Presentation on Leasing for the subject Management Financial Services

This is a presentation on leasing for the course MBA in Finance.

1. Presentation title Mirjam Nilsson

2. MEMBERS SUHAIB AKHTAR MOHD. FAIZ KHAN

3. Agenda Introduction 1 Clauses in lease agreement 2 Regulatory guidelines 3 Conclusion  4

4. Introduction Leasing, as a financing concept, is an arrangement between two parties, the lessor and the lessee, whereby the former arranges to buy capital equipment for the use of the latter for an agreed period of time in return for the payment of rent. Lease is a form of contract transferring the use of land, space, structure or equipment, in consideration of a payment, in the form of rent. 3 4

5. CLAUSES IN LEASE AGREEMENT 5

6. REGULATORY GUIDELINES OF LEASING 6 Provisions under Contract Act relating to Bailment Two parties – lessor(bailor), lessee(bailee) Transfer of possession of goods from a bailor to bailee, for a specific purpose. As under bailment, on accomplishment of purpose the goods transferred from lessee to lessor.

7. REGULATORY GUIDELINES OF LEASING 7 Reasonable Care The lessee to take reasonable care of the asset. If he fails, he is liable for loss or damage to the goods that he has caused. If goods damaged despite reasonable care(floods, riots etc ), then the lessee is not responsible. Generally lease agreements make the lessee responsible, irrespective of lessee's negligence.

8. Unauthorized use not permitted to the lessee The lessee is not allowed to use the leased asset, for any purpose other than one specified in the lease agreement. If he does so, then the lease agreement is terminated, and lessor recovers the possession of the goods. Return of Goods The lessee has to return the goods on completion of the lease term. Or the lease agreement has been terminated by the lessee or lessor because of breach of conditions.

9. REGULATORY GUIDELINES OF LEASING 9 Delivery of Goods Ensure delivery of goods to the lessee, along with documents for lawful use of asset. Lease commences on delivery. Peaceful possession Lesser must ensure quite possession of the goods during the lease term All known defects to be disclosed. If not then the lessor has to compensate the losses incurred by the lessee due to such defects.

10. REGULATORY GUIDELINES OF LEASING 10 Forfeiture of all lease rental paid up to the date of termination, even if it exceeds the amount of benefit received by the lessee. Repossession of goods on breach of lease through serving of a notice on lessee. For repossession of goods, physical force can be used by the lessor. Lessee may claim damages for loss resulting from the termination. Remedies for Breach

11. REGULATORY GUIDELINES OF LEASING 11 Both lessor or lessee can obtain the insurance. In case of asset being fully destroyed, the claims received, adjusted against the lessor's dues. Sub lease by lessee is not allowed unless provided in the lease agreement. Except for assets where sub lease is apparent.

12. CONCLUSION

13. Thank you