Unitech Limited Regulatory Compliance Response

Summary of Company's Response

Unitech Limited submitted a comprehensive response to the National Stock Exchange of India Ltd. regarding clarifications sought on its audited financial results for the year ended March 31, 2026. The response includes detailed Statements on Impact of Audit Qualifications for both standalone and consolidated financial results, addressing multiple audit qualifications that resulted in a disclaimer of opinion from the auditors.

Date of Communication and Nature of Query

  • Initial NSE Query Date: 24 June 2026 (responded on 25 June 2026)
  • First Reminder Date: 14 July 2026 (responded on 15 July 2026)
  • Second Query Date: 8 July 2026 (responded on 10 July 2026)

The NSE sought clarification regarding:

1. The Statement of Impact of Audit Qualifications not being signed by an authorized signatory (initial query)

2. The Statement not being signed by the audit committee chairperson (subsequent query)

Company's Clarification on Compliance Issues

Unitech confirmed that it had already submitted its responses through the NEAPS system (NSE Electronic Application Processing System) on 25.06.2026 and 10.07.2026. For the deficiency regarding signatures, the company:

  • Submitted signed copies of the Statement on Impact of Audit Qualifications (Standalone & Consolidated) on 25 June 2026
  • Clarified on 10 July 2026 that the Statements were signed by all directors including Dr. Girish Kumar Ahuja, the regular Chairperson of the Audit and Risk Management Committee

Regulatory Compliance Reference

The company's response explicitly references compliance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates the submission of Statements on Impact of Audit Qualifications when auditors issue a modified opinion.

Details of Financial Results Clarification

The comprehensive Statements on Impact of Audit Qualifications reveal severe financial and operational challenges:

Standalone Financial Results (₹ in Lakh):

  • Turnover/Total Income: 38,028.44
  • Total Expenditure: 1,85,238.68
  • Exceptional Items: (31,794.92)
  • Net Loss: (1,79,005.16)
  • Earnings Per Share (Basic): (6.84)
  • Total Assets: 16,45,177.76
  • Total Liabilities: 22,14,820.42
  • Net Worth: (5,69,642.66) [Negative]

Consolidated Financial Results (₹ in Lakh):

  • Turnover/Total Income: 56,680.41
  • Total Expenditure: 3,26,606.57
  • Exceptional Items: (31,794.92)
  • Net Loss: (3,01,814.52)
  • Earnings Per Share (Basic): (9.30)
  • Total Assets: 25,35,911.42
  • Total Liabilities: 30,63,832.92
  • Net Worth: (11,27,921.50) [Negative]

Audit Qualifications (17 Matters):

The auditors issued a disclaimer of opinion for the 6th consecutive year across multiple areas:

1. Resolution Framework Dependency: Impact of proposed reliefs and concessions pending Supreme Court approval not considered in books

2. Going Concern Uncertainty: Material uncertainty about company's ability to continue due to eroded net worth, losses, and pending litigations

3. Impairment Assessment Not Conducted: No impairment study for investments in unrelated companies (₹612,47.17 lakhs standalone, ₹16,78,08.77 lakhs consolidated)

4. Loan Loss Allowance: Unable to estimate fair value of loss allowance on loans to subsidiaries/JVs/associates (₹1,765,60.27 lakhs)

5. Investment Impairment: No impairment assessment for investments in JVs and associates (₹53,984.55 lakhs consolidated)

6. Goodwill Impairment: No impairment assessment for goodwill of ₹383,80.79 lakhs

7. Balance Confirmations: Multiple balances pending reconciliation/confirmation including trade receivables, payables, bank balances, borrowings

8. GNIDA Dues Recovery: Amount recoverable from GNIDA (₹183,39.80 lakhs) subject to confirmation/reconciliation

9. Supreme Court Registry Reconciliation: Variation between balance lying with Supreme Court registry and books of accounts

10. Statutory Dues Defaults: Unpaid statutory dues including Income Tax (₹79,29.00 lakhs), EPF (₹500.33 lakhs)

11. Public Deposits Default: Principal amount of ₹520,12.98 lakhs overdue, interest provision not created (₹612,34.92 lakhs accumulated)

12. GST Reconciliation: Old Input Credit Receivable subject to reconciliation with GST portal

13. Debt Covenant Defaults: Defaults in interest and principal repayments to banks/financial institutions

14. Revenue Recognition Issues: Usage of percentage of completion method questioned under Ind AS 115

15. Project Cost Reconciliation: Reconciliation of advance from homebuyers and project costs in progress

16. CWIP Status Unknown: Capital work in progress of ₹200,65.13 lakhs status unknown due to disputes

17. Physical Verification Pending: Property, plant, equipment, unsold flats and land physical verification pending

Management's Response to Qualifications:

The management consistently stated that quantification of impact is not possible due to:

  • Ongoing investigations by Enforcement Directorate and other central agencies
  • Matters being sub-judice before the Hon'ble Supreme Court
  • Resolution Framework pending approval from the Supreme Court
  • Legacy issues inherited from erstwhile management
  • Non-availability of complete records and documentation

The company emphasized that various reliefs and concessions have been sought in the Resolution Framework submitted to the Supreme Court, and financial impacts can only be determined after the Court's final decision.

Topic Tags: Regulatory Response, Financial Results Clarification, Audit Qualifications, Disclaimer of Opinion, Supreme Court Proceedings, Financial Distress, Legacy Issues Resolution