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Godrej Properties Ltd.

BSE: 533150 Sector: Infrastructure
NSE: GODREJPROP ISIN Code: INE484J01027
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VOLUME 28883
52-Week high 2598.00
52-Week low 1200.10
P/E 576.03
Mkt Cap.(Rs cr) 50,759
Buy Price 1825.35
Buy Qty 3.00
Sell Price 1826.55
Sell Qty 54.00
OPEN 1867.00
CLOSE 1867.00
VOLUME 28883
52-Week high 2598.00
52-Week low 1200.10
P/E 576.03
Mkt Cap.(Rs cr) 50,759
Buy Price 1825.35
Buy Qty 3.00
Sell Price 1826.55
Sell Qty 54.00

Godrej Properties Ltd. (GODREJPROP) - Auditors Report

Company auditors report

To the Members of Godrej Properties Limited

Report on the Audit of the Standalone financial statements

Opinion

We have audited the standalone financial statements of Godrej Properties Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) the standalone statement of changes in equity and the standalone statement ofcash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation in which are incorporated returns from branches in Singapore Qatar and UnitedArab Emirates (hereinafter referred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (‘the Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and its loss and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the Act and the Rules thereunder and we have fulfilled ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the Standalone financial statements.

Emphasis of Matter

A) We draw attention to Note 47 of the standalone financial statements which describesthe accounting for the Scheme of Amalgamation between the Company and Wonder SpaceProperties Private Limited a wholly owned subsidiary (‘the Scheme' or ‘businesscombination'). The Scheme has been approved by the National Company Law Tribunal(‘NCLT') vide its order dated 14 September 2020 and a certified copy has been filedby the Company with the Registrar of Companies Mumbai Maharashtra on 26 October 2020.The appointed date as per the NCLT approved Scheme is 5 April 2019 and as per therequirements of Appendix C to Ind AS 103 "Business Combination" the businesscombination has been accounted for as if it had occurred from the date of acquisition ofcontrol i.e. 5 April 2019. Accordingly the amounts relating to the financial year ended31 March 2020 include the impact of the business combination and have been restated by theCompany after recognising the effect of the amalgamation as above. The aforesaid note(Note 47) also describes in detail the impact of the business combination on thestandalone financial statements. Our opinion is not modified in respect of the abovematter.

B) We draw attention to Note 43 to the standalone financial statements relating toremuneration paid/ payable to the Managing Director & CEO of the Company for thefinancial year ended 31 March 2021 being in excess of the limits prescribed under Section197 of the Act by Rs 37.94 crores which is subject to the approval of the shareholders.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone of the financial statements of the currentperiod. These matters were our other addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

Revenue Recognition (Refer note 29 to the standalone financial statements)

The Key Audit Matter How the matter was addressed in our audit
The Company's most significant revenue streams involve sale of residential and commercial units representing 33.90% of the total revenue from operations of the Company. Our audit procedures included following:
• Evaluating the design and implementation and tested operating effectiveness of key internal controls over revenue recognition.
Revenue is recognised post transfer of control of residential and commercial units to customers for the amount /consideration which the Company expects to receive in exchange for those units. The trigger for revenue recognition is normally completion of the project or receipt of approvals on completion from relevant authorities or intimation to the customer of completion post which the contract becomes non- cancellable. The Company records revenue over time till the actual possession to the customers or on actual possession to the customers as determined by the terms of contract with customers. • Evaluating the accounting policies adopted by the Company for revenue recognition to check those are in line with the applicable accounting standards and their consistent application to the significant sales contracts.
• Scrutinising the revenue journal entries raised throughout the reporting period and comparing details of a sample of these journals which met certain risk-based criteria with relevant underlying documentation.
• Testing timeliness of revenue recognition by comparing individual sample sales transactions to underlying contracts.
• Conducting site visits during the year for selected projects to understand the scope nature and progress of the projects.
The risk for revenue being recognised in an incorrect period presents a key audit matter due to the financial significance and geographical spread of the Company's projects across different regions in India. • Considering the adequacy of the disclosures in the standalone financial statements in respect of the judgments taken in recognising revenue for residential and commercial property units in accordance with Ind AS 115.
Measurement of revenue recorded over time which is dependent on the estimates of the costs to complete Revenue recognition prior to receipt of Occupancy Certificate/ similar approval and intimation to the customer
Revenue recognition involves significant estimates related to measurement of costs to complete for the projects. Revenue from projects is recorded based on the Company's assessment of the work completed costs incurred and accrued and the estimate of the balance costs to complete. • Obtaining and understanding revenue recognition process including identification of performance obligations and determination of transfer of control of the asset underlying the performance obligation to the customer.
• Evaluating revenue overstatement or understatement by assessing Company's key judgments in interpreting contractual terms.
Considering the significant estimate involved in measurement of revenue we have considered measurement of revenue as a key audit matter. Determining the point in time at which the control is transferred by evaluating Company's in-house legal interpretations of the underlying agreements i.e. when contract becomes non-cancellable.
• Identifying and testing operating effectiveness of key controls around approvals of contracts milestone billing intimation of possession letters / intimation of receipt of occupation certificate and controls over collection from customers.
• Testing sample sales of units for projects with the underlying contracts completion status and proceeds received from customers.
• Requesting confirmations on a sample basis from major customers for selected projects and reconciling them with revenue recognised. In case of non-receipt of confirmations we have performed alternative procedures by comparing details with contracts collection details and other underlying project related documentation.
Measurement of revenue recorded over time which is dependent on the estimates of the costs to complete
• Identifying and testing operating effectiveness of key controls over recording of project costs.
• Assessing the costs incurred and accrued to date on the balance sheet by examining underlying invoices and signed agreements on a sample basis. Assessing contract costs to check no costs of revenue nature are incorrectly recorded in the balance sheet.
• Comparing on a sample basis revenue transactions recorded during the year with the underlying contracts progress reports invoices raised on customers and collections in bank accounts. Also checked the related revenue had been recognised in accordance with the Company's revenue recognition policies.
• Comparing the costs to complete workings with the budgeted costs and inquiring for variance.
• Sighting Company's internal approvals on sample basis for changes in budgeted costs along with the rationale for the changes.

Inventories (Refer note 13 to the standalone financial statements)

The Key Audit Matter How the matter was addressed in our audit
Inventories held by the Company comprising of finished goods and construction work in progress represent 14.04% of the Company's total assets. Inventory may be held for long periods of time before sale making it vulnerable to reduction in net realisable value (NRV). This could result in an overstatement of the value of inventory when the carrying value is higher than the NRV Our audit procedures included:
• Understanding from the Company the basis of estimated selling price for the unsold units and units under construction.
Assessing NRV
NRV is the estimated selling price in the ordinary course of business less estimated costs necessary to make the sale and estimated costs of completion (in case of construction work-in- progress). The inventory of finished goods and construction work-in- progress is not written down below cost when completed flats/ under-construction flats / properties are expected to be sold at or above cost. • Evaluating the design and testing operating effectiveness of controls over preparation and update of NRV workings by designated personnel. Testing controls related to Company's review of key estimates including estimated future selling prices and costs of completion for property development projects.
For NRV assessment the estimated selling price is determined for a phase sometimes comprising multiple units. The assessment and application of write-down of inventory to NRV are subject to significant judgement by the Company. • Evaluating the Company's judgement with regards to application of write-down of inventory units by auditing the key estimates data inputs and assumptions adopted in the valuations. Comparing expected future average selling prices with available market conditions such as price range available under industry reports published by reputed consultants and the sales budget plans maintained by the Company.
As such inappropriate assumptions in these judgements can impact the assessment of the carrying value of inventories. • Comparing the estimated construction costs to complete each project with the Company's updated budgets. Recomputing the NRV on a sample basis to test inventory units are held at the lower of cost and NRV.
Considering the Company's judgement associated with long dated estimation of future market and economic conditions and materiality in the context of total assets of the Company we have considered assessment of NRV of inventory as a key audit matter.

Deferred Tax Assets (Refer note 11 to the standalone financial statements)

The Key Audit Matter How the matter was addressed in our audit
Recognition and measurement of deferred tax assets Our audit procedures included:
Under Ind AS the Company is required to reassess recognition of deferred tax asset at each reporting date. The Company has deferred tax assets in respect of brought forward losses and other temporary differences as set out in note 11 (b) to the standalone financial statements. • Obtaining the approved business plans projected profitability statements for the existing ongoing projects.
The Company's deferred tax assets in respect of brought forward business losses are based on the projected profitability. This is determined on the basis of approved business plans demonstrating availability of sufficient taxable income to utilise such brought forward business loss. • Evaluating the design and testing the operating effectiveness of controls over quarterly assessment of deferred tax balances and underlying data.
• Evaluating the projections of future taxable profits. Testing the underlying data and assumptions used in the profitability projections and performing sensitivity analysis. Checking other convincing evidence like definitive agreements for land / development rights and verifying the project plans in respect of new projects and review of contractual agreements with customers and estimates on unsold inventory for existing projects.
We have identified recognition of deferred tax assets as key audit matter because of the related complexity and subjectivity of the assessment process. The assessment process is based on assumptions affected by expected future market or economic conditions. • Assessing the recoverability of deferred tax assets by evaluating profitability Company's forecasts and fiscal developments.
• Focusing on the adequacy of the Company's disclosures on deferred tax and assumptions used. The Company's disclosures concerning income taxes are included in note 11 to the standalone financial statements.

Investment in subsidiaries joint ventures and an associate and loans/financialinstruments to group entities. (Refer note 6 7 9 and 18 to the standalone financialstatements)

The Key Audit Matter How the matter was addressed in our audit
The carrying amount of the investments in subsidiaries joint ventures and an associate held at cost less impairment represents 7.77% of the Company's total assets. The loans/financial instruments to subsidiaries and joint ventures represents 30.05% of the Company's total assets. Recoverability of investments in joint ventures and an associate
Our audit procedures included:
Recoverability of investments in subsidiaries joint ventures and an associate • Evaluating design and implementation and testing operating effectiveness of controls over the Company's process of impairment assessment and approval of forecasts.
• Assessing the valuation methods used financial position of the subsidiaries joint ventures and an associate to identify excess of their net assets over their carrying amount of investment by the Company and assessing profit history of those subsidiaries joint ventures and an associate.
The Company's investments in subsidiaries joint ventures and an associate are carried at cost less any diminution in value. The investments are assessed for impairment at each reporting date. The impairment assessment involves the use of estimates and judgements. The identification of impairment event and the determination of an impairment charge also require the application of significant judgement by the Company. The judgement in particular is with respect to the timing quantity and estimation of projected cash flows of the real estate projects in these underlying entities. • For the investments where the carrying amount exceeded the net asset value understanding from the Company regarding the basis and assumptions used for the projected profitability.
• Verifying the inputs used in the projected profitability.
In view of the significance of these investments and above we consider valuation / impairment of investments in subsidiaries joint ventures and an associate to be a key audit matter. • Testing the assumptions and understanding the forecasted cash flows of subsidiaries joint ventures and an associate based on our knowledge of the Company and the markets in which they operate.
• Assessing the comparability of the forecasts with historical information.
• Analysing the possible indications of impairment and understanding Company's assessment of those indications.
• Considering the adequacy of disclosures in respect of the investments in subsidiaries joint ventures and an associate.

Investment in subsidiaries joint ventures and an associate and loans/financialinstruments to Company entities.

(Refer note 6 7 9 and 18 to the standalone financial statements)

The Key Audit Matter How the matter was addressed in our audit
Recoverability of loans/financial instruments to subsidiaries and joint venture Recoverability of loans/financial instruments to subsidiaries and joint venture
Our procedures included:
The Company has extended loans/financial instruments to joint ventures and subsidiaries. These are assessed for recoverability at each period end. • Evaluating the design and implementation and testing operating effectiveness of key internal controls placed around the impairment assessment process of the recoverability of the loans/financial instruments.
Due to the nature of the business in the real estate industry the Company is exposed to heightened risk in respect of the recoverability of the loans/financial instruments granted to the aforementioned parties. In addition to nature of business there is also significant judgment involved as to the recoverability of the working capital and project specific loans/ financial instruments. This depends on property developments projects being completed over the time period specified in agreements. • Assessing the net worth of subsidiaries and joint ventures on the basis of latest available financial statements.
• Assessing the controls for grant of new loans/financial instruments and sighting the Board approvals obtained. We have tested Company's assessment of the recoverability of the loans/financial instruments which includes cash flow projections over the duration of the loans/ financial instruments. These projections are based on underlying property development appraisals.
We have identified measurement of loans/financial instruments to subsidiaries and joint ventures as key audit matter because recoverability assessment involves Company's significant judgement and estimate. • Tracing loans/financial instruments advanced / repaid during the year to bank statement.
• Obtaining independent confirmations to assess completeness and existence of loans/financial instruments and advances given to subsidiaries and joint ventures as on 31 March 2021.

Other Information

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so. The Board ofDirectors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone

Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detectamaterialmisstatementwhenit deficiencies in internal controlthat we exists. Misstatements can arise from fraud or error and are consideredmaterial if individually or in the aggregate they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these standalone financialstatements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events the or conditions that may cast significantCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 (‘the Order') issuedby the Central Government of India in terms of Section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) As required by Section 143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus;

(c) the standalone balance sheet the standalone statement of profit and loss(including other comprehensive income) the standalone statement of changes in equity andthe standalone statement of cash flows dealt with by this report are in agreement with thebooks of account and with the returns received from the branches not visited by us; \

(d) in our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act;

(e) on the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164 (2) of the Act; and

(f) with respect to the adequacy of the internal financial controls with reference tothe standalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements Refer Note 48 to thestandalone financial statements; ii. the Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2021; and

iv. the disclosures in the standalone financial statements regarding holdings as wellas dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under Section 197(16) of the Act we report that:

i. We draw attention to Note 43 to the standalone financial statements relating toremuneration paid / payable to the Managing Director & CEO of the Company for thefinancial year ended 31 March 2021 being in excess of the limits prescribed under Section197 of the Act by Rs 37.94 crores which is subject to the approval of the shareholders.Our opinion is not modified in respect of this matter; and

ii. the Ministry of Corporate Affairs has not prescribed other details under Section197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Partner
Mumbai Membership No: 105149
3 May 2021 UDIN: 21105149AAAADA7376

Annexure A to the Independent Auditors' Report - 31 March 2021

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the financial statements for the year ended 31 March 2021 wereport the following:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets including property plant and equipmentand investment properties and investment property under construction.

(b) The Company has a regular programme of physical including property verificationplant and equipment and investment properties by which the fixed assets includingproperty plant and equipment and investment properties are verified by the managementaccording to a phased programme designed to cover all the items over a period of threeyears. In our opinion this periodicity of physical verification is reasonable havingregard to the size of the Company and the nature of its assets. In accordance with thepolicy the Company has physically verified certain property plant and equipment andinvestment properties during the year and no discrepancies were noticed in respect ofassets verified during the year.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 2 and 4 to the standalone financial statements are held in the name ofthe Company.

(ii) The inventory comprising of raw material and finished goods has been physicallyverified by the management during the year except for raw material stocks lying with thirdparties. In our opinion the frequency of such stocks lying verification with thirdparties at the year-end written confirmations have been obtained. No discrepancies werenoticed stocks and the on verification book records. The Company's inventory also includesconstruction work in progress and entitlement to Transferable Development Rights to whichthe requirements under paragraph 3(ii) of the Order are not applicable.

(iii) The Company has granted unsecured loans to eleven companies and thirty fivelimited liability partnerships covered in the register maintained under Section 189 of theCompanies Act 2013 (‘the Act'). The Company has not granted any loans secured orunsecured to firms or other parties covered in the register required to be maintainedunder Section 189 of the Act.

i) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the rate of interest and otherterms and conditions of unsecured loans granted by the Company to companies and limitedliability partnerships covered in the register required to be maintained under Section 189of the Act are not prima facie prejudicial to the interest of the Company.

ii) According to the information and explanations given to us and based on the auditprocedures conducted by us the unsecured loans granted to the companies and the interestthereon are repayable as per contractual terms and the unsecured loans granted to limitedliability partnerships and the interest thereon are repayable on demand or repayable asper contractual terms of the respective limited liability partnership agreements. Theborrowers have been regular in payment of principal and interest as demanded or as percontractual terms as applicable.

iii) There are no overdue amounts of more than 90 days in respect of the unsecuredloans granted to companies and limited liability partnerships by the Company.

(iv) In our opinion and according to the information and explanations given to us andbased on the audit procedures conducted by us the Company has complied with theprovisions of Sections 185 and 186 of the Act with respect to loans granted guaranteesprovided and investments made by the Company. The Company has not provided any security inconnection with a loan to any other body corporate or person and accordingly complianceunder Sections 185 and 186 of the Act in respect of providing securities is not applicableto the Company.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records. \

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' StateInsurance Goods and Services tax Labour cess Professional tax Property tax Cess andother material statutory dues have been regularly deposited during the year by the Companywith the appropriate authorities. Amounts deducted / accrued in the books of account inrespect of undisputed statutory dues of Income-tax have generally been regularly depositedduring the year by the Company with the appropriate authorities though there have beenslight delays in a few cases. As explained to us the Company did not have any dues onaccount of wealth tax and Custom duty.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Goods andServices tax Labour cess Professional tax Property tax Cess and other materialstatutory dues were in arrears as at 31 March 2021 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales tax Service tax Value added tax and Goods and Services tax as at 31March 2021 which have not been deposited with the appropriate authorities on account ofany dispute except as stated below:

Name of the statute Nature of the dues Amount not deposited on account of demand Rupees in crores* Financial year (F.Y.) to which the amount relates Forum where dispute is Pending
MVAT Act 2002 Entry Tax 0.77 2012-13 The Joint Commissioner of MVAT (Appeal -4) Mumbai
MVAT Act 2002 Value Added Tax 3.30 2008-09 The Joint Commissioner of Sales Tax (Appeals V) Mumbai
MVAT Act 2002 Value Added Tax 0.04 2011-12 The Joint Commissioner of Sales Tax (Appeals V) Mumbai
Finance Act 1994 Service Tax 42.64 2005-06 to 2010-11 Custom Excise & Service Tax Appellate Tribunal Bangalore
Finance Act 1994 Service Tax 5.82 2012-13 to 2014-15 Custom Excise & Service Tax Appellate Tribunal Mumbai
Finance Act 1994 Service Tax 9.92 2014-15 and 2015- Custom Excise & Service Tax Appellate Tribunal Mumbai
16
Finance Act 1994 Service Tax 0.45 2008-09 to 2011-12 Custom Excise & Service Tax Appellate Tribunal Bangalore
Finance Act 1994 Service Tax 4.39 2010-11 to 2012-13 Custom Excise & Service Tax Appellate Tribunal Bangalore
MVAT Act 2002 Value Added Tax 4.47 2007-08 The Joint Commissioner of Sales Tax (Appeals V) Mumbai
MVAT Act 2002 Value Added Tax 4.92 2009-10 The Joint Commissioner of Sales Tax (Appeals V) Mumbai
MVAT Act 2002 Value Added Tax 0.99 2010-11 The Joint Commissioner of
Sales Tax (Appeals V) Mumbai
MGST Act 2017 Goods and Services Tax 13.21 2017-18 Bombay High Court
Finance Act 1994 Service Tax 5.53 2016-17 & 2017-18 Custom Excise & Service Tax Appellate Tribunal Mumbai
CGST Act 2017 Goods and Services Tax 0.06 2017-18 Appeal to be filed before Commissioner (Appeal)
Income Tax Act 1961 Income tax 0.37 2006-07 Commissioner or Income Tax (Appeals)
Income Tax Act 1961 Income tax 0.04 2011-12 Commissioner or Income Tax (Appeals)
Income Tax Act 1961 Income tax 0.22 2012-13 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income tax 0.49 2013-14 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income tax 1.24 2013-14 Income Tax Appellate Tribunal
Income Tax Act 1961 Income tax 2.20 2014-15 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income tax 1.14 2014-15 Income Tax Appellate Tribunal
Income Tax Act 1961 Income tax 0.05 2015-16 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income tax 0.74 2015-16 Income Tax Appellate Tribunal

* net of amount deposited under protest

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted during the year in repayment of loans or borrowings to banksor financial institutions or dues to debenture holders. The Company does not have anyloans or borrowings from government during the year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and has notobtained any term loans during the year. Accordingly paragraph 3 (ix) of the Order is notapplicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company due to inadequate profits during the currentyear the managerial remuneration paid / payable to the Managing Director & CEO of theCompany is in excess of the limits specified under Section 197 of the Act read withSchedule V to the Act by Rs 37.94 crores. The Company is in the process of obtainingapproval from Shareholders for such excess remuneration paid / payable. Further themanagerial remuneration paid / payable to the Executive Chairman is in accordance with theprovisions of Section 197 of the Act read with Schedule V to the Act. The subsidiarycompanies associate and joint venture companies incorporated in India did not pay anyremuneration to directors of the Company during the year.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usthe Company has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required byIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act

(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has made private placement ofequity shares during the year in compliance with the requirements of Section 42 of theAct. Out of the total money raised aggregating Rs 3750 crores Rs 52.61 crores has beenutilised till 31 March 2021 (also Refer note 53 to the standalone financial statements).Pending utilisation of the funds raised by issue of equity shares the funds aggregatingto Rs 3697.39 crores were used for purposes other than for which they were raised andwere temporarily invested in mutual funds and bank deposits. In the previous year hasmade private placement of equity shares during the year in compliance with therequirements of Section 42 of the Act. Out of the total money raised aggregating Rs 2100crores Rs 121.56 crores was utilised by the Company for which it was raised in theprevious year and the funds aggregating to Rs 1406.21 crores has been utilised by theCompany for which it was raised in the current year (also Refer note 53 to the standalonefinancial statements). Pending utilisation of the funds raised by issue of equity sharesthe funds aggregating to Rs 572.23 crores were used for purposes other than for which theywere raised and were temporarily invested in mutual funds and bank deposits. The Companyhas not made any private placement of fully or partly convertible debentures during theyear.

(xv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Partner
Mumbai Membership No: 105149
3 May 2021 UDIN: 21105149AAAADA7376

Annexure B to the Independent Auditors' Report - 31 March 2021

Report on the Internal Financial Controls with reference to the aforesaid financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act") (Referred to in paragraph (A) (f) under ‘Report on Other Legaland Regulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Godrej Properties Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2021 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal controls with referenceto standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with respect to standalone financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder Section 143 (10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to standalone financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to standalone financial statements were established and maintainedand whether such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system with respect to standalone financial statements and theiroperating effectiveness. Our audit of internal financial controls with respect tostandalone financial statements included obtaining an understanding of internal financialcontrols with respect to standalone financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system withreference to standalone financial statements.

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Partner
Mumbai Membership No: 105149
3 May 2021 UDIN: 21105149AAAADA7376

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