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History of Leasing
Leasing in its modern style has developed over the past 50 years to
provide a method of amortizing the capital value of any asset over its
expected life span. Traditionally this was for high value assets such as
buildings, ships, and aircraft, but increasingly smaller values have been
coming into the leasing range, such as vehicles and equipment
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 cities in industrialized countries had made
leases an important form of landholding in urban areas.
The first instances of leasing hark back to 2000 BC. Evidence points to
the Sumerians using leasing transactions in agriculture and in the
Financial Institution of Pakistan Page 1
Al Zamin Leasing Corporation
The modern leasing industry began in 1952 with the establishment of the
United States Leasing in San Francisco, California, as an international
concern. In the years 1960 to 1962, leasing transactions were carried out
by Deutsche Leasing and Orient Leasing in Germany and Japan,
respectively. In the first half of the 1970s, leasing proliferated throughout
the world, including Iran.
History in Pakistan
The concept of leasing and hire purchase existed long before the first
leasing company, National Development Leasing Corporation Limited was
established in 1985. During 1985-1991 period only six companies were
established whereas during 1992-97, as many as, 27 leasing companies
entered the market. Some of the modaraba companies are involved in
leasing as their business. The leasing sector has registered consistent
and double digit growth — except for the last few years. However, this
was mainly due to recessionary trend of the economy. The volume of
leases underwritten over the years has increased mainly due to the fact
that leasing companies have become the only source of medium-term
financing.
While the sector continues to operate under intense competition the new
interpretation of old laws, particularly with regard to taxation, has
become a serious concern for the companies. It is true that the country
needs additional revenues to minimize budget deficit, but tax collectors
must refrain from issuing unrealistic demand notices. In this connection
the tax regime must read the explanatory note, regarding taxation, in the
latest annual report of Orix Leasing Pakistan.
holders. It paid the second-highest dividend for the year 1998-99 among
the 52 listed modaraba companies.
Introduction
Vision Statement
“To participate prominently in the economic and social development of
the country through a well established and competitive credit delivery
system managed by a motivated and efficient human resource”
Mission Statement
Management
Mr. Syed Shahid Owais is the Company Secretary, and has been working
with Al-Zamin Lease for the last several years in the area of Audit. He has
vast experience in the field of Audit and Accounts. Before joining Alzamin
Lease, Mr. Owais has worked with different Institutions in the field of
Finance and Accounting. Recently he is also assigned the responsibilities
of Cheif Financial Officer (CFO).
Mr. Mehboob-ur-Rehman
Mr. Naeem Baig is working as SVP & Manager of Central Region of Al-
Zamin Lease. He is an MBA and serving the company since 2006. His
experience includes different responsibility at different organization of
financial sector.
Mr. Razi is working as VP - Credit Administration & Recovery and has vast
experience in banking & leasing industry.
BOD’s
Corporate Objectives
☑ Improve relative positioning in top tier companies.
☑ Transformation from a single product to multi-products company.
☑ Offer a diversity of products tailored to customer in various
segments with a special focus on SMEs and consumer financing.
Mr. Zafar Iqbal
☑ Extend market reach sectorally and geographically with quality of
service and portfolio.
☑ Operate within the regulatory framework for NBFCs.
☑ Collection of money
☑ Lending of money
A. Collection of Money
Al Zamin leasing corporation collect the money from general public through
different tools. One of the tools is Certificate of Investment (COI).
1. Certificate of Investment:
Al Zamin leasing COI’s make it easy for you to invest by offering personalized
customer services and a flexible range of products with maximum security.
We revise our rate of return on a quarterly basis in order to give you the best
possible rate of return offer making adjustments for inflationary trends and
forecast. We provide steady income and higher returns.
Salient Features
Investment:
A COI is considered one of the best ways to save money and Al Zamin has made
it even better.
Flexibility:
We provide you a full line of flexibility saving products with a wide range of
terms. Competitive returns and personalized customer services so that your COI
can be tailored to fit your specific saving plan.
Accessibility:
☑ Our COIs are ideal for individuals, corporate bodies, firms, trust, societies,
NGO’s etc. as it provide high return, maximum security, steady income
and dependability.
☑ Our COIs are encashable at any time before maturity subject to the rules
and regulation of the scheme.
☑ Investment can be made for as little as Rs. 10,000.
1. COI Save
COI Save
2. COI Earn
3. COI Prime
COI Prime
Example:
We have a practical experience of opening an account in the investment
of Al Zamin leasing Corporation under the head of certificate of
investments.
A.Lending of Money
1) Corporate Financing
• Lease Lines
• Step up Leases
• Operating Leases
Example:
“Sapphire Fibers Limited want to take the CNC machine for their
operations, the pursue Al Zamin leasing for the financing. For availing
this facility sapphire fibers limited do the following activities”
i. Application Form
Sole Proprietorship_________________
Partnership ______________________
Sector: Textile
Details of Directors
Details of Lessors:
applicant and the business. They provide me the good response at which
I am satisfied to execute the facility of leasing”
“I also make the direct contact with the venders, creditors and other
stake holder of the business and discuss the credit behavior of the
business. In reply they give me a satisfactory reply, so I decided to
execute the facility to Sapphire fibers limited”
Description of Asset:
Bank Reference:
Designation Director
Date 3-04-09
Signature
Company Stamp
To,
Dear Sir,
Pursuant to your request for lease financing asset, we are pleased to offer
our indicative terms and conditions for lease financing.
Value 2 Million
Duration 36 Months
Accepted by:
Signature:
Stamp:
Income Statement
2008 2007
Net Sales 6511530833 5641730651
BALANCE SHEET
2008 2007
Proprietor's Capital PROFITABILITY
350000000 350000000
Reserves
Growth in Sales 3402930900 4765280458
15.41%
Inappropriate Profit C/F 3944506236 2696477738
Net Worth
Gross Profit Margin 7521897136 7636758796
16.75% 16.88%
Long Term Loan / Inter Group Finance 3122300 4475200
Operating Profit Margin 26.58% 13.02%
Deferred Liability 182061309 165453676
Net Profit Margin 20.56% 8%
Current Liabilities 3572290479 2630169503
Return on Fixed Assets 19.64% 8.87%
Current Assets 3546210057 2727047007
Return on Total Assets 10.83% 4.10%
Net Working Capital -26080422 96877502
Fixed Assets
Owners Index
8812706124 8179977335
EFFICIENCY PARAMETERS
LIQUIDITY
LEVERAGE
Comparative Analysis
Profitability Chart
Operating Chart
Form 29
Form A
To,
The Secretary,
Copyright Board,
Karachi.
Sir,
(i). In accordance with section 4(2) of the Ordinance, We hereby refer the
matter of the
(Name of the literary, dramatic, musical or artistic work or record) for the
determination
quantities.
(ii) These are delivered herewith for the perusal of the Board: -
reference.
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Financial Institution of Pakistan Page 37
Al Zamin Leasing Corporation
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Signed: ------------------------------
Date: ----------------------------------
Sales Invoice
Signature: 20,00,000
/-
(
Lease Terms:
✔ Market Reputation:
Good: Yes
Satisfactory:
Unsatisfactory:
✔ Credit worthiness:
Good: Yes
Satisfactory:
Unsatisfactory:
“I also make the direct contact with the venders, creditors and other
stake holder of the business and discuss the credit behavior of the
business. In reply they give me a satisfactory reply, so I decided to
execute the facility to Sapphire fibers limited”
While granting; any facility to the customers other than individuals, NBFC shall
obtain copy of accounts relating to the business of each of its borrower for
analysis and record in the following manner:
(b)Long Term Debt / Equity Ratio 60:40 i.e. debt being 1 .5 times or 150% 39%/61%
of equity
However in exceptional cases, NBFC may relax
these ratios in case of facilities up to three million
rupees, if they are satisfies that appropriate risk
mitigates have been put in place and shall record in
writing the reasons and justifications for doing so in
the approval form and maintain a file in their
central credit office containing all such approvals.
The Exceptions Approval file shall be made available
to the inspection team of the SEC during the
inspection.
Strength/opportunities:
☑ The direction of business is very good
Because the business is generating too many profits in the current year as
compare to the base year so hopefully it is expected that the business is going
to continue its current position in future.
☑ The business have more than 1.5 times equity to debt
The equity of the business is almost 200% from the debt and it is good
indication for the execution the lease facility.
☑ In future there is a vast opportunity for international trading.
There is great scope of the business of fibers so we predict the good return from
business in future and it is good for us.
Weakness /threats:
Financial Institution of Pakistan Page 45
Al Zamin Leasing Corporation
Agreement
IRREVOCABLE AUTHORITY TO RESPONSSESS MACNINARY
Registration 55362-KLO-623DE-85
Code 33265-ASDF
Model 2008
Sir,
Note: with this statement the legal agreement is also signed by both
parties in which each and every term and condition is written and agreed.
Witness 1 Witness 2
1) Consumer Financing
CRES CAR
Al-Zamin Lease now brings a car-financing scheme which best suits your
needs.
Salient Features
• Easy Documentation.
• Tenor 3 to 5 years.
• Personalized Service.
Documents Required
• Photograph • Photograph
• N.T.N Certificate
copy
Personal Information
NIC # NTN
Address Phone #
Owner/Tenant/Family Residence
Single 1 Child
Mariatal Status No. of Children
Eldest Child's
School Name
Name
Occupation Information
Profession
Employer/business Name
Employment/Business Address
Business
Owned
Premises
Rented Other
Phone # Salary/Income
Other Information
No
Do you have a Credit Card?
Name Since
No
Are you a member of any Club?
Name Since
A/c #
Reference 1:
(Neighbour)
Name
Address
Phone # Office
NIC #
Reference 2:
(Office Bearer)
Name
Address
Phone # Office
NIC #
Vehicle
Total Cost
Name
Down Term of Lease
Payment (months)
* I hereby declare thet the above information in correct and complete & I
authorise CresLease to verify the same
i. Application Form
Personal Information
34101-6632569-6 22365852
NIC # NTN
2002 7 years
Living since Years/Months
16-08-1970 MBA
Date of Birth Qualification
Married 3 Children
Marital Status No. of Children
Occupation Information
business man
Profession
brothers engerrings
Employer/business Name
small estate 2
Employment/Business Address
Rented Other
MD 1999
Designation Working since
055323265 1 lac
Phone # Salary/Income
Other Information
No
Do you have a Credit Card?
Name Since
No
Are you a member of any Club?
Name Since
A/c #
Reference 1:
(Neighbour)
Ali Khalid
Name
Model tow n
Address
KPS
Business/ Work Address
055-985632 055-652321
Phone # Office
31425-6322569-3
NIC #
Reference 2:
(Office Bearer)
Aslam Baig
Name
master tiles
Business/ Work Address
055-3214583 055-268512
Phone # Office
32256-62325698-
NIC #
To,
Dear Sir,
Pursuant to your request for lease financing asset, we are pleased to offer
our indicative terms and conditions for lease financing.
Value 1124264
Accepted by:
Signature:
Stamp:
__________________
Signature of
Witness
RE
1 Taxpayer's Name W
2 Bussines Name C
Registration
3 Business Address
4 Res. Address
5 E-Mail Address b
Financial Institution of Pakistan
6 Principal Activity Page 62
Al Zamin Leasing Corporation
(
Lease Terms:
Market Reputation:
Good: Yes
Satisfactory:
Unsatisfactory:
Credit worthiness:
Good: Yes
Satisfactory:
Unsatisfactory
While granting; any facility to the customers other than individuals, NBFC shall
obtain copy of accounts relating to the business of each of its borrower for
analysis and record in the following manner:
(b)Long Term Debt / Equity Ratio 60:40 i.e. debt being 1 .5 times or 150% 100% equity
of equity
However in exceptional cases, NBFC may relax
these ratios in case of facilities up to three million
rupees, if they are satisfies that appropriate risk
mitigates have been put in place and shall record in
writing the reasons and justifications for doing so in
the approval form and maintain a file in their
central credit office containing all such approvals.
The Exceptions Approval file shall be made available
to the inspection team of the SEC during the
inspection.
APPROVAL: MEMORANDUM TO
MANAGEMENT COMMITTEE:
Strength/opportunities:
☑ The direction of business is very good
Because the business is generating too many profits in the current year as
compare to the base year so hopefully it is expected that the business is going
to continue its current position in future.
☑ The business have more than 1.5 times equity to debt
The equity of the business is almost 200% from the debt and it is good
indication for the execution the lease facility.
☑ In future there is a vast opportunity for international trading.
There is great scope of the business of fibers so we predict the good return from
business in future and it is good for us.
Financial Institution of Pakistan Page 65
Al Zamin Leasing Corporation
Weakness /threats:
☑ The major weakness is the local trading
The political situation of the country is not stable and the external threat is also
not good for the business. So the business is not able to conduct the
international operation and that might be effect full for the business.
☑ Another is the limited operations
☑ The biggest threat is the political and economic situation
If the document is approved then the agreement is going to be signed.
i. Agreement
Registration 55362-KLO-623DE-85
Engine # SL-PAW2F8GBV
Model 2009
Sir,
Note: with this statement the legal agreement is also signed by both parties
in which each and every term and condition is written and agreed.
Witness 1 Witness 2
Salient Features
• You don't have to pay high deposit, for equipment & household items.
Calculate your rentals by multiplying the net financing (cost less deposit) of
asset with the factor of the selected period.
• Lease rental per month shall not exceed 60% of employee's take home
salary/income.
Future Planning
Al Zamin Leasing Corporation is planning to merge with Global Islamic Bank.
This merger is in under process, we can say that the due diligence reports
are prepared and goes for the evaluation when the reports got the clearance
the merger takes place.