TaxTMI 
TaxTMI 
TaxTMI 
Disclosure of financial information in offer document for REITs
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Richa G. Agarwal Deputy General Manager Investment Management Department Tel No.022-2644 9596 Email id - [email protected] Annexure - 'A' Financial information to be disclosed in offer document (A) Financial Information of REIT: The financial information, to be disclosed in the offer document, shall comply with the following: 1. Period of financial information to be disclosed: 1.1. The offer document shall contain financial information for a period of last three completed financial years immediately preceding the date of offer document. 1.2. If the closing date of the last completed financial year falls more than six months before the date of offer document, then the REIT shall also disclose interim financial information, in addition to the three year financial information referred in paragraph 1.1.above. The said interim financial information shall be not more than six months old from the date of offer document. 2. Nature of financial information 2.1. REIT shall disclose the financial information for the previous three financial years and the interim period, if any, in either of the following manner depending upon the history of the REIT: (a) If the RE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch have not been adjusted, shall be highlighted along with the management comments. If the impact of above adjustments/rectifications is not considered ascertainable, then a statement to that effect shall be given by the auditors. (b) Material amounts relating to adjustments for prior period errors/items (as discussed in Ind AS 8 'Accounting Policies, Changes in Accounting Estimates and Errors') shall be identified and adjusted in arriving at the profits of the years to which they relate. (c) Where there has been a change in accounting policy, the profits or losses/incomes or expenditures of the earlier years (required to be disclosed in the offer document) and of the year in which the change in the accounting policy has taken place shall be recomputed to reflect what the profits or losses/incomes or expenditures of those years would have been if a uniform accounting policy was followed in each of these years. (d) If any accounting policy followed in past was not in accordance with applicable laws and/or accounting standards, the financial statements shall be adjusted and recomputed in accordance with correct accounting policies. (e) The Balance Sheet shall be prepared afte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l information to the date of the offer document, the details of such changes shall be disclosed in the offer document. 4.5. Related party transactions: (a) For the related parties as defined in the REIT regulations, the REIT shall provide relevant disclosures of all related party transactions in compliance with the requirements of "Ind AS 24 - Related Party Disclosures" and the REIT Regulations. (b) Further, the following additional disclosures related to Related parties and Related party transactions, wherever applicable, shall also be included: i. Details of related party and its relationship with REIT; ii. Nature of the transaction; iii. Value of the transaction; iv. In case of any related party transaction involving acquisition or disposal of an real estate asset / property, the following additional information shall be provided * Summary of valuation report(s); * Material conditions or obligations in relation to the transaction; * Rate of interest, if external financing has been obtained for the transaction/acquisition; and * Any fees or commissions received or to be received by any associate of the related party in relation to the transaction. 4.6. Capital....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Standard on Auditing (SA) 600, "Using the Work of another Auditor", to the extent applicable. Further, the fact that the financial statements audited by other auditors have been relied upon shall be disclosed in the audit report. (d) As a part of the audit report, the auditor shall state whether: i. he has obtained all information and explanations which, to the best of his knowledge and belief, were necessary for the purpose of his audit; ii. the Balance Sheet and the Statement of Profit and loss/Income and Expenditure are in agreement with the books of account of the REIT; and iii. the financial statements comply with the applicable accounting standards in his opinion. (e) As a part of the audit report, the auditor shall give his opinion as to whether: i. the balance sheet gives a true and fair view of the state of affairs of the REIT as at the balance sheet dates; ii. the statement of profit and loss / income and expenditure gives a true and fair view of the REIT's profits or losses/incomes or expenditures for the years/periods ended at the balance sheet dates; iii. the statement of cash flows / receipts and payments gives a true and fair view of the cash mov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t developments subsequent to the last financial year: * A statement by the Manager whether in their opinion there have arisen any circumstances since the date of the last financial statements as disclosed in the offer document and which materially and adversely affect or is likely to affect the business or profitability of the REIT, or the value of its assets, or its ability to pay its liabilities within the next twelve months. * Procedure for dealing with and approval of related party transactions * Related party transaction(s) involving acquisition or disposal of an REIT asset * The analysis shall discuss impact of such acquisition/disposal on the yield of the units of REIT * An analysis of reasons for the changes in significant items of income and expenditure shall also be given, inter alia, containing the following: * unusual or infrequent events or transaction; * significant economic changes that materially affected or are likely to affect income from continuing operations; * known trends or uncertainties that have had or are expected to have a material adverse impact on revenues from continuing operations; * future changes in relationship between costs and r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(Indian Accounting Standards) Rules, 2015 at any time during the period of last three years, then the financial information for the last three years shall be disclosed on the following basis: a. If the concerned entity is following or is required to follow Companies (Indian Accounting Standards) Rules, 2015 for the latest two years (for the latest three years including comparatives of the first year of adoption) out of last three completed years, then the financial information for all the three years shall be prepared as per Companies (Indian Accounting Standards) Rules, 2015. b. If the concerned entity is following or is required to follow Companies (Indian Accounting Standards) Rules, 2015 only for the latest year (for the latest two years including comparatives) out of the historical period of three years, then the financial information for the recent two years shall be disclosed as per the Companies (Indian Accounting Standards) Rules, 2015 and the financial information for the earliest year (i.e. the third last year) shall be disclosed as per the Companies (Accounting Standards) Rules, 2006. For example, if financial information of Manager/Sponsor is presented for the finan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned to be reinvested as per para 18 (7) (a) of the REIT Regulations xx Add: Proceeds from sale of Real estate assets not distributed pursuant to an earlier plan to re-invest, if such proceeds are not intended to be invested subsequently xx Add/less: Any other item of non-cash expense / non cash income (net of actual cash flows for these items), if deemed necessary by the Manager. For example, any decrease/increase in carrying amount of an asset or of a liability recognised in Statement of profit and loss/income and expenditure on measurement of the asset or the liability at fair value, interest cost as per effective interest rate method, deferred tax, lease rents recognised on a straight line basis, etc. Xx Less: Repayment of external debt (principal) / redeemable preference shares / debentures, etc., if deemed necessary by the Manager xx Total Adjustments (B) xx Net Distributable Cash Flows (C)=(A+B) xx (II.) Calculation of Net Distributable Cash Flows at the Consolidated REIT level: Description Amount Profit after tax as per Statement of profit and loss/income and expenditure (consolidated) (A) xx Add: Depreciation and amortisation as per Statement of profi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cial Statements Such combined financial statements shall be prepared based on an assumption that all the assets and/or entities, proposed to be owned by REIT, were part of a single group for such period when REIT was not in existence. 1.4. Preparation of Combined Financial Statements: i. These statements shall be prepared on a combined basis and presented as if REIT assets were a part of a single group since the first day of the reporting period for which information is being presented. ii. The principles for preparation of combined financial statements shall be same as the principles laid down in "Ind AS 110 Consolidated Financial Statements", to the extent applicable. However, unlike consolidated financial statements, the combined financial statements shall not have the parent. iii. While preparing Combined Financial Statements, transactions between the entities proposed to be owned by REIT (i.e. transactions between the entities which are forming part of the combined financial statements) shall be eliminated. Further, all pertinent matters, such as non-controlling interests, foreign operations, different fiscal periods, or income taxes, etc. shall be treated in the same ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Liabilities for current tax; f) Deferred tax liabilities; g) Other liabilities 1.2. Line items for Statement of Profit and loss/Income and Expenditure I. Incomes and gains: a) Revenue from operations; b) Dividend; c) Interest; d) Profit on sale of assets/investments e) Other income (Clearly indicate nature of such income). II. Expenses and losses: a) Valuation expenses; b) Audit fees; c) Insurance & security expenses; d) Employee Benefits Expenses e) Investment management fees (including fees paid to Manager) f) Trustee Fee g) Depreciation on property, plant and equipment; h) Amortization of intangible assets; i) Finance Cost (Interest); j) Custodian fees; k) Registration fees; l) Repairs and maintenance in case of real estate assets; m) Loss on sale of assets/investments n) Other expenses (Clearly indicate nature of such expense) III. Profit or loss for the period before income tax IV. Tax expense (current tax and deferred tax) V. Profit or loss for the period after income tax VI. Items of other comprehensive income VII. Additional line items (if applicable) a) Items that will not be reclassified to profit or loss b) Income ta....