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Auditor Report of Godrej Industries Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Godrej Properties Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards notified in the Companies Act, 1956 ("the act") read with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b. in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 1 (g) to the financial statements, in respect of projects under long term contracts undertaken and/ or financed by the Company, we have relied upon the management''s estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and readability of the construction work in progress and project advances determined.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required under provisions of section 227(3) of the Companies Act, 1956, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards notified in the Companies Act, 1956, read with General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirements'' of our report of even date.

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.

2) (a) The inventory includes construction work in progress, and cost of development rights in identified land. Physical verification of inventory have been conducted at reasonable intervals by the management.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise.

(c) The Company has not taken any loan secured or unsecured from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956.

(d) Consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.

6) In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956, and the rules framed there under, in respect of the deposits accepted from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209 (1)(d) of the Act, and are of the opinion that prima facie the prescribed accounts and records have generally been made and maintained. We have not, however, made a detailed examination of the records with a view to examine whether they are accurate and complete.

9) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31 st March, 2014 for a period of more than six months from the date they became payable.

10) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial years.

11) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks. The Company does not have dues to financial institutions or outstanding debentures.

12) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of the transactions and contracts in respect of investments purchased and sold during the year and timely entries have been made therein .The investments made by the Company are held in its own name.

15) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and other financial institutions.

16) According to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loans were obtained.

17) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investment.

18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The Company did not have outstanding debentures during the year.

20) We have verified the end use of money raised by Initial Public Offer (IPO) as disclosed in Note 28(a) and Rights issue as disclosed in Note 28(b) forming an integral part of financial statements. Pending utilization of the funds raised through these public issues, a sum of" 5,458,640,000/- has been temporarily invested in Mutual Funds.

21) During the course of our examination of the books of account and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given and representations made by the Management, no major fraud on or by the Company, has been noticed or reported during the year.

For KALYANIWALLA & MISTRY

CHARTERED ACCOUNTANTS

Firm Registration Number 104607W

ERMIN K. IRANI

PARTNER

Membership Number: 35646

Place: Mumbai

Date: May 2, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Godrej Properties limited (" the company" ), which comprise the Balance sheet as at March 31, 2013, and the statement of Profit and loss and cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting standards referred to in sub-section (3c) of section 211 of the companies act, 1956 (" the act" ). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on auditing issued by the institute of chartered accountants of india. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. in making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. an audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

in our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india:

a. in the case of the Balance sheet, of the state of affairs of the company as at March 31, 2013;

b. in the case of the statement of Profit and loss, of the profit for the year ended on that date; and

c. in the case of the cash Flow statement, of the cash flows for the year ended on that date.

Emphasis of Matter

a) We draw attention to note 1(g) to the financial statements, in respect of projects under long term contracts undertaken and/or financed by the company, we have relied upon the management''s estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined.

b) We also draw attention to note 27 to the Financial statements, regarding the scheme of amalgamation of the wholly owned subsidiary of the company viz. Godrej Waterside Properties Private limited (GWPPl), with the company approved by The Honorable High court of Judicature at Bombay, whereby all the assets and liabilities of GWPPl have been taken over at their respective fair values as on april 1, 2012.

In accordance with the scheme of amalgamation, an amount of Rs. 1,228,652,637/- on account of Goodwill on merger has been charged to General Reserve and opening balance of surplus in the statement of Profit & loss instead of amortising the same in the statement of Profit & loss over a period of five years. The cost and expenses arise out of or incurred in carrying out and implementing the scheme amounting to Rs. 5,300,000/- has also been directly charged against the opening balance of surplus in statement of Profit & loss of the company. Had these amounts been charged to the statement of Profit and loss, the profit for the year would have been lower by Rs. 251,030.527/-, Goodwill would have been higher by Rs. 982,922,110/- (net written down value), General Reserve account would have been higher by Rs. 462,000,000/- and the surplus in statement of Profit & loss would have been higher by Rs. 520,922,110/-.

c) We also draw attention to note 32 to the financial statements, regarding a loan of Rs. 443,402,597/- to the GPl EsOP Trust for purchase of the company''s shares from Godrej industries limited equivalent to options granted under an Employee stock Option Plan. as at 31st March, 2013, the market value of the shares held by the GPl EsOP Trust is lower than the cost of acquisition of the shares by Rs. 123,999,119/- (net of provision of Rs. 58,923,028/- on account of options lapsed). The repayment of the loans granted to the GPl EsOP Trust is dependent on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. in the opinion of the management, the fall in value of the underlying equity shares is on account of current market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. as required by the companies (auditor''s Report) Order, 2003 (" the Order" ) issued by the central Government of india in terms of sub-section (4a) of section 227 of the act, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. as required under provisions of section 227(3) of the companies act, 1956, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books.

c. The Balance sheet, statement of Profit and loss and cash Flow statement dealt with by this Report are in agreement with the books of account.

d. in our opinion, the Balance sheet, statement of Profit and loss and cash Flow statement comply with the accounting standards referred to in subsection (3c) of section 211 of the act;

e. On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the act.

f. since the central Government has not issued any notification as to the rate at which the cess is to be paid under section 441a of the companies act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

annEXURE TO THE inDEPEnDEnT aUDiTOR''s REPORT

Referred to in paragraph 1 under the heading ''Report on Other legal & Regulatory Requirements'' of our report of even date.

1) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) as explained to us, the company has a program for physical verification of fixed assets at periodic intervals. in our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its assets.

(c) in our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.

2) (a) The inventory includes construction work in progress, and cost of development rights in identified land. Physical verification of inventory have been conducted at reasonable intervals by the management.

(b) in our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) (a) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the companies act, 1956.

(b) consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise.

(c) The company has not taken any loan secured or unsecured from companies, firms or other parties covered in the Register maintained under section 301 of the companies act, 1956.

(d) consequently, the question of commenting on the rates of interest and others terms and conditions of the loans taken being prejudicial to the interests of the company, payment of regular principal and the interest does not arise.

4) in our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the companies act, 1956 have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.

6) in our opinion and according to the information and explanations given to us, the company has complied with directives issued by the Reserve Bank of india and the provisions of section 58a and 58aa of the companies act, 1956, and the rules framed there under, in respect of the deposits accepted from the public.

7) The company has an internal audit system, which in our opinion is commensurate with the size of the company and nature of its business.

8) We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the central Government for maintenance of cost records under section 209 (1)(d) of the act, and are of the opinion that prima facie the prescribed accounts and records have generally been made and maintained. We have not, however, made a detailed examination of the records with a view to examine whether they are accurate and complete.

9) (a) according to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, investor Education and Protection Fund, Employees'' state insurance, income Tax, Value added Tax, sales Tax, Wealth Tax, service Tax, custom Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. according to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March, 2013 for a period of more than six months from the date they became payable.

10) The company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial years.

11) according to the information and explanations given to us and based on the documents and records produced to us, the company has not defaulted in repayment of dues to banks. The company does not have dues to financial institutions or outstanding debentures.

12) according to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) in our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) in our opinion and according to the information and explanations given to us, the company has maintained proper records of the transactions and contracts in respect of investments purchased and sold during the year and timely entries have been made therein .The investments made by the company are held in its own name.

15) in our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and other financial institutions.

16) according to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loans were obtained.

17) according to the information and explanations given to us and on an overall examination of the Balance sheet and cash Flows of the company, we report that the company has not utilized funds raised on short-term basis for long-term investment.

18) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the companies act, 1956.

19) The company did not have outstanding debentures during the year.

20) We have verified the end use of money raised by initial Public Offer (iPO) as disclosed in note 29(a) and institutional Placement Programme (iPP) as disclosed in note 29(b) forming an integral part of financial statements. Pending utilization of the funds raised through these public issues, a sum of Rs. 92,311,157/- has been temporarily invested in Mutual Funds.

21) During the course of our examination of the books of account and records of the company, carried out in accordance with the generally accepted auditing practices in india, and according to the information and explanations given and representations made by the Management, no major fraud on or by the company, has been noticed or reported during the year.

For KALYANIWALLA & MISTRY

CHARTERED ACCOUNTANTS

Firm Registration number 104607W

ERMIN K. IRANI

PARTNER

Membership number: 35646

Place: Mumbai

Date: May 9, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of GODREJ PROPERTIES LIMITED, as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 1(f) of Notes to Accounts, in respect of projects under long-term contracts undertaken and/or financed by the Company, we have relied upon the management's estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/losses have been accounted, interest income accrued and reliability of the construction work-in-progress and project advances determined.

5. Without qualifying our opinion, we draw attention to the fact that as referred to in Note 31(a) of Notes to Accounts, regarding a loan of Rs 443,911,462/- to the GPL ESOP Trust for purchase of the Company's shares from Godrej Industries Ltd. equivalent to options granted under an Employee Stock Option Plan. As at 31st March, 2012, the market value of the shares held by the GPL ESOP Trust is lower than the holding cost of acquisition of these shares by Rs 82,347,882/- (net of provision of Rs 58,923,028/- on account of options lapsed). The repayment of the loans granted to the GPL ESOP Trust is dependent on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. In the opinion of the management, the fall in value of the underlying equity shares is on account of current market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements.

6. In our opinion and to the best of our information and according to the explanations given to us, they said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date, and

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

7. On the basis of the written representations received from the directors as on 31st March, 2012, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.

2) (a) The inventory includes construction work-in-progress, and cost of development rights in identified land. Physical verification of inventory have been conducted at reasonable intervals by the management.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) Consequently the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and interest and reasonable steps for the recovery of the same does not arise.

(c) The Company has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(d) Consequently, the question of commenting on the rates of interest and other terms and conditions of the loans taken being prejudicial to the interests of the Company, payment of regular principal and the interest does not arise.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956, have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.

6) In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under, in respect of the deposits accepted from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and nature of its business.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1)(d) of the Act, and are of the opinion that prima facie the prescribed accounts and reocrds have generally been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st March, 2012, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues outstanding of Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess on account of any dispute other than the following:

Sr. No. Name of the Statute Amount Forum where dispute is pending

1 Income Tax Act, 1961 Rs.14,825,232/- Commissioner of Income Tax(Appeals)_

2 KVAT Act, 2003 Rs.12,130,007/- Jt. Commissioner of Commercial Taxes (Appeals)_

10) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial years.

11) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks. The Company does not have dues to financial institutions or outstanding debentures.

12) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

14) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of the transactions and contracts in respect of investments purchased and sold during the year and timely entries have been made therein. The investments made by the Company are held in its own name.

15) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and other financial institutions.

16) According to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loans were obtained.

17) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investment.

18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19) The Company did not issue any debentures during the year.

20) We have verified the end use of money raised by Initial Public Offer (IPO) as disclosed in Note 28(a) and Institutional Placement Programme (IPP) as disclosed in Note 28(b) forming an integral part of financial statements. Pending utilization of the funds raised through these public issues, a sum of Rs 4,342,311,157/- has been temporarily invested in Mutual Funds and Bank Deposits.

21) During the course of our examination of the books of account and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given and representations made by the Management, no major fraud on or by the Company, has been noticed or reported during the year.

For and on behalf of

KALYANIWALLA & MISTRY

Chartered Accountants

Firm Registration No: 104607W

ERMIN K. IRANI

Partner

Membership No. 35646

Place: Mumbai

Dated: May 05, 2012


Mar 31, 2011

1. We have audited the attached Balance sheet of Godrej PROPERTIES limited, as at 31st March, 2011, the Profit and loss account and the cash Flow statement of the company for the year ended on that date annexed thereto. these financial statements are the responsibility of the Companys management. our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in INDIA. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. as required by the companies (Auditors report) order, 2003, issued by the central Government in terms of sub-section (4a) of section 227 of the companies act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) in our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of such books.

c) the Balance sheet, Profit and loss account and the cash Flow statement dealt with by this report are in agreement with the books of account.

d) in our opinion, the Balance sheet, Profit and loss account and the cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the companies act, 1956.

e) Without qualifying our opinion, we draw attention to the fact that as referred to in note 1(f) of schedule 19-Notes to accounts, in respect of projects under long-term contracts undertaken and/or financed by the company, we have relied upon the managements estimates of the percentage of completion, costs to completion and on the projections of revenues expected from projects owing to the technical nature of such estimates, on the basis of which profits/ losses have been accounted, interest income accrued and realizability of the construction work in progress and project advances determined.

5. (a) Without qualifying our opinion, we draw attention to the fact that as referred to in note 8a of schedule 19- Notes to Accounts, regarding a loan of Rs. 368,916,600/- to the GPl ESOP trust for purchase of the Companys shares from Godrej industries ltd. equivalent to options granted under an employee stock option Plan. as at 31st march, 2011, the market value of the shares held by the GPl ESOP trust is lower than the cost of acquisition of the shares by Rs. 81,549,135/-. the repayment of the loans granted to the GPl ESOP trust is dependant on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. in the opinion of the management, the fall in value of the underlying equity shares is on account of current market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements.

(b) Without qualifying our opinion, we draw attention to the fact that as referred to in note 8b of schedule 19- Notes to accounts, regarding a loan of Rs. 82,884,089/- to Gil ESOP trust for purchase of the Holding companys shares from the market equivalent to options granted under an employee stock option Plan. as at 31st march, 2011, the market value of the shares held by the Gil ESOP trust is lower than the cost of acquisition of the shares by Rs. 24,174,390/-. the repayment of the loans granted to the Gil ESOP trust is dependant on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. in the opinion of the management, the fall in value of the underlying equity shares is on account of current market volatility and the loss, if any, can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements.

6. in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the companies act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance sheet, of the state of affairs of the company as at 31st march, 2011;

ii) in the case of the Profit and loss account, of the profit of the company for the year ended on that date; and

iii) in the case of the cash Flow statement, of the cash flows of the company for the year ended on that date.

7. on the basis of the written representations received from the directors as on 31st march, 2011, and taken on record by the Board of directors, we report that, none of the directors is disqualified as on 31st march, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the companies act, 1956.

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph (3) of our report of even date.

1) (a) the company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) as explained to us, the company has a program for physical verification of fixed assets at periodic intervals. in our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its assets.

(c) in our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.

2) (a) the inventory includes construction work in progress, and cost of development rights in identified land. Physical verification of inventory have been conducted at reasonable intervals by the management.

(b) in our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) (a) the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the companies act, 1956.

(b) consequently, the question of commenting on the rates of interest, terms and conditions of the loans granted being prejudicial to the interests of the company, receipt of regular principal and interest and reasonable steps for recovery of the same does not arise.

(c) the company has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the companies act, 1956.

(d) consequently, the question of commenting on the rates of interest and other terms and conditions of the loans taken being prejudicial to the interests of the company, payment of regular principal and the interest does not arise.

4) in our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. there are no sales of service. during the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the companies act, 1956 have been entered into the register required to be maintained under that section.

(b) the transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.

6) in our opinion and according to the information and explanations given to us, the company has complied with directives issued by the reserve Bank of India and the provisions of section 58A and 58AA of the companies act, 1956, and the rules framed thereunder, in respect of the deposits accepted from the public.

7) the company has an internal audit system, which in our opinion is commensurate with the size of the company and nature of its business.

8) in our opinion and according to the information and explanations given to us, the central Government has not been prescribed maintenance of cost records under section 209(1) (d) of the companies act, 1956, in respect of the activities carried on by the company.

9) (a) according to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, investor education and Protection Fund, Employees state insurance, income tax, Value added tax, sales tax, Wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities. according to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31st march, 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues outstanding of income tax, sales tax, Value added tax, service tax, customs duty, Wealth tax, excise duty or cess on account of any dispute other than the following:

Sr. Name of the Statute Amount Forum where dispute is No. pending

1 Income tax act, 1961 Rs. 558,587/- Commissioner of Income Tax (appeals)

10) the company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial years.

11) according to the information and explanations given to us and based on the documents and records produced to us, the company has not defaulted in repayment of dues to banks. the company does not have dues to financial institutions or outstanding debentures.

12) according to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) in our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/ societies.

14) in our opinion and according to the information and explanations given to us, the company has maintained proper records of the transactions and contracts in respect of investments purchased and sold during the year and timely entries have been made therein. the investments made by the company are held in its own name.

15) in our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and other financial institutions.

16) according to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loans were obtained.

17) according to the information and explanations given to us and on an overall examination of the Balance sheet and cash Flows of the company, we report that the company has not utilized funds raised on short-term basis for long-term investment.

18) the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the companies act, 1956.

19) the company did not issue any debentures during the year.

20) We have verified the end use of money raised by public issue as disclosed in note 2 of schedule 19. Pending utilization of the funds raised through public issue, a sum of Rs. 1,388,377,300/- has been temporarily invested in mutual Funds and Bank deposits.

21) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For and on behalf of Kalyaniwalla & Mistry Chartered accountants Firm Registration no. 104607W

Ermin K. Irani Partner Membership no. 35646

Place: Mumbai Dated: may 07, 2011


Mar 31, 2010

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph (3) of our report of even date.

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.

2) (a) The Management has conducted physical verification of inventory at reasonable intervals.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the

register maintained under Section 301 of the Companies Act, 1956

(b) Consequently, the question of commenting on the rates of interest and conditions of the loans granted being prejudicial to the interests of the Company, receipt of regular principal and the interest and reasonable steps for recovery of principal and interest does not arise.

(c) The Company has taken an unsecured loan of Rs. 650 lacs from two companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 550 lacs and year-end balance of loan taken from such party is Rs. Nil.

(d) The rate of interest and the other terms and conditions of the unsecured loan taken is not prima facie prejudicial to the interest of the Company.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. There are no sales of service. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956 have been entered into the register required to be maintained under that section.

(b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.

6) In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956, and the rules framed there under, in respect of the deposit accepted from the public.

7) The Company has an internal audit system which in our opinion is commensurate with the size of the Company and nature of its business.

8) In our opinion and according to the information and explanation given to us the Central Government has not prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

9) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Value Added Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues, payable in respect of above as at 31 st March, 2010 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues outstanding of Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess on account of any dispute other tan the following:

b) Without qualifying our opinion, we draw attention to the fact that as referred to in Note 9b of Schedule 19-Notes to Accounts, regarding a loan of Rs.709.74 lakh to GIL ESOP Trust for purchase of the Holding Companys shares from the market equivalent to options granted under an Employee Stock Option Plan. As at 31st March, 2010, the market value of the shares held by the GIL ESOP Trust is lower than the cost of acquisition of the shares by Rs.290.16 lakh. The repayment of the loans granted to the GIL ESOP Trust is dependant on the exercise of the options by the employees and the market price of the underlying equity shares of the unexercised options at the end of the exercise period. In the opinion of the management, the fall in value of the underlying equity shares is on account of current market volatility and the loss, if any , can be determined only at the end of the exercise period, in view of which provision for the diminution is not considered necessary in the financial statements.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

iii) in the case of the Cash Row Statement, of the cash flows of the Company for the year ended on that date.

7. On the basis of the written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

Sr. No. Name of the Statute Amount Forum where dispute is pending 1 Income Tax Act, 1961 3,369,812/- Commissioner of Income Tax (Appeals)

10) The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial year.

11) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks. The Company does not have dues to financial institutions or outstanding debentures.

12) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of the transactions and contracts in respect ot investments purchased and soid during the year and timety entries have been made therein The investments made by the Company are held in its own name.

15) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and other financial institutions.

16) According to the information and explanations given to us and based on the documents and records examined by us, on an overall basis, the term loan has been applied for the purpose for which the loan were obtained

17) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long-term investment.

18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The Company did not issue any debentures during the year.

20) We have verified the end use of money raised by public issue as disclosed in Note 2 of Schedule 19. Pending utilization of the funds raised through public issue, a sum of Rs. 25,559.01 lakh has been temporarily invested in Mutual Funds and Bank Deposits.

21) Based on the audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of Kalyaniwalla & Mistry

Chartered Accountants

Firm Registration No. 104607W

Ermin K. Irani

Partner

Membership No. 35646

Place: Mumbai Dated: May 17,2010

 
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