TaxTMI 
TaxTMI 
Revised framework for computation of Net Distributable Cash Flow (NDCF) by Real Estate Investment Trusts (REITs)
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....ution shall be 90% of the NDFC at the Trust level as well as the HoldCo/SPV level, subject to applicable provisions in the Companies Act, 2013 or the Limited Liability Partnership Act, 2008. Paragraph F of Chapter 3 of the Master Circular for Real Estate Investment Trusts provides an indicative framework for calculating NDCF at SPV level and at the REIT level. 2. In order to promote Ease of Doing Business, it has been decided to standardize the framework for calculation of available Net Distributable Cash Flows. Accordingly, the revised framework for computation of NDCF by REITs and its Holdcos/SPVs shall be as per Annexure A. Applicability of revised NDCF Framework: 3. The revised framework shall be applicable with effect from Apr....
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....h receipt basis) (+) Proceeds from sale of real estate investments, real estate assets or shares of SPVs or Investment Entity adjusted for the following • Applicable capital gains and other taxes • Related debts settled or due to be settled from sale proceeds • Directly attributable transaction costs • Proceeds reinvested or planned to be reinvested as per Regulation 18(16)(d) of REIT Regulations or any other relevant provisions of the REIT Regulations (+) Proceeds from sale of real estate investments, real estate assets or sale of shares of SPVs or Investment Entity not distributed pursuant to an earlier plan to re-invest as per Regulation 18(16)(d) of REIT Regulations or any other ....
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....or governmental stipulations; or - (refer note 2) (-) any capital expenditure on existing assets owned / leased by the SPV or Holdco, to the extent not funded by debt / equity or from reserves created in the earlier years (refer note 10) NDCF for HoldCo/SPV's B. Computation of Net Distributable Cash Flow at Trust level: - Particulars Cashflows from operating activities of the Trust (+) Cash flows received from SPV's / Investment entities which represent distributions of NDCF computed as per relevant framework (refer note 1 and 9 below) (+) Treasury income / income from investing activities of the Trust (interest income received from FD, any investment entities as defined in Regulation 18(5), tax refund, any other income....
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....) any reserve required to be created under the terms of, or pursuant to the obligations arising in accordance with, any: (i). loan agreement entered with financial institution, or (ii). terms and conditions, covenants or any other stipulations applicable to debt securities issued by the Trust or any of its SPVs/ HoldCos, or (iii). terms and conditions, covenants or any other stipulations applicable to external commercial borrowings availed by the Trust or any of its SPVs/ HoldCos, (iv). agreement pursuant to which the Trust operates or owns the real estate asset, or generates revenue or cashflows from such asset (such as, concession agreement, transmission services agreement, power purchase agreement, lease agreement, and any other agreemen....
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....DCF of SPV's (B) 250 250 Less: - Amount distributed by SPV's (C ) (235) (235) D = A + B -C 315 215 Max retention amount - 10% of D 31.5 21.5 Amount already retained by SPV 15 15 Max amount that can be retained by Trust 16.5 6.5 4. Further, Trust along with its SPVs needs to ensure that minimum 90% distribution of NDCF be met for a given financial year on a cumulative periodic basis as specified for mandatory distributions in the REIT regulations (subject to provisions of Note 1 above). 5. Surplus cash available in SPVs due to: (i) 10% of NDCF withheld in line with the Regulations in any earlier year or half year or (ii) Such surplus being available in a new SPV on ac....