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Unitech Ltd.

BSE: 507878 Sector: Infrastructure
NSE: UNITECH ISIN Code: INE694A01020
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VOLUME 4621833
52-Week high 9.87
52-Week low 3.89
P/E
Mkt Cap.(Rs cr) 1,831
Buy Price 7.00
Buy Qty 12400.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.39
CLOSE 7.39
VOLUME 4621833
52-Week high 9.87
52-Week low 3.89
P/E
Mkt Cap.(Rs cr) 1,831
Buy Price 7.00
Buy Qty 12400.00
Sell Price 0.00
Sell Qty 0.00

Unitech Ltd. (UNITECH) - Director Report

Company director report

Dear Members

Your Company's Directors are pleased to present the 45th Annual Report and the Auditedfinancial Statements of the Company for the year ended 31st March 2016.

FINANCIAL RESULTS

The Financial Performance of the Company for the year ended 31st March 2016 issummarized below:

(Figures in Rs. Crore)

2015-16 2014-15
Total Income 1328.20 1394.41
Less: Operating Expenses 1332.21 1071.89
Profit/ (Loss) before Interest Depreciation and Tax (4.01) 322.52
Less: i) Interest 301.07 307.31
ii) Depreciation 4.50 7.78
305.57 315.09
Profit/ (Loss) before (309.58) 7.43
Tax
Less: Provision for Tax
i) Current 9.52
ii) Earlier Year Tax 61.46
iii)Deferred (95.42) 13.72
(33.96) 23.24
Profit/ (Loss) after Tax (275.62) (15.81)
Balance carried over to (275.62) (15.81)
Balance Sheet

There were no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe Financial Statements relate and the date of report.

FINANCIAL HIGHLIGHTS AND STATE OF COMPANY AFFAIRS

The total income of the Company for the year under review is Rs. 1328.20 Crore. TheLoss before tax stood at Rs. 309.58 crore and Loss after tax stood at Rs. 275.62 Crore. Onconsolidated basis the total income of the Company and its subsidiaries stands at Rs.2072.27 Crore. The consolidated loss before tax stood at Rs. 969.41 crore and loss aftertax stood at Rs. 902.70 Crore. The earnings per share (EPS) on an equity share having facevalue of Rs. 2/- stands at Rs. (1.05) considering the total equity capital of Rs. 523.26Crore.

On consolidated basis the real estate and related division contributed Rs. 1364.15crore in the revenues of the Company whereas the contribution from the PropertyManagement business was Rs. 152.66 crore and from the Transmission Towers business was Rs.356.72 Crore. Hospitality and other segments contributed the balance revenues of Rs.143.69 Crore.

KEY HIGHLIGHTS OF THE BUSINESS AND OPERATIONS

During the year under review there was no change in the nature of business of theCompany. Some of the key highlights pertaining to the business of the Company includingits subsidiaries and associates for the year under review and period subsequent theretoare given hereunder:

Project Sales and Delivery

In line with the trend in the last few years given depressed market conditions yourCompany focused on project delivery against launch and sale of new projects. During theyear under review your Company has newly launched totaling an area of 1.29 million sq.ft. The Company achieved sales bookings for a total area of 1.28 million sq. ft. during2015-16 valued at Rs. 963 crore. In terms of total area sold in 2015 - 16 0.41 millionsq. ft. was sold in Gurgaon 0.61 million sq. ft. in Noida & Greater Noida 0.08million sq. ft. in Chennai 0.05 million sq. ft. in Kolkata and 0.14 million sq. ft. inother cities.

In terms of segment wise sales 70.30 % of the area sold was from the residentialsegment while 29.70 % was from non-residential. The average realization in 2015-16 fromthe non-residential segment was Rs. 12771 per sq. ft. as compared to the residentialsegment's average realization of Rs. 5277 per sq ft.

Project Execution and Delivery

Your Company delivered 3.99 million sq ft of completed area during the year and 60% ofthe projects are in handing over/finishing stage across various regions of the country. Asat 31st March 2016 a total of 34.78 million sq. ft. area is under development. In orderto efficiently execute the much higher scale of projects across markets the Company issubstantially upgrading its operations. During the year under review the Companycontinued to focus on strengthening the back end infrastructure of the constructiondivision to improve the quality and output of construction work.

More details about the business and operations of the Company are provided in theReport on Management Discussion and Analysis forming part of this Report.

DIVIDEND

Your Directors have not recommended any dividend for the year ended 31st March 2016.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 & Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ["Listing Regulations"] is given separately andforming part of this Report.

REPORT ON CORPORATE GOVERNANCE

The Report on Corporate Governance along with a certificate from M/s. DR AssociatesCompany Secretaries (CP No. 714) confirming compliance with the conditions of CorporateGovernance as stipulated under Schedule V of the Listing Regulations forms part of thisreport.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements of the Company provided in the AnnualReport are prepared in accordance with the Act and Accounting Standard (AS) 21 on'Consolidated Financial Statements' read with Accounting Standard (AS) 23 on 'Accountingfor Investments in Associates' and (AS) 27 on 'Financial Reporting of Interest in JointVentures'.

SUBSIDIARIES JOINT VENTURES & ASSOCIATES

Pursuant to first proviso to Section 129(3) of the Companies Act 2013 ("theAct") a statement containing salient features of financial statements of Company'ssubsidiaries joint ventures and associates (in Form AOC-1) is attached to the financialstatements. The said statement describes the performance and financial position of each ofCompany's subsidiaries joint ventures and associates. The policy for determining materialsubsidiaries as approved may be accessed on the Company's website at the link:http://www.unitechgroup.com/investor-relations/ corporate-governance.asp.

The audited financial statements and related information of the subsidiaries isavailable on website of the Company viz. www.unitechgroup.com and will be made availableupon request by any member of the Company & shall also be made available forinspection at the registered office of the Company.

During the year under review Glenmore Builders Pvt. Ltd. & ChintpurniConstructions Pvt. Ltd. were acquired by QnS Facility Management Pvt. Ltd. a wholly ownedsubsidiary of the Company. Further during the year under review status of UnitechInfra-Con Ltd. has been changed from Joint Venture to Subsidiary.

During the year under review following companies ceased to be associated with theCompany:

Sr. No. Name of Company CIN (Corporate Identification Number) Relation with the Company
1. Avril properties Pvt. Ltd. U45400DL2007PTC167714 Subsidiary
2. Havelock Schools Ltd. U80101DL2006PLC148646 Subsidiary
3. Mount Everest projects Pvt. Ltd. U70109DL2006PTC149815 Subsidiary
4. Ojos Developers Pvt. Ltd. U45400DL2007PTC170054 Subsidiary
5. Uni-chand Builders Pvt. Ltd. U45202DL1996PTC081396 Associate
6. Unitech Sai Pvt. Ltd. U74899DL2005PTC142456 Associate
7 Shantiniketan Properties Ltd. U70101DL2005PLC134655 Associate

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 (3) of the Act read with rule 12(1) of the Companies (Management andAdministration) Rules 2014 is annexed herewith as Annexure-I to this report.

KEY MANAGERIAL PERSONNEL (KMP)

In compliance with the provisions of Section 203 of the Companies Act 2013 thefollowing Executive Directors and Senior Officials of the Company are designated as theKey Managerial Personnel of the Company:

1. Mr. Ramesh Chandra Executive Chairman
2. Mr. Sanjay Chandra Managing Director
3. Mr. Ajay Chandra Managing Director
4. Mr. Sunil Keswani EVP & CFO
5. Mr. Deepak Jain VP & Company Secretary

DIRECTORS

In accordance with the provisions of Section 152 of the Act and rules made there underMr. Ajay Chandra Managing Director (DIN:00004234) retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. The Directorsrecommend reappointment of Mr. Ajay Chandra at the ensuing Annual General Meeting.

Based on the recommendations of the Nomination & Remuneration Committee and afterreviewing the declaration submitted by Maj. Gen. Virender Kumar Bhutani (Retd.)(DIN-03487268) confirming that he meet the criteria of Independence as prescribed undersection 149 (6) of the Act and Regulation 25 of the Listing Regulations appointed him asan Additional Non-Executive Independent Director of the Company.

Maj. Gen. Virender Kumar Bhutani (Retd.) (DIN-03487268) appointed as AdditionalNon-Executive Independent Director to hold office upto the ensuing Annual General Meetingis proposed to be appointed at the ensuing Annual General Meeting as Independent Directorof the Company under Section 149 of the Companies Act 2013 for a period of five yearsw.e.f. 30.05.2016 on non-rotational basis.

Since last Board Report Mr. Sanjay Bahadur (DIN: 0032590) Independent Directorresigned from the Board w.e.f 23rd February 2016. The Board wishes to place on record itsdeep sense of appreciation for the valuable services rendered by him to the Board and theCompany during his tenure as Director.

The details of programmes on familiarization of Independent Directors with the Companytheir roles rights and responsibilities in the Company nature of the industry in whichthe Company operates business model of the Company and related matters are available onthe Company's website under web link http://www.unitechgroup.com/investor-relations/corporate-governance.asp. During the year under review two such programms were held whichwere attended by Independent Directors.

During the year under review four meetings of the Board of Directors were held. Theintervening gap between two consecutive meetings was not more than one hundred and twentydays as provided in section 173 of the Act. The details of meetings are disclosed underCorporate Governance Report forming part of this Report.

BOARD EVALUATION

Pursuant to the provisions of Section 134 149 & Schedule IV of the Act andRegulation 17(10) of the Listing Regulations annual performance evaluation of theDirectors as well as of the various committees of the Board has been duly carried out.

The performance evaluation of the Independent Directors was carried out by the entireBoard and the performance evaluation of the Chairman & Non Independent Directors wascarried out by the Independent Directors at their properly convened meeting. Theperformance evaluation of the various Committees of Directors was carried out by theBoard.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy containing criteria for determiningqualifications positive attributes independence of a director and policy relating toremuneration for the Directors Key Managerial Personnel and Senior Management personnelof the Company are disclosed in the Corporate Governance Report forming part of thisreport.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) of the Act the Directors confirmthat:

• in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards had been followed along with proper explanation relatingto material departures;

• the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as at March 31 2016 andof the loss of the company for the year ended on that date;

• the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

• the Directors had prepared the annual accounts on a going concern basis;

• the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

• the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

INTERNAL FINANCIAL CONTROL FOR FINANCIAL STATEMENTS

Unitech has a proper and adequate system of internal controls to ensure that all assetsare safeguarded and protected against loss from unauthorised use or disposition and toensure that all transactions are authorised recorded and reported correctly andadequately.

The company works in a dynamic business environment and adopts the suitable internalfinancial controls especially the ones having bearing upon reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith the generally accepted accounting principles. It includes maintaining such businesspolicies and procedures as may be required to effectively conduct the business of thecompany and maintain such records as to properly record the business transaction assetsand liabilities of the company in such a way that they help in prevention of frauds &errors and timely completion of financial statements.

The Company’s internal controls are supplemented by programmes of internal auditsreviewed by management and documented policies guidelines and procedures. The internalcontrol is designed to ensure that financial and other records are reliable for preparingfinancial information and for maintaining accountability of assets.

All financial and audit control systems are also reviewed by the Audit Committee of theBoard of Directors of the company.

AUDIT COMMITTEE

The composition of the Audit Committee is provided in the Corporate Governance Reportforming part of this report.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditors

M/s. Goel Garg & Co. Chartered Accountants retiring at the conclusion of theensuing Annual General Meeting [’AGM’] have expressed their unwillingness forre-appointment as Statutory Auditors in the ensuing AGM. The Board of Directors of yourCompany on recommendation of Audit Committee proposes the appointment of M/s R. NagpalAssociates Chartered Accountants (Registration No. 002626N) as Statutory Auditors of thecompany for a term of five years in the ensuing AGM of the Company. M/s R. NagpalAssociates Chartered Accountants have confirmed their eligibility and willingness toaccept the office of Statutory Auditors if appointed.

Auditors’ Report

A) The Auditors’ in their Report to the members have given six qualified opinionsand the response of your Directors with respect to it are as follows:-

Response to Point (1)

On basis of internal assessments and evaluations possible recoveries from securities(registered or unregistered) have represented that significant portion of such tradereceivables balance outstanding are still recoverable/ adjustable and that no accrual fordiminution in value of trade receivables is therefore necessary as at 31st March 2016.The Management is confident of appropriately adjusting / recovering significant portionsof the remaining outstanding balance of such amounts in the foreseeable future.

Response to Point (2)

The Company along with 3-members Sale Committee constituted by the Hon’ble CompanyLaw Board (‘CLB’) are making best possible efforts for sale of the land parcelsearmarked for repayment of the deposits but such sale process is taking time due to globaleconomic recession and liquidity crisis particularly in the real estate sector of India.However regardless of these adversecircumstances and difficulties the company iscommitted to comply with the orders passed by the Hon'ble CLB and to repay all the publicdeposits along with interest thereon within permissible extended time period.

Further the company has earmarked 6 (six) unencumbered land parcels which shall besold and the entire sale proceeds thereof shall be utilized for repayment of the saiddeposits. The company is fully committed to repay all the deposits along with interestthereon and it is making all efforts to arrange the necessary resources required for thispurpose.

Response to Point (3)

The matter has been evaluated and the Company is of the firm view that the diminutionif any even if it exists is only temporary and that sufficient efforts are beingundertaken to revive the said subsidiaries in the foreseeable future so as to recovercarrying value of the investment. Further management believes that the loans and advancesgiven to these companies are considered good and recoverable based on the future projectsin these subsidiaries and accordingly no provision other than those already accounted forhas been considered necessary.

Response to Point (4)

Advances for the purchase of land projects pending commencement and to joint venturesand collaborators have been given in the normal course of business to land owningcompanies collaborators projects and for purchase of land. The management of the companybased on the internal assessment and evaluations considers that these advances which arein the normal course of business are recoverable/adjustable and that no provision isnecessary at this stage. The management is confident of recovering/ appropriatelyadjusting the balance in due course.

Response to Point (5)

The Company has written a letter to GNIDA dated 1 December 2015 wherein it has statedthat the cancellation of the lease deed is wrong unjust and arbitrary. The Company hasalso described steps taken for implementation of the project valid business reasons dueto delays till date. Further it had also proposed that in view of the fact that thirdparty interests have been created by the Company in the allotted land by allotting plotsto different allottees in the interest of such allottees GNIDA may allow the Company toretain an area of approximately 25 acres out of the total allotted land of approx. 100acres and that the amount paid by the Company till date may be adjusted against the priceof the land of 25 acres and remaining surplus amount may be adjusted towards dues of otherprojects of the Company under GNIDA. The discussions/ negotiations and the legal recourseprocess is currently underway.

Response to Point (6)

Management has represented that the significant change in estimates of total contractcosts has arisen due to significant delay in projects as well as due to revision inestimates by management based on technical and commercial market considerations.

B) The Auditors’ in their report to the members have stated two "Emphasis ofmatter" and the response of your Directors on them are as follows:-

Response to Point (1)

The company filed a writ petition before Hon'ble High Court of Punjab & Haryanachallenging the termination of development agreement. The matter was referred forarbitration and the matter is pending adjudication before the panel of three arbitrators.The company has concluded its evidence. The matter is next posted for 6th Aug 2016. Thecompany has a good case and accordingly no provision has been considered necessary.

Response to Point (2)

Based on the legal advice received by it the company believes that the said award isnot enforceable in India on various grounds including but not limited to lack ofjurisdiction by the LCIA appointed arbitral tribunal to pass the said award. Neverthelessin case the company is required to make the aforesaid investment into Kerrush InvestmentsLtd. (Mauritius) its economic interest in the SRA project in Santacruz Mumbai shall standincreased proportionately thereby creating a substantial asset for the company with animmense development potential.

C) Further the Board gives the following explanations to the comments of theAuditors’ in para 2 (g) to Report on Other Legal and Regulatory Requirements:-

The Company has sought legal opinions with respect to matured unpaid debentures andpublic deposits outstanding at Balance Sheet date. Based on the same the Board is of theview that the provisions of Section 164(2) (b) of the Companies Act 2013 does notattract.

D) Further the Board also gives the following explanations to the Disclaimer ofOpinion of the Auditors' in the Annexure A to Auditors' Report to the members:-

1. The company works in a dynamic business environment and adopts the suitable internalfinancial controls especially the ones having bearing upon reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith the generally accepted accounting principles. It includes maintaining such businesspolicies and procedures as may be required to effectively conduct the business of thecompany and maintain such records as to properly record the business transaction assetsand liabilities of the company in such a way that they help in prevention of frauds &errors and timely completion of financial statements. a) Following the norms prevailing inthe construction industry the company does not ascertain the credit worthiness ofcustomers. The company maintains the due KYC norms of the customers. The company has apolicy of taking advance at the time of booking and should in case if the customer failsto pay the due amount the company can forfeit the amount already paid by the customer.Most of the time the customer gets his purchase of unit financed by banks and the banksuse their own checks to ascertain the credit worthiness of such customer. Thus the companyis not exposed to any credit risk for not ascertaining the credit worthiness of customers.

b. The advances for the purchase of land projects pending commencement and to thejoint ventures and collaborators have been given in the normal course of business to landowning companies collaborators projects and for the purchase of land. The management ofthe company based on the internal assessment and evaluation considers that these advanceswhich are in the normal course of business are recoverable/ adjustable. The company has aprocess to advance such loans & advance and the management of the company keeps aclose watch on extending such loans & advance and their ultimate recovery.

c. The company as per the generally accepted accounting principles duly provides forthe diminished value of such loans & advances where the recovery of such loan isdoubtful. The management believes that the diminution in the value of investments to theextent other than the value already reduced in the books of accounts if any that exists;is only temporary and that the sufficient efforts are being undertaken to revive the saidsubsidiaries in the foreseeable future so as to recover carrying value of the investment.

2. The industry is passing through a tough phase and the company is no exception. Themanagement of the company to utilize the available resources better has decided to engageitself more with the operations of the company. This has led to centralization ofauthority at the top level which is required to sail through this tough time. As rightlypointed out by the auditors the company is further enhancing/ strengthening the internalfinancial reporting with respect to significant business control risk managementprocesses etc.

3. Project management and land management are the keys to the successful and timelycompletion of projects. The company has focused its attention to complete the existingprojects and has aligned all its available resources for the execution of the projects.This revised approach requires re-alignment of the prevailing internal control relating toProject Management Project Revenue and Land Management. Similarly to utilize its existingresources better the company is re-aligning its processes relating to Land ManagementReceivable Management Litigations & Claims.

E) Further the Board also gives the following explanations to comments of theAuditors' in the Annexure B to Auditors’ Report to the members:-

Response to Point (iii)(a)

The matter has been evaluated and the Company is of the firm view that the diminutionif any even if it exists is only temporary and that sufficient efforts are beingundertaken to revive the said subsidiaries in the foreseeable future so as to recovercarrying value of the investment. Further management believes that the loans and advancesgiven to these companies are considered good and recoverable based on the future projectsin these subsidiaries and accordingly no provision other than those already accounted forhas been considered necessary.

Response to Point (v)

The Company along with 3-members Sale Committee constituted by the Hon’ble CompanyLaw Board (‘CLB’) are making best possible efforts for sale of the land parcelsearmarked for repayment of the deposits but such sale process is taking time due to globaleconomic recession and liquidity crisis particularly in the real estate sector of India.However regardless of these adverse circumstances and difficulties the company iscommitted to comply with the orders passed by the Hon’ble CLB and to repay all thepublic deposits along with interest thereon within permissible extended time period.

Further the company has earmarked 6 (six) unencumbered land parcels to be sold and theentire sale proceeds thereof shall be utilized for repayment of the said deposits. Thecompany is fully committed to repay all the deposits along with interest thereon and it ismaking all efforts to arrange the necessary resources required for this purpose.

Response to Point (vii)(a)

The Management is of the view that there are few delays in the payment of income taxservice tax & provident fund. however with improved business environment andparticularly in the challenging Real Estates Industry the Company will be able to meet itsobligations in time. The Management is hopeful and committed to their level best tostreamline the same in future.

Response to Point (viii)

The real estate sector as a whole is passing through tough time and your company isalso facing this heat. In this challenging phase cash-flows of the company have beenadversely impacted and there were certain delays/defaults in timely repayment of dues(including interest) to Banks and financial institutions in respect of term loans and nonconvertible debentures. It is submitted that the company endeavors to streamline itsfuture operations and discharge the said liabilities in time.

Cost Auditors

The Board of Directors on recommendation of the Audit Committee has appointed M/s.M.K. Kulshrestha & Associates Cost Accountants as cost Auditors for the financialyear 2016-17 to carry out the audit of cost records maintained by the Company. In terms ofRule 14 of the Companies (Audit and Auditors) Rules 2014 the remuneration payable to theCost Auditors for the financial year 2016-17 is subject to ratification by theshareholders of the Company.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Act read with Rule 9 of the Companies(Appointment and remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. DR Associates Company Secretaries (CP No. 714) to conduct the SecretarialAudit of the Company for the year ended March 31 2017.

The Secretarial Audit Report (Form MR-3) is annexed as Annexure II forming part of thisReport.

The responses of your Directors on the observations made by the Secretarial Auditor areas follows:-

Response to Point (1)

The real estate sector is facing the heat of liquidity crunch and the company is alsogoing through this challenging time. The cash flows of the company have been adverselyimpacted. The Company is trying hard and is hopeful that it will streamline its operationsand provide its due share towards the betterment of the society by making the requiredcontribution for the CSR activities in future.

Response to Point (2)

The Company has sought legal opinions with respect to matured unpaid debentures andpublic deposits outstanding at Balance Sheet date. Based on the same the Board is of theview that the provisions of Section 164(2) (b) of the Companies Act 2013 does notattract.

Response to Point (3)

The company is going through a challenging phase due to stretched liquidity positionand there are delays in delivering projects and repayments of depositors and creditors.The same resulted in rise in litigations. The company is trying hard to make timelyrepayments and deliveries and hopeful to get out of it soon.

Response to Point (4)

There are delays in the payment of income tax service tax & provident fund due torecession in real estate sector. However with improved business environment in futurethe Company will be able to meet its obligations in time. The Management is hopeful andcommitted to their level best to streamline the same in future.

Response to Point (5)

The company is law abiding entity and is endeavor to file all required forms andreturns with the Registrar in time. However there has been few delays which themanagement ensures to take care in future.

Response to Point (6)

The company is law abiding entity and files necessary documents with Stock Exchanges inconformity with Listing Agreement/Listing Regulations. However there were few delays dueto administrative reasons in last quarter of year under review which the management iscommitted to streamline in future.

RISK MANAGEMENT

In accordance with the provisions of Regulation 21 of the Listing Regulations the RiskManagement Committee earlier constituted by the Company has been dissolved in the meetingof the Board of Directors held on 11th February 2016. No meeting of the Committee washeld during the period.

However a well defined risk management mechanism is in place. The Objective of themechanism is to minimize the impact of various risks identified and advance actions tomitigate it. A detailed exercise is carried out to identify evaluate monitor and manageboth business and non-business risks.

The Company has framed a Risk Management Policy to identify and assess the key riskareas monitor and report effectiveness of the policy and procedure.

VIGIL MECHANISM

Pursuant to Section 177(9) of the Act read with relevant Rules and Regulation 22 of theListing Regulations the Company has a Vigil Mechanism/Whistle Blower Policy for Directorsand employees to report genuine concerns. The said Policy has been posted onCompany’s website (www.unitechgroup.com).

During the year under review no concerns or grievances pursuant to the same werereported.

CORPORATE SOCIAL RESPONSIBILITY [CSR]

Pursuant to Section 135 of the Act read with Companies (Corporate Social ResponsibilityPolicy) Rules 2014 the Board has constituted a CSR committee and based on therecommendation of the Committee the CSR policy has been approved by the Board of Directorsof the Company. The same is available on the website of the Company(www.unitechgroup.com).

During the year under review the Company has not contributed the sum towards its CSRactivities as statutorily required i.e 2% of the average net profit for three precedingfinancial years.

The real estate sector as a whole is passing through challenging times and thereforethe company is also facing the subsequent impact of slowdown in the economy. In thischallenging phase the cash flows of the company have been adversely impacted. The companyis undertaking steps to successfully face these challenging times and thereby ensure thatin the near future the Company increases its contributions to CSR activities as theCompany is committed to contribute towards the betterment of the Communities where we liveand work.

The annual report on CSR activities is attached at Annexure-III forming part of thisreport.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of Loans given Guarantees given or Investments made under Section 186 ofthe Act are given in notes to standalone financial statements.

DEPOSITS

During the year under review the Company has not accepted any deposits under theprovisions of Section 73 of the Act read with the Companies (Acceptance of Deposits)Rules 2014.

Particulars of Deposits covered Under Chapter V of the Act are as follows:

Particulars Details
Amount of Deposits accepted during the year NIL
Amount of Deposits remained unpaid or unclaimed during the year* Rs. 554.93 Crore
Whether there has been any default in repayment of deposits or interest thereon; and if so the number of times and the total amount involved - In March 2015 the company had filed an application before the Hon’ble CLB for seeking inter-alia re-schedulement of repayment of
• At the beginning of the year Fixed Deposit. Later on the company had filed a list of unencumbered land parcel that can be sold for making the payment of deposits. The Hon'ble CLB had constituted a sale committee comprising of Chairman of CLB as its Chairman and one representative each on behalf of depositors and the company as its member to sell the earmarked properties. The next date of hearing is 4th July 2016.
• Maximum during the year
• At the end of the year
Details of deposits which are not in compliance with Chapter V of this Act.

* As at 31st March 2016

RELATED PARTY TRANSACTIONS

All related party transactions attracting compliance under section 188 of the Act andRegulation 23 of the Listing Regulations are placed before the Audit Committee and theBoard. Prior omnibus approval of the Audit Committee was also obtained for thetransactions which were of a foreseen and repetitive nature.

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm’s lengthbasis. During the year under review the Company has not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the company on materiality of related party transactions.In view of the same the requirement of giving particulars in Form AOC-2 is not applicablefor the year under review.

The Company has framed approved and implemented a policy on dealing with Related PartyTransactions and the same is available on Company’s website under web linkhttp://www.unitechgroup.com/investor-relations/corporate-governance.asp

Your Directors draw attention of the members to Note No. 33 to the standalone financialstatement which sets out related party disclosures.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The ratio of remuneration of each Director to the median employees' remuneration andother details in terms of Section 197(12) of the Act read with Rule 5 (1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided as AnnexureIV forming part of this report.

The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 will be provided upon request by any member of the Company.However in pursuance of Section 136 of the Act this report is being sent to allshareholders of the Company excluding the aforesaid information and the said particularsare made available for inspection at the Registered Office of the Company during workinghours and any member interested in obtaining such information may write to the CompanySecretary at the Registered Office of the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION

Since the Company does not own any manufacturing facility the requirements pertainingto disclosure of particulars relating to conservation of energy and technology absorptionare not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company is engaged in developing/constructing residential and commercial propertiesin India and selling the immovable properties to customers in India and abroad. TheCompany receives remittances of sale consideration for immovable properties located inIndia purchased by the customers abroad.

The foreign exchange earnings and outgo of the Company during the year under reviewwere NIL and 2.73 crore as compared to NIL and 15.99 crore in the previous yearrespectively.

SIGNIFICANT AND MATERIAL ORDERS

During the year under review there were no significant and material orders passed bythe regulators or courts or tribunals that would impact the going concern status andCompany's operation in future.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company had formulated and adopted a policy on prevention prohibition andredressal of sexual harassment at workplace in line with the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and therules framed thereunder. Further during the year under review no case/complaints pursuantto the same were reported to the Board.

ACKNOWLEDGEMENTS

Your Directors wish to express their sincere appreciation for the cooperation receivedfrom the financial institutions banks government authorities customers vendors andsuppliers during the year under review. Your Directors also wish to place on record theirdeep sense of appreciation for the significant contribution made by each & everyemployee of the Company. The Directors are also thankful to depositors and all otherstakeholders for their continued patronage.

FOR AND ON BEHALF OF BOARD OF DIRECTORS
FOR UNITECH LIMITED
Ramesh Chandra
Date: 30th May 2016 Chairman
Place: Gurgaon DIN: 00004216