Review of - (a) disclosure of financial information in offer document / placement memorandum, and (b) continuous disclosures and compliances by Infrastructure Investment Trusts (InvITs)
Summary
This circular revises Chapter 3 and Chapter 4 of the Master Circular for InvITs to update disclosure guidelines for financial information in offer documents and placement memoranda. It substitutes Paragraph 7 of Annexures 5 and 6 with new provisions regarding proforma financial statements, incorporation by reference, and summary audited financials for acquired assets. The revised requirements apply immediately, except for specific continuous disclosures effective from April 01, 2025. This section mandates the disclosure of audited consolidated and separate financial statements for follow-on offers, including proforma statements for material acquisitions. It establishes Indian Accounting Standards (Ind AS) and modified Schedule III of the Companies Act, 2013 as the basis for preparing financial information. Additional disclosures such as project-wise cash flows, contingent liabilities, and commitments are required to be included in the audited financial information. This section mandates specific disclosures regarding material changes in commitments, related party transactions, capitalization statements, and debt payment history. It further prescribes the format and valuation method
Text
Based on the report of the Working Group, inputs of Bharat InvITs Association, recommendations of the HySAC and internal deliberations, Chapter 3 and Chapter 4 of the Master Circular shall stand revised and the revised chapters are placed at Annexure A.
Paragraph 7 of Annexure – 5 of the Master Circular shall be substituted with the following: '7. Financials: a) Disclosure as per clauses 11(a) to 11(c) and 11(e) to 11(f) of the Schedule III of the InvIT Regulations...'
Paragraph 7 of Annexure – 6 of the Master Circular shall be substituted with the following: '7. Financials: a) Disclosure as per clauses 11(a) to 11(c) and 11(e) to 11(f) of the Schedule III of the InvIT Regulations...'
This circular shall be applicable with immediate effect except for the requirements specified under Chapter 4 which shall be applicable for disclosure of financial information for the period beginning on or after April 01, 2025.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with the provisions of Regulations 15(2)(iii), 23(8) and 33 of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014...
The recognized Stock Exchanges and Bharat InvITs Association are advised to disseminate the contents of this Circular on their website.
The offer document / placement memorandum shall contain audited financial statements for a period of three financial years and stub period (if applicable).
The audited stub period financial statements shall be disclosed, if financial statements for latest completed financial year included in the offer document / placement memorandum is older than six months from the date of filing of the offer document / placement memorandum.
In case of a follow-on offer, if the InvIT has been in existence for a period lesser than the last three completed financial years, then financial statements of the InvIT shall be disclosed for such financial years for which the InvIT has been in existence and for the stub period (if applicable).
In case of an initial offer, audited combined financial statements of the InvIT shall be disclosed in the offer document / placement memorandum.
In case of a follow-on offer, audited consolidated financial statements of the InvIT shall be disclosed in the offer document. The separate audited financial statements of the InvIT shall be disclosed on the InvIT’s website and the link to InvIT’s separate financial statements shall be specified in the offer document.
In case of a follow-on offer, if the InvIT has undertaken any acquisition or divestment of any material assets after the latest period for which the financial information is disclosed in the offer document but before the date of filing of the offer document, the certified proforma financial statements of the InvIT shall be disclosed for at least the period covering last completed financial year and the stub period, if any.
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Source: SecMarx — Review of - (a) disclosure of financial information in offer document / placement memorandum, and (b) continuous disclosures and compliances by Infrastructure Investment Trusts (InvITs). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.