Data Infr.Trust Management Discussions


BY THE INVESTMENT MANAGER AND DETAILS OF ASSETS OF THE TRUST

Economic Overview

Global Economy

Even amidst decelerated global growth, 2021 was a year in which we saw mobile network technology advancements taking center stage across the globe.

As the world enters the third year of the COVID-19 crisis, economic developments have been both encouraging and troubling, marred by risk and uncertainty. The good news is that output in many countries rebounded in 2021 after a sharp decline in 2020. Both advanced and middle-income economies have attained substantial vaccination rates. International trade has picked up, and high commodity prices are benefiting many developing countries. Domestic financial crisis and foreign debt restructurings have been less frequent than might have been expected in a time of severe global shocks.

Risks to the global baseline are tilted to the downside. The emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localized wage pressures mean uncertainty around inflation and policy paths is high.

The war in Ukraine comes at a time when some countries are moving past the acute phase of the pandemic and the global economy is just recovering. As central banks fight persistent and widespread inflation and rising debt vulnerabilities, multilateral efforts to respond to the humanitarian crisis and end of the pandemic remain essential.

Indian Economy

A positive business environment, robust industrial output and rapid vaccination coverage have provided a strong momentum for the growth of Indias economy.

Between October and December 2021 (Q3 FY2021-22), GDP grew by ~5.4%, slower than we had earlier estimated. Growth in the July-September quarter was revised up to ~8.4%, which explains the fading recovery in the subsequent quarter. The uneven (modest, at best) recovery in a few sectors, especially agricultural, manufacturing, and contact-intensive services sectors, weighed on the overall growth. Improving investment outlook with private investment, particularly manufacturing, benefiting from the Production-Linked Incentive (PLI) Scheme, and increases in infrastructure investment augurs well for the Indian Economy.

GDP growth is projected to range between 7.5% and 8.0% in FY2022-23.**

There was a visible growth in credit uptake in FY2021-22, with agricultural and industrial sectors and personal loans driving the uptick. Banks and Non-Banking Financial Companies (NBFCs) have healthier balance sheets and provisions compared to the levels seen in 2018.

The successful macroeconomic management of the COVID-19 pandemic has resulted in a strong recovery of Indias economy because of which the country is in a better position to face the economic fallout of the current Ukrainian crisis.

The telecom industry globally is a critical economic multiplier that cuts across all industries and is the base of all new- age communications and connectivity. The Indian telecom sector is, by far, the worlds second-largest telecommunications market. The rating agency ICRA Limited has revised the telecom sector outlook from negative to stable as recent prepaid tariff hikes taken by the Big 3 operators - on the back of the reforms package - are likely to boost industry Average Revenue Per User (ARPU) levels and also shore up telco profits. In the Union Budget of 2022, the Government has recognized the telecom sector as an enabler of growth and employment opportunities with emphasis on nationwide 5G rollout and access of affordable services to rural and remote areas.

Asset Overview

Summit Digitel Infrastructure Private Limited

The Trust made its first investment in SDIPL which holds the Tower Infrastructure Business. The Tower Infrastructure Business was transferred from Reliance Jio Infocomm Limited ("RJIL") to SDIPL by way of a slump sale on a going concern basis under a scheme of arrangement with effect from March 31, 2019. The Trust acquired entire equity share capital of SDIPL with an initial number of 1,35,671 towers on August 31, 2020, which increased to 1,51,594 towers as on March 31, 2022. As at March 31, 2022, the Trust owns 100% of the issued equity share capital of SDIPL.

As one of the largest telecom infrastructure providers, SDIPL truly believes in building, nurturing, and strengthening partnerships with its stakeholders. Since SDIPL has embarked on this journey, the strategic tower footprints and superior backhaul connectivity have been areas of excellence and one of the key USPs. During the year SDIPL signed Master Service Agreement ("MSA") with Bharti Airtel Limited ("Airtel"), one of the largest MNOs in the country and with BSNL, the government owned MNO and telecom service provider. Commercial discussions with Vodafone Idea Limited ("VIL") are underway and the Standard ISP Tenancy Model is also being deliberated upon with various internet service providers, to open the doors for new leasing opportunities on our existing asset base.

Space Teleinfra Private Limited

Towards the end of financial year, the Trust made its second investment and acquired entire equity share capital of STPL as on March 10, 2022. The transaction was funded by way of issuance of units on rights basis and preferential basis in compliance with the SEBI InvIT Regulations. As on March 31, 2022, the Trust has two Special Purpose Vehicles i.e. SDIPL and STPL.

To fund this acquisition, the Trust has issued and allotted 2,87,00,000 units at an Issue Price of Rs 110.46 each aggregating to Rs 3,170.20 million, on rights basis, on March 3, 2022, which are listed on BSE Limited w.e.f. March 7, 2022. The Trust has further issued and allotted 5,28,00,000 units at an Issue Price of Rs 110.46 each aggregating to Rs 5,832.28 million, on preferential basis, on March 8, 2022, which are listed on BSE Limited w.e.f. March 17, 2022. Also, the Trust has submitted requisite forms/ documents as required under the Foreign Exchange Management Act read with rules and regulations framed thereunder, for ensuring compliance with respect to downstream investment made by it in STPL.

As the use of wireless services on handsets, tablets and other advanced mobile devices grows and evolves, there is a corresponding increase in the demand for passive infrastructure required to deploy current and future generations of wireless communications technologies. To capture this growing data demand, MNOs are increasingly focusing on ODSC and IBS. With an ever-increasing data consumption and the onset of 5G and greater, seamless indoor coverage has become as essential as outdoor connectivity. The STPL acquisition will open new horizons as a wider platform would now be able to offer solutions to MNOs with best-in-class services for voice & data connectivity.

Operational Performance

Summit Digitel Infrastructure Private Limited

As on March 31, 2022, the portfolio has reached 1,51,594 sites. The flow of service requests for towers is increasing across circles with a good number of deliveries happening within Service Level Agreements ("SLAs") including the site feasibility.

There has been a marked improvement in network performance during the year namely improvement in network uptime and reduction in repeated/frequent failures. Network sustainability factor, a critical parameter for growth and profitability of the organisation is showing a positive trend. SDIPL places a strong focus on performance quality and improvement.

More than 90% of SDIPLs sites have demonstrated 100% performance uptime level. To further facilitate an upward trend in improvement, robust weekly and monthly operations governance mechanisms have been established with service partners and telecom operators.

Energy billing for the sharer is being done on the basis of the Fixed Energy Model (FEM) tariff card.

Site audit findings are being addressed through periodic governance meetings with partners.

During the year various special projects for incremental loading and reduction in cost for Roof Top Tower and Ground Based Towers have been implemented. Local - VocalRs initiative of automation of preventive maintenance activities has been initiated in several Indian languages including Tamil, Telugu, Hindi and Malayalam. Focusing on health and safety aspects, development of an online platform for Permit to Work and site audits through a mobile application has been initiated.

Space Teleinfra Private Limited

As on March 31, 2022, STPL has a site count of 1,635 with 2,073 tenancies. This includes 86 metro and airport sites, 440 IBS Retail and Institutional sites and 1,109 Small Cell sites. With a dominant share of the metros, airports and IBS segments, STPL has been a preferred digital connectivity infrastructure partner over the years for all its customers spread across the country offering a high degree of trust and reliability.

Particularly during the pandemic period, STPLs proven ability and focus on building a superior network infrastructure for telecom connectivity proved critical at a time when data connectivity needs along with data uptime became the customers critical need. Not only did its operations team work around the clock to ensure that the end users had uninterrupted service, but STPL also proved itself as an industry leader by providing value to its customers - both developers as well as MNOs. Nearly 100% of its metro sites had a network uptime performance in the past year which was in line with the customer SLAs; further, >95% of its IBS sites demonstrated 100% performance uptime level.

Executive Overview

Summit Digitel Infrastructure Private Limited

SDIPLs primary business is the leasing of space on telecom sites to wireless services providers and data providers.

The following table details the number of telecom sites SDIPL owned and operated as of March 31, 2022:

Site Tower Type
Particulars Ground Based Tower Ground Based Mast Roof-Top Tower / Pole Cell on Wheel Total Sites
Number of towers 1,00,111 17,366 32,839 1,278 1,51,594
Distribution % 66% 11% 22% 1% 100%

The outbreak of COVID-19 pandemic globally and in India is causing significant disturbance and slowdown of economic activity. SDIPL is engaged in the business of providing tower infrastructure and related operations in India. SDIPL has executed a long term MSA with RJIL (one of the largest telecommunication service provider in India) as its customer, which results into committed revenues and cash flows for SDIPL on a long term basis. Moreover, the COVID-19 pandemic has not had a material adverse impact on the operations of the telecommunication industry to which SDIPL currently caters to. Also, SDIPL has completed substantial portion of its planned capital expenditure and for the balance as well as for the operations and maintenance of the tower sites, SDIPL has in place long-term arrangements with experienced contractors/service providers. Further, SDIPL has adequate unutilised borrowing limits available to meet its balance capital expenditure requirements to reach targated portfolio of 1,74,451 towers. In view of the above, SDIPL does not expect any significant challenges on going concern, including emanating out of COVID-19, in the next 12 months.

Due to SDIPLs exclusive telecom tower portfolio, its tenant lease rates vary considerably depending upon factors such as type, position and load of tenant equipment on the tower, remaining tower capacity, tower location etc. It measures the remaining tower capacity by assessing several factors, including tower height, tower type, environmental conditions, existing equipment on the tower and permitting regulations in effect in the jurisdiction where the tower is located. In many instances, tower capacity can be increased with relatively modest tower augmentation capital expenditures.

SDIPL expects existing and potential new tenant demand for its telecom infrastructure will result from

• New technologies including 5G,

• Increased usage of mobile entertainment, mobile internet, and machine-to-machine applications,

• Adoption of other emerging and embedded wireless devices,

• Increasing smartphone penetration,

• Wireless carrier focus on expanding both network quality and capacity, including the use of towers and small cells,

• The adoption of other bandwidth-intensive applications (such as cloud services and video communications),

• The availability of additional spectrum, and

• Increased government initiatives to support connectivity throughout India.

Based on industry research and projections, we expect that a number of key industry trends will result in incremental revenue opportunities for us:

o The deployment of advanced mobile technology, such as 4G and 5G, will provide higher speed data services and further enable fixed broadband. As a result, we expect that our tenants will continue deploying additional equipment across their existing networks.

o Wireless service providers compete based on the quality of their networks, which is driven by capacity and coverage. To maintain or improve their network performance as overall network usage increases, our tenants continue to deploy additional equipment across their existing sites while also adding new cell sites. We anticipate increasing network expansion over the next several years, as existing network density is anticipated to be insufficient to cater rapidly increasing levels of wireless data usage.

o Next generation technologies requiring wireless connectivity have the potential to provide incremental revenue opportunities for us. These technologies may include edge computing functionality, autonomous vehicle networks and a number of other internet-of-things, applications, as well as other potential use cases for wireless services. These technologies may create new and complementary use cases for our sites over time, although these use cases are currently in emerging stages.

o Wireless service providers continue to acquire additional spectrum, and as a result are expected to add additional sites and equipment to their networks as they seek to optimize their network configuration and utilize additional spectrum. We believe these trends will result in incremental utilization and interconnection demand at our infrastructure facilities.

Space Teleinfra Private Limited

STPL is engaged in the business of providing passive infrastructure / integrated IBS and Small Cell to provide a common shared platform for the purpose of providing additional coverage, fresh coverage and for network connectivity purposes by various MNOs.

The following table details the number of telecom sites that STPL owned and operated as of March 31, 2022:

Site Type Site Count Tenancy Count Tenancy Ratio
IBS
Retail 315 542 1.72
Metro 72 172 2.39
Airport 14 29 2.07
Institutional 84 153 1.82
Subtotal IBS 485 896 1.85
Small Cell 1,109 1,133 1.02
Roof Top Pole 41 44 1.07

Due to subsequent waves of COVID, work-from-home ("WFH") habits have changed the technology expectations for an indoor network experience. High quality collaboration experience and seamless connectivity are among the top expectations for WFH now. A robust and reliable 4G network is needed to replicate operations seamlessly at home, especially now with the WFH & Work from Office ("WFO") being followed in parallel. This will lead to an increase in demand for IBS in various residential societies as well as deployment of small cells across India especially in dense and congested areas facing network coverage & capacity issues.

Going forward, 5G rollout will further accelerate the small cell deployment across all top cities. The roll out of 5G in India is expected to take place in the second half of this year as the spectrum auction process is planned by Q3 FY2022-23 post which services are expected to be rolled out.

Financial Performance

Our consolidated financial statements have been prepared in accordance with the requirements of the SEBI InvIT Regulations, as amended, from time to time, read with the SEBI circular number CIR/IMD/DF/127/2016 dated November 29, 2016 ("SEBI Circular"); Indian Accounting Standards as defined in Rule 2(1)(a) of the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS), to the extent not inconsistent with the SEBI InvIT Regulations, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Brief details of financial performance of the Trust for the financial year ended March 31, 2022 is as under:

(Rs in Million)

Particulars ¦ 2021-22 2020-21
Revenue from Operations 97,861 82,442
Other Income 331 153
Profit / (Loss) before Tax 5,477 (9,830)
Less: Current Tax 15

-

Deferred Tax (7)

-

Profit / (Loss) for the year 5,469 (9,830)
Add: Other Comprehensive Income (OCI) (933)

-

Total Comprehensive Income for the year 4,536 (9,830)
Add: Opening Balance in Retained Earnings and OCI (Adjusted) (51,462) (10,402)
Less: Other adjustments - (10,658)
Less: Return on Capital (21,775) (10,306)
Less: Change in Minority Interest*

-

(10,266)
Less: Unit Issuance Costs (29)

-

Closing Balance of Retained Earnings and OCI (68,730) (51,462)

*Excluding loss amounting to Rs 4,149 million attributable to non-controlling interest for the year

Consolidated Revenue of the Trust for FY2020-21 was Rs 82,442 million which has increased to Rs 97,861 million in FY2021-22.

Consolidated EBITDA of the Trust for FY2020-21 was Rs 30,502 million which has increased to Rs 34,895 million in FY2021-22.

During the year, SDIPL has successfully raised USD 500 million through offshore bond issuance pursuant to Rule 144A and Regulation S of the US Securities Act, 1933 at coupon of 2.875% p.a, with bullet repayment after 10 years. The issuance was rated investment grade by global rating agencies, S&P Global Ratings (BBB-) and Fitch Ratings Limited (BBB). This is the first USD bond issuance by any telecom tower entity from India. This brings SDIPL at par with global telecom tower entities and help to diversify its borrowing avenues. For this issuance, SDIPL also won the "Most Innovative Deal" award by The Asset in its annual Triple A Country Awards 2021 - South Asia, India.

SDIPL has also raised Rs 31,500 million from domestic capital markets during the financial year ended March 31, 2022. These issuances are rated AAA by CRISIL Limited, ICRA Limited and Care Ratings Limited, the three domestic rating agencies.

During the year, STPL has raised fund based and non-fund based facilities aggregating to Rs 697 million. The term loan facility are rated [ICRA]A- by ICRA Limited.

The Trust is primarily engaged in setting up, operating and maintaining passive tower infrastructure and related assets and providing passive tower infrastructure related services. Accordingly, Trust has single segment as per the requirements of Ind AS 108 - Operating Segments. All assets of the Trust are located in India and the revenue is earned in India hence, there is single geographic segment.

Health, Security, Safety and Environment

Summit Digitel Infrastructure Private Limited

SDIPL is committed to the principle that all occupational injuries and illnesses can be prevented and the management of Health, Security, Safety and Environment ("HSSE") is an integral part of its responsibilities at all levels in the organization.

SDIPL emphasizes on and considers its top priority, that employees, contractors, or members of the public will not have a Serious Safety Incident as a result of its operations and activities.

SDIPL has a constant focus on the identification of high-risk activities and proactive mitigation of such hazards that could lead to fatalities and/or serious permanent disabilities. This is the mantra to prevent and sustainably avert serious safety incidents while conducting business across 22 circles involving more than 22,000 subcontractor personnel everyday.

As on March 31, 2022, SDIPL has achieved 0.162 LWCFR (Lost Workday Case Frequency Rate). Unfortunately, there were two serious safety incidents during the year under review. SDIPL has conducted detailed accident investigation for each incident and has completed implementation of all identified immediate corrective/preventive measures. Actions identified as medium and long-term mitigation measures have been progressively implemented and followed up with its principal contractor.

SDIPL is committed to comply with all HSSE related statutory and regulatory requirements and shall always strive to go beyond the minimum acceptable threshold of compliance with legal obligations. There were no notices nor non-compliance reports from authorities.

SDIPLs HSSE management system is based on the TAGG (Train Audit Guide & Govern) strategy. TAGG is primarily based on elements of Training, Auditing, Governance, Reporting, cross functional guidance and creation of safe work procedures which helps to sustainably implement HSSE management systems, embed improvement in performance whilst ensuring that all business-related activities remain systematic, effective and focused towards proactive reduction and mitigation of HSSE risks.

The delivery of customized learning, development and training sessions to its employees and contract workers have helped in reinforcing key HSSE values and life-saving measures. SDIPL believes that increasing awareness on hazard identification and proactive risk mitigation will eventually build a sustained work environment that is rooted in safety. As on March 31, 2022, SDIPL has imparted 2,49,226 manhours of training to its employees, contractors, and field personnel.

Focusing on high-risk mitigation, campaigns such as National Road Safety Month, World Environment Day, National Safety Week, were conducted across the country. Senior functional leaders of company and its prime contractor were trained on the Brookfield approach to safety and job safety planning in a series of training spread over four weeks/80 hours.

SDIPL launched a flagship customized employee training program titled "Summit Safety Program (SSP)" in December 2021. With SSP, each SDIPL employee learns about the HSSE risks associated with his role, gets trained-assessed-certified on the required HSSE mitigation measures, thereby enabling safe work execution each time every time. As of March 31, 2022, 6 out of 8 courses have been delivered to all employees constituting over 1,115 manhours of training.

SDIPL is continually focusing on availability, use and maintenance of compliant personal protective equipment (PPE), bikes and safety harnesses for the 12,000 strong field force under the aegis of "Suraksha Kavach" campaign. Half yearly inspection and certification have been conducted.

SDIPL has implemented a comprehensive process of site HSSE inspection and assurance and has conducted 3,066 site inspections this year involving 67 checkpoints pertaining to key HSSE risks checked at each site and integrated with 30 HSSE processes to systematically identify areas of improvement. Total of 16,469 unsafe acts and conditions were reported during these site inspections, of which, 13,159 (80%) have been monitored, followed up, validated and closed in a time bound manner with prime focus to implement corrective and preventive learnings across the network.

With an intent to drive proactive HSSE performance across circles, SDIPL has developed and launched a comprehensive Safety Scorecard from October 2021. The scorecard has leading and lagging parameters which objectively ascertain clear improvement areas and activities requiring attention. As of March 31, 2022, SDIPLs safety scorecard stood at 71%.

HSSE governance has been working efficiently within company and also with its contractor. Weekly, fortnightly and monthly meetings are conducted for all the key stakeholders.

SDIPL believes that every person working for or on behalf of SDIPL needs to return home safely each day, every day, every time. In this context, HSSE processes pertaining to road transportation, selection of new offices, onboarding sharer activities, site visits, trainings, etc. have been implemented and are audited for quality assurance.

Protection of environment and natural resources is also a key priority for SDIPL. Focus is to reduce carbon footprint, sustainably reduce use of Diesel Generators, thereby conserving resources.

Focus on employee health in the era of COVID-19 has been a key management focus area. SDIPL has developed and implemented a Return to Normal Operations (RNO) process to ensure safe and secure business operations across the country. It has also been releasing a weekly state wise COVID Risk Rating (CRR) score (based on the positivity rate for each state) and a COVID advisory bulletin for the benefit of employees and business operations.

Space Teleinfra Private Limited

STPL firmly believes that all occupational injuries and work-related incidents at sites are preventable and that health, safety, security of human being and protection of environment overrides all other business targets.

STPL is commited to providing a healthy and safe working environment to prevent occupational ill-health and work-related injuries to its employees and business partners.

During the year 2021-22, STPL has achieved the target of ZERO serious safety incidents, ZERO high-risk incidents, and ZERO adverse environment impact.

It had launched seven safety habits in FY2021-22 across the organization with tag line of "Safety rules are the best tools" and "Seven safety habits that could save your life". Its safety habits include:

1. Use of full body harness;

2. Wear riding helmet/seat belt;

3. Use electrical gloves and safety shoes;

4. No mobile while riding;

5. No alcohol/No overspeeding;

6. Dont work if you are not trained; and

7. Assess the risk & take PTW (Permit to Work).

STPL has ensured that all its employees are trained on the safety habits and monthly one training program is conducted for all new employees.

STPL had developed training module for its 95 service partners to make them understand the company values, quality & HSSE requirements while working and monthly one training program conducted.

At site we have ensured, all our sites have electromagnetic fields (EMFs) sign board, proper access ladder and fire extinguisher.

It has further ensured to conduct hazard identification and risk assessment for all the activities being carried out at site, warehouse and office. Existing and additional controls are being clearly specified in the risk assessment.

It is committed to have minimal environmental impact by building and maintaining sites with ZERO diesel consumption.

STPL conducts quarterly mock drill programs at all its offices and warehouses to manage emergencies.

Future Business Outlook

Summit Digitel Infrastructure Private Limited

We expect going forward site lease revenue will continue to grow by tenant additions, as large wireless carrier-tenants continue to focus on meeting the increasing demand for data. At SDIPL, the employees pride themselves on being future- ready with 1,74,000 plus towers spanning the length and breadth of India, ensuring that the growing demand for these technologies is met. In cognizance of the global pursuit of reducing carbon footprints and becoming carbon neutral, 100% of sites are built outdoors with no air conditioned shelters. Aligned to SDIPLs HSSE values, we are committed to run a business with "Zero Harm."

In conclusion, our outlook for the business remains positive, riding on a huge upsurge in data demand and the need for a better-connected nation in the post pandemic world. The introduction of new technologies will further intensify the role of passive infrastructure players like us. SDIPL, with its nationwide presence and several industry best benchmarks stands in good stead to invest and capitalize on these opportunities.

Space Teleinfra Private Limited

The major contributors to STPLs revenue growth are :

1. Acquiring sites which add value to MNOs thus enhancing both coverage and capacity;

2. Adding tenants to the already acquired sites; and

3. Growing Tenancies ie. adding new tenants to the existing billed sites.

In future too the growth will be propelled by acquiring sites that the MNOs seek as also prestigious projects like metros, airports and large Governmental sites spread all across the country. Equally, STPLs acquisition strength can be leveraged for the small cell business where thousands of small landlords need to be engaged for installations on their properties. STPL continues to believe that its site revenue is likely to increase due to the growing use of 4G as also its ability to meet the incremental data demand due to the imminent 5G launch. By adding new tenants and new equipment for existing tenants on its sites, both the site utilization and profitability can increase in tandem. STPL will continue its focus on corporate parks, retail and institutional sites especially hospitals and educational institutes. In addition, STPL intends to continue to supplement its organic growth by selectively developing or acquiring new marquee sites (for both IBS and Small Cells) in the existing and new geographies where it can achieve its projected returns.

Aligned to STPLs HSSE values, we are committed to run a business with "ZERO serious safety incidents, ZERO High-risk incidents, and ZERO adverse Environment impact" STPL pledges to reach the highest levels of environmental performance by sustainably saving energy, eliminating emissions, conserving resources, reducing costs and taking a firm stride closer to a greener earth.

Details of revenue during the year from the underlying project

The Trust owns 100% equity share capital of SDIPL, which is engaged in the business of providing tower infrastructure and related operations and maintenance services.

During the current year FY2021-22, the Trust has acquired 100% equity share of STPL, which is engaged in business of building, maintaining, leasing, renting and otherwise dealing in infrastructure for the telecom sector - Small Cell Sites and IBS.

During the financial year ended March 31, 2022, SDIPL generated a revenue of Rs 97,651 million from its operations and Rs 318 million as other income. During the financial year ended March 31, 2022, post acquisition, STPL generated a revenue of Rs 210 million from its operations and Rs 13 million as other income.

FINANCIAL INFORMATION AND OPERATING EXPENSES OF THE TRUST

Summary of Audited Standalone and Consolidated Financial Information of the Trust for the financial year ended March 31, 2022, is as follows:

(Rs in Million)

Particulars Financial Year ended March 31, 2022 Financial Year ended March 31, 2021
Standalone Consolidated Standalone Consolidated
Total Income 39,042 98,192 13,860 82,595
Total Expenditure 463 92,715 310 92,425
Profit / (Loss) before tax 38,579 5,477 13,550 (9,830)
Less: Provision for tax
Current tax - 15 - -
Deferred tax - (7) - -
Profit/(Loss) for the period 38,579 5,469 13,550 (9,830)
Other comprehensive income - (933) - -
Total comprehensive income/(loss) for the period 38,579 4,536 13,550 (9,830)

Key operating expenses of the Trust for the financial year ended March 31, 2022, are as follows:

(Rs in Million)

Particulars Financial Year ended on March 31, 2022 Financial Year ended on March 31, 2021
Investment Manager Fees 28 26
Legal, Professional and advisory fees 13 2
Trustee Fee 2 2
Listing fees 3 1
Project Manager Fees 24 24
Payment to Auditors 49 18
Other expenses 344 196
Total 463 269

Further, the Audited Standalone and Consolidated Financial Information of the Trust for the financial year ended March 31, 2022 along with the Report of Auditors thereon, as approved by the Board of Directors of Brookfield India Infrastructure Manager Private Limited (formerly known as WIP (India) Private Limited) ("BIIMPL/Investment Manager"), acting in its capacity as Investment Manager of the Trust, forms part of this Annual Report.

DETAILS OF UNITS ISSUED BY THE TRUST Units

The Trust issued 2,52,15,00,000 units at an Issue Price of Rs 100 each aggregating to Rs 2,521.5 million on March 31, 2019, which were listed on BSE Limited w.e.f. September 1, 2020.

Pursuant to the approval granted by the Data InvIT Committee of the Board of Directors of BIIMPL, on March 3, 2022 the Trust has issued and allotted 2,87,00,000 units at an Issue Price of Rs 110.46 each aggregating to Rs 3170.20 million, on rights basis, which were listed on BSE Limited w.e.f. March 7, 2022.

Pursuant to the approval granted by the unitholders of the Trust, on March 8, 2022 the Trust has further issued and allotted 5,28,00,000 units at an Issue Price of Rs 110.46 each aggregating to Rs 5832.28 million, on preferential basis, which were listed on BSE Limited w.e.f. March 17, 2022.

During the year under review and as on the date of this Report, no units have been bought-back by the Trust.

Credit Rating

During the year, the Trust has voluntarily obtained an Issuer Rating ("Is") from CARE Ratings Limited, which has assigned "CARE AAA (1s)/Stable" rating (pronounced as Triple A (Issuer rating) with Stable outlook) to the Trust on January 4, 2022. Further, CARE Ratings Limited has reaffirmed Issuer Rating ("Is") of the Trust at "CARE AAA (Is); Stable" rating on April 29, 2022.

The aggregate consolidated borrowings and deferred payments of the Data InvIT and its Special Purpose Vehicles i.e. SDIPL and STPL (together known as "Group") do not exceed the thresholds specified in the SEBI InvIT Regulations and hence, there is no statutory requirement for obtaining credit rating. Further, the Trust has not issued any debt securities during the year under review.

During the year, SDIPL has obtained credit ratings details of which are mentioned below:

Instrument Amount Outstanding amount as on March 31, 2022 Credit Rating Agency Credit Rating Credit rating date Reaffirmation date
Term Loan facilities Rs 3,00,080 million Rs 98,183 million CRISIL Limited CRISIL AAA/ Stable August 31, 2022 September 20, 2021
1,18,360 Secured Redeemable Rs 1,18,360 million Rs 53,360 million Care Ratings Limited CARE AAA/ Stable March 5, 2021 November 12, 2021
Non-Convertible Debentures ("NCDs") PPD series 5 CRISIL Limited CRISIL AAA/ Stable March 3, 2021 September 20, 2021
15,000 NCDs Rs 15,000 million Rs 15,000 million CRISIL Limited CRISIL AAA/ Stable June 8, 2021 September 20, 2021
2.875% Senior Secured Notes USD 500 million Rs 37,879 million Fitch Ratings Limited S&P Global Ratings Investment Grade (IG) Ratings: BBB-/Stable July 30, 2021
Instrument Amount Outstanding amount as on March 31, 2022 Credit Rating Agency Credit Rating Credit rating date Reaffirmation date
6,500 NCDs Rs 6,500 million Rs 6,500 million CRISIL Limited CRISIL/AAA Stable September 20, 2021 -
10,000 NCDs Rs 10,000 million Rs 10,000 million Care Ratings Limited CARE/AAA Stable November 12, 2021
ICRA Limited ICRA/AAA Stable November 12, 2021

During the year, STPL has obtained credit rating for Term Loan facility, details of which are mentioned below:

Instrument Amount Outstanding amount as on March 31, 2021 Credit Rating Agency Credit Rating Credit rating date
Term Loans including sub limits Rs 500 million Rs 500 million ICRA Limited [ICRA]A- January 14, 2022

SUMMARY OF THE VALUATION AS PER THE FULL VALUATION REPORT AS AT THE END OF THE YEAR

Pursuant to the approval of the Board of Directors of Investment Manager, BDO Valuation Advisory LLP, Registered Valuer (IBBI Registration Number: IBBI/RV-E/02/2019/103) ("Valuer"), was appointed as the Valuer of the Trust to carry out the valuation of Trust Assets for FY2021-22 in accordance with the SEBI InvIT Regulations.

First valuation for the financial year was done by the Valuer as on September 30, 2021 for the Rights Issue of the Trust. As per the Valuation Report, Trust Assets have been valued using Discounted Cash Flow ("DCF") Method under Income Approach. Free Cash Flow to Firm model under the DCF Method has been used to arrive at the enterprise value of the Trust Asset. The said Valuation Report has been filed with BSE Limited on December 28, 2021 and the same is also available on the website of the Trust at www.towerinfratrust.com. As per the Valuation Report, Trust Assets have been valued at Rs 4,82,686.6 million, as on September 30, 2021, under Income Approach.

In terms of the provisions of Regulation 10 of the SEBI InvIT Regulations, the Valuation Report dated May 24, 2022 for the financial year ended March 31, 2022, issued by the Valuer of the Trust, has been filed with BSE Limited on May 26, 2022 and the same is also available on the website of the Trust at www.towerinfratrust.com. The Valuation Report is also attached as Annexure A to this Report.

As per the Valuation Report, Trust Assets have been valued at Rs 5,22,267 million under Income Approach. DCF Method has been used to arrive at the enterprise value of the Trust Asset. The Assets valuation as on March 31, 2022 includes both SDIPL and STPL.

VALUATION OF ASSETS AND NET ASSET VALUE ("NAV")

Pursuant to the provisions of Regulation 10 of the SEBI InvIT Regulations, the NAV of the Trust was computed based on the valuation done by the Valuer and the same has been disclosed as part of the Audited Financial Information of the Trust filed with BSE Limited on May 26, 2022 and is also available on the website of the Trust at www.towerinfratrust.com.

Standalone Statement of Net Assets of the Trust at Fair Value as at March 31, 2022 is as under:

(Rs in Million)

Particulars Financial Year ended March 31, 2022 Financial Year ended March 31, 2021
Book Value Fair Value Book Value Fair Value
A. Assets 285,826 297,825 255,778 266,642
B. Liabilities at Book value 6,626 6,626 2,355 2,355
C. Net Assets (A-B) 279,200 291,198 253,423 2,64,286
D. Number of Units (No. in Million) 2,603 2,603 2,522 2,522
E. NAV per Unit (C/D) (Rs) 107.26 111.87 100.50 104.81

INVESTMENT MANAGER ("IM") OF THE TRUST AND CHANGES THEREIN

BIIMPL has been appointed as the IM of the Trust with effect from October 13, 2020.

A. Details of Brookfield India Infrastructure Manager Private Limited (formerly known as WIP (India) Private Limited) i.e. IM, as on March 31, 2022

BIIMPL was incorporated on May 5, 2010 under the Companies Act, 1956, with the main object of providing financial advisory services. BIIMPL is a wholly-owned subsidiary of BHAL Global Corporate Limited - an affiliate of Brookfield Asset Management Inc. ("BAM").

BIIMPL was acquired by BHAL Global Corporate Limited to act as an Investment Manager to all the existing and proposed infrastructure investment trusts set up by the Brookfield Group from time to time, in terms of the SEBI InvIT Regulations.

Further, pursuant to the Informal Guidance issued by SEBI on March 12, 2020, BIIMPL can act as a common IM to all the infrastructure investment trusts to be set up and registered by the Brookfield group from time to time, under the SEBI InvIT Regulations.

BIIMPL was appointed as an Investment Manager to India Infrastructure Trust w.e.f. April 1, 2020, another InvIT set up by Brookfield earlier under the SEBI InvIT Regulations.

Considering the above, in order to ensure good governance and clear segregation of the management and operations of the different InvITs being/to be managed by BIIMPL, it was proposed to constitute a committee for each such InvIT. The operation and functioning of each such InvIT committee would be under the strict supervision of BIIMPL Board.

Accordingly, BIIMPL Board, had approved and adopted an Administration Policy to provide for a framework in relation to the internal compliance, governance and segregation of activities of various InvIT Committees that are/will be set up from time to time.

Considering the above, in order to ensure good governance and clear segregation of the management and operations of both the InvITs being managed by BIIMPL, the Board has constituted two InvIT Committees, namely Pipeline InvIT Committee and Tower InvIT Committee, for managing and administering respective InvITs and its assets, and has delegated the authority and responsibility of overseeing all the activities of the investment manager that pertain to the management and operation of the respective InvIT in accordance with the SEBI InvIT Regulations, respective Trust Documents, BIIMPL IMA and other applicable laws to the respective InvIT Committees. The operation and functioning of both the Committees are under the strict supervision of the Board of Directors of BIIMPL.

Further, the Board of Directors of BIIMPL at its meeting held on November 9, 2021, had renamed the Tower InvIT Committee as the Data InvIT Committee, pursuant to the change in name of Data InvIT.