Moneycontrol
Get App
Close Ad
SENSEX NIFTY
Unitech | Auditor's Report > Construction & Contracting - Civil > Auditor's Report from Unitech - BSE: 507878, NSE: UNITECH
YOU ARE HERE > MONEYCONTROL > MARKETS > CONSTRUCTION & CONTRACTING - CIVIL > AUDITORS REPORT - Unitech

Unitech

BSE: 507878|NSE: UNITECH|ISIN: INE694A01020|SECTOR: Construction & Contracting - Civil
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Jun 26, 15:40
1.08
0.05 (4.85%)
VOLUME 77,939
LIVE
NSE
Jun 26, 15:53
1.10
0.05 (4.76%)
VOLUME 1,360,334
Mar 16
Auditor's Report (Unitech) Year End : Mar '17

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

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

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

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

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act and the Rules made thereunder, including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

BASIS FOR QUALIFIED OPINION

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

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

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

S. No.

Particulars

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

Amounts paid during the financial year(Rs.)

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

A)

Deposits that have matured on or before March 31, 2015

1,533,295,000

28,252,000

1,505,043,000

B)

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

4,016,050,000

18,190,000

3,997,860,000

C)

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

120,600,000

26,268,000

94,332,000

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

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

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

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

3. We draw your attention to Note no. 57 to the standalone Ind AS financial statements. According to information available and explanations obtained, in respect of non-current investments (Long term investments) in, and loans and advances given to, some subsidiaries/a party (“the parties”), it has been observed from the perusal of the financial statements of these parties that the said parties have accumulated losses and their respective net worth have been fully/substantially eroded. Further, some of these parties have incurred net loss during the current year and previous year(s) and, that the current liabilities of these parties exceeded their respective current assets as at 31st March 2017. These conditions, along with absence of clear indications or plans for revival, in our opinion, indicate that there is significant uncertainty and doubt about the recovery of the loans and advances from these parties. Further, there is a clear indication that there is a decline in the carrying amount of these investments which is other than temporary.

Consequently, in terms of stated accounting policies and applicable accounting standards, diminution in the value of these investments which is other than temporary amounting to Rs.2,343,106,651 upto 31st March 2017 (Previous year ended 31st March, 2016 - Rs.4,402,510,584) and an accrual for diminution of doubtful debts and advances amounting to Rs.3,297,491,855upto 31st March 2017 (Previous year ended 31st March, 2016 - Rs.6,904,591,276) needs to be accounted for. Management is however of the firm view that the diminution is only temporary and that sufficient efforts are being undertaken to revive the said parties. However, in the absence of significant developments/movements in the operations of these parties, and any adjustment for diminution of carrying value of such investments in this regard, in our opinion, management has not adequately or sufficiently accounted for the imminent diminution. Had management accounted for such diminution, the loss for the year ended 31st March 2017 would have been higher by Rs.5,640,598,506 (Previous year ended 31st March, 2016- Rs.11,307,101,860).

4. We draw your attention to Note No.58 to the standalone Ind AS financial statements where in Advances amounting to Rs.6,491,240,803 (previous year ended 31st March, 2016 -Rs.6,945,264,168) are outstanding in respect of advances for purchase of land, projects pending commencement, joint ventures and collaborators which, as represented by the management, have been given in the normal course of business to land owning companies, collaborators, projects and for purchase of land. As per information made available to us and explanations given to us Rs.454,023,365 had been recovered / adjusted during the current year. The management, based on internal assessments and evaluations, has represented that the balance outstanding advances are still recoverable/adjustable and that no accrual for diminution of advances is necessary as at 31st March 2017. The management has further represented that, as significant amounts have been recovered/adjusted during the previous financial years and since constructive and sincere efforts are being put in for recovery of the said advances, it is confident of appropriately adjusting/recovering significant portions of the remaining outstanding balance of such amounts in the foreseeable future. However, we are unable to ascertain whether all the remaining outstanding advances, mentioned above, are fully recoverable/adjustable, since the said outstanding balances are outstanding/remained unadjusted for a long period of time, and further that, neither the amounts recovered nor rate of recovery of such long outstanding amounts in the previous years & current year, despite confirmations from some parties, clearly indicate, in our opinion, that all of the remaining outstanding amounts may be fully recoverable; consequently, we are unable to ascertain whether all of the remaining balances as at 31st March 2017 are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these remaining advances are subsequently determined to be doubtful of recovery.

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

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the various matters described in the ‘Basis for Qualified Opinion’ paragraph above, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its loss(including other comprehensive income) and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

1. We draw your attention to Note no. 56(c) to the standalone Ind AS financial statements, wherein no adjustments have been considered necessary by management for non-recoverability of investments in share capital/projects aggregating to Rs.279,089,174 (Previous year Rs.278,172,452) as the matters are sub-judice and the impact, if any, is unascertainable at this stage. Our opinion is not qualified in respect of this matter.

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

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

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

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

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

OTHER MATTERS

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

Our opinion is not qualified in respect of this matter.

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

Our opinion is not qualified in respect of this matter.

report on other legal and regulatory REQUIREMENTS

1. As required by Section 143 (3) of the Act, we report that:

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

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

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

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

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

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

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

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

Considering the fact that application of the Company under Section 74(2) of the Companies Act 2013(or Act) seeking extension of time for repayment of the deposits has been dismissed by the Hon’ble Company Law Board (subsequently replaced by the Hon’ble National Company Law Tribunal, New Delhi) and the company’s subsequent appeal has also been disposed off by the Hon’ble National Company Law Appellate Tribunal, New Delhi, and the Registrar of Companies, New Delhi has filed prosecution against the Company and its executive directors and key managerial personnel before the Ld. Special Court, Dwarka District Court, New Delhi which has however been stayed by the Hon’ble High Court of Delhi, and the debentures have been issued on private placement basis to lender and not to investors, the Board of the Company is of the view that the above delays in repayment/ redemption as the case may be do not fall under the purview of sub-section (2) of Section 164 of the Act. Accordingly, in the opinion of management, as also discussed and taken on record in the board meeting held to adopt theseInd AS financial statements of the Company, and further, as represented by each of the Directors, none of the Directors of the Company are disqualified as on 31 March 2017 in terms of sub-section (2) of the Section 164 of the Act.

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note no. 49 (I) to the standalone Ind AS financial statements;

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

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

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

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

“ANNEXURE B” TO THE INDEPENDENT AUDITOR’S REPORT

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

(i) In respect of its fixed assets:

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

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

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

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

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

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

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

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

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

(v) The Company has not accepted any deposits under the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder. Further the Company had accepted deposits under Section 58 A of the erstwhile Companies Act, 1956. In our opinion and according to the information and explanations given to us, the Company has not complied with requirement of section 74(1)(b) read with Rule 19 of the Companies (Acceptance of deposits) Rules, 2014 with regard to the deposits accepted from the public. The nature of contraventions are that the Company has total outstanding dues of Rs.7,809,294,611towards matured unpaid deposits & interest thereon as of March 31, 2017.

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

The following Orders have been passed in this regard by:

S.No

Order passed by

Particulars of relevant order(s)

Whether order(s) complied with

1

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

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

The directions given by NCLAT were as under:

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

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

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

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

2

Reserve Bank of India

Not Applicable

Not Applicable

3

Any court or any other tribunal

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

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

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

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

(a) Undisputed statutory dues including employee’s state insurance, sales tax, duty of customs, duty of excise, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities.

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

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

Nature of Dues

principal Amount (Rs.)

Income tax deducted at Source

762,534,155

WCT

8,257,808

CST

2,193,961

Service Tax

142,008,106

Employer’s Contribution to Provident Fund

177,329,361

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

Name of the Statute

Nature of Dues under dispute

Financial year

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

Forum where dispute is pending

Income Tax Act, 1961

Income tax on regular assessment

2004-05

7,363,246

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2006-07

53,104,997

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2007-08

16,219,162

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2009-10

2,127,867,288

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Income tax on regular assessment

2010-11

965,666,459

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2011-12

116,196,935

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2011-12

755,520,570

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2012-13

168,599,180

Commissioner of income Tax (Appeals), New Delhi

Income tax Act,1961

Income tax on regular assessment

2012-13

1,137,095,370

Income Tax Appellate Tribunal, New Delhi

Income tax Act,1961

Tax deducted at Source on regular assessment

2013-14

200,077,281

Commissioner of income Tax (Appeals), New Delhi

Service Tax

Service tax

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

7,260,129

SLP pending with Hon’ble Supreme Court

Service Tax

Service tax

2012-13

93,494,668

CESTAT, New Delhi

Haryana VAT Act, 2003

VAT

2011-12

281,988,670

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

Haryana VAT Act, 2003

VAT

2012-13

163,802,119

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

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

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

Particulars

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

period of default

Principal (Rs.)

Interest (Rs.)

Due to financial institutions:

Globe Fincap Limited

-

145,987

Interest : 1 days

ICICI-HFCL Limited

-

56,689,953

Interest : 1 to 90 days

IL&FS Financial Services Ltd.

-

36,682,246

Interest : 1 to 32 days

Indiabulls Housing Finance Limited

19,600,000

24,797,492

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

LIC of India

1,308,000,000

768,112,137

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

SREI Infrastructure finance Limited

1,544,469,935

605,768,141

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

Dues to Banks :

Axis Bank

-

1,821,994

Interest : 1 to 183 Days

Bank of Maharashtra

77,947,033

19,396,232

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

HDFC Bank Limited

2,520,545,242

566,512,448

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

ICICI Bank

-

9,493,826

Interest : 1 to 24 Days

IDBI Bank Loan

-

150,477,206

Interest : 1 to 60 Days

Oriental Bank of Commerce

9,722,220

7,496,096

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

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

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

particulars

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

period of default

Principal (Rs..)

Interest(Rs.)

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

2,085,014,496

1,338,467,074

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

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

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

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

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

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

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

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

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

For R. Nagpal Associates

Chartered Accountants

Firm Registration No. 002626N

(Ravinder Nagpal)

Partner

Membership No. 081594

Place: Gurugram

Date: 30th May 2017

Source : Dion Global Solutions Limited
Quick Links for unitech
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.