FINTELLIGENCE - Vivro - Issue 7.pdf · 2016-09-20 · to uplift this sector, SEBI introduced the Real Estate Investment Trusts regulations in 2014. Globally, REITs have been successful

FINTELLIGENCE ISSUE 7 | SEPTEMBER - OCTOBER 2016

FOREWORD

The Indian Realty sector has been a major contributor to the growth and is considered to be the backbone of the economy. It is also one of the preferred sectors for foreign investments, as India is one of the countries, globally, that offers affordable prime spaces with high growth potential. However, the sector has seen severe liquidity shortage in the past few years primarily on account of a lack of domestic demand – especially in the commercial space, and hence an over-supply of inventory. In a move to uplift this sector, SEBI introduced the Real Estate Investment Trusts regulations in 2014. Globally, REITs have been successful in channelizing investments into the Real estate sector in a systematic manner thereby easing liquidity pressures on developers and providing them an exit mechanism to deploy their capital in other projects and create assets. Well-structured and valued REITs will provide good investment opportunities to people as well as assist developers in funding their projects and ease out liquidity pressures.

Benjamin Franklin rightly said, “A Penny saved is a Penny gained”. Accordingly, saving and channelizing your wealth is just as important as building it. A well-structured investment plan decreases the risk of loss in savings & capital and increases the probability of achieving long term goals. Efficient financial planning considers your investment goals and your risk appetite and aims to align them with your investments to achieve better cash flow management, enhance security and to generate optimum returns in a considered manner. At Vivro, we assist our Wealth Management clients prepare and plan their personal finances

with the objective of maximizing and protecting the wealth of our clients after understanding their goals and risk ability. In this issue we present to you some of the guidelines to effective financial planning which can be useful in effectively and efficiently planning your finances. Someone has rightly said that you can either tell your money what to do, or the lack of it will always end up managing you.

Companies Act 2013 brought about a paradigm shift in the Indian Corporate Environment – clarifying several positions of the law while at the same time adding onto confusion in certain sections in comparison to the Companies Act, 1956. Loans to Directors and Subsidiaries as well as Loans and Investments codified under sections 185 and 186 respectively were subject matters of keen discussions and representations to the government. We have analysed the position of the law, as it stands today and have presented our findings in this issue.

The stress in the Banking sector seems to be one of the biggest factors weighing down our economy. The RBI, in its role of the regulator has brought out several regulations aimed to assist banks resolve NPAs and clean-up their balance sheets. The Scheme for Sustainable Structuring of Stressed Assets is the latest regulation introduced by the RBI in June 2016 which enables banks deal with borrowers who require deep financial restructuring. In our article entitled “S4A – A New Tool for Financial Restructuring” we have analysed these regulations.

We are happy to release our first anniversary publication of Fintelligence, for the month of

September – October, 2016. We hope you enjoy this edition of Fintelligence. Please write back to us on [email protected] with your valuable feedback and comments.

VIVEK VAISHNAV ROSHAN VAISHNAV

TABLE OFCONTENTS

Real Estate Investment Trusts - A Fillip to the Real Estate Sector 05

A Guide to Successful Financial Planning 10

Loans and Investments in Companies Act, 2013 - Unraveling the Perplexity 15

S4A - A New Tool for Financial Restructuring 19

About Vivro 25

IntroductionReal Estate sector has been a major contributor to the country’s GDP and is considered to be the backbone of the Indian Economy. It is worthwhile to note that this sector has emerged as the fifth largest destination of foreign investments. Several steps have been taken to uplift the sector that is riddled with liquidity pressures and growing unsold inventory. The Securities and Exchange Board of India (SEBI) took a remarkable step to promote the sector by clearing the guidelines for the Real Estate Investment Trusts (REITs) in September, 2014.

REITs today are highly successful and beneficial in about 20 countries of the world over, in respect of providing less risky investment options in real estate to small and big investors, regular and dependable income to the unit holders, drawing massive FDI in the real estate sector of the specified country, providing exit avenue and liquidity to the cash-strapped property developers, and huge contribution to the national GDP of the mentioned country. According to Cushman & Wakefield, the REIT market of India has immense potential to emerge out as one of the top five largest markets in Asia by market capitalization.

What is a REIT?A Real Estate Investment Trust (REIT) is a trust-like company or organization which owns, and in most cases operates income-producing real estate assets, and most of the earnings of which are distributed to its shareholders regularly as dividends. REITs generally get special tax treatment, and essentially deal in the commercial real estate assets such as office buildings, commercial and residential buildings and apartments, hospitals, shopping malls and complexes, hotels and resorts, cinema halls and multiplexes, warehouses, etc.

Investment in a listed REIT is quite like investing in a mutual fund. The listed REIT raises money from a pool of investors and utilizes the same for buying income-producing real estate assets, to draw rental and capital gains regularly. Most of the gains are then distributed to the unit holders or investors of the REIT in form of dividends. Thus, REITs reliably facilitate investors to acquire a diverse portfolio of real estate assets, or easy liquidity for their completed real estate projects, in a rather tax-efficient way.

Registration and Structure of REITsThe REIT Regulations require that before carrying out any activity, a REIT shall obtain a registration from SEBI in a manner and by payment of such fees prescribed. A REIT requires to be set up as a Trust and the instrument of Trust shall be in the form of a deed duly registered in India under the provisions of the Registration Act, 1908. The trust

REAL ESTATE INVESTMENT TRUSTSA FILLIP TO THE REAL ESTATE SECTOR

05 REAL ESTATE INVESTMENT TRUSTS - A FILLIP TO THE REAL ESTATE SECTOR

REAL ESTATE INVESTMENT TRUSTS - A FILLIP TO THE REAL ESTATE SECTOR 06

deed should have its main objective as undertaking the activity of a REIT in accordance with the REIT Regulations and shall include the responsibilities of the Trustees.

Structure of a REIT

A REIT shall have the following separate entities and is guided as under:

Entity Particulars

Sponsor • Number: Maximum 3 sponsors, each holding atleast 5% of the number of units of the REIT on post-initial offer basis;

• Networth: INR 100 crores or more on a collective basis and not less than INR 20 crores individually;

• Lock In Period: A minimum of 25% for 3 years from the date of listing, 1 year for units exceeding 25% and col-lectively hold 15% thereafter throughout the life of the REIT;

• Experience: 5 or more years’ of experience in development of real estate or fund management in the real estate industry. A sponsor who is also a developer should have at least 2 projects completed in order to be eligible.

Manager • Networth: INR 10 crores or more in case of corporate/company;

• Net Tangible Assets: INR 10 crore or more in case of a LLP;

• Experience: 5 or more years in fund management or advisory services;

• Directors: Half or more of its directors/members as independent Directors/Members;

• Personnel: 2 or more personnel, each having 5 or more years’ experience in fund management/ advisory/ property services

The Manager shall make investment decisions with respect to underlying assets of REIT and shall appoint, in consul-tation with trustee, valuer, auditor, registrar and transfer agent, merchant banker, custodian and any other intermedi-ary or service provider for managing assets of REIT or for offer and listing of its units.

REIT TRUSTEE

SPONSOR CONTRIBUTION

INVESTMENT

INVESTMENT MANAGEMENT

AGREEMENT

DISTRIBUTIONVALUATION

MANAGER

SPONSORS

INVESTORSVALUER

Entity Particulars

Trustee • Registered with SEBI (Debenture Trustees) Regulations, 1993 and is not an associate of the Sponsor(s)/Manager;

• Hold assets of REIT in trust for the benefit of unit holders in accordance with the trust deed and these regulations;

• Oversee activities of the manager in the interest of unit holders and ensure that manager complies with reporting and disclosure requirements.

Major Highlights of REIT Regulations

Parameters Guidelines

Structure To be set up as a Trust, registered with SEBI

Initial Offer of Units Only through Public Issue

Listing Mandatory

Offer Size REIT assets: INR 500 crore at the time of public offering, Maximum Offer Size: INR 250 Crores, Minimum Float: 25%

Asset Class Rent-yielding assets (office, retail, hospitality, warehouses, conference centers, etc.)

Trading Lot INR 1 Lakh

Minimum Investment by an Investor

INR 2 Lakhs per Investor; Minimum 200 public unit holders at all times.

Investment Entity REIT shall invest in commercial real estate assets, either directly or through Special Purpose Vehicles (SPVs). In such SPVs, a REIT shall hold controlling interest and not less than 50% of the equity share capital or interest. Further, such SPVs shall hold not less than 80% of its assets directly in properties and shall not invest in other SPVs.

A REIT shall invest in at least 2 projects with not more than 60% of value of assets invested in one project.

Sale of Asset If REIT or SPV proposes to reinvest sale proceeds, if any, into another property, it shall not be required to distribute any sale proceeds from such sale to the unit holders;

If REIT or SPV proposes not to invest the sales proceeds made into any other property, it shall be required to distribute the same as mentioned above.

Borrowings and Deferred Payments

A maximum of 49% of the value of REIT assets. Mandatory credit rating and investor approval above 25%

Related Party Transactions

Allowed on an arm’s-length basis

Net Asset Value (NAV) Declaration

Twice a year To be in line with international valuation standards and valuation standards as specified by ICAI for valuation of real estate.

Income Restrictions A minimum of 75% of the revenue of the REIT and the SPV, except gains arising from the disposal of prop-erties, should come from rental, leasing and letting or any other income incidental to the leasing of assets.

Income Distribution 90% of the net distributable cash flow is to be distributed among the unit holders not less than once every six months.


Investments and Asset Restrictions

REIT

UPTO 20% ATLEAST 80%

Completed and Rent Generating

Real Estate ProjectsOthers

Investment through an SPV

Direct Investment in Assets

Controlling interest of atleast 50%

Minimum 2 completed and income/rent generating projects with Maximum 60%

in a project

• Mortgage Backed Securities

• Listed Equity Shares of RE companies,

• Unutilised Floor Space Index, Transferable Development Rights,

• Govt. Securities, Debt of RE (other than that of SPV)

• Under Construction Projects: To be held for atleast 3 years after completion

• Completed but not generating income/rent

• Contiguous land in case of stage-wise project implementation

Maximum 20% of REIT Assets

Maximum 10% of REIT Value

Foreign Investment in REITThe Reserve Bank of India has notified the most awaited and crucial regulations enabling foreign investments under the automatic route in REIT and other entities regulated by the Securities and Exchange Control Board of India (“SEBI”) or any other authority designated for such purpose.

Any person resident outside India (other than an individual who is citizen of or any other entity which is registered/incorporated in Pakistan or Bangladesh), including a Securities Exchange Board of India (SEBI) registered FPI or a NRI is now permitted to invest in units of REIT. As the units of the REIT would be listed on stock exchanges, they can be traded subject to the guidelines and rules issued by the stock exchanges.

Applicability of ECB Policy and Issuance of Rupee Denominated Bonds OverseasREITs are recognized as an eligible borrower under the ECB framework of Long term foreign currency

denominated bonds and Indian Rupee Denominated bonds having a minimum maturity of five years. The issuers can raise up to $750 million under automatic approval. The proceeds can be used for all purposes barring real estate activities other than for development of affordable housing projects, investing in capital market and using the proceeds for equity investment domestically, purchase of land and activities prohibited as per the foreign direct investment (FDI) guidelines.

Tax ProvisionsThe Finance (No.2) Act, 2014 has introduced a special taxation regime for taxation of REITs. Certain provisions were amended by the Finance Act 2015 and thereafter certain clarifications were issued through the Union Budget FY 17 which made the REIT structure tax efficient. The provisions are summarized hereunder:

REAL ESTATE INVESTMENT TRUSTS - A FILLIP TO THE REAL ESTATE SECTOR 08

Summary of Tax Provisions

Nature of Income REIT Unit Holder SPV

Interest from SPV Exempt Taxable as Interest Income• Subject to Withholding tax by

REIT of 5% for NRIs and 10% for others. 20% in absence of PAN.

Allowed as a deduction

Dividend Exempt Exempt Exempted from Dividend Distribution Tax

Capital gains earned on sale of SPV/ properties held directly by REITs

Tax at 20% or 30% depending on the period of holding

Exempt Not Applicable

Income from renting/ leasing/ letting out any real estate asset owned directly by REIT

Exempt 10% for residents and at applicable rates for non-residents

Not Applicable

Capital gains earned on sale of REITs by the unit holder

Not Applicable If the sale of units is on the exchange*,

Long Term: Exempt (for more than 36 months)

Short Term: 15%

If the sale of units is off the exchange,

Long Term: 20% (for more than 36 months)

Short Term: At applicable rates

*Sale on exchange will be subjected to STT additionally.

Not Applicable

Other Income Tax at 30% Exempt Not Applicable

Note: The rates are excluding surcharge and education cess

Two issues which need to be addressed to see a rush of REIT listings in the Indian market are exemption from capital gains tax and state governments’ stamp duty while transferring assets to REIT’s holding company.

Proposed Amendments On July 18, 2016, SEBI has put up a Consultation Paper for amendments to the SEBI (Real Estate Investment Trusts Regulations, 2014). The major proposals include:

• Allowing REITs to invest 20% corpus in under-construction assets as against 10% currently;

• Raising the number of REIT sponsors to five, which is now capped at three;

• Clearing related-party transactions;

• Removal of restrictions on SPV to invest in other SPVs holding the assets;

• The number of shareholders needed to pass a resolution.

ConclusionREITs have been in existence in developed countries and have been accepted well since several years. It has definitely emerged as an attractive alternative investment instrument in the Indian financial markets. While the Indian regime is aimed to provide an organized market for retail investors and a professionally managed ecosystem, it has also ensured to provide an easy entry and exit to the investors by making it mandatory to list the REITs on recognized stock exchanges. The fact that REITs may be at par with equity shares makes it a liquid instrument which is investor friendly.

At a time when the realty sector is struggling for alternate avenues of funding and private players are sourcing institutional capital, enabling REITs to operate with ease is expected to act as a key enabler for capital markets in the country.


Until the middle part of the twentieth century, the whole economic system was run on the basis of classical economic principles and economic doctrines associated with the names of Adam Smith, David Ricardo, T R Malthus, J B Say, Alfred Marshall etc. According to them, the function of money was to act as a medium of exchange – a transaction function. John Maynard Keynes, in his book named ‘General Theory of Employment, Interest and Money’ in 1936, created a revolution in economic history and created a foundation on which modern economic principles and thinking was established. According to Keynes the demand for money arises due to three motives - transaction motive, precautionary motive and speculative motive. While the transaction motive refers to matters pertaining to operating incomes and operating expenses or household expenditures, precautionary motive refers to the use of money saved in times of uncertainty and emergency while speculative motive suggests that money creates a desire to save and speculate to earn based on price movements in the market. Precautionary and Speculative motives induce people to save.

As per a publication of the Reserve Bank of India titled, the “Handbook of Statistics on Indian Economy” published on September 16, 2015 the Gross Domestic Savings (at current prices) in 2013-14 was INR 34,759.35 Billion out of which the household sector contributed INR 20,651.79 Billion which accounts

for close to 60% of the total Gross Domestic Savings of the country. As a percentage of GDP the Gross Domestic Savings were 31.1% in 2014 as per data published by the World Bank.

It is an established fact that savings are important to the economy as they act as growth catalysts that provides capital to the country to carry out infrastructure development which leads to employment creation and in turn creates more savings and investments. For the people who are saving, their savings as Keynes rightly pointed out contributes to capital creation as well as enables them to invest for precautions and speculation. It is pertinent to note here that if savings are channelized well into the right investment avenues it decreases the risk of loss in savings and capital and increases the probability of achieving long term goals and aspirations. A well thought out financial plan enables a person to manage such risks and returns. There is no concrete methodology or defined manner to financial planning, but there are guidelines which when followed appropriately can assist in giving direction to savings in a manner that is aligned to a person’s risks and perceived goals.

In this article we shall focus on these Guidelines to Financial Planning.

A GUIDE TO SUCCESSFUL FINANCIAL PLANNING

A GUIDE TO SUCCESSFUL FINANCIAL PLANNING 10

11 A GUIDE TO SUCCESSFUL FINANCIAL PLANNING

Evaluate your Networth and Investible SurplusEvery investor who begins his/her investment journey aspires to invest large sums of money over his/her earnings period in life. However, it is prudent to understand that one must not invest beyond one’s means. It is important to know your Networth and

investible surplus before drawing up a successful financial plan. An estimate of investible surplus may be done by considering various factors such as available cash, estimated income during the year, planned expenses, unplanned expenses, committed

investments, emergency funds etc. It is best not to be overly ambitious while drawing up your investible surplus so that you don’t fall within the trap of over investment.

Determine your Investment GoalsAfter understanding what your investible surplus and net worth are, it is important to define the purpose for which you would like to make investments and save for the future. Investment goals vary at different ages of a person’s life. In the beginning people save to satisfy personal ambitions of owning your own house, car or even higher education. As life progresses, goals keep changing and it is important to revisit these goals and keep rebalancing your investment plan. For

example, when you have children you plan for their education, holidays, marriage etc. Eventually a person plans for retirement from the savings available and the income earning period remaining in his/her life cycle. With changing goals, the avenues of investment also change on the basis of changing risk appetite.

Investible Surplus

Particulars Remarks Amount

Monthly Incomes Incomes from business, salary, etc.

xxxx

Less: Monthly expenses

Household expenses, children’s expenses, planned investments etc.

(xxxx)

Less: Contingency funds

Funds kept aside for unplanned contingencies. These may be cash or cash substitutes such as liquid funds, short term debt funds etc.

(xxxx)

Investible Surplus XXXX

Networth

Particulars Remarks Amount

Total Assets Fair value of Cash, Investments, Properties, Cars, Collectibles, Jewellery etc

xxxx

Less: Total Liabilities

Outstanding loans, Insurance premiums, credit card dues etc.

(xxxx)

Estimated Networth XXXX


Measure your Risk AppetiteThe ability to take risks affects a person’s decision making in choosing the right investment avenues. Risk appetite can be broken into 2 parts – Risk Capacity and Risk Tolerance. Risk tolerance, how much risk a person chooses to take, is a psychological attribute of an individual. Risk capacity, how much risk a person can afford to take, is a financial attribute of an individual’s circumstances. In preparing a financial plan it is important to understand your risk tolerance as well as your risk capacity. The question here is – is this determination of risk appetite arbitrary? The answer is no. There are tools available which assist the individual as well as financial planners in understanding an individual’s risk appetite. Several financial planners have also developed their own models and mechanisms which assist in estimating an individual’s risk appetite. Higher the risk appetite the higher risk a person may be willing

to take in planning investments and vice versa. While it can be considered a general perception, there is no guarantee that a young person will always have a higher risk appetite than a much older person. Only by appropriately estimating the risk profile and appetite of a person can suitable investment avenues be determined to align a person’s investments with his goals and aspirations considering that person’s risk profile and appetite.

Research or Seek AdviceThere are several avenues in which investments can be structured in a financial plan. As discussed earlier, these planned investments should be in line with your overall risk appetite and defined goals. Avenues of investment can be research through newspapers, public announcements, certain websites on the internet etc. However, with the ever increasing choices and avenues for investment it can get complicated and confusing in selecting the best suited investment avenues to suit your financial plan. It

is prudent to consult an investment advisor or wealth advisor who specialises in planning goal based investments. While you may incur a small fee for such advice and assistance, it shall save you the risk of picking investment avenues which may not be suited to your needs.

Understand the Investment Assets ClassesThere are several asset classes in which investments can be structured based on perceived risks, planned time horizon and planned goals. Every asset class in turn has inherent characteristics, their own measures of risk and optimum time horizons. In terms of time horizons investments are categorised into Short Term, Medium Term and Long Term Investments. In terms of Risks one may categorise investments that are Safe, Cautious, Moderate and Aggressive – with probably different degrees to each categorisation. Some of the asset classes available for investment are:

EQUITY DEBT GOLD REAL ESTATE

• Equity Shares

• Equity Oriented Mutual Funds

• Equity Oriented AIF and PMS schemes

• Corporate Non-Convertible Debentures

• Corporate Fixed Deposits

• Bank Fixed Deposits

• Debt Oriented Mutual Funds

• Debt Oriented AIF and PMS schemes

• Physical Gold

• Gold Bonds

• Gold ETFs

• Land

• Residential Real Estate

• Commercial Real Estate

• REITs (when applicable)

The four basic asset classes listed above have varied risk and return characteristics.

When to buy and equity share and at what price is really the fundamental question in equity investing. Experts carry out considerable fundamental and technical research before picking the right stock at the

right price to fit well into their overall portfolio. Equity shares carry the risk of being over valued when bought, if not researched well. While the returns that can be expected from Equity Shares may be high when the markets look good, it carries the risk of fall in prices below the acquisition cost in times when the market crashes either on account of correction in prices, profit booking or uncertain domestic and global events.

A person may not understand equity, but this should not stop that individual from investing in Equity Mutual Funds, as long as an individual understands that the fund manager will deploy the money in the stock market and the investment will move with the market. Fund Managers are experts who invest in Equity Shares of listed companies after conducting a lot of research. They are also expected to generate reasonable returns for their investors and outperform against the benchmarks of schemes.

Debt based investments include a variety of investments. Bank Fixed Deposit is the most traditional form of investment for any individual in India. Over the years banks have given a reasonable return to investors

on their fixed deposits with the safety of capital. With the evolution of the financial markets in India, several newer avenues of investments have emerged which also have the characteristics of having a defined yield and safety of capital. Debt mutual funds such as Liquid Mutual Funds, Ultra Short Term Funds, Short Term Funds, Medium and Long term Funds are often used by investors who have a defined duration of investment of 1 – 3 years and do not have the risk appetite to invest into Equity. Several companies also have their own fixed deposit scheme as well as public issue and privately placed Non-Convertible Debentures which are often attractively priced and offer options of tenures which may be suitable to investors.

Gold is the most traditional form of investment, especially for Indians. It is seen as an investment avenue that guards against inflation and is liquid in nature as it can be sold easily. Investment in Gold can be made

by buying physical Gold, Gold ETFs and Gold Bonds. Sovereign gold bonds, have taken the sheen off gold ETFs recently.

Real Estate Investments in Land, Residential or Commercial real estate is another traditional form of investment avenues. It has the advantage of physical possession of an asset that is not intangible and is a

scare commodity as the available land mass is limited. Accordingly, good investments in land or constructed real estate often give phenomenal returns in comparison to other asset classes. Lack of liquidity is the major drawback of investing in real estate.

Diversification and InflationIt is understood now that a financial plan can be constructed after estimating Networth and Investible Surplus, considering the risk appetite of an individual, determining goals and understanding the various asset classes available for planning investments. The most important factor to understand is that all asset classes have individual characteristics and risk and reward patterns. A diversified portfolio cushions the risk and generates stable returns. There is an old saying “Don’t put all your eggs in one basket”. In planning investments as well it is important to determine short term needs and long term needs. An important consideration to be made when making a financial plan is inflation.

Inflation affects everyone and its impact on the household budget is widely understood. However, very few investors understand the impact of inflation on their investments. Even a modest 5% annual inflation can widen the gap between your nominal and real income to almost 20% in just five years. The post-tax returns from a bank deposit, which offers 8.5% interest, will not be able to match the rise in prices. This is why planners don’t recommend low-yield debt investments for the long term. Instead, they advise clients to take at least 15-20% exposure to equities to be able to beat inflation. Inflation should especially be considered while planning for long-term goals like retirement and children’s education.

Insurance to protect against unforeseen circumstancesEventualities can play havoc with your finances. A medical emergency or death of the family’s breadwinner can add considerable financial stress. The only way to deal with these mishaps is to be protected adequately. Insurance is a traditional and an effective way to safeguard against the unexpected. One should consider taking an appropriate term life insurance policy, health insurance and personal accident cover to safeguard against unforeseen circumstances.

13 A GUIDE TO SUCCESSFUL FINANCIAL PLANNING

Buffer or Contingency FundIt is advisable that one should have a buffer fund to take care of financial emergencies. This contingency fund should be large enough to meet at least three months’ worth of household expenses, including loan repayment and insurance premium obligations. An emergency fund should be easily accessible and its value should not be subject to fluctuations.

Monitor and Rebalance your InvestmentsOnce invested it is important to monitor your portfolio periodically. Not to say that one should look at their investments on a daily or weekly basis but a defined period of monitoring your portfolio will assist in understanding your investment position and realign it in changing life circumstances. In special scenarios it is important to review

your portfolio such as marriage, birth of a child, increase in earnings, windfall gains, sudden unexpected market movements and even when loans are taken as well as when they near maturity.

One should also be prepared to face a situation of a possible loss and learn when to exit to minimise the wounds. Many investors believe that if they select a good investment and time their moves well, it is enough. However, the decision to sell, especially at a loss, is not as easy. Behavioural economists contend that our refusal to sell an investment stems from our aversion to loss. If our investment turns out to be good, we are happy to sell and feel good about the gains. However, booking a loss is painful, so we tend to postpone the regret we feel at having made the wrong decision.

Conclusion A Penny Saved is a Penny Gained, a popular saying by none other than Benjamin Franklin – one of the founding fathers of the United States. In our work we have goals and aspire to excel in our field to achieve success. In the same way, in our personal lives we have goals to achieve a sense of personal success for ourselves and our family. One must note that a goal without a plan is merely a wish and wishes don’t always come true. Financial Planning is a means to translate your wishes into reality by saving and investing to meet your long term goals and objectives in your professional and personal life. At Vivro, we offer our wealth management clients our services to enable them to get one step closer to translate their wishes into goals and their savings into investments well-structured to meet these goals. We understand their needs and risk appetite and deliver solutions to suit their requirements. In delivering our financial planning solutions we always follow the maxim – “What is right for the client, is right for us.”


IntroductionThe Companies Act, 2013 (“2013 Act”) brought about a paradigm shift in the Indian Corporate environment, replacing the 58 year old Companies Act, 1956 (“1956 Act”). The intention of replacing the Companies Act, 1956 was to improve corporate governance, simplify regulations, strengthen the interests of minority investors and evolve an Act suited to the present business environment and foreign best practices.

The 2013 Act has been implemented in a phased manner, giving room to Indian companies to align themselves with the new provisions. As on today the 2013 Act is substantially implemented and the National Company Law Tribunal (NCLT) has also been constituted.

An important set of sections which have a far reaching effect on the day to day operations of a company are related to Loans and Advances which are coded in section 185 and 186. In this article we shall analyze transactions to which these sections are applicable, significant changes from 1956 Act and clarifications brought about by Rules notified and changes proposed by Amendment Bill 2016 to make these sections business friendly and practical.

Section – 2013 Act Corresponding sections of the 1956 Act

Transactions Covered Date of Notification in the Official Gazette

185 295 Loans to Directors and Subsidiaries

12 September 2013

186 372A Loans and Investments by Companies

1 April 2014

LOANS AND INVESTMENTS IN COMPANIES ACT, 2013 – UNRAVELING THE PERPLEXITY

15 LOANS AND INVESTMENTS IN COMPANIES ACT, 2013 - UNRAVELING THE PERPLEXITY

Loans to Directors and SubsidiariesProvisions of 1956 Act Under the 1956 Act, the provisions pertaining to loans to directors were governed under Section 295. The provision stated that a public limited company could not advance loans to directors or provide guarantees for a loan taken

by another company in which the director of the lending company was interested, either directly or indirectly through relatives, unless the requisite permission of the Central Government was taken. The provisions under section

LOANS AND INVESTMENTS IN COMPANIES ACT, 2013 - UNRAVELING THE PERPLEXITY 16

295 were however not applicable to loans advanced or guarantees given by private limited companies as well as loans given by a holding company to its “subsidiary company” or guarantees given by a holding company for loans availed by its “subsidiary company”. There was also no distinction between a loan and a deposit. The Companies Rules and Guidelines of the Ministry of Corporate Affairs further provided that loans extended to directors or their relatives were to be subjected at a rate of interest not less than 4 percent above the prevailing bank rate (standard rate made public under Section 49 of the Reserve Bank of India Act, 1934) with an overall limit of 25 times the gross salary drawn in the preceding 6 months prior to the making the application for approval of such loans or guarantees to the Government .

Provisions 2013 Act Section 185 of the 2013 Act was notified on 12th September 2013 along with 97 other sections of the 2013 Act. The drafting of this section was prohibitive in nature. It prohibited company from directly or indirectly, advancing any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person. No exemptions were carved out for private

limited companies or subsidiary companies and it applied to public limited companies and private limited companies. In effect, a company be it private or public limited, was restricted from advancing a loan, having a book debt or providing a guarantee or security to the following persons:

(i) Any Director; (ii) Any Director of a Holding Company of the Company that is lending (iii) Any Partner or Relative of any such Directors; (iv) Any Firm in which any such Director or Relative is a partner; (v) Any Private Company of which any such Director is a Director or Member of the Company that is lending; (vi) Any Body Corporate at a general meeting of which not less than 25% of total voting power may be exercised individually or jointly by any such Director(s) of the Company that is lending; (vii) Any Body Corporate, the Board of Directors of which is controlled by any of the Director(s) of the Company that is lending.

The provisions of this section were particularly harsh for Private Limited Companies and Subsidiary Companies. Subsidiary Companies generally rely on their holding company for financial assistance or guarantees as security for loans - which was prohibited by virtue of this section. Several representations made to government prompted it to bring in relaxations through circulars. The table below gives a perspective on the evolution of the various transactions covered under section 185:

Evolution of Section 185

Type of Transaction by 1956 Act Original Section 185 of 2013 Act

Circular GSR 464 dated June 5,2015

Amendment Act 2015

Final Position

Private limited company

Loan / guarantee / security to Director

Yes No Yes Ref conditions Note-1

Yes Ref conditions Note-1

Loan / guarantee / security to person in whom Director is interested

Yes No Yes Ref conditions Note-1

Yes Ref conditions Note-1

Loan / guarantee / security to wholly owned subsidiary

Yes No Yes subject to conditions Note-2

Yes Refer conditions Note-2

Public limited company

Loan / guarantee / security to Director

Govt approval

No Ref general exemptions

Loan / guarantee / security to person in whom Director is interested

Govt approval

No Ref general exemptions

Loan / guarantee / security to wholly owned subsidiary

Govt approval

No Yes subject to conditions

Yes subject to conditions

1. As per section 372A of the 1956 Act - “free reserves” means those reserves which, as per the latest audited balance sheet of the company, are free for distribution as dividend and shall include balance to the credit of the securities premium account but shall riot include share application money

Condition for Exemption to Private Limited Company

• No body corporate has invested in the share capital of the Company.

• 2. Borrowing from Bank / Financial Institute / Inter Corporate Borrowing does not exceed lower of INR 50 Crores or 200% of paid up capital

• 3. No repayment default of such borrowing subsists at the time of such loan.

General Exemption to both Private and Public Limited

• Managing Director or Whole Time Director either as terms employment of all employees or scheme approved by special resolution

• Loan / Guarantee given / Security provided in ordinary course of business of company with minimum rate of interest charged being Bank rate

Companies Exempt from Operation of Section 185

• Government company with approval of ministry and Nidhi company subject to conditions

Conditions for Exemption for Loan / Guarantee / Security by Holding Company to Wholly Owned Subsidiary Company

• Provided that the loans made under clauses (c) and (d) are utilised by the subsidiary company for its principal business activities.”

Proposed AmendmentsThe Companies (Amendment) Bill, 2016 proposes that companies may give a loan /guarantee / security to any person in whom the director is interested, subject to a special resolution passed in the general meeting with certain disclosures in the explanatory statement of the notice to the general meeting. The borrowing company shall in turn be required to utilize the loan / guarantee / security for its principal business activities. The amendment

also permits loan / guarantee / security given by a holding company to its wholly owned subsidiary company and may give a guarantee / security to its subsidiary company in a situation where a loan is taken by the subsidiary company from a bank or financial institution. However, the loan should be utilised by the subsidiary company for its principal business activities.

Loans and Investments by CompaniesThe provisions of loans and investments by Companies have been captured under Section 186 in the 2013 Act which is stricter than its predecessor Section 372A of the 1956 Act. Under the section two broad categories of transactions are covered – Loans Given and Investments made by a Company.

Provisions covered under the 1956 ActSection 372A of the 1956 Act, governed Public Limited Companies and Private Limited Companies that were subsidiaries of Public Limited Companies. It covered loans to any Body Corporate, Guarantee to any Body Corporate, Security in connection to a loan to a Body Corporate and acquisition of securities of any other Body Corporate. The section provided a ceiling limit for such transactions being the higher of 60% of its paid-up share capital and free reserves1 or 100% of its free reserves. A higher amount of transactions was permitted if it was approved by a special resolution passed in a general meeting. Such permissible loan to any Body Corporate was to be made at a rate of interest not lower than the prevailing bank rate, being the standard rate made public under section 49 of the Reserve Bank of India Act, 1934.

The section did not apply to a loan made, any guarantee given or any security provided by a banking company or an insurance company or a housing finance company in the ordinary course of its business, or a company established with the object of financing industrial enterprises, or of providing infrastructural facilities. A company whose principal business is the acquisition of shares, stock, debentures or other securities was also not exempted under this section. The section permitted such transactions by a holding company with its wholly owned subsidiary.

Provisions covered under the 2013 Act in section 186Section 186 of the 2013 Act was notified on 1 April 2014 and covers Public Limited Companies as well as all Private Limited Companies, thereby making it tedious for smaller Private Limited Companies to meet the compliance requirements of the Act.

17 LOANS AND INVESTMENTS IN COMPANIES ACT, 2013 - UNRAVELING THE PERPLEXITY

In a significant departure from section 372A of the 1956 Act, Section 186 extended its scope to Loans / Guarantees / Security in connection with a Loan to Non corporate Entities including LLPs and Partnership Firms by inserting the words “to any person or body corporate”. This extended the scope to loans given to employees, which was remedied through Circular No. 04/2015 dated 10 March 2015 which excluded loans and/or advances made to employees (other than managing directors tor whole-time directors which are covered under section 185) if such loans/advances are in accordance with the conditions of service and the remuneration policy of the Company.

Section 186 pegs the interest rates to a rate not lower than the prevailing yield of one year, three year, five year or ten year Government Security, closest to the tenor of the loan.

Similar to section 372A, Section 186(2) prescribes the overall limit on the amount of loan/advances/guarantees/security that can be given by a company at 60% of its paid-up share capital plus free reserves plus securities premium account or 100% of its free reserves plus securities premium account, whichever is higher. A Company is permitted to exceed this limit subject to the prior approval of shareholders by a special resolution passed at a general meeting.

Unlike Section 372A of the 1956 Act, the 2013 Act provides that a Company shall not make inter-corporate investments through more than two layers of investment

companies. However, the provisions of section 186 shall not be applicable when - a Company acquires any Company incorporated outside India and such Company has Investment Subsidiary beyond two layers. The exemption is also extended to a subsidiary Company from having any investment subsidiary for the purpose of meeting of the requirement under any law framed under any law for the time being in force. Companies that have defaulted in repayment of any deposits or loans will not be entitled for giving any loan/ security/ guarantee till such default is subsisting.

In terms of the reporting requirements, companies are required to disclose the loan / advances / security / investments made and the proposed purpose for which it shall be utilized in its financial statements. A Company shall also be required to maintain a register which includes details of loans / advances / security / investments made.

The Companies (Amendment) Bill, 2016 proposes to do away with the two layer restriction on investments and excludes employees from the scope of this section. It has also proposed that shareholders’ approval will not be required where a loan or guarantee is given or where a security has been provided by a company to its wholly subsidiary company or a joint venture company, or acquisition is made by a holding company, by way of subscription, purchase or otherwise of, the securities of its wholly owned subsidiary company.

Conclusion The primary distinction between the provisions of the two Acts is the inclusion of Private Limited Companies within the ambit of sections 185 and 186. While the 2013 Act is drafted with the intention of bringing in more transparency and safeguarding the interest of investors, the restrictions imposed on private limited companies has not been welcomed by the corporate world resulting in greater representation to the government to liberalize certain provisions under the Act. Sections 185 and 186 are part of these representations.

As a proactive measure to address the business needs of the corporate world, the provisions of these sections are substantially liberalized. The proposed changes in the Companies Amendment Bill 2016 shall bring in further relief.

LOANS AND INVESTMENTS IN COMPANIES ACT, 2013 - UNRAVELING THE PERPLEXITY 18

IntroductionIn the past few years the world has witnessed the financial sector go through one of its toughest periods with large financial institutions collapsing due to errors in decision making or swings in the economic performance of large nations. The Indian Banking sector is not insulated from this situation. Since 2010, the banking sector in India has witnessed large restructurings and reorganisations mainly on account of rising Non-Performing Assets in some industries which are key economic drivers of any developing country. As per estimates, the current size of Non – Performing Assets have risen to more than Rs. 5.8 Trillion as on 31st March 2016 and are expected to increase in the financial year 16 – 17. Public Sector banks especially have the largest share of bad loans and in turn are delivering poor financial performance with every passing quarter. An under-performing banking sector has a direct effect on the performance of the overall economy. These weak assets have plagued the banking system and in turn are hurting the performance of the banks and the economy at large.

The Reserve Bank of India has actively campaigned and worked with the Banks to institute a large clean-up of the financial statements of Banks – including measures such as the Asset Quality Review. As per CRISIL estimates, the weak assets in the Indian Banking system will touch a high of Rs.8 lakh crores by the end of the FY17. Looking at the alarming

levels of stressed assets in the banking system, RBI has come out with various tools and measures that are aimed to enable banks to resolve their bad loan situation. These tools include the Strategic Debt Restructuring Mechanism and the 5:25 Scheme. While Strategic Debt Restructuring enabled banks to convert their debt into equity and thereby take majority equity control of Borrowers as well as bring in new management/ownership to draw up a long term bank controlled restructuring plan, the 5:25 Schemes allowed Borrowers to elongate their debt obligations over a longer tenure. These schemes have been launched over the past 2 years, however, they have their limitations and hence have not been able to completely service the need of resolving stressed assets.

In another proactive measure by the RBI, a new scheme has been issued, S4A “Scheme for Sustainable Structuring Assets”, in order to strengthen the lenders’ ability to deal with large borrowers who are in financial stress and are in need of deep financial restructuring for their revival and rehabilitation.

S4A

A NEW TOOL FOR FINANCIAL RESTRUCTURING

19 S4A A NEW TOOL FOR FINANCIAL RESTRUCTURING

S4A A NEW TOOL FOR FINANCIAL RESTRUCTURING 20

S4A SimplifiedS4A stands for Scheme for Sustainable Structuring of Stressed Assets. Under this scheme the total outstanding debt of stressed borrowers is bifurcated into Sustainable Debt (Part A of total debt as per the Scheme) and Unsustainable Debt (Part B of total debt as per the Scheme).

Sustainable debt is the principal portion of the loan that can be serviced through the existing cash flow of the company over the same tenor as that of the existing facilities as agreed upon by the Joint Lenders Forum (JLF)/Consortium of lenders/banks concluded through an independent Techno Economic Viability (TEV) study. Sustainable debt should not be less than 50% of the current funded liabilities.

The balance portion of total debt over the sustainable debt level shall be

converted by the bank into equity/quasi-equity instruments. This shall result in a reduction of the debt levels of the company and simultaneously the promoter’s equity stake shall also get reduced.

The scheme provides a second chance to the large corporates who have been struggling under the burden of debt and facing difficulties in infusing fresh equity into the project. The scheme assumes that the equity and equity related instruments are expected to provide an upside to lenders when the borrower turns around.

Beneficiaries of the S4A SchemeIn order to be eligible under this scheme, the RBI has specified certain eligibility criteria for corporates. The account should meet all the following conditions:

• The project has commenced commercial operations;

• The aggregate exposure (including accrued interest) of all institutional lenders in the account is more than Rs.500 crores (including Rupee Loans, Foreign Currency Loans/External Commercial Borrowings);

• The debt meets the test of sustainability as mentioned above.

In respect of Securitisation Companies/ Reconstruction Companies (SCs/RCs), only those accounts shall be eligible which, in addition to meeting the criteria above, have been acquired against consideration in cash only, i.e. not by issuing any Security Receipts.

S4A Mechanism:Joint Lenders Forum (JLF)/Consortium of lenders/bank are required to formulate a resolution plan for the eligible borrowers. In case of Joint Lenders Forum, once the case is referred, a resolution plan has to be formulated within 45 days. After an independent Techno Economic Viability study, the dues will be bifurcated as under:

Security coverage will not be diluted in this process and the Part A portion shall have the same security cover as was available prior to the resolution.

Determining Sustainable Debt (Part A) and Unsustainable Debt (Part B):

Aggregate Current Outstanding Debt

Sustainable Part A Unsustainable Part B• Determine the debts (including

next 6 months funding required and crystallizing NFB facilities) that can be serviced (principal and interest) based on existing residual maturities of all debts;

• Consider cash flow from all sources available;

• Free Cash Flow not to include committed capital expenditure and to be as per latest available audited/reviewed Financial Statements;

• Residual Portion over Part A shall be the Unsustainable Debt or Part B.

Probable Post-Resolution Ownership


The Resolution Plan:

Current promoter continues to hold majority stake

Current promoter replaced by new promoter by-

Lenders acquire majority stake through conversion of debt or SDR and –

• Conversion into Equity through SDR mechanism and subsequent sale

• Manner contemplated as per Prudential Norms on Change in Ownership of Borrowing Entities (Outside SDR)

• Current management allowed to continue; or

• Operations and Management handed over to professional agency


In a situation where the resolution plan does not involve a change in promoter or where existing promoter is allowed to operate and manage the company by the lenders as minority owners, the principle of proportionate loss sharing by the promoters should be met.

In such cases, lenders shall, therefore, require the existing

promoters to dilute their shareholdings, by way of conversion of debt into equity /sale of some portion of promoter’s equity to lenders, at least in the same proportion as that of Part B to total dues to lenders. JLF/Consortium/bank is required to obtain promoters’ personal guarantee in all such cases, for at least the amount of Part A.

Key features of the Resolution Plan

No fresh moratorium to be granted on interest or principal

repayment for servicing the Sustainable Debt (Part A).

There shall be no extension in the repayment schedule or no

change in the pricing of the debt for the Sustainable Debt

compared to the pre-resolution position.

The unsustainable or Part B debt shall be converted

into equity/redeemable cumulatively optionally

convertible preference shares or optionally convertible debentures

(‘Part B Instruments’) as the case may be.

The plan should clearly spell out the

terms for exercise of options for the conversion of the

preference shares/debentures into equity. The existing or new promoters

will have the right of first refusal in case the lenders decide to sell the

share, at a price beyond some predetermined

price.

Lenders will have to submit the plan to an overseeing

committee (OC), comprising of eminent persons, which will be constituted by IBA in

consultation with RBI.

The resolution plan shall be agreed upon by a minimum of 75 percent of lenders by value and 50 percent of lenders by number

in the JLF/consortium/bank.

The OC will be an advisory body and shall review the processes involved in the preparation of resolution

plan and give its opinion on adherence to the provision in

the scheme guidelines.

Break-up Value Method Discounted Cash Flow Method (DCF)

Ascertained form the company’s latest audited balance sheet (not being more than one year from the date of valuation)

In case the latest audited balance sheet is not available, the shares shall be valued at Rs. 1 per company.

Equity: Future Cash Flows occurring within 85% of the useful life of the project only shall be considered.

Discount factor shall be actual interest rate plus 3%, being not less than 14% in aggregate.

Convertible Pref Shares/Convertible Debentures):Discount factor shall be marked up minimum by 1.5% over the Weighted Average Actual Interest Rate for various facilities.

For arrears in dividends, no credit to be taken. In such situations, DCF value should be further discounted by at least 15% if 1 year arrears and by 25% is arrears are for 2 years and so on with a 10% increment per year.

Asset Classification and ProvisioningA. Where there is a change of

PromoterClassification and provisioning shall be as per the SDR scheme or

‘Outside SDR’ scheme as applicable.

B. Where there is no change of Promoters• Standstill period of 90 days

given to formulate a resolution plan and implement the same. If the same is not complied with, classification and provisioning will be as per extant norms assuming there was no standstill.

• Assets that are Standard on the reference date shall continue to be Standard subject to provisions made upfront by lenders – Higher of 40 percent of the amount held in part B or 20 percent of the aggregate outstanding (sum of Part A and Part B). Provisions already created can be reckoned.

• Assets classified as NPA on the reference date shall be classified and provided as per extant IRAC norms.

• Lenders may upgrade Part A and Part B to standard category based on one years’ satisfactory performance of Part A loans.

• Provisioning on account of MTM of Part B instruments shall be subject to minimum provisioning required as mentioned above and spread across 4 quarters commencing from the quarter in which the plan was implemented.

• If Part A slips in NPA subsequently, extant NPA provisioning norms shall be applicable.

Valuation and Marking to Market:Fair value of the Part B instruments shall be determined as under:

The value of quoted shares shall be marked to market preferably on a daily basis and at least on a weekly basis.

However where the quotations for shares are not available or the shares are unlisted, valuation methods shall be used – Break Up Value Method and Discounted Cash Flow Method.


Advantages Disadvantages

• Borrowers shall have the possibility of holding majority ownership in comparison to the SDR mechanism

• In the SDR scheme the lender(s) has to find a buyer for the asset within 18 months. In case of S4A, there is no such time stipulation, hence the chances of success of the scheme are better considering that the borrower will have sufficient time to restructure and improve its performance.

• The longer time horizon may allow the lender to reap the benefits of higher equity valuation owing to turnaround in the business.

• S4A offers flexibility in terms of quantum of equity stake, mode of instrument and timeframe for holding the stake. Allowing partial conversion of debt into equity provides a lot of flexibility to both lenders and borrowers. In case of SDR, lenders have to hold minimum 51% stake where as there is no such condition in case of S4A. Banks also have the option of holding optionally convertible debentures instead of equity, which might be more preferred.

• Sustainable debt is derived on the basis of existing free cash flows of the borrower without considering future “incremental” cash flows. This may not be beneficial to borrowers who are in sectors in which the current scenario is grim due to external environment but may improve later.

• The scheme does not permit the lender to reschedule the existing tenor of the loan.

• Re-pricing of the debt is also not permitted under the scheme. Hence passing the benefit of reduction in the borrowing cost to the borrower is ruled out.

• The scheme excludes projects under construction.

S4A Advantages and LimitationsThe S4A Scheme has significant advantages over schemes like 5:25 and SDR (Strategic Debt Restructuring) and addresses a lot many challenges of existing schemes:

Conclusion The S4A scheme is expected to be successful in dealing with stressed assets if implemented prudently. The resolution scheme is path breaking considering the flexibility it offers to both lenders and borrowers to revive stressed assets. The scheme definitely strengthens the ability of lenders to deal with stressed assets that have the potential to bounce back if financial structuring is done successfully while borrowers get a second chance to turn around their enterprise. As large borrowers form a significant portion of the stressed assets in today’s banking environment, this scheme will certainly add to the tools available to curb rising NPAs. It is in the interest of lenders as a well thought out revival plans covering all aspects of industry, is made so as to ensure safety of their capital and recovery of principal and interest payments over a defined period of time.


About VivroVivro is a Financial Services Group engaged in the business of providing Investment Banking, Corporate Finance, Corporate & Financial Advisory and Wealth Management Services. Vivro Financial Services Private Limited is a Merchant Banker registered with the Securities Exchange Board of India (SEBI).

Our TeamVivro is founded by experienced professionals who have been engaged in Capital Market and Corporate Finance services for the last three decades. Our company is supported by a team of more than 90 enthusiastic and motivated people from different backgrounds with varied educational accomplishments and expertise. The talent pool of our company comprises of Chartered Accountants, Company Secretaries, MBAs, Lawyers as well as Ex-Bankers who have held senior positions at various banks and financial institutions. This mix of people infuses elements of creativity and professionalism in our workplace, which adds tremendous value to the services that we offer. With a strong team in place, Vivro is able to deliver value added solutions, tailor-made to suit the requirements of our clients.

Our Value PropositionVivro has emerged as a knowledgeable and reliable partner for businesses both in India and Abroad. Vivro has catered to several companies over the years and it enjoys tremendous confidence from clients, investors, lenders, brokers and financial institutions. Our advisory services and our ability to access the right capital for the right investment opportunity have resulted in significant stakeholder value creation. Vivro has a disciplined and demonstrated process specifically tailored for each client and transaction to maximize value.

ABOUTVIVRO

25 ABOUT VIVRO

Capital Market ServicesOur Capital Markets team assists private companies to raise capital from capital markets through Initial Public Offers of Equity & Debt, Placements, while they assist public limited companies in a host of capital market transactions ranging from Rights Issue, Qualified Institutional Placements, Institutional Placement Program, Takeovers and Open Offers, Buybacks, Delistings, etc.

Corporate FinanceVivro syndicates and structures debt finance from banks and financial institutions through several instruments such as:

• Term Loans/ Project Loans

• Working Capital Finance/ Corporate Loans/Letter of Credits/Bank Guarantees/External Commercial Borrowings

• Factoring/Commercial Paper

• Inter Corporate Deposits, Structured Finance, Infrastructure Financing, etc.

Corporate AdvisoryOur corporate advisory services include:

• Private Equity and Venture Capital placement and advisory

• Mergers and Acquisitions: Buy/ Sell advisory as well as Schemes of Arrangement for Corporate Reorganization

• Valuation Services and Fairness Opinions

• ESOP Structuring and Valuation

• Business and Expansion Plans and Strategies

• Corporate Governance Reporting

• Succession Planning

• Entry into India Services

Wealth ManagementVivro Wealth Advisors Private Limited, a wholly owned subsidiary of Vivro Financial Services Private Limited provides Wealth Management solutions to its retail and corporate clients. Our Wealth Advisory journey begins with understanding the needs of our clients, which forms the basis of our investment solutions across asset classes. We deliver solutions which are aligned to our client’s goals, priorities, aspirations and risk tolerance. We follow the maxim – ‘What is right for the client is right for us’ while delivering the Financial Plan. We also offer our Treasury Management solutions to corporates through which we assist in planning and making investments in a variety of financial instruments such as fixed income funds, equity funds, commodity funds etc.

ABOUT VIVRO 26

Mumbai607-608 Marathon Icon, Veer Santaji Lane, Opp. Peninsula Corporate Park, Off Ganpatrao Kadam Marg, Lower Parel, Mumbai- 400013.E [email protected]: +91 22 6666 8040

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The information contained herein is of general nature prepared by Vivro Financial Services Private Limited (‘VFSPL’, ’Vivro) on a particular subject or subjects and is not an exhaustive treatment of such subject(s). It is not intended to address the circumstances of any particular individual or entity. This material contains information sourced from third party sites (external sites). Vivro is not responsible for any loss whatsoever caused due to reliance placed on information sourced from such external sites. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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Documents

FINTELLIGENCE - Vivro - Issue 7.pdf · 2016-09-20 · to uplift this sector, SEBI introduced the Real Estate Investment Trusts regulations in 2014. Globally, REITs have been successful