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Mindspace Business Parks REIT.

BSE: 543217 Sector: Infrastructure
NSE: MINDSPACE ISIN Code: INE0CCU25019
BSE 00:00 | 28 Sep 363.36 0.10
(0.03%)
OPEN

365.40

HIGH

366.85

LOW

362.50

NSE 00:00 | 28 Sep 362.99 -1.68
(-0.46%)
OPEN

367.85

HIGH

367.85

LOW

360.02

OPEN 365.40
PREVIOUS CLOSE 363.26
VOLUME 6824
52-Week high 388.00
52-Week low 294.00
P/E 19.50
Mkt Cap.(Rs cr) 21,548
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 365.40
CLOSE 363.26
VOLUME 6824
52-Week high 388.00
52-Week low 294.00
P/E 19.50
Mkt Cap.(Rs cr) 21,548
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mindspace Business Parks REIT. (MINDSPACE) - Auditors Report

Company auditors report

To The Unitholders of Mindspace Business Parks REIT

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements ofMindspace Business Parks REIT (the ??REIT") and its subsidiaries (the"Special Purpose Vehicles") (together referred to as the "MindspaceGroup") which comprise the Consolidated Balance Sheet as at March 31 2022 theConsolidated Statement of Profit and Loss including Other Comprehensive Income theConsolidated Statement of Cash Flows the Consolidated Statement of Changes inUnitholders? Equity for the year then ended Consolidated Statement of Net Assets atfair value as at March 31 2022 Consolidated Statement of Total Returns at fair value forthe year then ended Statement of Net Distributable Cash Flows of the REIT and each of itsspecial purpose vehicles for the year then ended and a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "consolidatedfinancial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid consolidated financial statements give theinformation required by the Securities and Exchange Board of India (Real Estate InvestmentTrusts) Regulations 2014 as amended from time to time including any guidelines andcirculars issued thereunder read with SEBI Circular No. CIR/IMD/DF/146/2016 dated December29 2016 (the "REIT regulations") in the manner so required and give atrueandfair viewin conformity with the Indian Accounting Standards as defined in Rule 2(l)(a)of the Companies (Indian Accounting Standards) Rules 2015 (as amended) and otheraccounting principles generally accepted in India to the extent not inconsistent with theREIT Regulations of the consolidated state of affairs of the Mindspace Group as at March31 2022 and its consolidated profit including other comprehensive income itsconsolidated cash flows its consolidated changes in unitholders? equity for the yearended March 31 2022 its net assets at fair value as at March 31 2022 total returns atfair value and the net distributable cash flows of the REIT and each of its specialpurpose vehicles for the year ended on that date and other financial information of theGroup.

Basis for Opinion

We conducted our audit of the consolidated financial statements inaccordance with the Standards on Auditing (SA) issued by Institute of CharteredAccountants of India (ICAI). Our responsibilities under those Standards are furtherdescribed in the Auditor?s Responsibility for the Audit of the Consolidated FinancialStatements section of our report. We are independent of the Mindspace Group in accordancewith the Code of Ethics issued by the ICAI and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI?s Code of Ethics.We believe that the audit evidence obtained by us is sufficient and appropriate to providea basis for our audit opinion on the consolidated financial statements.

Emphasis of Matters

(i) We draw attention to Note 44(5)(a) of the consolidated financialstatements regarding freehold land and building thereon (Paradigm Malad) held by specialpurpose vehicle Avacado Properties and Trading (India) Private Limited which is presentlyunder litigation. Pending the outcome of the proceedings and a final closure of thematter no adjustments have been made in the consolidated financial statements. Ouropinion is not modified in respect of this matter.

(ii) We draw attention to Note 2 which describes the Basis ofpreparation of consolidated financial statements and Note 20 which describes thepresentation of "Unit Capital" as "Equity" instead of compoundfinancial instrument to comply with the REIT Regulations. Our opinion is not modified inrespect of this matter.

Key Audit Matter

Key audit matter is the matter that in our professional judgment wasof most significance in our audit of the consolidated financial statements of the currentperiod. This matter was addressed in the context of our audit of the consolidatedfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on this matter. We have determined the matter described below to be thekey audit matter to be communicated in our report.

Key Audit Matter: Auditor?s Response:
Fair Value of investment properties: Principal Audit Procedures Performed:
In accordance with REIT Regulations the REIT discloses Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value which requires fair valuation of assets and liabilities. As at March 31 2022 fair value of total assets was Rs. 284145 million out of which fair value of investment properties was Rs. 253630 million representing 89% of the fair value of total asset. Our audit procedures related to the forecasted market rent terminal capitalization rates and discount rate used to determine the fair value of investment properties included the following among others:
The fair value of investment properties is determined by an independent valuer using discounted cash flow method and mix of market approach and discounted cash flow method as applicable. ¦ We obtained the independent valuer's valuation reports to obtain an understanding of the source of information used by the independent valuer in determining these assumptions.
While there are several assumptions that are required to determine the fair value of investment properties; assumptions with the highest degree of estimate subjectivity and impact on fair values are forecasted market rent terminal capitalization rate and discount rate. Auditing these assumptions required a high degree of auditor judgement as the estimates made by the independent valuer contains significant measurement uncertainty. ¦ We tested the reasonableness of inputs shared by management with the independent valuer by comparing it to source information used in preparing the inputs.
Refer Statement of Net assets at fair value and Statement of total returns at fair value and Note 6 - Investment Properties in the consolidated financial statements. ¦ We evaluated the reasonableness of management's forecasted market rent by comparing it with sample of lease agreements for market rentals and contractual lease escalations.
¦ With the assistance of our fair valuation specialist we evaluated the reasonableness of forecasted market rent terminal capitalization rates and discount rate by comparing it with market information such as recent market transactions for comparable properties market surveys by property consultants and broker quotes as applicable.

Information Other than the Financial Statements and Auditor?sReport Thereon

¦ K. Raheja Corp Investment Manager LLP (the ‘InvestmentManager?) acting in its capacity as an Investment Manager of REIT is responsible forthe other information. The other information comprises the information included in theAnnual Report but does not include the standalone financial statements consolidatedfinancial statements and our auditor?s report thereon.

¦ Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

¦ In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

¦ If based on the work we have performed we conclude thatthere is a material misstatement of this other information we are required to report thatfact. We have nothing to report in this regard.

Management?s Responsibility for the Standalone FinancialStatements

The Governing Board of the Investment Manager (the"Management") is responsible for the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows changes in unitholders? equity netassets at fair value total returns at fair value and the net distributable cash flows ofthe REIT in accordance with the requirements of the REIT Regulations the IndianAccounting Standards as defined in Rule 2(l)(a) of the Companies (Indian AccountingStandards) Rules 2015 (as amended) and other accounting principles generally accepted inIndia to the extent not inconsistent with REIT Regulations. This responsibility alsoincludes maintenance of adequate accounting records for safeguarding the assets of theREIT and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements the Governing Boardof Investment Manager is responsible for assessing the REIT?s ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Management either intends to liquidate theREIT or to cease operations or has no realistic alternative but to do so.

The Management is also responsible for overseeing the financialreporting process of REIT.

Auditor?s Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor?s report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with the SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

¦ Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

¦ Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness ofthe REIT?s internal control.

¦ Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and related disclosures made by the Management.

¦ Conclude on the appropriateness of Management?s use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the REIT?s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor?sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor?s report. However future events orconditions may cause the REIT to cease to continue as a going concern.

¦ Evaluate the overall presentation structure and content ofthe standalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

¦ Obtain sufficient appropriate audit evidence regarding theStandalone financial statements of the REIT to express an opinion on the standalonefinancial statements.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin

(i) planning the scope of our audit work and in evaluating the resultsof our work; and

(ii) to evaluate the effect of any identified misstatements in thestandalone financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor?s report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

Based on our audit and as required by REIT regulations we report that:

a) We have obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purposes of our audit.

b) The Standalone Balance Sheet the Standalone Statement of Profit andLoss including Other Comprehensive Income the Standalone Statement of Cash Flows theStandalone Statement of Changes in Unitholders? Equity and Statement of NetDistributable Cashflows dealt with by this Report are i n agreement with the relevantbooks of account of the REIT.

c) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards as defined in Rule 2(l)(a) of the Companies (IndianAccounting Standards) Rules 2015 (as amended) and other accounting principles generallyaccepted in India to the extent not inconsistent with REIT Regulations.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm?sReg. No. 117366W/W-100018)
Nilesh Shah
Partner
(Membership No. 49660)
Mumbai May 12 2022 (UDIN: 22049660AIVMTU1653)

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