of international leasing. It discusses key concepts such as the differences between operating leases and financial leases. International leasing allows companies to access assets across borders and provides benefits like preserving capital, managing risks, and gaining tax advantages. However, it also introduces complexities regarding legal/tax compliance between countries. Specific examples of leased assets and a case study of an airline leasing aircraft are also provided.
Leasing involves a lessor providing equipment or property to a lessee in exchange for periodic payments. There are several types of leases, including finance leases where ownership transfers to the lessee, and operating leases which are shorter term. Key elements of any lease include the parties, asset, lease term, and rental payments. The leasing process involves selecting an asset, signing a lease agreement, and the lessor acquiring the asset for the lessee. Leasing provides advantages to both lessors and lessees such as tax benefits and avoiding large upfront costs.
This document provides an overview of various asset and fund-based financial services. It discusses topics like lease finance, consumer credit, factoring, bills discounting, and housing finance. For lease finance, it defines different types of leases and outlines the steps involved in a leasing transaction. It also covers hire purchase agreements and compares leasing to hire purchase. The document then discusses factoring, defining it and outlining the key functions performed by factoring companies. It concludes with a brief discussion of bills discounting.
Term loans are commonly used by small businesses to purchase equipment, buildings, or other fixed assets needed to operate. They typically have maturities of 1-5 years and require collateral. Interest rates can be fixed or variable. Lenders often include restrictive covenants in loan agreements regarding working capital, debt levels, dividends, management changes, asset sales, and additional borrowing. Common sources of term loans include banks, insurance companies, finance companies, the SBA, and other government agencies.
Leasing and hire purchase are two methods of financing assets. Leasing involves the transfer of the right to use an asset from the lessor to the lessee for a period of time in exchange for lease rentals. In hire purchase, the hirer obtains possession of the asset and pays for it through installments that cover principal and interest until full ownership transfers after the last payment. Leasing was introduced in India in 1973 and saw rapid growth through the 1970s and 80s as more companies entered the market and banks began funding leasing companies. Key differences between leasing and hire purchase include who claims depreciation and ownership of the asset.
The document defines and provides details on banking and other financial services that are subject to service tax in India. Key services include financial leasing, credit cards, merchant banking, asset management, custodial and depository services, and advisory services. The value of taxable services includes fees, interest charges, and commissions. Certain exemptions apply for agreements signed prior to the July 2001 introduction of the service tax on banking and financial services.
1) The document is a dissertation analyzing the competitive strategies of three major domestic airlines in India: Indian Airlines, Jet Airways, and Sahara Airlines.
2) It includes sections on research methodology, an introduction to the Indian aviation industry, profiles of the three airlines, a comparison of their marketing strategies, an analysis of customer perceptions and preferences, and conclusions and recommendations.
3) Primary research was conducted through a customer response questionnaire and interviews with airline staff, while secondary sources included airline literature and pamphlets.
The author acknowledges Amity Business School for providing the opportunity to write a dissertation on global branding. They thank their advisor Dr. ATK Raman for guidance throughout the research. They also thank the librarian and computer lab staff for assistance during the project. The research paper helped the author learn about considerations for global branding and how it can be achieved.
This document summarizes a market research report submitted to Nokia India Pvt. Ltd. evaluating the potential of end-user services on India's 3G/WCDMA platform and possible revenue models. The report assesses which 3G services Indian consumers are interested in and willing to pay for. It identifies the main services consumers want and the preferred tariff plans through surveys and statistical analysis. The goal is to help Nokia convince mobile operators to adopt 3G/WCDMA technology by demonstrating which applications will be accepted by Indian users.
This document is a project report submitted by Kamlesh Gautam to fulfill requirements for an MBA degree. The report details a summer training project conducted at National Thermal Power Corporation Limited's Rihand Super Thermal Power Project.
The report includes certificates from Gautam's university and project supervisor validating the work. It then covers the objectives, methodology, findings and recommendations of a study analyzing the financial concurrence process for contract awards at NTPC Rihand. Key findings include the average time taken for financial concurrence of awards being 31 days and proposals for reducing this lead time and saving money.
identifying distribution gap and planning for route effiumesh yadav
This document appears to be a student project report on identifying distribution gaps and planning route efficiency for Hindustan Coca-Cola Beverages in Varanasi, India. It includes certificates, acknowledgements, prefaces, and sections on distribution, direct marketing, and objectives at the firm, brand, and product line levels. The student conducted surveys of dealers and retailers to analyze distribution gaps and issues with route efficiency, such as shortages of certain bottle sizes and improper retailer visits. The goal was to identify problems and opportunities to improve Coca-Cola's distribution in the assigned areas.
This document provides an overview of a project report submitted for a Master's degree. It includes an executive summary that outlines the objectives and key findings of the research project conducted during a summer training. The research examined various aspects of the soft drink market in Ghaziabad, including the use of merchandising assets by retailers, demand for different brands, availability of brands, and packaging preferences. The document also includes sections on acknowledgements, company profile, introduction, methodology, analysis, limitations, recommendations, and conclusions.
comparative market analysis through each dealer survey aumesh yadav
This document provides a history of the soft drink industry from the late 1700s to the 1960s. It describes how carbonated water became popular for its perceived health benefits and how flavors were then added, leading to the development of early soft drinks in the late 1800s like Coca-Cola, Dr Pepper, and Moxie. The soft drink industry grew in the early 1900s with new brands but faced challenges during World Wars I and II as well as the Depression. The 1960s saw the rise of diet soft drinks as saccharin and cyclamate sweeteners were introduced.
The document provides a history of Pepsi Cola from its origins in 1893 when Caleb Bradham, a pharmacist from North Carolina, began experimenting with soft drink formulations. One of his creations was called "Brad's Drink" which was later renamed Pepsi-Cola in 1898. Pepsi-Cola received its first logo that year and continued to grow, receiving trademark protection in 1903. The company established early bottling franchises and saw increasing sales throughout the 1900s while undergoing several logo changes as the brand developed.
This document provides a summary of the marketing strategies of Coca-Cola based on a research project report. It discusses Coca-Cola's history and operations in India. Coca-Cola acquired several popular Indian brands in 1993 which helped rapidly introduce its international brands. The document outlines Coca-Cola's 3A strategy to increase availability, acceptability, and awareness among consumers. It also describes some of Coca-Cola's major brands like Coca-Cola, Diet Coke, Fanta, Limca, Maaza, Sprite, and Thumps Up and the company's commitments to the Indian brands. The creative advertisements of some brands focusing on their unique tastes and personalities are also highlighted.
This document provides an overview and history of Cadbury India Ltd. It discusses Cadbury's origins in 1824 when John Cadbury opened a grocery shop in Birmingham, England. It then summarizes Cadbury's growth over the decades as it introduced new chocolate products like Dairy Milk chocolate in 1905. The document also includes sections on Cadbury's organizational structure, research methodology used for projects, and the design and development of some of its iconic chocolate brands like Dairy Milk and Milk Tray.
This document provides an overview of the casual wear market in India and the consumer decision making process for casual wear purchases. It discusses the objectives of the research project, which are to study the consumer decision making process and factors influencing purchase decisions for casual wear among 15-25 year olds in Delhi. It then provides context on the size and growth of the casual wear market in India. The document summarizes the various types of casual wear, and outlines the current market scenario, including competitive and fashion trends that influence consumers. It also gives a brief overview of the textiles industry in India.
The document is a market research report submitted by a group of students to their professor. It includes an introduction, objectives, methodology, analysis, limitations, recommendations, and conclusion regarding a survey of consumer preferences for beer in Delhi, India. The methodology section describes how the survey was conducted using standard marketing research practices on a sample of 476 households. The analysis section summarizes the findings of the report and includes cross tabulation analysis. The report aims to provide useful insights into consumer preferences to help beer companies with marketing decisions.
Working capital management is important for short-term financial decisions and liquidity. It involves managing current assets like cash, inventory, and receivables, as well as current liabilities. Inadequate working capital can cause business failure, while excessive working capital leads to idle funds. The objectives of working capital management are to determine optimal investment levels in current assets, maintain sufficient liquidity to meet obligations, and locate appropriate short-term financing sources. Efficient working capital management is vital for business solvency and continuous operations.
working capitalmgmnt. in air port authorityumesh yadav
This document is a project report submitted by Manoj S. Hule for the Master of Business Administration program at Tilak Maharashtra University. The project examines the working capital management of Airports Authority of India. It includes certificates from the university and Airports Authority of India confirming the project work. The table of contents outlines chapters on the rationale for the study, objectives, company profile, theoretical framework, research methodology, data analysis, findings, limitations and expected contributions. The report aims to analyze the working capital management practices at Airports Authority of India and identify areas for improvement.
This document provides an overview of the two-wheeler industry in India. It begins with an introduction to the industry, historical development, and current state. The major players are identified as Bajaj Auto, Hero Honda, Kinetic, LML and TVS Motors. In recent years, the motorcycle segment has grown most rapidly, increasing its market share from 37% to nearly 70% currently. The objectives and parameters of the project are outlined, focusing on analyzing industry structure, major players, and their strategies through areas of management. An executive summary provides high-level details on industry trends, including increased competition leading to pricing pressures and reduced margins unless offset by volume growth.
This document provides guidance on how to better manage one's time by reducing wasted time and improving scheduling and planning. It discusses identifying responsibilities and priorities, distinguishing between urgent and important tasks, different types of tasks, and setting goals. Ways to assess current time management habits and do better include understanding what needs to be done, having a positive attitude, and starting to plan time right away. Taking the time to properly organize, prioritize and schedule tasks is presented as key to making the most effective use of the limited time available.
The document discusses the history and evolution of placement as a professional practice in rehabilitation counseling. It traces the origins of placement services to early 20th century legislation providing vocational education and rehabilitation for disabled veterans and workers. Over time, placement emerged as a distinct specialization within the field, with its own professional competencies and standards. A key development was the formation in 1964 of the Job Placement Division within the National Rehabilitation Association, recognizing placement as a unique profession. The role and importance of placement services has continued to adapt to changes in legislation, consumer expectations, and the rehabilitation field.
This document discusses the "glass ceiling effect", which refers to invisible barriers that prevent women from rising to senior leadership positions. It provides background on the origins of the term in the 1980s and examines different levels of barriers - at the apprenticeship level, within the leadership pipeline, and at the executive level where advancement seems impossible. The document explores whether barriers truly exist or if women's choices are more responsible for the lack of representation in top roles. It ultimately aims to determine if the glass ceiling is fiction or truth.
Supply chain management involves coordinating the flow of materials and information between suppliers, manufacturers, warehouses, and stores. The document discusses the key components of supply chain management including planning, sourcing, production, delivery, and returns. It also outlines the strategic and operational decisions involved in areas like location, production, inventory, and transportation that are important for managing the supply chain effectively. Overall, supply chain management is a strategic tool that can improve customer service and competitiveness by efficiently integrating all parts of the supply chain.
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Top 10 Free Accounting and Bookkeeping Apps for Small BusinessesYourLegal Accounting
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This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
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INCLUDED FRAMEWORKS/MODELS:
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2. ACKNOWLEDGEMENT
It has been a sincere desire of every individual to get an opportunity to express her/his views
,skill ,attitude and talents in which she/he is proficient so as to give an satisfaction and
confidence in her ability to do or produce something useful to mankind project is one such
avenue through which a management student gives vent to his feelings and expressions .
We take this opportunity to express our gratitude towards my guide Prof. Shubdha Joshi for
her constant encouragement, support and guidance in our endeavor, without which we would
have found it difficult to maintain our tempo and enthusiasm.
2
3. CONTENTS
Sr. No TOPICS Pg No.
1. Objective of the Project 8
2. Introduction of Banking Sector 9
3. Introduction of Co-operative in India 10
4. Man Behind the Success of New India Co-operative Bank 11
5. Company Profile 12
6. Vision & Mission Statement 13
7. History of New India Co-operative Bank 14
8. Introduction of New India Co-operative Bank 15
9. Executive Summary 16
10. Board of Directors 17
11. Clearing Services offered by the Bank 18-19
12. Retail Banking 20-29
13. Corporate Banking 30-32
14. C.B.S. Services offered by the Bank 33-37
15. Loans provided by Bank 38-51
16. Loans Against Securities 52
HISTORY OF LEASING
Over the centuries, leases have served many purposes and the nature of legal
regulation has varied according to those purposes and the social and economic
conditions of the times. Leases, for example, were mainly used for agricultural
purposes until the late 18th century and early 19th century when the growth of
3
4. cities in industrialized countries had made leases an important form of
landholding in urban areas.
The modern law of landlord and tenant in common law jurisdictions retains the
influence of the common law and, particularly, the laissez-faire philosophy that
dominated the law of contract and property law in the 19th century. With the
growth of consumerism, consumer protection legislation recognized that common
law principles, which assume equal bargaining power between the contracting
parties, create hardships when that assumption is inaccurate. Consequently
reformers have emphasized the need to assess residential tenancy laws in terms of
protection they provide to tenants. Legislation to protect tenants is now common.
Lease financing denotes procurement of assets through lease. Leasing has grown
as a big industry in the USA and UK and spread to other countries during the
present century. In India, the concept was pioneered in 1973 when the First
Leasing Company was set up in Madras and the eighties have seen a rapid growth
of this business. Lease as a concept involves a contract whereby the ownership,
financing and risk taking of any equipment or asset are separated and shared by
two or more parties. Thus, the Lessor may finance and lessee may accept the risk
through the use of it while a third party may own it. Alternatively the lessor may
finance and own it while the Lessee enjoys the use of it and bears the risk. There
are various combinations in which the above characteristics are shared by the
lessor and lessee.
LEASE FINANCING
A lease transaction is a commercial arrangement whereby an equipment owner or
manufacturer conveys to the equipment user the right to use the equipment in
return for a rental.
4
5. In other words, lease is a contract between the owner of an asset (the lessor) and
its user (the lessee) for the right to use the asset during a specified period in return
for a mutually agreed periodic payment (the lease rentals).
The important feature of a lease contract is separation of the ownership of the
asset from its usage.
Lease financing is based on the observation made by Donald B. Grant: “Why own
a cow when the milk is so cheap? All you really need is milk and not the cow.”
Leasing industry plays an important role in the economic development of a
country by providing money incentives to lessee.
The lessee does not have to pay the cost of asset at the time of signing the contract
of leases.
Leasing contracts are more flexible so Lessees can structure the leasing contracts
according to their needs for finance.
The Lessee can also pass on the risk of obsolescence to the lessor by acquiring
those 229 Appliances, which have high technological obsolescence. Today, most
of us are familiar with leases of houses, apartments, offices, etc
TYPES OF LEASE AGREEMENTS
Lease agreements are basically of types. They are
(a) Financial lease
(b) Operating lease
(c) Sale and lease back
5
6. (d) Leveraged leasing
(e) Direct leasing
(f) Sub lease
(g) Wet lease & Dry lease
(A) FINANCIAL LEASE
• Long-term, non-cancellable lease contracts are known as Financial
Leases.
• The essential point of financial lease agreement is that it contains a
condition whereby the Lessor agrees to transfer the title for the asset at the
end of the lease period at a nominal cost.
• An option is given to the lessee to purchase the asset he has used at the
expiry of the lease.
• Under this lease, the Lessor recovers 90% of the fair value of the asset as
lease rentals and the lease period is 75% of the economic life of the asset.
• The lease agreement is irrevocable.
• Practically all the risks incidental to the asset ownership and all the benefits
arising there from are transferred to the Lessee who bears the cost of
maintenance, insurance and repairs.
• Only title deeds remain with the Lessor.
• Financial lease is also known as ‘Capital Lease’.
• In India, financial Leases are very popular with high-cost and high
technology equipment.
(B) OPERATING LEASE
6
7. • An Operating Lease stands in contrast to the Financial Lease in almost all
aspects.
• This Lease agreement gives to the lessee only a limited right to use the
asset.
• The Lessor is responsible for the upkeep and maintenance of the asset.
• The lessee is not given any uplift to purchase the asset at the end of the
lease period.
• Normally the lease is for a short period and even otherwise is revocable at a
short notice.
• Mines, Computers hardware, trucks and automobiles are found suitable for
Operating Lease because the rate of obsolescence is very high in this kind
of assets.
(C) SALE AND LEASE BACK
• It is a sub-part of Finance Lease.
• Under this, the owner of an asset sells the asset to a party (the buyer), who
in turn leases back the same asset to the owner in consideration of lease
rentals.
• However, under this arrangement, the assets are not physically exchanged
but it all happens in records only. This is nothing but a paper transaction.
• Sale and lease back transaction is suitable for those assets, which are not
subjected depreciation but appreciation, say land.
• The advantage of this method is that the lessee can satisfy himself
completely regarding the quality of the asset and after possession of the
asset convert the sale into a lease arrangement.
7
8. • The sale and lease back transaction can be expressed with the help of the
following figure.
SALE TRANSACTION
SELLER BUYER
SALE TRANSACTION
SALE VALUE
LEASE TRANSACTION
LESSEE LESSOR
LEASE RENTALS
Structure of a Sale and Leaseback Deal
• Under this transaction, the seller assumes the role of a lessee and the buyer
assumes the role of a Lessor.
• The seller gets the agreed selling price and the buyer gets the lease rentals.
• It is possible to structure the sale at agreed value (below or above the fair
market price) and to adjust difference in the lease rentals. Thus the effect of
profit /loss on sale of assets can be deferred.
(D) LEVERAGED LEASING
8
9. • Under leveraged leasing arrangement, a third party is involved beside lessor
and lessee.
• The Lessor borrows a part of the purchase cost (say 80%) of the asset from
the third party i.e., lender and the asset so purchased is held as security
against the loan.
• The lender is paid off from the lease rentals directly by the lessee and the
surplus after meeting the claims of the lender goes to the lessor.
• The Lessor, the owner of the asset is entitled to depreciation allowance
associated with the asset.
• The lease back transaction can be expressed with the help of the following
figure.
Sells Asset Leases Asset
Manufacturer Lessor Lessee
Lender
Structure of a Leveraged Lease
(E) DIRECT LEASING
• Under direct leasing, a firm acquires the right to use an asset from the
manufacturer directly.
• The ownership of the asset leased out remains with the manufacturer itself.
9
10. • The major types of direct Lessor include manufacturers, finance companies,
independent lease companies, special purpose leasing companies etc.
(F)SUB-LEASE
• A transaction in which leased property is released by the original lessee to a
third party, and the lease agreement between the two original parties
remains in effect.
(G) WET LEASE AND DRY LEASE:
• A wet lease is any leasing arrangement whereby a company agrees to
provide an aircraft and at least one pilot to another company.
• ‘Dry lease’ on the other hand, refers to leasing only the aircraft.
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11. ADVANTAGES OF LEASING
There are several advantages of acquiring capital assets on lease:
SAVING OF CAPITAL
Leasing covers the full cost of the equipment used in the business by providing
100% finance. The lessee does not has to provide or pay any margin to
manufacturer. Lessor and there is no down payment. In this way the saving in
capital or financial resources can be used for other productive purposes e.g.
purchase of inventories.
FLEXIBILITY AND CONVENIENCE
The lease agreement can be tailor- made in respect of lease period and lease
rentals according to the convenience and requirements of all lessees.
PLANNING CASH FLOWS
Leasing enables the lessee to plan its cash flows properly. The rentals can be paid
out of the cash coming into the business from the use of the same assets.
IMPROVEMENT IN LIQUIDITY
Leasing enables the lessee to improve their liquidity position by adopting the sale
and lease back technique.
100 % FINANCING
In most cases, leasing allows you to finance 100% of the equipment cost –
including installation and setup. With equipment leasing, there is no down
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12. payment. The term of the lease can be matched with the useful life of the
equipment.
FIXED PAYMENTS
Leasing provides fixed periodic payments for the equipment acquisitions.
Payments are usually made on a monthly basis but can be structured as quarterly,
semi-annual or annual depending on your needs. A fixed payment amount
enhances the ability to forecast cash flow requirements. If any business
experiences seasonal fluctuations in revenues, leasing can be structured to allow
for lower payments during the off-peak season.
TAX ADVANTAGES
Under certain lease structures, business can lower its taxable income while
enjoying a lower payment than that required under traditional financing methods.
By converting a depreciable asset expense to a rent expense, the full payment can
be expensed for tax purposes.
BALANCE SHEET CONSIDERATIONS
Leasing offers companies the ability to better manage their balance sheets and
improve financial ratios by conserving operating capital and freeing up working
capital and bank credit lines for inventory, expansion and emergencies. Each type
of lease offers benefits unique to the company's financial conditions and
objectives.
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13. DISAVDVANTAGES OF LEASING
EARLY TERMINATION
The terms for early termination of most leases can be very unpleasant for the
consumer, particularly if the termination is forced, i.e., the car is totaled in an
accident or stolen. In such cases, insurance pay-outs often fall far short of the
balance due on the lease.
INSURANCE COST
Leasing companies tend to require higher amounts of insurance coverage than one
may normally carry. This could impact the insurance cost considerably.
HIGHER CREDIT REQUIREMENTS
Therefore, the credit worthiness standards tend to be higher for leases than
conventional loans. In other words, If you have a troubled credit history you may
have problems getting approved for a lease. For example, if the expensive car you
will be driving for the next 2-6 years belongs to someone else (the leasing
company), the owners want to be assured that you will make the payments on time
and will not trash their car.
NO OWNERSHIP
The main disadvantage of leasing is that you never own the product. It remains the
property of the leasing company during and after the lease. For example,when you
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14. lease a car, you are renting it. The leasing company retains ownership of the car
and you pay for the privilege of driving (and maintaining) it.
The only exception being if you arrange for it to be sold to another company or
person, in which case the leasing company would receive the money and a
percentage would be passed back to you (depending on the amount, product type,
age, and which leasing company you use).
As you do not own the product, you are unable to sell it in the event it is no
longer needed, and you cannot upgrade to a newer or better product without
either paying off the remaining contract, or paying a large fee to cancel the
contract. You also need to carry on paying a smaller lease cost, even after the
cost of the equipment has been fully covered.
LONG TERM EXPENSE
Although leasing allows you to avoid paying a large lump sum, over a long
period of time it often works out considerably more expensive. Over the course
of a standard lease, you pay the cost of the equipment as well as the leasing
companies charges.
After the lease finishes you need to carry on paying rental to use the product
(although after the initial lease the cost of rental goes down significantly). This
means that over a number of years, you will pay considerably more than the
actual cost of the equipment without ever actually owning it.
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15. MAINTENANCE
Although you do not own the equipment that you lease, you are still responsible
for its maintenance and repair. Unless you have specifically trained employees to
fix the equipment, then this could prove very costly in the event of a serious fault.
Some leasing companies will allow you to cover the maintenance and repair
costs for an extra sum (which is added to the monthly leasing cost). This will
increase your monthly payments, but may save your money in the long run;
particularly with manual or highly technical products that may go wrong
frequently, and may cause severe disruption if out of action. Cover is normally
through the leasing company itself, or through a separate insurance policy.
EXPENSIVE TO GET OUT OF A LEASE
Consider that your monthly payment is made up of two parts: depreciation and
interest. The depreciation part of the payment is calculated by taking the
difference between the capital cost and the residual (the total depreciation over the
lease) and dividing it by the number of months. In effect, you are paying off the
depreciation with equal payments each month. Graphically, the depreciation is
being paid "in a straight line" (see figure).
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16. But we all know that a car depreciates much more rapidly in the earlier years with
the biggest hit occurring the day you drive the car off the lot. So when you
terminate the lease before you have paid all of the depreciation, you will likely be
required to pay the difference between what the car is worth and how much you
have paid on the depreciation. This difference is often referred to as the "gap".
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17. CONCLUSION
Leasing has grown by leaps and bounds in the eighties but it is estimated
that hardly1% of the industrial investment in India is covered by the lease
finance, as against 40% in USA and 30% in UK and 10% in Japan.
The prospects of leasing in India are good due to growing investment needs
and scarcity of funds with public financial institutions.
This type of lease finances is particularly suitable in India where a large
number of small companies have emerged more recently.
Leasing in the sphere ofland and building has been in existence in India for
a long time, while equipment leasing has become very common in the
recent times.
EXAMPLE
Infrastructure Leasing & Financial Services Limited (IL&FS) is one of India's
leading infrastructure development and finance companies.
IL&FS was promoted by the Central Bank of India (CBI), Housing Development
Finance Corporation Limited (HDFC) and Unit Trust of India (UTI). Over the
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18. years, IL&FS has broad-based its shareholding and inducted Institutional
shareholders including State Bank of India, Life Insurance Corporation of India,
ORIX Corporation - Japan and Abu Dhabi Investment Authority
INTRODUCTION TO HIRE PURCHASE
Hire purchase (frequently abbreviated to HP) is the legal term for a contract
developed in the United Kingdom, and now found in India, Australia and New
Zealand. In the Republic of Ireland, HP most commonly refers to employment,
with the comparable system being called closed-end leasing.
In cases where a buyer cannot afford to pay the asked price for an item of property
as a lump sum but can afford to pay a percentage as a deposit, a hire-purchase
contract allows the buyer to hire the goods for a monthly rent. When a sum equal
to the original full price plus interest has been paid in equal installments, the buyer
may then exercise an option to buy the goods at a predetermined price (usually a
nominal sum) or return the goods to the owner. In Canada and the United States, a
hire purchase is termed an installment plan; other analogous practices are
described as closed-end leasing or rent to own.
Hire purchase differs from a mortgage and similar forms of lien-secured credit in
that the so-called buyer who has the use of the goods is not the legal owner during
the term of the hire-purchase contract. If the buyer defaults in paying the
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19. installments, the owner may repossess the goods, a vendor protection not available
with unsecured-consumer-credit systems.
HP is frequently advantageous to consumers because it spreads the cost of
expensive items over an extended time period.
Business consumers may find the different balance sheet and taxation treatment of
hire-purchase goods beneficial to their taxable income.
MEANING
Hire purchase is a type of installment credit under which the hire purchaser, called
the hirer, agrees to take the goods on hire at a stated rental, which is inclusive of
the repayment of principal as well as interest, with an option to purchase. Under
this transaction, the hire purchaser acquires the property (goods) immediately on
signing the hire purchase agreement but the ownership or title of the same is
transferred only when the last installment is paid.
The hire purchase system is regulated by the Hire Purchase Act 1972. This Act
defines a hire purchase as “an agreement under which goods are let on hire and
under which the hirer has an option to purchase them in accordance with the terms
of the agreement and includes an agreement under which:
• The owner delivers possession of goods thereof to a person on condition
that
such person pays the agreed amount in periodic installments.
• The property in the goods is to pass to such person on the payment of the
last of such installments, and
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20. • Such person has a right to terminate the agreement at any time before the
property so passes”.
Hire purchase should be distinguished from installment sale wherein property
passes to the purchaser with the payment of the first installment. But in case of
Hire purchase (ownership remains with the seller until the last installment is paid)
buyer gets ownership after paying the last installment. Hire purchase also differs
from leasing.
FEATURES OF HIRE PURCHASE AGREEMENT
Under hire purchase system, the buyer takes possession of goods
immediately and agrees to pay the total hire purchase price in installments.
Each installment is treated as hire charges.
The ownership of the goods passes from the seller to the buyer on the
payment of the last installment.
In case the buyer makes any default in the payment of any installment the
seller has right to repossess the goods from the buyer and forfeit the amount
already received treating it as hire charges.
The hirer has the right to terminate the agreement any time before the
property passes. That is, he has the option to return the goods in which case
he need not pay installments falling due thereafter. However, he cannot
recover the sums already paid as such sums legally represent hire charges
on the goods in question.
ADVANTAGES OF HIRE PURCHASE
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21. Spread the cost of finance: Whilst choosing to pay in cash is preferable, this
might not be possible for consumer on a tight budget. A hire purchase agreement
allows a consumer to make monthly repayments over a pre-specified period of
time.
Interest-free credit: Some merchants offer customers the opportunity to pay for
goods and services on interest-free credit. This is particularly common when
making a new car purchase or on white goods during an economic downturn.
Higher acceptance rates: The rate of acceptance on hire purchase agreements is
higher than other forms of unsecured borrowing because the lenders have
collateral.
Sales: A hire purchase agreement allows a consumer to purchase sale items when
they aren't in a position to pay in cash. The discounts secured will save many
families money.
Debt solutions: Consumers that buy on credit can pursue a debt solution, such as a
debt management plan, should they experience money problems further down the
line.
DISADVANTAGES OF HIRE PURCHASE
Personal debt: A hire purchase agreement is yet another form of personal debt. It
is monthly repayment commitment that needs to be paid each month.
Final payment: A consumer doesn't have legitimate title to the goods until the
final monthly repayment has been made.
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22. Bad credit:All hire purchase agreements will involve a credit check. Consumers
that have a bad credit rating will either be turned down or will be asked to pay a
high interest rate.
Creditor harassment:Opting to buy on credit can create money problems should
a family experience a change of personal circumstances.
Repossession right:A seller is entitled to 'snatch back' any goods when less than a
third of the amount has been paid back. Should more than a third of the amount
have been paid back, the seller will need a court order or for the buyer to return the
item voluntarily.
STANDARD PROVISIONS
To be valid, HP agreements must be in writing and signed by both parties. They
must clearly set out the following information in a print that all can read without
effort:
1. a clear description of the goods
2. the cash price for the goods
3. the HP price, i.e., the total sum that must be paid to hire and then purchase
the goods
4. the deposit
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23. 5. the monthly installments (most states require that the applicable interest rate
is disclosed and regulate the rates and charges that can be applied in HP
transactions) and
6. a reasonably comprehensive statement of the parties' rights (sometimes
including the right to cancel the agreement during a "cooling-off" period).
7. the right of the hirer to terminate the contract when he feels like doing so
with a valid reason.
IMPLIED WARRANTIES AND CONDITIONS TO
PROTECT THE HIRER
The extent to which buyers are protected varies from jurisdiction to jurisdiction,
but the following are usually present:
1. The hirer will be allowed to enjoy quiet possession of the goods, i.e. no-one
will interfere with the hirer's possession during the term of this contract
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24. 2. The owner will be able to pass title to, or ownership of, the goods when the
contract requires it
3. That the goods are of merchantable quality and fit for their purpose, save
that exclusion clauses may, to a greater or lesser extent, limit the Finance
Company's liability
4. Where the goods are let by reference to a description or to a sample, what is
actually supplied must correspond with the description and the sample.
THE HIRER'S RIGHTS
The hirer usually has the following rights:
1. To buy the goods at any time by giving notice to the owner and paying the
balance of the HP price less a rebate (each jurisdiction has a different
formula for calculating the amount of this rebate)
2. To return the goods to the owner — this is subject to the payment of a
penalty to reflect the owner's loss of profit but subject to a maximum
specified in each jurisdiction's law to strike a balance between the need for
the buyer to minimize liability and the fact that the owner now has
possession of an obsolescent asset of reduced value
3. With the consent of the owner, to assign both the benefit and the burden of
the contract to a third person. The owner cannot unreasonably refuse
consent where the nominated third party has good credit rating
4. Where the owner wrongfully repossesses the goods, either to recover the
goods plus damages for loss of quiet possession or to damages representing
the value of the goods lost
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25. THE HIRER'S OBLIGATIONS
The hirer usually has the following obligations:
1. To pay the hire installments
2. To take reasonable care of the goods (if the hirer damages the goods by
using them in a non-standard way, he or she must continue to pay the
installments and, if appropriate, compensate the owner for any loss in asset
value)
3. To inform the owner where the goods will be kept.
THE OWNER'S RIGHTS
The owner usually has the right to terminate the agreement where the hirer
defaults in paying the installments or breaches any of the other terms in the
agreement. This entitles the owner:
1. To forfeit the deposit
2. To retain the installments already paid and recover the balance due
3. To repossess the goods (which may have to be by application to a Court
depending on the nature of the goods and the percentage of the total price
paid)
4. To claim damages for any loss suffered.
FUNCTIONS OF HIRE PURCHASE
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26. 1. Hire purchases are used to acquire houses, automobiles, furniture, and other
large items that generally cannot be paid in a lump sum. Hire purchases
function as legal documents for which the lender can legally hold the title until
the item is paid in full.
2. A hire purchase can be an installment or deferred payment plan. In the
former, a set monthly payment is paid on a certain day each month for a
specified length of time. After the last payment, the item becomes the
purchaser's property. In the latter, the property immediately belongs to the
purchaser while payments are regularly made.
3. A hire purchase can be for a few months up to many years. The interest rate
can vary from low to high, depending on the institution granting the
agreement. Usually, a more expensive item will be set up for 10, 15, or more
years. Typically, a mortgage covers a span of 30 years.
4. To be valid, a hire purchase must be signed by both parties. It should
contain a description of the item, the price paid, the deposit (if any), monthly
amounts due, statement of each party's rights, and requirements, if any, for
early termination.
5. A hire purchase allows a person to buy an item, such as a house, over a long
period of time. With such an agreement, the buyer can enjoy his property while
making payments. The buyer also has the right to sell the property and allow
the new purchaser possession of his house.
6. If the purchaser fails to make the installments in a timely manner, the lender
has the right to repossess the property or item. In severe cases, the purchaser
may file for foreclosure or bankruptcy, at which time the item's ownership will
be returned to the lender.
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27. 7. Generally, a person must be at least 18 years of age to enter into a valid hire
purchase. There is no upper age limit to incurring such a purchase agreement.
Each person should carefully consider his financial position before incurring
any type of hire purchase.
NSIC AND HIRE PURCHASE
Small scale firms can acquire industrial machinery, office equipment, vehicles,
etc.
without making full payment through hire purchase. With the help of assets
acquired through hire purchase they can produce and sell. From the earning
payments can easily be made in installments. Ultimately the ownership of assets
can be acquired. Now several agencies like National Small Industries Corporation
(NSIC) provide machinery and equipment to small scale units on hire purchase
basis and on lease basis. NSIC follows the following Hire Purchase procedure and
Hire Purchase Scheme for financing plant and machinery to small scale un
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29. 29
LEASING HIRE PURCHASE
BASIS A lease transaction is a
commercial arrangement,
whereby an equipment
owner or manufacturer
conveys to the equipment
user the right to use the
equipment in return for a
Rental
Hire purchase is a type of
installment credit under
which the hire purchaser
agrees to take the goods on
hire at a stated rental,
which is inclusive of the
repayment of principal as
well as interest, with an
option to purchase.
Option No option is provided to
the lessee (user) to
purchase the goods.
Option is provided to the
Hirer (user).
Nature of expenditure Lease rentals paid
by the lessee are entirely revenue
Expenditure of the lessee.
Components Lease rentals comprise of
2 elements
(1) finance charge
(2) capital recovery
Only interest element
included in the HP
installments is revenue
expenditure by nature.
HP installments comprise
of 3 elements
(1) normal trading profit
(2) finance charge and
(3) recovery of cost of goods/assets.