Operating LeasingFleet Leasing

19/11/2009 2

Content

• Leasing• Operating• Financial

• Fleet leasing• Add-In products

• Comparative Advantages• Administration• Financial• Comparison

• PT. Surya NordFinans• Financial Standing

• Clients

• Sample Documentation

19/11/2009 3

Leasing

• Operating Leasing in Indonesia is handled as a rental.

• Depreciation made in the books of the Lessor.

• No transfer of title.

• Operating expenses as;• Insurance,• Road-tax,• Maintenance and repairs,• Replacement vehicle

are included in the Lease Fee.

19/11/2009 4

Leasing

• Financial Leasing, in Indonesia, is the equivalent of Hire Purchase in other countries.

• Title is transferred to the user on delivery.

• Operating expenses are for the user.

• Depreciation of the asset is made by the Lessee.

• Collection issues are prevalent.

19/11/2009 5

Fleet Leasing

• A Group of Vehicles – a Fleet – is provided to the Lessee.

• The composition of Brands and Models is determined by the Lessee.

• The Fleet is serviced and maintained by the Lessor.

• No other charges than Petrol and direct driving charges (driver) are paid by the Lessee.

• The Lessee undertakes not handle the vehicle with ‘normal care’

• The Lessee is buying ‘Transportation’, not a vehicle.

19/11/2009 6

Add-In Products

• Insurance – Paid and administered by the Lessor.

• Road Tax – Paid and administered by the Lessor.

• Normal Service and Maintenance - Paid and administered by the Lessor.

• Tyres – Included in Lease Fee.

• Replacement Vehicle - Paid and administered by the Lessor.

19/11/2009 7

Comparative Advantages

• Administration

• Financial

• Comparison

19/11/2009 8

Administration

• Simple Administration• One invoice per month• Service and maintenance handled by the Lessor• Insurance and Road Tax handled by Lessor

• No staff time for ‘vehicle issues’.

• Outside parties / tax inspectors do not discuss depreciation issues or other matter pertaining to assets as it is Operating Expenses for the company.

• Expertise with respect to vehicle values (at sale and purchase) provided by the Lessor.

• Timely transportation ensured for the user.

19/11/2009 9

Financial

• Fixed price for the duration of the Lease simplifies budgets and planning.

• Normal repairs and maintenance included in the price.

• No significant cash outlay up-front.• Tax issues resolved from the beginning.• Utilisation of ‘untaxed money’ for

payment of Lease Fee.

19/11/2009 10

Comparison

• A purchase of a vehicle drains cash flow from the corporation.

• A Toyota Kijang Innova costs IDR 182.4 million to buy.• With the assumption of:

• Lease Interest rate of 18.5%,• Three year utilisation,• One lease payment as deposit to Lessor,• User’s Pay back time requirement three and a half (3.5) years;

• Net saving, on a Net Present Value calculation, is IDR 81.5 million over the period.

19/11/2009 11

Company PT. CompanyProduct Toyota Kijang Innva 2.0 G Man

NPV Purchase IDR 142,855,266 SavingNPV Lease IDR 61,300,454 IDR 81,554,812 57.09%Lease Fee (excluding VAT) IDR 5,700,000

Lease Interest 18.50%

Tenor 3.0 Years1 Monthly Lease Payment 36 Payments

Deposit 1 PaymentsIDR 6,271,000 incl VAT 10 %

Residual Value 109,440,000.00

IncludingInsurance xMaintenance x IDR 4,377,600 per yearTyres xRoad Tax xReplacement Vehicle x

Company PT. Company

Product Toyota Kijang Innva 2.0 G Man

Lease Fee (excluding VAT) IDR 5,700,000

Lease Interest 18.50%

Tenor 3.0 Years1 Monthly Lease Payment 36 Payments

Deposit 1 PaymentsIDR 6,271,000 incl VAT 10 %

Residual Value 109,440,000.00

IncludingInsurance xMaintenance xTyres xRoad Tax xReplacement Vehicle x

19/11/2009 12

PT. Surya NordFinans

• PT. Surya NordFinans was acquired by the Surya Group in 2001.

• NordFinans is concentrating its financing activities on Operating Leasing of;• Vehicles (Fleet Leasing)• IT Equipment and Software

• Client base is primarily international corporations

19/11/2009 13

Clients

• PT. SKF Indonesia

• PT. Chubb Indonesia

• PT. ABB Transmission and Distribution

• PT. Luxindo Raya

• PT. Roche Indonesia

• PT. Eka Dharma (Volvo)

• PT. Maersk Indonesia

• Crown Relocation

• Elof Hansson Indonesia

19/11/2009 14

Sample Documentation

•Lease Agreement

•Schedules•Insurance•Asset Specification •Lease Schedule•Delivery Confirmation

•Invoice sample

19/11/2009 15

Lease Agreement - 1

19/11/2009 16

Lease Agreement - 2

19/11/2009 17

Lease Agreement - 3

19/11/2009 18

Insurance - 1

19/11/2009 19

Insurance - 2

19/11/2009 20

Insurance - 3

19/11/2009 21

Schedule 2 – Asset Description

19/11/2009 22

Schedule 3 – Payment Schedule

19/11/2009 23

Schedule 4 – Confirmation by Lessee

19/11/2009 24

Sample Invoice