Your Directors hereby present the 50th Annual Report and AuditedFinancial Statements of the Company for the financial year ended 31st March2021.
The Financial Performance of the Company (Unitech Limited) for thefinancial year ended 31st March 2021 is summarized herein below:
(Amount in Rs. Crore)
| ||2020-21 ||2019-20 |
|Revenue from Operations including Other Income ||91.71 ||1182.64 |
| ||91.71 ||1182.64 |
|Less: Expenses || || |
|Construction & Real Estate Project Expenditure ||55.48 ||980.98 |
|Cost of Land Sold ||67.45 ||74.21 |
|Changes in inventories of finished goods work-in-progress and Stock-in Trade || ||3.30 |
|Employee Benefits Expense ||29.59 ||49.15 |
|Finance Costs ||813.65 ||507.47 |
|Depreciation and Amortization Expense ||2.68 ||2.30 |
|Other Expenses ||51.26 ||502.51 |
|Total Expenses ||1020.11 ||2119.92 |
|Profit/ (Loss) before Tax and Exceptional Items ||(928.40) ||(937.28) |
| ||(928.40) ||(937.28) |
|Less: Exceptional Items ||800.92 ||216.45 |
| ||800.92 ||216.45 |
|Profit/ (Loss) before Tax ||(1729.33) ||(1153.73) |
|Profit/ (Loss) from continuing operations after Tax ||(1976.80) ||(1190.65) |
Material changes affecting the Company
There were no material changes or commitments affecting the financialposition of the Company having occurred between the end of the financial year to which theFinancial Statements relate and the date of report other than the ones already providedor stated in the Financial Statements.
The total income of the Company for the year under review is Rs. 91.71crore. The loss before tax stood at Rs. 1729.33 crore and loss after tax stood at Rs.1976.80 crore. On consolidated basis the total income stands at Rs. 561.16 crore. Theconsolidated loss before tax stood at Rs. 1307.82 crore and loss after tax stood at Rs.1562.43 crore.
Segmental Revenues (Consolidated)
On consolidated basis the Real Estate and related division contributedRs. 131.47 crore in the coffers of the Company whereas the contribution from the PropertyManagement Business was Rs. 89.52 crore and the business from the Power Transmissionactivity was Rs. 331.13 crore. Hospitality and other segments contributed Rs. 9.04 croretowards the gross revenue.
Business and Operations during the year under review there was nochange in the business of your Company.
FY 2020-21 started with the onset of Covid-19 pandemic which over theperiod of time has affected every aspect of our life and made people empathetic andsensitive. Even though the pandemic led to a lockdown for almost five/six months during FY2020-21 it has severely impacted the global economy including the real estate sector.
Management Discussion and Analysis Report
The Management discussion and Analysis (MDA) report for the year underreview as stipulated in Regulation 34 and Schedule V of the SEBI (Listing Obligations anddisclosure Requirements) Regulations 2015 (hereinafter referred as 'Listing Regulations')has been enclosed separately which may be read as an integral part of the Board Report.
Report on Corporate Governance
The Report on Corporate Governance alongwith compliance certificatefrom CS Kiran Amarpuri Practicing Company Secretary (CP No. 7348) confirming complianceof the conditions of Corporate Governance as stipulated in Schedule V of the ListingRegulations has been enclosed separately which may be read as an integral part of theBoard Report.
Consolidated Financial Statement
The Audited Consolidated Financial Statements of the Company itssubsidiaries associates and joint ventures provided in the Annual Report have beenprepared in accordance with the provisions of the Companies Act 2013 read with Ind AS110- "Consolidated Financial Statements" and Ind AS 28- "Investments inAssociates and Joint Ventures" and Ind AS 31 -"Interests in JointVentures".
Subsidiaries Joint Ventures & Associates
Pursuant to provisions of Section 129 (3) of the Companies Act 2013 astatement containing salient features of Financial Statements of subsidiaries jointventures and associates (Form AOC-1) of Unitech Limited is attached to the FinancialStatements. The said Statement portrays the performance and financial position of each ofCompany's subsidiaries joint ventures and associates. The policy for determining materialsubsidiaries as approved may be accessed at the Company's websitehttp://www.unitechgroup.com/investor- relations/corporate-governance.asp.
The Financial Statements and related information of the subsidiarieswill be made available at the Registered Office of the Company for inspection and atCompany's website www.unitechgroup.com for on-line perusal.
The Annual Return will be made available at the Company's websitehttp://www.unitechgroup.com/investor-relations for reference and perusal.
Details of Directors
Members are aware that faced with numerous litigations by a largenumber of homebuyers and other stakeholders the Hon'ble Supreme Court directed the UnionGovernment of India vide its Order dated 18.12.2019 to propose the appointment of anindependent Board of Directors of Unitech Limited. In compliance thereto the CentralGovernment proposed the constitution of a new Board of Directors which was approved bythe Hon'ble Supreme Court vide its Order dated 20.01.2020 passed in Bhupinder Singh Vs.Unitech Limited in Civil Appeal No. 10856/2016. Following from the above the Hon'bleSupreme Court was pleased to simultaneously direct the supersession of the erstwhileManagement with the appointment of a new Board of Directors.
During the year under review there was no change in the composition ofthe Board of Directors. Presently the composition of the Board of Directors is asfollows:
|Sr. No. ||Name(s) ||Designation ||Date of Appointment |
|1 ||Sh. Yudhvir Singh Malik IAS (Rtd.) ||Chairman & Managing director ||21.01.2020 |
|2 ||Sh. Anoop Kumar Mittal ||director ||22.01.2020 |
|3 ||Smt. Renu Sud Karnad ||director ||22.01.2020 |
|4 ||Sh. Jitu Virwani ||director ||22.01.2020 |
|5 ||Sh. Niranjan L. Hiranandani ||director ||22.01.2020 |
|6 ||Dr. Girish Kumar Ahuja ||director ||22.01.2020 |
|7 ||Sh. B. Sriram ||director ||22.01.2020 |
|8 ||Sh. Prabhakar Singh ||director ||03.02.2020 |
Key Managerial Personnel
In compliance of the provisions of section 2 (51) and 203 of theCompanies Act 2013 the following Director and Officials of the Company during the yearunder review have been designated as Key Managerial Personnel (KMP) of the Company:
|Sr. No. ||Name(s) ||Designation |
|1 ||Sh. Yudhvir Singh Malik ||Chairman and Managing director |
|2 ||Sh. Deepak Kumar Tyagi ||Chief Financial Officer (upto 30th June 2021) |
|3 ||Sh. Rishi Dev ||Company Secretary (up to 11th November 2020) |
|4 ||Sh. Kailash Chand Sharma ||Company Secretary (w.e.f. 24th November 2020) |
Seven meetings of the Board of directors were held during the yearunder review. Details of the meetings are provided in the Corporate Governance Reportwhich may be read as an integral part of the Board Report.
Annual Evaluation of Directors Committees and Board
All the directors have been appointed by the Central Government as itsnominee directors. The Annual Evaluation of directors Committees and Board could not takeplace due to the change of Management at that time.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy containing criteria fordetermining qualifications positive attributes independence of directors policyrelating to remuneration to Directors Key Managerial Personnel and Senior ManagementPersonnel of the Company are disclosed in the Corporate Governance Report which may beread as an integral part of the Board Report.
Directors' Responsibility Statement
Subject to the Audit qualifications raised by the Statutory Auditorsfindings of the investigations by different Investigating Agencies and decisions bydifferent Courts of competent jurisdiction the Directors confirm pursuant to therequirement of section 134(5) of the Companies Act 2013 that:
(i) While preparing the Annual Accounts for the year ended 31stMarch 2021 the applicable accounting standards have been followed alongwith properexplanations relating to material departures;
(ii) The Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as on 31 stMarch 2021 and of the loss of the Company for the year ended on that date;
(iii) The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) The Directors have prepared the annual accounts on an on-goingconcern basis;
(v) The Directors under the new Management will lay down sound internalfinancial controls to be followed by the Company and that such internal financial controlswould be adequately commensurate with the size of its operation and business; and
(vi) The Directors under the new Management will endeavour to deviseproper system to ensure compliance with the provisions of all applicable laws and thatsuch systems would be adequate and operationally effective.
Details in respect of frauds reported by Auditors other than thosewhich are reportable to the Central Government
To the best of our knowledge and belief and subject to the (i) outcomeof the ongoing investigations by various Investigating Agencies pertaining to transactionstransacted during the period of erstwhile Management or even otherwise having cascadingimpact (ii) outcome of the cases pending in Courts of competent jurisdiction and (iii)Audit qualifications no frauds were reported by the Auditors under section 143 (12) ofthe Companies Act 2013 for the year under review.
Statement on declaration by Independent Directors
All the Directors meet the criteria as laid down for IndependentDirectors under sub section 6 of section 149 of the Companies Act 2013 and regulation16(1) (b) of the Listing Regulations.
Policy on Director's Appointment and Remuneration
The Directors of the Company have been appointed by Central Governmentwith the prior approval of Hon'ble Supreme Court. No Remuneration is being paid to thedirectors of the Company except sitting fee for attending the Board/Committee meetings.The remuneration of Chairman & Managing director of the Company as being paid hasbeen determined by the Central Government in the Ministry of Corporate Affairs. Hencethere is no formal policy in place in respect of appointment and remuneration ofDirectors.
Auditor and Auditors' Report
M/s R. Nagpal Associates Chartered Accountants the Statutory Auditorsof the Company tendered their resignation on 18th February 2021 stating the reason thatthey did not have the required "Peer Review Certificate" from the Peer ReviewBoard of the Institute of Chartered Accountants of India (ICAI) thus causing a casualvacancy in the office of Statutory Auditors.
On the recommendation of the Audit Committee the Board in its meetingheld on 25th February 2021 accorded its consent for appointment of M/s GSA &Associates LLP Chartered Accountants (FRN 000257N/ N500339) as Statutory Auditorssubject to the approval of Shareholders in the General Meeting. Accordingly M/s GSA &Associates LLP Chartered Accountants (FRN 000257N/ N500339) were appointed by theShareholders as Statutory Auditors of the Company from the conclusion of 49th AnnualGeneral Meeting till the conclusion of 50th Annual General Meeting to fill the casualvacancy.
Further on the recommendation of the Audit Committee it was proposedby the Board of directors of the Company to appoint M/s GSA & Associates LLPChartered Accountants (FRN 000257N/ N500339) as Statutory Auditors subject to theapproval of Shareholders in the General Meeting for a period of five years i.e. from theconclusion of 50th Annual General Meeting till the conclusion of 55th Annual GeneralMeeting. The matter will be placed in the forthcoming Annual General Meeting for approvalof the appointment as above.
Auditors' Report - Qualified Observations
Some of the major qualified observations by the Statutory Auditors andthe response of your directors thereto are tabulated as follows:
|Sr. No. Auditor's Observations ||Management's Response |
|1 (i) Unitech Limited ("the Company") failed to hold its Annual General Meeting (AGM) due on or before 30th September 2021 (extended till 30th November 2021 vide notification number ROC-CHN/96-AGM/2021 dated 23rd September 2021) as required under section 96 of the Companies Act 2013 to transact the agenda including the approval of Accounts for the year ended 31st March 2021. The Company has not applied for any extension for the same to the Registrar of Companies NCT of Delhi & Haryana. The Company is in process of estimation of penalty and other implications due to non-holding of annual general meeting. ||(i) The Annual General Meeting for the Financial Year ended 31st March 2018 and 31st March 2019 were not convened by the erstwhile Management of the Company. In the meantime the Hon'ble Supreme Court directed the Union Government to propose appointment of an Independent Management for Unitech Limited. In compliance thereto the Central Government (Ministry of Corporate Affairs) proposed constitution of a new Board of Directors which was approved by the Apex Court vide its order dated 20.01.2020 also simultaneously superseding the erstwhile Management. The Annual General Meeting (AGM) for the year ended 31 st March 2020 was due to be held latest by 30th September 2020. Due to onset of COVID-19 pandemic and consequent nationwide lockdown offices remained closed during the lock-down period. Moreover the new Management did not have access to complete records of various transactions of the Company. It caused delays in finalization of accounts for the financial year 2019-20 and convening of Annual General Meetings. The Company held their Annual General Meetings for the years ended 31 st March 2018 31st March 2019 and 31st March 2020 on 24th May 2021 and now the Company is committed to hold its Annual General Meeting for the financial year ended 31 st March 2021 as early as possible. |
|(ii) Further the Company has not made any request letter to Security and Exchange Board of India "SEBI" for extension of time for submission of quarterly reviewed results for the quarter ended 30th June 2020 30th September 2020 and 31st December 2020 and year to date reviewed results for period ended 30th September 2020 and 31 st December 2020 and year to date audited results for year ended 31st March 2021. The Company is getting emails from National Stock Exchange "NSE" and Bombay Stock Exchange "BSE" for imposing penalties due to non-filling of the results to the tune of Rs. 5000 per day during the period of default. The Company has not taken any provision of such penalty in the books of accounts and Company is planning to seek relief against such penalty from SEBI. || |
| ||(ii) The Management had taken up the issue of seeking exemptions and waiver of penalties from MCA as well as SEBI vide its letters dated 11.06.2020 29.07.2020 and 27.08.2020 and had also sought the intervention of Secretary MCA to take up the matter with SEBI. The Secretary MCA also took up the matter with Chairman SEBI vide his letter dated 05.08.2020. SEBI responded vide its letter dated 09.09.2020 informing that the BSE and NSE had examined the issue in view of moratorium granted by the Hon'ble Supreme Court and the notice for suspension of trading of securities was withdrawn. Finding that there was no positive response on waiver of penalties the Management filed an IA No. 81660 of 2021 and 81663 of 2021 on 16.07.2021 in the Supreme Court seeking requisite reliefs which is still pending. The above defaults were also brought to the notice of the Hon'ble Supreme Court through the Action Taken Report-III filed on 28.03.2022. |
|2 Material uncertainty related to qoinq concern || |
|(i) The Consolidated 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. ||The newly appointed Board of directors has already stated its position in the Resolution Framework submitted in the Hon'ble Supreme Court on 15.07.2020 followed by an updated version whereof submitted before the Hon'ble Supreme Court on 05.02.2021. The reasons for opting against the winding up of the Company or its reference under IBC were also explained in the application filed for submission of the Resolution Framework. |
|(ii) As mentioned earlier subsequent to the new Board of Directors taking over the Management a Resolution Framework (RF) has been submitted to the Hon'ble Supreme Court by the Company as mentioned in the opening paragraphs of this report wherein the Company has requested the Hon'ble Supreme Court to grant numerous reliefs so that the Company is able to meet its operational obligations and settle its liabilities. The Board has also submitted in the RF that on the basis of review of records and finances of Unitech group as currently available it appears that Unitech Group has significant negative net worth but also considering the fact that there are more than 15000 homebuyers who have invested in various projects of the Company the resolution/ settlement provisions under the Insolvency and Bankruptcy Code (IBC) should not be applied on the Company. At present the Resolution Framework is under the consideration of the Hon'ble Supreme Court. || |
|(iii) 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. || |
|(iv) Considering the above we are unable to express an opinion on this matter. || |
|3 (i) 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. 105483.26 lakhs. 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. 13893.42 lakhs were to be forfeited out of the total amount paid till date. The Company has incurred (a) the amounts paid for land dues and stamp duty Rs. 34221.90 lakhs (b) the balance portions of the total amounts payable including contractual interest accrued till 31st March 2016 of Rs. 99091.90 lakhs; and (c) other construction costs amounting to Rs. 80575.05 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. 6682.10 lakhs (net of repayment). No contract revenue has been recognized on this project. The erstwhile Management had written a letter to GNIDA dated 1st December 2015 wherein it had stated that the cancellation of the lease deed was wrong unjust and arbitrary. Further the said erstwhile Management had also described steps taken for implementation of the project and valid business reasons due to delays till date. Further the said erstwhile 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 should 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 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. ||(i) The matter is still pending in the Hon'ble High Court of Allahabad for final disposal. |
| ||(ii) As regards the amount of Rs. 7436.35 lakhs (Rs. 6682.10 lakhs and interest @ 6% on the principal amount of Rs. 6682.10 lakhs) out of the monies paid by the Company with the registry of the Hon'ble Supreme Court the said amount has already been paid to the 352 Homebuyers on the directions of the Hon'ble Supreme Court which is a bit more than the principal amount deposited by the said homebuyers. |
| ||(iii) Further the Management is also in the process of filing a comprehensive IA before the Hon'ble Supreme Court qua GNIDA demands from Unitech including seeking appropriate directions on the instant issue. |
|(ii) GNIDA has in the meanwhile in terms of the Order of the Hon'ble Supreme Court dated 18.09.2018 deposited on behalf of the Company an amount of Rs. 7436.35 lakhs (Rs. 6682.10 lakhs and interest @ 6% on the principal amount of Rs. 6682.10 lakhs) out of the monies paid by the Company with the registry of the Hon'ble Supreme Court. || |
|(iii) During the year GNIDA has adjusted Rs. 9200.00 lakhs of Unitech group's liabilities towards the Company's other projects with GNIDA and forfeited Rs. 13893.42 lakhs. The Company had paid a sum of Rs. 34221.90 lakhs including Rs. 4934.95 lakhs of stamp duty on the land for the said land. || |
|(iv) The matter in respect of the land is still pending before the Hon'ble High Court of Allahabad and pending the final disposal the Company has subsequently shown the amount of Rs. 18339.80 lakhs as recoverable from GNIDA in its books of accounts including stamp duty of Rs. 4934.95 lakhs and lease rent paid of Rs. 6113.11 lakhs. Further the Company is also carrying other construction costs amounting to Rs. 80650.70 lakhs in respect of the projects to come upon the said land which also includes interest capitalized of Rs. 69684.68 lakhs. || |
|(v) The impact on the accounts viz. inventory projects in progress customer advances amount payable to or receivable from GNIDA cannot be ascertained since the matter is still sub-judice as mentioned hereinabove vis-a-vis dues of the Company and hence we are unable to express an opinion on this matter. || |
|(vi) The Company has deferred liability on account of interest payable to GNIDA appearing in the books of accounts as on 31st March 2021 amounting to Rs. 275193.97 Lakhs (including Rs. 39409.55 Lakhs booked on account of interest during the year ended 31st March 2021). || |
|4 (i) 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. 48066.95 lakhs deposited with the Hon'ble Supreme Court Registry ("Registry") is outstanding as at 31st March 2021. Management has received certain details of payments made and monies received in the registry from the Court and is in process of reconciling the same with entries posted in books of accounts. The Management has also requested the learned amicus curiae to provide the other relevant details like bank statement and balance confirmations. In view of the reconciliation exercise still in process and absence of other statement of transactions and confirmation of balance from the Registry we are unable to comment on the completeness and correctness of amounts outstanding with the Registry and of the ultimate impact these transactions would have on the Consolidated Financial Statements of the Company and hence we are unable to express an opinion on this matter. ||(i) The observation is a statement of fact and needs no further comments except that the Company is trying to obtain the updated requisite information from the Registry through the Ld. Amicus Curiae. |
5 Non-current investment and loans
Company has made investments and given loans to its subsidiaries jointventures associates and other. Details as on 31st March 2021 are as follows:
Amounts in Lakhs of Rs.
|Particulars ||Amount invested ||Impairment accounted for till 31.03.2021 ||Carrying amount |
|Equity investment - joint ventures ||54039.07 ||- ||54039.07 |
|Equity investment - associates ||299.25 ||- ||299.25 |
|Equity investment - others ||31040.70 ||- ||31040.70 |
|Debenture investment ||1512.18 ||- ||1512.18 |
|Investment - CIG ||25453.19 ||- ||25453.19 |
|Corporate guarantees ||8.70 ||- ||8.70 |
|Loans to Joint Ventures and Associates ||8381.00 || ||8381.00 |
|Share Application Money ||46.50 ||- ||46.50 |
(i) The books of accounts of Indian subsidiaries are maintained ontally accounting system and the data is available. The accounts of these Indiansubsidiaries could not be audited because of nonavailability of Directors andnon-appointment of Auditors. Now Directors and statutory auditors in respect of theIndian subsidiaries have been appointed.
(ii) As regards 32 Foreign subsidiaries along with Libya Division and03 foreign JVs the Management has listed down their available details. The auditedBalance Sheets of 04 foreign subsidiaries 02 foreign JVs and that of Libya Division arenot available. For rest of the companies the last audited available Balance Sheets arethat of 31.03.2017 except for two companies for which the available Balance Sheets arethat of 31.03.2010 and 31.03.2016. Moreover it is pertinent to mention here that theInvestigating Agencies are reportedly looking into the affairs of these foreign entities.
|Consolidated 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 since last 3-4 years plus also taking into accounts the factors such as 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: - ||(iii) The matter regarding investment in Carnoustie and CIG is already under scrutiny by the Investigating Agencies. The Management has already stated its position in the Resolution Framework of the Company. It is pertinent to mention here that Unitech Limited has also filed an IA in the Hon'ble Supreme Court for recovery of the amount invested. The matter has since been heard but the order is awaited. |
|(i) Equity investment - others include investment made in M/s Carnoustie Management (India) Private Limited (Carnoustie) of Rs. 31005.45 lakhs as on 31st March 2021. 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. 1000 - Rs. 1500 per share including a premium of Rs. 990 - Rs. 1490 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 sub-judice. ||(iv) However keeping in view the investigations carried out by the ED and the ED having filed a charge-sheet before the Adjudicating Authority under PMLA the Company seems to have no option but to await the final orders of the Adjudicating Authority in the Carnoustie matter. |
|(ii) Investment - CIG - The Company made investment of Rs. 25453.19 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 Consolidated Financial Statements. || |
6 Trade receivables and other financial assets
The Company has trade receivable and other financial assets as on 31stMarch 2021 are as follows: -
Amounts in Lakhs of Rs.
|Particulars ||Amount ||Provision accounted for till 31.03.2021 ||Carrying amount |
|Trade Receivable ||79480.95 ||31521.87 ||47959.09 |
|Security Deposits ||51041.43 ||934.04 ||50107.39 |
|Non-Current Loans and Advances ||100.00 ||- ||100.00 |
|Current Loans and Advances ||576.24 ||520.00 ||56.24 |
|Advances for purchase of Shares ||31079.48 ||31079.48 ||- |
|Staff Imprest & Advances ||47.89 ||- ||47.89 |
|Advances to others ||13.08 ||- ||13.08 |
Consolidated Financial Statements The Company has not assessed lossallowance for expected credit losses on financial assets in accordance with the principlesof Indian Accounting Standards AS 109 - "Financial Instruments".
In view of non-existence of any expected credit loss policy in theCompany we are unable to express an opinion upon the adjustments if any that may berequired to the carrying value of these financial assets and its consequential impact onthe Consolidated Financial Statements.
It is submitted that the new Management is in the process of developinga credit loss policy for the Company. The Management is in the remediation process whichis likely to take some time to finalize.
|7 Impairment Assessment of Bank Guarantees || |
|(i) The Company is having outstanding bank guarantee of Rs. 273622.31 as per audited financials for year ending 31st March 2020. 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 comment on the same. ||The Company is in the process of conducting impairment assessment of its investment in equity instruments debentures bonds various funds financial guarantees and other commitments loans given and advances given to subsidiaries associates and Joint Ventures. |
|8 inventory and projects in proqress || |
|(i) The Company as on 31st March 2021 has shown inventory of Rs. 62517.96 Lakhs and project in progress "PIP" of Rs. 1721844.57 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 18-60 months there are high indicators that such inventory and PIP assets should be tested for evaluating their respective net realised value "NRV" in accordance with the requirement of Indian Accounting Standard 2 "inventories". ||(i) The observations made by the Auditors are a statement of fact and legacy from the erstwhile management. It is for this reason that the Hon'ble Supreme Court deemed it appropriate to supersede the erstwhile management and constitute an independent Board of Directors; |
| ||(ii) Pursuant to take over the new management took stock of the sold residential and commercial units and the unsold inventories which have been duly captured in Annexure "A" to the Resolution Framework. The balance receivables from the home-buyers have also been mentioned in the same annexure. The inventories captured in the Resolution Framework are being further reconciled as an ongoing exercise. This is a work- in-progress item and it is expected to be fully reconciled in due course of time. |
|(ii) Further Management is in the process of verification of title documents for land and other immovable assets. || |
|(iii) As per the explanation provided by the Management pursuant to the approval of Hon'ble Supreme Court of India Project Management Consultants (PMCs) have been appointed for the projects for estimation of work done till date cost to be incurred further to complete the projects and to provide applicable completion timelines. These PMC's have also conducted actual physical assessment of the projects and are now in process of submitting their reports. Management is 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. ||(iii) While the management has been able to locate the title documents in respect of a substantial number of land assets/ properties there are still some cases where these are not readily available. Efforts are being made to do the needful as an ongoing exercise. |
| ||(iv) Five Project Management Consulting agencies (PMCs) have been appointed in November 2021 for various pan-India projects with the approval of the Hon'ble Supreme Court. They have been tasked to submit the BoQs and cost estimates for completion of respective projects. |
|(iv) In view of the absence of any NRV assessment by the Management and absence of any physical verification report 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 Consolidated Financial Statements. || |
|9. External Confirmation || |
|The Company has not initiated the process of external confirmation for outstanding balances of following areas as on 31st March 2021 are as follow: ||(i) The Company is expected to initiate the claim verification for all the monies extended to and by the Company. As provided in the Resolution Framework the Company shall be inviting claims including that from the borrowers. All such claims shall be verified and a view taken on the same at that point of time. |
Amounts in Lakhs of Rs.
|Particulars ||Amount invested ||Provision accounted for till 31.03.2021 ||Carrying amount |
|Trade Receivable ||79480.95 ||31521.87 ||47959.09 |
|Trade Payable ||81080.29 ||386.34 ||80693.95 |
|Advances received from Customers ||1120413.15 ||- ||1120413.15 |
|Advances to Suppliers ||7008.08 ||- ||7008.08 |
|Security deposits ||51041.43 ||934.04 ||50107.39 |
|Loans to Joint Venture and Associates ||8381.00 || ||8381.00 |
|Other Loans and advances ||676.24 ||520.00 ||156.24 |
|Advances for purchase of land and project pending commencement ||61287.37 ||30000.00 ||31287.37 |
|Loans from Joint Venture and Associates ||15455.39 || ||15455.39 |
|Security and other deposits payable ||22015.71 ||- ||22015.71 |
|Staff Imprest ||47.89 ||- ||47.89 |
|Inter Corporate deposits ||13853.66 ||- ||13853.66 |
|Other Assets ||14642.42 ||- ||14642.42 |
The Company has expressed its inability to send confirmation requestsin respect of above-mentioned areas due to uncertainty about the amount receivable andpayable appearing in the books of accounts which are outstanding for significantly longperiod of time. In view of non-existence of adequate supporting documents we are unableto express an opinion upon completeness of the balances appearing in books of accounts ofthe Company.
(ii) The erstwhile Management was superseded and the employees who wereauthorized signatories in the banks left the Company due to which the Company was not ableto get the bank statements in a large number of cases. Now the Management has started adetailed exercise on bank accounts maintained under various Divisions of Unitech Limitedincluding those of JVs and Associates and also for various subsidiary companies.
(iii) Simultaneous process for change of authorized signatories/revalidation of accounts/ KYC updation and foreclosure of replica bank accounts is anon-going effort as also noted by the Auditors.
(i) In respect to confirmation of bank balances the Company has sentconfirmation requests to all the banks. Out of 551 bank accounts we have received directbalance confirmation from banks for 21 bank accounts amounting to Rs. 453.64 Lakhs as on31st March 2021. We have been provided with bank statements as provided byCompany for 131 bank accounts amounting to Rs. 1022.91 Lakhs as on 31st March2021. For remaining 143 bank accounts amounting to Rs. 558.76 Lakhs as on 31stMarch 2021 Company is in the process to follow with the banks for providing statements/balance confirmations. In view of non-existence of supporting evidence related to bankbalances we are unable to comment upon completeness of the balances appearing in books ofaccounts of the Company and adjustments if any that may be required to the books ofaccounts and its consequential impact on the Consolidated Financial Statements.
(ii) With respect to the margin money with the banks and term depositswith the banks no confirmations for the balance outstanding and interest certificates forthe quarter ended 31st March 2021 have been received. In view of non-existenceof supporting evidence we are unable to comment upon completeness of the balanceappearing in the books of accounts of the Company and adjustment if any.
(iii) With respect to the loans and borrowings taken by the Companyamounting to Rs. 275538.27 Lakhs as on 31 st March 2021 no confirmation hasbeen received till date of this report. Also out of 35 borrowings sanctionletters/agreements is provided for only 9 cases and for the rest the relevant informationis not available with the Management. Interest expense on the said loans is accrued at aprovisional rate of interest. Such provisional rate of interest is based on the detailsavailable with the Company regarding interest rates charged by banks/ financialinstitutions and the same are 4-5 years old. In view of these we are unable to commentupon completeness of the balances appearing in books of accounts of the Company andadjustments if any that may be required to the books of accounts and its consequentialimpact on the Consolidated Financial Statements.
|10 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. ||(i) The Management has already submitted the Resolution Framework before the Hon'ble Supreme Court wherein the Company has sought various reliefs on account of penalties interest liabilities etc. due to be paid to Statutory Authorities banks financial institutions etc. |
| ||(ii) Since a view on various reliefs claimed in the Resolution Framework is yet to be taken by the Hon'ble Supreme Court it is not feasible at this stage to assess the overall impact of its contingent liabilities. |
|11 Revenue from real estate projects ||The Audit observation is a statement of fact and a legacy from the erstwhile Management. It is because of the situation created that the Hon'ble Supreme Court directed appointment of an independent Management. There are about 15000 home-buyers across about 80 residential and 12 Commercial projects where construction and completion of projects have been lying stalled and are at various stages of construction which have to be completed and handed over to the home-buyers. The entire exercise is being carried out under the overall guidance and supervision |
|(i) The Company is accounting for revenue under real estate projects using percentage of completion method (POCM) with an understanding that performance obligations are satisfied over time. Provisions of paragraph 35 of Indian Accounting Standard 115 "revenue from contracts with customers" specifies that an entity can recognize revenue over time if it satisfies any one of the following criteria: || |
|(a) The customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs || |
|(b) The entity's performance creates or enhances an asset (for example work in progress) that the customer controls as the asset is created or enhanced ||Management will be in a position to assess the impact thereof in due course of time. |
|(c) The entity's performance does not create an asset with an alternative use to the entity; and || |
|(d) The entity has an enforceable right to payment for performance completed to date. || |
|(ii) 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". || |
|(iii) 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. || |
|(iv) In view of the same we are unable to express an opinion on the matter. || |
12 The Company has failed to repay deposits accepted by it includinginterest thereon in respect of the following deposits:
|Particulars ||Unpaid matured deposits (Principal amount) as at 31st March 2020 (Rs. Lakhs) ||Principal paid during the Year (Rs. Lakhs) ||Unpaid matured deposits (Principal amount) as at 31st March 2021 (Rs. Lakhs) |
|deposits that have matured on or before 31st March 2017 ||57992.40 ||31.49 ||57960.91 |
(i) This issue has been duly recognized in Chapter 8 of the ResolutionFramework and the Company shall take action as per the directions of the Hon'ble Court inthis behalf.
(ii) It is however clarified that disbursement of some amount beendone to the fixed deposit holders (Sr. Citizens on a prorate basis) and continues to bedone by the Ld. Amicus Curiae on the directions of the Hon'ble Supreme Court. The detailsof amounts disbursed to the FD holders are being captured in the books of accounts.
(iii) The new Management neither processes any case nor is itauthorized to do so till the Hon'ble Supreme Court takes a decision in this matter.
|The total unpaid interest as on 31st March 2021 (including interest not provided in the books) amount to Rs. 46267.47 lakhs. || |
|Further the Company has not provided for interest payable on public deposits which works out to Rs. 7076.53 lakhs for the year ended 31st March 2021 (Cumulative upto 31st March 2021 - Rs. 28385.76 lakhs). || |
|Besides the impact of non-provision of interest payable on public deposits of Rs. 7076.53 lakhs for the year ended 31 st March 2021 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 Consolidated Financial Statements is currently not ascertainable and hence we are unable to express an opinion on this matter. || |
|13 The Company has accounted for following provisions/ impairment in the Consolidated Financial Statements for the year ended 31st March 2021: ||(i) It is informed that it was at the instance of the Hon'ble Supreme Court that the Union of India proposed the appointment of a new Board of directors in supersession of the erstwhile Management in view of the grievances of thousands of homebuyers and other stakeholders. |
|(i) Provision created against advance given for purchase of shares of Rs. 31079.48 lakhs. These advances were given in the years 2007 - 2013 and the Company has no evidence regarding recoverability of these advances. || |
|(ii) Reversal of deferred tax assets of Rs. 24672.66 created earlier on account of carry forward business losses. Same was reversed as there was no reasonable certainty of having taxable profits in foreseeable future against which this tax asset can be adjusted as required under provisions of Indian Accounting Standard 12 "income taxes". ||(ii) The new Management has already submitted a holistic Resolution Framework in the Hon'ble Supreme Court on 15.07.2020 followed by an updated version dated 05.02.2021. |
|(iii) Writing off of prepaid expenses of Rs. 3736.26 lakhs pertaining to brokerage paid in earlier years and interest receivable of Rs. 475.21 lakhs. The Company has no evidence regarding recoverability of these advances. ||(iii) Various investigating agencies are carrying out investigations into the alleged diversion of funds of the homebuyers among others. These investigations are being monitored by the Hon'ble Supreme Court directly. |
|(iv) Impairment in Goodwill of Rs. 1878.75 Lakhs. ||(iv) In addition to the above there are thousands of Court cases pending pan-India though at the moment they are lying dormant because of the moratorium granted by the Hon'ble Supreme Court vide its order dated 20.01.2020. |
|All of the above-mentioned adjustments carried in quarter and Year ending 31st March 2021 pertain to the earlier period presented by the Management for which annual general meeting was already held and the accounts were already adopted therein. This gives an indication that there were errors in the financials of earlier period which requires restatement as required under provisions of Indian Accounting Standard 8 "accounting policies changes in accounting estimates and errors". The Company is in the process of evaluating possibility of applicability of section 131 of the Companies Act 2013 with respect to the earlier period financial statements and subsequent requirement of seeking approval from concerned authorities as required in the said section. || |
| ||(v) In view of the above it would neither be possible nor would it be desirable to re-open the balance- sheets of the previous years for the present till the investigations are completed and court cases are settled in accordance with law. |
Secretarial Auditors and Secretarial Standards
Pursuant to provisions of section 204 of the Companies Act 2013 readwith Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Board of Directors of the Company in its meeting held on 18.01.2021 hasappointed CS Kiran Amarpuri Company Secretary in Practice (CP No. 7348) to conduct theSecretarial Audit of the Company for the financial year 2020-21.
The Secretarial Audit Report for the financial year 2020-21 (Form MR-3)submitted by CS Kiran Amarpuri Company Secretary in Practice (CP No. 7348) is annexedherewith at Annexure-I which may be read as an integral part of the Board Report.
during the year under review your Company has complied with applicableSecretarial Standards i.e. SS-1 and SS-2 relating to "Meetings of the Board ofDirectors" and "General Meetings" respectively.
The response of your directors to the observations made by theSecretarial Auditors are as follows:
|Sr. No. Observations of the Secretarial Auditor ||Response of the Management |
|1 The Company has failed to repay deposits accepted by it including interest thereon before the commencement of Companies Act 2013. ||(i) This issue has been duly recognized in Chapter 8 of the Resolution Framework and the Company shall be bound to take action as per the directions of the Hon'ble Supreme Court in this behalf. |
| ||(ii) It is however clarified that disbursement of some amount been done to the fixed deposit holders (Sr. Citizens on a prorate basis) and continues to be done by the Ld. Amicus Curiae on the directions of the Hon'ble Supreme Court from out of the amount allocated for the purpose. The details of amounts disbursed to the FD holders are being captured in the books of accounts. |
| ||(iii) The new Management neither processes any case nor is it authorized to do so till the Hon'ble Supreme Court takes a decision in this matter. |
|2 The Company failed to hold its Annual General Meeting for the financial year ended 31st March 2018 31st March 2019 and 31st March 2020. However as on date of this report these meetings have been held on 24.05.2021. ||(i) The Annual General Meetings for the financial years ended 31st March 2018 and 31st March 2019 were not convened by the erstwhile Management of the Company. In the meantime the Hon'ble Supreme Court directed the Union Government to propose appointment of an Independent Management for Unitech Limited. In compliance thereto the Central Government (Ministry of Corporate Affairs) proposed constitution of a new Board of Directors which was approved by the Apex Court vide its order dated 20.01.2020 also simultaneously superseding the erstwhile Management. |
| ||(ii) The Annual General Meeting (AGM) for the year ended 31st March 2020 was due to be held latest by 30th September 2020. Due to onset of COVID-19 pandemic and consequent nationwide lockdown offices remained closed during the lock-down period. Moreover the new Management did not have access to complete records of various transactions of the Company. It caused delays in finalization of accounts for the financial year 201920 and convening of Annual General Meetings. The Company held their Annual General Meetings for the year ended 31st March 2018 31st March 2019 and 31st March 2020 on 24th May 2021 and now the Company is committed to hold Annual General Meeting for the financial year ended 31 st March 2021 as early as possible. |
| ||(iii) The Management has taken up the issue of seeking exemptions and waiver of penalties from MCA as well as SEBI vide its letters dated 11.06.2020 29.07.2020 and 27.08.2020 and had also sought the intervention of Secretary MCA to take up the matter with SEBI. The Secretary MCA also took up the matter with Chairman SEBI vide his letter dated 05.08.2020. SEBI responded vide its letter |
| ||dated 09.09.2020 informing that the BSE and NSE had examined the issue in view of moratorium granted by the Hon'ble Supreme Court and the notice for suspension of trading of securities was withdrawn. Finding that there was no positive response on waiver of penalties the Management has filed an IA No. 81660 of 2021 and 81663 of 2021 on 16.07.2021 in the Supreme Court seeking requisite reliefs which is yet to be taken up. The above defaults were also brought to the notice of the Hon'ble Supreme Court in the Action Taken Report-III filed on 28.03.2022. |
|3 The Company failed to file Cost Audit Report for financial year(s) 2017-18 2018-19 and 2019-20 in Form CRA-4 in terms of section 148(1) of the Companies Act 2013 read with rule 3 of Companies (Cost Records and Audit) Rules 2014. ||(i) In terms of provisions of section 148 of the Companies Act 2013 the erstwhile Management in the BoD Meeting held on 13.02.2016 appointed M/s M. K. Kulshreshta as the Cost Auditors of the Company. M/s M. K. Kulshreshta continued to function as Cost Auditors of the Company till FY 2017-18. M/s M. K. Kulshreshta however did not submit any Cost Audit Report after financial year 2017-18 since his fee was reportedly not paid by the erstwhile Management. |
| ||(ii) The Management proposes to appoint new Cost Auditors in place of M/s M. K. Kulshreshta in due course. |
|4 The Company failed to establish Internal Audit System in terms of section 138 of the Companies Act 2013 read with rule 13 of the Companies (Accounts) Rules 2014. ||(i) The erstwhile Management appointed M/s VPSJ & Company Chartered Accountants as Internal Auditors of the Company in view of the decision taken in the meeting of the Board of Directors held on 14.09.2019. |
| ||(ii) M/s VPSJ & Company however resigned on 14.02.2020 without conducting/ submitting any Internal Audit of the Company. |
| ||(iii) The Company proposes to appoint new Internal Auditors in terms of section 138 of the Companies Act 2013 read with rule 13 of the Companies (Accounts) Rules 2014. |
|5 There are instances of late submission of various documents/ reports under LODR to the Stock exchanges. The Company has filed clarification in response to the email received from Stock Exchanges. ||(i) Immediately after take over by the new Management there was onset of Covid-19 pandemic which was followed by nationwide lockdowns. Moreover the new Management was also constrained in the absence of complete records/ data and reliable information which made the situation even worse. |
| ||(ii) The new Management has now managed to finalize the financial results for the financial year 2020-21 which are placed before the Members for approval. |
| ||(iii) The new Management is committed to make Unitech Limited which is the Holding Company a fully compliant entity. All the information and statements are being sent to the Stock Exchanges in time and references are being made for seeking exemption or extension wherever reliable information is not available. |
|6 (i) There was delay in approval of annual financial results and there are also instances of late submission of financial results for the quarter and year ended 31st March 2020. ||(i) Neither the financial accounts for the financial years 2017-18 and 2018-19 were finalized nor were the Annual General Meetings for the corresponding financial years ended 31st March 2018 and 31st March 2019 convened by the erstwhile Management for finalizing the financial accounts. |
|(ii) Further there are instances of non-compliance for preparation approval submission and publication of quarterly financial results for the quarter ended 30th June 2020 30th September 2020 31st December 2020 and 31st March 2021. As on date of this report financial results for the quarter ended 30th June 2020 have been approved by the Board of directors and submitted to Stock Exchanges. The action of continuation of trading of securities in 'z' category for non-filing of financial results was initiated by the Stock Exchanges. ||(ii) The onset of COVID-19 pandemic and consequent nationwide lockdown made the working more difficult for the new Management which took over in the last quarter of the FY 2019-20. But somehow the new Management managed to finalize the financial accounts for the financial year 2019-20 and got the Annual Accounts for the FY 2017-18 2018-19 and 2019-20 approved in the respective Annual General Meetings held on 24th May 2021 despite numerous challenges nonavailability of reliable records and simultaneous investigations by various investigating agencies. |
| ||(iii) Now the financial accounts for the financial year 2020-21 are being placed before the Members for approval. |
| ||(iv) The Management had also taken up the issue of seeking exemptions and waiver of penalties from MCA as well as SEBI vide its letters dated 11.06.2020 29.07.2020 and 27.08.2020 and had also sought the intervention of Secretary MCA to take up the matter with SEBI. The Secretary MCA also took up the matter with Chairman SEBI vide his letter dated 05.08.2020. SEBI responded vide its letter dated 09.09.2020 informing that the BSE and NSE had examined the issue in view of moratorium granted by the Hon'ble Supreme Court and the notice for suspension of trading of securities was withdrawn. Finding that there was no positive response on waiver of penalties the Management filed an IA No. 81660 of 2021 and 81663 of 2021 on 16.07.2021 in the Supreme Court seeking requisite reliefs which is still pending. The above defaults were also brought to the notice of the Hon'ble Supreme Court in the Action Taken Report -III filed on 28.03.2022. |
Particulars of Loans Guarantees or Investments
Particulars of Loans and Guarantees given or Investments made undersection 186 of the Companies Act 2013 are given in the respective Notes to StandaloneFinancial Statements.
Contracts or arrangements with related parties under section 188(1) ofthe Act
With reference to section 134(3)(h) of the Companies Act 2013 allrelated party transactions under section 188 of the Companies Act 2013 and regulation 23of the Listing Regulations were placed before the Audit Committee and the Board from timeto time. Prior omnibus approval of the Audit Committee was also obtained for thetransactions which were of a foreseen and repetitive nature. All contracts/arrangements/transactions made by the Company during the relevant year with relatedparties were in the ordinary course of business and on an arm's length basis.
Except in cases mentioned in Note No. 43 of Standalone FinancialsStatement the Company has not entered into any transaction with related parties duringthe year under report which could be considered material in accordance with the policy ofthe Company on materiality of Related Party Transactions. In view of the same therequirement of giving particulars of contracts or arrangements with related parties inForm AOC-2 is not applicable for the year under review. The Company has framed a policy ondealing with Related Party Transactions and the same is available at Company's websitewww.unitechgroup.com. Your Directors draw attention of the Members to Note No. 43 to theStandalone Financial Statement which sets out the related party disclosures.
The State of the Company's Affairs
(i) The Hon'ble Supreme Court vide its Order dated 20th January2020 inter alia directed the newly constituted Board of Directors of your Company to "...preparea resolution framework within a period of two months from today and to submit it to thisCourt."
(ii) During the year under review notwithstanding the Covid-19pandemic nationwide lockdowns triggered by the pandemic and legacy issues left behind bythe superseded erstwhile Management the Board held intense deliberations on variousissues during the course of preparation of Resolution Framework. The Board finallyapproved Resolution Framework in its meeting held on 17.06.2020 and the same was submittedto the Hon'ble Supreme Court on 15.07.2020 followed by an updated version thereofsubmitted on 05.02.2021.
(iii) Your Company envisages interaction with all the majorstakeholders (homebuyers and FD holders) in electronic mode in future. A handy moduleconnect. unitechgroup.com has been developed to facilitate online submission/updating oftheir contact details e-mail ids Mobile Nos. and PAN details. The application has beenlaunched with a general notice published on the website of the Company on 05.02.2021besides sending SMS and e-mails to the concerned individual homebuyers to the extent ofavailability of their contact details in the Company's database.
(iv) In an effort to sanitize the database pertaining to about 15000homebuyers a special Audit and reconciliation of their ledger accounts has beencompleted.
(v) It is informed that owing to onset of COVID-19 pandemic consequentnationwide lockdowns and several other constraints the new Management could not haveaccess to complete records of various transactions of the Company. It caused delays infinalization of accounts for the financial year 2019-20 and convening of Annual GeneralMeetings within the prescribed timelines. The Company held their Annual General Meetingfor the years ended 31st March 2018 31st March 2019 and 31st March 2020 on 24th May2021 and now the Company is committed to hold Annual General Meeting for the financialyear ended 31st March 2021 at the earliest.
(vi) During the year under review the process for discovery of marketvalue of unsold inventory in pan-India residential projects was initiated on 12.01.2021through a reputed International Property Consultant (IPC). The exercise however wascompleted in the following financial year i.e. 2021-22.The Board of Directors has dulybeen informed about the findings of the IPC.
(vii) It is also apprised that when the new Management took over inJanuary 2020 there were 3749 cases in all out of which 1188 have so far been disposedof leaving 2561 active cases which are presently pending in various pan-India courts ofcompetent jurisdiction.
(viii) during the year under review the directors of your Company haveengaged themselves in taking various steps as mentioned herein below which would enablethem to take sound decisions once the Resolution Framework is approved by the Hon'bleSupreme Court:
(a) Development of IT applications/systems for submission of claims byvarious stakeholders and processing;
(b) Audit of ledger accounts of all the homebuyers;
(c) Preparation of migration plans for homebuyers in various projectsas proposed in the Resolution Framework;
(d) An exercise for market valuation of various nonproject land assetshas been carried out for which your Board appointed three IPCs through competitivebidding. The report of these agencies has since been received in the month of August 2021which has been duly noted by the Board of Directors in their meeting held on 11.08.2021.
(e) Preparation of the list of land/property assets which can bemonetized for funding the incomplete projects;
(f) To determine the approach to sell unsold stock for generating cashflows in addition to the balance receivables from homebuyers for completion of variousprojects.
Amount if any proposed to carry to any Reserves
As the Company is incurring losses since last several years thereforeno amount is proposed to be carried to any reserve during the year under review.
As your Company has incurred a net loss during the year under reviewyour Directors have not recommended any dividend for the year ended 31st March2021.
Conservation of Energy Technology Absorption
Since the Company does not own any manufacturing facility except theUnitech Power Transmission Limited (UPTL) which is under the process of divestment therequirement of disclosure of particulars relating to conservation of energy and technologyabsorption is not applicable.
Foreign Exchange Earnings and Outgo
The Company is engaged in developing/constructing residential andcommercial properties in India and in the past used to sell the immovable properties tocustomers in India and abroad which stands discontinued now. During the year underreview no overseas property has been sold by the Company. The foreign exchange earningsand outgo of the Company during the year under review were NIL.
Risk Management Policy of the Company is in place. The same has beenhosted at the website of the Company. The objective of the policy is to identify andassess the key risk areas and to mitigating risk and monitor/ report effectiveness ofthe processes and controls and advance action which would have to be taken to mitigatesuch risk.
Corporate Social Responsibility
The Company has not undertaken any CSR activities during the year underreview since there is average loss during the preceding three financial years. The AnnualReport on CSR activities is attached herewith at Annexure-II which may be read as anintegral part of the Board Report.
Internal Financial Control for Financial Statements
The newly appointed Board of directors has been reviewing thesufficiency of existing internal control systems and assessing the need to bring betterfinancial control measures which are commensurate with the size of the business of theCompany.
The composition of the Audit Committee is provided in the CorporateGovernance Report which forms an integral part of the Board Report.
Pursuant to section 177(9) of the Companies Act 2013 read with rulesand regulation 22 of the Listing Regulations the Company has Vigil Mechanism fordirectors and Employees to report genuine concerns. The policy has been posted atCompany's website i.e. www.unitechgroup.com. During the year under review the Company hasnot received any such report in this behalf.
during the year under review the Company has not accepted any Depositsunder the provisions of section 73 and 76 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014. Particulars of Deposits covered under Chapter V ofthe Companies Act 2013 are as follows:
|Particulars ||Details |
|Amount of deposits accepted during the financial year 2020-21. ||NIL |
|Amount of deposits remained unpaid or unclaimed during the year i.e. as on 31.03.2021. ||Rs. 579.61 crore (Principal) |
|Whether there has been any default in repayment of deposits or Interest thereon; and if so the number of times and the total amount involved- ||(i) In March 2015 the Company had filed an application before the Hon'ble CLB [Now NCLT] for seeking inter-alia re-scheduling of repayment of Fixed Deposits. The Hon'ble National Company Law Tribunal New Delhi (NCLT) dismissed the said application. The appeal against the said order was also dismissed by the Hon'ble NCLAT vide its order dated 31st January 2017. |
|> At the beginning of the year ||(ii) Some Depositors filed intervention applications (IAs) before the Hon'ble Supreme Court in the matter of homebuyers of the Company. Considering their applications the Hon'ble Supreme Court directed the Amicus Curiae to create a web-portal where the depositors could provide their requisite information. Accordingly in compliance of the ibid direction the Ld. Amicus Curiae created a web-portal for the purpose. |
|> Maximum during the year ||(iii) Hon'ble Supreme Court vide its order dated 12th December 2019 allowed refunds to FD holders who were senior citizens aged 60 years and above. Ten per cent of the amount deposited with the Registry at that time i.e. Rs. 17.4 crore was allocated for the purpose. Having regard to the huge number of FD holders who had registered themselves on the web-portal the Hon'ble Court allocated a further sum of Rs. 30 crore for distribution amongst them. The additional amount of Rs. 30 crore was also to be disbursed to FD holders of the age group of 60 years and above in terms of the earlier direction/s. Out of the allocated sum of Rs. 47.40 Crore allocated an amount of Rs. 28.16 Crore has been disbursed till 30.06.2021 as per the report of the Ld. Amicus Curiae. The same is under reconciliation. |
|> At the end of the year || |
|details of deposits which are not in Compliance with Chapter V of the Companies Act 2013 || |
| ||(iv) Accordingly the matter pertaining to public deposits is presently before the Hon'ble Supreme Court as addressed through Chapter 8 of the Resolution Framework. Hence the final action in this behalf would depend on the finality of the matter at the level of the Hon'ble Apex Court. |
Particulars of Employees and Related Disclosures
The ratio of remuneration of each Director to the median employees'remuneration and other details in terms of section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided as Annexure-III forming part of this report.
during the year under review no employee was drawing remuneration ofRs 1.02 crore per annum which is required for inclusion in the statement containingparticulars of employees as required under section 197 of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
Significant and Material Orders
during the year under review there were apart from various Orderspassed by the Hon'ble Supreme Court of India no significant and material orders werepassed by the regulators or tribunals that may impact the going concern status andCompany's operation in future.
Cost Accounts and Cost Auditors
The Company is required to make and maintain cost records as specifiedby the Central Government under sub-section (1) of section 148 of the Act. The Companyproposes to appoint Cost Auditors in due course of time.
Prevention of Sexual Harassment at work place
The Company has formulated and adopted a policy on prevention andredressal of sexual harassment at workplace in line with provisions of Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rulesframed thereunder. During the year under review no case/complaints pursuant to the samewere reported to the Board.
Your directors wish to place on record their deep sense of appreciationfor the co-operation received from the Members Government authorities customers andvendors. Your directors also wish to place on record appreciation for the contributionmade by each and every employee of the Company. The Directors are also thankful to all thestakeholders for their continued help assistance and support.