TaxTMI 
TaxTMI 
TaxTMI 
Disclosure of financial information in offer document/placement memorandum for InvITs
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.... website at www.sebi.gov.in under the categories "Legal Framework" and under the drop down "Circulars". Yours faithfully, 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/placement memorandum (A) Financial Information of InvIT: The financial information, to be disclosed in the offer document/placement memorandum, shall comply with the following: 1. Period of financial information to be disclosed: 1.1. The offer document / placement memorandum shall contain financial information for a period of last three completed financial years immediately preceding the date of offer document / placement memorandum. 1.2. If the closing date of the last completed financial year falls more than six months before the date of offer document / placement memorandum, then the InvIT shall also disclose interim financial information, in addition to the three year financial information referred in para 1.1.above. The said interim financial information shall be not more than six months old from the date of offer document / placement memorandum. 2....
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....or all incorrect accounting practices or failures to make provisions or other matters which resulted in modified opinion(s) or modification(s) to the opinion in the auditor's report. Modified opinion(s), where quantification is not possible and which 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/ placement memorandum) 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. (....
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....anges shall be disclosed in the offer document / placement memorandum. 4.3. Commitments: (a) A statement of InvIT's Commitments, if any, as on the date of latest financial information disclosed in the offer document/placement memorandum, shall be disclosed. (b) If there are any material changes in the commitments from the aforementioned date of latest financial information to the date of the offer document / placement memorandum, the details of such changes shall be disclosed in the offer document / placement memorandum. 4.4. Related party pransactions: (a) For the related parties as defined in the InvIT regulations, the InvIT shall provide relevant disclosures of all related party transactions in compliance with the requirements of "Ind AS 24 - Related Party Disclosures". (b) In addition to the disclosures required as per Ind AS 24, the following additional disclosures related to Related parties and Related party transactions shall also be included: i. Details of related party and its relationship with InvIT; ii. Nature of the transaction; iii. Value of the transaction; iv. In case of any related party transaction involving acquisition or disposal of an InvIT asset, ....
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....e with the framework applicable to such InvIT assets or the framework applicable to the InvIT) for the respective periods covered in the period of three years and the interim period, if any, will have to be taken into consideration and the same shall be relied upon by the auditor giving the final report. For the audit procedures to be followed in such case, the auditor shall be guided by the procedures stated in 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 InvIT; 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. t....
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....t financial information with financial information of previous two years. 2. MDA shall, inter-alia contain the following : * Overview of the business of the InvIT * A summary of the financial information containing significant items of income and expenditure. * Factors that may affect results of the operations, key risks and mitigating factors * Quality of earnings and revenue streams * Significant developments subsequent to the last financial year: * A statement by the Investment 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 InvIT, 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 InvIT asset * The analysis shall discuss impact of such acquisition/disposal on the yield of the units of InvIT * An analysis of reasons for the changes in significant items of income and expe....
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....ed in accordance with Companies (Accounting Standards) Rules, 2006. Similarly, if the concerned entity is required to follow Companies (Indian Accounting Standards) Rules, 2015 during the entire period of last three years, then the three year financial information shall be prepared in accordance with Companies (Indian Accounting Standards) Rules, 2015. 2. In case the Investment Manager and/or Sponsor(s) has/have done a transition from Companies (Accounting Standards) Rules, 2006 to Companies (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, 201....
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....ore such head under distribution may be kept blank, etc. 3. InvIT may take guidance from the following framework for defining and calculating NDCFs at the SPV level and at the InvIT level : (I.) Calculation of Net Distributable Cash Flows at the SPV level: Description Amount Profit after tax as per Statement of profit and loss/income and expenditure (standalone) (A) Xx Add: Depreciation and amortisation as per Statement of profit and loss/income and expenditure Xx Add/less: Loss/gain on sale of Infrastructure Assets xx Add: Proceeds from sale of Infrastructure Assets adjusted for the following: * related debts settled or due to be settled from sale proceeds * directly attributable transaction costs * proceeds reinvested or planned to be reinvested as per para 18 (7) (a) of the InvIT Regulations xx Add: Proceeds from sale of Infrastructure 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 Investment Manager. For example, any decrease/increase in carr....
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....vIT shall follow the following principles : 1.1. Period for which combined financial statements shall be disclosed When the InvIT has not been in existence for some portion or the entire portion of the reporting period of three years and interim period, if any, then the financial information must be provided through combined financial statements, showing the combined financial performance of all the proposed InvIT assets, for such period when InvIT was not in existence. 1.2. Assets/entities forming part of Combined Financial Statements: All the assets or entities, which are proposed to be owned by the InvIT, as per the disclosures in the offer document / placement memorandum, shall collectively form part of combined financial statements. 1.3. Underlying assumption for preparation of Combined Financial Statements Such combined financial statements shall be prepared based on an assumption that all the assets and/or entities, proposed to be owned by InvIT, were part of a single group for such period when InvIT 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 InvIT assets were....
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.... Statements' and any other pertinent guidance/directions issued by ICAI in this context. (H) Minimum Disclosures for key financial statements: 1. For the financial statements listed at Paragraph 3.3 of Section '(A)' above, the line items shall, at minimum, include the following: 1.1. Line items for Balance Sheet: I. Assets a) Property, plant and equipment; b) Capital work-in-progress c) Investment property; d) Intangible assets; e) Inventories; f) Other receivables; g) Other financial assets (excluding Inventories & Other Receivables) h) Cash and cash equivalents; i) Deferred tax assets; j) Assets for current tax. II. Equity and Liabilities a) Unit capital; b) Other payables; c) Provisions; d) Financial liabilities (excluding amounts shown under (b) and (c)), separately disclosing liabilities owed to sponsors; e) 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 l....