4 unit asset & fund based financial services

8/15/2019 4 Unit Asset & Fund Based Financial Services

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ASSET & FUND BASED ASSET & FUND BASED

FINANCIAL SERVICESFINANCIAL SERVICES

11/27/15 1

VIJAY,

MBA,VAAGESWARI COLLEGE,

KARIMNAGAR, TELANGANA.


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FACTORING

• Due to globaliatio! t"e#e a#e a$%a!tage a!$ $i'a$%a!tage( I) *e t"i!+ t"e e,o!$ -a#t. t"e#e "a bee! alo*$o*! i! e,o!oi, a,ti%it0 globall0(

• Fi!a!,ial a#+et all o%e# t"e *o#l$ a#e )a,i!g #oug" *eat"e#(I! t"i ,e!a#io. a!agee!t o) ,a" a!$ #e,ei%able i o)utot i-o#ta!,e to bot" ,o#-o#ate gia!t a!$ all )i#

• a!0 bui!ee "a%e ,olla-e$ )o# *a!t o) liui$it0( T"e+e0 to u,,e lie i! ,o!%e#ti!g ,#e$it ale i!to ,a" *it"i! a"o#t -e#io$ o) tie(

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• T"e#e a#e a!0 t#a$itio!al et"o$ u," a

bill $i,ou!ti!g. ,o!ue# ,#e$it t"#oug")i!a!,ial i!te#e$ia#ie et,(. to #aie "o#tte# )u!$(

• Re,e!tl0. !e* )i!a!,ial e#%i,e. u," aFACT3RIN4 & F3RFAITIN4. "a%e ,oe

i!to eite!,e to ait t"e )i!a!,i!g o),#e$it ale a!$ t"e#eb0. "el- t"e bui!e

u!it to ti$e o%e# t"e liui$it0 ,#u!,"(

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• Fa,to#i!g i a ,o!ti!ui!g a##a!gee!t

bet*ee! a )i!a!,ial i!te#e$ia#0 +!o*! at"e )a,to# a!$ a bui!e ,o!,e#! t"e ,lie!t8*"e#eb0 t"e )a,to# -u#,"ae t"e ,lie!t9

a,,ou!t #e,ei%able/boo+ $ebt eit"e# *it"o# *it"out #e,ou#e o-tio!8 t"e ,lie!t(

• T"i #elatio! e!able t"e )a,to# to ,o!t#ol t"e,#e$it ete!$e$ to t"e ,utoe# a!$a$i!ite# t"e ale le$ge#(

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• Bei$e -u#,"ae o) a,,ou!t

#e,ei%able. )a,to# a0 -#o%i$e a *i$e#a!ge o) e#%i,e u," a t"e )ollo*i!g;

• C#e$it a!agee!t a!$ ,o%e#i!g t"e

,#e$it #i+ i!%ol%e$(•


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• Fa,to#i!g i a ,olle,tio! a!$ )i!a!,e e#%i,e

$eig!e$ to i-#o%e t"e ,lie!t9 elle#98 ,a")lo* b0 tu#!i!g "i ,#e$it ale i!%oi,e i!to #ea$0,a"(

T=E 3RI4IN 3F FACT3RIN4;T=E 3RI4IN 3F FACT3RIN4;

o$e#! )a,to#i!g ,ae i!to eite!,e i! t"eo$e#! )a,to#i!g ,ae i!to eite!,e i! t"e

1>2?(1>2?(

Fa,to#i!g a )i!a!,i!g agai!t #e,ei%able got aFa,to#i!g a )i!a!,i!g agai!t #e,ei%able got agoo$ i! t"e 1>6?(goo$ i! t"e 1>6?(

But. t"e#e *a !o ,o-lete )#ae*o#+ o)But. t"e#e *a !o ,o-lete )#ae*o#+ o)

tatuto#0 la* )o# a )a,to#i!g a##a!gee!t(tatuto#0 la* )o# a )a,to#i!g a##a!gee!t(11/27/15 @


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I! t"e U. )a,to#i!g ,ae i!toI! t"e U. )a,to#i!g ,ae i!to

eite!,e i! t"e )o# o) i!%oi,eeite!,e i! t"e )o# o) i!%oi,e$i,ou!ti!g($i,ou!ti!g(

I! 1>7@. t"e lea$i!g )a,to#i!gI! 1>7@. t"e lea$i!g )a,to#i!g

,o-a!ie o) t"e U )o#e$ t"e,o-a!ie o) t"e U )o#e$ t"e

Ao,iatio! o) B#iti" Fa,to# ABF8( Ao,iatio! o) B#iti" Fa,to# ABF8(No* it i -#ea$i!g all o%e# t"e *o#l$(No* it i -#ea$i!g all o%e# t"e *o#l$(

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FACTORING MECHANISM

• T"e ,lie!t e!$ a! i!%oi,e to "i ,utoe# i! t"e uual*a0 but a$$ a !oti)i,atio! t"at t"e i!%oi,e i aig!e$to a!$ ut be -ai$ to t"e )a,to# *it" *"o "e "a

a$e a! a##a!gee!t(

• T"e ,lie!t. t"e! ubit ,o-ie o) i!%oi,e to t"e )a,to#*it" a ,"e$ule o) o))e# a,,o-a!ie$ b0 t"e #e,ei-t.

$eli%e#0 ,"alla!. o# a!0 ot"e# %ali$ -#oo) o) $i-at,"(

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• T"e )a,to# -#o%i$e -#e-a0e!t u- to ? o) t"e i!%oi,e%alue a!$ )ollo*'u- *it" t"e ,utoe# )o# #ealiatio! o)-a0e!t $ue(

• T"e bala!,e -a0e!t i a$e ie$iatel0 o!#ealiatio!(

• T"e )a,to# e!$ a o!t"l0 tatee!t o) a,,ou!t to t"e

,lie!t to +ee- "i i!)o#e$ o) t"e )a,to#e$ i!%oi,e(

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FACTORINGMECHANISM

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CUSTOMER

CLIENT

FACTOR

1

FACTORING TRANSACTION

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• 1( Cutoe# -la,e a! o#$e#

*it" t"e ,lie!t )o# goo$a!$/o# e#%i,e o! ,#e$it,lie!t $eli%e# t"e goo$ a!$

e!$ i!%oi,e to ,utoe#(


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2

CUSTOMER

CLIENT

FACTOR

1


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2. Client send invoices to factor.


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2

CUSTOMER

CLIENT

FACTOR

16


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6( )a,to# a+e

-#e-a0e!t u- to ?to ,lie!t a!$ e!$-e#io$i,al tatee!t(


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2

CUSTOMER

CLIENT

FACTOR

16

:


11/27/15 1:

:( o!t"l0 tatee!t o)a,,ou!t to ,utoe#a!$ )ollo*'u-(


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2

CUSTOMER

CLIENT

FACTOR

16

:

5


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5( ,utoe# a+e-a0e!t to )a,to#(


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2

CUSTOMER

CLIENT

FACTOR

16

:

5

@


11/27/15 1@

@( Fa,to# a+ebala!,e 2?-a0e!t o!#ealiatio!

to t"e ,lie!t(


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2

CUSTOMER

CLIENT

FACTOR

16

:

5

@


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• Factorin co!"anies in India#

• Can$an% Factors Li!ited# &tt"#''(((.can$an%factors.co!

• S)I Factors and Co!!ercial Services *vt. Ltd# &tt"#''(((.s$ifactors.co!

• T&e Hon%on and S&an&ai )an%in Cor"orationLtd# &tt"#''(((.&s$c.co.in'+'2'cor"orate'trade,and,factorin,services

• Fore!ost Factors Li!ited# &tt"#''(((.fore!ostfactors.net

• Glo$al Trade Finance Li!ited# &tt"#''(((.tfindia.co!

• E-"ort Credit Garantee Cor"oration of IndiaLtd# &tt"s#''(((.ecc.in'*ortal'"rodctnservices'!atrit/'!factorin.as"

• Citi$an% NA0 India# &tt"#''(((.citi$an%.co.in

• S!all Indstries 1evelo"!ent )an% of IndiaSI1)I3# &tt"#''(((.sid$i.in'fac.as"

• Standard C&artered )an%# (((.standardc&artered.co.in11/27/15 1>


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Factorin c&ares#• FINANCE CHARGE; Fi!a!,e ,"a#ge i ,o-ute$ o! t"e

-#e-a0e!t outta!$i!g i! t"e ,lie!t9 a,,ou!t at o!t"l0i!te#%al( Fi!a!,e ,"a#ge a#e o!l0 )o# )i!a!,i!g t"at "abee! a%aile$( T"ee ,"a#ge a#e iila# to t"e i!te#etle%ie$ o! t"e ,a" ,#e$it )a,ilitie i! a ba!+(

• SER4ICE FEE# It i a !oi!al ,"a#ge le%ie$ at o!t"l0i!te#%al to ,o%e# t"e ,ot o) e#%i,e. !ael0. ,olle,tio!.ale le$ge# a!agee!t et,( t"i )ee i $ete#i!e$ o!

t"e bai o) ,#ite#ia u," a t"e g#o ale %alue. t"e!ube# o) ,utoe#. t"e !ube# o) i!%oi,e a!$ t"e$eg#ee o) ,#e$it #i+ #e-#ee!te$ b0 t"e ,utoe# et,(

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• Bot" t"ee ,"a#ge ta+e! toget"e#,o-a#e %e#0 )a%o#abl0 *it" t"e

i!te#et #ate ,"a#ge$ b0 ba!+ a!$)i!a!,ial i!titutio! )o# "o#t'te#bo##o*i!g(

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A$%a!tage o) Fa,to#i!g;

• Fa,to#i!g i be!e)i,ial to t"e ,lie!t. ,utoe# a!$ ba!+(

• )ENEFITS TO CLIENT#

T"e ,lie!t9 ,#e$it ale a#e ie$iatel0 ,o!%e#te$ i!to#ea$0 ,a" a t"e )a,to# a+e a -a0e!t o) a#ou!$ ?

o) t"e )a,to#e$ i!%oi,e i! a$%a!,e(

T"e ,lie!t ,a! o))e# ,o-etiti%e ,#e$it te# to "i bu0e#*"i,". i! tu#!. e!able "i to i!,#eae "i ale a!$

-#o)it(

T"e ,a" #ealie$ )#o ,#e$it ale ,a! be ue$ toa,,ele#ate -ee$ u-8 t"e -#o$u,tio! ,0,le(

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T"e ,lie!t i )#ee )#o t"e te!io! o) o!ito#i!g "iale le$ge# a!$ ,a! ,o!,e!t#ate o! -#o$u,tio!.a#+eti!g a!$ ot"e# a-e,t(

it" t"e abo%e -oi!t. #e$u,tio! i! o%e#"ea$ e-e!ea!$ a! i!,#eae i! ale a!$ -#o)it ,a! be ta+e -la,e(

E))i,ie!t a!agee!t o) o!e ,o-o!e!t ,a! "a%e-oiti%e i-a,t o! ot"e# ,o-o!e!t( Fo# ea-le. a!i!,#eae i! liui$it0 e!able t"e )i# to a%ail o)

$i,ou!t o! -u#,"ae o) #a* ate#ial(

T"e ,lie!t ,a! e-a!$ "i bui!e b0 e-lo#i!g !e*a#+et(

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Be!e)it to ,utoe# Bu0e#8Be!e)it to ,utoe# Bu0e#8

• Fa,to#i!g )a,ilitate t"e ,#e$it -u#,"ae o) t"e,utoe# a t"e0 get a$euate ,#e$it -e#io$(

• Cutoe# a%e o! ba!+ ,"a#ge a!$ e-e!e(

• T"e ,utoe# "a !ot to )u#!i" a!0 $o,ue!t( =e

"a ut to a,+!o*le$ge t"e !oti)i,atio! lette#. t"at i. a!u!$e#ta+i!g to a+e -a0e!t o) t"e i!%oi,e to t"e)a,to#(

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• Cutoe# a#e )u#!i"e$ *it"-e#io$i,al tatee!t o) outta!$i!g

i!%oi,e b0 t"e )a,to#(

• Fa,to#i!g $oe !ot i-i!ge e!,#oa,"8

o! t"e ,utoe#9 #ig"t(

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BENEFITS T3 BANS;

• Fa,to#i!g i-#o%e liui$it0 o) t"e ,lie!ta!$. t"e#eb0. i-#o%e t"e ualit0 o)

a$%a!,e o) ba!+( Fa,to#i!g i !ot at"#eat to ba!+i!g. it i a )i!a!,ial e#%i,e,o-lee!ta#0 to t"at o) t"e ba!+(

11/27/15 2@


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INTERNATI3NAL FACT3RIN4INTERNATI3NAL FACT3RIN4

• "e! t"e elle# a!$ bu0e# a#e lo,ate$ i! $i))e#e!t ,ou!t#ie a!$ a)a,to#i!g ag#eee!t ta+e -la,e it i ,alle$ I!te#!atio!al Fa,to#i!g(

• I!te#!atio!al Fa,to#i!g )a,ilitate I!te#!atio!al T#a$e(

• It i a ,o-#e"e!i%e ,o-lete8 #a!ge o) #e,ei%able a!agee!t

a!$ )i!a!,i!g e#%i,e *"e#ei! a )a,to# -#o%i$e a! e-o#te# *it" atleat t*o o) t"e )ollo*i!g e#%i,e;

C#e$it gua#a!tee(

C#e$it a!agee!t a!$ ba$ $ebt -#ote,tio!(

Fi!a!,e u- to >? o) t"e i!%oi,e %alue o! "i-e!t to a--#o%e$$ebto#(

Colle,tio! e#%i,e(


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E-o#t #e,ei%able t"at ,a! be )a,to#e$ "oul$ "a%e t"e)ollo*i!g ,"a#a,te#iti,;

T"e bu0e#9 ,ou!t#0 "oul$ be ,o%e#e$ b0 t"e )a,to#(

T"e e-o#te#9 -e#)o#a!,e obligatio! "oul$,o-lete$ at t"e tie. t"e e-o#te# -#ee!t a! i!%oi,e

)o# -#e-a0e!t(

T"e#e "oul$ be ulti-le "i-e!t o# a ,o!ti!uouale )lo* o! a! o!goi!g bai *it" t"e ae bu0e# o#

bu0e#(

Fa,to#i!g t#a!a,tio! a#e bet uite$ )o# ,#e$it -e#io$u- to 1? $a0(

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INTERNATIONAL FACTORING TRANSACTION


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IM*ORTER

1

2 6

:

5 @

E5*ORTER

E5*ORT FACTORIM*ORT FACTOR

1?G7H

2

11/27/15 2>



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>

IM*ORTER

2 6

:

5 @

E5*ORTER


1?G7H

2

11/27/15 6?

+. Receives t&e order



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IM*ORTER

2

6

:

5 @

E5*ORTER


1?G7H

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2 C r e d i t l i ! i t r e 6 e s t

2 Credit li!it re6est



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IM*ORTER

2

6

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E5*ORTER


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2 C r e d i t l i ! i t r e 6 e s t

7 . A " " r o v a l




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IM*ORTER

2

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E5*ORTER


1?G7H

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2 .

C r e d i t l i ! i t r e 6 e s t

7 . A " " r o v a l


8. 1elivers oods



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2

6

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11/27/15 6:


2 .


7 . A " " r o v a l


8. 1elivers oods

9 .

S $ ! i t s d

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IM*ORTER

2

6

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2 .


7 . A " " r o v a l


8. 1elivers oods

9 .

S $ ! i t s d

o c ! e n t s

: . * r e " a / ! e n t



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IM*ORTER

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E5*ORTER


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7 . A " " r o v a l


8. 1elivers oods

9 .

S $ ! i t s d

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: . * r e " a / ! e n t

;. 1oc!ents



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6

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2 .


7 . A " " r o v a l


8. 1elivers oods

9 .

S $ ! i t s d

o c ! e n t s

: . * r e " a / ! e n t

;. 1oc!ents < .

C o l l e c t i o n



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IM*ORTER

2

6

5

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E5*ORTER


1?

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2 .


7 . A " " r o v a l


8. 1elivers oods

9 .

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: . * r e " a / ! e n t

;. 1oc!ents < .

C o l l e c t i o n

=. *a/!ent re!ittance



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IM*ORTER

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2 .


7 . A " " r o v a l


8. 1elivers oods

9 .

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o c ! e n t s

: . * r e " a / ! e n t

;. 1oc!ents < .

C o l l e c t i o n

+ > . ) a l a

n c e * a / ! e n t




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2

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2 .


7 . A " " r o v a l


8. 1elivers oods

9 .

S $ ! i t s d

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;. 1oc!ents < . C o l l e c t i o n


+ > . ) a l a

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IM*ORTER

1

2 6

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E5*ORTER


1?G7H

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1( Re,ei%e t"e o#$e#

2( C#e$it liit #euet

6( A--#o%al

:( Deli%e# goo$

5( Subit $o,ue!t

@( (


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• IN S=3RT;

T"e e-o#te# "i- t"e goo$ to t"e i-o#te#(

T"e e-o#te# aig! "i i!%oi,e t"#oug" t"e e-o#t)a,to# to t"e i-o#t )a,to# *"o au#e t"e ,#e$it #i+ a-e# -#io# a##a!gee!t8(

T"e e-o#t )a,to# -#e'-a0 t"e i!%oi,e(

T"e i-o#te# -a0 t"e -#o,ee$ to t"e i-o#t )a,to#. *"o

t#a!)e# t"e aou!t t"e e-o#t )a,to#(

T"e e-o#t )a,to# $e$u,t -#e'-a0e!t al#ea$0 a$e a!$ot"e# ,"a#ge a!$ -a0 t"e bala!,e -#o,ee$ to t"e

e-o#te#(11/27/15 :6


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E5*ORTER?SE5*ORTER?S )ENEFITS)ENEFITS• A )a,to# aue all ,oe#,ial ,#e$it a!$ -oliti,al #i+(

• A! i-o#t )a,to# o))e# ,#e$it #i+ -#ote,tio! i! ,ae t"e bu0e# $oe !ot-a0 i!%oi,e *it"i! >? $a0 o) t"e $ue $ate(

• T"e#e i a #e$u,tio! i! t"e a$i!it#ati%e ,ot a t"e e-o#te# i $eali!g*it" o!l0 o!e e-o#t )a,to#. i##e-e,ti%e o) t"e !ube# o) ,ou!t#ie

i!%ol%e$(

• It e!able t"e e-o#te# to o))e# o-e! a,,ou!t te# to uali)ie$,utoe# a!$ ,o-ete *it" o%e#ea u--lie#(

• Valuable i!)o#atio! o! t"e ta!$i!g o) t"e )o#eig! bu0e# o! t#a$e,uto a!$ a#+et -ote!tial i -#o%i$e$ to t"e e-o#te# to e-a!$ t"ebui!e( T"i elii!ate t"e ,ot o) gat"e#i!g ,#e$it i!)o#atio!(

• A! i-o#t )a,to# )ollo* t"e #e,ei%able a!$ -ee$ u- t"e ,olle,tio!(11/27/15 ::

)ENEFITS TO IM*ORTERS)ENEFITS TO IM*ORTERS


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)ENEFITS TO IM*ORTERS)ENEFITS TO IM*ORTERS

• =e ,a! -a0 i!%oi,e i! t"e ,ou!t#0 lo,all0(

• =e $eal *it" t"e lo,al age!,0. i(e(. t"e i-o#t)a,to#(

• i!iu $o,ue!tatio! i #eui#e$(

3T=ER T=IN4S;


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RBI 4UIDELINES;

• T"e RBI iue$ gui$eli!e i! ul0 1>>? to-#o%i$e a tatuto#0 )#ae*o#+ to e!ableba!+ to ,a##0 out )a,to#i!g(

• T"e ba!+ a#e -e#itte$ to et u-ubi$ia#ie/i!%eti!g )a,to#i!g ,o-a!ie oi!tl0 *it" ot"e# ba!+ *it" t"e -#io#

a--#o%al o) RBI(• Ba!+ a#e alo -e#itte$ to u!$e#ta+e

)a,to#i!g $e-a#te!tall0(

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• Fa,to#i!g ,o-a!ie "oul$ !ot)i!a!,e ot"e# )a,to#i!g ,o-a!ie(

• A ba!+ ,a! i!%et i! t"e "a#e o) t"e

)a,to#i!g ,o-a!ie i!,lu$i!g it)a,to#i!g ubi$ia#ie(

• But it "oul$ !ot e,ee$ 1? o) t"e

-ai$ u- ,a-ital a!$ #ee#%e o) t"e ba!+i! agg#egate(

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SOME OF THE FACTORING COM*ANIES


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SOME OF THE FACTORING COM*ANIES

• SBI Fa,to# a!$ Coe#,ial Se#%i,e SBI FACS8 Lt$( It*a t"e )i#t )a,to#i!g i! I!$ia *"i," ta#te$ )u!,tio!i!g i!

A-#il 1>>1(

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F3RFAITIN4F3RFAITIN4

• T"e *o#$ KF3RFAIT ea! i! F#e!," Kto #eli!ui"Su##e!$e#8 a #ig"t(

• I! t"i. a! e-o#te# u##e!$e# "i #ig"t to a #e,ei%able$ue at a )utu#e $ate i! e,"a!ge )o# ie$iate ,a"-a0e!t. at a! ag#ee$ $i,ou!t. -ai!g all #i+ a!$#e-o!ibilitie )o# ,olle,ti!g t"e $ebt to t"e )o#)aite#(

• Fo#)aiti!g i t"e $i,ou!ti!g o) i!te#!atio!al t#a$e#e,ei%able o! a M!o!'#e,ou#e9 bai(

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• "i," ea! t"at t"e#e i !o ,oeba,+ o! a!e-o#te# i) t"e i-o#te# $oe !ot -a0(

• A )o#)aite# $e$u,t i!te#et i! t"e )o# o)$i,ou!t8 at a! ag#ee$ #ate )o# t"e )ull ,#e$it-e#io$ ,o%e#e$ b0 t"e #e,ei%able(

• T"i 0te *a o#igi!all0 ue$ i! t"e Eu#o-e,ou!t#ie i! t"e 1>@?( But late# it i ue$ all o%e#

t"e *o#l$( I! 1>>2. t"e RBI a--#o%e$ Fo#)aiti!g aa! e-o#t )i!a!,i!g i! I!$ia(

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• T"i i ge!e#all0 uitable )o# "ig" %alue e-o#t li+e "ea%0a,"i!e#0. ,a-ital goo$. ,o!ue# $u#able. %e"i,le.bul+ ,oo$itie. ,o!t#u,tio! ,o!t#a,t a!$ -#oe,te-o#t(

• =o*e%e#. !ot a!0 e-o#te# "a%e a$o-te$ t"i o-tio!.be,aue t"e ao# -#oble i t"at t"e i!iu aou!t

o) t#a!a,tio! -#e,#ibe$ b0 )o#eig! ba!+ o))e#i!g t"ie#%i,e i 2.5?.???(

• T"i aou!t i too "ig" )o# a! a%e#age e-o#te# i! I!$ia(

T"i "a bee! #e$u,e$

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1( Coite!t to -u#,"ae $ebt

2( Coe#,ial ,o!t#a,t

6( Deli%e#0 o) goo$:( 4i%e gua#a!tee

5( =a!$ o%e# $o,ue!t

@( Deli%e# $o,ue!t7( a+e -a0e!t

( ( Re-a0 at atu#it01?(


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VENTURE CAPITAL

4ENTURE CA*ITAL4ENTURE CA*ITAL


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• T"e ,o-a!ie e!gage$ i! t#a$itio!al li!e o)bui!e ,a! eail0 -#o,u#e !e,ea#0 )i!a!,ial,a-ital )#o t"e ,o!%e!tio!al ,a-ital a#+etou#,e li+e


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=AT IS VENTURE CA


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• VC i a )u!$ t"at i a%ailable )o# i!%ete!t i! a!e!te#-#ie *"i," o))e# t"e -#obabilit0 o) -#o)italo!g *it" t"e -oibilit0 o) lo(

• T"i i alo ,alle$ RIS CA


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• T"i )i!a!,i!g i ,oo!l0 ao,iate$ *it" t"eeuit0 i!%ete!t )o# a tie -e#io$ i! aall/e$iu bui!e *it" "ig" g#o*t"-ote!tial. "ig" #e*a#$ a!$ #i+(

• T=E AIN FEATURES 3F VC;

1(I!%ete!t a#e ge!e#all0 a$e i! euit0(

2( I!%ete!t a#e a$e i! !e* e!te#-#ie. ui!g!e* te,"!olog0. to -#o$u,e !e* -#o$u,t. i!e-e,tatio! o) "ig"e# gai!(

6(A VC i!%eto# ai!tai! a ,loe ,o!ta,t *it" a!e!t#e-#e!eu# to a)egua#$ "i i!%ete!t but$oe !ot i!te#)e#e i! t"e a!agee!t o) t"ee!te#-#ie(

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:( Ve!tu#e Ca-italit9 a--#oa," $i))e# )#o t"eto,+ a#+et i!%eto# a!$ t"e ba!+e#( =e,o!ti!uoul0 +ee- a ,loe *at," o%e#

bui!e(

5( VC i!%ete!t i !ot liui$. A %e!tu#e ,a-italit,a!!ot #ealie "i o!e0 o! $ea!$( T"e#e i

!o #e-a0e!t ,"e$ule( T"e i!%ete!t i loti) t"e e!te#-#ie i u!u,,e)ul(

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VENTURE CA


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• T"e ta#ti!g -oi!t o) t"e e%aluatio!

-#o,e b0 t"e Ve!tu#e Ca-ital I!titutio!VCI8 i t"e bui!e -la! o) t"e %e!tu#e,a-ital u!$e#ta+i!g -#oote#8(

• T"e0 "oul$ ,o!i$e# )eaibilit0 o) t"e-#oe,t. -#oe,t "ito#0. t#a,+ #e,o#$ o) t"e

e!t#e-#e!eu#. a#+et -ote!tial. )utu#etu#!o%e#. -#o)itabilit0 a!$ t"#eat et,(.

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VC INVESTENT


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VC INVESTENT


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STAGES OF FINANCING


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2.LATER STAGE2.LATER STAGE

STAGES OF FINANCING

+.EARLB STAGE+.EARLB STAGE

A( See$ Ca-ital/-#e'ta#t ,a-ital

C( Se,o!$ #ou!$ )i!a!,i!g

B( Sta#t'u- Ca-ital

A( De%elo-e!t Ca-ital

B( B#i$ge/E-a!io! Ca-ital

C( Bu0out

D( Tu#!a#ou!$

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A Seed Ca"ital'"re start ca"italA Seed Ca"ital'"re,start ca"ital


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• T"i tage i ee!tiall0 a! Ma--lie$ #eea#,"9

-"ae *"e#e t"e ,o!,e-t a!$ i$ea o)-#oote# ,o!titute t"e bai o) a -#e',oe#,ialiatio! #eea#," -#oe,t uuall0e-e,te$ to e!$ i! a -#otot0-e t#ial -#o$u,t8

*"i," a0 o# a0 !ot lea$ to a bui!elau!,"(

• T"i -"ae g#a$uall0 o%e to*a#$ t"e

$e%elo-e!t -"ae lea$i!g to a -#otot0-eo$el8 -#o$u,t teti!g a!$ t"e! to,oe#,ialiatio!(

A. Seed Ca"ital'"re,start ca"italA. Seed Ca"ital'"re,start ca"ital

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• T"e ai! #i+ at t"i tage i

a#+eti!g #elate$( T"e #i+ -e#,e-tio!o) i!%ete!t at t"i tage i et#eel0"ig"(

• Ve#0 )e* VCI i!%et i! t"e tage o)-#o$u,t $e%elo-e!t( T&is ca"ital iscalled as a seed ca"ital

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• It i a tage *"e! -#o$u,t/e#%i,e i

). Start," Ca"ital). Start," Ca"ital


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• It i a tage *"e! -#o$u,t/e#%i,e i,oe#,ialie$ )o# t"e )i#t tie i! ao,iatio!

*it" a VCI(• T"i i t"e tage *"e! ,oe#,ial a!u)a,tu#i!g"a to ,oe!,e( VC )i!a!,i!g "e#e i -#o%i$e$)o# -#o$u,t $e%elo-e!t a!$ i!itial a#+eti!g(

• It i!,lu$e e%e#al t0-e o) !e* -#o$u,t u," a;Ne* bui!e i! *"i," t"e ,o-a!0 "a goo$

+!o*le$ge a!$ *o#+i!g e-e#ie!,e(

Ne* -#oe,t b0 etabli"e$ ,o-a!ie A !e* ,o-a!0 -#oote$ b0 a! eiti!g ,o-a!0

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T"i i " "i " " $ " l $

C. Second rond financinC. Second rond financin


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• T"i i t"e tage at *"i," t"e -#o$u,t "a al#ea$0bee! lau!,"e$ i! t"e a#+et but t"e bui!e

"a !ot. 0et be,oe -#o)itable e!oug" )o# -ubli,o))e#i!g to att#a,t !e* i!%eto#(

• T"e -#oote# "a i!%ete$ "i o*! )u!$ but)u#t"e# i!)uio! o) )u!$ b0 t"e VCI i !e,ea#0(T"e VCI -#o%i$e la#ge# )u!$ at t"i tage t"a!t"e ea#l0'tage )i!a!,i!g(

• T"i )i!a!,i!g i -a#tl0 i! t"e )o# o) $ebt alo-#o%i$e$(

11/27/15 2

2.LATER STAGE2.LATER STAGE


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• T"i tage o) VC )i!a!,i!g i!%ol%e etabli"e$bui!ee *"i," #eui#e a$$itio!al *o#+i!g,a-ital a!$ )o# e-a!io! o) t"e bui!e(

• T"e #i+ a!$ *aiti!g -e#io$ i!%ol%e$ i! t"i

tage a#e le( Ve!tu#e ,a-ital )u!$ ,a! "a%eie$iate i!,oe i! t"e )o# o) $i%i$e!$ o#,a-ital gai!(

• T"e $i))e#e!t ub'tage o) t"e late# tage a#e;

11/27/15 6

A. 1evelo"!ent Ca"italA. 1evelo"!ent Ca"ital

It i t" )i i ) t bli " $ b i "i "


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• It i t"e )i!a!,i!g o) etabli"e$ bui!e *"i,"#eui#e a$$itio!al )i!a!,ial u--o#t but ,a!!ot

ta+e #eou#,e to -ubli, iue(• T"i etabli"e$ bui!ee *"i," "a%e

o%e#,oe t"e et#eel0 "ig"'#i+ ea#l0 tage."a%e #e,o#$e$ -#o)it )o# a )e* 0ea# but a#e 0et

to #ea," a tage *"e! t"e0 ,a! go -ubli, a!$#aie o!e0 )#o t"e ,a-ital a#+et

• U!$e# t"i. t"e VC )i!a!,e i ue$ to -u#,"ae

o) !e* eui-e!t/-la!t. e-a!io! o) a#+eti!ga!$ $it#ibutio! )a,ilitie. #e')i!a!,e o) eiti!g$ebt. -e!et#atio! "a a tie')#ae o) o!e to 60ea# a!$ )all i! t"e e$iu #i+ ,atego#0(

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• T"i )i!a!,e b0 VCI i!%ol%e lo* #i+-e#,e-tio! a!$ a tie')#ae o) 1 to 6 0ea#(

• Ve!tu#e Ca-ital u!$e#ta+i!g ue u," )i!a!,eto e-a!$ bui!e b0 *a0 o) g#o*t" o) t"ei#o*! -#o$u,ti%e aet o# b0 t"e a,uiitio! o)

ot"e# )i#/aet o) ot"e# )i#(

). )ride'E-"ansion Ca"ital). )ride'E-"ansion Ca"ital

11/27/15 5

C. )/otsC. )/ots


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• "i," i-lie t#a!)e# o) a!agee!t ,o!t#ol( T"e0)all i!to t*o ,atego#ie(

i8a!agee!t Bu0 3ut B38; I! t"i VCI -#o%i$e)u!$ to e!able t"e ,u##e!t o-e#ati!g

a!agee!t/i!%eto# to a,ui#e a! eiti!g-#o$u,t li!e8/bui!e(

ii8 a!agee!t Bu0 I! BI8 a#e )u!$ -#o%i$e$ to e!able

a! outi$e g#ou- Oo) a!age#8Pto bu0 a! o!goi!g ,o-a!0( T"e0 b#i!g 6 elee!t toget"e#; a a!agee!t tea a ta#get

,o-a!0 a!$ a! i!%eto#

11/27/15 @

1. Trnaronds1. Trnaronds


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• "i," i!%ol%e bu0i!g t"e ,o!t#ol o) a i,+,o-a!0(

• T*o +i!$ o) i!-ut a#e #eui#e$ i! t"i. t"e0 a#e

3NEQ AND ANA4EENT(

• T"e VCI "a%e to i$e!ti)0 goo$ a!agee!t

a!$ o-e#atio! lea$e#"i- i! t"i(

11/27/15 7

)ENEFITS OF 4ENTURE CA*ITAL)ENEFITS OF 4ENTURE CA*ITAL


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TO THE ENTRE*RENEUR#

Fill t"e ga- i! t"e o*!e#9 )u!$ i! #elatio! to t"e

ua!tu a #eui#e$ o# allo*e$ aou!t. e-e,iall0a! aou!t o) o!e0 legall0 -a0able i! $aage8 o)euit0 #eui#e$ i! t"e lau!,"i!g o) t"e !e* bui!e(

=el- t"e e!te#-#ie to get t"ei# *o#+i!g ,a-ital#eui#ee!t(

Ait t"e e!t#e-#e!eu# to #e,#uit -#o)eio!all0uali)ie$ a!$ +ille$ -e#o!!el to ,a##0 out-#o$u,tio! a!$ a!agee!t oot"l0(

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)ENEFITS)ENEFITS TO THE IN4ESTORSTO THE IN4ESTORS

• T"e #i+ o) t"e !e* %e!tu#e i bo#!e b0 t"e VC)u!$( T"e )u!$ $o*!loa$ t"ei# "a#e o!l0a)te# -#o)itable )u!,tio!i!g o) t"e ,o-a!ie(

• Si!,e t"e i!%eto# i!%et o!l0 a)te# t"e,o-a!0 ta#t ea#!i!g -#o)it. t"e #i+ i lea!$ it e!u#e a "ealt"0 g#o*t" o) t"e ,a-itala#+et(

11/27/15 >

)ENEFITS TO THE COM*ANB)ENEFITS TO THE COM*ANB


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)ENEFITS TO THE COM*ANB)ENEFITS TO THE COM*ANB

• VC -#o%i$e )i!a!,e to e-lo#e %at "uge8u!utilie$ -ote!tial a!$ tale!t(

• ?

HISTORBHISTORB


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HISTORBHISTORB

• T"e ,o!,e-t o) VC )u!$ o#igi!ate$ i! US )#ot"e 0ea# 1>:@(

• T"e -#ee!t $a0 gia!t big8 li+e A--le.i,#oo)t. ,Do!al$ a!$ Je#o a#e t"ebe!e)i,ia#ie o) t"e Ve!tu#e Ca-ital Fu!$( T"eo%e#all u,,e o) VC i! t"e US e!,ou#age$

ot"e# ,ou!t#ie to a$o-t t"e ,o!,e-t o) VCF a*ell(

11/27/15 >1

• T"e g#o*t" o) VC i! I!$ia i o) #e,e!t o#igi!(


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g gVC )u!$ *it" i!itial ,a-ital o) R(1? ,#o#e *aetabli"e$ b0 IDBI i! t"e 0ea# 1>5(

• I!$ia *a att#a,te$ to t"e be!e)it o) Ve!tu#eCa-ital Fu!$ )o# t"e -#ootio! o) "ig"'te,"i!$ut#ie(

• Te,"!olog0 De%elo-e!t a!$ I!)o#atio!Co-a!0 o) I!$ia TDICI8. a oi!t %e!tu#e o)UTI. ICICI a!$ IDBI -#o%i$e ea#l0 tage )i!a!,eto t"e -#oe,t i! t"e )o# o) ee$ ,a-ital(

• C#e$it Ca-ital Ve!tu#e I!$ia8 Lt$(. *a et u- i!t"e -#i%ate e,to# i! t"e 0ea# 1>>(

11/27/15 >2

• Ri+ Ca-ital a!$ Te,"!olog0 Fi!a!,e


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Ri+ Ca-ital a!$ Te,"!olog0 Fi!a!,eCo#-o#atio! o) I!$ia RCTL8 to )u!$ -#oe,ti!%ol%i!g !e* te,"!olog0 i etabli"e$ b0I!$ut#ial Fi!a!,e Co#-o#atio! o) I!$ia(

• Fi!a!,ial aita!,e i gi%e! i! t"e )o# o) euit0

-a#ti,i-atio!(

• IFCI %e!tu#e ,a-ital )u!$ lt$(. i t"e !e* !ae

o) RCTL(• Ve!tu#e Ca-ital Fu!$ "oul$ #egite# *it" SEBI

a!$ a$"e#e to it gui$eli!e(

11/27/15 >6

To" cities attractin ventre ca"ital invest!ents


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CITIES SECTORS

MUM)AISoft(are services0 )*O0 Media0 Co!"ter ra"&ics0Ani!ations0 Finance )an%in

)ANGALORE All I* led co!"anies0 IT ITES0 )io,tec&nolo/

1ELHI Soft(are services0 ITES 0 Teleco!

CHENNAI IT 0 Teleco!

HB1ERA)A1 IT ITES0 *&ar!aceticals

*UNE )io,tec&nolo/0 IT 0 )*O

CRE1IT RATINGCRE1IT RATING


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• I! t"e -#ee!t ,o-etiti%e a#+et. t"e#e a#e lot o),o-a!ie a#e i! t"e a#+et to #aie o!e0 )o# t"ei#

bui!e(

• It i $i))i,ult )o# t"e i!%eto# to u$ge. *"et"e# a!i!%ete!t i a)e a!$ #eliable o# !ot(

• T"e#e)o#e. to "el- t"e i!%eto# a+e a $e,iio! o!i!%ete!t. t"e !ee$ )o# a! i!$e-e!$e!t a!$ #eliableage!,0 *a )elt to #ate $ebt obligatio! o) t"e ,o-a!ie(

• T"u. ,#e$it #ati!g age!,0 ,ae i!to eite!,e(• C#e$it #ati!g age!,0 ea! a bo$0 ,o#-o#ate. *"i," i

e!gage$ i! t"e bui!e o) #ati!g o) e,u#itie o))e# b0*a0 o) -ubli, o# #ig"t iue(

11/27/15 >5

A $i t C $it R ti A i


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A,,o#$i!g to C#e$it Rati!g Age!,ieRegulatio! 1>>>. #ati!g ea!;

A! o-i!io! #ega#$i!g e,u#itie(

E-#ee$ i! t"e )o# o) ta!$a#$0bol(

Aig!e$ b0 a ,#e$it #ati!g age!,0(

Ue$ b0 a! iue# o) u," e,u#itie(

11/27/15 >@


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Rati!g i e-#ee$ i! al-"abeti,al o#al-"a!ue#i, 0bol o! t"e bai o) t"eu!$e#l0i!g ,#e$it ualit0 o) t"e $ebt i!t#ue!t(

It $oe !ot #e,oe!$ bu0i!g. "ol$i!g o#elli!g a!$ it i !ot bae$ o! au$it(

It o!l0 aee a!$ gi%e o-i!io! )o# a -e,i)i,-u#-oe(

11/27/15 >7

HISTORB


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1>7 CRISIL *a etabli"e$

1>>1 ICRA *a et u-

1>>: CARE ,ae i!to eite!,e

1>>@ ' Du)) a!$

HISTORB

Credit Ratin Infor!ation


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Credit Ratin Infor!ation

Services of India Ltd

11/27/15 >>

Invest!ent and Credit

Ratin Aenc/ of India Ltd

Credit Anal/sis and

Researc& Ltd

CLASSIFICATION OF CRE1IT RATINGCLASSIFICATION OF CRE1IT RATING


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CLASSIFICATION OF CRE1IT RATINGCLASSIFICATION OF CRE1IT RATING

+. 1e$entre and )ond Ratin; lo!g te#

i!t#ue!t li+e $ebe!tu#e a!$ bo!$ o),o#-o#ate bo$ie. go%e#!e!t a#e #ate$ b0 t"e#ati!g age!,ie(

Debe!tu#e #ati!g i t"e -#ia#0 a!$ ao#bui!e o) t"e ,#e$it #ati!g age!,0(

DEBENTURE RATIN4

11/27/15 1??

2( E6it/ Ratin; T"e #ati!g o) euitie o) t"e

http://credit-rating.pdf/http://credit-rating.pdf/


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,o-a!ie i ,alle$ euit0 g#a$i!g(

Euit0 #ati!g i %e#0 ,oo! to i!te#!atio!al,a-ital a#+et(

At -#ee!t. euit0 #ati!g i u!$e#ta+e! b0 #ati!gage!,ie i! I!$ia alo(

C#e$it #ati!g age!,0 C#iil "a aig!e$ t"e "ig"et 5/58g#a$e to t"e -#o-oe$ i!itial -ubli, o))e# I


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6. Fi-ed 1e"osit and Certificate of

1e"osit ratin; T"ee a#e t"ee$iu te# i!t#ue!t #ate$ b0 t"e#ati!g age!,ie( T"e )ie$ $e-oit

-#o%iio! o))e#e$ b0 t"e )i!a!,e,o-a!ie a!$ ,o#-o#ate bo$ie a#e#ate$ to e!u#e t"ei# a)et0 a!$

e,u#it0(

11/27/15 1?2

• =DFC Fie$ $e-oit $etail


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=DFC Fie$ $e-oit $etail

• De-oit ,o!ti!ue$ to g#o* $u#i!g FQ11( A

o! a#," 61. 2?11. outta!$i!g $e-oittoo$ at 2:.@25 ,#o#e( T"e $e-oito# baetoo$ at a--#oiatel0 >(@7 la+"( CRISIL

a!$ ICRA "a%e )o# t"e itee!t" ,o!e,uti%e0ea#. #ea))i#e$ t"ei# AAA #ati!g )o# =DFC9$e-oit( T"i #ati!g #e-#ee!t "ig"et

a)et0. att#a,ti%e #etu#! a!$ -e#)e,t e#%i,eta!$a#$ a #ega#$ tiel0 #e-a0e!t o)-#i!,i-al a!$ i!te#et(

11/27/15 1?6

:. Co!!ercial "a"er ratin; T"i "o#t'te#


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i!t#ue!t i alo #ate$ b0 t"e age!,ie(

Re-ute$ a!$ "ig" ou!$ ,o#-o#ate bo$ie iue,oe#,ial -a-e# to t"e -ubli, a!$ )i!a!,iali!titutio!(

It "a bee! a$e a!$ato#0 )o# t"e ,oe#,ial

-a-e# to get #e%ie*e$ a!$ #ate$ b0 t"e #ati!gage!,0(

5( L*G'erosene dealers'fir!s ratin; T"ei!it#0 o) -et#oleu a!$ !atu#al ga#e,oe!$e$ a a!$ato#0 e%aluatio! o) all-#i%ate ,o-a!ie elli!g L


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CRISIL/CARE/ICRA(

It i a$e a!$ato#0 )o# t"e ,o-a!ie to$i,loe t"ei# #ati!g to t"e -ubli,(

@( C"it )u!$ #ati!g; it i !ot a!$ato#0. oe o)

t"eel%e get #ate$(CRISIL #ate ,"it )u!$ i!,o#-o#ate$ a -ubli,

o# -#i%ate ,o-a!ie *it" a i!iu !et *o#t"

R(5 La+" a!$ a! o-e#ati!g t#a,+ #e,o#$ o) 1?0ea#(

11/27/15 1?5


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7(Real etate $e%elo-e# #ati!g; T"i #ati!g i )o#a -a#ti,ula# -#oe,t a!$ !ot )o# t"e ,o-a!0 aa *"ole(


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TO IN4ESTORS;

+.Assess!ent of credi$ilit/; Rati!g aee t"e

t#e!gt" a!$ *ea+!e o) t"e ,o-a!0/$ebti!t#ue!t o! t"e bai o) ,e#tai! -#e$ete#i!e$)a,to#(

It i be!e)i,ial to t"e i!%eto# to u!$e#ta!$ t"e

,#e$ibilit0 o) t"e iui!g ,o-a!0(

2. Ris% Indicator# all t"e i!%eto# a0 !ot -oet"e #eui#e$ +!o*le$ge a!$ i!)o#atio! )o# ,#e$it

e%aluatio!( I! t"i ,o!tet . i!%eto# ,a! i$e!ti)0 t"e#i+ ao,iate$ *it" t"e *it" t"e 0bol aig!e$to t"e i!t#ue!t b0 t"e ,#e$it #ati!g age!,0(

11/27/15 1?7

6( *rotects aainst $an%r"tc/; T"e )i!a!,ial


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" /

t#e!gt" o) t"e iui!g ,o-a!0 aee$ t"#oug",#e$it #ati!g(

=ig" #ati!g aig!e$ to t"e $ebt e,u#it0 o) a,o-a!0 i!$i,ate a a)e i!%ete!t(

:( Eas/ to nderstand; T"e #ati!g i gi%e! i! t"e

)o# o) 0bol( 3!,e t"e 0bol a#e ,lea#l0e-lai!e$( It i ea0 to u!$e#ta!$ a!$ ue t"e(

5( Ena$les 6ic% decisions; A! i!%eto# ,a! ta+e

ui,+ $e,iio! bae$ u-o! t"e #ati!g( T"e#e i !o!ee$ )o# "i to tu$0 o# +!o* t"e )u!$ae!tal o)t"e ,o-a!0(

11/27/15 1?


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@( Inde"endent decision; t"e i!%eto# ,a! buil$"i o*! -o#t)olio *it"out t"e "el- o) t"e -o#t)olioa!age# b0 ,a#e)ull0 *at,"i!g u-g#a$e a!$$o*!g#a$e o) t"e ,#e$it #ati!g(

7( Ot&er services; T"e #ati!g age!,ie ,o!$u,t#eea#," tu$ie a!$ -#o%i$e i!$ut#0 #e-o#t.ei!a# a!$ o-e! to a!al0t o) t"e age!,ie)o# $i,uio!(

11/27/15 1?>

A14ANTAGES TO COM*ANB


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+. Lo(ers t&e cost of $orro(in; T"e "ig"e# #ati!g)o# a)et0 -#o%i$e$ b0 t"e #ati!g age!,ie buil$ t"e

i!%eto#9 ,o!)i$e!,e i! t"e -a0e!t o) -#i!,i-ala!$ I!te#et(

T"e iui!g ,o-a!0 ,a! ,a-italie o! t"i b0lo*e#i!g t"e #ate o) i!te#et(

2( @idens investor $ase; T"e o-i!io! o) t"e #ati!gage!,0 buil$ u- i!%eto#9 ,o!)i$e!,e *"i," ,oul$e!able t"e iue# to #aie )u!$ e%e! i! a lu-e$a#+et(

T"e #ati!g itel) i ue$ a a! a$%e#tii!g tool to#aie )u!$ i! %a#iou e$ia(

11/27/15 11?


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6( Indces self disci"line; Rati!g #eui#e t"e$i,lou#e o) a,,ou!ti!g 0te )i!a!,ial#e-o#ti!g a!$ a!agee!t -atte#! o$el8(

T"i $i,lou#e i-oe el)'$i,i-li!e o! t"e)u!,tio!i!g o) t"e ,o-a!0(

:( Motivates ro(t&; #ati!g gi%e a )eeli!g o),o!)i$e!,e a!$ e!,ou#age t"e e!t#e-#e!eu# to

u!$e#ta+e !e* -#oe,t a!$ e-a!$ t"e eiti!g-#oe,t(

11/27/15 111

RATING *ROCESSRATING *ROCESS


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FACT FIN1INGS

ANALBSISRATING

STAGE

FINAL STAGE*RIMARB

STAGE

1( Rati!g#euet

2( Aig!i!g#ati!g tea 2ebe#8

1( Colle,tio! o)i!)o#atio!(

2( eeti!g &-la!t %iit

6(


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• T"e ao# ,#e$it #ati!g age!,ie i! I!$ia a#e;

C#e$it Rati!g I!)o#atio! Se#%i,e o) I!$ia Lt$(CRISIL8

I!%ete!t a!$ C#e$it Rati!g Age!,0 o) I!$ia Lt$(ICRA8

C#e$it A!al0i a!$ Reea#," Lt$ CARE8

Du)) a!$


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+. AAA LAAA CARE AAA Hi&est Safet/

2 AA LAA CARE AA Hi& safet/

7. A LA CARE A Ade6ate Safet/

8. ))) L))) CARE ))) Moderate safet/

9. )) L)) CARE )) Inade6ate safet/

:. ) L) CARE ) Ris% *roneLevel3

;. C LC CARE C S$stantial Ris%


115/188

+. FAAA MAAA CARE AAA Hi&est Safet/

2 FAA MAA CARE AA Hi& safet/

7. FA MA CARE A Ade6ate Safet/

8. F) M) CARE ))) Inade6ate safet/

9. ,, ,, CARE ))

:. ,, ,, CARE )

;. FC MC CARE C Ris% *roneLevel3


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+. *+ A+ *R,+ Hi&est Safet/

2 *2 A2 *R,2 Hi& safet/

7. *7 A7 *R, 7 Ade6ate Safet/

8. *8 A8 *R,8 Ris% *roneLevel3

9. *9 A9 *R,9 1efalt

SHORT ter! de$t instr!ents inclde co!!ercial "a"ers onl/.

11/27/15 11@

I*O GRA1INGI*O GRA1ING


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• T"e SEBI "a a$e I


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g , ,

How did the capital market regulator react to one of the worst years for the

primary market? By scrapping mandatory IPO (initial public offerings)grading and making it oluntary! "hairman #$ %inha&s public speeches

are about restoring inestor confidence but he clearly does not know how

to do it' %o powerful companies and market intermediaries once again

used a depressed primary market to successfully lobby for a dilution of

inestor protection measures' IPO grading was adocated by inestoractiists and associations around **+ and was reluctantly mandated by

the %ecurities and ,-change Board of India (%,BI) in **. only to be

dropped si- years on'

•

11/27/15 11


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• %,BI&s e-cuse for scrapping mandatory grading is the

reported findings of /arious studies& that a largenumber of inestors are /not influenced by grades&0

that plenty of low1grade IPOs receied a big response

from retail and institutional inestors and thirdly that

IPOs with high grades yielded more losses' In a clearcontradiction of these claims media reports also say

that %,BI&s action was /a moe to uplift the dormant

primary market&' It is also unclear how %,BI re2ected

yet another study which shows that oer time IPOswith higher grades yielded better price multiples'

11/27/15 11>

• Indian institutions hae scant regard for history so %,BI did

not bother to consult inestor associations who had fought


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not bother to consult inestor associations who had fought

long and hard for IPO grading' 3or did it bother to e-amine

whether the grading process could be made more meaningfulor ade4uately publicised' 5hanks to pressure from powerful

corporate lobbies the IPO grading process was hobbled at the

ery inception' Inestor groups wanted IPO grading to be

independent and rating agencies to be paid from the large pool

of badly utilised inestor protectionfunds with stock

e-changes and the ministry of corporate affairs' 5his did not

happen' "ompanies were paying for their own rating6leading

to charges about shoddy ratings6especially when India&s top

rating agency "7I%I8 gae 7eliance Power a 91star grade atthe peak of the bull run of :anuary **;'

11/27/15 12?

• Howeer the grading did protect genuine inestors who

had no time or ability to wade through bulky


121/188

had no time or ability to wade through bulky

offer documents to find out what the companies wanted

to hide' 5he simple 91point grade based on an e-pertealuation of fundamentals by a rating agency at least

acted as a fact check een if it did not coer price risk'

By making it oluntary %,BI has effectiely killed IPOgrading' But instead of celebrating their ictory

companies and market intermediaries should be really

worried at the complete absence of protest' It shows that

the inestor simply doesn&t care and that is the real

reason why only three companies made a public

offering in *


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CRISIL =oue. Ce!t#al A%e!ue

=i#a!a!$a!i Bui!e


123/188

:t" Floo#. 4o$#e Colieuoai0a =o-ital.Roa$ Be"i!$ E%

e#a#$ Naga# 3)) Eate#! E-#e=ig"*a0. Sio! E8

ubai :?? ?22

ebite; ***(,a#e#ati!g(,o

• )ric%(or% Ratins India *rivate Li!ited

6#$ Floo#. Ra Al+aa /6 & 62/2. ale!a Ag#a"a#a

Ba!!e#g"atta Roa$. Ba!galo#e 5@? ?7@

ebite; ***(b#i,+*o#+#ati!g(i!11/27/15 126

• Fitc& Ratins India *rivate Ltd. A-eea0 =oue @t" Floo#

http://www.careratings.com/http://www.brickworkratings.in/http://www.brickworkratings.in/http://www.careratings.com/


124/188

A-eea0 =oue. @t" Floo#

6 Di!"a* Va,""a Roa$.C"u#,"gate

ubai :?? ?2?

ebite; ***()it,"#ati!g(,o

• SME Ratin Aenc/ of India Ltd. SMERA3

U!it No( 1?2. 1&t Floo#. Sue# ebite; ***(e#a(i!

11/27/15 12:

http://www.fitchratings.com/http://www.smera.in/http://www.smera.in/http://www.fitchratings.com/


125/188

11/27/15 125

HIRE *URCHASE FINANCE


126/188

HIRE *URCHASE FINANCE

• =i#e -u#,"ae i a 0te o) a,ui#i!ggoo$ o! ,#e$it *"e#eb0 t"e elle# o) t"e

goo$ i #ega#$e$ a t"e dealer t"e-u#,"ae# i #ega#$e$ a t"e &irer a!$ t"e)i!a!,ie# a t"e o(ner (

11/27/15 12@

• U!$e# t"i t#a!a,tio!. t"e "i#e -u#,"ae# a,ui#et"e -#o-e#t0 goo$8 ie$iatel0 o! ig!i!g t"e


127/188

t"e -#o-e#t0 goo$8 ie$iatel0 o! ig!i!g t"e"i#e -u#,"ae ag#eee!t but t"e o*!e#"i- o# title

o) t"e ae i t#a!)e##e$ o!l0 *"e! t"e lati!talle!t i -ai$(

• T"e "i#e -u#,"ae 0te i #egulate$ b0 t"e =i#e


128/188

t"e#eo) to a -e#o! o! ,o!$itio! t"at u,"-e#o! -a0 t"e ag#ee$ aou!t i! -e#io$i,i!talle!t(

28 T"e -#o-e#t0 i! t"e goo$ i to -a tou," -e#o! o! t"e -a0e!t o) t"e lat o)u," i!talle!t. a!$

68 Su," -e#o! "a a #ig"t to te#i!ate t"eag#eee!t at a!0 tie be)o#e t"e -#o-e#t0o -ae(

11/27/15 12

=i " i l i $ t i


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• =i#e'-u#,"ae i ,oo!l0 ,a##ie$ out i!

t"e )o# o) a t#ia!gula# t#a!a,tio!( T"e$eale#/elle#/%e!$o# ell t"e goo$ to t"e)i!a!,ie# uuall0 )i!a!,e o# ,#e$it,o-a!08. *"i," be,oe t"e o*!e#. i!#etu#! )o# a! ie$iate -a0e!t. *"i," it"e ,a" -#i,e le $e-oit -ai$ b0 t"ebu0e#/,o!ue#. +!o*! a t"e "i#e#( T"e

o*!e# t"e! "i#e t"e goo$ to t"e "i#e#u!$e# a "i#e'-u#,"ae ag#ee!t(

11/27/15 12>

Hire,*rc&ase Transaction


130/188

Hirer'

cons!er

1ealer'seller

O(ner'financier

1

11/27/15 16?

1( =i#e# -a0 $eale# $e-oit(



131/188

2

Hirer'

cons!er

1ealer'seller

O(ner'financie

r

+

11/27/15 161

2( 3*!e# -a0 $eale# ,a" -#i,e le $e-oit



132/188

2

Hirer'

cons!er

1ealer'seller

O(ner'financie

r

+

11/27/15 162

6( Deale# $eli%e# goo$ to 3*!e# 7



133/188

2

Hirer'

cons!er

1ealer'seller

O(ner'financie

r

+

11/27/15 166

6(Deale# $eli%e# goo$ to3*!e# o# o*!e# $eli%e#

goo$ to =i#e#

7 7



134/188

2

Hirer'

cons!er

1ealer'seller

O(ner'financie

r

+

11/27/15 16:

:( 3*!e# "i#e goo$ to "i#e#

u!$e# =< ag#eee!t

7 7

8



135/188

2

Hirer'

cons!er

1ealer'seller

O(ner'financie

r

+

11/27/15 165

5( =i#e# -a0 i!talle!t too*!e# u!$e# =< ag#eee!t7 7

8

9


136/188

• =i#e -u#,"ae "oul$ be $iti!gui"e$

)#o i!talle!t ale *"e#ei! -#o-e#t0-ae to t"e -u#,"ae# *it" t"e-a0e!t o) t"e )i#t i!talle!t( But i!

,ae o) =< o*!e#"i- #eai! *it" t"eelle# u!til t"e lat i!talle!t i -ai$8bu0e# get o*!e#"i- a)te# -a0i!g t"elat i!talle!t( =< alo $i))e# )o#leai!g(

11/27/15 16@


137/188

• Di))e#e!,e bet*ee! leae )i!a!,i!g a!$ "i#e -u#,"ae

11/27/15 167

T0-e o) =i#e'


138/188

0-

T"e#e a#e t*o t0-e o) "i#e'-u#,"ae;

1(Co!ue# =i#e'


139/188

• T"i ,o%e# t"e )i!a!,i!g o) ,o!ue#goo$ -u#,"ae$ )o# -e#o!al. )ail0 a!$"oue"ol$ -u#-oe( T"e#e)o#e. t"e "i#e# i

a !atu#al -e#o! !ot bui!e8 a!$ t"egoo$ a#e obtai!e$ )o# !o!'bui!e-u#-oe(

11/27/15 16>

I!$ut#ial =i#e'


140/188

• I!$ut#ial "i#e'-u#,"ae #e)e# to goo$-u#,"ae$ b0 ,o-a!ie )o# ue i!bui!e o# i!$ut#0(

• Ea-le; T"e -u#,"ae o) a a,"i!e b0 a,o-a!0 to be ue$ i! bui!e(

11/27/15 1:?

Featu#e a!$ be!e)it


141/188

1( T"e ,o!ue# ,a! obtai! a aiu o)>? )i!a!,i!g(

2( T"e "i#e# be,oe t"e o*!e# o) t"e

goo$ o! ettlee!t o) t"e "i#e'-u#,"ae)a,ilit0(

6( T"e "i#e# ,a! o-t )o# ea#l0 )ull ettlee!t

11/27/15 1:1

:( T"e "i#e# ,a! te#i!ate t"e ag#eee!t b0


142/188

g 0#etu#!i!g t"e goo$ but "a to i!$e!i)0

t"e o*!e# o) a!0 $aage o# loei!,u##e$ i! $i-oi!g o) t"e aet(

11/27/15 1:2

A##a!gee!t t"at $i))e#e!t )i!a!,e ,o-a!ie"a%e *it" $eale#;

Hire,"rc&ase direct collection (it&ot

o"tion to t&e dealer3


143/188

" 3

11/27/15 1:6

T"i i a )a,ilit0 *"e#e t"e $eale# i!t#o$u,e t"e

bu0e# o) t"e %e"i,le to t"e )i!a!,ie#( "e! t"e)a,ilit0 i a--#o%e$. t"e "i#e# -a0 t"e o!t"l0i!talle!t to t"e )i!a!,ie#( I) t"e "i#e# $e)ault. t"e)i!a!,ie# *ill "a%e to #e-oe t"e %e"i,le(

Hirer' cons!er

1ealer'seller

O(ner'financier

Hire,"rc&ase direct collection (it&

c&oice to t&e dealer3


144/188

3• T"i i a )a,ilit0 *"e#e t"e $eale# i!t#o$u,e t"e bu0e# o) t"e

%e"i,le to t"e )i!a!,ie# a!$ gua#a!tee #e-a0e!t o) t"e)a,ilit0( "e! t"e )a,ilit0 i a--#o%e$. t"e "i#e# -a0 t"eo!t"l0 i!talle!t to t"e )i!a!,ie#( I) t"e "i#e# $e)ault. t"e)i!a!,ie# *ill ta+e a,tio! agai!t t"e "i#e# a!$ t"e $eale#(

11/27/15 1::

Hirer' cons!er

1ealer'seller

O(ner'financier

Hire,"rc&ase sc&edled collection

$/ t&e dealer3


145/188

/ 3• T"i i a )a,ilit0 *"e#e t"e $eale# i!t#o$u,e t"e bu0e#

o) t"e %e"i,le to t"e )i!a!,ie#( "e! t"e )a,ilit0 ia--#o%e$. t"e $eale# ,olle,t t"e o!t"l0 i!talle!to! be"al) o) t"e )i!a!,ie#( I) t"e "i#e# $e)ault. t"e$eale# "a to a+e t"e -a0e!t )o# t"e %e"i,le(

11/27/15 1:5

Hirer' cons!er

1ealer'seller

O(ner'financier


146/188

11/27/15 1:@

+. Frad


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T"e $eale# a0. i! ,olluio! *it" t"eu--lie#. -#ee!t ue$ o# #e,o!$itio!e$eui-e!t )o# )i!a!,i!g i!tea$ o) !e*

eui-e!t( T"e o*!e# a0 o!l0 ,oe to+!o* about it a)te# #e-oeio! a!$ *ill"a%e $i))i,ult0 i! $i-oi!g o) it(

11/27/15 1:7

• T"e $eale# ig"t i!t#o$u,e )i,titiou"i#e# T"i ,a! "a--e! i! ,"e$ le$


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"i#e#( T"i ,a! "a--e! i! ,"e$ule$

,olle,tio! a##a!gee!t( T"e $eale# ,a!,#eate a )i,titiou "i#e#9 !ae a!$ ubit)o#ge$ $o,ue!t to )i!a!,ie# T"e

)i!a!,ie# *ill -a0 t"e $eale# )o# !o!'eite!t goo$( T"e $eale# *ill ue t"e)u!$ )o# "i o*! -u#-oe a!$ $uti)ull0-a0 t"e o!t"l0 i!talle!t( T"e -#oble*ill u#)a,e *"e! t"e $eale# $e)ault o!-a0e!t(

11/27/15 1:

2 .Ot&er "ro$le!s• =i#e -u#,"ae )a,ilitie a#e ea!t -#ia#il0 )o#


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• =i#e'-u#,"ae )a,ilitie a#e ea!t -#ia#il0 )o#

o%able goo$( 4oo$ a))ie$ to t"e g#ou!$La!$8 *oul$ -oe a -#oble( T"e Natio!alLa!$ Co$e $e)i!e la!$ to i!,lu$e all t"i!gatta,"e$ to t"e ea#t" o# -e#a!e!tl0 )ate!e$

to a!0t"i!g atta,"e$ to t"e ea#t" *"et"e# o!o# belo* t"e u#)a,e( T"e#e)o#e. a ,lai b0a!0 -a#t0 o! t"e la!$ *ill i!,lu$e t"e )itu#e

t"oug" )i!a!,e$ b0 a!ot"e# -a#t0( T"e#e)o#e. a$i,laie# )#o t"e la!$lo#$ o%e# t"e )itu#e!ee$ to be ta+e!(

11/27/15 1:>


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• Stole! goo$ li+e a,"i!e#0 a#e $i))i,ult)o# t"e )i!a!,ie# to a,e#tai!( T"e )i!a!,ie#*ill alo loe it #ig"t o%e# t"e a,"i!e#0(

T"i a0 !ot "a--e! i! ,ae *"e#e t"e#ei a #egit#atio! bo$0. )o# ea-le. T"e"i#e# a0 !ot "a%e i!u#e$ t"e goo$(

11/27/15 15?

Re"ossession


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• T"e )i!a!,ie# a0 o!l0 #e-oe t"egoo$ t"at i. ta+e -oeio! o) goo$e!tio!e$ i! a "i#e'-u#,"ae ag#eee!t

a#ii!g out o) a!0 b#ea," o) t"e ag#eee!t#elati!g to t"e -a0e!t o) i!tale!t.*"e#e.

11/27/15 151

• i8 T"e#e "a$ bee! t*o u,,ei%e$e)ault o) -a0e!t i! t"e ,ae o) $eat"


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$e)ault o) -a0e!t i! t"e ,ae o) $eat"o) "ei#. : u,,ei%e $e)ault8 o# a $e)aulto) t"e lat -a0e!t a!$ t"e )i!a!,ie# "ae#%e$ o! "i#e# a Noti,e o) I!te!tio! toRe-oe a!$

• ii8 T"e -e#io$ )ie$ b0 t"e Noti,e o)I!te!tio! to Re-oe "a e-i#e$. *"i,""all !ot be le t"a! 21 $a0 a)te# t"ee#%i,e o) t"e !oti,e(

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*rocedres involved drin

t&e re"ossession


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t&e re"ossession

• T"e =i#e'


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#e-oe t"e goo$. t"e! t"e age!t "a

to "o* t"e "i#e# a! aut"o#it0 ,a#$ iue$b0 t"e )i!a!,ie# a!$ "i i$e!tit0 ,a#$(

• iii8 A! aut"o#it0 ,a#$ ut bea# t"e-"otog#a-". !ae a!$ a$$#e o) t"eage!t. t"e !ae a!$ a$$#e o) t"e)i!a!,ie#. t"e !atu#e o) a--oi!te!t o)age!t a!$ t"e ig!atu#e o) t"e aut"o#ie$-e#o! o) t"e )i!a!,ie#(

11/27/15 15:


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i%8 T"e )i!a!,ie#9 o))i,e# o# age!t alo"a to "o* t"e "i#e# o# t"e o,,u-a!t o)t"e "i#e#9 -#eie. "i i$e!tit0 ,a#$

be)o#e #e-oei!g t"e goo$(

11/27/15 155

*rocedres after t&e oods

&as $een re"ossessed


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&as $een re"ossessed

• "e#e t"e )i!a!,ie# ta+e -oeio! o)t"e goo$ t"at *e#e ,o-#ie$ i! a "i#e'

-u#,"ae ag#eee!t. t"e )i!a!,ie# ut$eli%e# to t"e "i#e# -e#o!all0 a $o,ue!t.*"i," "all et out

11/27/15 15@

i8 A "o#t $e,#i-tio! o) t"e goo$ a!$


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i8 A "o#t $e,#i-tio! o) t"e goo$ a!$

ii8 T"e $ate o! *"i," t"e )i!a!,ie# too+-oeio! o) t"e goo$

iii8T"e tie at *"i," t"e )i!a!,ie# too+

-oeio! o) t"e goo$i%8T"e -la,e *"e#e t"e )i!a!,ie# too+

-oeio! o) t"e goo$

%8 T"e a,+!o*le$ge!t o) #e,ei-t o) t"egoo$(

11/27/15 157

%i8 "e#e t"e "i#e# i !ot -#ee!t at t"etie o) #e-oeio!. t"e )i!a!,ie# ut


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e!$ u," $o,ue!t to t"e "i#e#ie$iatel0 a)te# ta+i!g -oeio! o) t"egoo$(

%ii8 it"i! 21 $a0 a)te# t"e )i!a!,ie# "a

ta+e! -oeio! o) goo$. t"e )i!a!,ie#ut e#%e o! t"e "i#e# a!$ e%e#0gua#a!to# o) t"e "i#e# a Noti,e to =i#e#

u!$e# Se,tio! 1@(

11/27/15 15

%iii8 I) t"e !oti,e i !ot e#%e$. t"e #ig"t o)t"e )i!a!,ie# u!$e# t"e "i#e'-u#,"ae


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t"e )i!a!,ie# u!$e# t"e "i#e'-u#,"ae

ag#eee!t *ill t"e#eu-o! ,eae(

i8 =o*e%e#. i) t"e "i#e# ee#,ie "i o# "e#

#ig"t u!$e# t"e "i#e'-u#,"ae ag#eee!tto #e,o%e# t"e goo$ ta+e! -oeio! b0t"e )i!a!,ie#. t"e !oti,e i $eee$ to "a%e

bee! $ul0 e#%e$ o! t"e "i#e#(

11/27/15 15>

8 Cot i!%ol%e$ i! t"e #e-oeio! *ill be bo#!e


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b0 t"e "i#e#;

18T"e ,ot o) #e-oeio! a!$

28T"e ,ot i!,i$e!tal o) ta+i!g -oeio!a!$ t"e ,ot o) to#age(

11/27/15 1@?


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11/27/15 1@1


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• I! i-le *o#$. Leae i a )i!a!,ial,o!t#a,t bet*ee! t"e bui!e ,utoe#ue#8 a!$ t"e eui-e!t u--lie#

!o#all0 o*!e#8 )o# ui!g a -a#ti,ula#aet/eui-e!t o%e# a -e#io$ o) tieagai!t t"e -e#io$i, -a0e!t ,alle$KLeae #e!tal(

11/27/15 1@2


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• Leae ge!e#all0 i!%ol%e t*o -a#tie i(e(t"e leo# o*!e#8 a!$ t"e leee ue#8(

• U!$e# t"i a##a!gee!t. t"e leo#

t#a!)e# t"e #ig"t to ue to t"e leee i!#etu#! o) t"e leae #e!tal ag#ee$ u-o!(

• Leae ag#eee!t ,a! be a$e )leible

e!oug" to eet t"e )i!a!,ial #eui#ee!to) bot" t"e -a#tie(

11/27/15 1@6

E5AM*LE OF CAR LEASE


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11/27/15 1@:

LESSORLESSEE


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11/27/15 1@5

1ifference $et(een

Lease and Hire *rc&ase#


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• O(ners&i" of t&e Asset# I! leae. o*!e#"i-lie *it" t"e leo#( T"e leee "a t"e #ig"t toue t"e eui-e!t a!$ $oe !ot "a%e a!o-tio! to -u#,"ae(

• "e#ea i! "i#e -u#,"ae. t"e "i#e# "a t"e

o-tio! to -u#,"ae( T"e "i#e# be,oe t"eo*!e# o) t"e aet/eui-e!t ie$iatel0a)te# t"e lat i!talle!t i -ai$(

11/27/15 1@@

• 1e"reciation# I! leae )i!a!,i!g. t"e$e-#e,iatio! i ,laie$ a a! e-e!e i! t"eb + ) l


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boo+ o) leo#(

• 3! t"e ot"e# "a!$. t"e $e-#e,iatio! ,lai iallo*e$ to t"e "i#e# i! ,ae o) "i#e -u#,"aet#a!a,tio!(

• Rental *a/!ents# T"e leae #e!tal ,o%e# t"e,ot o) ui!g a! aet( No#all0. it i $e#i%e$*it" t"e ,ot o) a! aet o%e# t"e aet li)e(

• I! ,ae o) "i#e -u#,"ae. i!talle!t i i!,lui%e

o) t"e -#i!,i-al aou!t a!$ t"e i!te#et )o# t"etie -e#io$ t"e aet i utilie$(

11/27/15 1@7

• 1ration# 4e!e#all0 leae ag#eee!t a#e$o!e )o# lo!ge# $u#atio! a!$ )o# bigge#

t li+ l $ t t


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aet li+e la!$. -#o-e#t0 et,(

• =i#e


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#e-o!ibilit0 o) t"e leee but. i! o-e#ati!g leae.

it i t"e #e-o!ibilit0 o) t"e leo#(

• I! "i#e -u#,"ae. t"e #e-o!ibilit0 lie *it" t"e"i#e#(

• E-tent of Finance# Leae )i!a!,i!g ,a! be ,alle$t"e ,o-lete )i!a!,i!g o-tio! i! *"i," !o $o*!-a0e!t a#e #eui#e$ but i! ,ae o) "i#e-u#,"ae. t"e !o#all0 1? to 25 a#gi! o!e0

i #eui#e$ to be -ai$ u-)#o!t b0 t"e "i#e#(T"e#e)o#e. *e ,all it a -a#tial )i!a!,e li+e loa! et,(

11/27/15 1@>


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11/27/15 17?

• It ,a! be $e)i!e$ a Ko!e0. goo$ o# e#%i,e-#o%i$e$ to a! i!$i%i$ual i! lieu o) -a0e!t


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• Co!ue# C#e$it i!,lu$e all aet'bae$)i!a!,i!g -la! o))e#e$ to -#ia#il0 i!$i%i$ual toa,ui#e $u#able ,o!ue# goo$(

• T0-i,all0. i! a ,o!ue# ,#e$it t#a!a,tio!. t"ei!$i%i$ual',o!ue#'bu0e# -a0 a )#a,tio! o) t"e,a" -u#,"ae -#i,e at t"e tie o) t"e $eli%e#0 o)t"e aet a!$ -a0 t"e bala!,e *it" i!te#et o%e#a -e,i)ie$ -e#io$ o) tie(

11/27/15 171

• F#o a o$et begi!!i!g i! t"e ea#l0 eig"tie. t"e,o!ue# ,#e$it "a ee#ge$ a a! i-o#ta!taet'bae$ )i!a!,ial e#%i,e i! I!$ia


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aet bae$ )i!a!,ial e#%i,e i! I!$ia(

• T"e ai! u--lie# o) ,o!ue# ,#e$it a#e)o#eig!/ulti'!atio!al ba!+. ,oe#,ial ba!+a!$ )i!a!,e ,o-a!ie a!$ ,o%e# ite u," a

CARS. SC33TERS. VCR. VC


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1(


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11/27/15 17:

• T"e -a#tie to a ,o!ue# ,#e$itt#a!a,tio! $e-e!$ u-o! t"e !atu#e o) t"et ti


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t#a!a,tio!(

• I! )i#t ,atego#0. t"e#e a#e t*o -a#tie.!ael0 bo##o*e#',o!ue#',utoe# a!$$eale#',u')i!a!,ie#(

• I! e,o!$ ,atego#0. *"e#e t"e -a#tie a#e$eale#. )i!a!,ie# a!$ t"e ,utoe#

11/27/15 175


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11/27/15 17@

• Hire,*rc&ase; T"e ,utoe# "a t"e o-tio! to-u#,"ae t"e aet( But "e a0 !ot ee#,ie t"e


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o-tio! a!$ #etu#! t"e goo$ a,,o#$i!g to t"e te#o) t"e ag#eee!t(

• Conditional Sale; T"e o*!e#"i- i !ott#a!)e##e$ to t"e ,utoe# u!til t"e total -u#,"ae

-#i,e i!,lu$i!g t"e ,#e$it ,"a#ge i -ai$( T"e,utoe# ,a!!ot te#i!ate t"e ag#eee!t be)o#et"e -a0e!t o) t"e )ull -#i,e(

• Credit Sale; t"e o*!e#"i- i t#a!)e##e$ to t"e

,utoe# o! -a0e!t o) t"e )i#t i!talle!t( =e,a!!ot ,a!,el t"e ag#eee!t(

11/27/15 177

3DE 3F


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F#o t"e -oi!t o) %ie* o) -a0e!t. t"e ,o!ue#

,#e$it a##a!gee!t )all i!to t*o g#ou-(

1( Do*!


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• A *i$e #a!ge o) o-tio! a#e a%ailable(T0-i,all0. t"e #e-a0e!t -e#io$ #a!gebet*ee! 12'@? o!t"l0 i!talle!t( T"e#ate o) i!te#et i !o#all0 e-#ee$ at )lat#ate. t"e e))e,ti%e #ate o) i!te#et i ge!e#all0!ot $i,loe$(

11/27/15 17>


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• I! oe ,"ee. t"e #ate o) i!te#et i !ot$i,loe$. i!tea$ t"e EI ao,iate$ *it"t"e $i))e#e!t #e-a0e!t -e#io$ i e!tio!e$(

• ot o) t"e ,"ee -#o%i$e )o# ea0#e-a0e!t( T"e0 alo -#o%i$e )o# eit"e# a#ebate )o# -#o-t -a0e!t a!$ ,"a#ge )o#$ela0e$ -a0e!t(

11/27/15 1?

e,u#it0


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• Se,u#it0 i ge!e#all0 i! t"e )o# o) a )i#t,"a#ge o! t"e aet( T"e ,o!ue#

,a!!ot ell/-le$ge/"0-ot"e,ate t"e aet(

11/27/15 11

Dea!$ )o# ,o!ue#)i!a!,eFa,to#8


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• I!,#eae i! ,o!ue# $i-oable i!,oe• E!"a!,ee!t i! #eal i!,oe o) ,o!ue#

• Co!%e!ie!t ie o) i!talle!t -a0e!t

• 4#o*t" i! !u,lea# )ailie lea$i!g to!ube# o) "oue "ol$

• Lo*e# ,"a#ge

• Do*! -a0e!t a!$ ,#e$it ,o!t#a,t

A$%a!tage o) Co!ue#C#e$itFi!a!,e8

E i iti A i t t b )it )


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• E!o0i!g -oitio! ; A! i-o#ta!t be!e)it o) ,o!ue#

,#e$it i t"at it allo* -eo-le to e!o0 -oeio! o)goo$ *it"out "a%i!g to -a0 )o# t"e ie$iatel0(

• Sa%i!g ; ,o!ue# ,#e$it allo* )o# a e,"a!i o),o-ulo#0 a%i!g t"i i!$u,e -eo-le to ue t"ei#

i!,oe *iel0 a!$ -#oote t"#i)t ao!g -eo-le(• Co!%e!ie!t o$e ; Co!ue# ,#e$it o))e# a ,o!%e!ie!t

o$e o) a,ui#i!g ,o!ue# $u#able(

• eeti!g ee#ge!,0 ; Co!ue# ,#e$it i ue)ul i!

eeti!g ee#ge!,ie u," a ill!e. a,,i$e!t a!$$eat" *"i," i!%ol%e u!e-e,te$ e-e!e(

• aiiatio! o) #e%e!ue; Co!ue# ,#e$it)a,ilitate -ee$0 $i-oal o) goo$ *"i," *oul$"a%e #eai!e$ u!ol$ i! t"e abe!,e o) ,#e$it


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)a,ilit0 to ,o!ue#( T"i "el- i! i!,#eae$ alea!$ -#o)it t"#oug" ,#e$it ale(

• A,,ele#ate i!$ut#ial i!%ete!t; Co!ue# ,#e$it

a,,ele#ate i!%ete!t i! ,o!ue# $u#ablei!$ut#0 gi%i!g #ie to g#o*i!g le%el o) i!,oe a!$e-lo0e!t(

• E!"a!,e$ li%i!g ta!$a#$ ; ,o!ue# ,#e$ite!able -eo-le o) liite$ ea! to a,ui#e goo$to e!"a!,e t"ei# ge!e#al ta!$a#$ o) li%i!g(

•


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Co!ue# ,#e$it -#oote "ig"e# le%el o)i!%ete!t. e-lo0e!t a!$ i!,oe t"u#aii!g t"e e))e,ti%e $ea!$ a!$ -#ooti!g"ig"e# ta!$a#$ o) g#o*t" a!$$e%elo-e!t(


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• Ri+ to t#a$e# ; Co!ue# C#e$it -oe,o!i$e#able #i+ to t#a$e# be,aue i) t"e bu0e#$e)ault o! -a0e!t t"e le!$e# ,a! a,ui#e t"e


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- 0

goo$ but ,a!!ot ell it at t"e o#igi!al -#i,e(• A#ti)i,ial Boo; Co!ue# ,#e$it ,#eate a#ti)i,ial

boo i! ,o!ue# $u#able i!$ut#0(

• Ba$ Debt ; Co!ue# ,#e$it ge!e#ate a ubta!tial

aou!t o) #e%e!ue )o# t#a$e# but t"e#e i a "ig"#i+ o) ba$ $ebt(

• E,o!oi, i!tabilit0; I!$i,#ii!ate ,o!ue# ,#e$itlea$ to e,o!oi, i!tabilit0 be,aue o) #e,u##e!,eo) boo a!$ lu-( I! boo t"e#e i ,#e$itete!io! a!$ i! #e,eio! t"e#e i ,#e$it tig"te!i!g(


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T=AN Q3U ((

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