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Auditor Report of Unitech Ltd.

Mar 31, 2023

INDEPENDENT AUDITORS'' REPORT

TO THE MEMBERS OF UNITECH LIMITED

Report on the Audit of the standalone financial statements

Disclaimer of Opinion

We have audited the accompanying Standalone Financial Statements
of the Company which comprise the Balance Sheet as at 31st
March, 2023, the Statement of Profit and Loss (including Other
Comprehensive Income), Statement of Changes in Equity and
Statement of Cash Flows, and a summary of significant accounting
policies and other explanatory information, in which are incorporated
the financial information for the year ended on that date of the
Company''s branch office at Libya which are not yet audited by the
branch auditor. As at 31st March 2023, the Company has made
provision for non- recoverability of assets and provision for write¬
back of trade liabilities in respect of the Libya branch office (also refer
sr no iii of other matters paragraph of this report for details).

Our audit indicates that, because of the substantive nature and
significance of the matter described below, we have not been
able to obtain sufficient appropriate evidence to provide a basis
for expressing an opinion on the statement as to whether these
Standalone Financial Statements are prepared in accordance with the
recognition and measurement principles laid down in the aforesaid
Indian Accounting Standard and other recognized accounting
practices and policies generally accepted in India and has disclosed
the information required to be disclosed under the Companies Act,
2013 including the manner in which it is to be disclosed, or that it
does not contain any material misstatement.

Basis for Disclaimer of Opinion

We conducted our audit of the Standalone Financial Statements
in accordance with standard on auditing specified under section
143(10) of the Act. Our responsibilities under those standards
are further described in the Auditor''s Responsibility for the audit
of the Standalone financial statements section of our report. We
are independent of the company in accordance with the Code of
Ethics issued by the institute of Chartered Accountant of India (ICAI)
together with the ethical requirements that are relevant to our audit
of the Standalone financial statements under the provisions of the
Act and the Rules made thereunder, and we have fulfilled our ethical
responsibilities in accordance with these requirements and the ICAI''s
Code of Ethics. Because of the significance of the matters described
below we have not been able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion.

We draw your attention to the following matters:

(i) We draw attention to Note no. 55 of the Standalone Financial
Statements, which have made references to the Resolution
Framework (RF) for Unitech group which has been prepared
under the directions of the Board of Directors of Unitech
Limited appointed by the Central Government pursuant to the
afore-said order of the Hon''ble Supreme Court and approved
by the Board of Directors in their Meeting held on June 17,
2020/ September 10, 2020/ October 28, 2020/ April 27, 2022 and
which has been filed with the Hon''ble Supreme Court. Through
RF, the company has requested the Hon''ble Supreme Court to
grant some concessions and reliefs so that the company is able
to fulfil its obligations towards the construction of the projects
and meet other liabilities.

As the RF has not yet been approved by the Hon''ble Supreme
Court, the impact of the proposed reliefs, concessions etc.
have not been considered in the books of accounts.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(ii) Material uncertainty related to going concern

We draw attention to Note no. 39 of the Standalone Financial
Statements wherein the management has represented that
the Standalone Financial Statements have been prepared
on a going concern basis, notwithstanding the fact that the
Company has incurred losses and has challenges in meeting its
operational obligations, servicing its current liabilities including
bank loans and public deposits. The Company also has various
litigation matters which are pending before different forums,
and various projects of the Company have stalled/ slowed
down.

These conditions indicate the existence of material uncertainty
that may cast significant doubt about Company''s ability
to continue as a going concern. The appropriateness of
assumption of going concern is critically dependent upon the
Company''s ability to raise finance and generate cash flows in
future to meet its obligations, and also on the final decision of
the Hon''ble Supreme Court on the Resolution Framework. Also,
the Board of Directors are exploring various possible options
for completion of ongoing projects and are trying to generate
additional possible revenues by construction of new flats. This
activity is getting conducted under supervision of Justice A.M.
Sapre, as appointed by Hon''ble Supreme Court of India.

Considering the above, we are unable to express an opinion on
this matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(iii) We draw attention to Note no. 53 of the Standalone Financial
Statements, Unitech Limited ("the Company") held its annual
general meetings for last 2 years with delays. The company had
not applied for any extension for these annual general meeting
to the Registrar of Companies, NCT of Delhi & Haryana and is in
the process of estimation of penalty and other implications due
to delay in holding of annual general meeting.

Further, the Company also delayed in filling of its quarterly and
annual/year to date results with Security and Exchange Board
of India "SEBI". The Company has not taken any provision
related to penalty on account of such delay and management
is now planning to seek relief against such penalty from SEBI.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(iv) We draw attention to Note no. 61 of the Standalone Financial
Statements, the Company had received a ''cancellation of

lease deed'' notice from Greater Noida Industrial Development
Authority ("GNIDA") dated 18 November 2015. As per the Notice,
GNIDA cancelled the lease deed in respect of Residential/ Group
Housing plots on account of non-implementation of the project
and non-payment of various dues amounting to Rs. 105,483.26
Lakhs. The said land is also mortgaged and the Company has
registered such mortgage to a third party on behalf of lender for
the Non-Convertible Debenture (NCD) facility extended to the
Company and, due to default in repayment of these NCDs, the
debenture holders have served a notice to the Company under
section 13(4) of the SARFAESI Act and have also taken notional
possession of this land. The Company had contractually entered
into agreements to sell with 352 buyers and has also received
advances from such buyers amounting to Rs. 6,682.10 Lakhs
(net of repayment). No contract revenue has been recognized
on this project.

GNIDA has, in the meanwhile, in terms of the Order of the
Hon''ble Supreme Court dated 18.09.2018, deposited on behalf
of the Company, an amount of Rs. 7,436.35 Lakhs (Rs. 6,682.10
Lakhs and interest @ 6% on the principal amount of Rs.
6,682.10 Lakhs), out of the monies paid by the Company, with
the registry of the Hon''ble Supreme Court. Out of the amount
received from GNIDA, the Hon''ble Supreme Court has refunded
the amount received in advance along with the interest to those
342 homebuyers who has submitted the relevant documents,
as per details of the position of accounts as on 22nd November,
2022 received from Hon''ble Supreme Court.

GNIDA has adjusted Rs. 9,200.00 Lakhs of Unitech group''s
liabilities towards the Company''s other projects with GNIDA
and forfeited Rs. 13,893.42 Lakhs.

The Company had paid a sum of Rs. 34,221.90 Lakhs, including
Rs. 4,934.95 Lakhs of stamp duty on the land, for the said land.

The matter in respect of the land is still pending before the
Hon''ble High Court of Allahabad, and pending the final
disposal, the Company has, subsequently, shown the amount
of Rs. 18,339.80 Lakhs as recoverable from GNIDA in its books
of accounts including stamp duty of Rs. 4,934.95 Lakhs and
lease rent paid of Rs. 61,13.11 Lakhs. Further, the Company is
also carrying.

a) Other construction costs amounting to Rs. 80,575.05 Lakhs
in respect of the projects to come upon the said land which also
includes interest capitalized of Rs. 696,84.68 Lakhs.

b) Deferred liability on account of interest payable to GNIDA
appearing in the books of accounts as on 31st March, 2023
amounting to Rs. 3,72,777.42 Lakhs (including Rs. 52,220.54
Lakhs booked on account of interest during the year ended
31st March, 2023). Out of the interest mentioned above Rs.
4,846.67 Lakhs has been capitalised in the books of accounts of
the company. The same is in contravention of the provisions of
Indian Accounting Standards 23 "Borrowing Costs".

The impact on the accounts viz. inventory, projects in progress,
customer advances, amount payable to or receivable from
GNIDA, and profit/(loss) for the year cannot be ascertained,

since the matter is still subjudice, as mentioned hereinabove,
vis-a-vis dues of the Company, and hence we are unable to
express an opinion on this matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(v) We draw attention to Note no. 71 of the Standalone Financial
Statements, Confirmations/ reconciliations are pending in
respect of amounts deposited by the Company with the
Hon''ble Supreme Court. As per books of account an amount
of Rs. 31,191.85 Lakhs deposited with the Hon''ble Supreme
Court Registry ("Registry") is outstanding as at 31st March,
2023. Management has received certain details of payments
made and monies received in the registry from the Court and
has accrued the same in its books of accounts. However, there
are still variations of Rs. 934.15 Lakhs between balance as
per books of accounts vs balance as per registry details and
management is in the process of reconciliation of the same.

Further, for the payments made from its registry, there was no
deduction made on account of tax at source and no goods and
services tax liability, wherever applicable on reverse charge
basis have been complied with.

In view of the reconciliation exercise still in process, possible
tax non compliances, we are unable to comment on the
completeness and correctness of amounts outstanding with the
Registry and of the ultimate impact these transactions would
have on the Standalone Financial Statements of the Company,
and hence we are unable to express an opinion on this matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(vi) We draw attention to Note no. 2, 3 and 4 of the Standalone
Financial Statements, according to information given and
explanation provided to us by the management, in respect
of Property, Plant and Equipment (PPE) including Investment
Property having net value of Rs. 2,996.56 Lakhs (net of
accumulated depreciation of Rs. 7,527.88 Lakhs), there is no
physical verification conducted by the Company since last
year. Further, the company does not maintain proper records
showing full particulars, including quantitative details and
situation of Fixed Assets comprising ''property, plant and
equipment, ''Intangible Assets'' & ''investment property''. In
view of this and also of the fact that these PPE''s are kept as
security for obtaining bank loans and all the loan accounts
of the Company (except loan obtained from Punjab National
Bank) are at non performing levels, we are not able to express
an opinion on this matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

Company has made investments and given loans to its
subsidiaries, joint ventures, associates and other. Details as on
31st March, 2023 are as follows: -

We draw attention to Note no. 5, 6 and 13 of the Standalone
Financial Statements, considering the fact that the accounts of
these above mentioned foreign entities are not available with
the management and for Indian entities, they are not audited
since last 4-5 years plus also taking into accounts the factors
such as non exitance of any loan agreement stating terms,
conditions and duration of loan, accumulated losses in above
said entities, substantial/ full erosion of net worth, significant
uncertainty on the future of these entities and significant
uncertainty on recovery of investments and loans, there are
strong indicators of conducting impairment/ expected credit
loss assessment for above mentioned investments and loans in
accordance with the principles of Indian Accounting Standards
36, "impairment of assets" and Indian Accounting Standards
109 "financial instruments".

Further: -

• Equity investment - others include investment made
in M/s Carnoustie Management (India) Private Limited
(Carnoustie) of Rs. 310,05.45 Lakhs as on 31st March,
2023. Regarding this investment, the Company has
already filed an Intervention Application "IA" before
Hon''ble Supreme Court of India wherein, the Company
has stated that erstwhile management has invested
in equity shares of Carnoustie @ Rs. 1,000 - Rs. 1,500
per share including a premium of Rs. 990 - Rs. 1,490
per share. As per IA submitted by the Company, there

was no basis available with erstwhile management for
such share valuation. Also, there were certain plots
allotted to Carnoustie at a price lower than the market
rate as on allotment date. Considering the nature of this
investment, same is to be valued at fair value through
other comprehensive income "FVTOCI" as required
under Indian Accounting Standards 109 "financial
instruments" but the Company has decided to carry
investment made in Carnoustie at cost as the matter is
subjudice.

• Investment - CIG - The Company made investment
of Rs. 254,53.18 Lakhs in CIG realty fund for which no
details are available with the Company. As explained by
management, the Company is planning to file a separate
Intervention Application "IA" before Hon''ble Supreme
Court of India requesting Hon''ble Court to take up this
matter. Management also explained that CIG funds are
already under investigation by Enforcement Directorate
(ED) and Serious Fraud Investigation Office (SFIO).
Considering the nature of this investment, same is to
be valued at fair value through other comprehensive
income "FVTOCI" as required under Indian Accounting
Standards 109 "financial instruments" but the Company
has decided to carry investment made in CIG funds
at cost as the matter is under investigation by various
authorities.

In view of non-existence of any impairment study, non-existence of
any expected credit loss policy in the Company and accounting of
investment at cost which were otherwise to be carried at FVTOCI, we are
unable to express an opinion upon the adjustments, if any, that may be
required to the carrying value of these non-current investments and non¬
current loan and its consequential impact on the Standalone Financial
Statement.

We had given a disclaimer of opinion on the standalone financial
statements for the year ended 31st March, 2022 in respect of this matter.

(viii) Impairment Assessment of Bank and Corporate Guarantees

We draw attention to Note no. 50 of the Standalone Financial
Statements, wherein it is stated that the company is having
outstanding bank and corporate guarantee of Rs. 1,07,059.26
Lakhs as per audited financials for year ending 31st March,
2023. The company has not conducted any impairment
assessment on the same in accordance with the principles of
Indian Accounting Standards 109 "financial instruments". In
view of the same, we are unable to express an opinion on the
same.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

The company has trade receivable and other financial assets as
on 31st March, 2023 are as follows: -

We draw attention to Note no. 7, 10, 13 and 14 of the Standalone
Financial Statements, the company has not assessed loss
allowance for expected credit losses on financial assets in
accordance with the principles of Indian Accounting Standards
AS 109 - "Financial Instruments".

In view of non-existence of any expected credit loss policy in
the Company, we are unable to express an opinion upon the
adjustments, if any, that may be required to the carrying value
of these financial assets and its consequential impact on the
Standalone Financial Statement.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(x) Inventory and project in progress

We draw attention to Note no. 9 and 16 of the Standalone
Financial Statements, Company, as on 31st March, 2023, has
shown inventory of Rs. 62,517.96 Lakhs and project in progress
"PIP" of Rs. 17,56,942.48 Lakhs. Company is currently carrying
these inventory and PIP items at cost which is computed based
on percentage of completion method under Indian Accounting
Standard 115 "Revenue from Contracts with Customers". In
view of the fact that in majority of the projects of the Company,
construction and other operational activities are on hold since
last 24-60 months, there are high indicators that such inventory
and PIP assets should be tested for evaluating their respective
net realisable value "NRV" in accordance with the requirement
of Indian Accounting Standard 2 "inventories".

Further, management is in the process of verification of title
documents for land and other immovable assets.

As per the explanation provided by the management, pursuant
to the approval of Hon''ble Supreme Court of India, Project
Management Consultants (PMCs) have been appointed for the
projects for estimation of work done till date, cost to be incurred
further to complete the projects and to provide applicable
completion timelines. These PMC''s have also conducted actual

physical assessment of the projects and submitted their reports.
Management was earlier of the view that NRV assessment of
inventory and PIP can be made only after the appointed PMCs
complete their assessment of respective projects and submit
their final reports but the same is still awaited.

Further, the Company has during the year capitalized expenses
to the tune of Rs. 11,249.80 Lakhs as construction expenses
(including interest expense of Rs. 6,154.51 Lakhs). This Same
is in contravention of the provisions of Indian Accounting
Standard 16 "Property plant and equipment" and Indian
Accounting Standard 23 "Borrowing cost" as construction
activity for all the projects is stalled since last 5-6 years. This
has resulted in understatement of current year loss by above
said amount.

Also further, the Company, in its financial statements has
bifurcated PIP under two headings - "Project in progress on
which revenue is not recognized" and "Amount recoverable
from project in progress (on which revenue is recognized)".
We have not been provided with any basis on which this
bifurcation is made.

In view of the absence of any NRV assessment by the
management and absence of any physical verification report,
capitalization of expenses and interest cost during the year,
and absence of any basis of bifurcation of projects in financial
statements, we are unable to express an opinion upon the
existence and adjustments, if any, that may be required to the
carrying value of these inventories and PIP and its consequential
impact on the Standalone Financial Statements.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xi) External Confirmation

The company has not initiated the process of external
confirmation for outstanding balances of following areas as on
31st March, 2023 are as follow:

We draw attention to Note no. 66 of the Standalone Financial
Statements, the company has expressed its inability to send
confirmation requests in respect of above-mentioned areas
due to uncertainty about the amount receivable and payable
appearing in the books of accounts which are outstanding for
significantly long period of time. In view of non-existence of
adequate supporting documents, we are unable to express an
opinion upon completeness of the balances appearing in books
of accounts of the Company.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

Bank confirmations

In respect to confirmation of bank balances, margin money
balance and term deposits, the company has not sent
confirmation requests to any of the banks. In view of non¬
existence of supporting evidence related to bank balances,
we are unable to comment upon completeness of the
balances appearing in books of accounts of the Company
and adjustments, if any, that may be required to the books
of accounts and its consequential impact on the Standalone
Financial Statements.

With respect to the loans and borrowings taken by the Company
amounting to Rs. 2,79,186.01 Lakhs as on 31st March, 2023, no
confirmation has been received till date of this report.

The company is accruing interest expense on the said loans is
accrued at a provisional rate of interest. Such provisional rate
of interest is based on the details available with the Company
regarding interest rates charged by banks/ financial institutions
and the same are 4-5 years old. The company, has before the
date of approval of standalone financial statements for the year
ended 31st March, 2023, obtained statement of accounts from
several banks/financial institutions regarding its borrowings.
The Company analysed the statements, obtained from banks/
financial institutions, and additional liability, related to interest
and penal interest, was identified to the tune of Rs. 907,77.98
Lakhs. The company accrued the additional liability in the year
ended 31st March, 2023 whereas the interest/ penal interest
pertained to the earlier periods also. Non accounting of interest/
penal interest in earlier period, as part of error accounting, is in
contravention to the provisions of Indian Accounting Standard
8 "Accounting policies, changes in accounting estimates
and errors". The Company, is still in process of getting these
statements from remaining banks/financial institutions. In view
of these, we are unable to comment upon completeness of
the balances appearing in books of accounts of the Company
and adjustments, if any, that may be required to the books

of accounts and its consequential impact on the Standalone
Financial Statements.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xii) We draw attention to Note no. 50 of the Standalone Financial
Statements, Company is in the process of estimating impact
of its contingent liabilities which is subject to the decision
of hon''ble Supreme Court of India on proposed resolution
framework submitted by the Company. In absence of the same,
we are unable to express an opinion on the impact of such
contingent liabilities on the Company.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xiii) We draw attention to Note no. 67 of the Standalone Financial
Statements, Company has not appointed an internal auditor
for the financial year 2020-21,2021-22 and 2022-23 which is in
contravention of the provisions of section 138 of the Companies
Act, 2013 which mandates appointment of internal auditor for
all listed companies.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xiv) We draw attention to Note no. 67 of the Standalone Financial
Statements, the company has not yet appointed a Chief
Financial Officer and the prescribed time period under section
203 of the Companies Act, 2013 has already expired. Further
the company has not filed any application with Ministry of
Corporate Affairs for compounding of the said offence.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xv) We draw attention to Note no. 62 of the Standalone Financial
Statements, The Company has accounted for its investment in
one of its subsidiary M/s Unitech Power Transmission Limited,
as non-current assets held for sale. Cost of investment as on
31st March, 2023 is Rs. 42,26.26 Lakhs. The Company is carrying
said investment at cost and has not made any estimation of its
fair value less cost to sell as required under provisions of Indian
Accounting Standard 105 "Non-Current Assets Held for Sale
and Discontinued Operations". The company, post as on 31st
March, 2023, has received a binding offer of Rs. 6700.00 Lakhs
from a buyer which is also approved by the directors of the
company through circular resolution dated 14.08.2023. In the
absence of any fair value assessment by the Company, we are
unable to express an opinion on the matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xvi) The company has made many adjustments in accordance with

Indian Accounting Standards applicable to the company as on
31st March, 2020. The company is in the process of identifying
the impact already incorporated in the books of accounts in
previous years. In view of the same, we are unable to express
an opinion on completeness of the impact of Indian Accounting
Standard appearing in the books of account of the company.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xvii) Revenue from real estate projects

We draw attention to Note no. 31 of the Standalone Financial
Statements, The Company is accounting for revenue under
real estate projects using percentage of completion method
(POCM) with an understanding that performance obligations
are satisfied over time. Provisions of paragraph 35 of Indian
Accounting Standard 115 "revenue from contracts with
customers" specifies that an entity can recognise revenue over
time if it satisfies any one of the following criteria: -

• The customer simultaneously receives and consumes
the benefits provided by the entity''s performance as the
entity performs

• The entity''s performance creates or enhances an asset
(for example, work in progress) that the customer
controls as the asset is created or enhanced

• The entity''s performance does not create an asset with
an alternative use to the entity and; the entity has an
enforceable right to payment for performance completed
to date.

On perusal of various agreements entered by the Company with
home buyers, it seems that the Company does not satisfy any of
the conditions specified in paragraph 35 of Indian Accounting
Standard 115 "revenue from contracts with customers".

Based on the explanation provided by the management, they are
in agreement with our understanding and are in the process of
evaluation its impact on the present and earlier presented periods.

In view of the above, we are unable to express an opinion on
the all the matter mentioned above.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

Regarding tax deducted at source, the Company has decided
not to deposit outstanding amount of tax deducted at source
till 20th January, 2020 i.e. period before the date when court
appointed management took over. Accordingly, the same are
still outstanding in the books of accounts of the Company.

During financial year ending 31st March, 2023, the Company is
not deducting tax at source at the time of booking of expenses
/ accounting entry but is deducting the same at the time of
payment. Same is in contravention of the provisions of chapter
XVII of Income-tax Act, 1961 which mandates deduction of tax
at source at earlier of booking or payment.

The Company is filling its GST returns in the states wherein it
has obtained registration. However, there is no reconciliation
available with the Company for the sales / input tax credit "ITC"
appearing as per books of accounts and details filled in the GST
returns.

We further like to draw attention to Note no. 16 of the Standalone
Financial Statements, which includes balance of Rs. 12,677.74
Lakhs pertaining to balance of input tax credit "ITC" receivables
by the Company under Goods and Services Tax Act, 2017.
The Company does not have any ITC register and has also not
provided any reconciliation between "ITC balance appearing in
books" and "balance appearing in GST department''s portal". In
absence of any such detail and reconciliation, we are unable to
comment on accuracy or completeness of the same.

Further, the company has long outstanding dues payable to
employees amounting to Rs. 5,980.48 Lakhs as on 31st March,
2023. The company is in the process of evaluating the period
from which dues to employees are outstanding and also in
settlement of full and final amount payable to past employees
of the company.

In view of the all of the above, we are unable to express an
opinion on the matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xix) We draw attention to Note no. 57 of the Standalone Financial
Statements, The Company has failed to repay deposits
accepted by it including interest thereon in respect of the
following deposits:

Further, the Company has not provided for interest payable on
public deposits which works out to Rs. 6,678.84 Lakhs for the
year ended 31st March 2023 (Cumulative upto 31st March 2023
- Rs. 41,795.45 Lakhs).

Besides, the impact of non-provision of interest payable on
public deposits of Rs. 6,678.84 Lakhs for the year ended 31st
March 2023 on the profit and loss, we are unable to evaluate
the ultimate likelihood of penalties/ strictures or further
liabilities, if any on the Company. Accordingly, impact, if any,
of the indeterminate liabilities on these Standalone Financial
Statements is currently not ascertainable, and hence we are
unable to express an opinion on this matter.

Further, the Company has also accepted security deposits from
various entities amounting to Rs. 22,129.99 Lakhs as on 31st
March, 2023. We have not been provided with any relevant
agreement / document against which such security deposits
have been received. Due to absence of any related details /
document, we are in a position to comment on possible impact
of the same on the Company.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xx) We draw attention to Note no. 54 of the Standalone Financial
Statements, there have been delays in the payment of dues
of non-convertible debentures, term loans & working capital
loans (including principal, interest and/ or other charges as the
case may be) to the lenders of the company and the total of
such outstanding amount to Rs. 7,95,501.55 Lakhs as on 31st
March, 2023. The lenders have initiated the action against the
company under various act(s). On account of the same, we
are unable to determine the impact of the likely outcome of
the said proceedings and hence we are unable to express an
opinion on this matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xxi) We draw attention to Note no. 68 of the Standalone Financial
Statements of the Company as on 31st March, 2023 which
contains the details of Intervention Application "IA" before
Hon''ble Supreme Court of India wherein, the Company has
stated that erstwhile management has invested in the state
of Hyderabad through a collaboration agreement with M/s
Dandamundi Estate and Mr. D.A. Kumar and deposited an
amount of Rs. 481,31.00 Lakhs (out of which an amount of Rs.
6,00.00 Lakhs got adjusted on account of some dues of M/s
Dandamundi Estate). Now the new management, is trying to
recover the amounts deposited with M/s Dandamundi Estate
and Mr. D.A. Kumar along with interest @ 18% pa and has
not created any provision against said deposit in the books of
accounts on account of matter being subjudice. In view of the
same, we are unable to express an opinion on this matter.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xxii) We draw attention to Note no. 71 of the Standalone Financial
Statements, the Company is unable to correctly map the
monies received with appropriate customer codes. Due to this,
Rs. 483.74 Lakhs have been accounted for under advance from
customer during the financial year ending 31st March, 2023.
Cumulative total of such receipts which are not identifiable is
Rs. 2,897.90 Lakhs.

Due to non-availability of data and supporting documents, we
are unable to express an opinion on the same.

We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.

(xxiii) Filing of E-forms with Registrar of Companies

The company has failed to submit following e-forms with
Registrar of Companies during the year:

a) Form DPT-3 - Return of Deposit

b) Form CRA-4 - Cost Audit Report for F.Y. 2020-21 file with
the Central Government

(xxiv) Schedule III of Companies Act, 2013

The Company is not able to provide / substantiate details
of following disclosures required under the provisions of
Schedule III of Companies Act, 2013:-

a) Complete details of title deeds of immovable properties
not held in the name of the Company

b) Details of benami property held and any proceeding has
been initiated or pending against the company, if any

c) Details of quarterly returns or statements of current
assets filed by the company with banks or financial
institutions are in agreement with the books of accounts

d) Complete details of company declared wilful defaulter
by the bank or financial institution or other lender

e) Utilisation of borrowed funds

f) Relationship and transactions with struck off companies

g) Ageing for trade receivables

h) Ageing for trade payables

i) Details related to creation / satisfaction of charges

j) Details related to surrender or disclosure of income in the
tax assessments under the Income-tax Act, 1961 (such
as, search or survey or any other) relevant provisions of
the Income-tax Act, 1961

(xxv) We draw attention to Note no. 66 of the Standalone Financial
Statements, with respect to opening balances appearing in the
books of accounts of the Company as on 31st March, 2023.
There are several old outstanding balances for which there
is no information/ supporting documents available with the

Company: -

• Other comprehensive income / (loss) amounting Rs.
(523,31.93) Lakhs

• Provision for bad and doubtful debts/ trade receivables
amounting Rs. 323,73.95 Lakhs

• Allowances for bad and doubtful loans and advances to
related parties amounting to Rs. 15,89.05 Lakhs

• Other loans and advance amounting to Rs. 520.00 Lakhs

• Trade receivables and advances received from
customers amounting Rs. 11930,75.62 Lakhs

• Loans/ advances given to subsidiaries, joint ventures
and associates amounting to Rs. 4689,32.90 Lakhs

• Loans taken from subsidiaries, joint ventures and
associates amounting to Rs. 74,192.20 Lakhs

• Expenses payable amounting to Rs. 51,612.66 Lakhs

• Current Tax Assets amounting to Rs. 3004.64 Lakhs

• Deferred Liability amounting to Rs. 2,36,049.12 Lakhs

• Advance given for purchase of land amounting to Rs.
61,287.37 Lakhs and its Ind AS Adjustments amounting
to Rs. 43,65.00 Lakhs.

• Provision for doubtful advance given for purchase of
land amounting Rs. 30,000.00 Lakhs

• Investment in Subsidiary - Corporate Guarantee
amounting to Rs. 8.70 Lakhs.

• Investment in CIG Funds (Ind AS Adjustments)
amounting to Rs. 9,60.83 Lakhs.

• Security Deposits receivables (Ind AS Adjustments)
amounting to Rs. 2,867.51 Lakhs.

• Prepaid Expenses (Ind AS Adjustments) amounting to
Rs. 17.84 Lakhs.

• Loans to Subsidiaries (Ind AS Adjustments) amounting
to Rs. 50,730.57 Lakhs.

• Term loans from bank and Financial Institution (Ind AS
Adjustments) amounting to Rs. 63.93 Lakhs.

• Other Payables (Ind AS Adjustments) amounting to Rs.
7.19 Lakhs

Considering the significance of amounts involved in above
mentioned areas, we are not in a position to express an opinion
on the Standalone Financial Statements as on 31st March, 2023.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xxvi) We draw attention to Note no. 50 of the Standalone Financial
Statements, the company has not provided the complete
details of pending litigations against the company, outstanding
bank and corporate guarantees and commitments to be
performed by the company.

In view of above, we are unable to express an opinion on the
same.

We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.

(xxvii) We draw attention to Note no. 52 of the Standalone Financial
Statements, the company has not performed the process of
identification of creditors to be classified as Micro and Small
Enterprises (MSE) during the year and due to absence of details of
MSE, the company cannot determine the amount outstanding to
MSE creditors and interest due thereon under "The Micro, Small
and Medium Enterprises Development Act, 2006".

In view of above, we are unable to express an opinion on the same.

We had given a disclaimer of opinion on the standalone financial
statements for the year ended 31st March, 2022 in respect of this
matter.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial
statements of the current year. These matters were addressed in
the context of our audit of the standalone financial statements as a
whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. As all material items are already
described as a matter in the "Basis of Disclaimer of Opinion" para,
there are no items which can be reported as key audit matters to be
communicated separately.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL
STATEMENTS AND AUDITOR''S REPORT THEREON

The company''s management and board of directors are responsible for the
other information. The other information comprises the information included
in Annual Report but does not include the Standalone Financial Statements
and our auditor''s report thereon. The Annual Report is expected to be made
available to us after the date of this auditor''s report.

Our opinion on the Standalone Financial Statements does not cover the other
information and we will not express any form of assurance conclusion thereon.

In connection with our audit report of the Standalone financial statements,
our responsibility is to read the other information identified above when it
becomes available and, in doing so, consider whether the other information
is materially inconsistent with the Standalone financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated.

When we read the Annual Report, if we conclude that there is material
misstatement therein, we are required to communicate the matter to those
charged with governance and if required issue a revised Audit report on
Standalone Financial Statements.

RESPONSIBILITY OF MANAGEMENT FOR STANDALONE
FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters
stated in sub-section 5 of Section 134 of the Companies Act, 2013 ("the
Act") with respect to the preparation of these Standalone Financial

Statements that give a true and fair view of the financial position,
financial performance including other comprehensive income,
changes in equity and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Indian Accounting Standards specified under Section 133 of the Act
read with relevant rules issued thereunder.

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 Standalone financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or
error.

In preparing the Standalone financial statements, management is
responsible for assessing the company''s ability to continue as a going
concern, disclosing as applicable, matters related to going concern
and using the going concern basis of accounting unless management
either intend to liquidate the company or to cease operation, or has
no realistic alternative but to do so.

The board of directors are also responsible for overseeing the
Company''s financial reporting process.

AUDITORS'' RESPONSIBILITY FOR THE AUDIT OF THE STANDALONE
FINANICAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the
Standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor''s
report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in
accordance with Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Standalone financial
statements.

As part of an audit in accordance with Standards on Auditing, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of the
Standalone financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control;

• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under Section 143(3)(i) of the Act, we

are also responsible for explaining our opinion on whether the
company has adequate internal financial controls system in
place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management;

• Conclude on the appropriateness of management''s use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company''s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our auditor''s report to the related disclosures
in the Standalone financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our
auditor''s report. However, future events or conditions may
cause the Company to cease to continue as a going concern;
and

• Evaluate the overall presentation, structure and content of the
Standalone financial statements, including the disclosures, and
whether the Standalone financial statements represent the
underlying transactions and events in a manner that achieves
fair presentation.

Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable
user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatements in the
standalone financial statements.

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

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

OTHER MATTER:

(i) We draw your attention to Note no. 72 to the Standalone Financial

Statements. The Company had received an arbitral award dated
6th July 2012 passed by the London Court of International
Arbitration (LCIA) wherein the arbitration tribunal has directed
the Company to purchase the investment of Cruz City 1 (a
company owned by Lehman Bros.) in Kerrush Investment Ltd.
(Mauritius) at the overall value of USD 298,382,949.34 (Previous
year ended 31st March 2022 - USD 298,382,949.34). The High
Court of Justice, Queen''s Bench Division, Commercial Court
London had confirmed the said award.

Further, consequent to the order passed by the Hon''ble High
Court of Delhi in the case instant, the company is required to

make the aforesaid investment into Kerrush Investments Ltd.
(Mauritius). The decree of the aforesaid amount against the
company is pending for execution.

Based on the information obtained and audit procedures
performed, we are unable to assess whether the underlying
SRA project in Santacruz, Mumbai would be substantial to
justify the carrying value of these potential investments.

We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.

(ii) We draw attention to Note no. 56 of the Standalone Financial
Statements, A forensic audit of the Company was conducted
as per directions of the Hon''ble Supreme Court, and the report
on the forensic audit was submitted in a sealed envelope to
the Hon''ble Supreme Court. We have been informed that the
report on the forensic audit is not available with the Company
or its Board of Directors; hence impact of observations in the
forensic audit report can be ascertained only after the same is
obtained.

We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.

(iii) We draw attention to Note no. 69 of the Standalone Financial
Statements, we did not audit the financial statements/
information of Libya branch office, included in the Standalone
Financial Statements of the Company, whose financial
statements/ information reflect total assets of Rs. 13,28.47
Lakhs (Previous year Rs. 13,28.47 Lakhs) as at 31st March, 2023
and total revenues of Rs. NIL (Previous year Rs. NIL) for the year
ended on that date, as considered in the Standalone financial
statements and described above. The company has also made
provision against all assets of Rs. 13,28.47 Lakhs (Previous year
Rs. 13,28.47 Lakhs). The financial statements/ information of
this branch has not yet been audited by the branch auditor due
to the adverse political situation prevailing in Libya.

The company has also not applied for necessary approvals
from AD category - 1 bank to write off all the assets and write
back all the liabilities in the books of accounts.

We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2020
(''the Order''), issued by the Central Government of India in
exercise of powers conferred by sub-section 11 of section 143
of the Act, we enclose in the "Annexure A" a statement on the
matters specified in paragraphs 3 and 4 of the Order.

2. As required by sub-section 3 of Section 143 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,
except as stated in Basis of Disclaimer of Opinion
section.

b) Except for the possible effects of the matters described
in the Basis of Disclaimer of Opinion section above, 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.

c) The accounts of the branch office of the company
auditable under section 143(8) of the Act by the branch
auditor have not yet been audited by the branch auditor
due to the adverse political situation prevailing in Libya,
as mentioned in Other Matters para above, and hence
we are unable to comment on whether the financial
information provided by the management in this regard
has been properly dealt with.

d) The standalone balance sheet, the standalone statement
of profit and loss (including other comprehensive
income), the standalone statement of changes in equity
and the standalone statement of cash flows dealt with by
this Report are in agreement with the books of account
and with the financial information provided by the
management with regard to the branch not visited by us
except for matters described in the Basis of Disclaimer
section.

e) As mentioned in the Basis of Disclaimer of Opinion
section above, in our opinion, the aforesaid Standalone
financial statements are not complied with the Indian
Accounting Standards specified under Section 133 of
the Act, as applicable, read with relevant rules issued
thereunder.

f) The matters described in the Basis of Disclaimer of
Opinion section above, in our opinion, may have an
adverse effect on the functioning of the company.

g) As mentioned earlier, the Hon''ble Supreme Court vide
its order dated 20th January 2020 has, inter alia, given
directions that the Board of Directors of Unitech Limited,
as existing on that date, be superseded with immediate
effect in order to facilitate the taking over of management
by the new Board of Directors constituted in terms of
the proposal submitted by the Union Government. The
company has not provided the Form DIR-8 pursuant
to Section 164(2) and the rule 14(1) of Companies
(Appointment and Qualification of Directors) Rule, 2014
as on 31st March, 2023 and hence we are unable to
comment on whether all the directors are disqualified as
on 31st March, 2023.

h) The qualifications relating to the maintenance of
accounts and other matters connected therewith are
as stated in the Basis for Disclaimer of Opinion section
above.

i) With respect to the adequacy of the internal financial
controls over financial reporting of the Company and

the operating effectiveness of such controls, refer to our
separate report in "Annexure B". Our report expresses a
Disclaimer of Opinion on the existence of the Company''s
internal financial control over financial reporting.

j) With respect to the other matters to be included in
the Auditors'' 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 not provided the full details of
pending litigations, as mentioned in the Disclaimer
of Opinion para, we are unable to comment on
whether the company has disclosed the impact of
pending litigations on its financial position in the
Standalone Financial Statements in accordance
with the generally accepted accounting practice.
Refer Note 50 of the Standalone financial
statements.

ii) The company has not provided the details and
relevant supporting of any long term contracts
including derivative contracts entered into by the
company and hence we are unable to comment
on whether the company has made provisions, as
required under the applicable law or accounting
standards, for all material foreseeable losses on
long term contracts.

iii) There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Company. With regard
to unclaimed and unpaid amounts pertaining to
matured deposits and interest accrued thereon,
the Company has informed us that a number of
deposit holders have put in claims which are
pending before various judicial forums for the
matured deposit and interest accrued thereon, and
hence ascertaining the unclaimed amounts for the
purpose of transfer to the Investor Education and
Protection F


Mar 31, 2017

REPORT ON THE STANDALONE INDIAN ACCOUNTING STANDARDS (IND AS) FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of Unitech Limited (“the Company”) which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date to be audited by the branch auditor of the Company’s branch office at Libya.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE IND AS 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 of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act. 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 standalone Ind AS 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 Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act and the Rules made thereunder, including 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 thereunder.

We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view 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 Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

BASIS FOR QUALIFIED OPINION

1. We draw your attention to Note no. 12to the standalone Ind/4S financial statements, “Trade Receivables”, wherein an amount of Rs.11,961,456,172 is outstanding as at 31st March, 2017 (Previous year ended 31st March 2016 - Rs.11,343,059,293 lacs) which is comprised of trade receivables pertaining to sale of land, properties, trading goods, finished goods, commercial plots/properties of various kinds. Some of these balances amounting to Rs.2,279,863,145as at 31st March 2017 (Previous year ended 31st March 2016 - Rs.2,257,811,164) are outstanding for significantly long periods of time. The management has explained that such long overdue outstandings have arisen in the normal course of business from transactions with customers who have contravened the contractual terms. The management has undertaken a detailed exercise to evaluate the reasons of such long outstandings as well as possibility of recoveries. The management, based on internal assessments and evaluations, possible recoveries from securities (registered or unregistered) have represented that significant portion of such trade receivables outstandings are still recoverable/adjustable and that no accrual for diminution in value of trade receivables is therefore necessary as at 31st March 2017.

However, we are unable to ascertain whether all of the long overdue outstanding trade receivables are fully recoverable/ adjustable, since the outstanding balances as at 31st March 2017 are outstanding/remained unadjusted for a long period of time. Based on our assessment and audit procedures performed, in our opinion, trade receivables amounting to Rs.2,279,863,145 are doubtful of recovery and consequently, management ought to provide/accrue for the diminution for these balances. Had the management provided/accrued for the diminution in value of the said trade receivables, the carrying value of the trade receivables would have been lower by Rs.2,279,863,145 and the loss for the year ended 31st March 2017 would have been higher by Rs.2,279,863,145.

2. We draw your attention to Note no. 27 to the standalone Ind /4S financial statements with respect to deposits from public. The Company has failed to repay deposits accepted by it including interest thereon in respect of the following deposits:

S. No.

Particulars

Amounts outstanding as at March 31, 2016 (Rs.)

Amounts paid during the financial year(Rs.)

Unpaid matured deposits as on March 31 2017 (Rs.)

A)

Deposits that have matured on or before March 31, 2015

1,533,295,000

28,252,000

1,505,043,000

B)

Deposits that were due to mature on or after April 1, 2015 and on or before March 31, 2016

4,016,050,000

18,190,000

3,997,860,000

C)

Deposits that were due to mature on or after April 1, 2016

120,600,000

26,268,000

94,332,000

Pursuant to Section 74(2) of the Companies Act, 2013, the Company had made an application to the Hon’ble Company Law Board (subsequently replaced by the Hon’ble National Company Law Tribunal, New Delhi) seeking extension of time for repayment of the outstanding public deposits (including interest thereon) as is considered reasonable. The Company had also identified and earmarked 6 (six) unencumbered land parcels for sale and utilization of the sale proceeds thereof for repayment of the aforesaid outstanding deposits. However, during the financial year under review, the Hon’ble National Company Law Tribunal, New Delhi (NCLT) vide its order dated 04.07.2016 dismissed the said application. On appeal against the said order, the Hon’ble National Company Law Appellate Tribunal, New Delhi (NCLAT) vide its order dated 03.11.2016 extended the date of repayment of deposits upto 31.12.2016. Subsequently, the said appeal was also disposed off by the Hon’ble NCLAT vide its order dated 31.01.2017 without granting any further extension of time.

As explained and represented by management, the Company is making best possible efforts for sale of the land parcels earmarked for repayment of the deposits but such sale process is taking time due to global economic recession and liquidity crisis, particularly, in the real estate sector of India. However, regardless of these adverse circumstances and difficulties, the management has represented that they are committed to repay all the public deposits along with interest thereon.

Considering that the management has not been able to comply with the directions given by the Hon’ble CLB, NCLT and NCLAT to repay the deposits within prescribed time-period, the Registrar of Companies, New Delhi has filed prosecution against the Company and its executive directors and key managerial personnel before the Ld. Special Court, Dwarka District Court, New Delhi. However, the Hon’ble High Court of Delhi has stayed the said prosecution.

We are unable to evaluate the ultimate likelihood of penalties/ strictures or further liabilities, if any on the Company. Accordingly, impact, if any, of the above, on the standalone Ind AS financial statements is currently not ascertainable.

3. We draw your attention to Note no. 57 to the standalone Ind AS 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/a party (“the parties”), it has been observed from the perusal of the financial statements of these parties that the said parties have accumulated losses and their respective net worth have been fully/substantially eroded. Further, some of these parties have incurred net loss during the current year and previous year(s) and, that the current liabilities of these parties exceeded their respective current assets as at 31st March 2017. 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 parties. Further, 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 these investments which is other than temporary amounting to Rs.2,343,106,651 upto 31st March 2017 (Previous year ended 31st March, 2016 - Rs.4,402,510,584) and an accrual for diminution of doubtful debts and advances amounting to Rs.3,297,491,855upto 31st March 2017 (Previous year ended 31st March, 2016 - Rs.6,904,591,276) needs to be accounted for. Management is however of the firm view that the diminution is only temporary and that sufficient efforts are being undertaken to revive the said parties. However, in the absence of significant developments/movements in the operations of these parties, and any adjustment for diminution of carrying value of such investments in this regard, in our opinion, management has not adequately or sufficiently accounted for the imminent diminution. Had management accounted for such diminution, the loss for the year ended 31st March 2017 would have been higher by Rs.5,640,598,506 (Previous year ended 31st March, 2016- Rs.11,307,101,860).

4. We draw your attention to Note No.58 to the standalone Ind AS financial statements where in Advances amounting to Rs.6,491,240,803 (previous year ended 31st March, 2016 -Rs.6,945,264,168) are 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. As per information made available to us and explanations given to us Rs.454,023,365 had been recovered / adjusted during the current year. The management, based on internal assessments and evaluations, has represented that the balance outstanding advances are still recoverable/adjustable and that no accrual for diminution of advances is necessary as at 31st March 2017. The management has further represented that, as significant amounts have been recovered/adjusted during the previous financial years and since constructive and sincere efforts are being put in for 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, mentioned above, are fully recoverable/adjustable, since the said outstanding balances are outstanding/remained unadjusted for a long period of time, and further that, neither the amounts recovered nor rate of recovery of such long outstanding amounts in the previous years & current year, despite confirmations from some parties, 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 31st March 2017 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.

5. We draw your attention to Note 59to the standalone Ind AS financial statements. The Company has received a ‘cancellation of lease deed’ notice from Greater Noida Industrial Development Authority (“GNIDA”) dated 18 November 2015. As per the Notice, GNIDA has cancelled the lease deed in respect of Residential/Group Housing plots on account of non implementation of the project and non-payment of various dues amounting to Rs.10,548,326,223. As per the notice, and as per the relevant clause of the bye-laws/contractual arrangement with the Company, 25% of the total dues amounting to Rs.1,389,342,488has been forfeited out of the total amount paid till date. The Company has incurred total expenditure of Rs.21,390,794,902 [comprising of (i) the amounts paid under the contract/bye-laws of Rs.3,422,189,575; (ii) the balance portions of the total amounts payable, including contractual interest accrued till 31st March 2016, of Rs.9,909,190,197; and (iii) other construction costs amounting to Rs.8,059,415,130]. The Company is also carrying a corresponding liability of Rs.9,909,190,197 representing the total amounts payable to GNIDA including interest accrued and due of Rs.6,669,204,822. The said land is also mortgaged and the Company has registered such mortgage to a third party on behalf of lender for the Non-Convertible Debenture (NCD) facility extended to the Company and, due to default in repayment of these NCDs, the debenture holders have served a notice to the Company under section 13(4) of the SARFEASI Act and have also taken notional possession of this land. Further, the Company has contractually entered into agreements to sell with 397 buyers and has also received advances from such buyers amounting to Rs.920,267,391(net of repayment). No contract revenue has been recognized on this project. Management has written a letter to GNIDA dated 1st December 2015, wherein it has stated that the cancellation of the lease deed is wrong, unjust and arbitrary. Further, management has also described steps taken for implementation of the project, valid business reasons due to delays till date. Further, Management had also proposed that in view of the fact that third party interests have been created by the Company in the allotted land, by allotting plots to different allottees, in the interest of such allottees, GNIDA may allow the Company to retain an area of approximately 25 acres out of the total allotted land of approximately 100 acres and that the amount paid by the Company till date may be adjusted against the price of the land of 25 acres and remaining surplus amount may be adjusted towards dues of other projects of the Company under GNIDA. As informed and represented to us, the discussions/ negotiations and the legal recourse process is currently underway and no solution/direction is ascertainable until the date of this report. In view of the materiality of the transaction/circumstances and uncertainties that exist, we are unable to ascertain the overall impact of the eventual outcome of the aforementioned notice/circumstance. Consequently, we are unable to ascertain the impact if any, inter alia, on carrying value of the project under ‘projects in progress’ and on the standalone Ind AS financial results of the Company.

As per management, the Company, GNIDA and the buyers have reached a consensus that the cancellation of lease deed will be revoked; however the same is uncertain as on the date of this report.

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 various matters described in the ‘Basis for Qualified Opinion’ paragraph above, the aforesaid standalone Ind AS 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, 2017, and its loss(including other comprehensive income) and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

1. We draw your attention to Note no. 56(c) to the standalone Ind AS financial statements, wherein no adjustments have been considered necessary by management for non-recoverability of investments in share capital/projects aggregating to Rs.279,089,174 (Previous year Rs.278,172,452) 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.

2. Reference is invited to Note 49(III)(e) to the standalone Ind AS financial statements of the Company. The Company had received an arbitral award dated 6th July 2012 passed by the London Court of International Arbitration (LCIA) wherein the arbitration tribunal has directed the Company to invest USD 298,382,949.34 (Previous year USD 298,382,949.34) equivalent to Rs.19,346,732,699 (Previous year Rs.19,792,606,340) in Kerrush Investments Ltd (Mauritius). The High Court of Justice, Queen’s Bench Division, Commercial Court London had confirmed the said award.

Though the company believed, on the basis of legal advice, that the said award is not enforceable in India on various grounds, including, but not limited to lack of jurisdiction by the LCIA appointed arbitral tribunal to pass the said award, the aggrieved party filed a petition with Hon’ble High Court of Delhi for enforceability of the said award. The Hon’ble High Court of Delhi has passed an order in the case instant.

Based on its own assessment and legal advice received, the Company is sanguine & strongly believes that its stand taken in this matter will be vindicated in the Hon’ble Supreme Court. The Company is preparing for filing the SLP in the Hon’ble Supreme Court against the said order of the Hon’ble High Court of Delhi.

Moreover, in case the company is required to make the aforesaid investment into Kerrush Investments Ltd. (Mauritius), its economic interest in the SRA project in Santacruz Mumbai shall stand increased proportionately thereby creating a substantial asset for the company with an immense development potential.

Based on the information obtained and audit procedures performed, we are unable to assess the ultimateimpact of the above whether the Company will be required to make the investment in terms of the aforesaid award or not, and if the said award is held to be enforceable in India, then, whether the underlying SRA project in Santacruz, Mumbai would be substantial to justify the carrying value of these potential investments. Our opinion is not qualified in respect of this matter.

OTHER MATTERS

1. We did not audit the financial statements/information of Libya branch office included in the standalone Ind AS financial statements of the Company whose financial statements/ information reflect total assets of Rs.376,794,833 (Previous year Rs.397,642,887) as at 31st March, 2017 and total revenues of Rs. NIL (Previous year Rs. NIL) for the year ended on that date, as considered in the standalone Ind AS financial statements and described above. The financial statements/information of this branch have not yet been audited by the branch auditor due to the adverse political situation prevailing in Libya.

Our opinion is not qualified in respect of this matter.

2. The financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the year ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the previous auditors, on which the said auditors had expressed a qualified opinion dated May 30, 2016 and May 29, 2015 respectively. Adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of this matter.

report on other legal and regulatory REQUIREMENTS

1. 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 branch not visited by us.

(c) The reports on the accounts of the branch office of the Company audited under Section 143 (8) of the Act by branch auditor 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 (including Other Comprehensive Income), the Statement of Changes in Equity, 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 branch not visited by us.

(e) Except for the matters described in basis for qualified opinion paragraph above, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

(f) The matters described in the basis for qualified opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the company.

(g) Reference is drawn to note no. 54 and 55 to the standalone Ind AS financial statements with respect to unpaid matured non-convertible debentures and unpaid matured public deposits outstanding as at balance sheet date and our qualification in paragraph 2 above under “Basis for Qualified Opinion” in respect of these matters and ensuing uncertainties.

The Company has failed to repay the deposits accepted by it including interest thereon. The Hon’ble Company Law Board (subsequently replaced by the Hon’ble National Company Law Tribunal, New Delhi) has acknowledged and noted the default in various orders passed by it, till date in this regard. Further the Company has also failed to redeem Non-Convertible Debentures including interest thereon. The above mentioned failure to pay deposits or redeem debentures, in our opinion, has continued for one year or more.

Considering the fact that application of the Company under Section 74(2) of the Companies Act 2013(or Act) seeking extension of time for repayment of the deposits has been dismissed by the Hon’ble Company Law Board (subsequently replaced by the Hon’ble National Company Law Tribunal, New Delhi) and the company’s subsequent appeal has also been disposed off by the Hon’ble National Company Law Appellate Tribunal, New Delhi, and the Registrar of Companies, New Delhi has filed prosecution against the Company and its executive directors and key managerial personnel before the Ld. Special Court, Dwarka District Court, New Delhi which has however been stayed by the Hon’ble High Court of Delhi, and the debentures have been issued on private placement basis to lender and not to investors, the Board of the Company is of the view that the above delays in repayment/ redemption as the case may be 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 meeting held to adopt theseInd AS 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 2017 in terms of sub-section (2) of the Section 164 of the Act.

In view of the above mentioned circumstances and the legal interpretation taken/ considered by the Board of Directors, and the resulting uncertainties, 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.

(h) The qualifications relating to the maintenance of accounts and other matters connected therewith are as stated in the “Basis for qualified opinion” paragraph above.

(i) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses a qualified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

(j) 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, as amended, 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 standalone Ind AS financial statements - Refer Note no. 49 (I) to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses 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.

iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8 November, 2016 of the Ministry of Finance, during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. - Refer Note no. 47 to the standalone Ind AS financial statements.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

“ANNEXURE B” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date to the members of Unitech Limited on the standalone Ind AS financial statements for the year ended 31st March, 2017)

(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, no material discrepancies were noticed on such verification.

(c ) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deeds provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

(ii) As explained to us, the inventories as at balance sheet date were physically verified during the year by the Management and no material discrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us, the Company has granted unsecured loans to fifty five subsidiaries companies covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The loans given to thirty seven subsidiaries, being short term loans repayable on demand, are interest free and the terms and conditions of the grant of such loans are not prima facie prejudicial to the interest of the Company considering Company’s economic interest in such entities as well as business exigency. The loans given to two subsidiaries, being short term loans payable on demand are interest bearing and the terms and conditions of the grant of such loans are not prima facie prejudicial to the interest of the Company considering Company’s economic interest in such entities as well as business exigency. However, in respect of such interest free loans given to fifteen subsidiaries, amounting to Rs.863,452,811/-, we have qualified our main report above under para 3 of ‘Basis for qualified opinion’ on the potential non recovery of such loans and accordingly, the terms and conditions of the grant of such loans as at the balance sheet date are prejudicial to the Company’s interest. Similarly, in respect of such interest bearing loans given to one subsidiary, amounting to Rs.543,157,735/-, we have qualified our main report above under para 3 of ‘Basis for qualified opinion’ on the potential non-recovery of such loans and interest accrued thereon and accordingly, the terms and conditions of the grant, as at the balance sheet date, of such loans are prejudicial to the Company’s interest.

(b) The loans granted are repayable on demand and accordingly, there is no specific stipulation of the schedule of repayment of principal and interest. We are informed that the Company has not demanded repayment of any such loan during the year, and thus, there has been no default on the part of the parties to whom the money has been lent.

(c) The said loans being repayable on demand and no demand for repayment being made till date, there is no overdue amount of loans granted to such parties.

(iv) According to the information and explanations given to us, the Company has not granted any loans to any of its directors or to any other person in whom the director is interested under section 185 of the Companies Act, 2013. Further, the Company being a company providing infrastructural facilities, the provisions of sub-sections (2) to (10) of Section 186 does not apply to the Company. The Company is not an investment company as defined in Explanation to section 186.

(v) The Company has not accepted any deposits under the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder. Further the Company had accepted deposits under Section 58 A of the erstwhile Companies Act, 1956. 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 nature of contraventions are that the Company has total outstanding dues of Rs.7,809,294,611towards matured unpaid deposits & interest thereon as of March 31, 2017.

We also draw your attention to Note no. 54 with respect to unpaid matured deposits. Further, as already highlighted in para 2 under ‘Basis for qualified opinion’ in our main report above,the application of the Company under Section 74(2) of the Companies Act 2013(or Act) seeking extension of time for repayment of the deposits has been dismissed by the Hon’ble Company Law Board (subsequently replaced by the Hon’ble National Company Law Tribunal, New Delhi) and the company’s subsequent appeal has also been disposed off by the Hon’ble National Company Law Appellate Tribunal, New Delhi, and the Registrar of Companies, New Delhi has filed prosecution against the Company and its executive directors and key managerial personnel before the Ld. Special Court, Dwarka District Court, New Delhi which has however been stayed by the Hon’ble High Court of Delhi.

The following Orders have been passed in this regard by:

S.No

Order passed by

Particulars of relevant order(s)

Whether order(s) complied with

1

Order dated 31st January 2017 passed by Hon’ble National Company Law Appellate Tribunal, New Delhi (NCLAT) arising out of Order dated 4th July 2016 passed by the National Company Law Tribunal, New Delhi (NCLT) in Company petition (T) 10/8/2015 dated 4th July 2016

As described in detail in para 2 of “Basis for Qualified Opinion” the NCLAT observed that no specific efforts were taken by the Company and its Directors to pay back the dues of depositorsin terms of section 74(1) read with section 74(2) of the Companies Act 2013 (“the Act”)and that there was no ground to extend the period of re-payment of deposits beyond 31st December 2016, being the last date upto which extension had been granted to the Company.

The directions given by NCLAT were as under:

a) The Registrar of Companies(RoC) to pursue the case under section 74(3) of the Act before the Special Judge.

b) The RoC to request the Special Court to find out whether a case is made out for punishment u/s 75 of the Act apart from section 74(3) if there is any evidence of fraud.

The Company has paid Rs.72,710,000 as principal, besides interest thereon, during the year 2016-17.

As explained the Company is making best possible efforts for sale of the land parcels earmarked for repayment of the deposits

2

Reserve Bank of India

Not Applicable

Not Applicable

3

Any court or any other tribunal

Certain courts/ consumer courts have directed the Company to pay varying amounts

As explained and represented by management, the Company has earmarked six unencumbered land parcels including those in subsidiary Companies for sale and utilization of sale proceeds thereof for repayment of deposits. Further, as informed, the management is committed to repay all the deposits along with interest thereon and is making all efforts to arrange the necessary resources required for this purpose.

(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, duty of customs, duty of excise, value added tax, cess and other statutory dues 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, 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, Sales Tax, Service tax and provident fund dues which are given below:

Nature of Dues

principal Amount (Rs.)

Income tax deducted at Source

762,534,155

WCT

8,257,808

CST

2,193,961

Service Tax

142,008,106

Employer’s Contribution to Provident Fund

177,329,361

(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

Unpaid demands (net of amount deposited) (Rs.)

Forum where dispute is pending

Income Tax Act, 1961

Income tax on regular assessment

2004-05

7,363,246

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2006-07

53,104,997

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2007-08

16,219,162

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2009-10

2,127,867,288

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Income tax on regular assessment

2010-11

965,666,459

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2011-12

116,196,935

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2011-12

755,520,570

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2012-13

168,599,180

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2012-13

1,137,095,370

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2013-14

200,077,281

Commissioner of income Tax (Appeals), New Delhi

Service Tax

Service tax

For the period 01/12/200531/07/2007

7,260,129

SLP pending with Hon’ble Supreme Court

Service Tax

Service tax

2012-13

93,494,668

CESTAT, New Delhi

Haryana VAT Act, 2003

VAT

2011-12

281,988,670

Jt. Excise & Taxation Commissioner (Appeals), Faridabad, Haryana

Haryana VAT Act, 2003

VAT

2012-13

163,802,119

Jt. Excise & Taxation Commissioner (Appeals), Faridabad, Haryana

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to Government. Further, the Company has not generally defaulted to a financial institution, bank or to debenture holders except as enumerated below:

(a) In case of defaults in the repayment of loans or borrowings to financial institutions and banks:

Particulars

Amount of Default of repayment as at balance sheet date (Rs.)

period of default

Principal (Rs.)

Interest (Rs.)

Due to financial institutions:

Globe Fincap Limited

-

145,987

Interest : 1 days

ICICI-HFCL Limited

-

56,689,953

Interest : 1 to 90 days

IL&FS Financial Services Ltd.

-

36,682,246

Interest : 1 to 32 days

Indiabulls Housing Finance Limited

19,600,000

24,797,492

Principal : 22 to 81 days Interest : 17 to 90 days

LIC of India

1,308,000,000

768,112,137

Principal : 664 to 2217 days Interest : 1 to 1218 days

SREI Infrastructure finance Limited

1,544,469,935

605,768,141

Principal : 1 to 807 days Interest : 1 to 1021 days

Dues to Banks :

Axis Bank

-

1,821,994

Interest : 1 to 183 Days

Bank of Maharashtra

77,947,033

19,396,232

Principal : 549 to 641 Days Interest : 1 to 579 Days

HDFC Bank Limited

2,520,545,242

566,512,448

Principal : 25 to 606 Days Interest : 1 to 518 Days

ICICI Bank

-

9,493,826

Interest : 1 to 24 Days

IDBI Bank Loan

-

150,477,206

Interest : 1 to 60 Days

Oriental Bank of Commerce

9,722,220

7,496,096

Principal : 25 to 84 Days Interest : 1 to 60 Days

Dispute with LIC of India is pending before the Debt Recovery Tribunal for final adjudication.

(b) In case of defaults in the repayment of dues to the debenture holders:

particulars

Amount of default of repayment as at balance sheet date (Rs.)

period of default

Principal (Rs..)

Interest(Rs.)

Due to debenture-holders (Issued to public financial institution on Private placement basis)

2,085,014,496

1,338,467,074

Principal : 107 to 1417 Days Interest : 1 to 1432 Days

(ix) In our opinion and according to the information and explanations given to us, the Company has not raised any monies by way of initial public offer/ further public offer (including debt instruments). Further, as per information and explanations provided the Company has generally applied term loans for the purposes for which they were raised in accordance with terms agreed with respective lenders.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) To the best of our knowledge and according to the information and explanations given to us, the Company has neither paid nor provided for any managerial remuneration during the year and hence reporting under clause (xi) of the Order is not applicable.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For R. Nagpal Associates

Chartered Accountants

Firm Registration No. 002626N

(Ravinder Nagpal)

Partner

Membership No. 081594

Place: Gurugram

Date: 30th May 2017


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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