ORIX Leasing Pakistan Limited

Acknowledgement

This report contains operations of ORIX leasing Pakistan Limited in detail as far as I could find

out. I personally visited, collected data from internet and

necessary documents provided to me by ORIX officials; that helped

me in completion of this report.

The report starts with a slight introduction to fertilizer industry and then

ORIX introduction is given, highlighting its salient features, facilities,

products and management. Afterwards a comprehensive detail of

ORIX inventory management, supplier management, forecasting

and production processes are given.

I dedicate this report to my teacher Sir Hayat M. Awan who assisted me

throughout the semester in operation’s management course, and my

fellows who were always there to help me out in ups and downs.

ORIX Leasing Pakistan Limited

History and Prospects:ORIX Leasing Pakistan Limited began operations in January 1987, as a joint venture between ORIX Corporation, Japan and local sponsors. ORIX Corporation is Japan’s leading diversified financial services institution with assets in excess of US$ 50 billion and subsidiaries and associates in 21 countries. Following the footsteps of its Japanese parents, OLP has played a major role in promoting the leasing industry Pakistan. Its strength lies in an extensive branch network, a diversified portfolio of over 3000 clients, a wide range of financial products, personnel development and office automation.

Operations:Since the start of operations in January 1987, the Company has written leases totaling Rs 15.54 billion. The Company has an asset base of Rs. 6.1 billion, net worth of Rs. 926 million and earned a pretax profit of Rs. 156 million for the year ended June 30, 2000. The Pakistan Credit Rating Agency has rated the Company’s short and long-term debt as A1+(A one plus) and AA- (double A minus) respectively. The Company enjoys the highest Credit rating in the leasing sector. The Company’s Head Office is in Karachi with branches in Lahore, Islamabad, Peshawar, Faisalabad, Hyderabad, Multan, and Sialkot. The company serves as the regional base for ORIX Group’s activities in the Middle East and North Africa. It manages joint venture leasing companies in Oman and Egypt. The Company has recently established a joint venture leasing company in the Kingdom of Saudi Arabia. The Company is also a founder shareholder of ORIX Investment Bank Pakistan Limited.

Business Activities:The Company’s main business is leading of moveable assets primarily industrial machinery, commercial vehicles and passenger cars. The Company provides lease financing to both large and small businesses. Lessees include public and private limited companies, partnerships, and sole proprietorships. The Company specializes in providing lease financing to small and medium size businesses. The Company has also been active in micro enterprise financing since inception and has been given special lined of credit for micro enterprises by multi lateral institutions, which include the World Bank, FMO (The Netherlands Development Finance Company) and the Swiss Development Agency

Other business areas:While lease financing remains the Company’s core business, ancillary financial services have also been added to its product range. These include installment loans for household appliances to corporate employees, auto leasing to salaried employees, self-employed professionals and businessmen, and provision of vehicles and equipment on operating lease.

OLP’s current portfolio of financial services includes:

Corporate Finance Lease:Providing industrial commercial machinery and transportation equipment to corporate sector.

Consumer finance:Allowing corporate employees to acquire domestic appliances.

Automobile Leasing:Vehicle leases for individual and corporate clients.

Operating Leasing:Providing productive assets on short-term rental basis.

Micro Enterprises Lease:Financing for cottage industries and unorganized sector entities.

Certificate Of Investment (COI’S):Offering investment plans matching the needs of our valued customers.

Strategic FocusThe Company’s business strategy is to concentrate on providing lease finance to small and medium sized enterprise. This has resulted in a high degree of risk diversification through sectoral and asset class diversification with risk spread over a large client base with lower per party exposure. At the same time, the Company also competes actively in the big-ticket lease market where target lessees comprise local and multinational blue chip corporate.

Product DevelopmentSince inception, the Company has primarily developed its leasing business and ancillary products such as consumer finance, rental of equipment and operating lease. Accordingly, a high degree of expertise has developed amongst the Company’s staff in the various leasing products. This technical expertise of the Company’s management is being fully utilized in the various job placements in the joint venture abroad.

Assets Class and Strategic ShiftsEconomic slowdown and low capital formation has resulted in weak demand for plant and machinery. To make up for the decline in machinery leasing, the Company has shifted emphasis to vehicle leasing over the past three years and this has been the business focus since then. Vehicles provide greater comfort in the event of default due to their high resale value, as under current market conditions, plant and machinery has low residual values.

DiversificationA major strength of the Company is its ability to maintain a highly diversified portfolio with low single party exposure. The Company will continue to target it’s niche market of small to medium size lessees with low exposures and will only entertain big-ticket leases where spreads are reasonable and credit risk is good. The Company has eight marketing offices located in the Country’s major industrial cities. To further extend it’s market reach, the Company uses its existing offices to source business in adjoining cities throughperiodic visits by marketing teams and intends to continue this strategy, as marketing results in smaller cities have been good.To further diversify revenue sources, the Company has entered into related ancillary businesses of consumer finance and auto lease for individuals. The Company started operating lease two years ago and is now among the market leaders in providing generators and communication equipment on short-term rental basis. Recognizing the potential for investment banking in Pakistan, OLP established ORIX Investment Bank Pakistan Limited (OIBP) in 1995.The Company’s policy on internal diversification is to enter into fields closely allied to leasing to reduce risk and make best use of available expertise within the ORIX Group of companies.

Area of Activity

Fund Based ActivitiesLeasing remains the Company’s main activity. However, the Company has diversified into different areas of leasing such as operating lease, factoring, hire purchase and consumer finance, etc.

Non-Fund Based ActivitiesNon-Fund based activities include technical advice which the management of the Company has been providing to its associated companies in the region.

Resource Mobilization

The Company offers Certificates of Investment (COIs) with varying maturities ranging from 3 months to five years.A key factor in the Company’s profitability has been its ability to raise finance for its business at competitive rates. The Company’s sources of funds are diversified and continuous efforts are made to broaden this base and ensure that the ratio of short term to long-term funds remains satisfactory.The Company’s long term funding has traditionally been provided by multilateral lending institutions while local financial institutions have provided the Company with medium and short term funds. Company’s long term financing sources include:

International Finance Corporation Asian Development Bank FMO (Netherlands) IBRD (World bank)

The Company follows a conservative policy of ensuring that the average maturity of its borrowing exceeds the average maturity of its lease portfolio. The Company aims to earn sufficient spread to enable the Company to be cushioned against major shifts that might occur in future interest rates

Use of ProceedsThe TFCs are being issued for purposes of writing new leases and other business as permitted under the Company’s Memorandum & Articles of Associations. The Company’s lease disbursement in the past two years (1999 & 2000) exceeds Rs. 4,849 million and in 2001 exceed 5.1 billion and the business requires term financing since leases being written are for three years or longer period. The total amount of Rs. 700 million realized from the present issue (first tranche) will be used to finance new business volumes. The Company has traditionally relied on International and domestic lending institutions to meet it’s medium to long-term funding requirements and the Company sees TFC’s as a instrument to diversify its funding sources.

Relationship with ORIX GroupA significant factor in OLP’s development over the past decade has been the harmonious relationship and complete understanding between its foreign and local sponsors. This partnership is a model for successful joint ventures, where foreign shareholders provide the technical know how and local partners support through funding and market knowledge. With cohesion at Board level, management is left free to pursue development of the Company.OLP enjoys good relations with the ORIX Group, enabling it to capitalize on the expertise of other Group companies. Over the years, OLP’s staff has visited Group Companies in Japan, Thailand, Singapore, Malaysia and Australia under an exchange program, which sends one or two employees of OLP for overseas training every year. OLP also contributes to the Group by referring business and investment opportunities in Pakistan to Group companies. The Company anticipates doing the same in other Middle East countries as it expands its international presence.

Associated Companies:

Overseas Joint VenturesOman ORIX Leasing Company SAOG (Oman ORIX):Oman ORIX, in which ORIX Leasing Pakistan Limited holds 20.25% of equity and provides management support, continues to show strong growth in volumes and profits. IN 1999, net profit after tax rose by 26% to Rial Omani (RO) 684,989 (Pak Rs 92.33 million) from RO 542,403 (Pak Rs. 73.1 million) enabling the Company to declare a dividend of 10% and a bonus of 2.45%. Purchase cost of new business written during the year increased to RO 16.9 million (Pak Rs.2.28 billion) compared to RO 13.6 million (Pak Rs.1.84 billion) last year and gross lease receivables increased by 33% to RO 24 million (Pak Rs.3.24 billion). As at December 31,1999, Oman ORIX had total assets of RO 22.3 million(Pak Rs. 3.0 billion) and a net worth of RO 5.397 million (Pak Rs.727.47 million).For the year ended June 30, 2000, the Company earned a pre-tax profit of RO 455,719 (Pak Rs.61.4 million) and increased its asset base to RO 29.19 million (Pak Rs.3.9 billion).Oman ORIX leases all type of assets including motorcars, construction, earthmoving and transportation equipment, information technology equipment and plant and machinery. The Company’s lessees include individuals; small and medium size companies and large sub contractors in diverse economic sectors including services, trading and contracting, construction and manufacturing.Oman ORIX’S Head Office is in Muscat and during the year the Company extended its geographical reach by opening branches in the cities of Sohar and Salalah.

ORIX Leasing Egypt SAE (ORIX Egypt)ORIX Corporation, Japan and ORIX Leasing Pakistan Limited each hold 23% of ORIX Egypt’s equity. The Company started operations in November 1997 and has established a good business base.For the year ended December 31,1999, ORIX Egypt’s profit before tax of Egyptian Pounds (EP) 2.04 million (Pak Rs. 30.8 million) was more than double last year’s profit of EP 0.9 million (Pak Rs, 13.6 million). Business volume increased by 57% with disbursements of EP 38.3 million (Pak Rs. 577.9 million compared to EP 24.4 million (Pak Rs. 368.2 million) last year. Gross lease receivables increased to EP 47.7 million (Pak Rs. 719.8 million) from EP 30.5 million (Pak Rs.460.3 million). The Company continued to focus on needs of small and medium sized businesses, which enables it to diversify risk and earn good spreads.

Saudi ORIX Leasing Company (Saudi ORIX)Saudi ORIX is under formation and is expected to commence operations by the end of this year. The Company will be a pioneer of leasing in Saudi Arabia. As the largest economy in the Gulf with the biggest oil production in the world, Saudi Arabia offers immense potential for leasing.Saudi ORIX Leasing Company will start with a paid up capital of Saudi Riyal 60 million, equivalent to approximately Rs.900 million at current exchange rate. ORIX Leasing Pakistan proposes to take 10% equity in the new venture together with other sponsoring shareholders ORIX Corporation, Japan (20%), International Finance Corporation (10%), Saudi Investment Bank (30%) and a private business group consisting of eminent Saudi bankers and businessmen (jointly holding 30%).

Joint Venture in Pakistan

ORIX Investment Bank Pakistan Limited (OIB)ORIX Corporation, Japan and ORIX Leasing Pakistan Limited hold 20% and 15% respectively of OIB’s equity. For the year ended June 30, 2000 OIB’s profit before tax rose by 37.5% to Rs.44.28 million from Rs.32.2 million last year. The bank continues to concentrate on maintaining a high quality loan portfolio while seeking to improve fee-based income from advisory services. OIB is primarily engaged in providing a range of investment banking products, which include corporate advisory services, project packaging, structuring and placement of capital market debt products, issuance anddiscounting of bankers acceptance and treasury operations. At June 30,2000,OIB had total assets in excess of Rs. 1.46 billion.

Board of Directors:Mr. Yoshihiko Miuauchi ChairmanMr. Shakirullah Durrani Vice ChairmanMr. Takeshi Sato Director Mr. Masatoshi Yokota DirectorMr. Muhammad Mazharuddin Director Mr. Shaheen Amin DirectorMr. Mohammad Qamrul Haq DirectorMr. Humayun Murad Chief Executive

Branches of ORIX Leasing Pakistan LimitedHead Office is in Karachi. There are total 8 branches of ORIX. Which are as follows:

1. Karachi (Head Office)2. Lahore3. Islamabad4. Faisalabad5. Sialkot6. Peshawar7. Multan8. Hyderabad

Departmentalization of ORIX Leasing Pakistan Limited

There are total 11 departments in Karachi Head Office of ORIX Leasing Pakistan Limited. Which are as follows:

1. Marketing department2. Credit department3. Business Control department4. Rental Recoveries5. Administration department6. Human Resource department7. Finance & Accounts department8. Treasury department9. Rental Collection department10. Information System development11. Hard Ware Section12. Consumer finance services13. Auto lease14. Operating lease

Marketing departmentThe principal responsibilities of the marketing department are identify customer need for credit, carry out credit analysis, prepare detailed report on lessee’s financial position and submit it to higher-ups for approval. Involve in searching and developing new clients and manage good relationship with them.They also evaluate the documents submitted by the customers prepare the files (approval and payment) and then send it for checking to the Business Control department

Credit departmentThis department define broader based credit polices for the Company. By evaluating different environmental conditions it set guidelines for credit evaluations. Mostly big-ticket files credit analysis is done

Business Control departmentThe legal documents, which are signed by the customers, are re-checked here. They also maintain the record of these documents. They handle the matters related to insurance of the asset such as arrangement of insurance, insurance claims etc.

Rental RecoveriesThe cases, which require special handling regarding recovery of overdue rentals, go to rental recoveries department. The recovery process is carried out by various means such as:

Repossession of vehicle Legal action By customer consent

Administration departmentThey handle all the office matters related with office administration such as office vehicle maintenance, utilities bills, rents of offices, renovation of offices, maintenance of office equipment, arrangement of inter branch tours etc. In short it can be said that it deal with all the general administration matters.

Human Resource departmentThis department involve in the activities such as planning of the human resource, development of the human resource, annual reviews for promotion, for employment made broad based policies, evaluate employees and nominate for different courses, arrange orientation for new employees, formalized job description, set employees packages etc.This department also set rules and regulation for the employees and employer or redefined them. Also it deals with the hiring and firing of the employees. In short we can say that it deals with all the affairs related with the employees of the company such as salaries, promotions, annual leaves, bonuses, employees in house training sessions etc.

Finance and Accounts departmentIt maintains company’s accounts records. It maintains the record of all the business transactions. It operates the company’s bank accounts and maintains the record of payments and receiving.

This department arranges internal audits. It also facilitates external audits by State Bank of Pakistan or by different audit agencies.

Treasury departmentThis department manages and arranges the financial resource for the company as and when required. The finance is required for the disbursement activities. It also manages the holding financial resources of the company. So the basic function of this department is the money management.On branch level it facilitate the account opening or provision of over draft. Also it handles the repayment of the loans, which are taken by the company.

Rental Collection departmentThis department involves in the activities like physically collecting the rentals on due dates and updates the records by feeding the date about the rentals collection. Branches send statement of deposits to this department and it is then feeded it in the computer and debt notes are generated.

Information System Department

1. Software development and data maintenance.This department is responsible for the development and continues up gradation of the information systems. On the basis of data generated at different locations this system generate required reports.The integrated computer system has the information about customers history, customer grading, contract information, rental repayment records, customer exposure, salary database etc.Presently it is working for connecting all the braches on line. Recently on very shorter scale they are developing software for different companies on their demand.

2. Hard ware sectionThey are responsible for the replacement of the hard ware of the computer also they repair if there is any fault occur in the hard ware of the computers.

Consumer Finance ServicesThis department gives household appliances on hire purchase basis to the individuals such as refrigerators, microwave ovens, computers, bikes etc. In the beginning they have provided this service to the employees of the multinational companies such as PIA, Engro chemicals etc. Companies gave undertaking that the rentals will be deducted form the salary of the employees and it will be paid to ORIX in one check. But now this service can also availed by the general public.

Auto leaseThey finance automobiles to individuals including businessmen; corporate employee and self employed professionals. The lease period is 3 to 5 years and insurance is included in the rentals. They provide different features of insurance such as the individual life insurance are also included in it.

Operating lease (Rentic Division)This department provides various types of assets on rental basis such as:

Power generators Air compressors Satellite equipment Delivery vans Luxury buses Transportation vehicles

ORIX has wider range of diesel and gas power generators. It gives them on short-term lease. It gives air compressors on lease to civil aviation. Satellite equipment is used for wide area computer networking it gives it to different companies and banks. Delivery vans are given on lease to different distribution companies on daily bases. Luxury buses are given on lease to different multinational companies. Transportation vehicles such as big containers and traulas are given on lease to different companies for moving their goods.For every type of asset there is separate asset manager. These asset managers are appointed by the companies or firms or business houses, which are expert in maintenance of these assets.

Benefits of operating lease

Off Balance Sheet FinancingAs the asset is returned to ORIX at the end of the contract, the transaction is a pure operating lease, therefore it remains off balance sheet thus improving the return on assets. No capital budgeting is required.

Lower RentalsAs the asset is not completely depreciated therefore it carries higher residual value, which results in lower rentals for the user as the financial costs are significantly reduced.

Value added comfortsOperating lease can bundle together various services required with the asset such as maintenance, operation, insurance and replacement of the asset in one value added package.

CustomizableThe package can be tailored for the requirements of your organization.

Resource allocation flexibilityOperating lease allows your business greater flexibility in terms of utilization of the capital and insulates your business against the risk associated with capital investments.Furthermore operating lease allows you to:

Complete solution as per user demand Hedge against technological obsolescence and inflation Asset without investment Better utilization of tax benefits Conservation of credit lines Time to concentrate on core business Take advantage of the lessor’s purchasing power

Historical successIn the recently closed financial year they got the historical success by achieving disbursement of Rs.5 billion. The major reasons for this success were availability of cheaper funds due to which they have low rates, they have offered new products in CFS and operating lease, they start providing factoring services and they have exploit new markets

Comparison with competitorsORIX is providing diversified financial services to its customers. They are providing corporate lease, auto lease, operating lease, consumer finance services, term finance certificates and hire purchase.They are providing much better rates in leasing as compared to their competitors because cheaper funds are available to them. It is a multinational company and has a good reputation in the financial market due to which they can get better funds in the local money market.They believe in providing personalized services to their customers. The person who generates business he has to build good business relations with the customers. Similar person deals with the customer from taking of the lease proposal to follow up so he is building a long-term relation with a customer. Also ORIX is providing doorstep services to its customers.

Critical Success FactorsToday OLP occupies a leading position in the leasing industry. The company’s success may be attributed to its:

Marketing expertise

Funding ability

Branch network

Technical ability based on the world wide experience of the ORIX group

FUTURE PLANS OF ORIX LEASING PAKISTAN LIMITEDPresently they have entered into a strategic alliance with United bank limited to introduce leasing business in previously untapped areas. As per the scheme ORIX will establish its counters in selected UBL branches in the cities where ORIX does not has its own offices. In the first phase such 5 counters will be established in Rahim Yar Khan, Bahawalpur, Sargodha, Sahiwal and Gujranwala. The operations will eventually be extended to other locations.Moreover ORIX plans to increase its business and profitability by introduction of new products, expanding the operating lease and CFS business etc.

ORIX Leasing Pakistan Limited Multan Branch

ORIX Leasing Pakistan Limited Multan Branch established in February 2001 on LMQ Road Trust Plaza.Multan Branch is offering three types of leasing.

1. Corporate Lease2. Auto Lease3. Hire Purchase

Corporate LeaseIn this lease the asset is leased in the name of the Company. In Corporate lease they are offering finance against these assets:

1. Automobiles2. Machinery3. Office equipment

In corporate lease there are two modes of leases:1. Direct Lease2. Sale and Lease back agreement

Direct lease is mostly of Automobiles and office equipment. In this case ORIX buys the asset to be leased directly from the vendor and then leases it to the lesse.In sale and lease back agreement they are giving mostly machinery. In this case ORIX lease on the cost of the machinery custom duties are berried by the customer. So customer purchase machinery himself and sell it to ORIX than from ORIX he leases it back.

Equipment selection and priceIn all cases, the lessee determines selection and price. Upon approval of a lease, ORIX purchases the equipment to the lessee’s specification, and pays the vendor in full when the equipment has been delivered and accepted by the lessee.

PaymentRental payments are usually due in advance. A deposit is usually required at inception of the lease contract. Lease can be structured on lessee requirement such as monthly or quarterly payments, for advance or arrears payment, equal or uneven payment.

Length of leaseThe minimum lease term is 3 years and this can be extended to five years depending on lessee’s requirements

Expiration of leaseAt the expiration of lease, several options are normally available to the lessee:

The equipment can be returned to ORIX The lease can be renewed on a year-to-year basis at a greatly reduced annual cost The lease may purchase the equipment at the residual value of the asset.

In corporate lease there is option that the asset either insured by ORIX or by the lessee. The interest rate and the deposit rate in corporate lease are set by negotiation with the lessee. The minimum down payment is 10%.

Auto Lease:Auto lease program was launched in January 1997 with all the cars dealers manufacturers through their authorized dealers in order to market individuals falls under three categories as follows:

1. Corporate Employee2. Self-Employed Person (Professional)3. Businessman

In auto lease brand new cars are leased to the individuals. Maximum leased period is 3 to 5 years. The insurance of the asset in this case is arranged by ORIX. Minimum down payment is 20% and minimum interest rate charged is usually from 19% to 23%.

Hire Purchase:Hire Purchase is same as lease the only difference is lease period, which is less than 3 years. In higher purchase automobiles, household durable is given on installment,

Honda Easy Purchase PlanORIX Leasing Pakistan Limited on 2nd July 2001 launched Honda Easy Purchase Plan with the cooperation of Atlas Honda in all eight cities where it has its branches.They are offering Honda CD 70 and Honda CG 125 with a minimum down payment of Rs. 25,000. Lease period is 1 to 3 years and this plan is offered to both salaried person and businessman.

Departments in Multan BranchThere are two departments in the Multan Branch.

1. Credit and Marketing department2. Accounts department

Credit and Marketing departmentIn credit and marketing department the designation of the working staff is credit and marketing officer. At presently only one person is working in this department other three persons are yet to be appointed.Credit and marketing department is responsible for achieving assigned targets and in developing business. Ensure recovery of over dues and maintenance of relevant records. Principal activities of the department include:

Business Development:Credit and marketing people strive to generate corporate clients for the company and define strategies to retain them.

Target Accomplishment:These people work as a team member to assist team leader in achieving the targets.

Follow Up:They collect and follow up rentals in order to assist Rental department in their operations.

Reporting:They prepare various reports and documents to submit them to concerned authorities for further proceedings.

Credit Approval:They coordinate with team leader for credit approval.The people working in the credit and marketing department identify the customer need for credit, carry out credit analysis, prepare detailed report on lessee’s financial position and submit it to higher-ups for approval. Involve in searching and developing new clients and manage good relationship with them. They try to contribute and meet targets as a part of a team. Interact with Rentals department for daily rental updates. Responsible for recovering rentals on due dates and overdue rentals as well. Prepare credit analysis report of lessee, complete lease execution documents for credit approval and contract execution. Submit lessee’s financial standing to top management for the credit approval.

Accounts departmentThe designation of the person working in accounts department is “Assistant Accounts”. At this time only one person is working in this time. The main responsibilities of the assistant account are as follows: Cash and cheques holding and preparation of relevant registers and statements Purchase of stationery for office use. Makes statement of deposit. Paper filling of contract and confidential files. Dealing in other branch expenses such as telephone, electricity, courier service, petrol

and hotel bills payment. Maintenance of contract papers.

Process of Lease

Process of lease consist of following steps:

Contact of customer for lease informationFirst of all the company in case of corporate lease or the individual in case of auto lease contacted the ORIX for getting information about the lease options and terms. Marketing and credit officer give this information to the customer. He gives them lease proposal in which terms of lease are mentioned about their selected lease option. In other case marketing and credit officer himself contacted the company or individual and give them the lease proposal.

Approval of Lease proposalIf the company or individual accepts the terms and conditions of the lease proposal they give the lease acceptance to ORIX.

Submission of the required documents by the customerMarketing and credit officer ask customer to submit the required documents for getting asset on lease which are as follows:

For an Employee1. Copy of National Identity Card2. Copy of recent Utility Bills (Residential) in his / her name3. Copy of last six months Bank Statement4. Copy of Ownership Documents or Rent Agreement of the residence5. Original / Copy of recent Pay slip6. A letter from employer confirming:-

Date of joining Designation Salary Package

For a Self-Employed Person (Professional), Like Doctors / Lawyer etc.

1. Copy of National Identity Card2. Copy of Ownership Documents or Rent agreement of the residence3. Any of the recent utility Bills (Residential)4. Copy of Professional Degree5. Copy of Membership Evidence in case the applicant is a member of any

professional organization6. Financial statement (audited) or Management Accounts, If audited Financial

Statement are not available.7. Copy of Last two years Tax Assessment Statements.8. Copy of Last Six month’s Bank Statement

For a Businessman (Individual)

1. Copy of National Identity Card2. Copy of Ownership Documents or Rent agreement of the residence3. Any of the recent utility Bills (Residential)4. Copy of Last two years Tax Assessment Statements.5. Copy of Last Six month’s Bank Statement6. Copy of Driving License

For a Business (Corporate)

1. Copy of National Identity Cards of all partners (if partnership)2. Copy of Last two years Tax Assessment Statements.3. Copy of last three years audited accounts (Balance Sheet, Profit & Loss Account)4. Copy of Last Six month’s Bank Statement5. Copy of Form “29”6. Copy of Form “A”7. Copy of Certificate of Incorporation8. Copy of Ownership Documents or Rent agreement

For Honda Easy Purchase Plan these documents are required

1. Copy of individuals NIC2. Copy of driving license3. Copy of last six months paid utility bills4. Two fresh snaps5. Copy of NIC of two guarantors6. Copy of last six months bank statements7. For salaried persons copy of their appointment letter and salary certificate.8. For businessmen copy of tax return of their last assessment.9. Bank manager’s certificate.10. If the business is on rent then their deed of rent or ownership documents.

Analysis of the credit worthiness of the customersAfter the submission of the documents by the customer credit worthiness of the customers is evaluated for giving them asset on lease.Individuals (employee) credit worthiness is evaluated from their salary slip and bank statements. From these documents they come to know the monthly income of the customer and deposited amount in the bank account.Individuals (businessman) credit worthiness is evaluated from the bank statements they gave from the bank statements they done the volume test to calculate their monthly average revenue. Also marketing and credit officer personally visited the customer’s business place to verify the information provided by the customer.Corporate customers credit worthiness is evaluated from the financial information provided by them. From their financial statements (balance sheet, income statements etc;) ratios analysis are conducted to measure the financial strength of their business.

Approval of the lease from ORIX:

Credit limit, which can approve by different persons, is as follows:Designation Credit LimitAssistant Manager 500,000Manager 1.5 millionSR. Manager 2.5 millionA.G.M 3.5 millionDirector marketing 5 millionManaging director 10 millionExecutive committee 30 millionBoard of Directors Above 30 million

Final procedures:After approval of the lease legal documents are prepared and signed by the lessee and lesser. Deposit is taken from the lessee and purchase order is issued to the vendor in case of direct lease. In case of sale and lease back first vendor issue sale invoice and cash receipt to the lessee, lessee gave these documents to ORIX and issue sale invoice to ORIX. ORIX then issue purchase order to lessee and leased the purchased asset to lessee. After this lessee rentals are started which can be in advance or in arrear.In corporate lease two types of files are prepared

1. Approval file2. Payment file

Approval fileIn approval file documents relating to credit evaluation and are kept.

Lease Application Form Summary lease report Annual Reports Lessee information sheet Volume test Bank statements Tax Returns Property documents Purchase certificate Checklist for lessee

Payment fileIn payment file all legal documents are kept such as lease contract, promissory note, acceptance receipt, undertaking indemnity for the use of the asset, for import, taxes, duties and other charges, for insurance premium, also it include guarantee and indemnity, execution slip, all rental receipts and all other memos related to the leased asset. In case of auto lease there is only payment file and all document are kept in it.

Future Plans of ORIX Leasing Pakistan Limited Multan Branch

In future they want to offer more lease options to its customers such as they want to offer operating lease and consumer finance services. For operating lease they intended to target textile sector in which they plan to provide power generators on lease there is a much potential in this sector. Also they plan to target pharmaceutical sector because lots of hospitals are establishing in the surrounding areas of Multan so they wanted to provide medical machinery on lease to them also they wanted to target doctors market for automobile lease which is presently dominated by Al-Falah financing.They want to provide consumer finance services to multinational companies in this area such as PARCO and CAPCO. They want to make contracts with them that ORIX will provide household appliances, automobiles etc on lease to their employees and the company will deduct rental form the salary of their employees and paid it to ORIX.Also Multan Branch always wants to remain ahead of their annual business targets set by the company. Multan office also planning to expand operation geographically to the surrounding areas i.e R.Y.K, Bahawalpur and other cities.

ORIX Leasing Pakistan Limited ... 1, Multan Branch Ground Floor, Trust Plaza LMQ Road, Multan Tel: 061- 4518431. Fax: 061-4580321