INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF UNITECH LIMITED
Report on the Audit of the standalone financial statements
Disclaimer of Opinion
We have audited the accompanying Standalone Financial Statements
of the Company which comprise the Balance Sheet as at 31st
March, 2023, the Statement of Profit and Loss (including Other
Comprehensive Income), Statement of Changes in Equity and
Statement of Cash Flows, and a summary of significant accounting
policies and other explanatory information, in which are incorporated
the financial information for the year ended on that date of the
Company's branch office at Libya which are not yet audited by the
branch auditor. As at 31st March 2023, the Company has made
provision for non- recoverability of assets and provision for write¬
back of trade liabilities in respect of the Libya branch office (also refer
sr no iii of other matters paragraph of this report for details).
Our audit indicates that, because of the substantive nature and
significance of the matter described below, we have not been
able to obtain sufficient appropriate evidence to provide a basis
for expressing an opinion on the statement as to whether these
Standalone Financial Statements are prepared in accordance with the
recognition and measurement principles laid down in the aforesaid
Indian Accounting Standard and other recognized accounting
practices and policies generally accepted in India and has disclosed
the information required to be disclosed under the Companies Act,
2013 including the manner in which it is to be disclosed, or that it
does not contain any material misstatement.
Basis for Disclaimer of Opinion
We conducted our audit of the Standalone Financial Statements
in accordance with standard on auditing specified under section
143(10) of the Act. Our responsibilities under those standards
are further described in the Auditor's Responsibility for the audit
of the Standalone financial statements section of our report. We
are independent of the company in accordance with the Code of
Ethics issued by the institute of Chartered Accountant of India (ICAI)
together with the ethical requirements that are relevant to our audit
of the Standalone financial statements under the provisions of the
Act and the Rules made thereunder, and we have fulfilled our ethical
responsibilities in accordance with these requirements and the ICAI's
Code of Ethics. Because of the significance of the matters described
below we have not been able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion.
We draw your attention to the following matters:
(i) We draw attention to Note no. 55 of the Standalone Financial
Statements, which have made references to the Resolution
Framework (RF) for Unitech group which has been prepared
under the directions of the Board of Directors of Unitech
Limited appointed by the Central Government pursuant to the
afore-said order of the Hon'ble Supreme Court and approved
by the Board of Directors in their Meeting held on June 17,
2020/ September 10, 2020/ October 28, 2020/ April 27, 2022 and
which has been filed with the Hon'ble Supreme Court. Through
RF, the company has requested the Hon'ble Supreme Court to
grant some concessions and reliefs so that the company is able
to fulfil its obligations towards the construction of the projects
and meet other liabilities.
As the RF has not yet been approved by the Hon'ble Supreme
Court, the impact of the proposed reliefs, concessions etc.
have not been considered in the books of accounts.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(ii) Material uncertainty related to going concern
We draw attention to Note no. 39 of the Standalone Financial
Statements wherein the management has represented that
the Standalone Financial Statements have been prepared
on a going concern basis, notwithstanding the fact that the
Company has incurred losses and has challenges in meeting its
operational obligations, servicing its current liabilities including
bank loans and public deposits. The Company also has various
litigation matters which are pending before different forums,
and various projects of the Company have stalled/ slowed
down.
These conditions indicate the existence of material uncertainty
that may cast significant doubt about Company's ability
to continue as a going concern. The appropriateness of
assumption of going concern is critically dependent upon the
Company's ability to raise finance and generate cash flows in
future to meet its obligations, and also on the final decision of
the Hon'ble Supreme Court on the Resolution Framework. Also,
the Board of Directors are exploring various possible options
for completion of ongoing projects and are trying to generate
additional possible revenues by construction of new flats. This
activity is getting conducted under supervision of Justice A.M.
Sapre, as appointed by Hon'ble Supreme Court of India.
Considering the above, we are unable to express an opinion on
this matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(iii) We draw attention to Note no. 53 of the Standalone Financial
Statements, Unitech Limited ("the Company") held its annual
general meetings for last 2 years with delays. The company had
not applied for any extension for these annual general meeting
to the Registrar of Companies, NCT of Delhi & Haryana and is in
the process of estimation of penalty and other implications due
to delay in holding of annual general meeting.
Further, the Company also delayed in filling of its quarterly and
annual/year to date results with Security and Exchange Board
of India "SEBI". The Company has not taken any provision
related to penalty on account of such delay and management
is now planning to seek relief against such penalty from SEBI.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(iv) We draw attention to Note no. 61 of the Standalone Financial
Statements, the Company had received a 'cancellation of
lease deed' notice from Greater Noida Industrial Development
Authority ("GNIDA") dated 18 November 2015. As per the Notice,
GNIDA cancelled the lease deed in respect of Residential/ Group
Housing plots on account of non-implementation of the project
and non-payment of various dues amounting to Rs. 105,483.26
Lakhs. The said land is also mortgaged and the Company has
registered such mortgage to a third party on behalf of lender for
the Non-Convertible Debenture (NCD) facility extended to the
Company and, due to default in repayment of these NCDs, the
debenture holders have served a notice to the Company under
section 13(4) of the SARFAESI Act and have also taken notional
possession of this land. The Company had contractually entered
into agreements to sell with 352 buyers and has also received
advances from such buyers amounting to Rs. 6,682.10 Lakhs
(net of repayment). No contract revenue has been recognized
on this project.
GNIDA has, in the meanwhile, in terms of the Order of the
Hon'ble Supreme Court dated 18.09.2018, deposited on behalf
of the Company, an amount of Rs. 7,436.35 Lakhs (Rs. 6,682.10
Lakhs and interest @ 6% on the principal amount of Rs.
6,682.10 Lakhs), out of the monies paid by the Company, with
the registry of the Hon'ble Supreme Court. Out of the amount
received from GNIDA, the Hon'ble Supreme Court has refunded
the amount received in advance along with the interest to those
342 homebuyers who has submitted the relevant documents,
as per details of the position of accounts as on 22nd November,
2022 received from Hon'ble Supreme Court.
GNIDA has adjusted Rs. 9,200.00 Lakhs of Unitech group's
liabilities towards the Company's other projects with GNIDA
and forfeited Rs. 13,893.42 Lakhs.
The Company had paid a sum of Rs. 34,221.90 Lakhs, including
Rs. 4,934.95 Lakhs of stamp duty on the land, for the said land.
The matter in respect of the land is still pending before the
Hon'ble High Court of Allahabad, and pending the final
disposal, the Company has, subsequently, shown the amount
of Rs. 18,339.80 Lakhs as recoverable from GNIDA in its books
of accounts including stamp duty of Rs. 4,934.95 Lakhs and
lease rent paid of Rs. 61,13.11 Lakhs. Further, the Company is
also carrying.
a) Other construction costs amounting to Rs. 80,575.05 Lakhs
in respect of the projects to come upon the said land which also
includes interest capitalized of Rs. 696,84.68 Lakhs.
b) Deferred liability on account of interest payable to GNIDA
appearing in the books of accounts as on 31st March, 2023
amounting to Rs. 3,72,777.42 Lakhs (including Rs. 52,220.54
Lakhs booked on account of interest during the year ended
31st March, 2023). Out of the interest mentioned above Rs.
4,846.67 Lakhs has been capitalised in the books of accounts of
the company. The same is in contravention of the provisions of
Indian Accounting Standards 23 "Borrowing Costs".
The impact on the accounts viz. inventory, projects in progress,
customer advances, amount payable to or receivable from
GNIDA, and profit/(loss) for the year cannot be ascertained,
since the matter is still subjudice, as mentioned hereinabove,
vis-a-vis dues of the Company, and hence we are unable to
express an opinion on this matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(v) We draw attention to Note no. 71 of the Standalone Financial
Statements, Confirmations/ reconciliations are pending in
respect of amounts deposited by the Company with the
Hon'ble Supreme Court. As per books of account an amount
of Rs. 31,191.85 Lakhs deposited with the Hon'ble Supreme
Court Registry ("Registry") is outstanding as at 31st March,
2023. Management has received certain details of payments
made and monies received in the registry from the Court and
has accrued the same in its books of accounts. However, there
are still variations of Rs. 934.15 Lakhs between balance as
per books of accounts vs balance as per registry details and
management is in the process of reconciliation of the same.
Further, for the payments made from its registry, there was no
deduction made on account of tax at source and no goods and
services tax liability, wherever applicable on reverse charge
basis have been complied with.
In view of the reconciliation exercise still in process, possible
tax non compliances, we are unable to comment on the
completeness and correctness of amounts outstanding with the
Registry and of the ultimate impact these transactions would
have on the Standalone Financial Statements of the Company,
and hence we are unable to express an opinion on this matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(vi) We draw attention to Note no. 2, 3 and 4 of the Standalone
Financial Statements, according to information given and
explanation provided to us by the management, in respect
of Property, Plant and Equipment (PPE) including Investment
Property having net value of Rs. 2,996.56 Lakhs (net of
accumulated depreciation of Rs. 7,527.88 Lakhs), there is no
physical verification conducted by the Company since last
year. Further, the company does not maintain proper records
showing full particulars, including quantitative details and
situation of Fixed Assets comprising 'property, plant and
equipment, 'Intangible Assets' & 'investment property'. In
view of this and also of the fact that these PPE's are kept as
security for obtaining bank loans and all the loan accounts
of the Company (except loan obtained from Punjab National
Bank) are at non performing levels, we are not able to express
an opinion on this matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
Company has made investments and given loans to its
subsidiaries, joint ventures, associates and other. Details as on
31st March, 2023 are as follows: -
We draw attention to Note no. 5, 6 and 13 of the Standalone
Financial Statements, considering the fact that the accounts of
these above mentioned foreign entities are not available with
the management and for Indian entities, they are not audited
since last 4-5 years plus also taking into accounts the factors
such as non exitance of any loan agreement stating terms,
conditions and duration of loan, accumulated losses in above
said entities, substantial/ full erosion of net worth, significant
uncertainty on the future of these entities and significant
uncertainty on recovery of investments and loans, there are
strong indicators of conducting impairment/ expected credit
loss assessment for above mentioned investments and loans in
accordance with the principles of Indian Accounting Standards
36, "impairment of assets" and Indian Accounting Standards
109 "financial instruments".
Further: -
• Equity investment - others include investment made
in M/s Carnoustie Management (India) Private Limited
(Carnoustie) of Rs. 310,05.45 Lakhs as on 31st March,
2023. Regarding this investment, the Company has
already filed an Intervention Application "IA" before
Hon'ble Supreme Court of India wherein, the Company
has stated that erstwhile management has invested
in equity shares of Carnoustie @ Rs. 1,000 - Rs. 1,500
per share including a premium of Rs. 990 - Rs. 1,490
per share. As per IA submitted by the Company, there
was no basis available with erstwhile management for
such share valuation. Also, there were certain plots
allotted to Carnoustie at a price lower than the market
rate as on allotment date. Considering the nature of this
investment, same is to be valued at fair value through
other comprehensive income "FVTOCI" as required
under Indian Accounting Standards 109 "financial
instruments" but the Company has decided to carry
investment made in Carnoustie at cost as the matter is
subjudice.
• Investment - CIG - The Company made investment
of Rs. 254,53.18 Lakhs in CIG realty fund for which no
details are available with the Company. As explained by
management, the Company is planning to file a separate
Intervention Application "IA" before Hon'ble Supreme
Court of India requesting Hon'ble Court to take up this
matter. Management also explained that CIG funds are
already under investigation by Enforcement Directorate
(ED) and Serious Fraud Investigation Office (SFIO).
Considering the nature of this investment, same is to
be valued at fair value through other comprehensive
income "FVTOCI" as required under Indian Accounting
Standards 109 "financial instruments" but the Company
has decided to carry investment made in CIG funds
at cost as the matter is under investigation by various
authorities.
In view of non-existence of any impairment study, non-existence of
any expected credit loss policy in the Company and accounting of
investment at cost which were otherwise to be carried at FVTOCI, we are
unable to express an opinion upon the adjustments, if any, that may be
required to the carrying value of these non-current investments and non¬
current loan and its consequential impact on the Standalone Financial
Statement.
We had given a disclaimer of opinion on the standalone financial
statements for the year ended 31st March, 2022 in respect of this matter.
(viii) Impairment Assessment of Bank and Corporate Guarantees
We draw attention to Note no. 50 of the Standalone Financial
Statements, wherein it is stated that the company is having
outstanding bank and corporate guarantee of Rs. 1,07,059.26
Lakhs as per audited financials for year ending 31st March,
2023. The company has not conducted any impairment
assessment on the same in accordance with the principles of
Indian Accounting Standards 109 "financial instruments". In
view of the same, we are unable to express an opinion on the
same.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
The company has trade receivable and other financial assets as
on 31st March, 2023 are as follows: -
We draw attention to Note no. 7, 10, 13 and 14 of the Standalone
Financial Statements, the company has not assessed loss
allowance for expected credit losses on financial assets in
accordance with the principles of Indian Accounting Standards
AS 109 - "Financial Instruments".
In view of non-existence of any expected credit loss policy in
the Company, we are unable to express an opinion upon the
adjustments, if any, that may be required to the carrying value
of these financial assets and its consequential impact on the
Standalone Financial Statement.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(x) Inventory and project in progress
We draw attention to Note no. 9 and 16 of the Standalone
Financial Statements, Company, as on 31st March, 2023, has
shown inventory of Rs. 62,517.96 Lakhs and project in progress
"PIP" of Rs. 17,56,942.48 Lakhs. Company is currently carrying
these inventory and PIP items at cost which is computed based
on percentage of completion method under Indian Accounting
Standard 115 "Revenue from Contracts with Customers". In
view of the fact that in majority of the projects of the Company,
construction and other operational activities are on hold since
last 24-60 months, there are high indicators that such inventory
and PIP assets should be tested for evaluating their respective
net realisable value "NRV" in accordance with the requirement
of Indian Accounting Standard 2 "inventories".
Further, management is in the process of verification of title
documents for land and other immovable assets.
As per the explanation provided by the management, pursuant
to the approval of Hon'ble Supreme Court of India, Project
Management Consultants (PMCs) have been appointed for the
projects for estimation of work done till date, cost to be incurred
further to complete the projects and to provide applicable
completion timelines. These PMC's have also conducted actual
physical assessment of the projects and submitted their reports.
Management was earlier of the view that NRV assessment of
inventory and PIP can be made only after the appointed PMCs
complete their assessment of respective projects and submit
their final reports but the same is still awaited.
Further, the Company has during the year capitalized expenses
to the tune of Rs. 11,249.80 Lakhs as construction expenses
(including interest expense of Rs. 6,154.51 Lakhs). This Same
is in contravention of the provisions of Indian Accounting
Standard 16 "Property plant and equipment" and Indian
Accounting Standard 23 "Borrowing cost" as construction
activity for all the projects is stalled since last 5-6 years. This
has resulted in understatement of current year loss by above
said amount.
Also further, the Company, in its financial statements has
bifurcated PIP under two headings - "Project in progress on
which revenue is not recognized" and "Amount recoverable
from project in progress (on which revenue is recognized)".
We have not been provided with any basis on which this
bifurcation is made.
In view of the absence of any NRV assessment by the
management and absence of any physical verification report,
capitalization of expenses and interest cost during the year,
and absence of any basis of bifurcation of projects in financial
statements, we are unable to express an opinion upon the
existence and adjustments, if any, that may be required to the
carrying value of these inventories and PIP and its consequential
impact on the Standalone Financial Statements.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xi) External Confirmation
The company has not initiated the process of external
confirmation for outstanding balances of following areas as on
31st March, 2023 are as follow:
We draw attention to Note no. 66 of the Standalone Financial
Statements, the company has expressed its inability to send
confirmation requests in respect of above-mentioned areas
due to uncertainty about the amount receivable and payable
appearing in the books of accounts which are outstanding for
significantly long period of time. In view of non-existence of
adequate supporting documents, we are unable to express an
opinion upon completeness of the balances appearing in books
of accounts of the Company.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
Bank confirmations
In respect to confirmation of bank balances, margin money
balance and term deposits, the company has not sent
confirmation requests to any of the banks. In view of non¬
existence of supporting evidence related to bank balances,
we are unable to comment upon completeness of the
balances appearing in books of accounts of the Company
and adjustments, if any, that may be required to the books
of accounts and its consequential impact on the Standalone
Financial Statements.
With respect to the loans and borrowings taken by the Company
amounting to Rs. 2,79,186.01 Lakhs as on 31st March, 2023, no
confirmation has been received till date of this report.
The company is accruing interest expense on the said loans is
accrued at a provisional rate of interest. Such provisional rate
of interest is based on the details available with the Company
regarding interest rates charged by banks/ financial institutions
and the same are 4-5 years old. The company, has before the
date of approval of standalone financial statements for the year
ended 31st March, 2023, obtained statement of accounts from
several banks/financial institutions regarding its borrowings.
The Company analysed the statements, obtained from banks/
financial institutions, and additional liability, related to interest
and penal interest, was identified to the tune of Rs. 907,77.98
Lakhs. The company accrued the additional liability in the year
ended 31st March, 2023 whereas the interest/ penal interest
pertained to the earlier periods also. Non accounting of interest/
penal interest in earlier period, as part of error accounting, is in
contravention to the provisions of Indian Accounting Standard
8 "Accounting policies, changes in accounting estimates
and errors". The Company, is still in process of getting these
statements from remaining banks/financial institutions. In view
of these, we are unable to comment upon completeness of
the balances appearing in books of accounts of the Company
and adjustments, if any, that may be required to the books
of accounts and its consequential impact on the Standalone
Financial Statements.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xii) We draw attention to Note no. 50 of the Standalone Financial
Statements, Company is in the process of estimating impact
of its contingent liabilities which is subject to the decision
of hon'ble Supreme Court of India on proposed resolution
framework submitted by the Company. In absence of the same,
we are unable to express an opinion on the impact of such
contingent liabilities on the Company.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xiii) We draw attention to Note no. 67 of the Standalone Financial
Statements, Company has not appointed an internal auditor
for the financial year 2020-21,2021-22 and 2022-23 which is in
contravention of the provisions of section 138 of the Companies
Act, 2013 which mandates appointment of internal auditor for
all listed companies.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xiv) We draw attention to Note no. 67 of the Standalone Financial
Statements, the company has not yet appointed a Chief
Financial Officer and the prescribed time period under section
203 of the Companies Act, 2013 has already expired. Further
the company has not filed any application with Ministry of
Corporate Affairs for compounding of the said offence.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xv) We draw attention to Note no. 62 of the Standalone Financial
Statements, The Company has accounted for its investment in
one of its subsidiary M/s Unitech Power Transmission Limited,
as non-current assets held for sale. Cost of investment as on
31st March, 2023 is Rs. 42,26.26 Lakhs. The Company is carrying
said investment at cost and has not made any estimation of its
fair value less cost to sell as required under provisions of Indian
Accounting Standard 105 "Non-Current Assets Held for Sale
and Discontinued Operations". The company, post as on 31st
March, 2023, has received a binding offer of Rs. 6700.00 Lakhs
from a buyer which is also approved by the directors of the
company through circular resolution dated 14.08.2023. In the
absence of any fair value assessment by the Company, we are
unable to express an opinion on the matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xvi) The company has made many adjustments in accordance with
Indian Accounting Standards applicable to the company as on
31st March, 2020. The company is in the process of identifying
the impact already incorporated in the books of accounts in
previous years. In view of the same, we are unable to express
an opinion on completeness of the impact of Indian Accounting
Standard appearing in the books of account of the company.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xvii) Revenue from real estate projects
We draw attention to Note no. 31 of the Standalone Financial
Statements, The Company is accounting for revenue under
real estate projects using percentage of completion method
(POCM) with an understanding that performance obligations
are satisfied over time. Provisions of paragraph 35 of Indian
Accounting Standard 115 "revenue from contracts with
customers" specifies that an entity can recognise revenue over
time if it satisfies any one of the following criteria: -
• The customer simultaneously receives and consumes
the benefits provided by the entity's performance as the
entity performs
• The entity's performance creates or enhances an asset
(for example, work in progress) that the customer
controls as the asset is created or enhanced
• The entity's performance does not create an asset with
an alternative use to the entity and; the entity has an
enforceable right to payment for performance completed
to date.
On perusal of various agreements entered by the Company with
home buyers, it seems that the Company does not satisfy any of
the conditions specified in paragraph 35 of Indian Accounting
Standard 115 "revenue from contracts with customers".
Based on the explanation provided by the management, they are
in agreement with our understanding and are in the process of
evaluation its impact on the present and earlier presented periods.
In view of the above, we are unable to express an opinion on
the all the matter mentioned above.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
Regarding tax deducted at source, the Company has decided
not to deposit outstanding amount of tax deducted at source
till 20th January, 2020 i.e. period before the date when court
appointed management took over. Accordingly, the same are
still outstanding in the books of accounts of the Company.
During financial year ending 31st March, 2023, the Company is
not deducting tax at source at the time of booking of expenses
/ accounting entry but is deducting the same at the time of
payment. Same is in contravention of the provisions of chapter
XVII of Income-tax Act, 1961 which mandates deduction of tax
at source at earlier of booking or payment.
The Company is filling its GST returns in the states wherein it
has obtained registration. However, there is no reconciliation
available with the Company for the sales / input tax credit "ITC"
appearing as per books of accounts and details filled in the GST
returns.
We further like to draw attention to Note no. 16 of the Standalone
Financial Statements, which includes balance of Rs. 12,677.74
Lakhs pertaining to balance of input tax credit "ITC" receivables
by the Company under Goods and Services Tax Act, 2017.
The Company does not have any ITC register and has also not
provided any reconciliation between "ITC balance appearing in
books" and "balance appearing in GST department's portal". In
absence of any such detail and reconciliation, we are unable to
comment on accuracy or completeness of the same.
Further, the company has long outstanding dues payable to
employees amounting to Rs. 5,980.48 Lakhs as on 31st March,
2023. The company is in the process of evaluating the period
from which dues to employees are outstanding and also in
settlement of full and final amount payable to past employees
of the company.
In view of the all of the above, we are unable to express an
opinion on the matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xix) We draw attention to Note no. 57 of the Standalone Financial
Statements, The Company has failed to repay deposits
accepted by it including interest thereon in respect of the
following deposits:
Further, the Company has not provided for interest payable on
public deposits which works out to Rs. 6,678.84 Lakhs for the
year ended 31st March 2023 (Cumulative upto 31st March 2023
- Rs. 41,795.45 Lakhs).
Besides, the impact of non-provision of interest payable on
public deposits of Rs. 6,678.84 Lakhs for the year ended 31st
March 2023 on the profit and loss, we are unable to evaluate
the ultimate likelihood of penalties/ strictures or further
liabilities, if any on the Company. Accordingly, impact, if any,
of the indeterminate liabilities on these Standalone Financial
Statements is currently not ascertainable, and hence we are
unable to express an opinion on this matter.
Further, the Company has also accepted security deposits from
various entities amounting to Rs. 22,129.99 Lakhs as on 31st
March, 2023. We have not been provided with any relevant
agreement / document against which such security deposits
have been received. Due to absence of any related details /
document, we are in a position to comment on possible impact
of the same on the Company.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xx) We draw attention to Note no. 54 of the Standalone Financial
Statements, there have been delays in the payment of dues
of non-convertible debentures, term loans & working capital
loans (including principal, interest and/ or other charges as the
case may be) to the lenders of the company and the total of
such outstanding amount to Rs. 7,95,501.55 Lakhs as on 31st
March, 2023. The lenders have initiated the action against the
company under various act(s). On account of the same, we
are unable to determine the impact of the likely outcome of
the said proceedings and hence we are unable to express an
opinion on this matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xxi) We draw attention to Note no. 68 of the Standalone Financial
Statements of the Company as on 31st March, 2023 which
contains the details of Intervention Application "IA" before
Hon'ble Supreme Court of India wherein, the Company has
stated that erstwhile management has invested in the state
of Hyderabad through a collaboration agreement with M/s
Dandamundi Estate and Mr. D.A. Kumar and deposited an
amount of Rs. 481,31.00 Lakhs (out of which an amount of Rs.
6,00.00 Lakhs got adjusted on account of some dues of M/s
Dandamundi Estate). Now the new management, is trying to
recover the amounts deposited with M/s Dandamundi Estate
and Mr. D.A. Kumar along with interest @ 18% pa and has
not created any provision against said deposit in the books of
accounts on account of matter being subjudice. In view of the
same, we are unable to express an opinion on this matter.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xxii) We draw attention to Note no. 71 of the Standalone Financial
Statements, the Company is unable to correctly map the
monies received with appropriate customer codes. Due to this,
Rs. 483.74 Lakhs have been accounted for under advance from
customer during the financial year ending 31st March, 2023.
Cumulative total of such receipts which are not identifiable is
Rs. 2,897.90 Lakhs.
Due to non-availability of data and supporting documents, we
are unable to express an opinion on the same.
We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.
(xxiii) Filing of E-forms with Registrar of Companies
The company has failed to submit following e-forms with
Registrar of Companies during the year:
a) Form DPT-3 - Return of Deposit
b) Form CRA-4 - Cost Audit Report for F.Y. 2020-21 file with
the Central Government
(xxiv) Schedule III of Companies Act, 2013
The Company is not able to provide / substantiate details
of following disclosures required under the provisions of
Schedule III of Companies Act, 2013:-
a) Complete details of title deeds of immovable properties
not held in the name of the Company
b) Details of benami property held and any proceeding has
been initiated or pending against the company, if any
c) Details of quarterly returns or statements of current
assets filed by the company with banks or financial
institutions are in agreement with the books of accounts
d) Complete details of company declared wilful defaulter
by the bank or financial institution or other lender
e) Utilisation of borrowed funds
f) Relationship and transactions with struck off companies
g) Ageing for trade receivables
h) Ageing for trade payables
i) Details related to creation / satisfaction of charges
j) Details related to surrender or disclosure of income in the
tax assessments under the Income-tax Act, 1961 (such
as, search or survey or any other) relevant provisions of
the Income-tax Act, 1961
(xxv) We draw attention to Note no. 66 of the Standalone Financial
Statements, with respect to opening balances appearing in the
books of accounts of the Company as on 31st March, 2023.
There are several old outstanding balances for which there
is no information/ supporting documents available with the
Company: -
• Other comprehensive income / (loss) amounting Rs.
(523,31.93) Lakhs
• Provision for bad and doubtful debts/ trade receivables
amounting Rs. 323,73.95 Lakhs
• Allowances for bad and doubtful loans and advances to
related parties amounting to Rs. 15,89.05 Lakhs
• Other loans and advance amounting to Rs. 520.00 Lakhs
• Trade receivables and advances received from
customers amounting Rs. 11930,75.62 Lakhs
• Loans/ advances given to subsidiaries, joint ventures
and associates amounting to Rs. 4689,32.90 Lakhs
• Loans taken from subsidiaries, joint ventures and
associates amounting to Rs. 74,192.20 Lakhs
• Expenses payable amounting to Rs. 51,612.66 Lakhs
• Current Tax Assets amounting to Rs. 3004.64 Lakhs
• Deferred Liability amounting to Rs. 2,36,049.12 Lakhs
• Advance given for purchase of land amounting to Rs.
61,287.37 Lakhs and its Ind AS Adjustments amounting
to Rs. 43,65.00 Lakhs.
• Provision for doubtful advance given for purchase of
land amounting Rs. 30,000.00 Lakhs
• Investment in Subsidiary - Corporate Guarantee
amounting to Rs. 8.70 Lakhs.
• Investment in CIG Funds (Ind AS Adjustments)
amounting to Rs. 9,60.83 Lakhs.
• Security Deposits receivables (Ind AS Adjustments)
amounting to Rs. 2,867.51 Lakhs.
• Prepaid Expenses (Ind AS Adjustments) amounting to
Rs. 17.84 Lakhs.
• Loans to Subsidiaries (Ind AS Adjustments) amounting
to Rs. 50,730.57 Lakhs.
• Term loans from bank and Financial Institution (Ind AS
Adjustments) amounting to Rs. 63.93 Lakhs.
• Other Payables (Ind AS Adjustments) amounting to Rs.
7.19 Lakhs
Considering the significance of amounts involved in above
mentioned areas, we are not in a position to express an opinion
on the Standalone Financial Statements as on 31st March, 2023.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xxvi) We draw attention to Note no. 50 of the Standalone Financial
Statements, the company has not provided the complete
details of pending litigations against the company, outstanding
bank and corporate guarantees and commitments to be
performed by the company.
In view of above, we are unable to express an opinion on the
same.
We had given a disclaimer of opinion on the standalone
financial statements for the year ended 31st March, 2022 in
respect of this matter.
(xxvii) We draw attention to Note no. 52 of the Standalone Financial
Statements, the company has not performed the process of
identification of creditors to be classified as Micro and Small
Enterprises (MSE) during the year and due to absence of details of
MSE, the company cannot determine the amount outstanding to
MSE creditors and interest due thereon under "The Micro, Small
and Medium Enterprises Development Act, 2006".
In view of above, we are unable to express an opinion on the same.
We had given a disclaimer of opinion on the standalone financial
statements for the year ended 31st March, 2022 in respect of this
matter.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial
statements of the current year. These matters were addressed in
the context of our audit of the standalone financial statements as a
whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. As all material items are already
described as a matter in the "Basis of Disclaimer of Opinion" para,
there are no items which can be reported as key audit matters to be
communicated separately.
INFORMATION OTHER THAN THE STANDALONE FINANCIAL
STATEMENTS AND AUDITOR'S REPORT THEREON
The company's management and board of directors are responsible for the
other information. The other information comprises the information included
in Annual Report but does not include the Standalone Financial Statements
and our auditor's report thereon. The Annual Report is expected to be made
available to us after the date of this auditor's report.
Our opinion on the Standalone Financial Statements does not cover the other
information and we will not express any form of assurance conclusion thereon.
In connection with our audit report of the Standalone financial statements,
our responsibility is to read the other information identified above when it
becomes available and, in doing so, consider whether the other information
is materially inconsistent with the Standalone financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated.
When we read the Annual Report, if we conclude that there is material
misstatement therein, we are required to communicate the matter to those
charged with governance and if required issue a revised Audit report on
Standalone Financial Statements.
RESPONSIBILITY OF MANAGEMENT FOR STANDALONE
FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters
stated in sub-section 5 of Section 134 of the Companies Act, 2013 ("the
Act") with respect to the preparation of these Standalone Financial
Statements that give a true and fair view of the financial position,
financial performance including other comprehensive income,
changes in equity and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Indian Accounting Standards specified under Section 133 of the Act
read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation
of the Standalone financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or
error.
In preparing the Standalone financial statements, management is
responsible for assessing the company's ability to continue as a going
concern, disclosing as applicable, matters related to going concern
and using the going concern basis of accounting unless management
either intend to liquidate the company or to cease operation, or has
no realistic alternative but to do so.
The board of directors are also responsible for overseeing the
Company's financial reporting process.
AUDITORS' RESPONSIBILITY FOR THE AUDIT OF THE STANDALONE
FINANICAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
Standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in
accordance with Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Standalone financial
statements.
As part of an audit in accordance with Standards on Auditing, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
Standalone financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control;
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under Section 143(3)(i) of the Act, we
are also responsible for explaining our opinion on whether the
company has adequate internal financial controls system in
place and the operating effectiveness of such controls;
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management;
• Conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures
in the Standalone financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may
cause the Company to cease to continue as a going concern;
and
• Evaluate the overall presentation, structure and content of the
Standalone financial statements, including the disclosures, and
whether the Standalone financial statements represent the
underlying transactions and events in a manner that achieves
fair presentation.
Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable
user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatements in the
standalone financial statements.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
OTHER MATTER:
(i) We draw your attention to Note no. 72 to the Standalone Financial
Statements. The Company had received an arbitral award dated
6th July 2012 passed by the London Court of International
Arbitration (LCIA) wherein the arbitration tribunal has directed
the Company to purchase the investment of Cruz City 1 (a
company owned by Lehman Bros.) in Kerrush Investment Ltd.
(Mauritius) at the overall value of USD 298,382,949.34 (Previous
year ended 31st March 2022 - USD 298,382,949.34). The High
Court of Justice, Queen's Bench Division, Commercial Court
London had confirmed the said award.
Further, consequent to the order passed by the Hon'ble High
Court of Delhi in the case instant, the company is required to
make the aforesaid investment into Kerrush Investments Ltd.
(Mauritius). The decree of the aforesaid amount against the
company is pending for execution.
Based on the information obtained and audit procedures
performed, we are unable to assess whether the underlying
SRA project in Santacruz, Mumbai would be substantial to
justify the carrying value of these potential investments.
We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.
(ii) We draw attention to Note no. 56 of the Standalone Financial
Statements, A forensic audit of the Company was conducted
as per directions of the Hon'ble Supreme Court, and the report
on the forensic audit was submitted in a sealed envelope to
the Hon'ble Supreme Court. We have been informed that the
report on the forensic audit is not available with the Company
or its Board of Directors; hence impact of observations in the
forensic audit report can be ascertained only after the same is
obtained.
We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.
(iii) We draw attention to Note no. 69 of the Standalone Financial
Statements, we did not audit the financial statements/
information of Libya branch office, included in the Standalone
Financial Statements of the Company, whose financial
statements/ information reflect total assets of Rs. 13,28.47
Lakhs (Previous year Rs. 13,28.47 Lakhs) as at 31st March, 2023
and total revenues of Rs. NIL (Previous year Rs. NIL) for the year
ended on that date, as considered in the Standalone financial
statements and described above. The company has also made
provision against all assets of Rs. 13,28.47 Lakhs (Previous year
Rs. 13,28.47 Lakhs). The financial statements/ information of
this branch has not yet been audited by the branch auditor due
to the adverse political situation prevailing in Libya.
The company has also not applied for necessary approvals
from AD category - 1 bank to write off all the assets and write
back all the liabilities in the books of accounts.
We had mentioned this matter under "other matter" on the
standalone financial statements for the year ended 31st March,
2022.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order, 2020
('the Order'), issued by the Central Government of India in
exercise of powers conferred by sub-section 11 of section 143
of the Act, we enclose in the "Annexure A" a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2. As required by sub-section 3 of Section 143 of the Act, we
report that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit,
except as stated in Basis of Disclaimer of Opinion
section.
b) Except for the possible effects of the matters described
in the Basis of Disclaimer of Opinion section above, in
our opinion, proper books of account as required by law
have been kept by the Company so far as it appears from
our examination of those books.
c) The accounts of the branch office of the company
auditable under section 143(8) of the Act by the branch
auditor have not yet been audited by the branch auditor
due to the adverse political situation prevailing in Libya,
as mentioned in Other Matters para above, and hence
we are unable to comment on whether the financial
information provided by the management in this regard
has been properly dealt with.
d) The standalone balance sheet, the standalone statement
of profit and loss (including other comprehensive
income), the standalone statement of changes in equity
and the standalone statement of cash flows dealt with by
this Report are in agreement with the books of account
and with the financial information provided by the
management with regard to the branch not visited by us
except for matters described in the Basis of Disclaimer
section.
e) As mentioned in the Basis of Disclaimer of Opinion
section above, in our opinion, the aforesaid Standalone
financial statements are not complied with the Indian
Accounting Standards specified under Section 133 of
the Act, as applicable, read with relevant rules issued
thereunder.
f) The matters described in the Basis of Disclaimer of
Opinion section above, in our opinion, may have an
adverse effect on the functioning of the company.
g) As mentioned earlier, the Hon'ble Supreme Court vide
its order dated 20th January 2020 has, inter alia, given
directions that the Board of Directors of Unitech Limited,
as existing on that date, be superseded with immediate
effect in order to facilitate the taking over of management
by the new Board of Directors constituted in terms of
the proposal submitted by the Union Government. The
company has not provided the Form DIR-8 pursuant
to Section 164(2) and the rule 14(1) of Companies
(Appointment and Qualification of Directors) Rule, 2014
as on 31st March, 2023 and hence we are unable to
comment on whether all the directors are disqualified as
on 31st March, 2023.
h) The qualifications relating to the maintenance of
accounts and other matters connected therewith are
as stated in the Basis for Disclaimer of Opinion section
above.
i) With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate report in "Annexure B". Our report expresses a
Disclaimer of Opinion on the existence of the Company's
internal financial control over financial reporting.
j) With respect to the other matters to be included in
the Auditors' Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our information and according
to the explanations given to us:
i) The company has not provided the full details of
pending litigations, as mentioned in the Disclaimer
of Opinion para, we are unable to comment on
whether the company has disclosed the impact of
pending litigations on its financial position in the
Standalone Financial Statements in accordance
with the generally accepted accounting practice.
Refer Note 50 of the Standalone financial
statements.
ii) The company has not provided the details and
relevant supporting of any long term contracts
including derivative contracts entered into by the
company and hence we are unable to comment
on whether the company has made provisions, as
required under the applicable law or accounting
standards, for all material foreseeable losses on
long term contracts.
iii) There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Company. With regard
to unclaimed and unpaid amounts pertaining to
matured deposits and interest accrued thereon,
the Company has informed us that a number of
deposit holders have put in claims which are
pending before various judicial forums for the
matured deposit and interest accrued thereon, and
hence ascertaining the unclaimed amounts for the
purpose of transfer to the Investor Education and
Protection Fund was indeterminate.
iv) Due to non-availability of adequate and relevant
supporting documents, we are unable to comment
whether:
a) any funds (which are material either individually
or in the aggregate) have been advanced or
loaned or invested (either from borrowed funds
or share premium or any other sources or kind
of funds) by the company to or in any other
person(s) or entity(ies), including foreign entities
("Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the
company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
b) any funds (which are material either individually or
in the aggregate) have been received by the company
from any person(s) or entity(ies), including foreign
entities ("Funding Parties"), with the understanding,
whether recorded in writing or otherwise, that the
company shall, whether, directly or indirectly, lend
or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries; and
c) Based on such audit procedures that have
been considered reasonable and appropriate
in the circumstances, nothing has come to our
notice that has caused them to believe that the
representations under sub-clause (i) and (ii) of Rule
11(e), as provided under (a) and (b) above does
not contain any material misstatement.
v) The company has not declared or paid any
dividend during the year. Hence, reporting under
section 123 of the Companies Act, 2013 is not
applicable.
vi) As proviso to rule 3(1) of the Companies (Accounts)
Rules, 2014 is applicable for the company only
w.e.f. April 1, 2023, reporting under this clause is
not applicable.
k) As required by section 197(16) of the Act, we report
that the company has paid remuneration to its directors
during the year in accordance with the order no. Legal
-10/01/2020 dated 21/01/2020 of the Central Government,
Ministry of Corporate Affairs.
For GSA & Associates LLP
Chartered Accountants
Firm Registration No.: 000257N/ N500339
(Tanuj Chugh)
Partner
Place: Gurugram Membership No. 529619
Date: 29th August, 2023 UDIN: 23529619BGTYFG5555
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