Summary of Results

Summary

 

Consolidated Income Statement

 

Statement of Comprehensive Income

 

Consolidated Balance Sheet (Group)

 

Review of performance

FY 2021 vs FY 2020

Total property income increased by ₹363 million (4%) to ₹10.6 billion mainly due to income contribution of ₹941 million from:

  • Anchor Annex at ITPB, which was completed in November 2020; and
  • aVance 6 at aVance Hyderabad, which was acquired in March 2021;

This is partially offset by lower occupancy and lower utilities income and carpark income due to the COVID-19 pandemic.

In SGD terms, total property income increased by 1% to S$192.7 million. The SGD appreciated by 3% against the INR over the same period last year.

Total property expenses decreased by 13% to ₹2.0 billion (S$37.0 million) mainly due to lower operation and maintenance expenses across the portfolio, lower utilities expenses and reversal of expected credit loss in FY 2021 compared to allowance for expected credit loss in FY 2020.

Net property income increased by 8% to ₹8.6 billion (S$155.7 million) due to the factors described above.

Trustee-manager's fees increased by ₹86 million (10%) to ₹934 million (S$17.0 million), which is in-line with higher net property income and portfolio value as of 31 December 2021.

Other operating expenses decreased by ₹117 million (30%) to ₹272 million (S$4.9 million) mainly due to higher provision of Singapore GST in FY 2020.

Finance costs increased by ₹460 million (19%) to ₹2.8 billion (S$51.3 million) mainly due to increase in borrowing level.

Interest income increased by ₹193 million (7%) to ₹3.0 billion (S$53.8 million) mainly due to higher interest income from investments in Casa Grande, GardenCity, Arshiya Panvel, Aurum Q Parc and BlueRidge 3, after excluding interest income following the acquisitions of aVance 6 and Aurum Q1.

Realised gain on derivative financial instruments of ₹292 million (S$5.3 million) arose mainly from the settlement of foreign exchange forward contracts entered by the Group to hedge the foreign exchange exposure arising from the income repatriation from India to Singapore.

Realised exchange loss of ₹570 million (S$10.3 million) arose mainly from settlement of SGD-denominated loans. Realised exchange gain or loss is recognised when borrowings that are denominated in currencies other than the INR are settled.

As a result, ordinary profit before tax was ₹7.2 billion in FY 2021, an increase of 12% as compared to ₹6.5 billion in FY 2020. In SGD terms, ordinary profit before tax increased by 8% to S$131.2 million.

Income tax expenses increased by ₹1.0 billion (38%) to ₹3.7 billion (S$67.6 million) mainly due to higher deferred tax liabilities arising from acquisition of aVance 6 and annual revaluation; together with lower current income tax resulting from reversal of dividend distribution tax (“DDT”) provision in FY 2020.

Distribution adjustments:

  • Current income tax expenses of ₹2.0 billion (S$35.7 million).
  • Trustee-manager fees of ₹455 million (S$8.3 million) to be paid in units. The Trustee-manager has elected to receive 50% of its base fee and performance fee in units and 50% in cash; hence 50% of the fees are added back to the income available for distribution.
  • Realised loss on settlement of loans of ₹105 million (S$1.9 million) was added back for distribution purpose. This pertains to refinancing of SGD-denominated loans that have not been hedged into INR. Exchange gain/loss is recognised when borrowings that are denominated in currencies other than the INR are revalued. The exchange gain/loss is realised when the borrowing matures, is prepaid, or swapped to INR denomination.
  • Income due to non-controlling interestss of ₹356 million (S$6.5 million) is deducted from income available for distribution.

Income available for distribution decreased by 9% to ₹5.5 billion, mainly due to the reversal of DDT provision in FY 2020 and higher finance cost due to higher level of borrowing in FY 2021, partially offset by higher NPI and higher interest income from additional investments in Casa Grande, GardenCity, Arshiya Panvel, Aurum Q Parc and BlueRidge 3. In SGD terms, income available for distribution decreased by 11% to S$100.0 million.

Income available for distribution per unit was ₹4.78 or 8.66 S₵. DPU was ₹4.30 or 7.80 S₵ after retaining 10% of income available for distribution, representing a decrease of 9% and 11% in INR terms and SGD terms respectively.

2H FY 2021 vs 2H FY 2020

Total property income for 2H FY 2021 increased by ₹316 million (6%) to ₹5.4 billion mainly due to income contribution of ₹539 million from:

  • Anchor Annex at ITPB, which was completed in November 2020; and
  • aVance 6 at aVance Hyderabad, which was acquired in March 2021;

but partially offset by lower occupancy and lower utilities income and carpark income due to the COVID-19 pandemic.

In SGD terms, total property income increased by 5% to S$97.4million. The SGD appreciated by about 3% against the INR over the same period last year.

Total property expenses for 2H FY2021 increased by 4% to ₹1.0 billion (S$18.9 million) mainly due to higher operation and maintenance expenses, allowance for expected credit loss in 2H FY 2021 compared to reversal of expected credit loss in 2H FY 2020.

Net property income for 2H FY 2021 increased by 7% to ₹4.3 billion (S$78.5 million) due to the above factors.

Trustee-manager's fees for 2H FY 2021 increased by ₹48 million (11%) to ₹480 million (S$8.7 million), which is in-line with higher net property income and portfolio value as of 31 December 2021.

Other operating expenses for 2H FY 2021 decreased by ₹159 million (57%) to ₹120 million (S$2.2 million) mainly due to higher provision for Singapore GST in 2H FY 2020.

Finance costs for 2H FY 2021 increased by ₹331 million (28%) to ₹1.5 billion (S$27.3 million) mainly due to an increase in borrowing level.

Interest income for 2H FY 2021 increased by ₹115 million (8%) to ₹1.5 billion (S$27.5 million) mainly due to higher interest income from investments in Casa Grande, GardenCity, Arshiya Panvel, Aurum Q Parc and BlueRidge 3, after excluding interest income following the acquisition of aVance 6 and Aurum Q1.

Realised exchange loss for 2H FY 2021 of ₹107 million (S$1.9 million) arose mainly from settlement of SGD-denominated loans. Realised exchange gain or loss is recognised when borrowings that are denominated in currencies other than the INR are settled.

As a result, ordinary profit before tax was ₹3.6 billion in 2H FY 2021, an increase of 20% as compared to ₹3.0 billion in 2H FY 2020. In SGD terms, ordinary profit before tax increased by 19% to S$65.7 million.

Income tax expenses for 2H FY 2021 increased by ₹497 million (23%) to ₹2.7 billion (S$48.4 million) mainly due to lower current income tax resulting from reversal of DDT provision in 2H FY 2020.

Distribution adjustments:

  • Income tax expenses of ₹1.2 billion (S$21.3 million).
  • Trustee-manager's fees of ₹235 million (S$4.3 million) to be paid in units. The Trustee-manager has elected to receive 50% of its base fee and performance fee in units and 50% in cash; hence 50% of the fees are added back to the income available for distribution.
  • Realised loss on settlement of loans of ₹39 million (S$0.7 million) was added back for distribution purpose. This pertains to refinancing of SGD-denominated loans that have not been hedged into INR. Exchange gain/loss is recognised when borrowings that are denominated in currencies other than the INR are revalued. The exchange gain/loss is realised when the borrowing matures, is prepaid, or swapped to INR denomination.
  • Income due to non-controlling interests of ₹193 million (S$3.5 million) is deducted from income available for distribution.

Income available for distribution for 2H FY 2021 decreased by 13% to ₹2.5 billion, mainly due to the reversal of DDT provision in FY 2020 and higher finance cost resulting from higher level of borrowing, partially offset by higher NPI and higher interest income. In SGD terms, income available for distribution decreased by 14% to S$46.2 million

Income available for distribution per unit for 2H FY 2021 was ₹2.21 or 3.99 S₵. DPU was ₹1.99 or 3.60 S₵ after retaining 10% of income available for distribution, representing a decrease of 13% and 14% in INR terms and SGD terms.

2H FY2021 vs 1H FY2021

 

Total property income for 2H FY 2021 increased by 2% to ₹5.4 billion (S$97.4 million) mainly due to the income contribution from aVance 6 at aVance Hyderabad which was acquired in March 2021.

Total property expenses for 2H FY 2021 increased by 5% to ₹1.0 billion (S$18.9 million) mainly due to higher operation and maintenance expenses during 2H FY 2021; and higher allowance of expected credit loss in 2H FY 2021 compared to reversal of expected loss in 1H FY 2021.

As a result, net property income for 2H FY 2021 increased by 2% in both INR and SGD terms to ₹4.3 billion and S$78.5 million respectively.

Income available for distribution for 2H FY2021 decreased by 14% in both INR and SGD terms to ₹2.5 billion and S$46.2 million, mainly due higher net finance cost and higher current tax resulting from withholding tax on dividend in 2H FY 2021, but partially offset by increased NPI.

Income available for distribution per unit for 2H FY 2021 was ₹2.21 or 3.99 S₵. DPU decreased by 14% to ₹1.99 or 3.60 S₵ respectively, after retaining 10% of income available for distribution.

 

Commentary

India had recovered from the impact of the second wave of COVID-19 in 2Q 2021 as vaccination rates increased and daily cases reduced sharply in 3Q 2021. We saw a gradual ramp-up in attendance in our parks till December 2021. However, the recent spread of the Omicron variant of COVID-19 has increased daily cases and consequently delayed tenants' plans to return to office.

Based on the market research report by CBRE South Asia Pvt Ltd (“CBRE”) for the period ended 31 December 2021, some of the key highlights (compared to period ended 30 June 2021) include:

Bangalore

  • In Whitefield (the micro-market where ITPB is located), vacancy increased to 18.0%, from 16.3% as of 30 June 2021, due to significant supply addition. Average rental value increased by 2% in the micro-market. CBRE expects rental value to remain stable across both SEZ and non-SEZ sectors.

Chennai

  • In Old Mahabalipuram Road (the micro-market where ITPC is located), vacancy decreased to 14.3%, from 15.8% as of 30 June 2021, due to significant leasing activity amid low addition of new supply. Rental values remained stable. CBRE expects rental values to be under pressure in the coming quarters.
  • In Grand Southern Trunk (the micro-market where CyberVale is located), vacancy increased to 28.9%, from 19.4% as of 30 June 2021, due to the exit of several large tenants from the micro-market. Rental values remained stable. CBRE expects rental values to be under pressure in the coming quarters due to the higher vacancy level.

Hyderabad

  • In IT Corridor I9 (the micro-market where ITPH, CyberPearl and aVance Hyderabad are located), vacancy increased to 9.4%, from 7.6% as of 30 June 2021, mainly due to a slight increase in supply and slower take up. Rental value remained stable over the same period. CBRE expects rental values in IT Corridor I to remain stable in the coming quarters.

Pune

  • In Hinjawadi (the micro-market where aVance Pune is located), vacancy increased to 27.1%, from 17.7% as of 30 June 2021, due to significant supply addition and slower take up. Rental value decreased by 4% over the same period. CBRE expects rental values in Hinjawadi to remain largely stable over the coming quarters.

Mumbai

  • In Navi Mumbai (the micro-market where Aurum Q1 is located), vacancy increased to 37.6%, from 36.5% as of 30 June 2021, due to addition of new supply. Rental values remained stable across SEZ and non-SEZ spaces. CBRE expects rental values to be under pressure in the coming quarters.

The performance of a-iTrust is influenced by its tenants' business performance and outlook, condition of each city's real estate market and global economic conditions. a-iTrust will continue to focus on enhancing the competitiveness of its properties to distinguish itself from competitors, while maintaining financial discipline, and seeking growth opportunities.While vacancy increased across micro-markets in 2021, we are encouraged by several new leases that we have signed across our assets in these micro-markets during the last quarter of the year.

Notes