Nexus Select Trust REIT के अकाउंट के लिये नोट

Mar 31, 2025

(a) Terms / rights attached to Units

(i)    The Trust has only one class of Unit. Each Unit represents an undivided beneficial interest in the Trust. Each holder of Units is entitled to one vote per unit.The Board of Directors of the Manager approves distribution. The distribution will be in proportion to the number of Units held by the Unitholders. The Trust declares and pays distribution in Indian Rupees.

(ii)    The Trust has not allotted any fully paid-up units by way of bonus units nor has it bought back any class of units from the date of incorporation till the balance sheet date. Further the Trust has not issued any units for consideration other than cash from the date of incorporation till the balance sheet date, except as disclosed above.

Security

The NCDs are secured against first ranking pari passu mortgage of immoveable assets - Select Citywalk Mall and first ranking hypothecation over the escrow account into which all cashflows of the mortgaged property will be deposited and hypothecation over all such cashflows (both present and future).Further, Corporate Guarantee is provided by Select Infrastructure Private Limited capped to the value of its mortgaged property.

(A) The Trust has obtained lease rental discounting Loan (‘LRD Loan’) of ^12,500 Million with a flexi hybrid loan of ^1,000 Millions as a sub-limit of LRD Loan. LRD Loan carries interest rate of 8.40% p.a i.e. Repo Rate + Spread. LRD Loan will be repaid in 156 months which includes 48 months as standstill period.

Security

The LRD loan is secured against exclusive charge on immovable properties and lease receivables of Nexus Hyderabad Mall, Nexus Centre City and 67.95% of total buildup area of Nexus Koramangala Mall and corporate guarantee is provided by Nexus Hyderabad Retail Private Limited and Nexus Mysore Retail Private Limited.

Security

The NCDs are secured against first ranking pari passu mortgage of immovable assets - Select Citywalk Mall and first ranking pari passu hypothecation over the escrow account into which all cashflows of the mortgaged property will be deposited and hypothecation over all such cashflows (both present and future). Further, Corporate Guarantee is provided by Select Infrastructure Private Limited capped to the value of its mortgaged property.

(C) The Trust has maintained hundred percent security cover and is in compliance with all the covenants as mentioned in the respective Debenture Trust Deeds.

Nexus Select Trust (the ‘Trust’) is a business trust registered under SEBI REIT Regulations, 2014. Hence, the interest and dividend received or receivable by the Trust is exempt from tax under section 10(23FC) of the Income Tax Act, 1961 (the ‘Act’) and the rental income received or receivable is exempt from tax under section 10(23FCA) of the Act. Further, any expenditure incurred in relation to earning the exempt income is not tax deductible in view of the provisions of section 14A of the Act. The income of the Trust, other than exempt income, is chargeable to tax at the maximum marginal rates in force.

29 Earning per unit (EPU)

Basic EPU is calculated by dividing the profits for the period/year attributable to unitholders of the Trust by the weighted average number of units outstanding during the period/year. Diluted EPU is calculated by dividing the profits attributable to unit holders of the Trust by the weighted average number of units outstanding during the period plus the weighted average number of units that would be issued on conversion of all the dilutive potential units into unit capital.

30    Investment Management fee REIT Management fee

Pursuant to the Investment Management Agreement dated August 10, 2022, Investment Manager is entitled to fees @ 1% of distributions. The fees has been determined for undertaking management of the Trust and its investments. REIT management fees recognised during the year ended March 31, 2025 amounts to ^126.20 Million respectively (for the year ended March 31, 2024 : ^107.19 Million). There are no changes during the year ended March 31, 2025 in the methodology for computation of fees paid to the Manager.

31    Secondment Fees

Pursuant to the Secondment agreement dated April 27, 2023, the Manager is entitled to fees of TO.10 Million per month in respect certain employees of the Manager being deployed to the Trust in connection with the operation and management of the assets of the Trust. The fees shall be subject to an escalation of five per cent every financial year for a period of five years. Secondment fees for the year ended March 31, 2025 amounts to ^1.26 Million respectively (for the year ended March 31, 2024 : ^1.06 Million). There are no changes during the year ended March 31, 2025 in the methodology for computation of secondment fees paid to the Manager.

32    Under the provisions of the REIT Regulations, the Trust is required to distribute to Unitholders not less than 90% of the net distributable cash flows of the Trust at least once in every six months in each financial year. Accordingly, a portion of the Unit Capital contains a contractual obligation of the Trust to pay to its Unitholders. Hence, the Unit Capital is a compound financial instrument which contain both equity and liability components in accordance with Ind AS 32-Financial Instruments: Presentation. However, in accordance with SEBI Circular No. SEBI/HO/DDHS-PoD-2/P/CIR/2023/116 dated July 06, 2023 (as amended from time to time) issued under the REIT Regulations, the unit capital have been classified as equity in order to comply with the mandatory requirements of Section H of Chapter 3 to the SEBI master circular dated July 06, 2023 (as amended from time to time) dealing with the minimum disclosures for key financial statements. Consistent with Unit Capital being classified as equity, the distributions to Unitholders is presented in Other Equity and not as finance cost. In line with the above, the distribution payable to unit holders is recognised as liability when the same is approved by the Manager.

B Measurement of fair values

The level of fair values are defined below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

 

33 Financial instruments - Fair value measurement (continued)

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Transfers between Level 1, Level 2 and Level 3

There were no transfers between Level 1, Level 2 or Level 3 during the year ended March 31, 2025

Determination of fair values

Fair values of financial assets and liabilities have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

i)    The fair value of mutual funds are based on NAV at reporting date and fair value of compulsory convertible debentures is based on the terms and condition specific to compulsory convertible debentures

ii)    The fair values of other financial assets and liabilities are considered to be equivalent to their carrying values.

C Financial instruments - risk management Risk management framework

The Board of Directors of the Manager of the Trust has overall responsibility for the establishment and oversight of the Trust’s risk management framework. The Trust’s risk management policies are established to identify and analyse the risks faced by the Trust, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Trust’s activities.

The Board of Directors of the Manager of the Trust, monitors compliance with the Trust’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Trust. The Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

I Credit risk

Credit risk is the risk of financial loss to the Trust if a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Trust’s receivables from loans given to its SPV’s and cash and cash equivalents. The carrying amount of financial assets represents the maximum credit exposure.

The Trust establishes an allowance account for impairment that represents its estimate of losses in respect of its financial assets. The main component of this allowance is estimated losses that relate to counterparties. The allowance account is used to provide for impairment losses. Subsequently when the Trust is satisfied that no recovery of such losses is possible, the financial asset is considered irrecoverable and the amount charged to the allowance account is then written off against the carrying amount of the impaired financial asset.

Cash at bank and fixed deposits are placed with financial institutions which are regulated and have low risk.

As at the reporting date, there is no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying value of each financial asset on the Standalone Balance Sheet.

II Liquidity Risk

Liquidity risk is the risk that the trust will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Trust’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Trust’s reputation.

Management monitors rolling forecasts of the Trust’s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried out by the management of the Trust in accordance with practice and limits set by the Trust. In addition, the Trust’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet those, monitoring balance sheet liquidity ratios and maintaining debt refinancing plans.

Maturities of financial liabilities

The following are the Trust’s remaining contractual maturities of financial liabilities as the reporting date. The contractual cash flows reflect the undiscounted cash flows of financial liabilities based on the earliest date on which the Trust may be required to pay and includes contractual interest payments and excludes the impact of netting agreements. The Trust believes that the working capital is sufficient to meet its current requirements, accordingly no liquidity risk is perceived.

III Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Trust’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

(a) Currency risk

The Trust operates only in India and hence does not have any exposure to currency risk.

c) Price Risk

Price risk is the risk of fluctuations in the value of assets and liabilities as a result of changes in market prices of investments. The Trust has no material exposure to equity securities price risk and is not exposed to commodity risk. The Trust’s exposure to price risk arises from investments held by the Trust in mutual funds and classified in the balance sheet as fair value through statement of profit or loss. The fair value of these investments is marked to an active market. The financial assets carried at fair value by the Trust are mainly investments in liquid and overnight debt mutual funds and accordingly no material volatility is expected.

The following definitions have been considered for the purpose of computation of ratios and other

information

(a)    Debt Equity Ratio = Total borrowings V Unitholders’ Equity²

(b)    Debt Service Coverage Ratio = Earnings before Finance costs, Depreciation, Amortisation and Tax / [Finance cost (net of capitalisation and excluding interest on lease deposit and interest on lease liability) + Scheduled principal repayments made during the year to the extent not refinanced excluding repayment made of overdraft facility]

(c)    Interest Service Coverage Ratio = Earnings before Finance costs, Depreciation, Amortisation and Tax / Finance cost (net of capitalisation and excluding interest on lease deposit and interest on lease liability)

(d)    Net worth = Unitholder’s Equity²

(e)    Current ratio = Current assets/ Current liabilities

(f)    Long term debt to working capital ratio = Long term debt³/ working capital⁴

(g)    Current liability ratio = Current liabilities/ Total liabilities

(h)    Total debt to total assets = Total debt⁵/ Total assets

35 Disclosure as per SEBI... (continued)

(i)    Debtors Turnover = Revenue from operations/ Average trade receivable

(j)    Bad debts to account receivable ratio = Bad debts (including provision for doubtful debts) / Average trade receivable

(k)    Operating margin = (Profit before tax and exceptional Item + Interest expense - Other Income) / (Interest Income + Dividend Income)

(l)    Net profit margin = Profit after exceptional items and tax/ Total Income

(m)    Asset cover ratio = Net asset value of the SPVs and Joint venture of the Trust as per Independent Valuer/ Total borrowingsl (excluding processing fees)

Notes

1    Total borrowings = Long-term borrowings + Short-term borrowings + Accrued interest

2    Unitholder’s equity = Unit Capital + Other equity + Corpus

3    Long term debt = Long term borrowings (excluding current maturities of long term debt) + Interest accrued on debts (Non-current)

4    Working capital = Current asset - Current liabilities

5    Total Debt = Long term borrowings (including current maturities of long term borrowings) + short term borrowings and interest accrued on these debts

37 Capital Management

The Trust’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Trust’s capital structure mainly constitutes equity in the form of unit capital and debt. The Trust manages its capital to ensure that the the Trust will be able to continue as going concern while maximising the return to unitholders through an optimum mix of debt and equity within the overall capital structure. The Trust governing board reviews the capital structure of the Trust considering the cost of capital and the risks associated with each class of capital.

The Trust’s capital structure is influenced by the changes in regulatory framework, government policies, available options of financing and the impact of the same on the liquidity position.

The Trust monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total liabilities, including interest-bearing loans and borrowings less cash and cash equivalents, other bank balances and interest accrued on fixed deposits. Adjusted equity comprises all components of equity.

(a)    Extending loans to SPV’s for capital expenditure, repayment of debt obligation of the Trust and SPV’s (including replenishing of OD’s) and payment of fees and expenses in relation to the issue.

(b)    There are no deviations in the use of proceeds from the objects stated in the offer document or between projected utilization of funds made in the offer document and the actual utilization of funds.

43    Segment reporting

The Trust has only one operating segment. Hence, disclosure under Ind AS 108, “Operating Segments” is not applicable.

44    In accordance with section 233 of the Companies Act, 2013 and rules made thereunder, during the previous year following schemes of amalgamation (the “Scheme”) was filed for amalgamation, on fast track basis, between wholly owned subsidiary company and their respective Holding company :

•    Merger of NSMMPL, holding company with MSPL, subsidiary company - The appointed date as per the Scheme is April 1, 2023, which was approved by Regional Director on July 28, 2023.

•    Merger of WRPL, subsidiary company with SIPL, holding company - The appointed date as per the Scheme is May 15, 2023, which was approved by Regional Director on October 12, 2023.

45    (i) The following SPV’s have filed petitions for capital reduction under Section 66 read with section 52 and other applicable provisions of the Companies Act, 2013 to obtain approval of National Company Law Tribunal (NCLT):

•    CSJIPL

•    NURPL

•    NWPL

•    CPPL

•    NHRPL

In the previous year, NCLT has passed an adverse order for CSJIPL. However, this does not have any impact on CSJIPL financial statements. Out of the remaining above, during the previous year, capital reduction scheme for CPPL, NHRPL & NURPL have been approved by the NCLT. Accordingly, balance available in securities premium account of CPPL, NHRPL & NURPL amounting to ^625.03 Million,^258.93 Million and ^271.36 Million respectively is adjusted against the debit balance in Profit & Loss Account. Further during the year ended March 31, 2025 NCLT has approved capital reduction scheme for NWPL. NCLT has reduced the face value of share from ^10 each fully paid up to ^4 each fully paid up. Accordingly, NWPL has adjusted ^63.17 Million (out of share capital) and ^1,330.15 Million (out of balance available in securities premium account) against the debit balance in Profit & Loss Account during the year ended March 31, 2025. The said capital reduction has no significant impact on Standalone Financial Statements.

46    There were no significant adjusting events that occurred subsequent to the reporting period.

47    The Trust acquired the SPVs/Investment Entity by issuing units on May 12, 2023. Accordingly, the numbers for the year ended March 31, 2024 are not comparable.

48    The figures of previous period/year have been reclassified/regrouped for better presentation in the financial statements and to conform to the current period’s classifications/disclosures. This does not have any impact on the profits/(loss) and hence, no change in the basic and diluted earnings per unit of previous period/year.