On July 9, 2024, the Securities and Exchange Board of India (SEBI) issued the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2024, under the authority of sections 30, 11, and 12 of the SEBI Act, 1992. This amendment introduces new clauses and sub-regulations to enhance the Infrastructure Investment Trusts (InvIT) framework, particularly focusing on unit-based employee benefit schemes. Key changes include the definition and implementation of the “employee unit option scheme,” allowing investment managers to offer unit options to their employees through a dedicated employee benefit trust. The regulations outline how these trusts can acquire units, either through secondary market acquisitions or as part of management fees, and set strict guidelines on the transfer, lock-in, and vesting of these units. The amendment mandates comprehensive disclosure requirements and compliance with insider trading norms, ensuring transparency and fairness in the administration of these employee benefit schemes. Additionally, it establishes the role of the nomination and remuneration committee in overseeing these schemes and details the processes for varying scheme terms, secondary acquisitions, and listing of units. This regulatory update aims to provide a structured approach to offering unit-based benefits, promoting employee participation while safeguarding the interests of all stakeholders involved in InvITs.
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 9th July, 2024
SECURITIES AND EXCHANGE BOARD OF INDIA (INFRASTRUCTURE INVESTMENT TRUSTS) (SECOND AMENDMENT) REGULATIONS, 2024
No. SEBI/LAD-NRO/GN/2024/192.—In exercise of the powers conferred under section 30 read with sections 11 and 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, namely: –
1. These regulations may be called the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2024.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, ─
I. in regulation 2, in sub-regulation (1), –
i. after clause (o), the following new clause shall be inserted, namely, ─
“(oa) “employee unit option scheme” means a scheme under which the investment manager grants unit options to its employees through an employee benefit trust.
Explanation. – For the above purpose, employees of the investment manager shall include all directors of the investment manager except independent directors.”
ii. after clause (zc), the following new clause shall be inserted:
“(zca) “liquid asset” means cash, units of overnight or liquid mutual fund schemes, fixed deposits of scheduled commercial banks, government securities, treasury bills, repo on government securities and repo on corporate bonds.”
II. in regulation 10, after sub-regulation (27), the following new sub-regulation shall be inserted namely, –
“ (28) The investment manager may at its discretion, offer unit based employee benefit scheme for its employees based on the units of the InvIT subject to compliance with the provisions of Chapter IVB of these regulations”
III. after chapter IVA and before chapter V, the following new chapter shall be inserted, namely, ─
“CHAPTER IVB
FRAMEWORK FOR UNIT BASED EMPLOYEE BENEFIT SCHEME
Applicability
17G. (1) The provisions of this chapter shall be applicable for all unit based employee benefit scheme introduced on or after the date of this chapter coming into force:
Provided that the provisions pertaining to disclosure requirements in this chapter shall apply to any unit based employee benefit scheme introduced prior and subsisting as on the date of this chapter coming into force.
(2) For unit based employee benefit scheme introduced prior to this chapter coming into force, any unit acquired or any unit based employee benefit options granted by any employee benefit trust after the date of this chapter coming into force, shall be in compliance with this chapter.
Nature of scheme and implementation of scheme through trust.
17H. (1) The unit based employee benefit scheme shall be in the nature of employee unit option scheme.
(2) Any offer of a unit based employee benefit scheme by the investment manager shall not result in any additional cost to the InvIT, its HoldCo and SPV.
(3) The unit based employee benefit scheme shall be implemented through a separate employee benefit trust which shall be created by the investment manager.
(4) The investment manager shall ensure that the trust deed under which the employee benefit trust is formed contains provisions specified in Part A of Schedule IX of these regulations.
Manner of receiving units by the employee benefit trust.
17I. (1) The employee benefit trust may receive units of the InvIT in the following manner for the purpose of offering unit based employee benefit scheme:
(a) The investment manager may receive the units of InvIT in lieu of management fees, through the employee benefit trust, only for the limited purpose of providing unit based employee benefit on such units;
Explanation. – For the above purpose, the investment manager may take full or part of the management fees in the form of units of InvIT.
(b) A shareholder of investment manager may transfer full or part of the units of InvIT held by it to the employee benefit trust:
Provided that in case a sponsor is also a shareholder of the investment manager, then the sponsor group and associate of the sponsor may also transfer full or part of the units held by them to the employee benefit trust;
(c) The investment manager may transfer full or part of the units of InvIT held by it to the employee benefit trust;
Explanation. – For the purpose of clauses (b) and (c), any transfer of units to the employee benefit trust shall be irrevocable and without any consideration in return i.e. shall constitute a gift to the employee benefit trust.
(2) Subordinate units shall not be eligible for being transferred to the employee benefit trust or being made part of a unit based employee benefit scheme.
(3) The cash accumulated by the employee benefit trust on account of distributions received on units of the InvIT held by such trust, income earned on the assets held by the employee benefit trust and receipt of exercise price from the employees of the investment manager on exercise of options, may be used by the employee benefit trust for acquiring units of the InvIT either from the secondary market or during any fresh issuance of units by the InvIT only for the purpose of using such units for unit based employee benefit scheme.
(4) The employee benefit trust may subscribe to the units of the InvIT subject to compliance with the minimum lot for primary market transaction specified under these regulations:
Provided that the minimum trading lot specified under these regulations shall not be applicable for vesting of units of a privately placed InvIT in employees of the investment manager and exercised by them:
Provided further that in case of a privately placed InvIT, the employees of the investment manager may sell an odd lot quantity of the units vested upon them, in off-market transaction(s).
Secondary acquisition.
17J. (1) The employee benefit trust shall not be used as a mode for trading in units of the InvIT.
(2) Secondary acquisition in a financial year by the employee benefit trust shall not exceed two per cent of the total outstanding units of the InvIT as at the end of the previous financial year.
Explanation. – “secondary acquisition” means acquisition of existing units of the InvIT by the employee benefit trust on the platform of a recognised stock exchange for cash consideration for the purpose of unit based employee benefit scheme.
(3) The total number of units under secondary acquisition held by the employee benefit trust shall at no point of time exceed five per cent of the total outstanding units of the InvIT as at the end of the financial year immediately prior to the year in which the unitholders approval is obtained for such secondary acquisition:
Provided that the above ceiling limit shall exclude the units that are allotted to the employee benefit trust by way of a new issue or gift.
(4) The investment manager shall obtain approval of unitholders for secondary acquisition as per sub-regulation (5) of regulation 22 of these regulations.
(5) The employee benefit trust shall be required to hold the units acquired through secondary acquisition for a minimum period of six months.
(6) The employee benefit trust shall disclose the period during which it plans to undertake secondary acquisition, in advance of at least seven working days (excluding the date of intimation and the date of start of such period), to the recognised stock exchanges and the depositories.
(7) The employees of the investment manager shall not sell units of the InvIT held by them during the period referred in sub-regulation (6).
(8) The investment manager shall submit a list of its employees to the depositories along with relevant details of the employees including their Income Tax Permanent Account Number, in advance of at least seven working days (excluding the date of intimation and the date of start of the period during which the employee benefit trust plans to undertake secondary acquisition).
(9) The depositories shall impose lock-in on the holdings of units of InvIT by such employees and the lock-in shall be released after the period during which the employee benefit trust plans to undertake secondary acquisition, as disclosed to the recognised stock exchanges and depositories, has elapsed.
Manner of allotment of units to the employee benefit trust by the InvIT.
17K. (1) An investment manager of any InvIT that allots units to the employee benefit trust in lieu of management fees to the investment manager shall ensure the following:
(a) obtaining the approval of unitholders as per sub-regulation (5) of regulation 22 of these regulations before issuance of units to the employee benefit trust;
(b) issuance of units to the employee benefit trust only once in a financial year, within ninety days after the completion of the annual valuation exercise;
(c) issuance of units to the employee benefit trust shall be made in compliance with the guidelines for preferential issue of units specified by the Board:
(d) allotting such units directly to the employee benefit trust so that such units are used exclusively for unit based employee benefit scheme.
Role of nomination and remuneration committee.
17L. (1) The nomination and remuneration committee of the investment manager shall be responsible for the administration and superintendence of the unit based employee benefit scheme.
(2) The nomination and remuneration committee shall formulate the detailed terms and conditions of the unit based employee benefit scheme which shall include the provisions as specified in Part B of Schedule IX of these regulations.
(3) The nomination and remuneration committee of the investment manager shall frame suitable policies and procedures to ensure compliance with all securities laws particularly the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and the Securities and Exchange Board of India I (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 by the investment manager, its directors, its key managerial personnel, sponsor, recipients of units under the unit based employee benefit scheme, the employee benefit trust and trustee of the employee benefit trust.
Variation of terms of the scheme.
17M. (1) The investment manager may vary the terms of the unit based employee benefit scheme offered pursuant to an earlier resolution of the unitholders but not yet exercised by the employees, if such variation is not prejudicial to the interests of the employees.
(2) The investment manager shall obtain the approval of unitholders as per sub-regulation (5) of regulation 22 of these regulations before varying the terms of the unit based employee benefit scheme.
(3) Notwithstanding the provisions of sub-regulation (1), the investment manager may vary the terms of the unit based employee benefit scheme to fulfil any legal or regulatory obligation without seeking unitholders’ approval.
(4) The explanatory statement to the notice for passing a resolution for variation of terms of a unit based employee benefit scheme and the resolution proposed to be passed by the unitholders shall disclose complete details of the variation, the rationale therefor, details of any employees that may be the beneficiaries of such variation and information as specified in Part C of Schedule IX of these regulations or as otherwise specified by the Board.
(5) The investment manager may reprice the options which are not exercised, whether or not they have been vested, if the scheme was rendered unattractive due to fall in the price of the units in the stock market:
Provided that the investment manager shall ensure that such repricing is not detrimental to the interests of the employees and approval of the unitholders has been obtained for such repricing as per sub-regulation (5) of regulation 22 of these regulations.
Listing.
17N. (1) In case a new issue of units is made under any unit based employee benefit scheme, units so issued shall be listed immediately on all recognised stock exchange(s) where the existing units are listed, subject to the following conditions:
(a) The unit based employee benefit scheme is in compliance with these regulations;
(b) A statement, as specified in Part D of Schedule IX of these regulations, is filed and the investment manager obtains an in-principle approval from the recognised stock exchange(s);
(c) As and when an exercise is made, the investment manager notifies the concerned recognised stock exchange(s) as per the statement as specified in Part E of Schedule IX of these regulations.
Trustee of the employee benefit trust.
17O. (1) The trustee of the employee benefit trust shall be a trustee registered with the Board under the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993.
(2) The trustee of the InvIT shall not act as the trustee of the employee benefit trust.
(3) The employee benefit trust or its trustee shall not be eligible to vote on account of the units of the InvIT held by such trust.
Insider trading norms.
17P. (1) The provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 shall be applicable to the investment manager, its directors, its key managerial personnel, sponsor, recipients of units under the unit based employee benefit scheme, the employee benefit trust and trustee of the employee benefit trust.
(2) The relaxations and exemptions provided under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 in relation to employee stock option scheme shall mutatis-mutandis apply to the unit based employee benefit scheme offered in accordance with this chapter.
(3) The trading window restrictions specified under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 shall not apply in respect of issue of units by the InvIT to the employee benefit trust, in lieu of management fees, for providing unit based employee benefit in accordance with this chapter.
Other requirements.
17Q. (1) The units held by the employee benefit trust shall be used only for the purpose of offering unit based employee benefit scheme.
(2) The employee benefit trust shall not undertake any transfer or sale of units of the InvIT held by it except for providing unit based employee benefits in accordance with this chapter.
(3) The units of the InvIT transferred to the employee benefit trust shall be locked in by the depository and shall be released by the depository only for the transfer of units to the employees of the investment manager as per the unit based employee benefit scheme.
(4) There shall be a minimum vesting period of one year for unit based employee benefit scheme.
(5) The unappropriated inventory of units which are not backed by grants, acquired through secondary acquisition by the employee benefit trust, shall be appropriated within a reasonable period which shall not extend beyond the end of the subsequent financial year, or the second subsequent financial year:
Provided that the extension up to the second subsequent financial year shall be subject to the approval of the nomination and remuneration committee of the investment manager.
(6) No unit based employee benefit scheme shall be offered unless the disclosures as specified in Part G of Schedule IX of these regulations are made by the investment manager to the prospective option grantees.
(7) The investment manager implementing unit based employee benefit scheme shall follow the requirements including the disclosure requirements of the Accounting Standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 including any ‘Guidance Note on Accounting for employee share-based Payments’ issued in that regard from time to time.
(8) The investment manager granting options to its employees pursuant to a unit based employee benefit scheme shall be free to determine the exercise price subject to conforming to the accounting policies specified in sub-regulation (7) of this regulation.
(9) The investment manager shall ensure that the explanatory statement to the notice prepared for convening a meeting of unitholders to obtain their approval for a unit based employee benefit scheme and the resolution proposed to be passed by the unitholders contain the information as specified in Part C of Schedule IX of these regulations or as otherwise specified by the Board.
(10) The cash accumulated by the employee benefit trust shall be deployed in liquid assets, which shall be unencumbered.
(11) The unitholding of the employee benefit trust shall be shown as “non-sponsor and nonpublic” unitholding for the purpose of disclosure to the recognised stock exchanges.
(12) In case of change in investment manager, the outgoing investment manager shall no longer receive management fees or units in lieu of management fees from the InvIT and accordingly shall not offer any fresh unit based employee benefit scheme based on the units of such InvIT.
(13) In case of change in investment manager, the employee benefit trust of the outgoing investment manager shall sell and/or dispose of the units held by it within six months from the date of change of the investment manager.
Disclosures.
17R. (1) The investment manager shall disclose details of the unit based employee benefit scheme being implemented in the Annual Report of the InvIT, as specified in Part F of Schedule IX of these regulations.
(2) The investment manager shall include the value of options granted under a unit based employee benefit scheme as a part of its employee compensation and shall disclose the same in the Annual Report.”
IV. in regulation 22, in sub-regulation (5), after sub-clause (vi) of clause (f), the following new clauses shall be inserted, namely, –
“ (g) introduction of unit based employee benefit scheme after an initial offer;
(h) unit based employee benefit scheme proposed at the time of initial offer;
Explanation. – For any unit based employee benefit scheme proposed at the time of initial offer, the investment manager shall obtain the approval of the unitholders on such proposed scheme after listing of the InvIT and shall ensure that the scheme is not implemented until such approval is obtained;
(i) acquisition of units by the employee benefit trust as specified in sub-regulation (3) of regulation 17I:
Provided that approval by way of a separate resolution shall be required in case of secondary acquisition and such approval shall mention the percentage of secondary acquisition that could be undertaken subject to the limits specified under regulation 17J:
(j) issuance of units to the employee benefit trust as specified in clause (a) of sub-regulation (1) of regulation 17I;
(k) transfer of units to the employee benefit trust as specified in clauses (b) and (c) of sub-regulation (1) of regulation 17I;
(l) a separate resolution that shall be required for grant of options to identified employees, during any one year, equal to or exceeding one per cent of the unit capital of the InvIT at the time of grant of options;
(m) variation of the terms of the unit based employee benefit scheme including repricing of the options;”
V. After schedule VIII, the following new schedule shall be inserted, namely, –
“Schedule – IX
Part A – Minimum Provisions in Trust Deed
[See regulation 17H(4)]
The trust deed shall, inter alia, provide the following:
1. Details of the trust, including:
(i) Name of the trust;
(ii) Object of the trust;
(iii) Details of settlor;
(iv) Details of scheme(s) administered;
(v) Source(s) of funds;
(vi) Description of the manner in which the trust funds shall be used for meeting the objects of the trust;
(vii) Description of the classes of beneficiaries along with their rights and obligations;
(viii) Details of trustee.
2. Powers and duties of trustee, including:
(i) To frame rules for administration of the scheme(s) in compliance with the scheme documents, object(s) of the trust and these regulations;
(ii) To maintain books of account of the trust as required under law including these regulations;
3. Mode and manner of dissolution of the trust;
4. Duties of the trustee which shall include that:
(i) the trustee shall act in the interest of employees who are beneficiaries of the trust subject to provisions of these regulations,
(ii) the trustee shall not act in any manner or include any provision in the trust deed that would be detrimental to the interests of the beneficiaries.
5. Such other clauses as are necessary for safeguarding the interests of the beneficiaries including such other clauses as specified by the Board.
Part B – Terms and Conditions of schemes to be formulated by the Nomination and remuneration committee
[See regulation 17L (2)]
The nomination and remuneration committee is required to formulate the detailed terms and conditions of the schemes which shall, inter alia, include the following provisions:
a. the quantum of options per employee and in aggregate under a scheme;
b. the conditions under which options may vest in employees and may lapse in case of termination of employment for misconduct;
c. the exercise period within which the employee can exercise the options and that options would lapse on failure to exercise the same within the exercise period;
d. the specified time period within which the employee shall exercise the vested options in the event of termination or resignation;
e. the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period;
f. the procedure for making a fair and reasonable adjustment to the entitlement including adjustment to the number of options and to the exercise price in case of any corporate actions. In this regard, the following shall, inter alia, be taken into consideration by the nomination and remuneration committee:
i. the number and price of options shall be adjusted in a manner such that total value to the employee of the options remains the same after the corporate action;
ii. the vesting period and the life of the options shall be left unaltered as far as possible to protect the rights of the employee(s) who is granted such options;
g. the grant, vesting and exercise of options in case of employees who are on long leave; and
h. the procedure for funding the exercise of options
Part C – Contents of the explanatory statement to the notice and resolution for unitholders meeting
[See regulations 17M (4) and 17Q (9)]
The explanatory statement to the notice and the resolution proposed to be passed for the unit based employee benefit schemes shall, inter alia, contain the following information:
a. brief description of the scheme(s);
b. the total number of options to be offered and granted;
c. identification of classes of employees entitled to participate and be beneficiaries in the scheme(s);
d. requirements of vesting and period of vesting;
e. maximum period (subject to these regulations) within which the options shall be vested;
f. exercise price, purchase price or pricing formula;
g. exercise period/offer period and process of exercise/ acceptance of offer;
h. the appraisal process for determining the eligibility of employees for the scheme(s);
i. maximum number of options to be offered and issued per employee and in aggregate, if any;
j. maximum quantum of benefits to be provided per employee under a scheme(s);
k. whether the scheme(s) involves new issue of units by the InvIT or gift or secondary acquisition by the trust or all;
l. maximum percentage of secondary acquisition (subject to limits specified under these regulations) that can be made by the trust for the purposes of the scheme(s);
m. a statement to the effect that the investment manager shall conform to the accounting policies specified in regulation 17Q(7);
n. the method which the investment manager shall use to value the options;
o. period of lock-in.
Part D – Information required in the statement to be filed with recognised Stock Exchange(s) [See regulation 17N (1)(b)]
Description of Schemes
1. Unit Capital of the InvIT as on date of institution of the scheme/ amendment of the scheme.
2. Date of institution of the scheme/ amendment of the scheme.
3. Validity period of the scheme.
4. Date of notice of unitholders meeting for approving the scheme/for amending the scheme/for approving grants under regulation 22(5)(l) of these regulations.
5. Date of unitholders meeting approving the scheme/amending the scheme/approving grants under regulation 22(5)(l) of these regulations.
6. Kinds of benefit granted under the scheme.
7. Identity of classes of persons eligible under the scheme:
(a) employees,
(b) employees outside India,
(c) directors, except independent directors.
8. Total number of units reserved under the scheme, as applicable.
9. Number of units entitled under the grant.
10. Total number of grants to be made.
11. Maximum number of options to be granted per employee per grant and in aggregate.
12. Exercise price or pricing formula.
13. Whether any amount is payable at the time of grant? If so, quantum of such amount.
14. Lock-in period under the scheme.
15. Vesting period under the scheme.
16. Maximum period within which the grant shall be vested.
17. Exercise period under the scheme.
18. Whether employee can exercise all the options vested at one time? Yes/No
19. Whether employee can exercise vested options at various points of time within the exercise period? Yes/No
20. Whether scheme provides for the procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of any corporate actions? Clause in scheme describing such adjustment.
21. Description of the appraisal process for determining the eligibility of employees under the scheme.
22. The specified time period within which vested options are to be exercised in the event of termination or resignation of an employee.
23. The specified time period within which options to be exercised in the event of death of the employee.
24. Whether the scheme provides for conditions under which options vested in employees may lapse in case of termination of employment for misconduct? Clause in Scheme describing such adjustment.
25. Whether scheme provides for conditions for the grant, vesting and exercise of options in case of employees who are on long leave? Clause in scheme describing such adjustment.
26. Whether amount paid/payable by the employee at the time of the grant, vesting or exercise of the options will be forfeited if the employee does not exercise the same within the exercise period? Clause in scheme describing such adjustment.
27. Details of approval of unitholders pursuant to sub-regulation (5) of regulation 22 of these regulations with respect to:
(a) Grant to identified employees, during any one year, equal to or exceeding 1% of the unit capital of the InvIT at the time of grant.
28. Details of the variation made to the scheme along with the rationale therefor and the details of the employees who are beneficiary of such variation:
Sd/-
Company Secretary / Compliance Officer
Place:
Date:
Documents to be filed with the registration statement
1. Copy of scheme, certified by the Company Secretary / Compliance Officer.
2. Copy of notice of unitholder meeting approving the scheme/for amending the scheme/for approving grants under 22(5)(l) of these regulations certified by the Company Secretary / Compliance Officer.
3. Copy of resolution of unitholders for approving the scheme/ for amending the scheme/for approving grants under sub-regulation (5) of regulation 22 of these regulations certified by the Company Secretary / Compliance Officer.
4. List of sponsors as defined under these regulations.
5. Copy of latest Annual Report of the InvIT.
6. Certificate of Secretarial Auditor on compliance with these regulations.
7. Specimen copy of unit certificate, if applicable.
8. Any other relevant documents.
Undertakings
The undersigned investment manager hereby undertakes:
1. To file a post-effective amendment to this statement to include any material information with respect to the scheme of distribution not previously disclosed in the statement or any material change to such information in the statement.
2. To notify the concerned recognised stock exchanges on which the units of the InvIT are listed, of each issue of units pursuant to the exercise of options under the scheme mentioned in this statement, in the specified form, as amended from time to time.
3. That the investment manager shall conform to the accounting policies specified in regulation 17Q(7) of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014.
4. That the scheme confirms to the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014.
5. That the investment manager has in place systems / codes / procedures to comply with the Securities and Exchange Board of India (Insider Trading) Regulations, 2015 or any modification or re-enactment thereto.
Signatures
Pursuant to the requirements of the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, the investment manager certifies that it has reasonable grounds to believe that it meets all the requirements for the filing of this form and has duly caused this statement to be signed on its behalf by the undersigned, thereunto, duly authorized
Name of the investment manager
Name of the Compliance Officer
Designation
Date:
Place:
Part E – Format of notification for issue of units [See regulation 17N(1)(c)]
1. Name of InvIT and address of Registered Office:
2. Name of the recognised Stock Exchanges on which the units of InvIT are listed:
3. Filing date of the statement referred in regulation 17N(1)(b) of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 with the recognised Stock Exchange:
4. Filing Number, if any :
5. Title of the Scheme pursuant to which units are issued, if any:
6. Kind of security to be listed :
7. Date of issue of units :
8. Number of units issued :
9. Unit Certificate No., if applicable :
10. Distinctive number of the units, if applicable :
11. ISIN Number of the units :
12. Exercise price per unit:
13. Total issued units after this issue :
14. Total issued unit capital after this issue :
15. Details of any lock-in on the units :
16. Date of expiry of lock-in :
17. Details of listing fees, if payable:
Signature of Company Secretary/Compliance Officer
Date:
Place:
Part F – Disclosures in the annual report of the InvIT
[See regulation 17R(1)]
The investment manager in the annual report of the InvIT shall disclose any material change in the scheme(s) and whether the scheme(s) is / are in compliance with the regulations.
Further, the following details, inter alia, shall be disclosed on the InvIT’s website and a web-link thereto shall be provided in the annual report.
A. Relevant disclosures in terms of the accounting standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 (18 of 2013) including the ‘Guidance note on accounting for employee share-based payments’ issued in that regard from time to time.
B. Details related to Unit Option Scheme
(i) A description of each unit option scheme that existed at any time during the year, including the general terms and conditions of each unit option scheme, including –
(a) Date of unitholders’ approval
(b) Total number of options approved under unit option scheme
(c) Vesting requirements
(d) Exercise price or pricing formula
(e) Maximum term of options granted
(f) Source of units (primary, secondary, gift or combination)
(g) Variation in terms of options
(i) Method used to account for unit option scheme – Intrinsic or fair value.
(ii) Option movement during the year (For each unit option scheme):
| Particulars | Details |
| Number of options outstanding at the beginning of the period | |
| Number of options granted during the year | |
| Number of options forfeited / lapsed during the year | |
| Number of options vested during the year | |
| Number of options exercised during the year | |
| Number of units arising as a result of exercise of options | |
| Number of options outstanding at the end of the year | |
| Number of options exercisable at the end of the year |
(iv) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the units.
(v) Employee wise details (name of employee, designation, number of options granted during the year, exercise price) of options granted to –
(a) senior managerial personnel as defined under clause (d) of sub-regulation (1) of regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(b) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year; and
(c) identified employees who were granted option, during any one year, equal to or exceeding 1% of the unit capital of the InvIT at the time of grant.
(vi) A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information:
(a) the weighted-average values of unit price, exercise price, expected volatility, expected option life, expected dividends, the risk-free interest rate and any other inputs to the model;
(b) the method used and the assumptions made to incorporate the effects of expected early exercise;
(c) how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and
(d) whether and how any other features of the options granted were incorporated into the measurement of fair value, such as a market condition.
C. Details related to Trust
(i) The following details, inter alia, in connection with transactions made by the Trust meant for the purpose of administering the schemes under the regulations are to be disclosed:
(ii) General information on all schemes
| Sl. No. | Particulars | Details |
| 1. | Name of the Trust | |
| 2. | Details of the Trustee | |
| 3. | Any other contribution made to the Trust during the year |
(iii) Brief details of transactions in units by the Trust
(a) Number of units held at the beginning of the year;
(b) Number of units acquired during the year through (i) primary issuance (ii) secondary acquisition, also as a percentage of unit capital as at the end of the previous financial year, along with information on weighted average cost of acquisition per unit;
(c) Number of units transferred to the employees;
(d) Number of units held at the end of the year.
(iv) In case of secondary acquisition of units by the Trust
| Number of Units | As a percentage of unit capital as at the end of the year immediately preceding the year in which unitholders’ approval was obtained |
| Held at the beginning of the year | |
| Acquired during the year | |
| Transferred to the employees during the year | |
| Held at the end of the year |
Part G – Disclosure Document
[See regulation 17Q (6)]
A: Statement of Risks
All investments in units or options are subject to risk as the value of units may increase or reduce. In addition, the options /are subject to the following additional risks:
1. Concentration: The risk arising out of any fall in value of units is aggravated if the employee’s holding is concentrated in the units of a single InvIT.
2. Leverage: Any change in the value of the unit may lead to a significantly larger change in the value of the options.
3. Illiquidity: The options cannot be transferred to anybody and therefore the employees cannot mitigate their risks by selling the whole or part of their benefits before they are exercised.
4. Vesting: The options will lapse if the employment is terminated prior to vesting. Even after the options are vested, the unexercised options may be forfeited if the employee is terminated for gross misconduct.
B: Information about the InvIT
1. Business of the InvIT: A description of the main objects and present business of the InvIT.
2. Abridged financial information: Abridged financial information, for the last five years for which audited financial information is available, as specified by the Board from time to time. The last audited accounts of the InvIT shall also be provided unless this has already been provided to the employee in connection with a previous option or grant or otherwise.
3. Risk Factors: Management perception of the risk factors for the InvIT.
4. Continuing disclosure requirement: The option grantee shall be provided copies of all documents that are sent to the unitholders of the InvIT. This shall include the annual accounts of the InvIT as well as notices of meetings and the accompanying explanatory statements.
C: Salient Features of the Scheme
This Part shall contain the salient features of the scheme of the investment manager including the conditions regarding vesting, exercise, adjustment for corporate actions, and forfeiture of vested options. It shall not be necessary to include this Part if it has already been provided to the employee in connection with a previous grant and no changes have taken place in the scheme since then. If the scheme administrator provides advisory services to the grantees in connection with the exercise of options or sale of resulting units, such advice shall be accompanied by an appropriate disclosure of concentration and other risks. The scheme administrator shall conform to the code of conduct appropriate for such fiduciary relationships.”
BABITHA RAYUDU, EXECUTIVE DIRECTOR
[ADVT.-III/4/Exty./280/2024-25]
Footnotes:
1. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014-15/10/1577.
2. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was subsequently amended by the –
a) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, vide No. SEBI/LAD/NRO/GN/2016-17/021, with effect from November 30, 2016.
b) Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, vide No. SEBI/LAD/NRO/GN/2016-17/38, with effect from March 6, 2017.
c) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2017, vide No. SEBI/LAD-NRO/GN/2017-18/024, with effect from December 15, 2017.
d) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, vide No. SEBI/LAD-NRO/GN/2018/07, with effect from April 10, 2018.
e) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2019, vide No. SEBI/LAD-NRO/GN/2019/10, with effect from April 22, 2019.
f) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/05, with effect from March 02, 2020.
g) Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10, with effect from April 17, 2020.
h) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/15, with effect from June 16, 2020.
i) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/27, with effect from July 30, 2021.
j) Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30, with effect from August 3, 2021.
k) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/83, with effect from May 4, 2022.
l) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/101 with effect from January 1, 2023.
m) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/122 with effect from February 14, 2023.
n) Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD–NRO/GN/2023/137 with effect from July 4, 2023.
o) Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146 with effect from August 18, 2023.
p) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/145 with effect from August 16, 2023.
q) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/159 with effect from October 23, 2023.
r) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/182 with effect from May 27, 2024.
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