ANNUAL REPORT 2013-14 CONTENTS Vision .................................................................................................. 02 The Year That Was ...............................................................................04 Company Information ........................................................................... 06 Awards & Recognition .......................................................................... 08 Chairman’s Message ............................................................................10 Managing Director’s Message ...............................................................12 Management Discussion and Analysis ....................................................14 Director’s Report and Annexures ...........................................................28 Report on Corporate Governance ..........................................................43 Business Responsibility Report ..............................................................64 Financials ............................................................................................ 73 Consolidated Financials ......................................................................118 Notice and Explanatory Statement .......................................................158 VISION Godrej City, Panvel, Mumbai 02 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 We aspire to be among the nation’s top 3 real estate companies, while continuing to be the most trusted name in the industry. We shall deliver superior value to all stakeholders through extraordinary and imaginative spaces created out of deep customer focus and insight. 03 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 THE YEAR THAT WAS ROBUST GROWTH ò -@JVUZVSPKH[LK[V[HSPUJVTLPUJYLHZLKI` ò +LTVUZ[YH[LZ .73ëZ HIPSP[` [V Z\JJLZZM\SS` 20% to INR 1254.2 crore from INR 1047.6 raise capital crore in FY13 ò :[YLUN[OLULK .73ëZ MPUHUJPHS WVZP[PVU HUK ò *VUZVSPKH[LK,)0;+(MVY-@PTWYV]LKI` HIPSP[`[VHKKWYVQLJ[ZHJYVZZ0UKPH 21% to INR 357.6 crore from INR 296.2 crore in FY13 CONTINUED PROGRESS IN BUSINESS ò 5L[ WYVMP[ PUJYLHZLK I` [V 059 DEVELOPMENT crore in FY14 from INR 138.4 crore in FY13 ò .VKYLQ7YVWLY[PLZHKKLKUL^WYVQLJ[Z^P[O eTPSSPVUZXM[VMZHSLHISLHYLH[V[OL Company’s development portfolio STRONG SALES ò (KKLK HU PTWVY[HU[ [V^UZOPW WYVQLJ[ PU ò 9LNPZ[LYLKIVVRPUN]HS\LVM059*YVYL in FY14 despite adverse market conditions )HUNHSVYL^P[OHZHSLHISLHYLHVMTPSSPVUZX M[;OPZ^PSSIL.73ëZ[OPYK[V^UZOPWWYVQLJ[ ò .73 ZHSLZ PU -@ -@ JVTIPULK HYL HM[LY(OTLKHIHKHUK7HU]LS higher than in the cumulative prior history of the company ò (KKLK [^V WYVQLJ[Z \UKLY [OL 9LZPKLU[PHS *VPU]LZ[TLU[7SH[MVYT6ROSH5L^+LSOP ò /PNOLZ[ L]LY ZHSLZ PU H ZPUNSL X\HY[LY Sahakar Nagar 2, Mumbai :\YWHZZLK059JYVYLPUX\HY[LYS`ZHSLZ in Q4 FY14 ON TIME DELIVERY AT GODREJ GARDEN ò .VKYLQ *LU[YHS 4\TIHP :VSK V]LY CITY, AHMEDABAD apartments valued at over INR 400 crore in a single day ò +LSP]LYLK OVTLZ HJYVZZ [V^LYZ PU 7OHZLVM.VKYLQ.HYKLU*P[`(OTLKHIHK ò .VKYLQ>H[LYZPKL2VSRH[H9LJVYKLKZHSLZ VM ZX M[ ]HS\LK H[ 059 JYVYL ò ;OL .SVIHS 0UKPHU 0U[LYUH[PVUHS :JOVVS OHZ Successful monetization of an old commercial ILLUPUH\N\YH[LKH[.VKYLQ.HYKLU*P[`;OL WYVQLJ[ first batch of students started attendance in ò .VKYLQ <UP[LK )HUNHSVYL :VSK April, 2014. HWHY[TLU[Z[V[HSSPUNZXM[^P[OPU[OL first week of the launch HIGH EMPLOYEE ENGAGEMENT ò .VKYLQ)2*4\TIHP:VSKZXM[ ò ,_OPIP[LK L_JLW[PVUHS PTWYV]LTLU[ PU [LHT for INR 505 crore despite a weak commercial building and employee engagement while market in Mumbai growing employee base by 40% ò 0UHULTWSV`LLLUNHNLTLU[Z[\K`I`/L^P[[ SUCCESSFUL RIGHTS ISSUE .VKYLQ 7YVWLY[PLZë LTWSV`LL LUNHNLTLU[ ò 9PNO[Z0ZZ\LVM059JYVYLV]LYZ\IZJYPILK scores came in at 81%, well above the average PUHKPMMPJ\S[THJYVLJVUVTPJLU]PYVUTLU[ MVY[OLILZ[PUJSHZZJVTWHUPLZPU(ZPH 04 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 Godrej Glenelg, Mumbai 05 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 COMPANY INFORMATION DIRECTORS : 4Y(KP).VKYLQ *OHPYTHU 4Z7HYTLZO^HY(.VKYLQ 4Y1HTZO`K5.VKYLQ 4Y5HKPY).VKYLQ 4Y7PYVQZOH.VKYLQ 4HUHNPUN+PYLJ[VY *OPLM,_LJ\[P]L6MMPJLY 6. Mr. Amit B. Choudhury 4Y2LRP)+HKPZL[O 4YZ3HSP[H+.\W[L 4Y7YHUH`+=HRPS +Y7YP[HT:PUNO 11. Mr. S. Narayan 4Y(TP[H]H4\ROLYQLL 4Y2;1P[OLUKYHU ,_LJ\[P]L+PYLJ[VY 4Y=:YPUP]HZHU ,_LJ\[P]L+PYLJ[VY REGISTERED .VKYLQ)OH]HU OFFICE : [O-SVVY(/VTL:[YLL[ Fort, Mumbai 400 001. AUDITORS : 4Z2(3@(50>(33( 40:;9@ Chartered Accountants 2HSWH[HY\/LYP[HNL 127, Mahatma Gandhi Road 4\TIHP BANKERS : State Bank of India IDBI Bank /+-*)HUR 06 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 Godrej Sky, Mumbai 07 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 AWARDS & RECOGNITION Awards Received by Godrej Properties Best Emerging Developer ò 5+;=7YVWLY[`(^HYKZ Brand Excellence Award ò )YHUK,_JLSSLUJL(^HYKZ Master Brand 2013 ò >VYSK)YHUK*VUNYLZZ:\TTP[ Developer of the Year ò 0UKPHU9LHS[`(^HYKZ ò 0UKPHëZ)LZ[*VTWHUPLZ[V>VYR-VYI`[OL.YLH[7SHJLZ[V #1 Ranked Real Estate Developer Work Institute, India in partnership with the Economic Times ò =V[LKHZ ILZ[JVTWHU`[V^VYRMVYPU[OLV]LYHSSJH[LNVY` India’s Top 10 Innovative Builders ò *VUZ[Y\J[PVU>VYSK(YJOP[LJ[HUK)\PSKLY*>()(^HYKZ ò 6ULVM[OLJVTWHUPLZPU0UKPH[VOH]LTHKL Sustainability Award – CII an outstanding contribution to the green building TPZZPVU.YLLU*V:\TTP[ Outstanding Contribution in Real Estate ò ,7*>VYSK(^HYKZ (Residential Project) Real Estate Developer of The Year (Maharashtra) ò )YHUKZ(JHKLT`9LHS,Z[H[L(^HYKZ Ethical Brand For Real Estate ò *46(ZPH Real Estate Company of the Year ò :LJVUK7VZP[PVU*VUZ[Y\J[PVU>LLR(^HYKZ Diamond EDGE Winner for Customer ò 0UMVYTH[PVU>LLR Experience Transformation ò 9LJLP]LKI`4Y7PYVQZOH.VKYLQè*VUZ[Y\J[PVU Real Estate Person of the Year Week Awards 2013 Person of the Year 2013 ò 9LJLP]LKI`7PYVQZOH.VKYLQ:P_[O.09,43LHKLYZOPW(^HYKZ Most Admired Retail Website ò (ZPH9L[HPS*VUNYLZZ(^HYKZ Gold in the category of Online Newsletter – Vibrations ò 7\ISPJ9LSH[PVUZ*V\UJPSVM0UKPH79*0 Silver in the category of In-House Magazine – Storey Times ò 7\ISPJ9LSH[PVUZ*V\UJPSVM0UKPH79*0 Best Business Practice in Real Estate ò 5H[PVUHS9LHS,Z[H[L(^HYKMVY,_JLSSLUJLPU9LHS,Z[H[LMVY[OL year 2012 by Accommodation Times 08 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 YOUR COMPANY HAS RECEIVED MORE THAN 60 AWARDS AND RECOGNITIONS OVER THE LAST 5 YEARS AND 28 AWARDS IN FY14. 7YVQLJ[:WLJPĉJ Awards The Trees ò /VUV\Y(^HYKI`ê;OL)VZ[VU:VJPL[`VM3HUKZJHWL(YJOP[LJ[Zë ò )LZ[4HYRL[PUN*HTWHPNU(MMVYKHISL/V\ZPUN:LNTLU[7H\S Writer’s Great India Marketing Summit Godrej Garden City ò (MMVYKHISLOV\ZPUNWYVQLJ[MVY[OL`LHY>LZ[0UKPH[O,Z[H[L Awards 2013, West India Edition ò ;OL)LZ[PUUV]H[P]L4HYRL[PUN*HTWHPNU.VSKLU4PRLZ(^HYK Godrej Platinum, Bangalore ò 3\_\Y`7YVQLJ[VM[OL@LHY)HUNHSVYL9LHS,Z[H[L(^HYKZ ò )LZ[\WJVTPUNWYVQLJ[PU)LUNHS*9,+(0 Godrej Platinum, Kolkata Bengal Realty Awards 2014 ò :[HYYH[PUNè*90:03 Godrej Frontier ò )LZ[ *VTWSL[L9LZPKLU[PHS7YVQLJ[\UKLY3\_\Y`:LNTLU[ in NCR Region CNBC AWAAZ Real Estate Awards 2013 Godrej Palm Grove ò )LZ[TPKYHUNLOV\ZPUNWYVQLJ[VM[OL`LHYè Chennai Real Estate Awards 2013 Godrej Anandam ò :[HY9H[PUN*90:03 09 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 MESSAGE FROM THE CHAIRMAN 4Y(KP).VKYLQ Chairman, ;OL.VKYLQ.YV\W Your Company delivered a strong performance. We continued to lay the foundation for our future growth and success through sustained momentum in business development. Dear Shareholders, FY14 was a challenging year for the Indian In the midst of these challenges, your economy. The country has witnessed a Company delivered a strong performance. sharp decline in its economic growth from We continued to lay the foundation for our an average of 8.2% during the period FY04 future growth and success through sustained -@[VILSV^ PU-@HUK-@;OPZ momentum in business development by poor performance was driven by a weak HKKPUNUL^WYVQLJ[Z^P[OHZHSLHISLHYLHVM manufacturing sector, a slowdown in the V]LYTPSSPVUZX\HYLMLL[^OPJOMVY[OLMPYZ[ investment cycle, and a slump in consumer time took our total development portfolio to demand. Monetary tightening implemented V]LYTPSSPVUZX\HYLMLL[>LKLTVUZ[YH[LK by the RBI in its effort to control inflation also robust performance on most operational and dampened growth. 7VVYJVUZ\TLYZLU[PTLU[ financial parameters. For the full year, our combined with high interest rates and a very total income increased by 20% to INR 1,254 challenging regulatory approval environment crore, EBITDA increased by 21% to INR 358 combined to create a difficult year for the real crore and net profit increased by 15% to INR estate sector. 159 crore. During the year we successfully 010 GODREJ PROPERTIES LIMITED ANNUAL REPORT 2013-14 executed a rights issue through which your government’s top priorities and, if executed Company raised 700 crores, which will ensure well, changes to the way the infrastructure HKLX\H[LJHWP[HS[VM\UKV\YVUNVPUNNYV^[O and real estate sectors are governed could and success. Furthering our commitment yield strong benefits in each of these three towards sustainable development, I am happy priority areas. [VUV[L[OH[.VKYLQ)2*^HZ[OLMPYZ[T\S[P VJJ\WHU[ I\PSKPUN PU )HUKYH 2\YSH *VTWSL_ After the challenging environment over the [VYLJLP]LH3,,+7SH[PU\TWYLJLY[PMPJH[PVUH last couple of years, I expect a far improved standard which is globally recognized as the operating environment for your Company highest available rating for sustainable design. in the years ahead. The Indian real estate Your Company has also been accredited sector remains at a very early stage of what