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Auditor Report of Unitech Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Unitech Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the Branch Auditors of the Company's branches.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESpONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

BASIS FOR QUALIFIED OpINION

1. Reference is invited to Note 50 to the standalone financial statements according to which an amount of Rs. 7,242,711,244 (previous year Rs. 7,718,890,401) is outstanding which is comprised of advances towards purchase of land, projects pending commencement, advances paid to joint ventures entities and collaborators. The management has explained that such advances have been given in the normal course of business to land owning companies, collaborators, projects and for purchase of land. As per information made available to us and explanation given Rs. 476,179,157 (previous year Rs. 1,529,898,595) have been recovered / adjusted during the current financial year. The management, based on internal assessments and evaluations, have represented that the balance outstanding advances are still recoverable/ adjustable and that no accrual for diminution of advances is necessary as at balance sheet date. The management has further represented that as significant amounts have been recovered/adjusted during the previous and current financial year and since constructive and sincere efforts are being put in for recovery of the said advances, they are confident of appropriately adjusting / recovering significant portions of the remaining outstanding balance of such amounts in the foreseeable future. However, we are unable to ascertain whether all the remaining outstanding advances, as above, are fully recoverable / adjustable since the outstanding balances as at balance sheet date are outstanding / remained unadjusted for a long period of time, and further that, neither the amount recovered nor rate of recovery of such long outstanding amounts in the current year, clearly indicate, in our opinion, that all of the remaining outstanding amounts may be fully recoverable, consequently, we are unable to ascertain whether all of the remaining balances as at balance sheet date are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these remaining advances are subsequently determined to be doubtful of recovery. This matter was also qualified in our report on the financial statements for the year ended 31st March 2014.

2. Reference is invited to Note 51 to the standalone financial statements. According to information available and explanations obtained, in respect of non-current investments (long term investments) in, and loans and advances given to, some subsidiaries, it has been observed from the perusal of financial statements of these subsidiaries that the subsidiaries have accumulated losses and their net worth have been fully / substantially eroded. Further that, these subsidiaries have incurred net loss during the current and previous year(s) and, current liabilities of these subsidiaries exceeded their current assets as at the respective balance sheet dates. These conditions, along with absence of clear indications or plans for revival, in our opinion, indicate that there is significant uncertainty and doubt about the recovery of the loans and advances from these subsidiaries. Further, that there is a clear indication that there is a decline in the carrying amount of these investments which is other than temporary.

Consequently, in terms of stated accounting policies and applicable accounting standards, diminution in the value of investment which is other than temporary amounting to Rs. 1,002,590,750 and an accrual for diminution of doubtful debts and advances amounting to Rs. 21,279,415 need be accounted for in the financial statement for the year ended 31st March 2015. Management is however of the firm view that the diminution is only temporary and that sufficient efforts are being undertaken to revive the said subsidiaries. However, in the absence of significant movement in the operations of the investee companies, and any adjustment for diminution of expenses in this regard, in our opinion, management has not adequately accounted for the imminent diminution. Consequently, the loss for the year ended 31st March 2015 is understated and reserves as at 31st March 2015 are overstated to the extent of Rs. 1,023,870,165.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the 'Basis for Qualified Opinion' paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

1. Reference is invited to note 47 to the standalone financial statements with respect to deposits. Pursuant to sub section (2) of Section 74 of the Act, the Company had made an application to the Hon'ble Company Law Board (CLB or the Board) to allow the Company further time to repay the outstanding public deposits, or part thereof and interest payable thereon as is considered reasonable by CLB. The Board has pronounced vide its order dated 14 May 2015, that the Company has been granted certain extension as mentioned in the aforesaid mentioned note. As explained and represented by management, they are currently evaluating all the recourses available to it to seek further time for re-payment of the public deposits. Further, the management is committed to repay all the public deposits along with interest thereon within permissible time period and making all efforts to arrange the necessary resources required for this purpose. Accordingly, impact, if any, on the standalone financials is currently not ascertainable.

Our opinion is not modified in respect of this matter.

2. Reference is invited to note 49 to the standalone financial statements, wherein no adjustments have been considered necessary by management for non-recoverability of balance of certain short term loans aggregating to Rs. 5,006,504,267 (Previous year Rs. 4,296,647,377) to subsidiary company and investments in subsidiary / in company's project aggregating to Rs. 277,257,892 (Previous year Rs. 275,323,078) as the matters are sub-judice and the impact, if any, is not ascertainable at this stage.

Our opinion is not modified in respect of these matters.

OTHER MATTER

We did not audit the financial statements/information of two branches included in the standalone financial statements of the Company whose financial statements / financial information reflect total assets of Rs. 379,227,721 as at 31st March, 2015 and total revenues of Rs. NIL for the year ended on that date, as considered in the standalone financial statements and described above. The financial statements/ information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 best of 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 the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

(d) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

(e) Except for the matter 2 described in basis of qualified opinion, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(f) Reference is drawn to note 45 and 47 to the financial statement with respect to matured unpaid debentures and public deposits outstanding as at balance sheet date. Based on the legal advice received by the Company and available recourse with the Company as the case may be with respect to the above, management and board of the Company is of the view that the above do not fall under the purview of sub-section (2) of Section 164 of the Act. Accordingly, in the opinion of management as also discussed and taken on record in the board of Directors meeting held to adopt the financial statements of the Company and further as represented by each of the Directors, none of the Directors of the Company are disqualified as on 31 March 2015 in terms of sub-section (2) of the Section 164 of the Act.

In view of the above legal interpretation taken by the board and the Management, we are unable to comment on whether the Directors of the Company are disqualified under sub-section (2) of Section 164 of the Act as required by us to state so.

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 39 (I) to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts. As per information provided and explanations give, the company has not entered into any derivative contract;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of the Auditors' Report of even date to the members of Unitech Limited on the financial statements for the year ended 31st March, 2015)

In terms of information and explanations given to us and the books and records examined by us, we report that:

(i) In respect of its fixed assets:

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to this programme, certain fixed assets were physically verified by the management during the year and as informed, discrepancies identified on such verification have been properly dealt with in the books of account.

(ii) In respect of its inventories:

(a) The inventories have been physical verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies, firms or the other parties covered in the register maintained under section 189 of the Act. Therefore, the provisions of paragraph 3(iii) (a) & (b) are not applicable.

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

(v) Reference is drawn to note 47 with respect to unpaid matured deposits. As already highlighted in paragraph 2 (f) in our Report on Other Legal and Regulatory Requirements, above, the Hon'ble Company Law Board has pronounced an order with respect to the extended time period within which the company has to repay the deposits matured along with other directions. In our opinion and according to the information and explanations given to us, the Company has not complied with requirement of section 74(1)(b) read with Rule 19 of the Companies (Acceptance of deposits) Rules, 2014 with regard to the deposits accepted from the public. The natures of contraventions are as follows:

a. There were outstanding matured deposits and interest thereon amounting to Rs. 318,477,193 in respect of 'earlier deposits' in accordance with the requirements of the Companies Act 1956. As per management, the cheques have been issued, however, the issued cheques are outstanding in the bank reconciliation statements, as they have remained not cleared beyond the validity period of the cheques of three months.

b. The Company has unpaid matured deposits amounting to Rs. 1,520,352,000 which became due on their respective due dates up to 31st March, 2015. Further, the company has unpaid matured deposits of Rs. 194,863,000 as at 31st March 2015 which remained unclaimed.

c. Lastly, the Company has to still repay deposits amounting to Rs. 4,071,071,000 which represents those deposits otherwise payable on their respective dates up to financial year 2016-17, but have become payable within one year from the commencement of the Companies Act, 2013 i.e. by 31st March, 2015, pursuant to section 74(1)(b) of the Act, subject to any extensions or relaxations that management may obtain from the concerned authorities in the light of the aforementioned Company Law Board order.

As explained and represented by management, they are currently evaluating all the recourses available to it to seek further time for re-payment of the deposits. Further that management is committed to repay all the deposits along with interest thereon within permissible time period and making all efforts to arrange the necessary resources required for this purpose.

Further, based on information made available and explanations provided to us, except for the order from CLB mentioned above and certain orders passed in the consumer courts, which have been complied with/ amicably resolved by Management, no other order has been passed by National Company Law Tribunal / Company Law Board or Reserve Bank of India or any court or any other Tribunal, on the Company in respect of deposits accepted till date of this report.

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) In our opinion and according to the information and explanations given to us in respect of statutory dues:

(a) Undisputed statutory dues including Employee's State Insurance, sales tax, wealth tax, duty of customs, duty of excise, value added tax, cess have generally been regularly deposited with the appropriate authorities.

However, income tax, service tax and provident fund dues have not been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Employees' State Insurance, wealth-tax, sales-tax, duty of customs, duty of excise, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable except for Income Tax, service tax and provident fund dues which are given below:

Name of the Statute Nature of Dues Amount(Rs.)



Income Tax Act,1961 Self Assessment tax 277,648,755

Income Tax Act,1961 Tax deducted 40,332,239 at Source and interest

Income Tax Act,1961 Tax deducted at 207,573,932 Source and interest

Service Tax Service Tax 24,862,252

Employees' Provident Funds Employer's Contribution 37,165,440 & Miscellaneous Provisions to Provident Fund Act, 1952

Name of the Statute Period to which the Due date amount relates

Income Tax Act,1961 2012-13 30th September 2013

Income Tax Act,1961 01.12.2013 to 31.03.2014 Various as per respective Act

Income Tax Act,1961 01.04.2014 to 30.09.2014 Various as per respective Act

Service Tax 01.07.2014 to 30.09.2014 Various as per respective Act

Employees' Provident Funds 01.04.2014 to 30.09.2014 Various as per & Miscellaneous Provisions respective Act Act, 1952

(b) The following dues have not been deposited by the company on account of disputes, since the appeals are pending before the relevant authorities.

Name of the Statute Nature of Dues under dispute Financial year

Income Tax Act, 1961 Income tax on regular 2004-05 assessment

Income Tax Act, 1961 Income tax on regular 2006-07 assessment

Income Tax Act, 1961 Tax deducted at Source on 2007-08 regular assessment

Income Tax Act, 1961 Income tax on regular 2008-09 assessment

Income Tax Act, 1961 Tax deducted at Source on 2011-12 regular assessment

Income Tax Act, 1961 Income tax on regular 2011-12 assessment

Income Tax Act, 1961 Tax deducted at Source on 2012-13 regular assessment

Service Tax Service tax 01-12-2005 to 31-07-2007

Name of the Statute Amount (Rs.) Forum where dispute is pending

Income Tax Act, 1961 7,363,246 Commissioner of Income Tax (Appeals), New Delhi

Income Tax Act, 1961 222,484,964 Commissioner of Income Tax (Appeals), New Delhi

Income Tax Act, 1961 16,219,162 Commissioner of Income Tax (Appeals), New Delhi

Income Tax Act, 1961 8,492,309,740 Income Tax Appellate Tribunal, New Delhi

Income Tax Act, 1961 116,196,935 Commissioner of Income Tax (Appeals), New Delhi

Income Tax Act, 1961 824,043,190 Commissioner of Income Tax (Appeals), New Delhi

Income Tax Act, 1961 168,599,180 Commissioner of Income Tax (Appeals), New Delhi

Service Tax 7,260,129 SLP pending with Hon'ble Supreme Court

(also refer note 39(I)(c), (d) & (e) to the financial statements)

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

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

(ix) On the basis of audit procedures performed by us and according to the information, explanation and representations given to us by the management, the matured debentures unpaid and outstanding as at current balance sheet date and as also described in Note 9 of the financial statements, had been duly rescheduled and restructured during the previous financial years. As per information available and explanation given, the Company has received notice of default in respect of term loans and such Non-Convertible debentures. Further, the Company has outstanding delays as at balance sheet date in repayment of dues (including interest) to banks and financial institutions of amounts given and as explained in note 4 and note 52 to the financial statements. The Company also has outstanding delays as at balance sheet date in repayment of dues (including interest) to debenture holders aggregating to Rs. 1,471,196,292 and delays ranging from 1 day to 701 days.

(x) The company has given corporate guarantees for loans taken by its subsidiaries and associates from banks and financial institutions. The terms and other conditions, in our opinion, are not prima facie prejudicial to the interest of the company considering company's economic interest in such entities.

(xi) In our opinion and according to the information and explanations given to us, the term loans raised during the year by the company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

(xii) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Goel Garg & Co Chartered Accountants (Firm's Registration No. 000397N)

(S. C. Garg) Partner (Membership No. 013370)

Place: Gurgaon Date: 29th May, 2015


Mar 31, 2014

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

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 and 8/2014 dated 4th April 2014 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

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

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

BASIS FOR QUALIFIED OPINION

Reference is invited to Note 46 to the financial statements according to which an amount of Rs. 7,718,890,401 (previous year - Rs. 9,248,788,996) is outstanding which is comprised of advances towards purchase of land, projects pending commencement, advances paid to joint ventures entities and collaborators. The management has explained that such advances have been given in the normal course of business to land owning companies, collaborators, projects and for purchase of land. As per information made available to us and explanation given Rs. 1,529,898,595 (previous year Rs. 6,825,516,966) have been recovered/adjusted during the current financial year. The management, based on internal assessments and evaluations, have represented that these advances are recoverable/ adjustable and that no provision is necessary as at balance sheet date. The management has further represented that as significant amounts have been recovered / adjusted during the previous and current financial year and since constructive and sincere efforts are being put in recovery of the said advances, it is confident of appropriately adjusting / recovering significant portions of the remaining outstanding balance of such amounts in the foreseeable future. However, we are unable to ascertain whether all the remaining outstanding advances, as above, are fully recoverable / adjustable since the outstanding balances as at balance sheet date are outstanding / remained unadjusted for long period of time, and further that, neither the amount recovered nor rate of recovery of such long outstanding amounts in the current year, clearly indicate, in our opinion, that all of the remaining outstanding amounts are fully recoverable, consequently, we are unable to ascertain whether all of the remaining balances as at balance sheet date are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these remaining advances are subsequently determined to be doubtful of recovery.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India/

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

EMPHASIS OF MATTER

(a) We draw attention to Note 45 to the financial statements, wherein no adjustments have been considered necessary for recoverability of balance of short term loans aggregating to Rs. 4,296,647,377 (Previous year Rs. 3,674,531,405) and investments aggregating to Rs. 275,323,078 (Previous year Rs. 274,005,098) as the matters are sub-judice and the impact, if any, is unascertainable at this stage. Our opinion is not qualified in respect of this matter.

(ii) We did not audit the financial statements of Singapore branch, whose financial statements reflect total assets (net) of Rs. 50,945 as at March 31, 2014 (Previous year- Rs. 768,399) total revenues of Nil (Previous year - Nil) and net cash outflows amounting to Rs. 304,917 for the year then ended. As informed to us, these financial statements are in the process of being audited by other auditors whose reports have not been furnished to us by the Management. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

2. As required by Section 227(3) of the Act, we report that:

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

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 and 8/2014 dated 4th April, 2014 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

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

(f) Since the Central Government has neither issued any notification as to the rate at which the cess is to be paid under Section 441A of the Act nor has it issued any Rules under the said Section prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of the Auditors'' Report of even date to the members of Unitech Limited on the financial statements for the year ended 31st March 2014) In terms of information and explanations given to us and the books and records examined by us, we report that:

(i) In respect of its fixed assets:

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to this programme, certain fixed assets were physically verified by the management during the year and as informed, discrepancies identified on such verification have been properly dealt with in the books of account.

(c) Fixed assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) In respect of its inventories:

(a) The inventories have been physical verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies, firms or the other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of paragraph 4(iii) (b), (c) & (d) are not applicable. During the year the Company has taken unsecured loan from four companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 2,138,984,904 and the year-end balance of loan taken was Rs. 2,135,178,810. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company. Further, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act, have been so entered.

(b) None of the transactions made in pursuance of such contracts or arrangements exceed the value of Rupees five lakh in respect of any one such party in the financial year.

(vi) In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of Sections 58-A & 58-AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public, except that the mandatory investments were not made as per Rule 3A of The Companies (Acceptance of Deposit) Rules, 1975 during the year. Further, there were delays in repayment of matured fixed deposits accepted under section 58 A of the Act and as included in the balance sheet under book overdraft in note 9 - "other current liabilities" which had matured for repayment on or before the balance sheet date and were outstanding as at 31st March,2014.

Further, according to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, on the Company in respect of deposits accepted.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) In our opinion and according to the information and explanations given to us in respect of statutory dues:

(a) Undisputed statutory dues including service tax, investor education and protection fund, employee''s state insurance, sales tax, wealth tax, custom duty, excise duty, cess have generally been regularly deposited with the appropriate authorities. However, income tax and provident fund dues have not generally been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date

Name of the Statue Nature of the Dues Amount (Rs. ) Income Tax, 1961 Self-Assessment tax 215,759,252 Income Tax, 1961 Tax deducted at source 49,863,876 Income Tax, 1961 Tax deducted at source 24,978,638 Income Tax, 1961 Tax deducted at source 92,138,471

Name of the Statue Period to which the Due Date amount relates Income Tax, 1961 2012-13 30 September 2013 Income Tax, 1961 2013-14 7 August 2013 Income Tax, 1961 2013-14 7 September 2013 Income Tax, 1961 2013-14 17 October 2013

(c) The following dues have not been deposited by the company on account of disputes, since the appeals are pending before the relevant authorities.

Name of the Statute Nature of dues Financial year

Income Tax Act, 1961 Income tax matter 2004-05 under dispute

Income Tax Act, 1961 TDS matter under 2007-08 dispute

Income Tax Act, 1961 Income tax matter 2008-09 under dispute

Income Tax Act, 1961 TDS matter under 2011-12 dispute

The Finance Act,1994 Service tax demand 01-12-2005 (Service Tax) under dispute to 31-07-2007

Haryana Value Added VAT demand under 2010-11 Tax Act, 2004 dispute

Name of statue Amount (Rs. ) Forum where dispute is pending_

Income Tax, 1961 7,363,246 Commissioner of Income Tax (appeals)

Income Tax, 1961 16,219,162 Commissioner of Income Tax (appeals)

Income Tax, 1961 8,529,809,740 Income Tax Appellate Tribunal, New Delhi

Income Tax, 1961 115,954,908 Commissioner of Income Tax (appeals)

The Finance Act, 1994 8,554,085 Commissioner, Central Excise (Adj.) New Delhi (Service Tax) and Hon''ble Delhi High Court, Delhi Haryana Value Added 590,403,812 Filed writ and pending with Tax Act, 2004 Punjab and Haryana High Court, Chandigarh, demand stayed

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

(xi) On the basis of audit procedures performed by us and according to the information, explanation and representations given to us by the management, the matured debentures unpaid and outstanding as at current balance sheet date and as also described in Note 9 of the financial statements, had been duly rescheduled and restructured during the previous financial years. As per information available and explanation given, the Company has received notice of default in respect of term loans and such Non-Convertible debentures. Further, the Company has outstanding delays as at balance sheet date in repayment of dues (including interest) to banks and financial institutions of amounts given and as explained in note 4 and note 47 to the financial statements. The Company also has outstanding delays as at balance sheet date in repayment of dues (including interest) to debenture holders aggregating to Rs. 2,602,461,303 and delays ranging from 1 day to 336 days.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly Paragraph 4 (xii) of the order is not applicable.

(xiii) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Accordingly, paragraph 4 (xiii) of the Order, is not applicable.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, paragraph 4 (xiv) of the Order is not applicable.

(xv) The company has given corporate guarantees for loans taken by its subsidiaries and associates from banks and financial institutions. The terms and other conditions, in our opinion, are not prima facie prejudicial to the interest of the company considering company''s economic interest in such entities.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year by the company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

(xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised any money by way of public Issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For goel garg & Co., Chartered Accountants FRN : 000397N

(J L garg) Partner Membership Number: 005406

Place: Gurgaon Dated: May 28, 2014


Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of UNITECH LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

BASIS FOR QUALIFIED OPINION

Reference is invited to Note 48 to the financial statements according to which an amountof 9,248,788,996 (previousyearRs. 16,074,305,962) is outstanding in respect of advances for purchase of land, projects pending commencement, joint ventures and collaborators which, as represented by the management, have been given in the normal course of business to land owning companies, collaborators, projects and for purchase of land. Although significant portion has been adjusted / recovered during the current financial year, considering that the remaining balances as at balance sheet date are outstanding / unadjusted for long periods of time, we are unable to ascertain whether all of the remaining balances as at balance sheet date are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these remaining advances are subsequently determined to be doubtful of recovery,

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

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

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

EMPHASIS OF MATTER

(i) We draw attention to Note 47 to the financial statements, wherein no adjustments have been considered necessary for recoverability of balance of short term loans aggregating to Rs.3,674,531,405 (previous year Rs.3,013,863,597) and investments in share capital/projects aggregating to Rs.273,980,098 (Previous year Rs.270,079,306) as the matters are sub-judice and the impact, if any, is unascertainable at this stage. Our opinion is not qualified in respect of this matter;

(ii) We draw attention to Note 49 to the financial statements, in respect of investment in Unitech wireless companies, related settlement and future contractual investment obligation. As explained to us, the management is not currently in a position to ascertain how and in which group Company the aforesaid obligation is likely to devolve and thus, the consequent impact, if any, on the financial statements in future of the Company or subsidiaries / affiliates / nominees as the case may be, is currently not ascertainable. Further, in the event of settlement not going through between the Company and Telenor Asia Pte. Ltd. as explained in note 49 to financial statements, the impact, if any, on the financial statements is also currently not ascertainable. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003

("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

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

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

(f) Since the Central Government has neither issued any notification as to the rate at which the cess is to be paid under Section 441A of the Act nor has it issued any Rules under the said Section prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 of report on other legal and regulatory requirements of the auditors'' report of even date to the members of Unitech Limited on the financial statements for the year ended 31st March, 2013)

In terms of information and explanations given to us and the books and records examined by us, we report that:

(i) In respect of its fixed assets:

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to this programme, certain fixed assets were physically verified by the management during the year and as informed, discrepancies identified on such verification have been properly dealt with in the books of account.

(c) Fixed assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) In respect of its inventories:

(a) The inventories have been physical verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies, firms or the other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of paragraph 4(iii)(b), (c) & (d) are not applicable. During the year the Company has taken unsecured loan from three companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.769,125,072 and the year end balance of loan taken was Rs. 329,103,497. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company. Further, the Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act, have been so entered.

(b) None of the transactions made in pursuance of such contracts or arrangements exceed the value of Rupees five lakh in respect of any one such party in the financial year.

(vi) In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of Sections 58-A & 58-AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. However, the mandatory investments fell short of the prescribed requirement as per Rule 3A of The Companies (Acceptance of Deposit) Rules, 1975 during the year and there were some delays during the year in repayment of matured and claimed fixed deposits accepted under section 58 A of the Act. However, as per information and explanations given to us, the Company has adhered to the prescribed requirements as per Rule 3A, with respect to mandatory investments during the year, by 31st December, 2012. Further, there was no outstanding delay in repayment of deposits matured and claimed after 31st December, 2012.

Further, according to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal, on the Company with respect to deposits accepted.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1)(d) of the Companies Act 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) In our opinion and according to the information and explanations given to us in respect of statutory dues:

(a) Undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, sales tax, wealth tax, custom duty, excise duty, cess have been regularly deposited with the appropriate authorities. However, income tax and service tax dues have not generally been regularly deposited with the appropriate authorities though the delays in deposit have not been serious.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) The following dues have not been deposited by the Company on account of disputes, since the appeals are pending before the relevant authorities:

(xv) The Company has given corporate guarantees for loans taken by its subsidiaries and associates from banks and financial institutions. The terms and other conditions, in our opinion, are not prima facie prejudicial to the interest of the Company considering Company''s economic interest in such entities.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

(xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) During the year, the Company has not made any preferential.

Name of the Statute Nature of dues Financial year

Income Tax Act, 1961 Income tax matter under dispute 2004-05

Income Tax Act, 1961 Income tax matter under dispute 2007-08

The Finance Act, 1994 Service tax demand 01-12-2005 (service Tax) to 31-07-2007

Income Tax Act, 1961 Income tax matter under dispute 2008-09

Amount (Rs.) Forum where dispute is pending

7,363,246 Commissioner of Income Tax (appeals)

140,069,833 Income tax appellate tribunal

8,554,085 Commissioner, Central Excise (Adj.) New Delhi and Hon''ble Delhi High Court, Delhi

9,875,410,334 Commissioner of Income Tax (appeals)



(also refer note 40(I)(d) to the financial statements)

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

(xi) On the basis of audit procedures performed by us and according to the information, explanation and representations given to us by the management, the matured debentures which were outstanding as at previous balance sheet date and as also mentioned in our report of previous financial year, have been duly rescheduled and restructured during the year. Further, the Company has outstanding delays as at balance sheet date in repayment of dues (including interest) to banks and financial institutions of amounts given and as explained in note 4 to the financial statements. The Company also has outstanding delays as at balance sheet date in repayment of dues (including interest) to debenture holders aggregating to Rs. 218,941,289 and delays ranging from 1 day to 351 days,

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly Paragraph 4 (xii) of the Order is not applicable.

(xiii) In our opinion, the Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Accordingly, paragraph 4 (xiii) of the Order, is not applicable.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, paragraph 4 (xiv) of the Order is not applicable. allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to information and explanations given to us, during the year covered by our audit report, the Company has not issued any debentures.

(xx) The Company has not raised any money by way of public Issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



For Goel Garg & Co.,

Chartered Accountants

FRN:000397N





(Ashok Kumar Agarwal)

Partner

Membership Number : 084600

Place: Gurgaon

Dated: 30th May, 2013


Mar 31, 2012

1. We have audited the attached Balance sheet of Unitech Limited ('the Company') as at 31st March, 2012, the statement of profit and loss and the cash flow statement ('financial statements') for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. The financial statements referred above include unaudited financial statements of a Libya branch ('the branch'), whose financial statements reflect total liabilities (net) Rs. 3,233,388 and total revenue of Rs. 539,842 as at 31st March, 2012.

5. Further to our comments in the annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(iii) The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

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

6. Without qualifying our opinion, we draw attention to the following:

(i) Note no 46, wherein no adjustments have been considered necessary for recoverability of balance of short term loans aggregating to Rs. 3,013,863,597 and investments aggregating to Rs. 270,079,306 as the matters are sub-judice and the impact, if any, is unascertainable at this stage;

(ii) Note no 48 wherein the Hon'ble Supreme Court of India, vide a judgment dated 2nd February, 2012 read with the order dated 24th April, 2012, has quashed 122 UAS licenses granted to the private companies (including 22 UAS licenses issued to Unitech Wireless companies) pursuant to the press releases issued on 10th January, 2008 and subsequent allocation of spectrum to the licensees, effective from 7th September, 2012 and directed DoT to auction the licenses by 31st August, 2012. The Company is directly holding 6.76% stake in Unitech Wireless companies and economic interest of 25.99% in Unitech Wireless companies through compulsorily convertible debentures and related rights to purchase the equity shares of three affliate companies.

Accordingly, the impact, if any, on realizable value of the direct investments and liabilities or obligations, if any arising out of economic interests of the Company in Unitech Wireless companies amounting to Rs. 9,020,510,728 is dependent upon the steps taken by DoT, outcome of auction and legal proceedings, and is thus not ascertainable as at the date of this report.

Consequently considering the above explanations and the fact that licenses are operative till 7th September, 2012, investments of the Company in this regard are being carried at book values in the financial statements for the year ended 31st March, 2012. Further, no impact of any indirect / economic interest referred above has been accounted for pending contingencies in this regard.

Further, with respect to note 39(I) (b) regarding contingent liabilities, the Company believes that the arbitration claims of Telenor for indentification given by the Company for any losses in respect of amount invested by Telenor in Unitech Wireless companies are not maintainable because the Hon'ble Supreme Court has ordered cancellation of 2G licenses held by all 122 licensees by questioning the government policy.

Consequently, since the matters are sub-judice, the outcome of which is not ascertainable at this stage, the consequential impact, if any, on the financial statements for the year ended 31st March, 2012 is not ascertainable.

7. Advances for purchase of land and projects pending commencement amounting to Rs. 16,074,305,962 under the head Short term Loans and advances (Note 47 to the financial statements), as explained by management, have been given in the normal course of business to land owing companies / collaborators / projects / for purchase of land. The management has represented that based on information available such advances in respect of ongoing business transactions are considered recoverable. However, considering that some of these advances are outstanding and unadjusted for long periods of time, we are unable to ascertain the recoverability / subsequent adjustments, if any. Accordingly, to the extent that some of these advances may not be recoverable, we are unable to ascertain the final impact, if any, on the financial statements.

8. In our opinion and to the best of our information and according to the explanations given to us, subject to our comments in the preceding paragraph, the said financial statements together with the notes thereon, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) In the case of the balance sheet, of the state of Affairs of the company as at 31st March, 2012;

(b) In the case of the statement of profit and loss, of the profit of the Company for the year ended on that date; and

(c) In the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of the auditors' report of even date to the members of Unitech Limited on the financial statements for the year ended 31st March, 2012)

In terms of information and explanations given to us and the books and records examined by us, we report that:

(i) In respect of its fixed assets:

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

b. The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to this programme, certain fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

c. Fixed assets disposed of during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) In respect of its inventories:

a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies, firms or the other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of paragraph 4(iii) (b), (c) & (d) are not applicable. During the year the Company has taken unsecured loan from three Companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 535,837,572 and the year end balance of loan taken was Rs. 378,315,997. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from company, listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company. Further, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act, and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58-A & 58-AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public except that the mandatory investments as required as per Rule 3A fell short of the prescribed requirement during the year. Further, there were delays in repayments of matured fixed deposits accepted under section 58 A of the Act during the year and deposits amounting to Rs. 29,562,046 which had matured for repayment before the balance sheet date and had remained outstanding as per the bank statements reviewed by us as of the date of this report .

No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal, on the Company in respect of deposits accepted.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) In our opinion and according to the information and explanations given to us in respect of statutory dues:

(a) Undisputed statutory dues including provident fund, investor education and protection fund, employee's state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, service tax, cess have not generally been regularly deposited with the appropriate authorities though the delays in deposit have not been serious.

(b) Undisputed amounts payable in respect of income tax and service tax were in arrears, as at 31.03.2012 for a period of more than six months from the date they became payable.

Name of the Nature of Financial year Amount (Rs.) Due date Deposited on statute dues

Income Tax Regular 2010-11 906,893,734 31.03.2011 on 25.07.2012 Act, 1961 Income Tax

The Service Regular 2011-12 17,378,054 Upto on or before Tax Act, 1994 demand 30.09.2011 14.06.2012

(c) The following dues have not been deposited by the company on account of disputes, since the appeals are pending before the relevant authorities.

Name of the Nature of dues Financial Amount (Rs.) Forum where dispute is Statute year pending

Income Tax Act, Income tax matter 2004-05 73,63,246 Commissioner of Income Tax 1961 under dispute (Appeals)

Income Tax Act, Income tax matter 2007-08 140,069,833 Income tax Appellate Tribunal 1961 under dispute

The Service Tax Service tax 01-12- 2005 to 85,54,085 Commissioner, central Act, 1994 demand 31-07-2007 excise(Adj.) New Delhi and Hon'ble Delhi High Court, Delhi

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

(xi) On the basis of audit procedures performed by us and according to the information, explanation and representations given to us by the management, the Company has outstanding delays as at balance sheet date in repayment of dues (including interest) to banks and financial institutions as given in note 4(iv) to the financial statements. Further, the Company has outstanding delays as at balance sheet date in repayment of dues (including interest) to debenture holders aggregating to Rs. 2,666,601,964 and delays range from 1 day to 321 days. As explained by the management, the company had initiated the process of rescheduling and restructuring its debentures before the year end. The delay is attributable to the processing of documentation of such rescheduling / restructuring.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly Paragraph 4

(xii) of the order is not applicable.

(xiii) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Accordingly, paragraph 4 (xiii) of the Order, is not applicable.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, paragraph 4 (xiv) of the Order is not applicable.

(xv) The company has given corporate guarantees for loans taken by its subsidiaries and associates from banks and financial institutions. The terms and other conditions, in our opinion, are not prima facie prejudicial to the interest of the company considering company's economic interest in such entities.

(xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year by the company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

(xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) According to information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised any money by way of public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Goel Garg & Co.,

Chartered Accountants FRN : 000397N

(Ashok Kumar Agarwal) Partner

Membership Number : 084600

Place: Gurgaon

Dated: 14th August, 2012




Mar 31, 2011

1. We have audited the attached Balance Sheet of Unitech Limited (the 'Company') as at 31st March 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto, in which are incorporated the unaudited returns of Libya Branch (the 'Branch') (refer Note No. 2 of Schedule 16). These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper unaudited returns received by us from the Branch not visited by us.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the unaudited returns from the branch.

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

(v) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

(vi) Without qualifying our opinion, we draw attention to (a) Note No. 2 of Schedule 16 regarding the Branch and consequential loss thereof, if any; (b) Note No. 15 of Schedule 16 regarding advances against projects pending commencement, though unsecured and unconfirmed, are considered good by the management and we have relied on management contention; (c) Note No. 16 of Schedule 16 regarding Advances recoverable, though unsecured and unconfirmed, are considered good by the management and we have relied on management contention.

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and schedules 1 to 16, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(b) In the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in Paragraph 3 of the Auditors' Report of even date to the members of Unitech Limited on the financial statements for the year ended 31st March, 2011)

In terms of information and explanations given to us and the books and records examined by us, we report that:

(i) In respect of its fixed assets:

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

b. The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to this programme, certain fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

c. Fixed Assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) In respect of its inventories:

a. The inventories also include Project in Progress. The procedures of physical verification of the above in phased manner followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies, firms or the other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of paragraph 4(iii)(b), (c) & (d) are not applicable. During the year the Company has taken unsecured loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 259.75 Crores and the year end balance of loan taken was Rs. 10.60 Crores. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from company, listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company. Further, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

(v) a. According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act, have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, and exceeding the value of Rs. 5 lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of Sections 58A & 58AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, on the Company in respect of deposits accepted.

(vii) The Company has an internal audit system commensurate with the size and nature of its business.

(viii) We are informed that the Central Government has not prescribed the maintenance of cost records for any of the Company's products under Section 209(I)(d) of the Act. Accordingly paragraph 4 (viii) of the order is not applicable.

(ix) In respect of statutory dues:

According to the information and explanations given to us in respect of statutory dues:

a. The Company is generally regular in depositing undisputed statutory dues, wherever applicable with appropriate authorities during the year.

b. No undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax and cess were in arrears, as at 31.03.2011 for a period of more than six months from the date they became payable.

c. The following dues have not been deposited by the company on account of disputes, since the appeals are pending before the relevant authorities.

Name of the Nature of dues Financial Amount Forum where Statute Year/Period (Rs. in Crores) dispute is pending

Income Tax Income Tax Assessment 0.74 Commissioner of Act, 1961 Matter under Year 2005-06 Income Tax (Appeals) dispute

Service Tax Service Tax 01-12-2005 to 0.86 Commissioner, Central Act, 1994 Demand 31-07-2007 Excise(Adj.) New Delhi and Hon'ble Delhi High Court, Delhi

Total 1.60

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

(xi) On the basis of audit procedures performed by us and according to the information, explanation and representations given to us by the management, the Company had delayed in certain repayments of dues (including interest) to banks and financial institutions. The delayed principal amount and the interest aggregated to Rs. 141.37 crores and Rs. 29.39 Crores respectively and delays range from 1 day to 106 days.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly Paragraph 4 (xii) of the order is not applicable.

(xiii) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Accordingly, paragraph 4 (xiii) of the Order, is not applicable.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, paragraph 4 (xiv) of the Order is not applicable.

(xv) The Company has given corporate guarantees amounting to Rs. 1281.36 Crores for loans taken by its subsidiaries and associates from banks and financial institutions. The terms and other conditions, in our opinion, are not prima facie prejudicial to the interest of the company.

(xvi) According to the information and explanations given to us and records examined by us, the term loans have generally been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short term assets.

(xviii) During the year, 177,500,000 Warrants were converted into equal number of equity shares of Rs. 2/- each at a premium of Rs. 48.75 per share in compliance with the SEBI (Issue of Capital and Disclosure) Regulations, 2009 which resulted in increase in the paid-up capital of the Company by Rs. 35.50 Crores. Hence, at the end of the year, the Company had no warrants outstanding for conversion.

(xix) According to information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised any money by way of Public Issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Goel Garg & Co.,

Chartered Accountants

FRN : 000397N

(J. L. GARG)

Partner

Membership Number: 5406

Place: New Delhi

Dated: 29th May, 2011














Mar 31, 2010

1. We have audited the attached Balance Sheet of Unitech Limited (the Company) as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto, in which are incorporated the returns from Libya Branch audited by another Auditor. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (the order), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Libya Branch not visited by us. The Branch Auditors Report has been forwarded to us and has been appropriately dealt with.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the branch;

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

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and schedules 1 to 16, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010;

(b) In the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 3 of the Auditors Report of even date to the members of Unitech Limited on the financial statements for the year ended 31st March2010)

In terms of information and explanations given to us and the books and records examined by us, we report that:

(i) In respect of its fixed assets:

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to this programme, certain fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) Fixed Assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

(ii) In respect of its inventories:

(a) The inventory has been physically verified by the management in a phased manner during the year. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material.

(iii) The Company has not granted any loans secured or unsecured to companies, firms or the other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of paragraph 4(iii)(b), (c) & (d) are not applicable. The Company has taken unsecured loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 77.41 lakhs and the year end balance of loans taken from such party was Rs. 77.41 lakhs. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from company, listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company. Further, the company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58-A & 58-AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal, on the Company in respect of deposits accepted.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We are informed that the Central Government has not prescribed the maintenance of cost records for any of the Companys products under Section 209(I)(d) of the Act. Accordingly paragraph 4 (viii) of the order is not applicable.

(ix) In respect of statutory dues: According to the information and explanations given to us in respect of statutory dues:

(a) The company is generally regular in depositing undisputed statutory dues, wherever applicable with appropriate authorities during the year.

(b) No undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax and cess were in arrears, as at 31.03.2010 for a period of more than six months from the date they became payable except for the service tax amounting to Rs.32,203,396/-.

(c) The following dues have not been deposited by the company on account of disputes, since the appeals are pending before the relevant authorities.

Name of the Nature of dues Financial Amount Statute Year/Period (Rs. in Crores)

Income Tax Income Tax Assessment 0.74 Act, 1961 Matter under Year 2005-06 dispute

The Service Service Tax 01-12-2005 0.86 Tax Act, 1994 Demand to 31-07-2007

TOTAL 1.60

Name of the Forum where Statue dispute is pending

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

The Service Tax Act, 1994 Commissioner, Central Excise (Adj.)New Delhi and Honble Delhi High Court, Delhi

TOTAL

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

(xi) Based on our audit procedures and as informed, the company has delayed beyond the stipulated dates, repayment of dues to Debenture Holders, Banks & Financial Institutions amounting to Rs.25 crores, for which necessary approvals for rescheduling/ restructuring of repayments have been obtained from the lenders.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly Paragraph 4 (xii) of the order is not applicable.

(xiii) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Accordingly, paragraph 4 (xiii) of the Order, is not applicable.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, paragraph 4 (xiv) of the Order is not applicable.

(xv) The company has given corporate guarantees amounting to Rs. 1649.94 Crores for loans taken by its subsidiaries and associates from banks and financial institutions. The terms and other conditions, in our opinion, are not prima facie prejudicial to the interest of the company.

(xvi) According to the information and explanations given to us and records examined by us, the term loans have generally been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short term assets.

(xviii)The company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. The company has allotted 227,500,000 Share Warrants on June 29, 2009, convertible into equal numbers of Equity Shares of face value of Rs.2/- each at a premium of Rs.48.75 per Equity Shares to Harsil Projects Private Limited, one of the promoter group Company. Out of the said warrants, 5,00,00,000 Warrants were converted into equal number of equity shares of Rs.2/- each on March 29, 2010.The aforesaid preferential allotment is in accordance with the requirements of the guidelines laid down in this regard by the Securities and Exchange Board of India and in our opinion the price at which shares have been issued is not prejudicial to the interest of the company.

(xix) According to information and explanations given to us, during the period covered by our audit report, the company has created security in respect of debentures issued.

(xx) The company has not raised any money by way of Public Issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Goel Garg & Co.,

Chartered Accountants Registration number: 000397N

(S.C.Garg)

Partner

Membership Number: 13370

Place : Gurgaon Dated : 28th May, 2010



 
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