Unitech's Rs 1,607 cr loans come under auditor scrutiny

Company today disclosed the auditors' comments as part of the notes to the company's financial results

Realty major Unitech's short-term loans and advances worth Rs 1,607 crore for purchase of land and projects have come under its auditors' lens for remaining outstanding for a long period of time, but the company has said it is confident of their recovery.

Making their observation on the matter, the auditors, Goel Garg & Co, said in their report for the last fiscal that "considering that some of these advances are outstanding and unadjusted for long periods of time, we are unable to ascertain the recoverability/subsequent adjustments, if any".

Unitech today disclosed the auditors' comments as part of the notes to the company's financial results for the quarter ended June 30, 2012.

"The management has represented that based on the information available such advances in respect of ongoing business transactions are considered recoverable," the audit report said.

The auditors said they are "unable to ascertain the final impact, if any", as some of these advances may not be recoverable.

"Advances for the purchase of land and projects pending commencement amounting to Rs 16,074,305,962 (Rs 1,607.43 crore) under the head Short Term Loans and advances, as explained by the management, have been given in the normal course of business to land owing companies collaborators/ projects/for purchase of Land," the auditors said.

The company said it "took note of the above (auditors' observations), and is of the opinion that advances for purchase of land and projects pending commencement, are considered good for recovery or are recoverable in due course."