GLOBE RESIDENCY REIT

ANNUAL REPORT

MANAGED BY
TABLE OF
CONTENTS
Scheme’s Information 3

Vision, Mission 5

Board of Directors’ Profile 7

Chairman’s Review 11

Directors’ Report 13

Pattern of Unit holding 21

Financial Highlights 22

Statutory Reports 24

Valuation Report 25

Review Report to the Unit Holders on

Statement of Compliance with Code 46
of Corporate Governance
Statement of Compliance with Code 47
of Corporate Governance

Independent Auditor’s Report 50

Financial Statements 53

Directors’ Report in Urdu Language 93

 Globe Residency REIT
Other Executives Mr. Razi Haider CFO & Company Secretary
Mr. Murtaza Shabbir Head of Internal Audit & Compliance

Scheme's Information Trustee Central Depository Company of Pakistan Limited

CDC House, 99-B, Block “B” S.M.C.H.S.
Main Shahrah-e-Faisal, Karachi.

Share Registrar CDC Share Registrar Services Limited

Management Company Arif Habib Dolmen REIT Management Limited CDC House, 99-B, Block “B” S.M.C.H.S.
Main Shahrah-e-Faisal, Karachi.
Board of Directors Mr. Arif Habib Chairman
Mr. Nadeem Riaz Director Bankers Dubai Islamic Bank
Mr. Naeem Ilyas Independent Director Meezan Bank Limited
Ms. Tayyaba Rasheed Independent Director Askari Bank Limited
Mr. Muhammad Noman Akhter Independent Director Bank Alfalah Limited
Mr. Abdus Samad A. Habib Director
Mr. Faisal Nadeem Director External Auditor A.F. Fergusons and Co. Chartered Accountants, State Life Building
Mr. Sajid Ullah Sheikh Director No, 1-C, I.I Chundrigar Road, Karachi.
Mr. Muhammad Ejaz Chief Executive Officer
Internal Auditor Junaidy Shoaib Asad & Co. Chartered Accountants,
Audit Committee Mr. Naeem Ilyas Chairman 1/6-P, P.E.C.H.S., Mohtarma Laeeq Begum Road,
Mr. Abdus Samad A. Habib Member Off Shahrah-e-Faisal, Karachi.
Mr. Sajid Ullah Sheikh Member
Mr. Muhammad Noman Akhter Member Legal Advisor Ahmed & Qazi 4th Floor, Clifton Centre, Clifton, Karachi.

Development Advisor Arch Vision Plus 103, Rufi Trade Centre, SB-29 Block 13-C, Main
Human Resource & University Road,Gulshan-e-Iqbal, Karachi.
Remuneration Committee Ms. Tayyaba Rasheed Chairperson
Mr. Abdus Samad A. Habib Member Arif Habib Development and Engineering Consultatnts (Private) Limited
Mr. Sajid Ullah Sheikh Member Arif Habib Centre, 23, M.T. Khan Road, Karachi.
Mr. Muhammad Ejaz Member
Property Valuer MYK Associates (Pvt.) Limited MYK HOUSE, 52-A, Block ‘B’, Street #5,
Muslim Cooperative Housing Society (S.M.C.H.S.), Karachi.

REIT Accountant Junaidy Shoaib Asad & Co. Chartered Accountants,

1/6-P, P.E.C.H.S., Mohtarma Laeeq Begum Road,
Off Shahrah-e-Faisal, Karachi.

Rating Agency VIS Credit Rating Company Limited VIS House, 128/C, 25th Lane Off
Khayaban-e-Ittehad, Phase VII, DHA, Karachi.

Current Ratings RFR2 (dr)

Registered Office of Arif Habib Centre, 23, M.T. Khan Road, Karachi.
Management Company

03 | Globe Residency REIT Annual Report 2023 | 04

VISION
Our vision is to become the preferred real estate developer known for transforming urban
landscapes and enhancing the quality of life for residents and investors alike. We strive to be
industry leaders in innovation, sustainability, and customer satisfaction, with a portfolio of
iconic properties that leave a lasting legacy for generations to come.

MISSION
Our mission is to create exceptional living spaces and investment opportunities by delivering
high quality real estate projects that exceed the expectations of our clients and enhance the
communities we serve. We are committed to integrity, innovation, and sustainable
development practices that enrich the lives of our stakeholders.

05 | Globe Residency REIT Annual Report 2023 | 06

 DIRECTORS’ PROFILE Mr. Naeem Ilyas
Independent Director
Ms. Tayyaba Rasheed
Independent Director

Mr. Naeem Ilyas has over 30 years of strategic cum Ms. Tayyaba Rasheed has more than 20 years of rich
Mr. Arif Habib operational management level combined experience. and diverse experience in corporate and Investment
Chairman
He has served in senior positions across corporates Banking. Her area of expertise includes investment
including FMCG, Pharmaceuticals, Process Industry, banking, corporate finance and relationship
Mr. Arif Habib is the Chairman of Arif Habib Group and As Director
Building MEP Design Consultancy, Digital healthcare, management with profound understanding of structured
Chief Executive of Arif Habib Corporation Limited, the Arif Habib Corporation Limited
Proptech, e-Commerce, Information Technology. financing, infrastructure advisory, capital markets and
holding company of Arif Habib Group. He is also the Arif Habib Equity (Private) Limited
islamic finance. She has closed numerous landmark
Chairman of Fatima Fertilizer Company Limited, Aisha Arif Habib Consultancy (Private) Limited
Engr. Naeem Ilyas is a Pakistan Engineering Council Infra and capital market deals in her career. She was last
Steel Mills Limited, Javedan Corporation Limited (the Fatima Cement Limited
registered Professional Engineer (PE) and associated as serving as Head of Investment Banking Group at a large
owner of Naya Nazimabad) and Sachal Energy International Builders and Developers (Private) Limited
MEP Design Engineering & building services, having commercial bank. Prior to that she had worked in a
Development (Pvt.) Limited and Arif Habib Dolmen REIT NCEL Building Management Limited
MBA, LLB, MA (Eco), PGD (NILAT) degrees/diplomas and senior position at CIBG NBP and Bank Alfalah where she
Management Limited. Pakarab Energy Limited
has specialization in operations management from started her career as Management Trainee Officer. She
The Pakistan Business Council
LUMS / McGill. He has founded REIT Academy and is currently working in the portfolio management
Mr. Arif Habib remained the elected President/Chairman Pakistan Engineering Company Limited
Institute of Real Assets Development & Management function of one of the large Multilateral Banks.
of Karachi Stock Exchange for six times in the past and Pakistan Opportunities Limited
(IRADM). He is CEO at Magna Engineering (Pvt) Ltd and
was a Founding Member and Chairman of the Central
Director at Easy Health Tech Int’l (Pvt) Ltd., Infinitum She holds an MBA degree from IBA and is a CFA, FRM
Depository Company of Pakistan Limited. He has served As Honorary Trustee/Director
Technologies (Pvt) Ltd. and some other companies. charter holder. She holds Real Estate Developer Finance
as a Member of the Privatisation Commission, Board of Habib University Foundation
Certification from Moody`s and various Islamic Banking
Investment, Tariff Reforms Commission and Securities & Karachi Education Initiative
He has been instrumental in developing e-commerce certifications from NIBAF and IBA CEIF. She has
Exchange Ordinance Review Committee. He has been a Memon Health and Education Foundation
land scape in Pakistan, attended exposure study trips at completed the Directors Training Program and is a
member of the Prime Minister’s Economic Advisory Pakistan Centre for Philanthropy
MIT, Harvard Business School and Stanford University in certified Independent Director.
Council (EAC) and the Think-Tank constituted by the Memon Education Board
USA and successfully exited from well-known
Prime Minister on COVID-19 related economic issues.
ecommerce business after arranging road shows in Corporate Responsibilities
He has also remained a member of the Prime Minister's
Task Force on attracting Foreign Direct Investment (FDI) Mr. Nadeem Riaz Boston, Silicon Valley, Washington and UAE. As Director
Non-Executive Director Aisha Steel Mills Limited
and a member of Advisory Committee of Planning
He is also serving as a board member of HANDS (not for United Brands Limited
Commission. Mr. Nadeem Riaz has experience of over 32 years in the profit), has also served as Justice of Peace and member Pakistan Railway Freight Transportation Company (Pvt)
real estate market developing and managing renowned CPLC for several years, Founder Chairman PQATI Limited
Mr. Habib participates significantly in welfare activities. and award winning residential,commercial and retail (BQATI), Vice Chairman LATI, Chairman EFP-NICC
He remains one of the directors of Pakistan Centre for projects. He is a pioneer in developing international Forum, Managing Trustee of MPF Educational Trust,
Philanthropy (PCP), Habib University Foundation, standard shopping malls in Pakistan, transforming the Secretary General of Memon Professional Forum (MPF).
Karachi Education Initiative (KSBL), Arif Habib dynamics of the retail industry. He during his academics received President Talent
Foundation and Naya Nazimabad Foundation as well as
Farming Scholarship and IAESTE Student Exchange
trustee of Memon Health & Education Foundation (MMI). Mr. Riaz is a member of both International Council of Trainings in Central Asian States. He has professional
Shopping Centers and Middle East Council of Shopping hands on experience and trainings in Canada, Japan,
Corporate Responsibilities Centers, since 2002. Germany, China and Middle East. He is member of
As Chairman
Pakistan Institute of Corporate governance (PICG), ICSP
Fatima Fertilizer Company Limited Corporate Responsibilities and Certified Director from IBA, Karachi. He has also
Fatimafert Limited As Director served as visiting faculty member at ICMAP, NED
Sachal Energy Development (Private) Limited DHA Dolmen Lahore (Private) Limited University, IBA –Karachi, Hamdard University and
Javedan Corporation Limited Dolmen (Private) Limited others.
Aisha Steel Mills Limited Dolmen Project Management (Private) Limited
Arif Habib Development and Engineering Consultants Dolmen Real Estate Management (Private) Limited Corporate Responsibilities
(Private) Limited Grove (Private) Limited Magna Engineering (Private) Limited (Chief Executive)
Sapphire Bay Development Company Limited International Complex Projects Limited Parents Pakistan (SMC-Private) Limited (Chief Executive)
Arif Habib Foundation Retail Avenue (Private) Limited
Naya Nazimabad Foundation Sindbad Wonderland (Private) Limited As Director
Black Gold Power Limited
Easy Health Tech Int'l (Private) Limited
Essa Textile and Commodities (Private) Limited
Fahim, Nanji & Desouza (Private) Limited
Institute of Holistic Rehabilitation & Inclusion (IHRI)
(Private) Limited
Infinitum Technologies (Private) Limited

07 | Globe Residency REIT Annual Report 2023 | 08

 Mr. Muhammad Noman Akhter Mr. Faisal Nadeem Mr. Muhammad Ejaz
Independent Director Non-Executive Director Chief Executive

Mr. Muhammad Noman Akhter is a qualified Chartered In 2019, Mr. Samad Habib took on the role of CEO at Mr. Faisal is a director at the Dolmen Group, one of Mr. Muhammad Ejaz is the founding Chief Executive of
Accountant from the Institute of Chartered Accountants Safemix Concrete. Guided by his strategic acumen, Pakistan’s leading real estate organizations. He has Arif Habib Dolmen REIT Management Limited, Pakistan’s
of Pakistan (ICAP). He brings with him over 19 years of Safemix Concrete has undergone a remarkable been involved in the development, marketing and pioneering REIT Management Company. He has been
diversified experience in public and private transformation from a lossmaking entity to a profitable management of prime commercial and retail real estate associated with Arif Habib Group since August 2008
organizations. He served in Securities & Exchange enterprise. projects including Dolmen Mall Clifton. and sits on the board of several group companies. He
Commission of Pakistan (SECP) for more than 13 years. has spear headed several group projects when these
Prior to joining SECP in May 2008, he worked with Corporate Responsibilities Mr. Faisal started career as Manager Special Projects were at a critical stage during their execution.
Pakistan Cables Limited, A. F. Ferguson & Co. He started Javedan Corporation Limited (Chief Executive) associated with the development of Dolmen Mall Tariq
his career from Taseer Hadi Khalid & Co. a member of Safemix Concrete Limited (Chief Executive) Road, Dolmen Mall Hyderi, Dolmen Food Courts, The Prior to joining Arif Habib Group, Ejaz has served at
KPMG International. Harbour Front Office Tower and Dolmen Mall Clifton. senior positions with both local and international banks.
As Chairman He was the Treasurer of Emirates NBD bank in Pakistan
Corporate Responsibilities NN Maintenance Company (Private) Limited He later served in the capacity of Director Leasing, for and served Faysal Bank Pakistan as Regional Head of
Proton Technologies (Private) Limited (Chief Executive) the Dolmen property portfolio. He is currently serving as Corporate Banking Group. He also served Saudi-Pak
As Director the Chief Operating Officer at Dolmen Real Estate bank (now Silk bank) as Head of Corporate and
Partnerships Aisha Steel Mills Limited Management (Pvt.) Limited, which manages over 2 Investment Banking. He also had short stints at Engro
Faizan Associates Arif Habib Corporation Limited million square feet of prime retail and commercial space. Chemical and American Express bank.
AabPara Residency Arif Habib Equity (Pvt.) Limited
KNJ Builders and Developers Arif Habib Foundation Corporate Responsibilities Ejaz did his graduation in Computer Science from FAST,
Arif Habib Development and Engineering Consultants As Director ICS and did MBA in Banking and Finance from IBA,
As Director (Private) Limited International Complex Projects Limited Karachi, where he has also served as a visiting faculty
Tech Menders (Private) Limited Black Gold Power Limited Sindbad Wonderland (Private) Limited member. He has also conducted programs at
Nooriabad Spinning Mills (Pvt.) Limited Grove (Private) Limited NIBAF-SBP and IBP. He is a Certified Director and also a
Memon Health and Education Foundation Retail Avenue (Private) Limited Certified Financial Risk Manager.
Mr. Abdus Samad A. Habib Pakistan Opportunities Limited DHA Dolmen Lahore (Private) Limited
Non-Executive Director Dolmen (Private) Limited He actively participates in the group's CSR initiatives
Dolmen Project Management (Private) Limited especially those, which render services in the fields of
Dolmen Real Estate Management (Private) Limited health and education with emphasis on female literacy.
Starting his career at Arif Habib Corporation Limited, Mr Salfo Pakistan (Private) Limited
Samad Habib developed his experience in sales, Corporate Responsibilities
marketing and corporate activities working his way up As Director
through various executive positions. Arif Habib Corporation Limited
Mr. Sajid Ullah Sheikh Arif Habib Development and Engineering Consultants
In 2004, Mr. Samad Habib joined Arif Habib Limited Non-Executive Director (Private) Limited
leading the company as its Chairman and Chief Javedan Corporation Limited
Executive. He played a key role in shaping the strategic Mr. Sajid Ullah Sheikh is a Fellow member of Institute of Sachal Energy Development (Private) Limited
direction of the company where he specialized in capital Chartered Accountants of Pakistan. His association with Sapphire Bay Development Company Limited
market operations and corporate finance. Several Dolmen Group spans over 12 years and he is currently
noteworthy Initial Public Offerings (IPOs) and successful working as Group Director Finance at the Dolmen
private placements took place under his stewardship, Group. He started his career with KPMG Taseer Hadi and
showcasing his exceptional financial acumen and deep Co. later joined Avery Dennison Pakistan before
market insight. associating with Dolmen Group.

Mr. Samad Habib transitioned to Javedan Corporation Corporate Responsibilities

Limited, in 2011, as the driving force behind the As Director
transformation of a dilapidated cement plant to a vibrant Grove (Private) Limited
living community, Naya Nazimabad. Mr. Samad Habib DHA Dolmen Lahore (Private) Limited
has been pivotal to advancing positive societal change,
providing the city's middle class an elevated standard of
living. His dedication, passion for social betterment and
optimism are set to further transform the area with the
largest commercial precinct development in the city
presently under planning.

09 | Globe Residency REIT Annual Report 2023 | 10

 CHAIRMAN’S
The Board exercised its powers in light of the power assigned to the Board in accordance with the relevant laws and
regulation applicable on GRR and it has ensured compliance with all the applicable laws and regulation while
exercising their powers and making decisions.

REVIEW The evaluation of the Boards performance is assessed based on those key areas where the Board require clarity in
order to provide high level oversight, including strategic process, key business drivers and performing milestones,
Dear Unitholders of Globe Residency REIT the economic environment in which the Scheme operates, the risks faced by Scheme Business, Board dynamics,
capability and information flows. Based on the aforementioned, it can be reasonably be stated the Board of Directors
The Board of Directors of Arif Habib Dolmen REIT Management Limited, the REIT Management Company (RMC), of the RMC has played a key role in ensuring that Scheme’s objectives are achieved through a joint effort with the
have issued a separate report on the performance and the future outlook of Globe Residency REIT (GRR). management team and guidance and oversight by the Board and its members.

The Board is responsible for overseeing the Management of the REIT and in turn the Unit Holders’ best interest.

I, in my capacity of Chairman of the Board, am issuing this report on my assessment of the performance of the Board.

It gives me great satisfaction to report that the Board has been meeting regularly and maintained continuous Arif Habib
oversight and while being cognizant of its role and responsibilities, which it has carried out diligently in order to up Chairman
hold the best interest of the Unit Holders of GRR.
September 15, 2023
The Board’s composition has a balance of executive, non-executive and independent directors and the Board, as a
whole, has the core competencies, diversity, requisite skills, knowledge and experience necessary in the context of
the GRR’s operations.

The Board has formed Audit, as well as Human Resource and Remuneration Committees. It has approved the
Committees’ Terms of Reference (TORs) and ensured that the respective members of the Committees are equipped
with the necessary resources required by them to carry out assigned roles and responsibilities.

Throughout the year, the Management continued to bring all significant issues before the Board and its Committees
to ensure robustness of the decision making process; in particular, all the related party transactions entered into,
were brought to the Board’s attention and were reviewed in detail by the Audit Committee and thereafter, the Board.

The Board has developed and has been ensuring the implementation of a Code of Conduct covering professional
standards, ethical practices and corporate values, that have been adhered to in the Management Company’s
conduct, as well as in managing GRR by the Management with respect to the day-to-day operational activities.

The Board carried out an evaluation of the Board’s own performance and that of its Committees, as well as that of
individual Directors. The Board is extremely satisfied with the result of its self-assessment.

All meetings of the Board, as well as those of its Committees were held with the requisite quorum and all the
decisions were taken through Board resolutions. The minutes of the Board meetings, as well as that of its
Committees were accurately recorded and circulated amongst the Members with regularity and timeliness. The
Board and the Audit Committee have reviewed and are satisfied that there are adequate systems of internal control
in place and that these were regularly assessed for implementation and adequacy.

All the key executives of the Management Company who serve the best interest of the Unit Holders of GRR, were
evaluated and appropriate compensation was given so as to ensure that they perform their respective functions
diligently. The key executives included the Chief Executive, the Chief Financial Officer, the Company Secretary and
the Head of Internal Audit.

The Board has prepared and approved the Directors’ Report and has ensured that the Directors’ Report is published
with the Quarterly and Annual Financial Statement of the Scheme and the contents of the Directors’ Report are in
accordance with the requirement of applicable laws and regulation

11 | Globe Residency REIT Annual Report 2023 | 12

 Financial and Operational Performance
DIRECTORS’ REPORT The following table provides a summary of the financial performance of GRR for the year ended June 30, 2023:

Dear Unitholders of Globe Residency REIT For the Year Ended

June 30, 2023
On behalf of the Board of Directors of Arif Habib Dolmen REIT Management Limited (RMC), we are pleased to
present the Directors' Review report of Globe Residency REIT (“GRR” or “the Scheme”) for the financial year ended Revenue from contracts with customers 2,849,842
June 30, 2023. Cost of sales (2,422,323)
Administrative and operating expenses (127,957)
Overview
Net operating income 299,562
Globe Residency REIT is as a pioneering developmental REIT scheme dedicated to the development and sale of Gain on disposal under Musharaka arrangement 52,693
Globe Residency Apartments; a residential complex offering 1,344 apartment units across 9 towers over 40,500 Profit after Tax 271,083
square yards FL-site. This complex is located within Naya Nazimabad, one of Karachi's largest gated projects. Earnings per unit - Basic and diluted (Rupees) 1.936

Globe Residency REIT is the first developmental REIT Scheme, which was listed on December 28, 2022 on the Financial and operational performance are both progressing well with strong sales, revenue generation, and
Pakistan Stock Exchange (PSX). consistent installment recovery rates. Additionally, construction milestones remain in line with our business plan,
which ensures the project's successful completion.
A significant part in the development and management of Globe Residency's real estate assets is a strategic
Musharaka Agreement with Meezan Bank Limited. Following are the key points in this agreement: Of the total inventory of 1,344 apartment units, 779 units have been sold of which 155 apartments have been sold in
the current year. The total consideration for these sales amounts to PKR 11.879 billion, with PKR 2.722 billion
Partnership Nature: The agreement establishes a Musharaka partnership between Globe Residency REIT and generated in the current year. The increase in apartment pricing is attributed to strong demand and adequately
Meezan Bank Limited. Musharaka is a form of Islamic financing and partnership where parties pool their resources covers rising construction costs.
and share profits and losses based on an agreed-upon ratio.
The recovery rate of installments remains high at approximately 90%, a positive sign for the project's financial stability.
Asset Focus: The partnership specifically covers three out of the nine towers owned by Globe Residency REIT as
real estate assets included in the Musharaka arrangement. Maintaining construction progress according to the schedule is crucial for meeting timelines and ensuring the quality
standards of the project. In line with our business plan, approximately 45.84% of the construction has been
Profit and Loss Sharing: Both parties have agreed to share profits and losses on a 50/50 basis. This means that any completed.
profits generated from the specified towers will be equally distributed between Globe Residency REIT and Meezan For the Year Ended
Bank Limited. Conversely, any losses incurred will also be shared equally. It's essential to continue monitoring and managing the project carefully to ensure it staysJune
on track and meets its
30, 2023
objectives.
Construction and Sales Acceleration: The agreement is designed to expedite the construction process and
streamline the sales of the specified towers. Meezan Bank Limited will provide financing or other support to help Business Environment
accelerate the completion of these towers.
The real estate business in Pakistan is going through a period of rapid change owing to drastic changes in economic,
Operational Excellence and Market Leadership: Globe Residency REIT highlights its commitment to operational political, and social environment. Major factors such as fiscal adjustment and subsidy removal under the IMF program,
excellence and market leadership through this strategic collaboration. By partnering with a reputable bank like rising inflation from 11.9% to 29.2% and a volatile political scenario has caused uncertainty in the market. Inflation has
Meezan Bank Limited, Globe Residency aims to leverage the bank's expertise and resources to enhance its real especially impacted food, fuel and electricity pricing.
estate operations and market position.
The appreciation in USD has nullified the gains made in real estate investments thus driving down transaction
In summary, the Musharaka Agreement between Globe Residency REIT and Meezan Bank Limited represents a volumes especially in speculative markets. Despite the USD pricing having recently seen some correction, the market
significant move to optimize the management and profitability of a portion of Globe Residency's real estate assets. It has not responded to this and generally views this as a temporary adjustment.
reflects their shared commitment to achieving operational excellence and a leading position in the real estate market
through this strategic partnership. With the stabilization of the exchange rates, we expect an increasing interest from overseas investors seeking an
appealing entry point into the market.

While construction projects have gained momentum, cost has seen a sharp rise and developers are unsure about
how to price their projects due to unknown costs.

The market is presently driven by need based buying, particularly in the residential market. Urbanization, the
country's growing population, and a growing middle class remain resilient market drivers.

The market has started seeing recovery in segments such as middle-income housing. We expect this trend to carry
through to other segments with the general elections expected to be a turning point.

13 | Globe Residency REIT Annual Report 2023 | 14

 Business Risk Summary Trading in Scheme’s Units by Directors and Executives

Real estate market has been volatile over the last year with inflation and rising construction costs being a major A statement showing GRR’s units bought and sold by RMC’s Directors, Chief Executive Officer, Chief Financial Officer,
challenge. GRR’s steadfast commitment to innovation, unwavering dedication to delivering exceptional quality, and a Company Secretary and their spouses and minor family members is annexed as Annexure - I.
resolute focus on providing outstanding customer experiences not only allow us to effectively manage these
challenges but also enable us to leverage them as opportunities for growth and differentiation. As we navigate the Directors’ Attendance at Board and its Committee Meetings
dynamic business landscape, we remain confident that the project's resilience and adaptability will continue to drive
success and innovation. During the year ended June 30, 2023, eight (08) Board Meetings, six (06) Audit Committee Meetings and one (01)
Human Resource & Remuneration Committee Meeting were held. The names of Directors and their attendance in
Outlook Board and Committee meetings held during the year are presented below:

The economy of Pakistan is going through a period of economic readjustment and the real estate development Human
sector is particularly vulnerable to the economic slowdown, as it is heavily reliant on capital and lacks access to Sr. Board Audit Resource &
financial assistance. Name of Director Remuneration
No. Meeting Committee
Committee
The real estate sector is a major employment generator, second only to agriculture. In response to the government’s
1 Mr. Arif Habib 8 - -
incentives, many projects were launched with varying levels of success. The aim of these projects was to boost the
sector and general economic growth. 2 Mr. Nadeem Riaz 3 - -
3 Mr. Naeem Ilyas 8 6 -
Therefore, it is essential to extend the timelines provided under the government’s incentive framework carefully to
4 Ms. Tayyaba Rasheed 8 - 1
ensure successful completion of the projects, which will ultimately lead to economic revival and prosperity in this
region. 5 Mr. Muhammad Noman Akhter 8 6 -
6 Mr. Samad A. Habib 6 4 1
In these difficult times, we take great pride in the strength of our organization, management experience, and the
7 Mr. Faisal Nadeem 4 - -
quality of our clients. Together, they make us stand out in a very competitive market. With firm belief, we execute our
business plan within the defined cost, quality, and timeframes to ensure the success of what we do. We have high 8 Mr. Sajid Ullah Sheikh 6 6 1
hopes for the long-term success of our Developmental Real Estate Investment Trusts (REITs). We believe it will 9 Mr. Muhammad Ejaz 7 - 1
weather the storm and continue to prosper.
Directors’ Remuneration
Corporate Governance
The Non-Executive Directors (including independent directors) of RMC, excluding those directors who are
GRR is Pakistan’s first developmental REIT Scheme that is listed on the Pakistan Stock Exchange. The Board of RMC concurrently serving as Executive Directors in any of the Arif Habib Group of Companies are provided a remuneration
and management are committed to observe the Code of Corporate Governance and are cognizant of their for attending Board and its Committee Meetings as may be approved by the Board from time to time.
responsibilities to monitor operations and performance, enhance accuracy, comprehensiveness, and transparency of
financial and non-financial information. The Chief Executive Officer is the only executive director on the Board. Further as and when the Board decides to
assign any additional roles and responsibilities to any non-executive directors, the Board shall decide the
The Board would like to state that proper books of accounts of GRR have been maintained and appropriate remuneration to be provided to such director which is commensurate with the roles and responsibilities so assigned.
accounting policies have been consistently applied in the preparation of financial statements. Accounting estimates
as stated in note 2.4 of the financial statements are based on reasonable and prudent judgment. International The Scheme is exclusively obligated to pay a management fee to RMC, and therefore, there is no impact on the fund's
Financial Reporting Standards, as applicable in Pakistan, are followed in the preparation of the financial statements. financial statements related to Directors' remuneration.
The system of internal controls is sound in design and has been effectively implemented and monitored. The financial
statements of GRR present fairly its situation, the result of its operations, cash flows and the movement in NAV. No Composition of the Board
material payment has remained outstanding on account of any taxes, duties, levies, or charges.
The current composition of the board is as follows:
In compliance with the Code, the Board hereby reaffirms that there is no doubt about GRR’s ability to continue as a
going concern and that there has been no material departure from the best practices of corporate governance. It is Total Number of Directors:
management’s endeavour to excel through better Corporate Governance with fair and transparent practices
(a) Male: 8
(b) Female: 1

15 | Globe Residency REIT Annual Report 2023 | 16

 Composition: Financial and Business Highlights

Name Status The key operating and financial data have been given in summarized form under the caption “Financial & Business
Highlights” along with and graphic representation as annexure to this report.
Mr. Arif Habib Chairman
Mr. Nadeem Riaz Non-Executive Director Audit Committee

Mr. Naeem Ilyas Independent Director As required under the Code of Corporate Governance, the Audit Committee continued to perform as per its Terms of
Ms. Tayyaba Rasheed Independent Director Reference duly approved by the Board.

Mr. Muhammad Noman Akhter Independent Director Auditors

Mr. Abdus Samad A. Habib Non-Executive Director
The present external auditors M/s. A.F. Ferguson & Co. Chartered Accountants, shall retire, and being eligible, have
Mr. Faisal Nadeem Non-Executive Director offered themselves for reappointment for the year ending on June 30, 2024. The external auditors hold satisfactory
rating by the Institute of Chartered Accountants of Pakistan (ICAP) as required under their Quality Control Review
Mr. Sajid Ullah Sheikh Independent Director
Program. As suggested by the Audit Committee of RMC, the Board of RMC recommends reappointment of M/s. A.F.
Mr. Muhammad Ejaz Chief Executive Officer Ferguson & Co. Chartered Accountants, as auditors of GRR for the financial year ending on June 30, 2024, at a fee
to be mutually agreed.
Committees of the Board:
Election of Directors
Audit Committee
In accordance with the provisions of Section 161 of the Companies Act 2017 (Section 180 of the repealed Companies
Mr. Naeem Ilyas Chairman Ordinance, 1984) the three years term of eight elected directors of RMC was completed in October 2021 and all
Mr. Noman Akhter Member Directors were retired. Fresh elections of Directors were held on October 26, 2021, and the number of Directors as
Mr. Samad A. Habib Member fixed by the Board (eight in numbers) were elected unopposed. Further Chairman, Chief Executive and
Mr. Sajid Ullah Sheikh Member sub-committees of the board were also appointed on the said date.

Human Resource & Remuneration Committee Post Balance Sheet Events

Ms Tayyaba Rasheed Chairperson There have been no material changes since June 30, 2023, to the date of this report except the declaration and
Mr. Abdus Samad A. Habib Member distribution of a Final Cash Dividend @ Rs. 3.00 / unit i.e., 30 %. The effect of this declaration shall be reflected in next
Mr. Sajid Ullah Sheikh Member year’s financial statements.
Mr Muhammad Ejaz Member
Related Party Transactions
Pattern of Unitholding
To comply with the requirements of REIT Regulations and Code of Corporate Governance, GRR presented all related
The units of GRR are listed on the Pakistan Stock Exchange. There were 1,444 unitholders of GRR as of June 30, 2023. party transactions before the Audit Committee and Board of RMC for their review and approval. These transactions
The detailed pattern of unitholding and categories of unitholding of GRR including units held by Directors and have been approved by the Audit Committee and Board of Directors in their respective meetings. The details of
Executives, if any, are provided as Annexure-II. related party transactions have been provided in note 29 of the annexed audited financial statements.

Categories of Unit holders Units Held % Acknowledgement

Directors and their spouse(s) and minor children 190,214 0.14
Associated Companies, undertakings, and related parties 100,043,083 71.46 We are thankful to GRR’s valued investors, the Securities and Exchange Commission of Pakistan, the management of
Executive 6,836 - Pakistan Stock Exchange Limited, the Trustees of GRR and all business partners for their continued cooperation and
NIT and ICP - - support. We also appreciate the effort put in by the management team.
Banks, Development Financial Institutions, Non Banking Financial
Institutions. - - For and on behalf of the Board
Insurance Companies 74,180 0.05
Modarabas and Mutual Funds - -
General Public
a. Local 33,256,971 23.75
b. Foreign 143,690 0.10 Muhammad Ejaz Arif Habib
Others 6,285,026 4.50 Chief Executive Chairman
Total 140,000,000 100 September 15, 2023
Karachi.

17 | Globe Residency REIT Annual Report 2023 | 18

 ANNEXURE 1 ANNEXURE II
Statement showing units bought and sold by Directors, Chief Executive Officer, Chief Financial Officer, Company PATTERN OF UNIT HOLDING
Secretary and their Spouses and Minor Children from December 28, 2022 to June 30, 2023. Categories of Unit Holders as at June 30, 2023

UNITS UNITS No. of No. of

NAME OF DIRECTOR DESIGNATION REMARKS Categories of Unit Holders Unit Holders Unit Held Holding %
BOUGHT SOLD
Mr. Arif Habib Chairman 10,787,938 10,787,938 Directors, Chief Executive Officer and their spouse(s) and
Mr. Nadeem Riaz Director - - minor children
Mr. Naeem Ilyas Director - - Mr. Abdus Samad A Habib 1 18,815 0.01
Ms. Tayyaba Rasheed Director - - Mr. Faisal Nadeem 1 170,899 0.12
Mr. Muhammad Noman Akhter Director - - Mr. Muhammad Ejaz 1 500 0.00
Mr. Abdus Samad A. Habib Director 18,815 -
Mr. Faisal Nadeem Director 170,899 - Associated Companies, undertakings and related parties 3 100,043,083 71.46
Mr. Sajidullah Sheikh Director - -
Mr. Muhammad Ejaz Chief Executive 500 - Executives 1 6,836 0.00
Mr. Razi Haider CFO & Company Secretary 6,836 -
NIT and ICP 0 - -

Banks Development Financial Institutions, Non-Banking Financial

Institutions 0 - -

Insurance Companies 1 74,180 0.05

Modarabas and Mutual Funds 0 - -

General Public
a. Local 1373 33,256,971 23.75
b. Foreign 49 143,690 0.10
Foreign Companies 0 - -
Others 14 6,285,026 4.49
Total 1444 140,000,000 100.00

Unit holders holding 10% or more Unit Held Percentage

ARIF HABIB CORPORATION LIMITED 77,255,802 55.18

19 | Globe Residency REIT Annual Report 2023 | 20

 Pattern of Unit Holding FINANCIAL HIGHLIGHTS
As of June 30, 2023

# Of Unit holders Unit Holding'Slab Total Units Held Financial Highlights 30-June-2023 30-June-2022

92 1 to 100 1,016 Profitablility

604 101 to 500 295,756
Net Profit Margin 9.51% 13.35%
280 501 to 1,000 273,044 Return on total assets 9.93% 10.18%
357 1,001 to 5,000 774,210 Return on Unitholders’ fund 22.00% 26.01%
47 5,001 to 10,000 342,684
11 10,001 to 15,000 124,817 Liquidity
11 15,001 to 20,000 193,183 Current ratio (in times) 3.09 7.13
2 20,001 to 25,000 50,000
2 25,001 to 30,000 57,057 Market Ratios
8 30,001 to 35,000 267,411
Dividend payout ratio 92.21% 0.00%
1 45,001 to 50,000 50,000 Dividend Yield (at par @ Rs.10 per unit) 30.00% 0.00%
2 50,001 to 55,000 107,121 P/E Ratio (in times) 4.22 0.00
1 65,001 to 70,000 68,360
1 70,001 to 75,000 74,180 Valuation
1 90,001 to 95,000 90,421 Earning per unit - Basic and diluted (PKR) 1.936 2.445
2 110,001 to 115,000 227,482 No. of ordinary units 140,000,000 140,000,000
1 115,001 to 120,000 119,396
2 150,001 to 155,000 304,925 Trends (PKR '000)
1 170,001 to 175,000 170,899 Net Operating Income 299,562 417,029
1 210,001 to 215,000 212,121 Profit after taxation 271,083 342,360
1 340,001 to 345,000 341,502 Uniholders' fund 1,855,490 1,584,407
1 535,001 to 540,000 536,699 Total assets 4,113,180 4,049,813
1 680,001 to 685,000 683,500
1 795,001 to 800,000 800,000
2 935,001 to 940,000 1,870,988
1 950,001 to 955,000 952,005
1 1,245,001 to 1,250,000 1,249,801
1 1,705,001 to 1,710,000 1,707,833
1 2,265,001 to 2,270,000 2,267,710
1 4,125,001 to 4,130,000 4,129,811
1 5,520,001 to 5,525,000 5,522,690
1 5,840,001 to 5,845,000 5,841,129
1 9,195,001 to 9,200,000 9,200,000
1 10,245,001 to 10,250,000 10,249,166
1 13,585,001 to 13,590,000 13,587,281
1 77,255,001 to 77,260,000 77,255,802
1444 140,000,000

21 | Globe Residency REIT Annual Report 2023 | 22

 FINANCIAL HIGHLIGHTS (PKR '000)

Total Assets Unitholder's Fund

TOTAL ASSETS UNIT HOLDERS' FUND

4,150,000 2,000,000

4,100,000 1,800,000

4,050,000 1,600,000

4,000,000 1,400,000
2022 2023 2022 2023

Total Liabilities NAV

TOTAL LIABILTIES NET ASSET VALUE

2,600,000 14.00

2,400,000
12.00
2,200,000

2,000,000 10.00
2022 2023 2022 2023

Net Profit Margin Return on Total Assets

NET PROFIT MARGIN RETURN ON TOTAL ASSETS

15.00% 10.20%

10.00%
10.00%
5.00%
9.80%
0.00%
2022 2023
2022 2023

STATUTORY
REPORTS
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25 | Globe Residency REIT Annual Report 2023 | 26
27 | Globe Residency REIT Annual Report 2023 | 28
 Total Units Held

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 Total Units Held

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 Total Units Held

33 | Globe Residency REIT Annual Report 2023 | 34

35 | Globe Residency REIT Annual Report 2023 | 36
 Total Units Held

37 | Globe Residency REIT Annual Report 2023 | 38

 Total Units Held

39 | Globe Residency REIT Annual Report 2023 | 40

 Total Units Held

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 Total Units Held

43 | Globe Residency REIT Annual Report 2023 | 44

Annual Report 2023 | 46
47 | Globe Residency REIT Annual Report 2023 | 48
49 | Globe Residency REIT Annual Report 2023 | 50
51 | Globe Residency REIT Annual Report 2023 | 52
 FINANCIAL
STATEMENTS
53 | Globe Residency REIT Annual Report 2023 | 54
STATEMENT OF FINANCIAL POSITION STATEMENT OF PROFIT OR LOSS
AS AT JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023
For the year For the period from
ended June April 1, 2022 to
ASSETS Note 2023 2022 Note 30, 2023 June 30, 2022
------(Rupees in '000)------ ------(Rupees in '000)------
Non-current assets
Property and equipment 4 372 603
Long term deposits 5 3,057 100
Revenue from contracts with customers 23 2,849,842 2,564,540
Contract cost assets 7 20,947 19,467
24,376 20,170
Cost of sales 24 (2,422,323) (2,056,955)
Current assets
Inventory property 6 2,055,904 2,301,375
Gross profit 427,519 507,585
Current portion of contract cost assets 7 17,455 8,849
Contract assets 8 1,535,223 916,202
Administrative and operating expenses 25 (127,957) (90,556)
Receivable from joint operator 9 148,540 -
Net operating income 299,562 417,029
Advance for development expenditure 10 319,190 324,453
Other receivables 11 4,664 318,642
Gain on disposal under Musharaka arrangement 34.2 52,693 -
Bank balances 12 7,307 160,122
Other income 26 99,604 7,500
Mark-up receivable on bank balances 521 -
451,859 424,529
4,088,804 4,029,643
Total assets 4,113,180 4,049,813
Remuneration of the REIT Management Company 18.1 (28,000) (6,981)
UNIT HOLDERS' FUND AND LIABILITIES Sindh sales tax on remuneration of the REIT Management Company 18.2 (3,640) (908)
REPRESENTED BY: Remuneration of the Central Depository Company of Pakistan Limited - Trustee 19.1 (5,600) (1,396)
Sindh sales tax on remuneration of the Trustee 19.2 (728) (182)
Unitholders’ fund Annual fee of the Securities and Exchange Commission of Pakistan 20.1 (5,600) (2,900)
Issued, subscribed and paid up units (140,000,000 units of Rs. 10 each) 13 1,400,000 1,400,000
(43,568) (12,367)
Revenue reserves 455,490 184,407
1,855,490 1,584,407
Profit before taxation 408,291 412,162
Non-current liabilities
Long term loan 14.1 933,333 1,400,000
Taxation 27 (137,208) (69,802)
Outstanding land consideration 15 - 500,000
933,333 1,900,000
Profit after taxation 271,083 342,360
Current liabilities
Contract liabilities 16 178,044 66,015
(Rupees) (Rupees)
Commission payable 2,091 524
Trade and other payables 17 126,789 128,306
Earnings per unit - Basic and diluted 28 1.936 2.445
Payable to the REIT Management Company 18 9,009 11,796
Payable to the Central Depository Company of Pakistan Limited - Trustee 19 7,906 1,578
Payable to the Securities and Exchange Commission of Pakistan 20 5,600 2,900
The annexed notes from 1 to 36 form an integral part of these financial statements.
Current portion of outstanding land consideration 15 250,000 200,000
Current portion of long term loan 14.1 466,667 -
Accrued expenses and other liabilities 21 196,855 139,800
Accrued mark-up on long term loan 81,396 14,487
1,324,357 565,406

Total liabilities 2,257,690 2,465,406

Contingencies and commitments 22

Total unit holders’ fund and liabilities 4,113,180 4,049,813

(Rupees) (Rupees)

Net assets value per unit 13.25 11.32

The annexed notes from 1 to 36 form an integral part of these financial statements.

Chief Financial Officer Chief Executive Officer Director Chief Financial Officer Chief Executive Officer Director

55 | Globe Residency REIT Annual Report 2023 | 56

STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF CHANGES IN UNIT HOLDERS’ FUND
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023
For the year For the period from
ended June April 1, 2022 to Issued, Revenue Total unit
30, 2023 June 30, 2022 subscribed reserves holders’
and paid Unappropriated fund
------(Rupees in '000)------
up units profit
------------------(Rupees in '000)------------------
Profit after taxation 271,083 342,360
Transactions with owners:

Other comprehensive income - - Issuance of 140,000,000 units at par value of Rs. 10 per unit 1,400,000 - 1,400,000

Reserves transferred on Project acquisition - (157,953) (157,953)

Total comprehensive income 271,083 342,360 1,400,000 (157,953) 1,242,047

The annexed notes from 1 to 36 form an integral part of these financial statements. Total comperhensive income for the period from
April 1, 2022 to June 30,2022 - 342,360 342,360

Balance as at June 30, 2022 1,400,000 184,407 1,584,407

Total comprehensive income for the year - 271,083 271,083

Balance as at June 30, 2023 1,400,000 455,490 1,855,490

The annexed notes from 1 to 36 form an integral part of these financial statements.

Chief Financial Officer Chief Executive Officer Director Chief Financial Officer Chief Executive Officer Director

57 | Globe Residency REIT Annual Report 2023 | 58

STATEMENT OF CASH FLOWS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023
For the year For the period from
ended June April 1, 2022 to
Note 30, 2023 June 30, 2022
--------(Rupees in '000)-------- 1. LEGAL STATUS AND NATURE OF BUSINESS

CASH FLOWS FROM OPERATING ACTIVITIES 1.1 Globe Residency REIT (the REIT) is established under the Trust Deed dated December 24, 2021, executed between Arif Habib
Profit before taxation 408,291 412,162 Dolmen REIT Management Limited (AHDRML), as the REIT Management Company and Central Depository Company of
Pakistan Limited (CDCPL), as the Trustee; and is governed under the repealed Real Estate Investment Trust Regulations, 2015
Adjustments for non-cash items: (REIT Regulations, 2015) [now Real Estate Investment Trust Regulations, 2022], promulgated and amended from time to time
Depreciation expense 25 231 58 by the Securities & Exchange Commission of Pakistan (SECP).
Finance cost 25 - 4,159
Gain on disposal under Musharaka arrangement 34.2 (52,693) - 1.2 The Trust Deed of the REIT was registered on December 24, 2021 whereas approval of the registration of the REIT has been
355,829 416,379 granted by the SECP on December 14, 2021. The REIT is established with the objective of construction of the acquired Real
(Increase) / decrease in assets Estate into residential units under the project named "Globe Residency Apartments" (the Project), in the vicinity of Naya
Inventory property 245,471 (840,145) Nazimabad, Karachi, for generating income for Unit Holders. The Project has been acquired from Javedan Corporation
Long term deposits (2,957) - Limited and as per the approval received by the REIT Management Company from the SECP vide their letter number
Contract cost assets (10,086) 5,310 SECP/SCD/PRDD/REIT/GRR/2021/51, the Project has been transferred on as-is-where-is basis to the REIT structure. The
Contract assets (619,021) (916,202) effective date of the transfer of the Project from the structure of Javedan Corporation Limited to the REIT structure was April
Other receivables 313,978 238,046 1, 2022. The REIT is a limited life (5 years), Close-end, Developmental REIT. The registered office of the REIT Management
Advance for development expenditure 5,263 183,604 Company is situated at Arif Habib Centre, 23 M.T. Khan Road, Karachi.
Mark-up receivable on bank balances (521) -
(67,873) (1,329,387) 1.3 The Globe Residency REIT / the Project is registered with the Federal Board of Revenue (FBR) as a builder / developer by
(Decrease) / increase in liabilities virtue of which the taxability of the REIT / the Project will be determined under Section 100D and Eleventh Schedule of Income
Contract liabilities 112,029 (1,315,507) Tax Ordinance, 2001. The tax liability determined under Section 100D in relation to the income generated from sale of
Commission payable 1,567 5,665 residential units under the Project shall be final tax.
Trade and other payables (1,517) 128,306
Payable to the REIT Management Company (2,787) 11,796 The FBR, through the Finance Act 2020, has introduced Section 100D and Eleventh Schedule which later became part of
Payable to the Central Depository Company of Pakistan Limited - Trustee 6,328 1,578 Income Tax Ordinance, 2001. Section 100D introduced a fixed tax scheme for builders and developers from tax year 2020
Payable to the Securities and Exchange Commission of Pakistan 2,700 2,900 (and onwards) whereby tax payable by a builder or a developer earning profits and gains derived from the sale of buildings
Outstanding land consideration (450,000) 700,000 or sale of plots, who opts for assessment under this section, shall be computed and paid in accordance with the rules in the
Accrued expenses and other liabilities 69,688 125,030 Eleventh Schedule on a project-by-project basis.
Accrued mark-up on long term loan 66,909 14,487
(195,083) (325,745) 1.4 During the year, the Real Estate Investment Trust Regulations 2015 (REIT Regulations, 2015) has been repealed after the
enactment of the Real Estate Investment Trust Regulations 2022 (REIT Regulations, 2022).
Carrying amount of inventory property sold to joint operator (660,803) -
Development expenditures paid on behalf of joint operator (296,836) - 1.5 During the year, the REIT has been listed on the Pakistan Stock Exchange Limited (PSX) with the approval of the SECP on
Tax paid (176,774) (1,125) December 28, 2022 under the REIT Regulations, 2022. The units of the REIT were "offered for sale" by the sponsors upon
Net cash used in operating activities (1,041,540) (1,239,878) listing.

CASH FLOWS FROM FINANCING ACTIVITIES 1.6 The VIS Credit Rating Company Limited (VIS) maintained the RMC rating of the REIT Management Company to AM2+ on
Proceeds from Musharaka Capital 34.2 888,725 - October 25, 2022 [2022: AM2+ on September 22, 2021]. The rating reflects the REIT Management Company’s experienced
Proceeds from long term loan 14 - 1,400,000 management team, structured investment process and sound quality of systems and processes. Furthermore, VIS Credit
Net cash generated from financing activities 888,725 1,400,000 Rating Company Limited has assigned the stability rating of the REIT to RFR2 (dr) on December 20, 2022.

Net (decrease) / increase in cash and cash equivalents (152,815) 160,122 2. BASIS OF PREPARATION
Cash and cash equivalents at the beginning of the year / period 160,122 -
2.1 Statement of compliance
Cash and cash equivalents at end of the year / period 12 7,307 160,122
2.1.1 These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in
The annexed notes from 1 to 36 form an integral part of these financial statements. Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:

- International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB)
as notified under the Companies Act, 2017;

Chief Financial Officer Chief Executive Officer Director

59 | Globe Residency REIT Annual Report 2023 | 60

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

- Provisions of and directives issued under the Companies Act, 2017 and Part VIII A of the repealed Companies 2.4.1.2 Determining the timing of revenue recognition on the sale of apartments
Ordinance, 1984; and
The REIT has evaluated the timing of revenue recognition on the sale of apartments based on a careful analysis of the rights
- 'The Real Estate Investment Trust Regulations 2022 (REIT Regulations, 2022) and requirements of the Trust Deed. and obligations under the terms of the contract.

Where the provisions of and directives issued under the Companies Act, 2017, Part VIII A of the repealed Companies For contracts relating to the sale of apartments under development, the REIT has considered the factors contained in the
Ordinance, 1984 and the REIT Regulations, 2022, and requirements of the Trust Deed differ from the IFRSs, the provisions of contracts for the sale of apartments and concluded that the control of a multi-unit property is transferred to the customer
and directives issued under the Companies Act, 2017, Part VIII A of the repealed Companies Ordinance, 1984 and the REIT over time because:
Regulations, 2022, and requirements of the Trust Deed have been followed.
(a) The REIT’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
2.2 Basis of measurement That is, the REIT has considered various factors that indicate that the customer controls the part-constructed
property as it is being constructed, e.g., the customer’s ability to change any specification of the property as it is
These financial statements have been prepared under the 'historical cost convention'. being constructed or to transfer it to another entity. However, none of the factors is determinative and therefore, the
REIT has carefully weighed all factors and used judgement to determine that it meets the over-time criterion.
2.3 Functional and presentation currency
(b) The REIT’s performance does not create an asset with alternative use. Furthermore, the REIT has an enforceable right
These financial statements are presented in Pakistani Rupees which is the functional and presentation currency of the REIT. to payment for performance completed to date. It has considered the factors that indicate that it is restricted
All figures have been rounded off to nearest thousand of rupees unless otherwise stated. (contractually or practically) from readily directing the apartment under development for another use during its
development. In addition, the REIT is, at all times, entitled to an amount that at least compensates it for
2.4 Use of significant estimates and judgments performances completed to date (usually costs incurred to date plus a reasonable profit margin).
In making this determination, the REIT has carefully considered the contractual terms. The REIT has determined that
The preparation of financial statements in conformity with accounting and reporting standards as applicable in Pakistan, the input method is the best method for measuring progress for these contracts because there is a direct
requires management to make judgments, estimates, assumptions and use judgments that affect the application of policies relationship between the costs incurred by the REIT and the transfer of goods and services to the customer.
and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstances, the results of 2.4.1.3 Measurement of progress when revenue is recognised over time
which form the basis of making the judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates. For contracts involving the sale of apartments under development that meet the over time criteria of revenue recognition, the
REIT’s performance is measured using an input method, by reference to the inputs towards satisfying the performance
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are obligation relative to the total expected inputs to satisfy the performance obligation, i.e., the completion of the apartment.
recognized in the period in which the estimates are revised if the revision affects only that period, or in the period of the The REIT uses the costs incurred method (input method) as a measure of progress for its contracts because it best depicts the
revision and future periods if the revision affects both current and future periods. REIT’s performance. Under this method of measuring progress, the extent of progress towards completion is measured
based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. When
In the process of applying the REIT’s accounting policies, management has made the following judgements, which have costs are incurred, but do not contribute to the progress in satisfying the performance obligation (such as unexpected
the most significant effect on the amounts recognised in the financial statements: amounts of wasted materials, labour or other resources), the REIT excludes the effect of those costs. Also, the REIT adjusts
the input method for any cost incurred that are not proportionate to the REIT’s progress in satisfying the performance
2.4.1 Revenue from contracts with customers obligation.

The REIT applied the following judgements that significantly affect the determination of the amount and timing of revenue 2.5 Standards, interpretations and amendments to published accounting and reporting standards that are effective
from contracts with customers: in the current year

2.4.1.1 Determination of performance obligations There are certain new standards, interpretations and amendments to the published accounting and reporting standards
that are mandatory for the REIT's accounting period beginning on July 1, 2022. The REIT Regulations, 2015 has been
With respect to the sale of apartments under development, the REIT concluded that the goods and services transferred in repealed after the enactment of the REIT Regulations, 2022 on November 28, 2022. The impact on these financial
each contract constitute a single performance obligation. In particular, the promised goods and services in contracts for statements due to this change has been disclosed under note 35.
the sale of apartments under development mainly include design work, procurement of materials and development of the
property. Generally, the REIT is responsible for all of these goods and services and the overall management of the project. All other new standards, interpretations and amendments to the published accounting and reporting standards do not
Although these goods and services are capable of being distinct, the REIT accounts for them as a single performance have any significant impact on the REIT's operations and, therefore, have not been detailed in these financials statements.
obligation because they are not distinct in the context of the contract. The REIT uses those goods and services as inputs
and provides a significant service of integrating them into a combined output, i.e., the completed property for which the
customer has contracted.

61 | Globe Residency REIT Annual Report 2023 | 62

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

2.6 Standards, interpretations and amendments to published accounting and reporting standards that are not yet effective The interest capitalised is calculated using the REIT’s weighted average cost of borrowings after adjusting for borrowings
associated with specific developments. Where borrowings are associated with specific developments, the amount
There are certain other standards, amendments and interpretations that are mandatory for the REIT's accounting period capitalised is the gross interest incurred on those borrowings less any investment income arising on their temporary
beginning on or after July 1, 2023 but are considered not to be relevant or will not have any significant effect on the REIT's investment. Interest is capitalised from the commencement of the development work until the date of practical completion,
operations and are therefore not disclosed in these financial statements. i.e., when substantially all of the development work is completed. The capitalisation of finance costs is suspended if there are
prolonged periods when development activity is interrupted. Interest is also capitalised on the purchase cost of a site of
3. SIGNIFICANT ACCOUNTING POLICIES property acquired specifically for redevelopment, but only where activities necessary to prepare the asset for redevelopment
are in progress.
The significant accounting polices applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to all the years presented. 3.4 Contract cost assets

3.1 Property and equipment The REIT pays sales commission to its brokers for contracts that they obtain to sell certain units of property and capitalises the
incremental costs of obtaining a contract that meet the criteria in IFRS 15. These costs are amortised on a systematic basis
All property and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly that is consistent with the revenue recognition policy and amortisation for the period is recognised as part of cost of sales in
attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash the statement of profit or loss. Capitalised costs to obtain such contracts are presented separately on the statement of
flow hedges of foreign currency purchases of property and equipment. financial position and its amortisation is included in cost of sales in the statement of profit or loss. The REIT assesses, at each
reporting date, whether the carrying amount exceeds the remaining amount of consideration that the entity expects to
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when receive in exchange for the residential development less the costs that relate directly to completing the development and
it is probable that future economic benefits associated with the item will flow to the REIT and the cost of the item can be that have not been recognised as expenses.
measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged
to the statement of profit or loss during the financial year in which they are incurred. 3.5 Other receivables

Depreciation is calculated using straight-line method to allocate their cost to their residual values over their estimated useful Receivables are recognised in accordance with the respective repayment schedules / original invoiced price except where the
lives. The residual values, useful lives and depreciation methods are reviewed and adjusted, if appropriate, at each reporting time value of money is material, in which case receivables are recognised at fair value and subsequently measured at
date. Depreciation is charged on additions from the month the asset is available for use and on disposals upto the month amortised cost. Refer note 3.7.1 for accounting policies on financial assets.
preceding the month of disposal. Details of estimated useful life and annual depreciation rates is disclosed in note 4.1.
3.6 Cash and cash equivalents
3.2 Inventory property
For the purpose of the statement of cash flows, cash and cash equivalents consist of balances with banks and term deposit
Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or receipts having maturity of not more than three months.
capital appreciation, is held as inventory and is measured at the lower of cost and net realizable value.
3.7 Financial instruments
Principally, this is residential property that the REIT develops and intends to sell before, or on completion of, development.
3.7.1 Financial assets
Cost incurred in bringing each property to its present location and condition includes:
3.7.1.1 Classification and subsequent measurement
(a) Freehold and leasehold rights for land
(b) Amounts paid to contractors for development 'The REIT has applied IFRS 9 and classifies its financial assets in the following measurement categories:
(c) Planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes,
development overheads and other related costs - at amortised cost;
- at fair value through other comprehensive income (FVOCI); and
3.3 Borrowing costs - at fair value through profit or loss (FVPL).

Borrowing costs are recognised as an expense in the period in which these are incurred except in cases where such costs are The classification requirements for debt and equity instruments are described below:
directly attributable to the acquisition or construction of an inventory property (which is a qualifying asset) that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. (i) Debt instruments
Capitalisation commences when: (1) the REIT incurs expenditures for the asset; (2) the REIT incurs borrowing costs; and (3)
the REIT undertakes activities that are necessary to prepare the asset for its intended use or sale. All other borrowing costs Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective,
are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in such as loans, government and corporate bonds etc.
connection with the borrowing of funds. Currently, the REIT has borrowing costs directly attributable to the acquisition of or
construction of qualifying assets.

63 | Globe Residency REIT Annual Report 2023 | 64

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

Classification and subsequent measurement of debt instruments depend on: 3.7.1.2 Derecognition

- 'the REIT’s business model for managing the asset; and Financial assets, or a portion thereof, are derecognised when the contractual rights to receive the cash flows from the
- the cash flow characteristics of the asset. assets have expired, or when they have been transferred and either:

Based on these factors, the REIT classifies its debt instruments in one of the following three measurement categories: (i) the REIT transfers substantially all the risks and rewards of ownership; or
(ii) the REIT neither transfers nor retains substantially all the risks and rewards of ownership and the REIT has not
a) At amortised cost retained control.

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of Any gain or loss on derecognition of financial assets is taken to the statement of profit or loss except in the case of equity
principal and interest (SPPI) are measured at amortised cost. The carrying amount of these assets is adjusted by instruments designated as FVOCI on initial recognition.
any expected credit loss allowance recognised and measured as described in note 3.8 to these financial
statements. 3.7.1.3 Regular way contracts

b) Fair value through other comprehensive income (FVOCI) All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date on which the REIT
commits to purchase or sell the asset. Regular way purchases / sales of assets require delivery of securities within two days
Financial assets that are held for collection of contractual cash flows and for selling the assets, where the assets’ from the transaction date as per the stock exchange regulations.
cash flows represent solely payments of principal and interest are measured at fair value through other
comprehensive income (FVOCI). Movements in the carrying amount are taken through other comprehensive 3.7.2 Investment in subsidiary companies
income, except for the recognition of impairment gains or losses, recognised and measured as described in note
3.8, interest revenue and foreign exchange gains and losses on the instrument’s amortised cost which are Investment in subsidiary companies is stated at cost less impairment, if any, for any diminution in its value.
recognised in the statement of profit or loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to the profit or loss. 3.7.3 Financial liabilities

c) Fair value through profit or loss (FVPL) 3.7.3.1 Classification and subsequent measurement

Assets that do not meet the criteria for classification at amortised cost or FVOCI are measured at fair value through Financial liabilities are classified and measured at amortised cost except for:
profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss
and is not part of a hedging relationship is recognised in the statement of profit or loss in the period in which it - Financial liabilities at fair value through profit or loss; and
arises. - Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition, whereby a
financial liability is recognised for the consideration received for the transfer.
(ii) Equity instruments
3.7.3.2 Derecognition
Equity instruments are instruments that meet the definition of equity from the issuer's perspective and are instru
ments that do not contain a contractual obligation to pay and that evidence a residual interest in the issuer's net Financial liabilities are derecognised at the time when these are extinguished i.e. when the obligation specified in the
assets. contract is discharged, cancelled or expires. Any gain or loss on derecognition of financial liabilities is taken to the
statement of profit or loss.
All equity investments are required to be measured in the statement of financial position at fair value, with gains and
losses recognised in the statement of profit or loss, except where an irrevocable election has been made at the time 3.7.4 Initial recognition
of initial recognition to measure the investment at FVOCI.
Financial assets and financial liabilities are recognised at the time the REIT becomes a party to the contractual provisions of
The dividend income for equity securities classified under FVOCI is to be recognised in the statement of profit or the instrument. These are initially recognised at fair value plus transaction costs except for financial assets carried at fair
loss. However, any surplus / (deficit) arising as a result of subsequent movement in the fair value of equity securities value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value
classified as FVOCI is to be recognised in other comprehensive income and is not recycled to the statement of profit and transaction costs associated with these financial assets are taken directly to the statement of profit or loss.
or loss on derecognition.

3.7.5 Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount is reported in the financial statements when there is a
legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the
assets and settle the liabilities simultaneously.

65 | Globe Residency REIT Annual Report 2023 | 66

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

3.7.6 Business model Non financial assets

The business model reflects how the REIT manages the assets in order to generate cash flows. That is, whether the objective The carrying amounts of non-financial assets are reviewed at each reporting date to ascertain whether there is any indication
is solely to collect the contractual cash flows from the assets or is to collect both the contractual cash flows and cash flows of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is
arising from the sale of assets. If neither of these is applicable (e.g. financial assets are held for trading purposes), then the recognized, as an expense in the statement of profit or loss, for the amount by which the asset’s carrying amount exceeds its
financial assets are classified as part of ‘other’ business model and measured at FVPL. Factors considered by the REIT in recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use. Value in
determining the business model for a group of assets include past experience on how the cash flows for these assets were use is determined through discounting of the estimated future cash flows using a discount rate that reflects current market
collected, how the asset’s performance is evaluated and reported to key management personnel, how risks are assessed and assessments of the time value of money and the risk specific to the assets. For the purpose of assessing impairment, assets
managed and how managers are compensated. are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

3.7.7 Solely payments of principal and interest (SPPI) An impairment loss is reversed if there has been change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that
Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, the would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
REIT assesses whether the financial instruments’ cash flows represent solely payments of principal and interest (the ‘SPPI
test’). In making this assessment, the REIT considers whether the contractual cash flows are consistent with a basic lending 3.9 Accrued and other liabilities
arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a
profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or Liabilities for trade and other account payable are carried at cost which is the fair value of the consideration to be paid in
volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair future for goods and services received, whether or not billed to the REIT.
value through profit or loss.
3.10 Provisions
3.7.8 Reclassifications
Provisions are recognized when the REIT has a present, legal or constructive obligation as a result of past events, it is
The REIT reclassifies debt investments when and only when its business model for managing those assets changes. The probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
reclassification takes place from the start of the first reporting period following the change. Such changes are expected to be estimate of the amount of obligation can be made. Provisions are regularly reviewed and adjusted to reflect the current
very infrequent and none occurred during the year. best estimate.

3.7.9 Derivatives 3.11 Contingent liabilities

Derivative instruments are initially recognised at fair value and subsequent to initial measurement each derivative instrument A contingent liability is disclosed when the REIT has a possible obligation as a result of past events, whose existence will be
is re-measured to its fair value and the resultant gain or loss is recognised in the statement of profit or loss. confirmed only by the occurrence or non-occurrence, of one or more uncertain future events not wholly within the control of
the REIT; or the REIT has a present legal or constructive obligation that arises from past events, but it is not probable that an
3.8 Impairment outflow of resources embodying economic benefits will be required to settle the obligation, or the amount of the obligation
cannot be measured with sufficient reliability.
Financial assets
3.12 Revenue recognition
The REIT recognizes a loss allowance for expected credit loss (ECL) on trade receivables. The amount of ECL is updated at
each reporting date to reflect changes in credit risk since initial recognition of the respective financial assets. The REIT’s key source of income is revenue from contracts with customers from the sale of inventory property under
development.
The REIT always recognizes lifetime ECL for receivable. The ECL on these financial assets are estimated using a provision
matrix based on the REIT’s historical credit loss experience, adjusted for factors that are specific to the receivables, general 3.12.1 Revenues from the sale of inventory property
economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting
date, including time value of money where appropriate. The REIT enters into contracts with customers to sell property that are either completed or under development. Contracts
to sell completed property will only be entered in the future if any apartments are sold after completion of the property
For all other financial assets, the REIT recognizes lifetime ECL when there has been a significant increase in credit risk since development.
initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial
recognition, the REIT measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. The (i) Completed inventory property
assessment of whether lifetime ECL should be recognized is based on significant increases in the likelihood or risk of a default
occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date. The sale of completed property constitutes a single performance obligation and the REIT has determined that this
is satisfied at the point in time when control transfers. This generally occurs when either legal title and / or
Lifetime ECL represents the ECL that will result from all possible default events over the expected life of a financial instrument. possession of the inventory property is transferred to the customer.
In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting date.

67 | Globe Residency REIT Annual Report 2023 | 68

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

(ii) Inventory property under development (ii) Trade receivables

The REIT considers whether there are promises in the contract that are separate performance obligations to which a A trade receivable represents the REIT’s right to an amount of consideration that is unconditional (i.e., only the
portion of the transaction price needs to be allocated. For contracts relating to the sale of property under passage of time is required before payment of the consideration is due). Revenue earned from property
development, the REIT is responsible for the overall management of the project and identifies various goods and development activities, but yet to be billed to customers, is initially recognised as contract assets and reclassified to
services to be provided, including design work, procurement of materials, site preparation and foundation pouring, trade receivables when the right to consideration becomes unconditional. Refer also to the accounting policies on
framing and plastering, mechanical and electrical work, installation of fixtures (e.g., windows, doors, cabinetry, etc.) financial assets in this note for more information. The trade receivables are presented in the statement of financial
and finishing work. The REIT accounts for these items as a single performance obligation because it provides a position under “Rent and other trade receivables”.
significant service of integrating the goods and services (the inputs) into the completed apartment (the combined
output) which the customer has contracted to buy. 3.14 Finance income

For the sale of property under development, the REIT has determined that its performance does not create an Profit on bank deposits is recognized on a time proportionate basis using effective yield method.
asset with alternative use to the REIT and it has concluded that, at all times, it has an enforceable right to payment
for performance completed to date. Therefore, control transfers over time for these contracts. 3.15 Taxation

For contracts that meet the over time revenue recognition criteria, the REIT’s performance is measured using an 3.15.1 Current
input method, by reference to the costs incurred to the satisfaction of a performance obligation (e.g., resources
consumed, labour hours expended, costs incurred, time elapsed or machine hours used) relative to the total Provision for current taxation is based on taxable income for the year, if any, at the current rates of taxation after taking into
expected inputs to the completion of the property. The REIT excludes the effect of any costs incurred that do not consideration applicable tax credits and rebates and exemptions available, if any, and taxes paid under the final tax regime.
contribute to the REIT’s performance in transferring control of goods or services to the customer (such as The charge for current tax also includes adjustments, where necessary, relating to prior years which arise from assessments
unexpected amounts of wasted materials, labour or other resources) and adjusts the input method for any costs framed / finalised during the year.
incurred that are not proportionate to the REIT’s progress in satisfying the performance obligation.
3.15.2 Deferred
3.13 Contract balances
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary timing differences arising
(i) Contract assets and contract liabilities from difference between the carrying amount of the assets and liabilities in the financial statements and corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences
A contract asset is the right to consideration in exchange for goods or services transferred to the customer when and deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable
that right is conditioned on something other than the passage of time, for example, billings require certification by profit will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised.
the customer. Upon receipt of such certification from a customer, the amount recognised as contract assets is
reclassified to trade receivables. Contract assets are subject to impairment assessment on the same basis as Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse based on tax
financial assets that are within the scope of IFRS 9 – refer to “Impairment“ in note 3.8. rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited in the profit
or loss account, except where deferred tax arises on the items credited or charged to equity in which case it is included in
A contract liability is the obligation to transfer goods or services to a customer for which the REIT has received equity or when they relate to items recognised in other comprehensive income in which case it is recognised in the other
consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognised as comprehensive income.
revenue when the REIT performs under the contract (i.e. transfers control of the related goods or services to the
customer). 3.16 Net assets value per unit

Unlike the method used to recognise contract revenue related to sale of completed property, the amounts billed to The net assets value (NAV) per unit as disclosed on the statement of financial position is calculated by dividing the net
the customer for the sale of a property under development are based on achievement of the various milestones assets of the REIT by the number of units outstanding at the year end.
established in the contract. The amounts recognised as revenue for a given period do not necessarily coincide with
the amounts billed to the customer. In the case of contracts in which the goods or services transferred to the 3.17 Earnings per unit
customer exceed the related amount billed to the customer, the difference is recognised (as a contract asset) and
presented in the statement of financial position under “Contract assets”, whereas in contracts in which the goods or Earnings per unit (EPU) is calculated by dividing the profit or loss attributable to unit holders' of the REIT by the weighted
services transferred are lower than the amount billed to and certified by the customer (i.e., when a payment is due average number of units outstanding during the year.
or a payment is received before the REIT transfers the remaining goods or services), the difference is recognised (as
a contract liability) and presented in the statement of financial position under “Contract liabilities”.

For more information on contract assets and contract liabilities, please refer to notes 8 and 16.

69 | Globe Residency REIT Annual Report 2023 | 70

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

2023 2022 Note 2023 2022

------(Rupees in '000)------ ------(Rupees in '000)------
4. PROPERTY AND EQUIPMENT 5. LONG TERM DEPOSITS

Operating fixed assets 372 603 Security deposits with:

372 603 - Central Depository Company of Pakistan Limited 100 100
- Karachi Water & Sewerage Board 2,957 -
4.1 The following is a statement of operating fixed assets: 3,057 100
6. INVENTORY PROPERTY
2023
Computer Office Carrying amount at beginning of the year / Project acquisition 2,301,375 27,777
Total
equipment equipment Net additions during the year
-------------------(Rupees in '000)------------------- Land - 3,240,000
At July 1, 2022 Land transfer duties and taxes - 19,148
Cost 638 55 693 Development expenditures 1,244,858 249,862
Accumulated depreciation (83) (7) (90) Borrowing cost capitalised 6.1 250,307 18,237
Net book value 555 48 603 Construction materials utilised 1,617,630 792,588
Share of Joint Operator 34.2 (296,836) -
For the year ended June 30, 2023 2,815,959 4,319,835
Opening net book value 555 48 603 Sold to joint operator under Musharaka arrangement 34.2 (660,803) -
Additions - - - Transfers to Cost of sales 6.2 (2,400,627) (2,046,237)
Disposals 2,055,904 2,301,375
Cost - - -
Depreciation - - - 6.1 This relates to borrowing cost incurred on term finance facility as discussed in note 14.1.1. The borrowing costs have been
- - - capitalized for inventory properties as these are qualifying assets.
Depreciation charge for the year (213) (18) (231)
342 30 372 6.2 The revenue is measured using an input method. By using the costs incurred method as a measure of progress for its
At June 30, 2023 contracts, the REIT's cumulative performance has been measured at 45.84% as at June 30, 2023 (June 30, 2022: 27.66%). The
Cost 638 55 693 cumulative performance percentage of the total costs capitalised with respect to inventory properties that have been
Accumulated depreciation (296) (25) (321) contracted to be sold, have been recognised in cost of sales cumulatively.
Net book value 342 30 372
Note 2023 2022
2022 ------(Rupees in '000)------
Computer Office 6.3 Break-up of inventory property
equipment equipment Total
Musharaka Asset 34.2 957,639 -
At April 1, 2022 -------------------(Rupees in '000)------------------- Other inventory property 1,098,265 -
Cost (at Project acquisition) 638 55 693 2,055,904 -
Accumulated depreciation (at Project acquisition) (30) (2) (32)
Net book value 608 53 661 7. CONTRACT COST ASSETS

For the period from April 1, 2022 to June 30, 2022 Current portion 17,455 8,849
Opening net book value 608 53 661 Non-current portion 20,947 19,467
Additions - - - Total contract cost assets 38,402 28,316
Disposals
Cost - - - 7.1 Movement in contract cost assets
Depreciation - - -
- - - At beginning of the year / Project acquisition 28,316 33,630
Depreciation charge for the period (53) (5) (58) Additions 31,782 5,404
555 48 603 Amortisation for the year (recognised in Cost of sales) (21,696) (10,718)
At June 30, 2023 Total contract cost assets 38,402 28,316
Cost 638 55 693
Accumulated depreciation (83) (7) (90)
Net book value 555 48 603

Depreciation rate: % per annum 33.33 33.33

71 | Globe Residency REIT Annual Report 2023 | 72

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

7.2 The REIT capitalised the sales commissions paid or payable to its brokers for contracts obtained to sell apartments as they 10.2.1 The maximum aggregate amount outstanding at any time during the year calculated by reference to month-end balances
represent incremental costs of obtaining a contract. The capitalised costs are amortised on a systematic basis that is for M/s. Safe Mix Concrete Limited (Related Party) was Rs. 47.873 million.
consistent with the revenue recognition policy and amortisation for the year is recognised in Cost of sales amounted to
Rs. 21.696 million (April 1, 2022 to June 30, 2022: Rs. 10.718 million). Contract cost assets are apportioned between current
and non-current portion on the basis of Management's best estimate in respect of future construction projections. Note 2023 2022
------(Rupees in '000)------
11. OTHER RECEIVABLES
Note 2023 2022
8. CONTRACT ASSETS ------(Rupees in '000)------ Advance tax 11.1 4,664 -
Receivable from Javedan Corporation Limited (Related Party) - 318,642
At beginning of the year 916,202 - 4,664 318,642
Receipts during the year (2,091,201) -
Recorded as revenue 2,710,222 916,202 11.1 This amount has been paid against tax demand under the provisions of Section 4C of the Income Tax Ordinance, 2001. For
1,535,223 916,202 detailed disclosures, refer note 22.1.1.

Note 2023 2022

8.1 Contract assets are initially recognised for revenue earned from property under development but yet to be billed to ------(Rupees in '000)------
customers. Upon billing of invoice, the amounts recognised as contract assets are reclassified to trade receivables. 12. BANK BALANCES

8.2 On April 1, 2023 the management approved discounts aggregating to Rs. 269.534 million for several customers, on a Savings accounts 12.1 7,307 160,122
case-by-case basis, with respect to the total consideration receivable from such customers against the sale of apartments.
This modification in the transaction price initially agreed with the customers has been adjusted during the year via a 12.1 The rate of return on these saving accounts during the year ranges from 6.5% to 19.5% (April 1, 2022 to June 30, 2022: 5.5% to
cumulative catch-up adjustment, as per the requirement of IFRS 15, impacting the revenue recorded during the year, with 12.25%) per annum. The mark-up rates effective at the year end on these accounts ranges from 10% to 19.5% (June 30, 2022:
corresponding adjustments to contract assets and contract liabilities balances as at the modification date. 8.25% to 12.25%) per annum.

8.2.1 The cumulative catch-up adjustment had a decreasing impact of Rs. 65.465 million on contract assets as of the modification 13. UNIT HOLDER'S FUNDS
date.
2023 2022 13.1 Issued, subscribed and paid up units
Note
------(Rupees in '000)------ 2023 2022 Note 2023 2022
9. RECEIVABLE FROM JOINT OPERATOR
(Number in Units) ------(Rupees in '000)------
Receivable from joint operator 9.1 148,540 -
148,540 - Ordinary units of Rs.10 each
140,000,000 140,000,000 fully paid in cash 13.2 1,400,000 1,400,000
140,000,000 140,000,000 1,400,000 1,400,000
9.1 This represents net receivable from joint operator in relation to the joint operation under Musharaka arrangement, as
disclosed in note 31 to these financial statements.
13.2 This represents 140,000,000 (June 30, 2022: 140,000,000) ordinary units of Rs. 10/- each amounting to Rs. 1,400 million
(June 30, 2022: Rs. 1,400 million).
Note 2023 2022
------(Rupees in '000)------
10. ADVANCE FOR DEVELOPMENT EXPENDITURE Note 2023 2022
14 LONG TERM LOAN
------(Rupees in '000)------
Mobilization advance to contractors 10.1 246,867 318,653
Advance to supplier 10.2 72,323 5,800 Term finance facility 14.1 1,400,000 1,400,000
319,190 324,453 1,400,000 1,400,000

10.1 This represents mobilization advances paid in accordance to the agreements signed for construction of the Project to 14.1 Break-up of term finance facility
M/s. Abaseen Construction Company (Pvt.) Ltd (Contractor), M/s. Principal Builders (Contractor), M/s. AH Construction
( P v t . ) Long-term portion of term finance facility 933,333 1,400,000
Limited (Contractor) and M/s. Karizma Construction and RF Associates (Contractors). Current portion of term finance facility 466,667 -
1,400,000 1,400,000
10.2 This represents balance of advance amount paid to M/s. Agha Steel Industries Ltd, M/s. Faizan Steel, M/s. Infinite Building
Solutions, M/s. National Technology Corporation and M/s. Safe Mix Concrete Limited (Related Party) in accordance with the
agreements signed for supply construction materials.

73 | Globe Residency REIT Annual Report 2023 | 74

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

14.1.1 The long term financing facility has been availed from Bank Alfalah Limited (the Bank) to facilitate in meeting financing 17.1 This represents balance of amounts payable to M/s. Aisha Steel Mills Limited, M/s. Agha Steel Industries Limited, M/s. Faizan
requirements for purchase of land and construction thereon of residential apartments under REIT project. The bank has Steel, M/s. Arch Vision Plus, M/s. Safe Mix Concrete Limited, M/s Naveena, M/s. Al Makkah Block Works, M/s. FQ Traders,
approved a facility of Rs. 1.4 billion at a profit rate of 6 months KIBOR + 1.25% spread. The loan is repayable in six equal M/s. Huzaifa Enterprise, M/s. Muhammad Laiq & sons, M/s. Naveena Steel Mills (Private) Limited, M/s. NN Maintenance
half-yearly instalments starting from September 30, 2023. The facility requires to create, register, where applicable, and Company (Private) Limited, M/s. Rana Traders and M/s Safe Mix Concrete Limited in accordance with the agreements signed
maintain, throughout the tenor, a mortgage on the Real Estate in favour of the Bank for a maximum secured amount of for the supply of construction materials.
Rs. 1,866.67 million. The tenor of financing is 4 years from the date of disbursement (including 1 year grace period). Principal
and markup to be paid on semi-annual basis. 17.2 This represents net payable balance to Javedan Corporation Limited amounting to Rs. 6.442 million as at June 30, 2023 (net
receivable balance as at June 30, 2022: 318.642 million). Refer note 28.1 for detailed disclosures of transactions during the
year with Javedan Corporation Limited.
2023 2022
15. OUTSTANDING LAND CONSIDERATION ------(Rupees in '000)------
Note 2023 2022
Current portion 250,000 200,000 18. PAYABLE TO THE REIT MANAGEMENT COMPANY ------(Rupees in '000)------
Non-current portion - 500,000
250,000 700,000 Remuneration of the REIT Management Company payable 18.1 7,371 6,981
Sindh Sales Tax payable on remuneration of the REIT
15.1 This represents balance consideration payable to Javedan Corporation Limited (Related Party) in accordance with the Management Company 18.2 908 908
conveyance deed executed on March 30, 2022. The amount is payable in lieu of the land acquired under the REIT project and 8,279 7,889
held as development properties to be sold during the normal course of business. As per the conveyance deed, Rs. 200 Other 730 3,907
million shall be payable within one year from the date of execution of the conveyance deed, whereas the remaining two 9,009 11,796
installments of Rs. 250 million each shall be payable within two years and three years from the date of execution of the
conveyance deed respectively. 18.1 Under the provisions of the REIT Regulations, 2022, the REIT Management Company is entitled to a remuneration as stated
in the Offering Document and the Information Memorandum of the REIT. The REIT Management Company charges fee at the
2023 2022 rate of 1.0% (April 1, 2022 to June 30, 2022: 1.0%) of the REIT Fund. The management fee is payable on quarterly basis in
16. CONTRACT LIABILITIES ------(Rupees in '000)------ arrears.

At beginning of the year / Project acquisition 66,015 1,381,522 18.2 The Sindh Government has levied Sindh Sales Tax on the remuneration of the REIT Management Company through Sindh
Receipts 251,621 332,831 Sales Tax on Services Act 2011, effective from July 1, 2014. The current applicable tax rate is 13% being effective from
Revenue recognised (139,592) (1,648,338) July 1, 2016. During the year, an amount of Rs. 3.64 million (April 1, 2022 to June 30, 2022: Rs. 0.908 million) was charged on
178,044 66,015 account of sales tax on remuneration of the REIT Management Company.

16.1 Contract liabilities include instalments received from customers subject to cancellation charges in the event where a Note 2023 2022
customer plans to cancel their contract. This gives the REIT protection if the customer withdraws from the conveyancing ------(Rupees in '000)------
transaction. If this were to happen, 25% (June 30, 2022: 25%) of the customers' deposits would be forfeited. The customer's 19. PAYABLE TO THE CENTRAL DEPOSITORY COMPANY
ability to transfer the apartment to a third party gives reasonable evidence to conclude that where the customer would like OF PAKISTAN LIMITED - TRUSTEE
to withdraw from their conveyance deed, the customer would prefer transferring their apartment booking to a third party
rather than cancel their booking and forfeited their deposits. Remuneration of the Trustee payable 19.1 6,996 1,396
Sindh Sales Tax payable on remuneration of the Trustee 19.2 910 182
16.2 As a consequence of the cumulative catch-up adjustment, as detailed in note 8.2, an increase of Rs. 30.203 million in 7,906 1,578
contract liabilities was recorded as of the modification date, which was April 1, 2023.

19.1 The Trustee is entitled to an annual remuneration for services rendered to the REIT under the provisions of the Trust Deed.
Note 2023 2022 Accordingly, the REIT has charged Trustee remuneration at a rate of 0.2% (April 1, 2022 to June 30, 2022: 0.2%) per annum of
17. TRADE AND OTHER PAYABLES ------(Rupees in '000)------ initial REIT Fund during the year and an amount of Rs. 5.6 million (April 1, 2022 to June 30, 2022: Rs. 1.396 million) has been
recorded in the statement of profit or loss.
Payable to supplier 17.1 118,429 128,306
Payable to Javedan Corporation Limited 17.2 6,442 - 19.2 The Sindh Government has levied Sindh Sales Tax on the remuneration of the Trustee through Sindh Sales Tax on Services Act
Payable to Rahat Residency REIT 1,918 - 2011, effective from July 1, 2015. The current applicable rate is 13% being effective from July 1, 2016. During the year, an amount
126,789 128,306 of Rs. 0.728 million (April 1, 2022 to June 30, 2022: Rs. 0.182 million) was charged on account of sales tax on remuneration of
the Trustee.

75 | Globe Residency REIT Annual Report 2023 | 76

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

22.2 Commitments
Note 2023 2022
------(Rupees in '000)------ There were no commitments outstanding as at June 30, 2023 and as at June 30, 2022.
20. PAYABLE TO THE SECURITIES AND EXCHANGE
COMMISSION OF PAKISTAN

Annual fee payable 20.1 5,600 2,900 For the year For the period from
ended June April 1, 2022 to
20.1 Under the provisions of the REIT Regulations, 2022, the REIT is required to pay monitoring fee to SECP at an amount equal Note 30, 2023 June 30, 2022
to0.2% of initial REIT fund.
23. REVENUE FROM CONTRACTS WITH CUSTOMERS ------(Rupees in '000)------

2023 2022 Revenue from contracts with customers 2,849,842 2,564,540

21. ACCRUED EXPENSES AND OTHER LIABILITIES ------(Rupees in '000)------
24. COST OF SALES
Sales tax and withholding income tax 8,262 23,325
Auditors' remuneration payable 4,746 1,080
Transfers from inventory property 6 2,400,627 2,046,237
Payable to project manager 123,519 75,326
Amortisation of contract cost assets 7.1 21,696 10,718
Payable to REIT accountant 250 -
2,422,323 2,056,955
Unit registrar's fee payable 189 191
Other liabilities 36,245 3,601
25. ADMINISTRATIVE AND OPERATING EXPENSES
Tax payable 23,644 36,277
196,855 139,800
Formation cost - 1,026
Project management fee 25.1 62,664 72,735
22. CONTINGENCIES AND COMMITMENTS Fees and subscriptions 15,715 4,528
Legal and professional charges 2,294 5,411
22.1 Contingencies Marketing expense 30,408 1,552
Depreciation expense 4.1 231 58
22.1.1 On March 30, 2023, the Additional Commissioner Inland Revenue [ACIR] passed an order under Section 122(5A) of the REIT accountant's fee 3,608 -
Income Tax Ordinance, 2001 (ITO), amending the assessment for tax year 2022 and raised demand of Rs. 54.057 million. Auditors' remuneration 8,796 1,080
Finance cost - 4,159
ACIR demanded tax aggregating to Rs. 37.671 million under Section 100D of the ITO and contended that the said tax Bank charges 35 7
should have been paid for the tax year starting from July 2021, instead from the Project start date / date of registration with Other charges 4,206 -
the Federal Board of Revenue (FBR). The above demand was raised under clauses (b) and (c) of sub-rule (2) of rule 2 of the 127,957 90,556
Eleventh Schedule to the ITO despite the fact that these clauses already stand deleted through the Finance Act, 2021,
causing this impugned order to be void ab-initio. 25.1 These represent project management fee accrued for the year ended June 30, 2023. In accordance with the regulation 15 (viii)
of the REIT Regulations, 2022, the REIT Management Company is obliged to appoint a development advisor with the consent
Furthermore, the above order also included a demand aggregating to Rs. 16.486 million under Section 4C of the ITO i.e. by of the Trustee. For this purpose, Arif Habib Development & Engineering Consultants (Private) Limited (the Project Manager)
levying Super Tax at the slab rate of 4%. The matter of application of Super Tax for the tax year 2022 has already been has been engaged to manage and supervise the Project, effectively from March 31, 2022. The responsibilities of the Project
declared as void / illegal by the Honourable Sindh High Court through its judgment dated December 22, 2022, and the Manager include material procurement, sales and marketing, collections from customers, contracts preparation, and
same matter is presently subjudice before the Honourable Supreme Court of Pakistan (SCP). coordination and supervision of the Project. The Project Manager is entitled to receive fees equivalent to 15% of the profit
before tax generated by the REIT. The fee shall be payable, on a monthly basis, to the Project Manager at the higher of 1.5%
The management, based on the advice of its tax advisor, made payment under protest of Rs. 4.664 million against the of monthly sales collection and Rs. 5 million.
aforesaid demand of Super Tax at the applicable slab rate of 2%, despite concerns over legality / jurisdiction to pay Super
Tax for the tax year 2022. This amount has been recorded as receivable as disclosed in note 11. The REIT reserves the right to For the year For the period from
claim refund of Super Tax in case the matter is decided by the SCP in favour of the taxpayers. ended June April 1, 2022 to
30, 2023 June 30, 2022
The management filed an appeal before the Commissioner Inland Revenue (Appeals) [CIR(A)] against the impugned order 25.2 Auditors' remuneration ------(Rupees in '000)------
of the ACIR, which was decided by the CIR(A) against the REIT through Appellate Order dated July 24, 2023, making no
changes on all the issues raised therein. Annual audit fee 2,500 1,000
Half yearly review of condensed interim financial statements 800 -
Considering the facts of the case, and upon consultation with its tax advisor, an appeal before the Appellate Tribunal will Certifications and other services 500 -
shortly be filed. The management is confident the appeal is likely to be decided in favour of the REIT. Accordingly, no Out of pocket expenses 719 -
provision has been recorded in these financial statements for the above matter. 4,519 1,000
Sindh Sales Tax on services 362 80
Prior year adjustment 3,915 -
8,796 1,080

77 | Globe Residency REIT Annual Report 2023 | 78

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

29. TRANSACTIONS AND BALANCES WITH RELATED PARTIES / CONNECTED PERSONS

For the year For the period from
Connected persons and related parties include Arif Habib Dolmen REIT Management Limited being the REIT Management
ended June April 1, 2022 to
Company, Central Depository Company of Pakistan Limited being the Trustee, Arif Habib Development & Engineering
Note 30, 2023 June 30, 2022 Consultants (Private) Limited being the Project Manager and an associate due to common directorship, other REITs managed
26. OTHER INCOME ------(Rupees in '000)------ by the REIT Management Company and other entities under common management and / or directorship and the directors
and their close family members and officers of the REIT Management Company and the Trustee, key management personnel,
Profit on bank deposits 12.1 26,261 7,500 other associated undertakings and unit holders holding more than 10% units / net assets of the REIT.
Scrap sales 26.1 73,343 -
99,604 7,500 Transactions with related parties are in the normal course of business, at contracted rates and terms determined in
accordance with commercial rates. There are no potential conflicts of interest of the related party with respect to the REIT.
26.1 This represents sale of scrap steel bars that could not be utilized for construction of the Project. These scrap materials are part
of normal loss expected to occur and hence do not indicate a NRV loss in the value of inventory property. There are no related parties incorporated outside Pakistan with whom the REIT had entered into transactions during the year.

For the year For the period from Details of the transactions with related parties and balances with them, if not disclosed elsewhere in these financial
statements are as follows:
ended June April 1, 2022 to
30, 2023 June 30, 2022 For the year For the period from
27. TAXATION ------(Rupees in '000)------ ended June April 1, 2022 to
30, 2023 June 30, 2022
Tax charge for the current year 164,141 69,802 29.1 Transactions during the year / period:
Joint operator's share of tax charge (26,933) - ------(Rupees in '000)------
Current tax expense 137,208 69,802 Arif Habib Dolmen REIT Management Limited -
(Management Company)
27.1 As discussed in note 1.3, the Project is registered in the aforesaid tax scheme (i.e. under Section 100D and Eleventh Schedule - Remuneration of the REIT Management Company 28,000 6,981
to the Income Tax Ordinance, 2001). As per the scheme, the total tax liability for the REIT's income from the Project arrived at - Remuneration paid 28,390 -
Rs. 236.7 million which is to be paid on a quarterly basis until September 30, 2023. Out of Rs. 236.7 million, Rs. 135.255 million - Sindh sales tax on remuneration of the REIT Management Company 3,640 908
(April 1, 2022 to June 30, 2022: Rs. 67.628 million) relates to the current year and accordingly has been recognised in these - Formation cost - 1,026
financials statements. - Development & other expenditure 958 2,631
- Fees and subscriptions 150 150
27.2 One of the primary conditions specified in Section 100D is the completion of the "grey structure" of the Project, as defined - Short term deposit - 100
under the Eleventh Schedule to the Income Tax Ordinance, 2001, by September 30, 2023. - Repayment of expenses incurred by Management Company 4,285 -

The management is of the view that the grey structure of the Project is not expected to be completed by September 30, 2023 Central Depository Company of Pakistan Limited -
for reasons beyond the control of the management. However, since the REIT has complied with all the conditions laid down (Trustee)
in the law, the management is of the view that after making payment of tax liability on due dates as laid down in the - Remuneration of the Central Depository Company of Pakistan Limited - Trustee 5,600 1,396
aforementioned scheme, and following the guidelines issued by FBR in the form of Frequently Asked Questions (FAQs), it - Sindh sales tax on remuneration of the Trustee 728 182
would remain subject to tax under Section 100D. The tax consultant of REIT has also advised that following the guidelines
issued by FBR, and payment of taxes on due dates, the argument for taxability under the aforementioned scheme exists. Arif Habib Development & Engineering Consultants (Private) Limited -
Accordingly, management has recorded the tax liability of the REIT under Section 100D. (Associate due to common directorship)
- Expenses incurred on behalf of the REIT 5,071 2,591
For the year For the period from - Project management fee charge for the year 62,664 72,735
- Project management fee paid during the year 16,950 -
ended June April 1, 2022 to
30, 2023 June 30, 2022
Javedan Corporation Limited (JCL) -
28. EARNINGS PER UNIT - BASIC AND DILUTED ------(Rupees in '000)------ (Sponsor of the REIT / associate due to common directorship)
- Subscription of units - 1,400,000
Total earnings for the year / period 271,083 342,360 - Payment for partial land consideration 250,000 1,140,000
- Adjusted for partial land consideration against receivable balance 200,000 -
------(Number in units)------ - Expenses incurred on behalf of the REIT 141,569 1,131,397
- Amounts received from customers on behalf of the REIT 14,843 1,593,555
Weighted average number of ordinary units during the year / period 140,000,000 140,000,000 - Proceeds of scrap sales received by JCL on behalf of the REIT 21,586 -
- Proceeds of scrap sales received by REIT on behalf of the JCL 3,524 -
---------(Rupees)--------- - Repayment to the REIT in respect of scrap sales received by JCL 2,915 -
- Payment made in respect of expenses incurred by JCL on behalf of the REIT 105,926 -
Earnings per unit - basic and diluted 1.936 2.445 - Repayment to the REIT in respect of amounts received from
customers on behalf of the REIT 119,431 143,516

79 | Globe Residency REIT Annual Report 2023 | 80

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

For the year For the period from

ended June April 1, 2022 to For the year For the period from
30, 2023 June 30, 2022 ended June April 1, 2022 to
--------(Rupees in '000)-------- 30, 2023 June 30, 2022
Rahat Residency REIT (RRR) - Alamgir A Shaikh --------(Rupees in '000)--------
(Associate due to common directorship) (Director of sponsor)
- Amounts received from scrap sales on behalf of the RRR 1,918 - - Amounts received in respect of apartments sold 2,486 653
- Revenue in respect of apartments sold 2,095 3,568
Safe Mix Concrete Limited
(Associate due to common directorship)
- Purchases of construction material 654,327 222,378 29.2 Amounts outstanding as at year / period end
- Payments made in respect of construction material 696,684 -
Arif Habib Dolmen REIT Management Limited -
Aisha Steel Mills Limited (Management Company)
(Associate due to common directorship) - Remuneration of the REIT Management Company payable 7,371 6,981
- Purchase of G.I sheets 43,834 - - Sindh Sales Tax payable on remuneration of the REIT Management Company 908 908
- Amount paid in respect of G.I sheets 13,185 - - Payable in respect of formation cost - 1,026
- Payable in respect of development & other expenditure 580 2,631
NN Maintenance Company (Private) Limited - Payable in respect of fees and subscriptions 150 150
(Associate due to common directorship) - Payable in respect of short term deposit - 100
- Electricity charged during the year 16,318 -
- Amount paid in respect of electricity charges 13,163 - Central Depository Company of Pakistan Limited -
(Trustee)
Power Cement Limited - Remuneration of the Trustee payable 6,996 1,396
(Associate due to common directorship) - Sindh Sales Tax payable on remuneration of the Trustee 910 182
- Purchases of cement bags 6,389 -
- Payments made in respect of cement bags 6,389 - Arif Habib Development & Engineering Consultants (Private) Limited -
(Associate due to common directorship)
Muhammad Arif Habib - Payable in respect of expenses incurred on behalf of the REIT 5,071 2,591
(Director of Management Company) - Payable in respect of project management fee 118,449 72,735
- Amounts received in respect of apartments sold 159,504 -
- Revenue in respect of apartments sold 187,732 - Javedan Corporation Limited (JCL) -
(Sponsor of the REIT / associate due to common directorship)
Haji Abdul Ghani - Payable in respect of expenses incurred on behalf of the REIT 317,603 281,960
(Associate due to sponsor of the associated Company) - Net receivable in respect of scrap sales 15,147 -
- Amounts received in respect of apartments sold 179,699 38,989 - Receivable in respect of amounts received from customers on behalf of the REIT 296,014 600,602
- Revenue in respect of apartments sold 187,732 562,927 - Outstanding land consideration 450,000 700,000

Arif Habib Limited Safe Mix Concrete Limited

(Associate due to common control) (Associate due to common directorship)
- Amounts received in respect of apartments sold 183,806 8,693 - Payable in respect of purchases of construction material 6,717 49,074
- Revenue in respect of apartments sold 44,320 103,064
Aisha Steel Mills Limited
Muhammad Kashif Habib (Associate due to common directorship)
(Close relative of a director) - Payable in respect of G.I sheets 30,649 -
- Amounts received in respect of apartments sold 10,452 1,888
- Revenue in respect of apartments sold 6,838 10,252 NN Maintenance Company (Private) Limited
(Associate due to common directorship)
Abdus Samad A. Habib - Payable in respect of electricity charges 3,155 -
(Director of Management Company)
- Amounts received in respect of apartments sold 2,749 2,890 Rahat Residency REIT (RRR) -
- Revenue in respect of apartments sold 3,070 5,194 (Associate due to common directorship)
- Payable in respect of scrap sales 1,918 -
Razi Haider
(CFO & Company Secretary of Management Company)
- Amounts received in respect of apartments sold 2,237 2,239
- Revenue in respect of apartments sold 2,095 3,610

81 | Globe Residency REIT Annual Report 2023 | 82

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

2022
2023 2022
At At fair value
--------(Rupees in '000)-------- amortised through Total
Muhammad Arif Habib cost profit or loss
(Director of Management Company)
- Contract asset outstanding 113,334 - -------------------(Rupees in '000)-------------------
Financial assets
Contract assets 916,202 - 916,202
Haji Abdul Ghani Other receivables 318,642 - 318,642
(Associate due to sponsor of the associated Company) Bank balances 160,122 - 160,122
- Contract asset outstanding 113,334 190,408 1,394,966 - 1,394,966
Razi Haider Financial liabilities
(CFO & Company Secretary of Management Company) Long term loan 1,400,000 - 1,400,000
- Contract asset outstanding 1,229 1,371 Outstanding land consideration 700,000 - 700,000
Commission payable 524 - 524
Arif Habib Limited Trade and other payables 128,306 - 128,306
(Associate due to common control) Payable to the REIT Management Company 10,888 - 10,888
- Contract asset outstanding - 39,338 Payable to the Central Depository Company
- Contract liability outstanding 100,148 - of Pakistan Limited - Trustee 1,396 - 1,396
Accrued expenses and other liabilities 80,198 - 80,198
Muhammad Kashif Habib Accrued mark-up on long term loan 14,487 - 14,487
(Close relative of a director) 2,335,799 - 2,335,799
- Contract asset outstanding 4,871 8,485

Abdus Samad A. Habib 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(Director of Management Company)
- Contract asset outstanding 2,687 2,366 The REIT’s objective in managing risk is the creation and protection of unit holders’ value. Risk is inherent in the REIT’s
activities, but it is managed through monitoring and controlling activities which are primarily set up to be performed based
Alamgir A Shaikh on limits established by the REIT's constitutive documents, the REIT Regulations, 2022 and directives of the SECP. These limits
(Director of sponsor) reflect the business strategy and market environment of the REIT as well as the level of the risk that REIT is willing to accept.
- Contract asset outstanding 1,229 1,620 The Board of Directors of the REIT Management Company supervises the overall risk management approach within the REIT.
The REIT is exposed to market risk, liquidity risk and credit risk arising from the financial instruments it holds.

31.1 Market risk

2023
At At fair value Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the
amortised through Total market price. Market risk comprise of three types of risks: currency risk, interest rate risk and other price risk.
cost profit or loss
30. FINANCIAL INSTRUMENTS BY CATEGORY (i) Interest rate risk
-------------------(Rupees in '000)-------------------
Financial assets Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
Contract assets 1,535,223 - 1,535,223 changes in market interest rates. As of June 30, 2023, the REIT is exposed to such risk on its balances held with banks
Receivable from joint operator 148,540 - 148,540 and long term loan.
Bank balances 7,307 - 7,307
Mark-up receivable on bank balances 521 - 521 a) Sensitivity analysis for variable rate instruments
1,691,591 - 1,691,591
Financial liabilities Presently, the REIT holds balances with banks and long term loan which expose the REIT to cash flow interest rate
Long term loan 1,400,000 - 1,400,000 risk. A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) with all
Outstanding land consideration 250,000 - 250,000 other variables remain constant, the total comprehensive income for the year and net assets of the REIT by the
Commission payable 2,091 - 2,091 amounts shown below. The analysis is performed on the same basis for 2022.
Trade and other payables 126,789 - 126,789
Payable to the REIT Management Company 8,101 - 8,101
Payable to the Central Depository Company
of Pakistan Limited - Trustee 6,996 - 6,996
Accrued expenses and other liabilities 164,949 - 164,949
Accrued mark-up on long term loan 81,396 - 81,396
2,040,322 - 2,040,322

83 | Globe Residency REIT Annual Report 2023 | 84

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023
Total comprehensive income Net assets
100 bps 100 bps 100 bps 100 bps 2022
increase decrease increase decrease Exposed to interest rate risk
Not exposed
June 30, 2023 ----------------------- (Rupees in '000) ----------------------- Effective More than 3
Up to More than to interest Total
interest rate months and
3 months 1 year rate risk
Financial assets 73 (73) 73 (73) up to 1 year
-------------------------------------------------------------------------------------------------------
% (Rupees in '000) -------------------------------------------------------
Financial liabilities 14,000 (14,000) 14,000 (14,000) Financial assets
Contract assets - - - 916,202 916,202
June 30, 2022 Other receivables - - - 318,642 318,642
Bank balances 8.25% to 12.25% 160,122 - - - 160,122
Financial assets 1,601 (1,601) 1,601 (1,601) 160,122 - - 1,234,844 1,394,966
Financial liabilities
Financial liabilities 14,000 (14,000) 14,000 (14,000)
Long term loan - 1,400,000 - - 1,400,000
(b) Sensitivity analysis for fixed rate instruments Outstanding land consideration - - - 700,000 700,000
Commission payable - - - 524 524
As at June 30, 2023, the REIT does not hold any fixed rate instruments that may expose the REIT to fair value
interest rate risk. Trade and other payables - - - 128,306 128,306
Payable to the REIT Management Company - - - 10,888 10,888
The composition of the REIT’s investment portfolio and interest rates are expected to change over time. Payable to the Central Depository Company
Accordingly, the sensitivity analysis prepared as of June 30, 2023 is not necessarily indicative of the impact on the of Pakistan Limited - Trustee - - - 1,396 1,396
REIT’s net assets of the future movements in interest rates. Accrued expenses and other liabilities - - - 80,198 80,198
Interest rate sensitivity position for on-balance sheet financial instruments is based on the earlier of contractual
Accrued mark-up on long term loan - - - 14,487 14,487
repricing or maturity date. - 1,400,000 - 935,799 2,335,799
On-balance sheet gap 160,122 (1,400,000) - 299,045 (940,833)
The REIT's profit rate sensitivity related to financial assets and financial liabilities as at June 30, 2023 can be
determined as follows: Total interest rate sensitivity gap 160,122 (1,400,000) -
2023 Cumulative interest rate sensitivity gap 160,122 (1,239,878) (1,239,878)
Exposed to interest rate risk
Not exposed
Effective More than 3
Up to More than to interest Total (ii) Currency risk
interest rate months and
3 months 1 year rate risk
up to 1 year Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of
-------------------------------------------------------------------------------------------------------
% (Rupees in '000) ------------------------------------------------------------------------------------------------------- changes in foreign exchange rates. The REIT does not have any financial instruments in foreign currencies and
Financial assets
Contract assets - - - 1,535,223 1,535,223 hence is not exposed to such risk.
Receivable from joint operator - - - 148,540 148,540
(iii) Price risk
Bank balances 10% to 19.5% 7,307 - - - 7,307
Mark-up receivable on bank balances - - - 521 521 Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
7,307 - - 1,684,284 1,691,591 in market prices (other than those arising from profit rate risk or currency risk) whether those changes are caused by
Financial liabilities factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments
Long term loan - 1,400,000 - - 1,400,000 traded in the market. The REIT is not exposed to price risk as at June 30, 2023.
Outstanding land consideration - - - 250,000 250,000
Commission payable - - - 2,091 2,091 31.2 Liquidity risk
Trade and other payables - - - 126,789 126,789
Payable to the REIT Management Company - - - 8,101 8,101 Liquidity risk is the risk that the REIT may not be able to generate sufficient cash resources to settle its obligation in full as they
Payable to the Central Depository Company fall due or can only do so on terms that are materially disadvantageous to the REIT. The REIT’s approach to managing liquidity
of Pakistan Limited - Trustee - - - 6,996 6,996 is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the REIT’s reputation.
Accrued expenses and other liabilities - - - 164,949 164,949
Accrued mark-up on long term loan - - - 81,396 81,396 The table below summarises the maturity profile of the REIT's financial instruments. The analysis into relevant maturity
- 1,400,000 - 640,322 2,040,322 groupings is based on the remaining period at the end of the reporting period to the contractual maturity date. However, the
On-balance sheet gap 7,307 (1,400,000) - 1,043,962 (348,731) assets and liabilities that are receivable / payable on demand including bank balances have been included in the maturity
grouping of one month.
Total interest rate sensitivity gap 7,307 (1,400,000) -
Cumulative interest rate sensitivity gap 7,307 (1,392,693) (1,392,693)

85 | Globe Residency REIT Annual Report 2023 | 86

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

2023
The table below analyses the REIT's maximum exposure to credit risk:
More than More than More than Financial
Within 1 1 month 3 months 1 year More than instruments
Total 2023 2022
month and upto and upto and upto 5 years with no fixed
3 months 1 year 5 years maturity Balance as per Maximum Balance as per Maximum
---------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------
statement of exposure to statement of exposure to
Financial assets
Contract assets - - - - - 1,535,223 1,535,223 financial Position credit risk financial
financial Position
Position credit risk
Receivable from joint operator - - - - - 148,540 148,540 Financial assets -----------------------------(Rupees in '000)-----------------------------
Bank balances 7,307 - - - - - 7,307
Mark-up receivable on bank balances 521 - - - - - 521 Contract assets 1,535,223 1,535,223 916,202 916,202
7,828 - - - - 1,683,763 1,691,591 Other receivables 4,664 - 318,642 318,642
Financial liabilities Receivable from joint operator 148,540 148,540 - -
Long term loan - 233,334 233,333 933,333 - - 1,400,000 Bank balances 7,307 7,307 160,122 160,122
Outstanding land consideration - - - - - 250,000 250,000 Mark-up receivable on bank balances 521 521 - -
Commission payable 2,091 - - - - - 2,091 1,696,255 1,691,591 1,394,966 1,394,966
Trade and other payables 126,789 - - - - - 126,789
Payable to the REIT Management Company - 8,101 - - - - 8,101 The REIT Management Company and the Project Manager monitor customers’ overdue balances on an ongoing basis. Credit
Payable to the Central Depository Company evaluations are performed by the development advisor before sale agreements are entered into with clients.
of Pakistan Limited - Trustee 6,996 - - - - - 6,996
Accrued expenses and other liabilities 164,949 - - - - - 164,949 The REIT has placed its funds with banks having sound credit ratings. The credit quality of REIT's major balances can be
Accrued mark-up on long term loan - 81,396 - - - - 81,396 assessed with reference of external credit ratings as follows:
300,825 322,831 233,333 933,333 - 250,000 2,040,322
Net financial assets / (liabilities) (292,997) (322,831) (233,333) (933,333) - 1,433,763 (348,731) Rating Short term Long term % of financial assets
Agency rating rating 2023 2022
2022 -----------------------------(Rupees in '000)-----------------------------
More than More than More than Financial
Bank balances
Within 1 1 month 3 months 1 year More than instruments
Total
month and upto and upto and upto 5 years with no fixed PACRA A-1+ AA+ 0.14% 9.44%
Bank Alfalah Limited
3 months 1 year 5 years maturity Meezan Bank Limited VIS A-1+ AAA 0.14% 0.00%
---------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------- Dubai Islamic Bank Pakistan Limited VIS A-1+ AA
Financial assets Askari Bank Limited PACRA A-1+ AA+ 0.04% -
Contract assets - - - - - 916,202 916,202 0.11% -
Other receivables - - - - - 318,642 318,642 0.43% 9.44%
Bank balances 160,122 - - - - - 160,122
160,122 - - - - 1,234,844 1,394,966 32. CAPITAL RISK MANAGEMENT
Financial liabilities
Long term loan - - - 233,334 1,166,666 - 1,400,000 Management's objective when managing unit holder's funds is to safeguard the REIT's ability to continue as a going concern
Outstanding land consideration - 200,000 250,000 250,000 - - 700,000 so that it can continue to provide optimum returns based on income earned and realized gains as per the Trust Deed to its
Commission payable 524 - - - - - 524 unit holders and to ensure reasonable safety of unit holder's funds. The REIT is not exposed to externally imposed minimum
Trade and other payables 128,306 - - - - - 128,306 unit holder's maintenance requirement.
Payable to the REIT Management Company - 10,888 - - - - 10,888
Payable to the Central Depository Company The REIT manages its investment property and other assets by monitoring return on net assets and makes adjustment to it in
of Pakistan Limited - Trustee 1,396 - - - - - 1,396 the light of changes in market conditions. The REIT also manages its capital using a gearing ratio. The gearing ratio of the REIT
Accrued expenses and other liabilities 80,198 - - - - - 80,198 is as follows:
Accrued mark-up on long term loan - 14,487 - - - - 14,487 2023 2022
210,424 225,375 250,000 483,334 1,166,666 - 2,335,799 ------ (Rupees in '000) ------
Net financial assets / (liabilities) (50,302) (225,375) (250,000) (483,334) (1,166,666) 1,234,844 (940,833)
Debt 1,400,000 1,400,000
31.3 Credit risk Total unit holders' fund 1,855,490 1,584,407
Total capital 3,255,490 2,984,407
Credit risk is the risk which arises with the possibility that one party to a financial instrument will fail to discharge its
obligation and cause the other party to incur a financial loss. The REIT attempts to control credit risk by monitoring credit Gearing ratio 43% 47%
exposures, limiting transactions with specific counterparties and continually assessing the creditworthiness of
counterparties. Credit risk arises principally from the REIT’s contract assets, deposits and other receivables, receivable from
joint operator, bank balances and mark-up receivable on bank balances.

87 | Globe Residency REIT Annual Report 2023 | 88

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023 FOR THE YEAR ENDED JUNE 30, 2023

33 FAIR VALUE OF FINANCIAL INSTRUMENTS

2022
When measuring the fair value of an asset or a liability, the REIT uses observable market data as far as possible. Fair values Carrying amount Fair value
are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: Financial
Financial instruments Financial
instruments
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. 'at fair value through instruments
'at fair value Total Level 1 Level 2 Level 3 Total
other comprehensive 'at amortised
through profit
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or income' cost'
or loss'
indirectly.
-------------------------------------------------------- (Rupees in '000) ------------------------------------------------------
Financial assets - not measured at fair value
Level 3: Inputs for the asset or liability that are not based on observable market date (i.e., unobservable inputs). Contract assets - - 916,202 916,202
Other receivables - - 318,642 318,642
33.1 Accounting classifications and fair values of financial instruments Bank balances - - 160,122 160,122
- - 1,394,966 1,394,966
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for Financial liabilities - not measured at fair value
financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair Long term loan - - 1,400,000 1,400,000
value. Outstanding land consideration - - 700,000 700,000
Commission payable - - 524 524
2023 Trade and other payables - - 128,306 128,306
Carrying amount Fair value Payable to the REIT Management Company - - 10,888 10,888
Financial Payable to the Central Depository Company
Financial instruments Financial
instruments of Pakistan Limited - Trustee - - 1,396 1,396
'at fair value through instruments
'at fair value Total Level 1 Level 2 Level 3 Total Accrued expenses and other liabilities - - 80,198 80,198
other comprehensive 'at amortised
through profit Accrued mark-up on long term loan - - 14,487 14,487
income' cost'
or loss' - - 2,335,799 2,335,799
-------------------------------------------------------- (Rupees in '000) ------------------------------------------------------
Financial assets - not measured at fair value
Contract assets - - 1,535,223 1,535,223 34. INTEREST IN JOINT ARRANGEMENTS
Receivable from joint operator - - 148,540 148,540
Bank balances - - 7,307 7,307 34.1 During the year, the REIT and Meezan Bank Limited (the Bank) have entered into a 'Shirkat-ul-Aqd' arrangement for
Mark-up receivable on bank balances - - 521 521 construction and development of residential Towers 2, 3 and 4 (the Musharaka Asset) of the Project. The Musharaka Asset is
- - 1,691,591 1,691,591 currently being owned by the REIT. The total estimated construction and development expenditures for the Musharaka Asset
Financial liabilities - not measured at fair value is Rs. 3,618.652 million. As per the framework agreement, both the REIT and the Bank (collectively referred as 'the Partners')
- - 1,400,000 1,400,000 have agreed to jointly develop the Musharaka Asset under an equal partnership whereby each party shall invest 50% of the
Long term loan
amount required for construction and development expenditures (including the value of land). Under the framework
Outstanding land consideration - - 250,000 250,000
agreement, the Partners have agreed to jointly own the Musharaka Asset in such a manner that each Partner will have equal
Commission payable - - 2,091 2,091
undivided ownership. During the Mushkaraka period, legal title to the Musharaka Asset so purchased by the Bank will be
Trade and other payables - - 126,789 126,789
held by the REIT on behalf of the Bank. All decisions with respect to development and sale of the Musharaka Asset would be
Payable to the REIT Management Company - - 8,101 8,101
made only with unanimous consent of the Partners. The Partners have agreed to share the operating profits generated from
Payable to the Central Depository Company the sale of the Musharaka Asset in accordance with the agreed profit-sharing ratio of 50:50 and in case of loss will also share
of Pakistan Limited - Trustee - - 6,996 6,996 in the ratio of 50:50. During the Musharaka period, the Partners may make provisional profit payments in such manner and at
Accrued expenses and other liabilities - - 164,949 164,949 such time as may be mutually agreed between the Partners.
Accrued mark-up on long term loan - - 81,396 81,396
- - 2,040,322 2,040,322 The above arrangement falls within the purview of 'Joint Operations' in accordance with IFRS 11 since both Partners jointly
control the development and construction of the Musharaka Asset and have rights to the assets and obligations for the
liabilities relating to the Musharaka Asset.

34.2 In order to execute the above-mentioned arrangement, the REIT entered into an arrangement with the Bank on September
26, 2022, to sell 50% of the project site for the said towers (Musharakah Asset) at a consideration of Rs. 485.270 million. The
carrying value of the land disposed of was Rs. 432.577 million which resulted in the gain on disposal of Rs. 52.693 million
during the current year. Moreover, the costs incurred till September 26, 2022 (including cost of grey structure) appearing in
the books of the REIT as "inventory property" amounted to Rs. 456.452 million. As per the terms of agreement, the Bank is
liable to make a 50 percent contribution to the cost of the project. Therefore, 50 percent of the carrying amount of the grey
structure was disposed of by the REIT to the Bank at the carrying amount of Rs. 228.226 million.

89 | Globe Residency REIT Annual Report 2023 | 90

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023

During the year, the Bank has contributed a total sum of Rs. 888.725 million which includes the consideration of Rs. 485.270
million for its share of land as mentioned above. All expenses incurred till September 26, 2022 have been adjusted from the
carrying amount of the Musharakah Asset. Any amount left is to be adjusted from future development expenditures.

Moreover, as disclosed in note 26, the tax charge for the period is calculated as a period cost since the total tax liability for the
Project is computed as a fixed levy under the provisions of Section 100D. The proportionate tax charge to date (from the start
of the Project) for the Musharakah Asset amounted to Rs. 53.866 million. Accordingly, the Bank's share of tax amounted to
Rs. 26.933 million.

Subsequent to the Musharaka Agreement date, any development expenditures pertaining to the Bank's share of Musharaka
Asset incurred by the REIT shall be adjusted against the balance payable / receivable to / from the joint operator.

(Rupees in '000)
Musharaka Asset - September 26, 2022

Land (including land transfer duties and taxes) 865,154

Development expenditures (including construction materials utilized) 456,452
Carrying amount as at agreement date 1,321,606

June 30, 2023

Globe
Meezan
Residency
Bank
REIT
------ (Rupees in '000) ------
Attribution of cost before joint operation:
Musharaka Asset as at agreement date 1,321,606 -
Less: Bank's share of Musharaka Asset (660,803) 660,803
660,803 660,803
Development expenditures subsequent to agreement date 296,836 296,836
Carrying amount as at reporting date 957,639 957,639

Bank's share of cumulative tax charge 26,933

Gain on disposal under Musharaka arrangement 52,693
Less: amount received from the Bank (888,725)
Receivable from the Bank 148,540

35. CORRESPONDING FIGURES

The REIT Regulations, 2015 has been repealed after the enactment of the REIT Regulations, 2022. The disclosure
requirements contained under Section 29 (2) of the repealed REIT Regulations, 2015 have been removed under the
promulgated REIT Regulations, 2022. Accordingly, the disclosure requirements of IAS 24 'Related Party Disclosures' have
been followed in the current year and corresponding figures for certain related party transactions have been rearranged and
reclassified, under note 29.

36. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue by the Board of Directors of the REIT Management Company on
September 15, 2023.

Chief Financial Officer Chief Executive Officer Director

91 | Globe Residency REIT Annual Report 2023 | 92

   - -   

           2023  30   
          30  3.00  23.75 33,256,971  
  0.10 143,690 
4.50 6,285,026 
  
100 140,000,000 
    GRR      REIT
         
   
  29      
                 

  
 
  GRR 
 
 GRR              
        
  
         
  
 

 

       
       
   

                       2024  30


RMC  RMC   (ICAP)

     

  
    
2024  30     GRR        
 

  
  202315

 
 2018      180   1984    161   2017 
                8  RMC
              2021  26 
  
  

        

93 | Globe Residency REIT Annual Report 2023 | 94

 
              

   
 
       

              

             

 
                RMC  
     
 
    
     
   8  (a)

1  (b)

    1,444  GRR  2023  30            GRR 
 II  

      GRR
  
     
  

      
%           
0.14 190,214       
71.46 100,043,083  
         
  

- 6,836  
       
- - ICP NIT 
 
    
NBFCs  DFIs 
 
- -
    
0.05 74,180  
  
   

95 | Globe Residency REIT Annual Report 2023 | 96

     GRR       
                 
 
       
                   
     
  
  

     

   
        
    

     RMC GRR       
 I 
    
  
         
           


     (6)       (8)   2023  30  
     REIT   

   
      
    
            
    

- - 8   1
      RMC          REIT   GRR
  
            
- - 3    2
    
- 6 8  3

1 - 8  4
  
        GRR    
- 6 8  5
           
1 4 6   6
                2.4 
- - 4  7
            
1 6 6  8 
        GRR     
1 - 7   9        NAV  

   
 

            
 RMC

97 | Globe Residency REIT Annual Report 2023 | 98

  
                  
   
           
         
 
  779        1,344
  155     
     
   
2.722      11.879     
          
     
                  
                 90 
 

                

         
        
   45.84
    
          
              
 
  
      GRR   
                
 
      
      
        
         
         IMF      
  
      
    29.2 11.9    
   
  

                          
                    

99 | Globe Residency REIT Annual Report 2023 | 100

  
 
   
 
  
       
  
2023 30       (RMC)REIT  


            
    "GRR" REIT 
      REIT    
                
  
                
      REIT REIT 
 

40,500   9  FL    1,344  
     
   

       REIT 
          
 2022 28(PSX)      REITREIT 
     
    


  

           
      GRR 2023 30  
   

 
 2023 30 
       REIT       

            
2,849,842
       
(2,422,323) 
   
(127,957)  
299,562   
     REIT          
52,693         
 
271,083  
1.936           
     50/50
   REIT   
    

101 | Globe Residency REIT Annual Report 2023 | 102