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Godrej Properties Ltd.

BSE: 533150 Sector: Infrastructure
NSE: GODREJPROP ISIN Code: INE484J01027
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VOLUME 16478
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OPEN 510.00
CLOSE 503.60
VOLUME 16478
52-Week high 917.00
52-Week low 462.00
P/E 157.26
Mkt Cap.(Rs cr) 11,865
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Godrej Properties Ltd. (GODREJPROP) - Director Report

Company director report

DIRECTORS' REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31 2018

TO THE MEMBERS

The Directors have pleasure in presenting the Thirty-Third Directors' Report of yourCompany along with the financial statements tor the financial year ended March 312018.

1. OPERATING RESULT :

Certain key aspects of the Company's performance (on a standalone basis) during thefinancial year ended March 312018 as compared to the previous financial year aresummarized below:

Particulars Financial Year Financial Year
2017 - 2018 2016 - 2017
Revenue from Operations 955.83 998.63
Other Income 493.61 222.40
Total Income 1449.44 1221.03
Profit before Tax 373.54 266.08
Profit after Tax 240.85 196.51
Other Comprehensive Income (2.76) (0.31)
Total Comprehensive Income 238.09 196.20

2. DIVIDEND:

In terms of the Regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI LODRRegulations") the Dividend Distribution Policy of the Company is appended asAnnexureI to this Report and also available on the website of the Company athttps://www.godreiproperties.com/investor/corporategovernance .

Keeping in view of the overall objective of improving Return on Capital Employedthrough various projects being added in Company's portfolio the Board believes thatconserving and investing the Company's capital in the many high return investmentopportunities currently available instead of distributing it as a dividend will maximizeshareholder value creation. The Board therefore felt that in the interest of the minorityretail investors the Company should utilize the internal accruals on its projects ratherthan paying dividend to shareholders. The Directors have therefore not recommended anydividend for the financial year ended March 312018.

3. SHARE CAPITAL:

During the financial year ended March 312018 the Company had issued and allotted115436 equity shares of' 5/- each of the Company to its eligible employees on exercise ofoptions granted under the Godrej Properties Limited Employee Stock Option Scheme 2011(GPL ESGS). Consequently the issued subscribed and paid-up equity share capital of theCompany has increased to 216480128 equity shares of' 5/- each. The Company has neitherissued shares with differential rights as to dividend voting or otherwise nor issuedshares (including sweat equity shares) to the employees or Directors of the Company underany Scheme other than GPL ESGS.

4. OVERVIEW OF OPERATIONS:

For the financial year under review GPL's total income stood at ' 2397 crore on aconsolidated basis an increase of 38% compared to the previous year. EBITDA increased by25% to ' 503 crore and net profit increased by 14% to ' 235 crore.

In a weak real estate market GPL delivered a very strong performance. GPL added 12 newprojects with 23.5 million sq.ft saleable area potential in aggregate located acrossBengaluru Pune National Capital Region and Mumbai. The projects added are all ofsubstantial size and are in line with the Company's long term strategy of focusing onvalue accretive and risk efficient models. These new projects have further strengthenedGPL's project pipeline and will drive the Company performance in coming years.

From sales perspective we significantly outperformed the market. Though the real estatemarket slowdown continued leading to a decline in sales over the previous year GPL'ssales grew by 152% from ' 2020 crore in FY17 to ' 5083 crore in FY18 making us India'slargest publicly listed developer by value of real estate sales. We launched 10 newprojects in FY18 across our 4 growth markets leading to over ' 2200 crore inbooking value. Most notable of these were The Suites in Greater Noida Godrej 24 in Puneand Godrej Air in Bengaluru where over 1300 units were sold within a month of launchgenerating over ' 1000 crore in sales. These successful launches were further complimentedby an equally strong performance in sustenance sales. The Company achieved sales of morethan 6 million square feet in FY18 which was twice the area sold in the previous year andas a result significantly strengthened GPL's market position helping it to become one ofthe Top 3 players in each of its four key growth markets.

On the operational front we successfully delivered over 3 million sq.ft across ourprojects. We have now delivered over 18 million sq. ft. of real estate in the last fiveyears. Our delivery

record demonstrates that we can operate at a large scale and keep pace with ouraccelerating sales.

GPL is committed to deliver on its vision of being amongst the nation's top 3 realestate companies and was recognized for the ‘Best Developer of the year 2017' awardby Construction Times Builders Award ‘Developer of the Year - Residential' award byReal Estate Company of the Year 2017 - APAC Insider and ‘Outstanding Contribution inReal Estate Sector' award by 5th National Conference Resident WelfareAssociations (NCRWA) Exhibition - Mumbai. Sustainable development is an important part ofour vision and we received several recognitions for our efforts on environment and safetysuch as ‘Leader in Sustainable Real Estate Developments' award by 2017 Grohe HurunReport and ‘Golden Peacock National Quality Award' by Institute Of Directors (IOD).GPL received significant external recognition with a total of 47 awards being receivedinFY18.

The Company's credit rating has been reaffirmed by ICRA at AA with continued access tocheaper capital showcasing confidence in the Company's operations.

5. FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY:

Consumer demand for residential real estate continued to remain low in FY18. Inaddition key reforms like Real Estate Regulation and Development Act (RERA) and Goods andService Tax (GST) were implemented leading to a decline in number of new projects launchedin FY18 potentially due to short-term uncertainty. The Company continue to believe thatthese reforms will lead to improved governance in the sector and bring about consolidationamongst real estate players. The Company remains positive about long term potential of thesector due to higher consumer confidence favorable interest rates rising disposableincome and stagnant real estate prices. The Company believes that we are in a strongposition to disproportionately benefit from expected shifts in the sector. With a strongbrand pan-India presence demonstrated track record and excellent sales & marketingcapabilities we are well poised for a high growth trajectory over next few years.

This Company will continue to add new projects on a Development Management Model on afee basis as well as through joint development agreement with land owners working with ourresidential investment platform to enter projects which require significant upfrontcapital. The Company will continue to focus on 4 key markets - Mumbai NCRBengaluru and Pune while at the same time opportunistically evaluating other markets.When evaluating new projects we will continue to seek superior long-term growth inshareholder value by maximizing returns through optimal financing and fiscal discipline.

On the operational front the Company shall continue to focus on business developmentactivities to create a healthy project pipeline across our growth markets quick projectlaunch turnaround times to optimize return on capital delivering exceptional customerservice and experiences to promote loyalty and using technology for increased constructionproductivity and higher quality.

6. DEPOSITORY SYSTEM:

Your Company's equity shares are availabletordematerialisation through NationalSecurities Depository Limited and Central Depository Services (India) Limited. As on March31 2018 99.98 % of the equity shares of the Company were held in dematerialised form.

7. CORPORATE RESTRUCTURING:

(A) . Scheme of Arrangement between Godrej

Vikhroli Properties India Limited (‘GVPIL') and Godrej Green Homes Limited(‘GGHL') and Godrej Highrises Properties Private Limited (‘GHPPL'j

Godrej Vikhroli Properties India Limited was developing a mixed use project whichconsists of premium commercial office space (‘the Commercial Project') residentialtowers (‘the Residential Project') and a luxury hotel (‘the Hotel Project').

Pursuant to the Scheme of Arrangement tor demerger of the businesses of GVPIL theCommercial Project and the Hotel Project has been segregated info separate companies suchthat if will result in focused approach to exploit the growth potential of each of theprojects. Accordingly the Commercial Project is transferred to Godrej Green Homes Limitedand the Hotel Project has come under Godrej Highrises Properties Private Limited. TheNational Company Law Tribunal Mumbai Bench (‘Tribunal') has sanctioned the Scheme ofArrangement on November 10 2017. The appointed date of the Scheme was March 312017.

(B) . Scheme of Amalgamation of Godrej Vikhroli

Properties India Limited with Godrej Properties Limited (‘The Company')

Godrej Vikhroli Properties India Limited (GVPIL) a wholly owned subsidiary of theCompany was amalgamated with the Company in terms of the Scheme of Amalgamation (Scheme)approved by the National Company Law Tribunal Mumbai Bench vide its order dated December07 2017. Pursuant to the Scheme of Amalgamation the Residential Project of GVPIL hascome under the Company. The appointed date of the Scheme was April 012017.

(C). Scheme of Amalgamation of Godrej Real Estate Private Limited with GodrejProperties Limited (‘The Company'):

Godrej Real Estate Private Limited (GREPL) a wholly owned subsidiary of the Companywas amalgamated with the Company in terms of the Scheme of Amalgamation (Scheme) approvedby the National Company Law Tribunal Mumbai Bench vide its order dated April 11 2018.The appointed date of the Scheme was April 012017.

8. ISSUE OF NON-CONVERTIBLE DEBENTURES:

During the year the Company has issued unsecured rated listed redeemablenon-convertible debentures (NCDs) of ' 500 crore. The proceeds of the issue of NCDs wereutilized towards refinancing of existing debt as per the objects of the issue stated inthe Disclosure Document.

9. EXTRACT OF ANNUAL RETURN:

The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013(the "Companies Act") and as prescribed in Form No. MGT-9 of the Companies(Management and Administration) Rules 2014 as amended from time to time is appended asAnnexure II to this Report.

10. NUMBER OF MEETINGS OF THE BOARD:

The Board met 4 (four) times in the financial year ended March 312018 on May 04 2017August 02 2017 November 03 2017 and February 02 2018.

11. DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors hereby confirm that:

i. In the preparation of the annual accounts for the financial year ended March 312018 the applicable accounting standards have been followed along with proper explanationrelating to material departures.

ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 312018 and of the profit of theCompany for the year ended on March 312018.

iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act and rules madethereunder as amended for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.

iv. They have prepared the annual accounts tor financial year ended March 312018 on a‘going concern' basis.

v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and have been operating efficiently.

vi. They have devised proper systems to ensure compliance with provisions of allapplicable laws and that such systems were adequate and operating effectively.

12. DECLARATION BY INDEPENDENT DIRECTORS:

The Independent Directors of the Company have submitted the declaration of Independenceas required under Section 149(7) of the Companies Act confirming that they meet thecriteria of independence under Section 149(6) of the Companies Act and Regulation 16(1)(b)of SEBI LODR Regulations.

13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

The policy of the Company on directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under Section 178(3) of the Companies Act is appended as Annexure III tothis Report.

14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The details of loans given investments made guarantees given and securities providedunder Section 186 of the Companies Act have been provided in the notes to the standalonefinancial statements.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered into during the financial year 20172018 with Related Partiesas defined under the Companies Act and SEBI LODR Regulations were in the ordinary courseof business and on an arm's length basis. During the year the Company had not enteredinto any transaction referred to in Section 188 of the Companies Act with related partieswhich could be considered material under SEBI LODR Regulations. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3) of the CompaniesAct in Form AOC-2 is not applicable. Attention of Members is drawn to the disclosures oftransactions with related parties set out in Notes to Accounts - Note No 43 forming partof the Standalone financial statements.

As required under Regulation 23 of SEBI LODR Regulations the Company has formulated aRelated Party Transactions Policy which is available on the website of the Company athttps:// www.aodreiproperties.com/investor/corporateaovernance .

16. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: -

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between March 312018 and the date of this Report otherthan those disclosed in this Report.

17. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:

The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act readwith the Companies (Accounts) Rules 2014 is appended as Annexure IV to this Report.

18. BUSINESS RISK MANAGEMENT:

The Company has constituted a Risk Management Committee consisting of key executivesand an independent director to identify and assess business risks and opportunities. TheRisk Management Committee identifies the risks at both enterprise level and at projectlevel.

The business risks identified are reviewed by the Risk Management Committee and adetailed action plan to mitigate identified risks is drawn up and its implementation ismonitored. The key risks and mitigation actions are then placed before the Audit Committeeof the Company.

19. CORPORATE SOCIAL RESPONSIBILITY:

A Corporate Social Responsibility (CSR) Committee has been constituted in accordancewith Section 135 of the Companies Act. The details required under the Companies (CorporateSocial Responsibility Policy) Rules 2014 are given in CSR Report appended as Annexure Vto this Report. The CSR Policy is available on the website of the Company atwww.aodreiDroDerties.com/investors .

20. VIGIL MECHANISM:

The Company has established a vigil mechanism for directors employees and otherstakeholders to report their genuine concerns details of which have been given in theCorporate Governance Report forming part of this Annual Report.

21. ANNUAL EVALUATION OF PEFORMANCE OF THE BOARD:

The Company conducted a formal Board Effectiveness Review as part of its efforts toevaluate identify improvements and thus enhance the effectiveness of the Board ofDirectors (Board) its Committees and individual directors. This was in line with therequirements mentioned in the Companies Act and the SEBI LODR Regulations.

The Corporate HR team of Godrej Industries Limited and Associate Companies (GILAC)worked directly with the Executive Chairman and the Nomination and Remuneration Committeeof the Board to design and execute this process which was adopted by the Board. EachBoard Member completed a confidential online questionnaire providing vital feedback onhow the Board currently operates and how it might improve its effectiveness.

The survey comprised of four sections and compiled feedback and suggestions on:

• Board processes (including Board composition strategic orientation and teamdynamics);

• Individual committees;

• Individual Board members; and

• Chairman's Feedback Report

The following reports were created as part of the evaluation:

• Board Feedback Report

• Individual Board Member Feedback Report

• Chairman's Feedback Report

The overall Board Feedback Report was facilitated by Mr. Keki Dadiseth with theIndependent Directors. The Directors were vocal about the Board functioning effectivelybut also identified areas which show scope for improvement. The Individual Committees andBoard Members' feedback was shared with the Executive Chairman. Following his evaluationExecutive Chairman's Feedback Report was also compiled.

22. SUBSIDIARY COMPANIES:

A. Subsidiaries

During the financial year under review the Company incorporated a wholly ownedsubsidiary in United States of America known as Godrej Properties Worldwide INC.

As at March 31 2018 the Company had 16 subsidiaries under the Companies Act namelyGodrej Realty Private Limited Godrej Buildcon Private Limited Godrej Garden CityProperties Private Limited Godrej Projects Development

Limited (formerly known as Godrej Projects Development Private Limited) GodrejLandmark Redevelopers Private Limited Godrej Redevelopers (Mumbai) Private LimitedGodrej Home Developers Private Limited Godrej Hillside Properties Private Limited GodrejPrakriti Facilities Private Limited Godrej Highrises Properties Private Limited GodrejGenesis Facilities Management Private Limited Godrej Skyline Developers Private LimitedGodrej Residency Private Limited Prakritiplaza Facilities Management Private LimitedCitystar Infraprojects Limited and Godrej Properties Worldwide INC.

During the financial year under review GBTC I (Master) Pte. Ltd an investee companyof Godrej Fund Management had entered into Share Subscription Share Purchase andShareholders' Agreements with the Company in respect of Godrej Green Homes Limited (GGHL)pursuant to which the Company has sold 50% of the equity share capital of GGHL to GBTC I(Master) Pte. Ltd. Further the Company had sold its entire stake in its wholly ownedsubsidiary Godrej Investment Advisers Private Limited to Anamudi Real Estates LLP.Accordingly Godrej Investment Advisers Private Limited and its subsidiary Godrej FundManagement Pte Ltd has ceased to be subsidiaries of the Company.

The Company shall provide a copy of the financial statements of its subsidiarycompanies to the members of the Company on their request. The financial statements of itssubsidiary companies will also be kept open for inspection by any members at theregistered office of the Company during business hours and will also be available on thewebsite of the Company.

As at March 31 2018 Wonder Space Properties Private Limited Wonder City BuildconPrivate Limited Godrej Home Constructions Private Limited Godrej Greenview HousingPrivate Limited Wonder Projects Development Private Limited Godrej Real View DevelopersPrivate Limited Pearlite Real Properties Private Limited Godrej One Premises ManagementPrivate Limited and Godrej Green Homes Limited are associate companies of the Company.

B. Limited Liability Partnerships (LLPs)

Your Company is a partner in the following LLPs as of March 312018:

1. Godrej Property Developers LLP

2. Mosiac Landmarks LLP

3. Dream World Landmarks LLP

4. Oxford Realty LLP

5. Godrej SSPDL Green Acres LLP

6. MS Ramaiah Ventures LLP

7. Oasis Landmarks LLP

8. Caroa Properties LLP

9. Amitis Developers LLP

10. Godrej Construction Projects LLP

11. Godrej Housing Projects LLP

12. GodrejLandDevelopersLLP

13. Godrej Developers & Properties LLP

14. GodrejHighrisesRealtyLLP

15. Godrej Project Developers & Properties LLP

16. AR Landcraft LLP

17. GodrejHighviewLLP

18. PrakhyatDwellingsLLP

19. GodrejSkyviewLLP

20. Bavdhan Realty @ Pune 21 LLP

21. Godrej Green Properties LLP

22. Godrej Projects (Pune) LLP

23. Godrej Projects (Soma) LLP

24. Godrej Projects North Star LLP (formerly known as Godrej Century LLP)

25. Godrej Projects North LLP

(formerly known as Godrej Projects (Bluejay) LLP)

26. Sai Srushfi Onehub Projects LLP

27. Godrej Afhenmark LLP

28. Godrej Vesfamark LLP

29. Godrej Irismark LLP

30. Godrej Avamark LLP

C. Material Non-Listed Indian Subsidiary:

As at March 31 2018 Godrej Buildcon Private Limited a wholly owned subsidiary of theCompany was considered material non-listed Indian subsidiary under Regulation 24 of SEBILODR Regulations and accordingly one Independent Director of the Company was on the Boardof Godrej Buildcon Private Limited.

23. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES:

As required under SEBI LODR Regulations and Section 129 of the Companies Act theconsolidated financial statements have been prepared by the Company in accordance with theapplicable accounting standards and form part of the Annual Report. A statement containingthe salient features of the Financial Statements of the subsidiaries joint ventures andassociate companies of the Company in Form AOC-1 as required under Rule 5 of the Companies(Accounts) Rules

2014 form part of the notes to the financial statements. The highlights of performanceof subsidiaries associates and joint venture companies and their contribution to theoverall performance of the Company is given as Annexure A in Consolidated Financials.

24. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT 2013:

Sr. No. Particulars (Rs. in crore)
1 Accepted during the year -
2 Remained unpaid or unclaimed as at the end of the year 0.63
3 Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved:-
(i) at the beginning of the year -
(ii) maximum during the year -
(iii) at the end of the year -
4 details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act -

The Company has not accepted any deposits from its Directors.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the regulators/courts/tribunalswhich would impact the going concern status of the Company and its future operations.

26. INTERNAL FINANCIAL CONTROL SYSTEM:

The Company has an internal financial control system commensurate with the size scaleand complexity of its operations. The Company has in place a mechanism to identifyassess monitor and mitigate various risks to key business objectives. Major risksidentified by the businesses and functions are systematically addressed through mitigatingaction on continuing basis. These are routinely tested and certified by Statutory as wellas Internal Auditors. The audit observations on internal financial controls areperiodically reported to the Audit Committee.

27. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the Articles of Association of the Company and the provisions of theSection 152(6)(e) of the Companies Act Mr. Nadir Godrej (DIN: 00066195) will retire byrotation at the ensuing Annual General Meeting and being eligible offered himself torre-appointment. Mr. S. Narayan (00094081) who was appointed as an Independent Director ofthe Company had stepped down from the Board of Directors of the Company with effect fromclosure of the business hours on August 2 2017 owing to his other commitments. The Boardplaced on record its gratitude for the contribution made by Mr. Narayan during his tenureas Independent Director. The Board of Directors at its meeting held on February 02 2018re-appointed subject to approval of the members of your Company Mr. Pirojsha Godrej asthe Executive Chairman and Mr. Mohit Malhotra as Managing Director & Chief ExecutiveOfficer of the Company with effect from April 1 2018 for a period of 3 (three) years.

Mr. Pirojsha Godrej (DIN: 00432983) - Executive Chairman Mr. Mohit Malhotra (DIN:07074531) - Managing Director and Chief Executive Officer Mr. Rajendra Khetawat - ChiefFinancial Officer and Mr. Surender Varma - Company Secretary & Chief Legal Officer arethe Key Managerial Personnel of the Company as at the date of this Report.

28. STATUTORYAUDITORS' REPORT:

There are no qualifications reservations or adverse remarks or disclaimers made by BSR& Co. LLP Statutory Auditors in their report.

29. COST AUDITORS:

The Board of Directors of the Company on recommendation of Audit Committee appointedM/s. R Nanabhoy & Co Cost Accountants as Cost Auditors of the Company for thefinancial year 2018-19 at a fee of ' 105000 (Rupees One Lakh five thousand only) plusapplicable taxes and out of pocket expenses subject to the ratification of the said feesby the shareholders at the ensuing Annual General Meeting pursuant to Section 148 of theCompanies Act.

The cost audit report would be filed with the Central Government within prescribedtimelines.

30. SECRETARIAL AUDIT REPORT:

The Board of Directors of the Company have appointed A K Jain & Co. PractisingCompany Secretary to conduct the Secretarial Audit and his Report on Company'sSecretarial Audit is appended to this Report as Annexure VI.

There are no qualifications reservations or adverse remarks or disclaimers made by A.K. Jain & Co. Company Secretary in practice in their Secretarial Audit Report.

The Board further confirms that the Company has complied with all the provisions of theSecretarial Standards issued by the Institute of Company Secretaries of India.

31. FRAUD REPORTING:

There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act and Rules framed thereunder either to the Company or to the CentralGovernment.

32. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2) of SEBI LODR Regulations is appended to this Report.

33. CORPORATE GOVERNANCE:

Your Company is committed to maintaining the highest standards of Corporate Governanceand adhering to the corporate governance requirements as set out by Securities andExchange Board of India. The Report on Corporate Governance as stipulated under SEBI LODRRegulations forms part of the Annual Report. The Certificate from the Practicing CompanySecretary confirming compliance with the conditions of Corporate Governance as stipulatedunder Schedule V to SEBI LODR Regulations and applicable provisions of the Companies Actforms part of the Corporate Governance Report.

34. AUDIT COMMITTEE OF THE COMPANY:

Your Company's Audit Committee comprises the following 6 (six) Independent Directorsviz. Mr. Keki B. Dadiseth (Chairman) Mrs. Lalita D. Gupte Mr. Amit B. Choudhury Mr.Pranay D. Vakil Dr. Pritam Singh and Mr. Amitava Mukherjee.

The composition of the Audit Committee is in compliance with the requirements ofSection 177 of the Companies Act and Regulation 18 ofSEBI LODR Regulations.

35. PARTICULARS OF EMPLOYEES:

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Companies Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been

appended as Annexure VII to this Report. The information required pursuant to Section197 of the Companies Act read with Rule 5(2)&(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 in respect of employees of the Companyis available for inspection by the Members at registered office of the Company duringbusiness hours on working days up to the date of the ensuing Annual General Meeting. Itany Member is interested in obtaining a copy thereof such Member may write to the CompanySecretary whereupon a copy would be sent.

36. EMPLOYEES STOCK OPTION SCHEMES:

As required in terms of the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 the disclosure relating to Godrej Properties LimitedEmployee Stock Grant Scheme 2011 ("GPL ESGS") is appended as Annexure VIII tothis Report.

37. BUSINESS RESPONSIBILITY REPORT:

The Business Responsibility Report tor the financial year ended March 31 2018 asstipulated under Regulation 34(2) of SEBI LODR Regulations is attached as part of theAnnual Report.

38. AWARDS & RECOGNITIONS:

The Directors take pleasure in informing the Members that the Company its people andprojects were acknowledged with several awards and ratings during the financial year endedMarch 31 2018. The details of the award received are given at page no.8ot this Report.

39. ACKNOWLEDGMENTS:

The Directors wish to place on record their appreciation and sincere thanks to thecustomers joint venture partners shareholders banks financial institutions fixeddeposit holders vendors and other associates who through their continued support andcooperation have helped as partners in the Company's progress. The Directors alsoacknowledge the hard work dedication and commitment of the employees.

For and on behalf of the Board of Directors
of Godrej Properties Limited
Pirojsha Godrej
Place: Mumbai Executive Chairman
Date : May 04 2018 (DIN: 00432983)

1. BACKGROUND AND APPLICABILITY:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Regulations") require the top 500 listed companies (by market capitalisation)to disclose a Dividend Distribution Policy in the annual report and on the corporatewebsite.

The Board of Directors ("Board") of Godrej Properties Limited("Company") has adopted this Dividend Distribution Policy to comply with theserequirements.

The Company currently has only one class of shares viz. equity tor which this policyis applicable. The policy is subject to review it and when the Company issues differentclasses of shares.

2. DIVIDEND DISTRIBUTION PHILOSOPHY:

The Company is committed to driving superior value creation for all its stakeholders.The focus will continue to be on sustainable returns through an appropriate capitalstrategy for both medium term and longer term value creation. Accordingly the Board wouldcontinue to adopt a progressive and dynamic dividend policy ensuring the immediate aswell as long term needs of the business.

3. DIVIDEND:

Dividend represents the profit of the Company which is distributed to shareholders inproportion to the amount paid-up on shares they hold. Dividend includes Interim Dividend.

The Dividend for any financial year shall normally be paid out of the Company profitsfor that year. This will be arrived at after providing for depreciation in accordance withthe provisions of the Companies Act 2013. If circumstances require the Board may alsodeclare dividend out of accumulated profits of any previous financial year(s) inaccordance with provisions of the Act and Regulations as applicable.

4. CIRCUMSTANCES UNDER WHICH SHAREHOLDERS CANNOT EXPECT DIVIDEND:

The Board will assess the Company's financial requirements including present andfuture organic and inorganic growth opportunities and other relevant factors (as mentionedelsewhere in this policy) and declare Dividend in any financial year.

Notwithstanding the above the shareholders of the Company may not expect Dividendunder the following circumstances:

a. Whenever it undertakes or proposes to undertake a significant expansion projectrequiring higher allocation of capital

b. Significantly higher working capital requirements adversely impacting free cash flow

c. Whenever it undertakes any acquisitions or joint ventures requiring significantallocation of capital

d. In the event of inadequacy of profit or whenever the Company has incurred losses

5. INTERIM AND FINAL DIVIDEND:

The Board may declare one or more Interim Dividends during the year. Additionally theBoard may recommend Final Dividend for the approval of the shareholders at the AnnualGeneral Meeting. The date of the Board meeting in which the Dividend proposal will beconsidered will be provided to the stock exchanges as required by Listing Regulations.

6. FINANCIAL PARAMETERS AND OTHER INTERNAL AND EXTERNAL FACTORS THAT WOULD BECONSIDERED FOR DECLARATION OF DIVIDEND:

• Distributable surplus available as per the Act and Regulations

• The Company's liquidity position and future cash flow needs

• Track record of Dividends distributed by the Company

• Payout ratios of comparable companies

• Prevailing Taxation Policy or any amendments expected thereof with respect toDividend distribution

• Capital expenditure requirements considering the expansion and acquisitionopportunities

• Cost and availability of alternative sources of financing

• Stipulations/ Covenants of loan agreements

• Macroeconomic and business conditions in general

• Providing of unforeseen event and contingency with financial implications

• Any other relevant factors that the Board may deem fit to consider beforedeclaring Dividend

7. UTILISATION OF RETAINED EARNINGS:

Subject to applicable regulations the Company's retained

earnings shall be applied tor:

• Funding inorganic and organic growth needs including working capital capitalexpenditure repayment of debt etc.

• Buyback of shares subject to applicable limits

• Payment of Dividend in future years

• Issue of Bonus shares

• Any other permissible purpose

8. MODIFICATION OF THE POLICY:

The Management Committee of the Board of Directors is authorized to change/amend thispolicy from time to time at its sole discretion and/or in pursuance of any amendments madein the Companies Act 2013 the Regulations etc.

9. DISCLAIMER:

This document does not solicit investments in the Company's securities. Nor is it anassurance of guaranteed returns (in any form) tor investments in the Company's equityshares.