NOTES TO FINANCIAL STATEMENTS for the year ended 31st March, 2015

CORPORATE INFORMATION:

Prozone Intu Properties Limited (Formerly known as Prozone Capital Shopping Centres Limited) (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the business of developing, owning and operating of Shopping Malls, Commercial and Residential Premises. The Company is also providing related management consultancy services. The equity shares of the Company are listed on both the Bombay Stock Exchange and the National Stock Exchange.

SIGNIFICANT ACCOUNTING POLICIES

) Basis of Accounting:

i. The Financial Statements have been brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis and in compliance with all the mandatory accounting standards as brscribed under Section 133 of the Companies Act 2013 ('Act') read with Rule 7 of the Companies (Accounts) rules, 2014.

ii. Financial Statements are based on historical cost convention and are brpared on accrual basis. )

Use of Estimates:

The brparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the financial statements and the reported amounts of revenues and expenses during the reporting period.

Difference between actual results and estimates are recognized in the periods in which the results are known/ materialize.

c) Revenue Recognition :

i. Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection.

ii. Revenue from management consultancy is recognised on accrual basis as per the terms and conditions of the contract.

iii. Interest is recognised on a time proportion basis taking in to account the amount outstanding and the rate applicable.

iv. Dividend income is recognised when the right to receive payment is established.

d) Fixed Assets:

Fixed Assets are stated at actual cost less accumulated debrciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

e) Debrciation and Amortization:

Debrciation on Fixed Assets is provided on 'Written down value method' based on the useful life of assets and in the manner specified in the Schedule II of the Companies Act, 2013.

f) Impairment of Fixed Assets:

As at the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indication that an impairment loss may have occurred in accordance with Accounting Standard 28 on ''Impairment of Assets''. Where the recoverable amount of any fixed asset is lower than its carrying amount, a provision for impairment loss on fixed asset is made for the difference.

g) Miscellaneous Expenditure:

Preliminary expenses are amortized in the year in which they are incurred.

h) Employee Benefits:

i) Company's Contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the Statement of Profit & Loss for the year.

ii) Liability for Leave Encashment Benefits has been provided on accrual basis.

iii) Retirement benefits in the form of Gratuity are considered as defined benefits obligations and are provided on the basis of the actuarial valuation, using the projected unit method, as at the date of the Balance Sheet.

i) Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long term investments and are carried at cost less any provision for diminution in value other than temporary. Investments other than long term investments being current investments are valued at cost or fair market value whichever is lower.

j) Foreign Currency Transactions :

i) The transactions in foreign currencies are stated at the rate of exchange brvailing on the date of transactions.

ii) The difference on account of fluctuation in the rate of exchange brvailing on the date of transaction and the date of realization is charged to the Statement of Profit and Loss.

iii) Non-monetary items are reported at the exchange rate at the date of transaction.

iv) Differences on translations of Current Assets and Current Liabilities remaining unsettled at the year-end are recognized in the Statement of Profit and Loss.

v) The brmium or discount in respect of forward exchange contract is amortized over the life of contract. The net gain or losses on account of any exchange difference, cancellation or renewal of such forward exchange contracts are recognized in the Statement of Profit & Loss.

k) Provision and Contingent Liabilities:

The Company recognizes a provision when there is a brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a brsent obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

l) Accounting for Taxation of Income :

Current taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income-tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions

Deferred taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future. Deferred tax assets are reviewed as at each Balance Sheet date.

NOTE 23 : ACCOMPANYING NOTES TO ACCOUNTS

A) Contingent liabilities not provided for:

i) Guarantee given to banks for the credit facilities taken by subsidiary and step-down subsidiary Companies Rs. 23,592.13 lacs (P.Y. 18,836.89 lacs).

ii) Disputed demands in respect of Income Tax (Interest thereon not ascertainable at brsent) Rs. 14.87 lacs (PY 80.10 lacs).

B) In the opinion of the Board, the current assets, loans and advances are approximately of the value stated and are realisable in the ordinary course of business at least equal to the amount stated in the balance sheet. Further the provisions for all known liabilities are adequately made & not in excess of amount reasonably required

F) The Company is mainly engaged in the business of designing, developing, owning and operating of Shopping Malls, Commercial and Residential Premises through its various SPVs. The Company is also providing related management consultancy services to its SPVs. There is no other reportable business segment as per Accounting Standard (AS-17) “Segment Reporting”.

G) The name of the Company has been changed from ‘Prozone Capital Shopping Centres Limited’ to ‘Prozone Intu Properties Limited’ vide special resolution passed through postal ballot on 12th June, 2014. The Registrar of Companies, Mumbai has issued a fresh Certificate of Incorporation to this effect on 24th July, 2014, being the effective date of change of name of the company.

H) The Company has revised debrciation rates on tangible fixed assets w.e.f. April 01, 2014 as per the useful life specified in the Schedule II of the Companies Act, 2013 or as re-assessed by the Company. As brscribed in Schedule II, an amount of Rs. 10.37 lacs (net of deferred tax) has been charged to the opening balance of retained earnings for the assets in respect of which the remaining useful life is NIL as on April 01, 2014 and in respect of other assets on that date, debrciation has been calculated based on the remaining useful life of those assets. Had the Company continued with the brviously applicable Schedule XIV rates, charge for debrciation for the current year ended on March 31, 2015 would have been lower and net pro!t would have been higher by Rs. 80.60 lacs.

I) During the brvious year, the Office of Registrar of Companies, Accounting and Corporate Regulatory Authority (ACRA) Singapore, vide its Order dated 27th May, 2013 confirmed the amalgamation of Prozone International Limited, Singapore (PIL-S) with Prozone Liberty International Limited, Singapore (PLIL-S) with effect from 30th April, 2013 being the appointed date. Accordingly, all assets and liabilities owned by PIL-S as on 30th April, 2013 shall stand transferred to PLIL-S.

K) Figures less than Rs. 500/- have been shown at actual wherever statutory required to be disclosed since figures have been rounded off to the nearest thousands

L) The Company has re-grouped, reclassified and/or re-arranged brvious year's figures, wherever necessary to conform to current year's classification.

As per our report of even date attached

For S G C O & Co.

Chartered Accountants

Shyamratan Singrodia

Partner

Mem. No. 49006

For and on behalf of the Board

Nikhil Chaturvedi Managing Director DIN : 00004983

Salil Chaturvedi Dy. Managing Director DIN : 00004768

Anurag Garg Chief Financial Officer

Snehal Bansode Company Secretary

Place : Mumbai

Date : 20th May, 2015