COMPANY PROFILE

Principal components of consolidated statement of profit and loss

Our revenue from operations comprizes the following sources:

(i) facility rentals; (ii) income from maintenance services; (iii) revenue from works contract services; (iv) revenue from power supply; and (v) other operating income.

Facility rentals

Revenue from facility rentals comprizes the base rental from our properties, income from car parking and others and certain Ind AS adjustments to reflect the impact of straight lining of leases and discounting of security deposits.

• Base rentals: Base rentals comprize rental income earned from the leasing of our assets

• Income from car parking and others: Primarily, includes income from car park, kiosks, signage, ATMs, promotional events, among others

Income from maintenance services

Income from maintenance services consists of the revenue that we receive or is receivable from tenants for the Common Area Maintenance (CAM) services provided as per the terms of agreement with the tenants, and also includes revenue from common area maintenance services provided to third parties, if any, located within the assets.

Revenue from works contract services

Revenue from works contract services includes revenue earned from providing the services of construction of building for the customer based on their specification and requirements pursuant to the works contract executed by KRC Infra with respect to the portion of land owned by the counterparty.

Revenue from power supply

Revenue from power supply includes income from supply of power to tenants within the notified SEZ as per the tariff regulations stipulated by Maharashtra Electricity Regulatory Commission (MERC).

Other operating income

Other operating income primarily includes (i) interest income from finance lease, which comprizes interest income from fit-out rentals where such leases are classified as finance leases. Leases are classified as finance leases when substantially all the risks and rewards of ownership is transferred to the lessee;

(ii) income from sale of surplus construction material and scrap; and (iii) service connection charges for power supply and other charges and (iv) any compensation received from customer.

Interest income

Our interest income comprizes the following sources: interest income on (i) fixed deposits with banks; (ii) electricity deposits;

(iii) income-tax refunds, and (iv) others.

Other income

Our other income primarily comprizes: (i) gain on redemption of investments; (ii) Liabilities no longer required written back, (iii) miscellaneous income.

Expenses

Our expenses primarily comprize: (i) cost of work contract services (ii) cost of power purchased (iii) employee benefit expenses (iv) Management Fees (v) other expenses (vi) finance cost (vii) depreciation and amortization expenses.

Cost of work contract services

Cost of work contract services is the expenses incurred towards construction of a building, based on agreed specifications and requirements, pursuant to the works contract executed by KRC Infra with respect to the portion of land owned by the counter party.

Cost of power purchased

Cost of power purchased is cost incurred for purchase of power, transmission charges and related expenses with respect to supply of power to tenants within the notified SEZ.

Employee benefits expenses

Employee benefits expenses primarily include salaries and wages, contribution to provident and other funds, gratuity expense, compensated absences and staff welfare expenses.

Management Fees

Management Fees is the fees paid to the Manager in relation to the services provided under the property management services (net of the employee expenses directly incurred by the Asset SPVs) and support services agreement.

Other expenses

Other expenses primarily comprize property tax, electricity, water and diesel charges, business support fees paid to the KRC Group entities, rates and taxes, corporate social responsibility expenses, assets written off/demolished and business promotion, repairs & maintenance, revenue share, miscellaneous expense and provision for unbilled revenue and advertizement expenses.

Earnings before finance costs, depreciation and amortization, regulatory income/expense, exceptional items and tax (EBIDTA)

We have elected to present earnings before finance costs, depreciation and amortization regulatory income/expense, exceptional items and tax as a separate line item on the face of the statement of profit and loss.

EBITDA is generally defined as netprofit beforeinterest expense, taxes, exceptional items, depreciation and amortization. However, Ind AS 114 (Regulatory Deferral Accounts) requires the movement in all regulatory deferral account balances to be

distinguished from other income and expenses. Hence, for the purpose of Consolidated Financial Statements, included in this Annual Report, net movement in regulatory deferral account balances has been disclosed separately in the Statement of Profit and loss after 'Profit before rate regulated activities and tax' and thus does not form part of EBITDA.

Depreciation and amortization expenses

Depreciation and amortization expenses comprize the depreciation of property, plant and equipment; depreciation of investment property; amortization of intangible assets and amortization of right of use of assets.

Finance costs

Finance costs primarily comprize: (1) interest expenses on borrowings from banks and financial institutions, debentures, bonds, (2) unwinding of interest expenses on security deposits, and (3) other finance charges. We capitalize borrowing costs in relation to under construction properties. Once construction is completed, the interest cost is charged to statement of profit and loss, causing an increase in finance costs.

Regulatory income/expense

As a deemed power distribution licensee in the SEZ area, some of our Asset SPVs charge tenants tariff on power consumption that is pre-approved by the state regulatory authority, Maharashtra Electricity Regulatory Commission (MERC). Accordingly, as per the Multi-Year Tariff (MYT)

regulations, we file a tariff petition for the control period based on projected expenses and revenue during the period. MERC reviews the tariff petition and approves expenses and revenue in compliance with the tariff regulations. Subsequently, we submit our audited accounts to MERC to undertake a truing up process, wherein MERC compares the actual expenses and revenue with the approved expenses and revenue for the past year, and allows total revenue gap/(surplus) to be recovered in the succeeding years tariff. As a result, there is an increase/(decrease) in succeeding years tariff based on past years revenue gap/(surplus), and this change is referred to as impact on account of true-up. Such revenue gap/(surplus) for the past years is recorded as regulatory income/(expense) in the financials.

Tax expense

Tax expense comprizes: (1) current tax and (2) deferred tax charge (net)

The Indian Income Tax Act provides companies an option to discharge their income tax liability at a concessional rate of 25.17% (including cess and surcharge) subject to fulfilment of certain conditions which includes opting out of other applicable tax holiday claims/incentives/tax exemption and utilizing MAT credit ('New Tax Regime'). With respect to the Consolidated Financial Statements as of and for the year ending March 31, 2024, and for the year ending March 31, 2023, we have not opted for the New Tax Regime and continue to discharge our income tax liability as per the existing tax regime.

• One time compensation of H 133 million received from tenant in FY24 on account of termination of letter of intent / lease deed during lock-in period.

During FY24, we achieved

• Gross leasing of c.3.6 msf

• New and vacant leasing of c.1.1 msf

• Contracted lease escalations on c.3.6 msf area

• Re-leasing spread of 14.3% over 3.4 msf area (incl. releasing and vacant area leasing)

Direct operating expenses (excluding cost of works contract services) increased in line with the increase in revenue from operations and maintenance services. The NOI Margin excluding works contract services is 80.9%.

Our consolidated revenue from operations and Profit for FY24 stood at H 24,292 million and H 5,612 million, respectively.

Cost of Work Contract Services

Cost of work contract services of H 710 million is the expenses incurred towards construction of a building for Gera Developments Private Limited in Gera Commerzone Kharadi, Pune.

Cost of Power Purchased

Cost of power purchased has decreased by H 24 milllion.

Employee Benefits Expenses

Employee benefits expenses primarily include salaries and wages, contribution to provident and other funds, gratuity expense, compensated absences and staff welfare expenses has increased by H 13 million.

• Business promotion expenses increase by H 102 million

• Revenue share provision of H 156 million

Financial Resources

As of March 31, 2024 our cash and cash equivalents stood at H 3,250 million. Cash and cash equivalents primarily consist of balances with banks in current accounts, deposit accounts with original maturity below three months and cash on hand. Our undrawn facilities stood at H 9,155 million. Our other bank balances and fixed deposits stood at H 4,430 million. We maintain a strong liquidity position consisting of cash and treasury balances.

Cash Flow form Operating Activities

Net cash generated from operating activities for FY24 was H 15,265 million. Our profit before tax was H 9,106 million, which was adjusted for non-cash and items relating to financing and investing activities, primarily for finance costs amounting to H 4,566 million, depreciation and amortization expenses amounting to H 3,827 million. Our changes in working capital primarily comprized an increase in trade payables of H 379 million, an increase in trade receivables of H 530 million, a decrease in other inventories of H 28 million, increase in other non-current and current assets (including financial assets) of H 341 million, an decrease of other non-current and current liabilities (including financial liabilities) and provisions amounting to H 31 million. In addition, we paid direct tax (net of refund) of H 1,924 million.

Cash Flow from Investing Activities

Net cash used in investing activities was H 14,587 million for FY24, primarily comprising interest received of H 75 million which was primarily offset by expenditure incurred on investment property and investment property under construction, including capital advances, net of capital creditors, property, plant and equipment and intangible assets of H 10,832 million, primarily with respect to Mindspace Airoli West, Gera Commerzone Kharadi, Mindspace Madhapur (Sundew) and Commerzone Porur, and net investment in fixed deposits of H 3,873 million.

Cash Flow from Financing Activities

Net cash utilized in financing activities was H 1,635 million for FY24, primarily comprising proceeds from debt raized net of payment of H 15,107 million which was offset by finance costs paid of H 4,561 million, distribution to unitholders and dividend to Non-Controlling Interest holder (including tax) of H 12,107 million and expenses incurred towards the issue of nonconvertible debentures of H 61 million.

Capital Expenditure and Capital Investments

Capital expenditure comprizes additions during the financial year to property, plant and equipment, capital work-in progress, investment property, intangible assets and investment property under construction. During FY24, we incurred capital expenditure of H 10,832 million, primarily for the construction activity at Mindspace Airoli West, Gera Commerzone Kharadi, Mindspace Madhapur (Sundew) and Commerzone Porur and re-energizing out assets via upgrades and infrastructure upgrades. Our capital commitments (net of advances) as at March 31, 2024 was H 9,681 million towards construction and upgrade of our assets.

Liquidity and Capital Resources Overview

Our low leverage and robust credit profile offer adequate headroom for future growth.

For the year ended March 31, 2024, we,

• Raized H 14.9 billion in fixed cost debt from financial institutions at Mindspace REIT and via issuance of NCDs and CPs bearing coupon ranging between 7.67% to 7.95% on p.a.p.m. basis

• Repaid H 4.9 billion via issuance of variable coupon NCD at MBPPL level

• We successfully repaid H 2 billion worth NCD (NCD Tranche 1) on the maturity of the said debenture.

• We strategically increased our exposure to fixed cost debt to c.55.6% of our total outstanding debt.

• Debt raized during the year was predominantly used for refinancing existing debt and to fund capital expenditure

• Availed new loan sactions of H 9,850 Mn including Overdraft lines during FY24

Our weighted average cost of borrowings stood at 7.6% at the end of March 2023. It has increased by c.20 bps to 7.8% at the end of March 2024. The corresponding numbers for March 2022 and March 2021, were 6.6% and 7.1%, respectively. The Reserve Bank of India has hiked policy rates by 250 bps in the current cycle, however, we were able to limit the impact of hikes on account of strategic repayment of high cost debt, increasing share of fixed cost borrowings and negotiating with banks to lower spreads/ interest rates. All of these were possible on account of our AAA credit ratings profile, low leverage, robust financial performance and portfolio occupancy.

Corporate Rating for Mindspace Business Parks REIT: 'CCR AAA/Stable' by CRISIL Ratings, '[ICRA] AAA (Stable)' by ICRA

MLD - Market Linked Debentures

NCD - Non-Convertible Debentures

TL - Term Loan

LAP - Loan Against Property

Note: As on March 31, 2024

• Credit Rating of J3.75 billion long-term principal protected market-linked debentures: 'CRISIL PPMLD AAA/Stable' by CRISIL Ratings Limited

• Credit Rating of J 5.0 billion and J 4.0 billion non-convertible debentures at REIT level and SPV level, respectively: Dual ratings of 'CRISIL AAA/Stable' by CRISIL Ratings Limited and '[ICRA] AAA (Stable)' by ICRA Limited for both facilities at REIT and SPV level. Both facilities are fixed rate in nature.

• Credit Rating of J 0.75 billion nonconvertible debentures at REIT level: 'CRISIL AAA/Stable' by CRISIL Ratings Limited. Facility is fixed rate in nature.

• Credit Rating of J 5.0 billion non-convertible debentures at REIT level: Dual rating of 'CRISIL AAA/Stable' by CRISIL

Ratings Limited and '[ICRA] AAA (Stable)' by ICRA Limited. Facility is fixed rate in nature.

• Credit Ratings of J 5.5 billion non-convertible debentures at REIT level: Dual rating of 'CRISIL AAA/Stable' by CRISIL Ratings Limited and '[ICRA] AAA (Stable)' by ICRA Limited. Facility is fixed rate in nature.

• Credit Ratings of J 7.0 billion Commercial papers at REIT level: Dual rating of 'CRISIL A1 ' by CRISIL Ratings Limited and '[ICRA] A ' by ICRA Limited. CPs to the tune of H 1.5 billion are outstanding as of March 31, 2024.

• Credit Rating of I 5.0 billion non-convertible debentures at REIT level: Dual rating of 'CRISIL AAA/Stable' by CRISIL Ratings Limited and '[ICRA] AAA (Stable)' by ICRA Limited. Facility is fixed rate in nature

• Credit Rating of I 5.0 billion non-convertible debentures at REIT level: Dual rating of 'CRISIL AAA/Stable' by CRISIL Ratings Limited and '[ICRA] AAA (Stable)' by ICRA Limited. Facility is fixed rate in nature

• Credit Rating of I 3.4 billion non-convertible debentures at REIT level: Dual rating of 'CRISIL AAA/Stable' by CRISIL Ratings Limited and '[ICRA] AAA (Stable)' by ICRA Limited. Facility is fixed rate in nature

Companies Act 2013. NDCF to be received by Mindspace REIT from the Asset SPVs may be in the form of dividends, interest income, principal loan repayment or proceeds of any capital reduction or buyback from the Asset SPVs, sale proceeds out of disposal of investments if any or assets directly held by Mindspace REIT or such other form as may be permitted by the REIT Regulations.

The Manager is required to declare and distribute at least 90% of the NDCF of Mindspace REIT as distributions (REIT Distributions) to the unitholders. Such distributions are to be declared and made for every quarter of a financial year. The first distribution was made upon completion of the first full quarter post the listing of Units, i.e., for the quarter ending December 31, 2020. Further, in accordance with the REIT Regulations, distributions need to be made within 15 days from the date of such declarations.

For FY24, we declared a distribution of H 11,362 million, or H 19.2 per unit comprising H 17.29 per unit as dividend and H 1.91 per unit as interest & other income payment. On an annualized basis, based on the issue price of H 275 per unit, the distribution yield stood at 7%.

Tax Implications of Distributions

As per provisions section 115UA of the Income Tax Act, 1961, income distributed by REIT is taxable in the hands of the unitholders in the same manner and proportion as the underlying income stream received by the REIT.

* The income shall be subject to deduction of tax at source

** Non-resident unitholders may seek to avail beneficial provisions under the applicable Double Taxation Avoidance Agreement ('DTAA') that India may have entered into with their respective country of residence

tax rate subject to applicable surcharge and cess.

Note: Taxability of income in the nature of dividend distributed by REIT to unitholders is dependent on the taxation regime adopted by the SPV(s). which distributes the dividend to REIT. If the SPV(s) has not opted for a concessional corporate tax rate under section 115BAA of the ITA ('Qualifying SPV') dividend received from such Qualifying SPV ('Qualified Dividend') and distributed by REIT is exempt in the hands of the Unitholders. Any dividend other than Qualified Dividend distributed by REIT ('Disqualified Dividend') is taxable in the hands of the Unitholders.

NAV

KZEN Valtech Private Limited, has been appointed as the independent valuer by the Governing Board of the Manager, K Raheja Corp Investment Managers LLP (ie. prior to conversion of LLP) on March 14, 2023. In addition, Jones Lang La Selle (JLL), has been appointed by the Governing Board as an independent consultant to carry out industry and market research. As per the independent valuation exercize carried out, our portfolio is valued at H 298,732 million with 91.0% of value in completed assets, underpinning Mindspace Business Parks REIT's asset quality as of March 31, 2024. NAV of the portfolio stood at H 380.5 p.u.

Occupancy Growth

Our Non-SEZ portfolio has achieved pre-covid occupancy levels with six out of our nine parks having committed occupancy levels exceeding 95%. As we navigate the evolving landscape of workplace dynamics, the resurgence of in-office operations, coupled with the continued growth of the GCC sector, serves as a robust driver for leasing expansion across our portfolio. Furthermore, recent reforms in SEZ regulations are expected to further mitigate any remaining vacancies.

Growing the Portfolio

Within our portfolio, we are strategically positioned to leverage embedded opportunities that promize substantial growth organically. With an area under development totaling 4.4 msf, including future developments amounting to 2.5 msf, we are poized for expansion. At Mindspace Airoli East Park, a composite structure spanning 0.8 msf announced, presenting a mixed-use development encompassing both office and hotel spaces. Additionally, significant redevelopment initiatives are underway at Mindspace Madhapur, encompassing c.3.0 msf. These organic porftfolio growth initiatives resulted in total leasable area of 33.2 msf up from 32.0 msf at the end of FY23.

Our portfolio demonstrates growth potential, underpinned by both organic development and opportunity to acquire the sponsor assets through the Right of First Offer arrangement. The sponsor boasts of a continuous prospective development pipeline of c.15 msf. Moreover, alongside our sponsor assets, we are actively exploring third-party inorganic opportunities to further augment our growth trajectory. These initiatives underscore our strategic foresight and determination to capitalize on emerging market trends while delivering sustained value to our stakeholders.

Human Resource

We are proud to announce that for the third consecutive year, we have been certified as a Great Place to Work. This recognition reaffirms our commitment to fostering a supportive and inclusive workplace culture. Gender diversity is a cornerstone of our hiring approach, and we're proud to report that women now comprize 37% of our managerial workforce, ranking among the highest in our industry. Our initiatives, such as Shikhar and Sheroes, have empowered employees to ascend to leadership roles within the organization, showcasing our dedication to talent development and diversity. Moreover, our 'Reach Out' initiative focusing on mental health and well-being has provided invaluable support to our employees. To dissolve hierarchical boundaries and foster open communication, we have initiated 'Coffee with CEO' sessions, facilitating meaningful dialogue between our leadership and staff. Additionally, our 'Outbound Programs' have strengthened team cohesion and personal connections through engaging outdoor activities. Lastly, CEO-led 'Townhalls' have offered insights into our achievements and shared our vision for the organization's future, ensuring transparency and alignment across all levels of the organization. These initiatives collectively underscore our unwavering commitment to nurturing a positive work environment and empowering our employees to thrive professionally and personally.

Internal Control Systems

Mindspace REIT has internal control systems commensurate with its size, scale and complexity to manage its operations, financial reporting, and compliance requirements. These systems have been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information in timely manner, prevention and detection of fraudulent practices, compliance with applicable laws, safeguarding assets from unauthorized use, executing transactions with proper authorization, and ensuring compliance with internal policies. The Manager has clearly articulated roles and responsibilities for all functional heads.

Functional heads are responsible to ensure compliance with the applicable laws, policies and procedures laid down by the Manager.

The systems, standard operating procedures, and controls are implemented and reviewed by the leadership team.

Based on the findings, process owners undertake corrective measures in their respective domains, thereby strengthening the controls. Deloitte Haskins & Sells LLP, who are our statutory auditors, audited the financial statements for each of the Asset SPVs as at March 31, 2024. They have expressed an unqualified opinion on the effectiveness of each Asset SPVs' internal controls over financial reporting as of March 31, 2024.

Industry Structure and Developments

Industry Structure and Developments affecting our operations are captured on pages 70 to 77 of annual report

Outlook

India's resilient leasing momentum is propelled by its tech ecosystem, characterized by significant offshoring and R&D activities spanning various sectors. The convergence of a skilled talent pool, cost efficiency, and quality real estate is fostering a sustained growth trajectory. Despite global headwinds, the country's office markets have been minimally affected, underscoring the resilience of India's commercial landscape.

GCCs now account for c.36% of all occupied Grade A stock across top seven cities, underscoring the pivotal role of tech offshoring across diverse sectors propelling demand within the country's office market. This sustained trend is anticipated to maintain India's office markets as among the most growth-oriented globally. Moreover, recent SEZ reforms, enabling floor-wize conversion to non-processing area (NPA), are poized to enhance occupancy levels, further bolstering market dynamics. With robust occupancies and a surge in enquiries, there is a positive outlook for rental growth in the near future.