Unitech Ltd
Directors Reports
Dear Members,
Your Directors hereby present the 52nd Annual Report and Audited
Financial Statements of the Company for the financial year ended 31st March, 2023.
Financial Results
The Financial Performance of the Company for the financial year ended
31st March, 2023 is summarized herein below:
Particulars |
2022-23 |
2021-22 |
Revenue from |
132.14 |
132.14 |
61.14 |
61.14 |
Operations including |
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Other Income |
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Less: Expenses |
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Construction & |
48.88 |
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48.89 |
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Real Estate Project |
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Expenditure including |
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Cost of Land Sold |
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Changes in Inventories |
- |
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- |
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of Finished Goods, |
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work-in-progress and |
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Stock-in-Trade |
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Employee Benefits |
16.41 |
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17.08 |
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Expense |
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Finance Costs |
2452.04 |
|
928.47 |
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Depreciation and |
2.51 |
|
2.52 |
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Amortization Expense |
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Other Expenses |
21.51 |
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11.32 |
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Total Expenses |
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2541.35 |
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1,008.28 |
Profit/ (Loss) before Tax |
(2409.21) |
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(947.14) |
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and Exceptional Items |
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Less: Exceptional Items |
- |
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- |
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Profit/ (Loss) before |
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(2409.21) |
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(947.14) |
Tax |
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Profit/ (Loss) from |
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(2409.21) |
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(947.14) |
continuing operations |
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after Tax |
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Material changes affecting the Company
There were no material changes or commitments affecting the financial
position of the Company having occurred between the end of the financial year to which the
Financial
Statements relate and the date of report, other than the ones already
provided or stated in the Financial Statements.
Financial Highlights
The total income of the Company for the year under review is Rs. 132.14
crore. The loss before tax stood at Rs. 2409.21 crore and loss after tax also stood at Rs.
2409.21 crore. On consolidated basis, the total income stands at Rs. 491.96 crore. The
consolidated loss before tax stood at Rs. 3113.76 crore and loss after tax stood at Rs.
3103.29 crore.
Segmental Revenues (Consolidated)
On consolidated basis, the Real Estate and related division contributed
Rs. 158.28 crore in the coffers of the Company, whereas the contribution from the Property
Management business was Rs. 136.90 crore, and Rs. 167.18 crore from the Power Transmission
business. Hospitality and other segments contributed Rs. 29.59 crore towards the gross
revenue.
Business and Operations
During the year under review, there was no change in the business of
your Company.
Operating Environment
The operating environment this year continued to remain challenging.
Geopolitical conflict in Europe coupled with the global supply chain disruptions led to an
unprecedented inflation in food, energy and commodity prices. Aggressive monetary
tightening measures from Central Banks worldwide led to further pressure on emerging
economies. The widespread inflation posed major challenges specifically with prices of
several commodities inflating to their decadal highs. There was, however, a normalization
in economic activities after a couple of years of Covid induced disruptions.
Management Discussion and Analysis Report
The Management Discussion and Analysis (MDA) report for the year under
review, as stipulated in regulation 34 and Schedule V of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (hereinafter referred to as Listing
Regulations'), has been enclosed separately, which may be read as an integral part of
the Board Report.
Report on Corporate Governance
The Report on Corporate Governance, along with compliance certificate
from CS Company Secretary (CP No. 7348), confirming compliance of the conditions of
Corporate Governance as stipulated in Schedule V of the Listing Regulations, has been
enclosed separately, which may be read as an integral part of the Board Report.
Consolidated Financial Statement
The Audited Consolidated Financial Statements of the
Company, its subsidiaries, associates and joint ventures provided in
the Annual Report have been prepared in accordance with the provisions of the Companies
Act, 2013, read with Ind. AS 110- Consolidated Financial Statements and Ind.
AS 28- Investments in Associates and Joint Ventures and Ind. AS 31
-Interests in Joint Ventures.
Subsidiaries, Joint Ventures & Associates
Pursuant to provisions of section 129 (3) of the Companies Act, 2013, a
statement containing salient features of Financial Statements of subsidiaries, joint
ventures and associates (Form AOC-1) of Unitech Limited is attached to the Financial
Statements. The said Statement portrays the performance and financial position of each of
Company's subsidiaries, joint ventures and associates. The policy for determining
material subsidiaries, as approved, may be accessed at the Company's website
http://www.unitechgroup.com/investor-relations/policy-determining-material-subsidiaries.asp.
The names of Companies which have become or ceased to be subsidiaries,
joint ventures or associate companies during the year
There has been no change in the subsidiaries, joint ventures or
associate companies during the year under review.
Annual Return
As required under section 92 of the Companies Act, 2013, the Annual
Return for the financial year ended March 31, 2023 is available on the website of the
Company and can be accessed at
http://www.unitechgroup.com/investor-relations/regulation-46-annual-return.asp for
reference and perusal.
Details of Directors
Members are aware that faced with numerous litigations by a large
number of homebuyers and other stakeholders, the Hon'ble Supreme Court directed the
Union of India vide its Order dated 18.12.2019 to propose the appointment of an
independent Board of Directors for Unitech Limited. In compliance thereto, the Central
Government proposed the constitution of a new Board of Directors, which was approved by
the Hon'ble Supreme Court vide its Order dated 20.01.2020 passed in Bhupinder
Singh Vs. Unitech Limited in Civil Appeal No. 10856/2016. Following from the above,
the Hon'ble Supreme Court was pleased to simultaneously direct the supersession of
the erstwhile Management with the appointment of a new Board of Directors.
During the year under review, there have been changes in the
composition of the Board of Directors of the Company. Mr. Balasubramanyam Sriram, Mr.
Niranjan L. Hiranandani and Mr. Anoop Kumar Mittal resigned from the office of Directors
with effect from 13.06.2022, 10.08.2022 and 12.08.2022 respectively. Ms. Uma Shankar was
appointed as Director on the Board of the Company with effect from 19.10.2022. The
composition of the Board of Directors as on 31.03.2023 was as follows:
Sr. No. Name(s) |
Designation |
Date of |
|
|
Appointment |
1 Sh. Yudhvir Singh |
Chairman & |
21.01.2020 |
Malik, IAS (Retd.) |
Managing |
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Director |
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2 Dr. Girish Kumar |
Director |
22.01.2020 |
Ahuja |
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3 Sh. Jitu Virwani |
Director |
22.01.2020 |
4 Sh. Prabhakar Singh |
Director |
03.02.2020 |
5 Ms. Uma Shankar |
Director |
19.10.2022 |
Further, after the close of the financial year till the signing of this
report, no changes have taken place in the composition of the Board of the Company.
Key Managerial Personnel
In compliance of the provisions of section 2(51) and 203 of the
Companies Act, 2013, the following Directors and Officials of the Company were designated
as the Key Managerial Personnel (KMP) of the Company during the year under review:
Sr. No. Name(s) |
Designation |
1 Sh. Yudhvir Singh Malik |
Chairman and |
|
Managing Director |
2 Sh. Ashok Kumar Yadav |
Chief Executive Officer |
3 Sh. Kailash Chand |
Company Secretary up |
Sharma |
to the close of working |
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hours as on 31st March, |
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2023 |
4 Ms. Anuradha Mishra |
Company Secretary |
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with effect from |
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1st April, 2023 |
Board Meetings
Thirteen (13) meetings of the Board of Directors were held during the
year under review. Details of the meetings are provided in the Corporate Governance
Report, which may be read as an integral part of the Board Report.
Annual Evaluation of Directors, Committees and Board
All the Directors have been appointed by the Central Government as its
Nominee Directors. The annual evaluation of performance of Directors, Committees and Board
has, therefore, not been undertaken.
Opinion of the Board with regard to integrity, expertise and experience
of the Independent Directors appointed during the year
Ms. Uma Shankar was appointed as a Director by the Ministry of
Corporate Affairs vide its Order dated 19.10.2022, in pursuance to the Order of the
Hon'ble Supreme Court dated 13.10.2022. Since all the Directors on the Board of the
Company have been appointed by the Central Government with the prior approval of the
Hon'ble Supreme Court, the said opinion is not required to be provided. All the
Directors, including, Ms. Uma Shankar, who was appointed during the FY 2022-23, are well
known professionals from diverse fields and have no personal/ pecuniary interest in the
Company.
Statement on declaration by Independent Directors
The Directors of the Company have been appointed by Central Government
(Ministry of Corporate Affairs), in compliance with the Order of the Hon'ble Supreme
Court dated 20.01.2020 and all the Directors are Nominee Directors.
Policy on Director's Appointment and Remuneration
The Directors of the Company have been appointed by the Central
Government with the prior approval of Hon'ble Supreme Court. No remuneration is being
paid to the Directors of the Company, except sitting fee for attending the Board/
Committee meetings. The remuneration of Chairman & Managing Director of the Company,
as being paid, has been determined by the Central Government in the Ministry of Corporate
Affairs. Hence, there is no formal policy in place in respect of appointment and
remuneration of Directors.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy containing criteria for
determining qualifications, positive attributes, independence of Directors, policy
relating to remuneration to Directors, Key Managerial Personnel and Senior Management
Personnel of the Company has been disclosed in the Corporate Governance Report, which may
be read as an integral part of the Board Report.
Directors' Responsibility Statement
Subject to the Audit qualifications raised by the Statutory Auditors,
findings of the investigations by different Investigating Agencies and decisions by
different Courts of competent jurisdiction, the Directors confirm in terms of section
134(5) of the Companies Act, 2013, that: (i) While preparing the Annual Accounts for the
year ended 31st March, 2023, the applicable accounting standards have been followed along
with proper explanations relating to material departures;
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company as on 31st March, 2023
and of the loss of the Company for the year ended on that date; (iii) The Directors have
taken proper and sufficient care for the 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 fraud and other irregularities; (iv) The Directors have
prepared the annual accounts on an on-going concern basis; (v) The Directors under the new
Management will lay down sound internal financial controls to be followed by the Company
and that such internal financial controls would be adequately commensurate with the size
of its operation and business; and (vi) The Directors under the new Management will
endeavour to devise proper system to ensure compliance with the provisions of all
applicable laws and that such systems would be adequate and operationally effective.
Details in respect of frauds reported by Auditors under section 143
(12) of the Companies Act, 2013, other than those which are reportable to the Central
Government
To the best of our knowledge and belief and subject to the (i) outcome
of the ongoing investigations by various Investigating Agencies pertaining to transactions
transacted during the period of erstwhile Management or even otherwise, having cascading
impact, (ii) outcome of the cases pending in Courts of competent jurisdiction, and (iii)
Audit qualifications, no frauds were reported by the Auditors under section 143(12) of the
Companies Act 2013, for the year under review.
Auditor and Auditors' Report
The Members of the Company appointed M/s GSA & Associates, LLP,
Chartered Accountants (FRN 000257 N/ N500339), as Statutory Auditors of the Company in the
50th Annual General Meeting, for a period of five years till the conclusion of 55th Annual
General Meeting.
Auditors' Report Qualified Observations
Management's Response to Independent Auditor's Report of the
Statutory Auditors on the Audited Standalone
Financial Results of Unitech Limited for the Quarter and Financial Year
ended 31.03.2023
Sr. No. Auditor's Observations |
Management's Response |
1 (i) Unitech Limited (the
Company) held its annual general meeting 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. |
(i) The Annual General Meeting (AGM) for the
year ended 31st March, 2022 was due to be held latest by 30th September, 2022. However,
the AGM for the FY 2021-22 was held on 31.03.2023. The new management did not have access
to complete records of various transactions of the Company. It caused delay in the
finalization of accounts and convening of Annual General Meeting. The new Management has
inherited several legacies under various provisions of law, including non- compliances
related to non-holding of Annual |
(ii) Further, the Company also delayed in filing 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. |
General Meeting of Unitech Limited on or before the due
dates. Ever since the new Management took control of Unitech Group as whole, it has been
endeavoring to make the Group compliant in accordance with the provisions of the Companies
Act, 2013 and rules made thereunder and other applicable laws. |
(iii) 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) The Company has scheduled its Annual General Meeting for
the FY 2022-23 on 29th September 2023, which is well within the prescribed time-lines |
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. (iii) The Management had taken up the issue of seeking
exemptions and waiver of penalties from MCA as well as SEBI vide its letters dated
11.06.2020, 29.07.2020 and 27.08.2020 and had also sought the intervention of Secretary
MCA to take up the matter with SEBI. The Secretary MCA also took up the matter with
Chairman SEBI vide his letter dated 05.08.2020. SEBI responded vide its letter dated
09.09.2020 informing that the BSE and NSE had examined the issue in view of moratorium
granted by the Hon'ble Supreme Court and the notice for suspension of trading of
securities had been withdrawn. Finding that there was no positive response on waiver of
penalties, the Management filed an IA No. 81660 of 2021 and 81663 of 2021 on 16.07.2021 in
the Supreme Court seeking requisite reliefs, which is still pending. The above defaults on
the part of the Company were also placed before the Hon'ble Supreme Court in the
Action Taken Report-III filed on 28.03.2022 |
Sr. No. Auditor's Observations |
Management's Response |
2. (i) We 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 |
The points mentioned herein are informatory
in nature and the Management has no further comments to offer on the same. |
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 |
The Management has already stated its
position in the Resolution Framework submitted in the Hon'ble Supreme Court on
15.07.2020, followed by updated versions submitted on 05.02.2021 and 08.08.2022, wherein
the Hon'ble Supreme Court has been prayed to grant certain concessions and reliefs so
that the Company is able to fulfil its obligations towards the construction and completion
of projects and meet other liabilities. The reasons for opting against the winding up the
Company or its reference under IBC have fully been explained in the application filed for
submission of the Resolution Framework. |
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. |
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(ii) 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. |
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(iii) We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in respect of this matter. |
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3. Material uncertainty related to going concern (i)
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. |
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(ii) These conditions indicate the existence of material
uncertainty that may cast significant doubt about Company's ability to continue as a
going concern. |
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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 |
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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 Abhay Manohar Sapre, as appointed by Hon'ble Supreme Court of
India. |
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(iii) We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in respect of this matter. |
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Sr. No. Auditor's Observations |
Management's Response |
4. (i) The Company had received a cancellation of lease
deed' notice from Greater Noida Industrial Development Authority (GNIDA)
dated 18th 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. |
(i) The matter is still pending in the
Hon'ble High Court of Allahabad for final is hopeful that its stand shall be
vindicated in the |
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. |
Hon'ble Court and there shall be no
adverse impact, other than the one already disclosed. |
(ii) 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. |
(ii) As regards the amount of Rs. 7,436.35
lakhs (Rs. 6,682.10 lakhs + interest @ 6% on the principal amount of Rs. 6,682.10 lakhs),
deposited with the |
(iii) 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. |
Registry of the Hon'ble Supreme Court,
the said amount has already been paid to 352 homebuyers pursuant to the directions of
Hon'ble Supreme Court, which is a bit more than the principal amount deposited by the
said homebuyers. |
(iv) 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. 6,113.11 Lakhs. Further, the Company is also carrying |
(iii) Further, the Management is also in the
process of filing a comprehensive IA before the Hon'ble Supreme Court qua
GNIDA's demands raised against Unitech, including seeking appropriate directions on
the instant issue. |
(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. 69,684.68 Lakhs. |
|
Sr. No. Auditor's Observations |
Management's Response |
(b) Deferred liability on account of interest payable to
GNIDA appearing in the books of accounts as on 31st March, 2022 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 capitalized in the books of accounts of the Company. The same is in contravention of
the provisions of Indian Accounting Standards 23 Borrowing Costs. |
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(v) The impact on the accounts viz. inventory, projects |
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in progress, customer advances, amount payable to |
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or receivable from GNIDA, cannot be ascertained, |
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since the matter is still subjudice, as mentioned |
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hereinabove, vis-a-vis dues of the Company, and |
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hence, we are unable to express an opinion on this |
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matter. |
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We had given a disclaimer of opinion on the standalone |
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financial statements for the year ended 31 st March, |
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2022 in respect of this matter. |
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5. (i) Confirmations/ reconciliations are pending in
respect(i) of amounts deposited by the Company with the |
The observation is a statement of fact and needs no further
comments. |
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. |
(ii) The Company received a detailed statement of accounts
from the Supreme Court's Registry in the month of November, 2022. After
reconciliation of the accounts, entries pertaining to (a) interest income of Rs. 4,980.00
lakhs upto 22.11.2022, (b) disbursement of Rs. 2,734.11 lakhs, out of 4,000 lakhs
deposited in the Supreme Court's Registry by M/s Pioneer Urban Land &
Infrastructure Limited, and (c) disbursement of Rs. 2,183.45 lakhs to homebuyers, FD
holders and other stakeholders, have been duly entered in the books of accounts for the
period ending 31.03.2023. |
(ii) 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. |
(iii) Further, during reconciliation, variations amounting to
Rs. 934.15 lakhs have been observed between Balance as per books of accounts vis-a-vis
Balance as per Supreme Court's Registry, which is proposed to be taken up with the
Supreme Court Registry and reconciled as soon as the relevant information is received from
the Registry. |
(iii) In view of the reconciliation exercise still in process
and absence of other statement of transactions and confirmation of balance from the
Registry, 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. |
(iv) As regards the TDS on the payments made from the
Registry or the TDS by the Bank on the accrued interest, the Registry has not provided any
information. This will have to be verified from the Supreme Court Registry. In any case,
prima facie, there should be no liabilities/ penalties on this account qua the Company as
the default, if any, would be on the part of the Bank or the Supreme Court Registry. |
(iv) We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in respect of this matter. |
|
Sr. No. Auditor's Observations |
Management's Response |
6. 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.c |
The Company has maintained the Fixed Assets |
Further, the Company does not maintain proper records showing
full particulars, including quantitative details and situation of Fixed Assets comprising
property, plant and equipment, capital work-in-progress' &
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. |
Register for recording the details of
Property, Plant & Equipments. The management is facing a major challenge in
reconciling the Opening Balances, which is a legacy issue and difficult to reconcile.
However, it is proposed to take up this exercise to prepare separate lists of PPE where
the reconciliation of Opening Balance remains an issue. The challenges faced in
reconciliation of the Opening Balances, wherever occurring, will be addressed separately.c |
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31 st March, 2022 in respect of this matter. |
|
7. Non-current investment and loans |
(i) Unitech Limited has 186 Indian Subsidiary |
Company has made investments and given loans to its
subsidiaries, joint ventures, associates and others. Details st as on 31 March, 2023 are
as follows: |
Companies out of which 08 subsidiary Companies have been
struck off by the Registrar of Companies, NCT Delhi and Haryana. The Company has moved the
National Company Law Tribunal (NCLT) for the revival of the subsidiaries which have been
struck off, out of which 02 have already been ordered to be revived. |
Particulars |
Amount invested |
Impairment accounted for till 31.03.2023 |
Carrying amount |
Equity investment - Indian subsidiaries |
75,342.84 |
30,745.68 |
44,597.16 |
Equity investment - foreign subsidiaries |
66,376.77 |
66,376.77 |
_ |
Equity investment - joint ventures |
54,041.94 |
- |
54,041.94 |
Equity investment associates |
299.25 |
- |
299.25 |
Equity investment |
31,040.70 |
- |
31,040.70 |
others |
|
|
|
Debenture |
1,512.18 |
- |
1,512.18 |
investment |
|
|
|
Investment CIG |
25,453.18 |
- |
25,453.18 |
Corporate |
8.7 |
- |
8.7 |
guarantees |
|
|
|
Loans given to |
372,702.40 |
1,589.05 |
371,113.36 |
subsidiaries |
|
|
|
Advances given to |
61,965.54 |
- |
61,965.54 |
subsidiaries |
|
|
|
(ii) For 149 Indian Subsidiary Companies, Statutory Auditors have been appointed so far
whereas the due process for settlement of accounts with the existing Statutory Auditors in
case of 16 other Subsidiaries is underway. For the remaining 13 Subsidiaries, wherein
there is a substantial foreign investment, necessary steps are being taken by the Company
in this regard.
(iii) As regards 32 foreign subsidiaries along with Libya Division and 03 foreign JVs,
the management has listed down their available details. The Audited Balance Sheets of 04
foreign subsidiaries, 02 foreign JVs, and that of Libya Division are not available with
the Company. For rest of the Companies, the last audited available Balance Sheets are
those of 31.03.2017 except for two Companies whose available Balance Sheets are those of
31.03.2010 and 31.03.2016. ntities
Moreover, it is pertinent to mention that, as per information available to the new
management, the Central Investigating Agencies are believed to be engaged with the issues
pertaining to these e
Sr. No. Auditor's Observations |
Management's Response |
Amounts in Rs. Lakhs Loans to Joint 8,381.00 - 8,381.00 |
(iv) The matter regarding investment in Carnoustie and CIG is
already under scrutiny by the Investigating Agencies and various attachment orders have
been passed by th e Enforcement Directorate. |
Ventures and Associates Advances to Joint 20.33 - 20.33
Ventures and Associates Share Application 46.5 - 46.5 Money |
The Management has included the position of Carnoustie and
CIG in the Resolution Framework submitted before the Hon'ble Supreme Court. It is
pertinent to mention here that Unitech Limited has also filed an IA in the Hon'ble
Supreme Court for the recovery of the amount invested. The matter has been heard but the
order is awaited. |
Considering the fact that the accounts of the above-
mentioned foreign entities are not available with the management and for Indian entities,
they are not audited since last 3-4 years plus also taking into account the factors such
as non-existence 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: - |
(v) However, keeping in view the investigations being carried
out by the ED, and the ED having filed charge-sheets before the Adjudicating Authority
under PMLA, the Company is left with no option but to await the final outcome in these
matters. |
(i) Equity investment others include investment made in M/s
Carnoustie Management (India) Private Limited (Carnoustie) of Rs. 31,005.45 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 much 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. |
|
Sr. No. Auditor's Observations |
Management's Response |
(ii) Investment CIG The Company made investment of Rs.
25,453.18 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 31 st March, 2022 in respect of this matter. |
|
8. Impairment Assessment of Bank and Corporate Guarantees |
(i) There are a number of secured, unsecured and |
Standalone Financial Statements, wherein it is stated
that the Company is having outstanding bank and corporate guarantee of Rs. 107,059.26
lakhs as per audited financials st for year ending 31 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 31 st March, 2022 in respect of this
matter. |
operational creditors qua the Company and its subsidiaries,
JVs and other affiliates. Further, the Company and the promoters have also given various
kinds of Guarantees, including Bank Guarantees and Corporate Guarantees, the lists whereof
(to the extent of availability of records), surviving or matured, have been shared with
the Statutory Auditors. However, it may not be possible to vouchsafe at this stage that
these are the only Guarantees given by the Company. |
|
(ii) The issues pertaining to secured, unsecured and
operational creditors have been covered in Chapter-3 of the Resolution Framework (RF).
Apart from seeking various reliefs and concessions qua such creditors, the RF also
contains a provision on invitation of Claims and settlement thereof (3.2). |
|
These issues have yet not been adjudicated by the
Hon'ble Supreme Court. Hence, it is neither possible nor feasible at this stage to
undertake any impairment assessment of secured creditors, and/ |
|
or Corporate Guarantees till these related issues are
crystalized and settled by the Hon'ble Supreme Court. Likewise, some of the
investments/ advances made by the Company are a subject matter of investigations being
conducted by various Central Investigating Agencies. |
9. Trade receivables and other financial assets |
The new Management is in the process of developing an |
The Company has trade receivables and other financial st
assets as on 31 March, 2023 as under - |
Expected Credit Loss Policy for the Company. However, it has
taken time due to various kinds of situations coming to the notice of the management.
Every effort |
Particulars |
Amount |
Provision accounted for till 31.03.2023 |
Carrying amount |
Trade Receivables |
78,751.93 |
31,521.87 |
47,230.06 |
Security Deposits |
52,818.32 |
934.04 |
51,884.28 |
Non-Current Loans |
100.00 |
- |
100.00 |
and Advances |
|
|
|
Current Loans and |
6,617.34 |
520.00 |
6,097.34 |
Advances |
|
|
|
Advances for |
31,079.48 |
31,079.48 |
- |
purchase of Shares |
|
|
|
Staff Imprest & |
47.09 |
- |
47.09 |
Advances |
|
|
|
Advances to others |
13.08 |
- |
13.08 |
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 31 st March, 2022 in respect of this matter.
Sr. No. Auditor's Observations |
Management's Response |
10. Inventory and project in progress |
(i) Five Project Management Consultants (PMCs) have been
engaged, with the approval of the |
(i) Standalone Financial Statement of the Company st as on 31
March, 2023, has shown inventory of Rs. 62,517.96 Lakhs and projects 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 |
Hon'ble Supreme Court, who have substantially completed
Part-A of the Scope of Work assigned to them. This includes As-is-assessment
of various projects i.e. the status of work done/ completed during the period of erstwhile
management. The PMCs have backed their work with photographs and videography of these
projects so as to avoid any conflicts when it comes to the claims of old contractors'
vis-a-vis the work to be done by the new contractors. Based on this exercise, the PMCs
have worked out the BoQs of the remaining works, which form the basis for preparation of
Tender Documents. |
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
realized value NRV in accordance with the requirement of Indian Accounting
Standard 2 inventories. |
(ii) About 130 to 140 Tenders would need to be floated to
complete the balance works, out of which 35 |
(ii) Further, management is in the process of verification of
title documents for land and other immovable assets. |
Tenders (Lot-1) were floated on 02.01.2023. On scrutiny of
bids, it was discovered that no bids were received against 18 tenders (out of 35) whereas
both the bids received in case of one tender failed to meet the eligibility criteria and
both the bids received in respect of another tender were abnormally high, resulting in the
rejection of bids for these 02 tenders. Thus, bids were required to be called afresh in
respect of these 20 (18+1+1) tenders. |
(iii) 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 PMCs 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. |
(iii) In continuation thereto, 2nd Lot of 31 Tenders was
prepared by the PMCs, which was duly reviewed by the EIL. Thus, a total of 51 Tenders (20
re-tenders of Lot-1 and 31 tenders of Lot-2) were approved by the BoD and Justice (Retd.)
A. M. Sapre in the month of April 2023 for uploading the same on Unitech's
e-Tendering web-portal. Accordingly, these tenders were uploaded on the Unitech's
web- portal on 08/09.05.2023. |
(iv) 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). The 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 4-5 years. This has resulted in understatement of current
year loss by above said amount. |
(iv) The extended last date for submission of bids in respect
of these 51 Tenders was 22.06.2023. On opening of Technical bids on 23.06.2023, it was
discovered that no bids had been received in respect of 09 tenders. After completion of
the process of evaluation of Technical and Financial bids, the management finalized the
bids received qua 34 tenders. This has been approved by the Board of Directors, followed
by Justice (Retd.) A.M. Sapre on 18.08.2023. |
Sr. No. Auditor's Observations |
Management's Response |
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. |
(v) Projects in Progress (PIP) on which revenue is not
recognized refers to those projects where no inventory is available for sale and only
expenditure is to be made for the completion of residual works in such projects. |
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. |
|
11. External Confirmation The Company has not
initiated the process of external confirmation for outstanding balances of the following
areas as on 31st March, 2023 are as follow: |
(i) It is stated that as per Standards on Auditing (SA)-505,
prescribed by the Institute of Chartered Accountants of India (ICAI), the process of
external confirmation is to be initiated by the Statutory |
Particulars |
Amount |
Provision accounted for till 31.03.2023 |
Carrying amount |
Trade Receivable |
78,751.93 |
31,521.87 |
47,230.06 |
Trade Payable |
82,070.64 |
386.34 |
81,684.30 |
Advances received |
10,97,542.77 |
- |
10,97,542.77 |
from Customers |
|
|
|
Advances to Suppliers |
7,235.30 |
- |
7,235.30 |
Security Deposits |
52,818.32 |
934.04 |
51,884.28 |
Loans and advances to Subsidiaries |
4,38,577.05 |
1,589.05 |
4,36,988.00 |
Loans to Joint Venture and Associates |
8,381.00 |
- |
8,381.00 |
Other Loans and advances |
6,717.34 |
520.00 |
6,197.34 |
Advances for purchase of land and project pending
commencement |
61,287.37 |
30,000.00 |
31,287.37 |
Loans from Subsidiaries, Joint Venture and Associates |
80,368.23 |
- |
80,368.23 |
Security and other deposits payable |
42,995.92 |
- |
42,995.92 |
Staff Imprest |
47.09 |
- |
47.09 |
Inter Corporate Deposits |
13,853.66 |
- |
13,853.66 |
Other Assets |
6,349.22 |
- |
6,349.22 |
Auditors for directly obtaining the evidence from the confirming parties at their
level. However,the management would initiate this exercise now keeping the Statutory
Auditors in loop for the with respect to outstanding balances as on 31.03.2023.
It would, therefore, be appropriate that the Statutory Auditors take up external
confirmations based on random sampling basis since obtaining confirmation from all the
parties would be a time- consuming exercise.
(ii) As far as the liability of the Company towards the secured, unsecured or
operational creditors is concerned, the same has been covered in Chapter-3 of the
Resolution Framework (RF) submitted before the Hon'ble Supreme Court. The RF also
contains a provision on the Process of Claim Settlement qua such creditors according to
which the Company shall be inviting claims from all such stakeholders but it can be done
only after a definitiveview on the RF is taken by the Hon'ble Supreme Court.
Sr. No. Auditor's Observations |
Management's Response |
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 periods 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 31 st 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. 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. |
|
Further, the Company is also accruing penal interest in few
of the loans. 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 31 st March 2022 in respect of this matter. |
|
Auditor's Opinion |
Management's Response |
12. 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. |
(i) The new Management has already submitted
its Resolution Framework (RF) before the Hon'ble Supreme Court, wherein the Company
has sought various reliefs on account of penalties, interest liabilities etc., among
others, due to be paid by the Company to the Statutory Authorities, Banks, Financial
Institutions etc. |
|
(ii) Since a view on various reliefs sought
in the RF is yet to be taken by the Hon'ble Supreme Court, it may not be feasible at
this stage to assess the overall impact of its contingent liabilities. |
13. 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. |
(i) The erstwhile Management appointed M/s
VPSJ & Company, Chartered Accountants, as Internal Auditors of the Company, in
compliance of the decision taken in the meeting of the Board of Directors held on
14.09.2019. |
|
(ii) M/s VPSJ & Company, however,
resigned on 14.02.2020 without conducting/ submitting any Internal Audit of the Company. |
|
(iii) The Company proposes to appoint new
Internal Auditors in terms of section 138 of the Companies Act, 2013, read with rule 13 of
the Companies (Accounts) Rules, 2014, which is expected to be finalized shortly. |
14. 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 Ministryunable to
meet their financial expectations. Further, 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 31 st March, 2022 in respect of this matter. |
The Company has been trying to fill-up the
position of Chief Financial Officer (CFO) for which some candidates have also been
interviewed but the Company is the Company has also requested the ICAI to suggest suitable
candidates for the position of CFO. It is looking for candidates with experience in the
real estate industry. |
15. 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. 4,226.26 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 |
(i) Unitech Limited, during the period of
erstwhile Management, had signed a binding term sheet with M/s Sterling & Wilson (SW)
and had agreed to sell the entire shareholding of M/s Unitech Power |
Non-Current Assets Held for Sale and Discontinued
Operations. The company, post as on 31st March, 2023, has received a binding offer
of Rs. 6,700.00 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 31 st
March, 2022 in respect of this matter. |
Transmission Limited (UPTL) for an overall
equity value of Rs. 105 Crore, out of which Rs. 68.40 Crore was the firm component whereas
Rs. 35 Crore was to be backed by a Bank Guarantee and was to be paid on meeting certain
conditions as set out in the purchase agreement. SW was further required to pay Rs. 1.6
Crore as the agent fee directly out of the total equity value of Rs. 105 Crore. However,
the said transaction did not mature and the Hon'ble Supreme Court permitted the new
Management to explore new buyers. |
Auditor's Opinion |
Management's Response |
15. |
(ii) Thereafter, the new Management made two more
unsuccessful attempts. The Board of Directors of Unitech Limited in its meeting held on
14.02.2023 decided to appoint M/s E&Y as the Transaction Advisor for the sale/
divestment of UPTL on as-is- where-is basis, for which exclusivity period of 09 months was
approved. |
|
(iii) Subsequent thereto, the notice of divestment was
uploaded on e-Tendering portal of Unitech Limited on 06.04.2023, inviting Expressions of
Interest (EoIs) from interested parties along side individual mailers to 37 potential
investors on or before 19.04.2023. A total of 10 parties submitted their EOIs by the Due
date, with whom NDAs were signed. Another notice was uploaded on the Unitech website and
e-tendering portal on 26.04.2023 inviting non- binding offers up to 01.05.2023. Four
non-binding offers were received, which were opened on 02.05.2023, for amounts of Rs. 65
Crore (Jakson Limited), Rs. 25.00 Crore (M/s JSC OGCC), Rs. 20.00 Crore (Shilpa Steel) and
Rs. 10.00 Crore (Shree Metals). The highest bidder thereafter submitted his Binding offer
on 27.07.2023. The highest bidder subsequently revised his offer to Rs. 67.00 Crore. |
|
The binding Term Sheet submitted by the highest bidder was
considered by the Board of Directors by circulation of an agenda on 11.08.2023. The said
binding term sheet has been approved by the Board of Directors of Unitech Limited on
14.08.2023. After the decision of the Board, the transaction advisor has been requested to
submit the final version of the binding term sheet. |
|
(iv) A fair valuation report as per the provisions prescribed
under section 56 of Income Tax Act, 1961, read with Rule 11UA of Income Tax Rules, 1962,
has been obtained from a registered Merchant Banker. However, the statutory auditor has
asked for getting the fair valuation report from an IBBI registered Valuer as required
under the provision of Indian Accounting Standard 105 - Non-current assets held for
sale and discontinued operations. The Management is in the process of getting the
needful done in this behalf. |
Auditor's Opinion |
Management's Response |
16. The Company has made many adjustments in accordance with
Indian Accounting Standards applicable to the |
The observations are a statement of fact and
need no further comments. |
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. |
|
17. Revenue from real estate projects |
(i) The Audit Observations are a statement
of fact and an accounting practice followed since from the period of the erstwhile
Management. The Statutory |
(i) 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. |
Auditors are of the view that the Company
should switch over from the POCM based accounting to Point-in-Time system of
accounting as prescribed in IND-AS-115 to correct this anomaly. |
Provisions of paragraph 35 of Indian Accounting Standard 115
revenue from contracts with customers specifies that an entity can recognize
revenue over time if it satisfies any one of the following criteria: |
This is expected to fall in line with the
Accounting Standards with the Project Accounting System being put in place after the award
of Contracts, constructions completed and units delivered to the Homebuyers. |
a) The customer simultaneously receives and consumes the
benefits provided by the entity's performance as the entity performs |
(ii) There are about 17,700 homebuyers
across 74 residential and 12 Commercial projects where construction is lying stalled at
various stages of construction. These units are to be completed and handed over to the
homebuyers. The entire exercise is being carried out under the overall guidance and
supervision of Hon'ble Supreme Court. |
b) 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 |
(iii) As such, the Management will be in a
position to assess the impact thereof only in due course of time after the Projects are
completed and handed over. |
c) 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. |
|
(ii) On perusal of various agreements entered by the Company
with homebuyers, 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. |
|
(iii) Based on the explanation provided by the management,
they are in agreement with our understanding and are in the process of evaluation of its
impact on the present and earlier presented periods. |
|
(iv) In view of the above, we are unable to express an
opinion on all the matter mentioned above. |
|
(v) We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in respect of this matter. |
|
Nature of dues |
Principal amount outstanding (Rs. in
Lakhs) |
Outstanding Since |
Income tax |
102,46.88 |
Pertaining from FY |
deducted at source |
|
2014-15 onwards |
Professional Tax |
0.59 |
Pertaining from FY 2018 |
|
|
2019 onwards |
Provident Fund |
24,42.87 |
Pertaining from FY 2015 |
|
|
2016 onwards |
Auditor's Opinion |
Management's Response |
18 Statutory dues / recoverable The Company has long
outstanding statutory liabilities as st on 31 March, 2023, details of which are as
follows:- |
(i) The new Management has already submitted
its Resolution Framework (RF) before the Hon'ble Supreme Court on 16.07.2020,
followed by updated versions dated 02.05.2021 and 08.08.2022, wherein the Company has
sought various reliefs on account of penalties, interest liabilities etc., among others,
due to be paid by the Company to the Statutory Authorities, Banks, Financial Institutions
etc. |
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. |
(ii) Since a definitive view on various
reliefs sought in the RF is yet to be taken by the Hon'ble Supreme Court, it may not
be feasible at this stage to assess the overall impact of its outstanding statutory
liabilities. |
During financial year ending 31 st 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. |
(iii) The new Management is committed to
make the Company compliant in terms of various provisions contained in the Companies Act
2013 and other related Act, Rules, Regulations etc. |
The Company is filing 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 |
(iv) As far as GST is concerned, after a
great deal of efforts put in by the management, 31 GST Registrations of Unitech's
various pan-India entities, out of a total of 34, have finally been got activated and the
pending Returns (GSTR-1 and GSTR-3B) have also been filed at different locations, while
fresh Registrations are being pursued in case of remaining 03 entities. |
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. 5,990.90 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. |
|
Auditor's Opinion |
Management's Response |
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 year ended 31 st March, 2022 in respect of this matter. |
(i) This issue has duly been explained in Chapter 8 of the
Resolution Framework (RF) submitted to the Hon'ble Supreme Court and the Company
shall take action as per the directions of the Hon'ble Court in this behalf. The New
Management neither processes any such case nor it is authorized to do so till the
Hon'ble Supreme Court takes a decision in this matter. |
19. The Company has failed to repay deposits accepted by it
including interest thereon in respect of the following deposits: |
(ii) It is, however, clarified that disbursement to some
fixed deposit holders (Sr. Citizens on a pro-rata basis) has been made through the Ld.
Amicus Curie on the directions of the Hon'ble Supreme Court issued from time to time
in the past. The details of amount disbursed to the FD holders directly from the Registry
have been received in the Company on 22.11.2022 and the amount of disbursal is being
captured in the books of accounts and reconciled. |
Particulars |
Unpaid matured deposits (Principal
amount) as at 31st March 2022 |
Principal paid during the year |
Unpaid matured deposits (principal
amount) as at 31st March 2023 |
Deposits that have matured on or before March 31, 2017 |
55,148.59 |
|
|
|
1,405.03 |
53,743.56 |
|
The total unpaid interest as on 31st March, 2023 (including
interest not provided in the books) amount to Rs. 59,677.16 Lakhs. |
|
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). |
(iii) Further refund of another amount of
Rs. 13.19 Crore has been approved by the Hon'ble Supreme Court vide its Orders dated
01.02.2023 for refund of principal amount of FDs to depositors facing |
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. |
Medical Exigencies. As on 22.08.2023, the
Company has already released an amount of Rs. 12.90 Crore to 501 out of 548 FD holders.
The remaining cases are pending for want of receipt of requisite papers from the concerned
Depositors. |
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 not 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 31 st March, 2022 in respect of this matter. |
|
Sr. No. |
|
Auditor's Opinion 20. 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 |
Management's Response (i) The
total financial liability of Unitech Group to the tune of Rs. 5,552.60 Crore as on
31.12.2019 has been captured in Annexure-C of the Resolution Framework (RF) submitted
before the Hon'ble Supreme Court. The financial liability of Unitech Limited has now
risen to Rs. 5,987.47 Crore as on 31.03.2022 as per Standalone Financial Statement for the
period. |
). 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 31 st March, 2022 in respect of this matter. |
(ii) A total of 19 lenders, including Banks
and ARCs, have filed 65 cases in various DRTs, namely, New Delhi (DRT-1), Chandigarh,
Chennai, Kolkata, Mumbai, Lucknow and Allahabad. In view of the moratorium granted by the
Hon'ble Supreme Court, all these cases have been ordered to be adjourned sine die. |
|
(iii) Various lenders have also filed IAs in
the Hon'ble Supreme Court, which are pending consideration by the Hon'ble
Supreme Court. |
|
(iv) Since the matter has already been
covered in the Resolution Framework and the final payment of principal amount and/or
interest thereon shall be made only in accordance with the decision of the Hon'ble
Supreme Court in this behalf. |
21. Standalone Financial Statements of the Company as on |
(i) The Company has filed an IA No.
47995/2021 dated |
31st March, 2023 which contains the details of Intervention |
27.03.2021 before the Hon'ble Supreme
Court for |
Application IA before Hon'ble Supreme Court
of |
recovery of the amount. Hence, the matter is
sub- |
India wherein, the Company has stated that erstwhile |
judice. |
management has invested in the state of Hyderabad |
(ii) Notwithstanding the IA pending before
the |
through a collaboration agreement with M/s Dandamundi |
Hon'ble Supreme Court, the management
has held |
Estate and Mr. D.A. Kumar and deposited an amount of |
meetings at the level of Directors and
Justice A.M. |
Rs. 48,131.00 Lakhs (out of which an amount of Rs. 600.00 |
Sapre with Mr. D.A. Kumar and visited the
land |
Lakhs got adjusted on account of some dues of M/s |
sites twice on 24.06.2022 and 02.01.2023. |
Dandamundi Estate). Now the new management, is trying |
|
to recover the amounts deposited with M/s Dandamundi |
(iii) It was agreed in the last meeting held
at the level of |
Estate and Mr. D.A. Kumar along with interest @ 18% pa |
Justice Sapre and the Chief Secretary,
Telangana |
and has not created any provision against said deposit |
that the District Administration would
complete the |
in the books of accounts on account of matter being |
site survey and identify the areas, which
have been |
subjudice. In view of the same, we are unable to express |
encroached. It was also inter-alia directed
by the |
an opinion on this matter. |
Chief Secretary that no further sale deeds
may be |
|
allowed to be executed on the land parcels
owned |
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31 st March, 2022 in respect of this matter. |
by Unitech Limited and its collaborator. |
|
(iv) On follow-up with the District
Collector of Medchal |
|
Malkajgiri, Hyderabad, it has been learnt
that a |
|
Surveyor has been appointed to complete the |
|
process of site demarcation, which is
expected to |
|
be completed in about next two months'
time. |
|
(v) This is an action under progress. |
Auditor's Opinion |
Management's Response |
22. The Company is unable to correctly map the monies
received from the customers towards maintenance charges with appropriate customer codes.
Due to this, Rs. 483.74 Lakhs have been accounted for under advance from customer during
the financial year ending 31 st March, 2023. Cumulative total of such receipts, which are
not identifiable, is Rs. 2,897.90 Lakhs. |
(i) The requisite MSAs of all the concerned
projects have already been shared with the statutory auditors. |
Due to non-availability of data and supporting documents, we
are unable to express an opinion on the same. |
(ii) As far as the mapping of monies
received from the residents (with customer codes) towards maintenance charges are
concerned, it is clarified that a mixed bag of arrangements, which has been continuing
since long. This observation relates to a total of ten projects comprising 06 Residential
and 04 JV Commercial projects. This comprises of |
We had mentioned this matter under other matter
on the standalone financial statements for the year ended st 31 March, 2022. |
(i) where the RWAs are collecting the money
and spending from out of a joint account, (ii) where the RWA are collecting and spending
on their own, and (iii) Where Unitech and its JV are collecting the Maintenance Charges
and spending the same. The main problem is that the RWAs have not maintained the
customer-wise accounts with their customer codes. This has been taken up with the
concerned RWAs for reconciliation thereof. The RWAs/ AoAs of 04 projects of Greater Noida
and 06 projects of Gurugram, have started the exercise which, may take about 3 to 6 months
time for final reconciliation. |
|
(iii) The complete verification and mapping
of the amounts is expected to be completed by 31.12.2023. |
23. Filing of E-forms with Registrar of Companies |
(i) E-Form DPT-3: The Company has now
received Statutory Auditor's certificate DPT-3 from M/s R. Nagpal & Associates
for the Financial Year 2019-20. |
The Company has failed to submit following e-forms with
Registrar of Companies during the year: |
(ii) The requisite e-Form DPT-3 for FY
2019-20 has already been filed. For the subsequent Financial Years 2020-21 and 2021-22,
the Company is in discussions with the Statutory Auditors for the requisite certificates,
which are likely to be filed by 30.09.2023. |
a) Form DPT-3 Return of Deposit |
(iii) Form CRA-4 Cost Audit Report: |
b) Form CRA-4 Cost Audit Report for F.Y. 2020-21 file with
the Central Government. |
(a) The erstwhile Management of Unitech
Limited had appointed M/s M.K. Kulshreshta & Associates as the Cost Auditor of the
Company in its BoD meeting held on 13.02.2015. Mr. Kulshreshta continued as the Cost
Auditor of the Company till FY 2019-20. |
|
(b) Mr. Kulshreshta did not submit any Cost
Audit Report since his fee was not paid by the erstwhile Management. |
Auditor's Opinion |
Management's Response |
|
(c) Further, the Company has
appointed M/s Pant S. Associates as the Cost Auditors for the period 2017-18 to 2021-22.
M/s Pant S. Associates has been appointed as the Cost Auditor for a further period of two
years from FY 2022-23 to FY 2023-24, as per the decision of the BoD taken in its meeting
held on 13.07.2023. |
|
(d) It is informed that the Cost Audit
Reports for the Financial Years from 2017-18 to 2021-22 have been submitted by the Cost
Auditor, which are being placed in the meeting of the Board of Directors scheduled to be
held on 29.08.2023 for approval and adoption. |
24. Schedule III of Companies Act, 2013 |
(i) After the new Management took over pursuant to the order
dated 20.01.2020 passed by the Hon'ble |
The Company is not able to provide/ substantiate details of
following disclosures required under the provisions of Schedule III of Companies Act,
2013:- |
Supreme Court, the Company has been making efforts to collect
the title papers of pan-India land parcels held by Unitech Group and keep them in the safe
custody in the Central Record Room at Gurugram |
a) Complete details of title deeds of immovable properties
not held in the name of the Company. |
(ii) There have been challenges in the reconciliation of land
parcels between the Land Division and the Accounts Division. Since a large number of
landholdings have been charged or mortgaged, the process of reconciliation has been taken
in hand, which is at an advance stage of completion and is expected to be completed by
30.06.2023. The statement of reconciliation would be shared thereafter with the Statutory
Auditors for appropriate appraisal and review. |
b) Details of benami property held and if any proceeding has
been initiated or pending against the Company, if any |
(iii) The delay in reconciliation has primarily been because
of the problems inherited by the new Management and also on account of the fact that
various key personnel left the Company after the appointment of new Board of Directors. |
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. |
(iv) The management has no details of benami property, which
is a subject matter of investigations by the Investigation Agencies. |
d) Complete details of Company declared wilful defaulter by
the bank or financial institution or other lender. |
(v) Since all the Loan Accounts, except PNB Loan Account
pertaining to Ciena, are NPAs and, therefore, quarterly returns and statements of current
assets are not being filed by the Company with the Banks and Financial Institutions. |
e) Utilization 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. |
|
Auditor's Opinion |
Management's Response |
|
(vi) As to whether the Company has been
declared a Wilful Defaulter by the Banks or Financial Institutions or other Lenders or
not, the Company shall share the information in this regard with the Statutory Auditors in
due course of time. It is, however, pointed out that the Company has recently received a
communication from Bank of Maharashtra, whose reference has been made in Note No. 79 of
the Standalone Financial Statement for the FY 2022-23. |
|
(vii) No funds have been borrowed by the
Company from any Bank or Financial Institution after the appointment of the new Board of
Directors. As far as the funds borrowed prior to the appointment of new Board of Directors
are concerned, the specific details about their utilization are not available in the
Company and that this aspect is also being looked into by the Central Investigating
Agencies. |
|
(viii) As far as other Observations
mentioned in Sr. No. 25 are concerned, the Company has already started the process to
collect the relevant information from various sources which are available to the new
Management. As soon as the information is collected, the same shall be shared with the
Statutory Auditors. |
25. Standalone Financial Statements, with respect to opening
balances appearing in the books of accounts of the Company as on 1st April, 2020, there is
no information/ supporting documents available with the Company related to following
accounts: - |
(i) The opening balances pertaining to the items mentioned
under Sr. No. 25 are outstanding for a long time and pertain to the period of the
erstwhile Management which has since been superseded by the Hon'ble Supreme Court
vide its order dated 20.01.2020. |
a) Other comprehensive income / (loss) amounting Rs.
(52,331.93) Lakhs |
(ii) The Company has been facing serious constraints because
of the resignations of several key personnel who left the Company either prior to the
appointment of the new Management or immediately after the new Management took over.
Further, even the availability of records has been a serious challenge for the new
Management. |
b) Provision for bad and doubtful debts/ trade receivables
amounting Rs. 32,373.95 Lakhs |
(iii) However, all out efforts are being made to collect and
compile the requisite information as sought and would be shared with the Statutory
Auditors in due course of time. |
c) Allowances for bad and doubtful loans and advances to
related parties amounting to Rs. 1,589.05 Lakhs |
|
d) Other loans and advances amounting to Rs. 520.00 Lakhs |
|
e) Trade receivables and advances received from customers
amounting Rs. 1193,075.62 Lakhs |
|
f) Loans/ advances given to subsidiaries, joint ventures |
|
and associates amounting to Rs. 468,932.90 Lakhs |
|
g) Loans taken from subsidiaries, joint ventures and
associates amounting to Rs. 74,192.20 Lakhs |
|
h) Expenses payable amounting to Rs. 51,612.66 Lakhs |
|
i) Current Tax Assets amounting to Rs. 3,004.64 Lakhs |
|
Auditor's Opinion |
Management's Response |
j) Deferred Liability amounting to Rs. 2,36,049.12 Lakhs |
|
k) Advance given for purchase of land amounting to Rs.
61,287.37 Lakhs and its Ind AS Adjustments amounting to Rs. 4,365.00 Lakhs. |
|
l) Provision for doubtful advance given for purchase of land
amounting Rs. 30,000.00 Lakhs |
|
m) Investment in Subsidiary - Corporate Guarantee amounting
to Rs. 8.70 Lakhs. |
|
n) Investment in CIG Funds (Ind AS Adjustments) amounting to
Rs. 960.83 Lakhs. |
|
o) Security Deposits receivables (Ind AS Adjustments)
amounting to Rs. 2,867.51 Lakhs. |
|
p) Prepaid Expenses (Ind AS Adjustments) amounting to Rs.
17.84 Lakhs. |
|
q) Loans to Subsidiaries (Ind AS Adjustments) amounting to
Rs. 50,730.57 Lakhs. |
|
r) Term loans from bank and Financial Institution (Ind AS
Adjustments) amounting to Rs. 63.93 Lakhs. |
|
s) 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 31 st March, 2022 in respect of this matter. |
|
26. 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 31 st March, 2022 in respect of this matter. |
(i) The relevant information pertains to the
period of the erstwhile Management which has since been superseded by the Hon'ble
Supreme Court vide its order dated 20.01.2020. The Company has been facing serious
constraints because of the resignations of several key personnel who left the Company
either prior to the appointment of the new Management or immediately after the new
Management took over. Further, even the availability of relevant records has been a
serious challenge for the new Management. |
|
(ii) The Central Investigating Agencies,
like Enforcement Directorate, SFIO, and CBI, among others, are already investigating on
various issues. Since the Company is not aware about the stage of the completion of these
investigations, it is neither possible nor feasible for the new Management to quantify the
liabilities of the Company at this stage. |
Auditor's Opinion |
Management's Response |
|
As far as the court cases are concerned, it
is |
|
pointed out that there were in all 4,001
court cases |
|
pending pan-India against the Company, out
of which 1,558 cases have so far been disposed of. Hence, there are at present 2,443
active cases, out of which except those which have been filedby the Company, all other
cases have been laid to rest by virtue of the moratorium granted by the Hon'ble |
|
Supreme Court vide its order dated
20.01.2020. A broad break-up of important cases is tabulated herein below: |
|
Particulars Active Disposed of Total |
|
Income Tax Cases 20 2 22 |
|
Provident Fund Cases 10 - 10 |
|
Homebuyers 1,418 337 1,755 |
|
Total 1,448 339 1,787 |
|
As far as the bank guarantees, corporate
guarantees and other commitments are concerned, the relevant data has been shared with the
Statutory |
|
Auditors while the original documents would
be shared with them in due course of time. |
27. The Company has not performed the process of (i)
identification of creditors to be classified as Micro and the MSMEs are entitled to a
speedier remedy |
The observation is admitted as correct.
However, It is believed that the MSME creditors, if any, should Development Act,
2006. primarily be from among the Vendors/ Contractors |
Small Enterprises (MSE) during the year and due to under the
MSME Act, 2006. The management has absence of details of MSE, the Company cannot determine
not received any notice from any such authority in the amount outstanding to MSE creditors
and interest due any state where the MSMEs can seek relief. thereon under The Micro,
Small and Medium Enterprises |
The information about their registration
under the MSME Act is to be supplied by the concerned parties only in order to claim the
benefits as prescribed therein. It is best left to the claimant to exercise any such
privilege if he/she is entitled to the same. |
In view of above, we are unable to express an opinion on of
the Company or any of its subsidiaries. It may the same. open a Pandora's box if the
management starts We had given a disclaimer of opinion on the standalone writing to all
its creditors to ascertain if they are financial statements for the year ended 31 st
March, 2022 in MSMEs or not. respect of this matter. |
In absence of requisite information on this
account, the Company is not in a position to quantify the amounts including interest,
which may have become due to such MSME Suppliers. As such, it is proposed that as and when
any such claim is received, the same would be processed on priority and shared with the
Auditors in due course. |
Pursuant to the provisions of section 204 of the Companies Act, 2013,
read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Board of Directors of the Company in its meeting held on 27.04.2023, has
appointed CS Kiran Amarpuri, Company Secretary in Practice (CP No. 7348), to conduct the
Secretarial
. AuditoftheCompanyforthefinancial year 2022-23
The Secretarial Audit Report for the financial year 2022-23 (Form MR-3)
submitted by the Secretarial Auditor is annexed herewith at Annexure-1, which may
be read as an integral part of the Board Report.
The response of your Directors to the observations made by the
Secretarial Auditor is as follows:
Sr. No. Observations of the Secretarial Auditor |
Response of the Management |
1. The Company has failed to repay deposits accepted by it
including interest thereon before the commencement of |
The matter related to Fixed deposits is
being supervised and managed under the directions of the Hon'ble Supreme Court. The
Company has not accepted or re-paid any FD at its own level. |
Companies Act, 2013. The matter of fixed depositors is
pending before the Hon'ble Supreme Court and deposits are being repaid in accordance
with the directions of the Hon'ble Supreme Court. |
|
2. The Company has been generally filing the forms and
returns with the Registrar within the prescribed time. |
The filing of e-form DPT 3 for FY 2022-23
can be done only after the approval of Financial Statements, which are being placed in the
meetings of Audit and Risk Management Committee and the Board of Directors scheduled to be
held on 29.08.2023. |
However, there are few instances where there have been delays
in filing. The Company has failed to submit return of deposits in Form DPT-3. |
The delay in holding the AGM for FY 2021-22
was beyond the control of the new Management. However, it is pertinent to mention that the
AGM for FY 2021-22 has already been held on 31.03.2023. It is further mentioned that the
AGM for FY 2022- 23 is proposed to be held on 29.09.2023. All due care shall be observed
for holding the AGMs in time, as observed by the Secretarial Auditor. |
3. The Company failed to hold its Annual General Meeting for
the financial year ended 31 st March, 2022 within the prescribed time without seeking
approval of the Registrar of Companies. However, as on date of this report, the meeting
has been held on 31.03.2023. |
The Company has already initiated the
process of appointment of Internal Auditor to comply with the provisions of section 138 of
the Companies Act, 2013, read with Rule 13 of the Companies (Accounts) Rules, 2014.
Accordingly, a few firms have been shortlisted by the Management for appointment as
Internal Auditor and efforts are being made to finalise and make the said appointment at
the earliest. |
4. The Company failed to establish Internal Audit System in
terms of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies
(Accounts) Rules, 2014. |
The Company has been looking for suitable
candidate for the position of Chief Financial Officer (CFO) and plans to make the said
appointment at the earliest to comply with the provisions of section 203 of the Companies
Act, 2013. |
5. The Company failed to appoint Chief Financial Officer in
terms of Section 203 of the Companies Act, 2013. |
The Company will, henceforth, make every
possible endeavour to file all documents/ reports to the Stock Exchanges under the SEBI
(LODR) Regulations 2015 within the prescribed timelines. |
6. There are instances of late submission of some documents/
reports under LODR to the Stock exchanges. The Company has filed clarification in response
to the notices issued by the stock exchange(s) and the Company has not paid any fine to
Stock Exchanges. |
(i) The new management has inherited the
legacy of substantial non-compliances from the erstwhile management which has resulted in
delays in the approval of financial results. |
7. There was delay in approval of annual financial results
and there are also instances of late submission of financial results for the quarter and
year ended 31 st March 2022. Further, there are instances of non-compliances for
preparation, approval, submission and publication of financial results for the period
ended 30 th June, 2022, 30th September 2022, 31st December 2022 and 31st March 2023.
Consequently, Disclosure of related party transactions could not have been made. As on
date of this report, financial results for the quarter ended 30 th June 2022 have been
approved by the Board of Directors and submitted to the Stock Exchanges. The action of
continuation of trading in securities in z' category for non-filing of
financial results was initiated by the Stock Exchanges. |
Further, the erstwhile Statutory Auditors of
the Company, M/s R. Nagpal & Associates, Chartered Accountants, resigned as Statutory
Auditors in January, 2020 as they could not obtain the Peer Review certificate |
|
Peer Review Board of Institute
of Chartered Accountants of India (ICAI). Thereafter, the Company took some time in
identifying a suitable firmof Chartered Accountants that could be appointed as Statutory
Auditors in place of the erstwhile auditors. |
|
(ii) The Key Managerial Personnel and
various other employees of the Company also resigned from the service after the
appointment of the new Management. Further, availability of credible data and relevant
documents have also been serious issues which the Management has been facing ever since
its appointment. |
|
(iii) The financial results for the quarter
ended 30 th June 2022 have already been approved by the Board of Directors in its meeting
held on 13.07.2023 and submitted to Stock Exchanges. |
|
(iv) The financial results for the quarter
and six months ended 30.09.2022, quarter and nine months ended 31.12.2022 and quarter and
year ended 31.03.2023 are proposed to be placed for consideration and approval in the
meetings of the Audit and Risk Management Committee and BoD proposed to be held on
29.08.2023. As far as the holding of AGM is concerned, the AGM for the FY 2022-23 is
scheduled to be held on 29.09.2023. |
|
(v) The Company will, henceforth, make every
possible endeavour to approve the Financial Results within the statutory time limits and
make requisite filings with the Stock Exchanges on time. |
8. There are instances of legal cases filed against the
Company under the various laws applicable to the Company. These cases are filed with
various courts of the Country. Moratorium on all the proceedings against the company is
continued in terms of order of Hon'ble Supreme Court dated 20.01.2020 |
Moratorium on all proceedings against the
Company is continued in terms of order of Hon'ble Supreme Court dated 20.01.2020. |
9. With regard to the unclaimed and unpaid amounts pertaining
to matured deposits and interest accrued thereon, the Company has informed us that a
number |
Chapter 8 of the Resolution Framework deals
with the subject of Fixed Deposits, which is awaiting final adjudication from the |
of depositors have put in claims which are pending before
various judicial fora for the matured deposits and interest accrued thereon. The amount
which was due to be transferred to IEPF Fund with respect to unpaid and unclaimed matured
deposits and interest thereon, which is outstanding for a period of seven years from the
date they became due for repayment, have not been transferred to IEPF Fund constituted
under Section 125 of the Companies Act, 2013. |
Hon'ble Supreme Court. Any payments of
the principal amount of the FDs is being made by the Company as per the directions from
the Hon'ble Supreme Court from time to time. The Company has not accepted or re-paid
any FD at its own level. |
Particulars of Loans, Guarantees or Investments
Particulars of Loans and Guarantees given or Investments made under
section 186 of the Companies Act, 2013, are given in the respective Notes to Standalone
Financial Statements.
Contracts or arrangements with Related Parties under section 188(1) of
the Act
With reference to section 134(3)(h) of the Companies Act, 2013, all
Related Party Transactions (RPTs) under section 188 of the Companies Act, 2013 and
regulation 23 of the Listing Regulations were placed before the Audit Committee and the
Board. All contracts/ arrangements/ transactions made by the Company during the relevant
year with the Related Parties were in the ordinary course of business and on an arm's
length basis.
As detailed in Note No. 46 of Standalone Financials
Statement, the Company has not entered into any transaction with
related parties during the year under report, which could be considered material in
accordance with the policy of the Company on materiality of Related Party Transactions. In
view of the same, giving particulars of contracts or arrangements with the Related Parties
in Form AOC-2 is not required for the year under review. The Company has framed a policy
on dealing with Related Party Transactions and the same is available at Company's
website www.unitechgroup. com. Your Directors draw your attention to Note No. 46 to the
Standalone Financial Statement, which sets out the related party disclosures.
The State of the Company's Affairs
1. The Directors of your company had engaged M/s Anarock Consultants
Private Limited to carry out the market valuation of unsold inventories of Unitech Group
on a representative basis in its various residential projects as on 31.03.2021, with a
stipulation that it would revalidate the market value of unsold inventories as of
01.10.2023 also. In compliance of the same, M/s Anarock has revalidated the market value
of the unsold inventories as of 01.10.2023 and submitted its final report to the
Management.
2. During the year under review, the Management issued a public notice
dated 31.08.2022 regarding meetings with the homebuyers of Unitech's Noida Projects.
The said meetings were convened to share the thought process of the new Management about
the future roadmap planned for Noida Projects and to seek the consent of homebuyers on the
Proposed Revised Layout Plans, subject to approval of the Competent Authority, to
improvise the planning of Projects with suitable modifications in compliance of (i) Uttar
Pradesh Apartment (Promotion of Construction,
Ownership and Maintenance) Act, 2010, and (ii) UP Real Estate
Regulation Act, 2016. Meeting for the Unitech Golf and Country Club, Sector 96-97-98,
Noida, was held on 04.09.2022, followed by Unihomes-3 in Sector-113 Noida and Unihomes in
Sector-117, Noida, on 06.09.2022 and 08.09.2022, respectively. It may be noted that the
number of consents received from the homebuyers fulfilled the requisite 2/3rd requirement
as per law. Pursuant thereto, the Revised Layout Plans and Building Plans have been
submitted to Noida Authority along with the Consent Forms. Approval of the Noida Authority
is still awaited.
3. During the year under review, the Management of your Company has
submitted 25 applications for renewal of licenses to the Department of Town and Country
Planning, Haryana on 08.07.2022 and deposited the current renewal fees also with respect
to the same. The Town & Country Planning Department has already granted renewal of 24
out of 25 Licenses vide its orders dated 07.09.2022. Further, applications have also been
submitted for Grant of Occupation Certificates (OCs) in respect of six projects of Unitech
in Gurugram, out of which four have duly been granted by the competent authority. Further,
applications for release of revised Building Plans were submitted for three projects,
which have been sanctioned. Out of the Zoning Plans submitted for three projects, the same
have been approved for two projects.
4. During the year under review, on the directions of the Honble
Supreme Court vide its order dated 17.08.2022, the Revised Payment Plan along with details
regarding the tentative timelines for completion of the residential projects was uploaded
on the website of the Company on 19.08.2022. The Homebuyers were requested to give their
comments/ suggestions on the Revised Payment Plan to a dedicated e-mail id. Accordingly,
503 e-mails were received on the subject. The suggestions/ observations of 503 homebuyers
were compiled along with the management's response thereto and filed before the
Hon'ble Supreme Court. As on the date of this report, the said issue is yet to be
adjudicated by the
Hon'ble Supreme Court.
5. During the year under review, the matter of sale of Unitech Power
Transmission Limited (UPTL) has also been under consideration. The Board of Directors
accorded their approval to engage M/s. Ernst & Young (EY) as Transaction Advisers for
the divestment of UPTL in the Meeting of the BoD held on 14.02.2023 at a success fee of
1.75% of the Enterprise Value, capping of OPE at Rs. 5 lakhs and with an exclusivity
period of 09 months. The matter of divestment of UPTL was put up on the website of Unitech
Limited on 06.04.2023 inviting Expressions of Interest (EOI) from interested parties till
19.04.2023. In addition, M/s E&Y had also sent communications to 37 prospective
investors. A total of 10 parties submitted their EOIs by the due date. Following from the
above, Non-disclosure Agreements
(NDAs) were signed with these 10 parties. Another Notice was uploaded
on the Unitech's Website and on the e-Tendering portal on 26.04.2023 inviting
non-binding offers from these 10 parties up to 01.05.2023. In response thereto,
non-binding offers were received within the fixed timelines only from 04 parties, namely,
(a) M/s Jakson Limited (Rs. 65 Crore), (b) M/s JSC OGCC Kazstroyservice (Rs. 25 Crore),
(c) M/s Shilpa Steel and Power Limited (Rs. 20 Crore), and (d) M/s Shree Metals (Mujbi)
Private Limited (Rs. 10 Crore). The non-binding term-sheets were opened on 02.05.2023.
Since the value offered by M/s Jakson Limited was found to be the highest among all the
bidders, it was allowed to conduct Due Diligence as per the process note prepared by
E&Y in consultation with UPTL to facilitate the highest bidder to submit its Binding
Offer on or before 17.06.2023. Eventually, the Binding Term Sheet for an amount of Rs. 65
Crore was received on 17.06.2023, along with a BG of Rs. 1.00 Crore. The highest bidder
had subsequently agreed to improve its offer to Rs. 67.00 Crore. The Board has already
approved the proposal by Circulation.
6. The Hon'ble Supreme Court, vide its order dated 18.05.2022,
appointed Justice (Retd.) A. M. Sapre to be associated with every stage of tendering
process and that the same be carried out under his supervision. Based on the ground-work
done by PMCs, it was estimated that about 130 Tenders would be required to be floated for
completion of all the 74 residential and 12 commercial projects. Since, it was practically
not possible to float all the 130 tenders in one go, the Management decided to float these
130 odd tenders in four to five Lots with each Lot comprising about 30-35 tenders.
Accordingly, after the approval of the Board of Directors (BoD) and Justice (Retd.) A. M.
Sapre in the month of November/ December 2022, a total of 35 Tenders (as Lot-1) were
floated on 02.01.2023 on Unitech's e-tendering web portal etenders.unitechgroup.com.
After the last date of submission of tenders, it was discovered that no bids were received
against 18 tenders (out of 35) whereas both the bids received in case of one tender failed
to meet the eligibility criteria and both the bids received in respect of another tender
were abnormally high, resulting in the rejection of bids for these 02 tenders. Thus, bids
were required to be called afresh in respect of these 20 tenders (18+1+1). Balance 15
tenders, which were found to be technically eligible and financially acceptable, were
recommended for Award of Contracts by the PMCs and EIL, which in turn was duly approved by
the BoD in April, 2023 and submitted to Justice (Retd.) A.M. Sapre for his approval and
onward recommendation to the Hon'ble Supreme Court seeking its permission for Award
of Contracts to the successful bidders qua these 15 tenders. Justice (Retd.) A. M. Sapre
scrutinized the same and submitted his recommendations to the Hon'ble Supreme Court.
Approval of the Hon'ble Supreme Court for Award of Contracts in
respect of these 15 Tenders is awaited. The Letters of Intent (LoIs) would be issued to
the Contractors after approval of the Hon'ble Supreme Court is received and works
would commence at the respective projects thereafter.
7. In continuation of the Tendering process, 2nd Lot of 31 Tenders were
prepared by the PMCs and duly reviewed by the EIL. Thus, a total of 51 Tenders (20
re-tenders of Lot-1 and 31 tenders of Lot-2), duly approved by BoD and Justice (Retd.) A.
M. Sapre, were uploaded on Unitech's e-tendering web portal on 08.05.2023 and
09.05.2023. Accordingly, these tenders were uploaded/ floated on the portal. A total of
103 bids were received against 42 Tenders as no bids were received against 09 Tenders.
Finally, after technical and financial evaluation and negotiations held with 15 bidders,
bids received against a total of 34 Tenders have been finalised, approved by the Board and
Justice Sapre. As on date, 15 Tenders of Lot-1 and 34 Tenders of Lot-2, have been
recommended by Justice (Retd.) A.M. Sapre for the approval of the Hon'ble Supreme
Court.
8. During the year under review, M/s MSTC were engaged as the
Auctioneers for handling the auction of various unencumbered land assets of Unitech Group.
M/s MSTC has an experience of about 50 years in conducting/ handling auctions of various
items including properties belonging to various Government Organizations and has developed
a robust e-auction platform for the purpose. Further, the e-auction processes had been
approved to be incorporated in the Land Sale Policy and SOP which has been duly approved
by the Hon'ble Supreme Court vide its order dated 17.08.2022. As on the date of this
report, M/s MSTC has been supplied with information in order to develop the auction
catalogue and it is proposed that the unencumbered properties will be hosted for e-Auction
shortly.
9. Document Management System/ Content Management System has been
installed and configured in the Company. Data Storage Structure for Documents related to
Projects has been created. Project Documents in electronic format are being moved to the
DMS.
Amount, if any, proposed to be carried to any Reserves
As the Company is incurring losses since last several years, no amount
is proposed to be carried to any reserve during the year under review.
Dividend
As your Company has incurred a net loss during the year under review,
your Directors have not recommended any dividend for the year ended 31st March, 2023.
Conservation of Energy, Technology Absorption
Since the Company does not own any manufacturing facility, except
Unitech Power Transmission Limited (UPTL), a wholly-owned subsidiary company, the
requirement of disclosure of particulars relating to conservation of energy and technology
absorption is not applicable.
Foreign Exchange Earnings and Outgo
The Company is engaged in developing/ constructing residential and
commercial properties in India and it used to sell the immovable properties to customers
in India and abroad in the past. However, no sale of immovable properties has been carried
out after the change of Management. During the year under review the Company has not sold
any overseas property. The foreign exchange earnings and outgo of the Company during the
year under review were NIL.
Risk Management
Risk Management Policy of the Company is in place and has been updated
and approved in the meeting of the Board of Directors held on 13.07.2023. The objective of
the policy is to identify and assess the key risk areas, and to mitigate risks, and
monitor/ report effectiveness of the processes and controls and advance action, which may
need to be taken to mitigate such risks.
Corporate Social Responsibility
The Company has not undertaken any CSR activities during the year under
review, since there is loss during the preceding three financial years. The Annual Report
on CSR activities is attached herewith at Annexure-2, which may be read as an
integral part of the Board Report.
Internal Financial Control for Financial Statements
The Board of Directors have been reviewing the sufficiency of existing
internal control systems and assessing the need to bring better financial control
measures, which are commensurate with the size of the business of the Company.
Audit and Risk Management Committee
The composition of the Audit and Risk Management Committee is provided
in the Corporate Governance Report, which forms an integral part of the Board Report.
Vigil Mechanism
Pursuant to section 177 (9) of the Companies Act, 2013, read with rules
made thereunder and regulation 22 of the Listing Regulations, the Company has Vigil
Mechanism for Directors and Employees to report genuine concerns. The policy has been
posted at Company's website i.e. http://
www.unitechgroup.com/investor-relations/whistle-blower-policy.asp During the year under
review, the Company has not received any such report in this behalf.
Secretarial Standards
The Company has devised proper systems to ensure compliance with the
provisions of all applicable Secretarial Standards issued by the Institute of Company
Secretaries of India and that such systems are adequate and operating effectively.
Deposits
During the year under review, the Company has not accepted any Deposits
under the provisions of section 73 and 76 of the Companies Act, 2013, read with Companies
(Acceptance of Deposits) Rules, 2014. Particulars of Deposits covered under Chapter V of
the Companies Act, 2013 are as follows:
Particulars |
Details |
Amount of Deposits accepted during the |
NIL |
financial year 2022-23. |
|
Amount of Deposits remained unpaid or |
Rs. 537.44 crore (Principal Amount) |
unclaimed during the year, i.e. as on 31.03.2023 |
|
Whether there has been any default in repayment of Deposits
or Interest thereon; and if so the number of times and the total amount involved- |
(i) The Company had filed an application in
March 2015 before the Hon'ble CLB [Now NCLT] for seeking, inter-alia,
re-scheduling of repayment of Fixed Deposits. The Hon'ble National Company Law
Tribunal, New Delhi (NCLT) dismissed the said application. The appeal against the said
order was also dismissed by the Hon'ble NCLAT vide its order dated 31st January,
2017. |
At the beginning of the year Maximum during the year |
(ii) Some Depositors filed intervention
applications (IAs) before the Hon'ble Supreme Court in the matter of homebuyers of
the Company. |
At the end of the year |
Considering their applications, the
Hon'ble Supreme Court directed the Amicus Curiae to create a web-portal where the
Depositors could provide their requisite information. Accordingly, in compliance of the
ibid |
Details of Deposits which are not in Compliance with Chapter
V of the Companies Act, 2013 |
direction, the Ld. Amicus Curiae created a
web-portal for the urpose. |
|
(iii)Hon'ble Supreme Court vide its
order dated 12th December, 2019, allowed refunds to FD holders who were senior citizens,
aged 60 years and above. Ten per cent of the amount deposited with the Registry at that
time i.e. Rs. 17.4 crore was allocated for the purpose. Having regard to the huge number
of FD holders, who had registered themselves on the web-portal, the Hon'ble Court
allocated a further sum of Rs. 30 crore for distribution amongst them. The additional
amount of Rs. 30 crore was also to be disbursed to FD holders of the age group of 60 years
and above, in terms of the earlier direction/s. Out of the allocated sum of Rs. 47.40
Crore allocated, an amount of Rs. 31.23 Crore has been disbursed till 22.11.2022 as per
the report of the Registry of the Hon'ble Supreme Court. |
|
(iv)Further, the Hon'ble Supreme Court,
on recommendations of Justice Sapre, approved the release of Rs.13.19 Crore for payment of
the principal amount of Fixed Deposits to 548 FD holders vide its order dated 01.02.2023
on grounds of medical exigencies. The said amount has been received in the Company's
Account. As on 10.07.2023, a total of Rs. 12.90 Crore has been refunded to 501 FD Holders.
The outstanding principal amount payable to the FD holders amounts to Rs. 535.87 Crore as
on 10.07.2023. |
|
(v)Accordingly, the matter pertaining to
public deposits is presently before the Hon'ble Supreme Court as addressed in Chapter
8 of the Resolution Framework. Hence, the final action in this behalf would depend on the
finality of the matter at the level of the Hon'ble Apex Court. |
Particulars of Employees and Related Disclosures
The ratio of remuneration of each Director to the median
employees' remuneration and other details in terms of section
197 (12) of the Companies Act, 2013, read with rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided as
Annexure-3, forming part of this report.
During the year under review, no employee was drawing remuneration of
Rs 1.02 crore per annum which is required for inclusion in the statement containing
particulars of employees as required under section 197 of the Companies Act, 2013, read
with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
Significant and Material Orders
During the year under review, apart from various Orders passed by the
Hon'ble Supreme Court, there were no significant and material orders tribunals that
may impact the going-concern-status' and Company's operation in future.
Details of applications made or any proceedings pending under the
Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end
of the financial year
During the year under review, no application was made nor was any
proceeding pending under the Insolvency and Bankruptcy Code, 2016, as per the records
available with the Company.
Details of difference between the amount of valuation done at the time
of one-time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof
The same is not applicable for the year under review.
Cost Accounts and Cost Auditors
The Company is required to make and maintain cost records as specified
by the Central Government under sub-section (1) of section 148 of the Act. The Company has
in its Board Meeting held on 13.07.2023 appointed M/s Pant S. & Associates (FRN:
101402) as Cost Auditors of the Company for conducting audit of cost records from FY
2022-23 to 2023-24. The remuneration to be paid to the Cost Auditor for FY 2022-23 &
2023-24 will be ratified in the ensuing Annual General Meeting of the Company.
Further, the observations of the Cost Auditor as given in his Cost
Audit Reports for the Financial Years from 2017-18 to 2021-22 are given herein below along
with the response of the Management on the same
Cost Auditor's Observation |
Management Response |
Company has to maintain detail |
The Company has been |
of area constructed during the |
maintaining the details |
financial year, that detail is not |
of each project as one |
available at Company's end. |
single entity, as a standard |
Instead of area constructed, |
practice from its inception, |
Company has mentioned each |
since calculations of |
project as different service and |
amounts spent qua the |
mentioned one (01) quantity |
area constructed each |
against each project. |
unit-wise is not practically |
|
feasible. |
Prevention of Sexual Harassment at work place
The Company has complied with the provisions relating to the
constitution of the Internal Complaints Committee under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed
thereunder. During the year under review, no case/ complaints pursuant to the same were
reported to the Board.
Acknowledgments
Your Directors wish to place on record their deep sense of appreciation
for the co-operation received from the Members, Government authorities, customers and
vendors. Your Directors also wish to place on record appreciation for the contribution
made by each and every employee of the Company. The Directors are also thankful to all the
stakeholders for their continued help, assistance and support.