With the amendments to Chapter 4 of the SEBI Master Circulars for Real Estate Investment Trusts (“REITs”) and Infrastructure Investment Trusts (“InvITs”) (collectively hereinafter referred to as “entities”), now in effect from April 1, 2025, the entities must ensure that their financial information for the quarter ending June 30, 2025, is prepared in full compliance with the updated regulatory requirements. While the circulars were issued on May 7, 2025, the revised Chapter 4 is applicable to financial information beginning from Q1 of the current financial year. Accordingly, this will be the first quarter for which the entities will report under the amended disclosure regime, and several key changes merit attention.
- Quarterly Reporting now mandatory
- Expanded Financial Statement requirements
- Mandatory Inclusion of NDCF and Segment Information
- Schedule III format and condensed format restrictions
- Board approval and Management certification
- Audit and Limited Review coverage
- Quarterly deviation reporting for debt proceeds
- Borrowing-linked disclosures and Ratios
- Net Borrowings Ratio now mandatory
The foremost change is the shift from half-yearly to quarterly financial reporting, which now mandates the entities to submit financial results to the stock exchanges within 45 days from the end of each quarter (i.e., by August 14, 2025, for Q1 results). For the final quarter of the financial year, the deadline remains 60 days.
These results must adhere to Indian Accounting Standard 34 for interim reporting and include a comprehensive set of financial statements: the statement of profit and loss, assets and liabilities, changes in unitholders’ equity, cash flows, net assets at fair value, and total returns at fair value.
One of the notable additions is the inclusion of the Statement of Net Distributable Cash Flows (NDCF), which must be submitted as part of financial results whenever distributions are declared. While this was previously required only on a half-yearly and annual basis, the integration of NDCF with quarterly disclosures ensures that investors have timely access to cash flow information that underpins distribution decisions.
Additionally, segment information is now required to be presented as per Ind AS 34 and Ind AS 108, as applicable, ensuring more detailed performance breakdowns by business or geographic segments.
The revised Chapter 4 mandates the entities to prepare financial statements in accordance with Schedule III of the Companies Act, 2013, with specific exceptions and modifications as notified. This change standardizes the format and structure of disclosures, enhancing comparability across issuers.
Also, annual financial statements can no longer be presented in a condensed format. Only quarterly financials, other than last quarter, may use the condensed format, ensuring that key financial periods are disclosed in full detail.
From a governance standpoint, the financial results must be approved by the Board of Directors/Governing Body of the Manager/Investment Manager and signed by the Chairperson, or Managing Director/partner, or Whole-time director/partner; and in the absence of all of them, by another authorized director. Moreover, both the Chief Executive Officer and Chief Financial Officer of the Manager/ Investment Manager must certify that the financial results are free from material misstatements or omissions, reinforcing senior-level accountability for accuracy and transparency.
In terms of audit requirements, the entities must ensure that 100% of consolidated revenue, assets, and profits are covered by audit (in case of audited results) or by limited review (in case of unaudited results). Statutory auditors must follow the procedures outlined under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations while conducting the limited review, ensuring a consistent assurance framework across listed entities.
Another significant change relates to deviation reporting: the statement of deviation in the use of debt proceeds is now required to be disclosed on a quarterly basis rather than half-yearly. This provision improves ongoing transparency around fund utilization and offers early insight into potential governance concerns.
For the entities with outstanding borrowings, SEBI now mandates the disclosure of additional financial ratios, such as leverage, interest coverage, and debt service metrics, on a consolidated basis. These ratios must be disclosed as part of the financial results.
Lastly, the Net Borrowings Ratio, a newly prescribed metric, must be included in the financial results and periodic reports in the specified format. The entities must ensure that their systems and internal processes are aligned to generate and validate this ratio, given its relevance for monitoring financial risk and compliance.
The quarter ending June 30, 2025, marks the first implementation of SEBI’s revised disclosure framework under Chapter 4. The entities must take proactive steps to align internal reporting systems, coordinate effectively with auditors, legal advisors, and internal teams, and ensure board-level oversight to meet the new compliance standards. Accuracy, completeness, and timely disclosures will be critical in maintaining regulatory compliance and sustaining investor confidence. A smooth transition in this reporting cycle will also help establish a strong foundation for consistent compliance in future periods under the updated regulatory regime.
