Group

Rental Solutions:

Advantages of Rentals for Point of Sale and CCTV

1. Income Tax Advantages: A rental is considered as an operating expanse and is therefore fully tax deductible.

2. VAT Implications: Savings in VAT are achieved due to the tax not being capitalize up from on the investment, but rather paid with each rental. The VAT on the rental is regarded as input tax and may be set off against any output collected.

3. Off-Balance sheet Financing: Rental agreements structured in terms of accounting code AC150 are not capitalized on the Balance Sheet, thus improving liquidity, profitability and solvency rations

4. Convenience: Savings in accounting costs. No requirement for fixed asset registers and/or records reflection capital and interest arising on financial leases.

5. Conservation of working capital: As no deposit is required, rentals offer a lower cost entry level, therefore reducing the use of working capital.

6. Diversification of Financial Resources: Rental facilities offer the end-user a new source of finance, existing credit facilities from the bank sector are therefore not affected.

7. Obsolescence Hedge: Rapid technological obsolescence place a burden on the owner of HI-Tech equipment. With rental agreements the end-user may upgrade the equipment at any stage.

8. Flexibility: The restraints of the Usury Act do not affect the rental agreement. Payments structures are thus structured according to the economic life-span of the equipment and the end-user's budget constraints.

9. Inflation Hedge: The flexible nature of rental agreements, offer a hedge against inflation. Longer periods, no deposits and annual escalations result in a lower entry level cost and allows the user to pay future rentals with inflated money.