DIRECTORSTo the Members,
Your Directors have pleasure in presenting the 40th Annual Report of yourCompany, together with the Audited Accounts for the year ended 31st March,2011.
FINANCIAL RESULTS
Your Company's performance during the year as compared with that during the previousyear is summarized below:
| | (Amount in Rs. million) |
| Particulars | 2010-11 | 2009-10 |
| 1. Total Income | 21,681.34 | 22,217.14 |
| Less: Operating Expenses | 11,046.08 | 11,549.77 |
| 2. Gross Profit before Interest and Depreciation | 10,635.26 | 10,667.37 |
| Less: | | |
| i) Interest | 3,286.74 | 3,453.54 |
| ii) Depreciation | 66.79 | 59.48 |
| 3,353.53 | 3,513.02 |
| 3. Profit before Tax | 7,281.73 | 7,154.35 |
| Less: Provision for Tax | | |
| i) Current | 2,200.00 | 1,730.00 |
| ii) Deferred | (19.08) | (18.67) |
| 2,180.92 | 1,711.33 |
| 4. Profit after Tax | 5,100.81 | 5,443.02 |
| Add/(Less): | | |
| i) Balance of Profit as per last Balance Sheet | 18,348.70 | 15,367.74 |
| ii) Foreign Project Reserve Written Back | - | 5.00 |
| iii) Taxes Paid for earlier years (Net of Provision) | - | (188.29) |
| iv) Debenture Redemption Reserve written back | 5,160.00 | 6,400.00 |
| 23,508.70 | 21,584.45 |
| Balance available for appropriation | 28,609.51 | 27,027.47 |
| 5. Appropriations | | |
| i) Proposed Dividend | 261.63 | 487.76 |
| ii) Tax on Dividend | 42.44 | 81.01 |
| iii) Transfer to Debenture Redemption Reserve | - | 8,110.00 |
| iv) Transfer to General Reserve | 64.15 | - |
| v) Dividend paid for earlier years | 18.44 | - |
| vi) Balance carried over to Balance Sheet | 28,222.85 | 18,348.70 |
| 28,609.51 | 27,027.47 |
FINANCIAL HIGHLIGHTS AND OPERATIONS
The total income of your Company for the year under review is Rs. 21,681.34 million.The real estate division contributed Rs. 16,931.48 million in the revenues of your companyfor the year, whereas the construction division put in Rs. 348.29 million. The revenuesfrom consultancy segment for the year were Rs. 778.76 million.
On consolidated basis, the total income of your Company and its subsidiaries stands atRs. 32,921.20 million. The consolidated profit before tax (PBT) stood at Rs. 8,515.60million. The consolidated profit after tax (PAT) stood at Rs. 5,811.79 million. Theearning per share (EPS), on an equity share having face value of Rs. 2/-, stands at Rs.2.24 considering the total equity capital of Rs. 5,232.60 million.
KEY HIGHLIGHTS OF THE BUSINESS AND OPERATIONS
Some of the key highlights pertaining to the business of your Company, including itssubsidiaries and joint venture Companies, for the year 2010-11 and period subsequentthereto are given hereunder:
• New Project Launches and Sales
During the year 2010-11, your Company launched new projects totaling an area of 10.4million square feet across different cities in India. Of the total area launched in2010-11, 3.9 million sqft was launched in Gurgaon, 2.2 million sqft in Noida and GreaterNoida, 1.4 million sqft in Chennai, 1.3 million sqft in Kolkata and 1.6 million sqft inother cities.
The Company received sales bookings for a total area of 9.16 million sqft during2010-11 valued at Rs. 43,236.52 million. With a share of 48%, Gurgaon had the largestshare of sales, followed by Noida and Greater Noida with 20%, Chennai with 11%, Kolkatawith 10% and other cities with 11%.
In terms of segment wise sales, 83% of the area sold was from the residential segmentwhile 17% was from non-residential. In value terms, share of non-residential segment wasslightly higher at 24% due to higher average realisation of Rs. 6,585 per sqft as comparedto an average realisation of Rs. 4,341 per sqft of residential segment.
• Commercial Leasing Business
A total of approximately 2.5 million square feet of space was leased out during 2010-11in the IT/ITeS projects that are being developed by the Company in Gurgaon, Noida &Kolkata with this the total leased area increased to 4.9 million sqft.
• Project Execution and Delivery
Unitech delivered 4.25 million sqft of completed property during the year. Companycurrently has about 80 ongoing projects covering a total of approx. 40 million sqft ofarea to be constructed and delivered in the coming years. In order to efficiently executethe much higher scale of projects across markets, Unitech had to substantially upgrade itsoperations. In 2010-11, a lot of effort has gone into further enhancing the Company'sinternal execution capabilities.
• Enhancing Execution Capabilities/ Capacity Building
Capacity building has been a key focus area for the Company during the year. On the onehand, various measures being undertaken to enhance internal capabilities focus on reducingconstruction time as well as cost. On the other hand, there is also a concerted effort atincreasing controls and supervision to deal more efficiently with project related issuesacross geographies. Some of the initiatives taken are product standardisation, processchanges, in house architectural and engineering design, expansion of contractor base andhigher mechanization.
• Scheme of Arrangement
The scheme of arrangement under section 391-394 of the Companies Act, 1956 for theamalgamation of two wholly owned subsidiaries of the Company i.e. Aditya PropertiesPrivate Limited and Unitech Holdings Limited with the Company and for the De-merger ofinfrastructure undertaking (post-merger) of Unitech Limited into its wholly ownedsubsidiary i.e. Unitech Infra Limited, duly approved by shareholders and creditors intheir meetings, was filed with Hon'ble High Court of Delhi and is pending for itsapproval.
More details about the business and operations of your Company are provided in theReport on Management Discussion and Analysis forming part of this Report.
DIVIDEND
Keeping in view the current economic scenario and the future funds requirements of theCompany, your Directors have recommended a dividend @ Re. 0.10 per share on an equityshare of Rs. 2/- each fully paid-up (i.e. 5%) for the year ended 31st March,2011, as against a last year dividend of 10% (Re. 0.20 per share). The dividend, ifapproved, will be paid:
(i) to those members, holding shares in physical form, whose names appear on theRegister of Members of the Company at the close of business hours on 29th August2011, after giving effect to all valid transfers in physical form lodged with the Companyor its Registrar and Shares Transfer Agent on or before 12th August 2011 and
(ii) to those beneficial owners, holding shares in electronic form, whose names appearin the statement of beneficial owners furnished by the Depositories to the Company as atthe close of business hours on 12th August 2011.
SUBSIDIARIES
There are 293 Subsidiary Companies as on 31st March, 2011. The financialdetails of the subsidiary companies as well as the extent of holdings therein are providedin a separate section of this Annual Report.
The Ministry of Corporate Affairs has, vide General Circular No. 2/2011 dated 8thFebruary 2011, granted general exemption for not attaching the annual accounts of thesubsidiary companies with the annual accounts of holding company.
Pursuant to the said Circular, the Board of Directors of your Company in their meetingheld on 29th May 2011 has given their consent, for not attaching the AnnualAccounts of the Subsidiary Companies with that of the Holding Company. Accordingly,Balance Sheet, Profit & Loss Account, Directors' Report and Auditors' Report of theSubsidiary Companies and other documents required to be attached under section 212(1) ofthe Act to the Balance Sheet of the Company, shall not be attached. However, thesedocuments shall be made available upon request by any member of the Company interested inobtaining the same and shall also be kept for inspection at the Registered Office of yourCompany and that of Subsidiary Companies concerned. Further, the financial data of theSubsidiary Companies has been furnished along with the statement pursuant to Section 212of the Companies Act, 1956 forming part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Accounting Standard AS-21 on Consolidated Financial Statementsread with Accounting Standard AS-23 on Accounting for Investements in Associates and AS-27on Financial Reporting of Interest in Joint Ventures, the audited Consolidated FinancialStatements forms part of this Annual Report.
CHANGES IN CAPITAL STRUCTURE
Authorised Share Capital
The authorised share capital of your Company is Rs. 10,000 million divided into4,000,000,000 equity shares (4,000 million) of Rs.2/- each and 200,000,000 preferenceshares (200 million) of Rs. 10/- each.
Issued and Paid-up Share Capital
The Company had, pursuant to the special resolution passed in the EGM held on 16thJune, 2009, allotted 227,500,000 warrants, convertible into equal number of equity sharesof Rs. 2/- each at a premium of Rs. 48.75 per share to Harsil Projects Private Limited, apromoter group Company on 29th June 2009.
As on 1st April, 2010, 177,500,000 such warrants were outstanding and thesame got converted in four tranches during the year 2010-11 into equal number of equityshares of the Company of face value of Rs. 2/- each at a price of Rs. 50.75 per equityshares (including a premium of Rs. 48.75 per equity shares), as per details below :
| Date of conversion of warrants | No. of warrants converted into equal number of equity shares |
| 02.06.2010 | 59,056,781 |
| 18.06.2010 | 20,000,000 |
| 22.12.2010 | 39,408,867 |
| 27.12.2010 | 59,034,352 |
Accordingly after the above said allotments, the issued and paid-up share capital ofyour Company stood at Rs. 5,232,602,094/- comprising of 2616301047 equity shares of Rs.2/-each as at 31st March 2011.
DIRECTORS
In accordance with the relevant provisions of the Companies Act, 1956 and Article 101of the Articles of Association of the Company, Mr. G.R. Ambwani and Mr. Sanjay Bahadur areliable to retire by rotation at the ensuing Annual General Meeting and being eligible,have offered themselves for re-appointment. The brief resume and other details of theabove directors, as stipulated under Clause 49(IV)(G) of the Listing Agreement, arefurnished in the Corporate Governance Report forming part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, your directors, based onthe information and representations received from the operating management, confirm that:
i) in the preparation of the Annual Accounts for the financial year ended 31stMarch, 2011, the applicable accounting standards have been followed with properexplanation relating to material departures, if any;
ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company at the end of the financial year and ofthe profit of your Company for that period;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of your Company and for preventing and detecting fraud andother irregularities;
iv) the Directors have prepared the Annual Accounts for the financial year ended 31stMarch, 2011 on a going concern basis.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as required under Clause 49 of theListing Agreement with the Stock Exchanges is given seperately forming part of thisReport.
REPORT ON CORPORATE GOVERNANCE
Committed to good corporate governance practices, your company fully conforms to thestandards set out by the Securities and Exchange Board of India and other regulatoryauthorities and has implemented and complied with all of its major stipulations. Therequisite Certificate issued by M/s Sanjay Grover and Associates, Company Secretariesconfirming compliance with the conditions of Corporate Governance as stipulated underClause 49 of the Listing Agreement, is attached to this report.
SOCIAL RESPONSIBILITY
The Company conducts its business in a way that creates social, environmental andeconomic benefits to the communities in which it operates and the Company has always beenearnest for contributing towards the betterment of society through various welfareinitiatives viz. providing education, skill development and healthcare for theunderprivileged section of the society. Some of such CSR initiatives are highlightedhereunder:
• Safety Measure at the Construction Site - The Company ensures stringentsafety regulations, conducive work environment, clean drinking water, creche facilitiesfor more than 22,000 workers at the various construction sites across India.
• Education - Unitech's schools of learning called "Shikshantar"with excellent academic faculty at the helm, provide holistic education to children fromall backgrounds.
• Rainwater Harvesting - All townships and projects developed by the Companyhave rainwater harvesting facilities. Unitech is committed to best practices that helpmaintain the water table and encourage recycling.
• Social Forestry - To affirm its concern for environmental sustainability,Company's brand is associated with 'green' and the Company ensures plantation on acontinuous basis in and around all our locations.
AUDITORS AND AUDITORS' REPORT
The Auditors, M/s. Goel Garg & Co., Chartered Accountants, hold office until theconclusion of the ensuing Annual General Meeting and being eligible are recommended forre-appointment. A certificate from the auditors has been received to the effect that there-appointment, if made, would be in accordance with Section 224(1B) of the Companies Act,1956.
M/s A. Zalmet, Certified and Legal Public Accountant, Libya who had been appointed asBranch Auditors for Libya Branch of your Company will also retire at the ensuing AnnualGeneral Meeting and being eligible is recommended for re-appointment.
The Auditors, without qualifying the Auditors' Report, have drawn attention on fewitems and the Board's responses on them are as follows:
• Refer point 4(vi) (a) of the Auditors' report - Due to ongoing civil warand internal conflicts in Libya, the Company had to abandon its branch operations duringthe financial year 2010-2011. The Company's contractors situated in Europe have alreadycommenced the procedures under international law for "Force Majeure" forcompensation/ estimation of amounts due by the Libyan Government, these would materializein due course of time and the management does not envisage any loss at this stage.
• Refer point 4(vi) (b) & (c) of the Auditors' report - The managementis of the opinion that advances against projects pending commencement and advancesrecoverable, are in the normal course of business and even though unsecured andunconfirmed are considered good.
• Refer point (xi) of the Annexure to the Auditors' Report - During theyear under review, there had been some delays in re-payments of dues to the Banks andFinancial Institutions due to slow down in the real estate business. However, themanagement opines that with improved business scenario, the company will be able to meetits obligation in time.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGNEXCHANGE EARNINGS AND OUTGO
Since your Company does not own any manufacturing facility, the requirements pertainingto disclosure of particulars relating to conservation of energy, research &development and technology absorption, as prescribed under the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988, are not applicable.
Foreign Exchange Earnings and Outgo
Activities relating to exports, initiatives to increase exports, Development of newexport markets for products and services and Export plans:
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 expenditure of the Company during the year underreview were Rs. 51.57 million and Rs. 176.98 million as compared to Rs. 253.43 million andRs. 63.964 million in the previous year respectively.
FIXED DEPOSITS
Your Company has Fixed Deposits to the tune of Rs. 9,333.282 million as on 31stMarch, 2011. 1427 deposits aggregating Rs. 84.279 million were due for renewal/repaymenton or before 31st March, 2011 against which no communication was received fromthe deposit holders.
PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, readwith the Companies (Particulars of Employees) Rules, 1975, the names and other particularsof employees forms a part of this Report. However, as per the provision 219(1) (b)(iv) ofthe Companies Act, 1956, the Directors' Report and the Accounts are being sent to allmembers of the Company excluding the aforesaid information. Any member interested inobtaining such particulars may write to the Company Secretary at the registered office ofthe Company. This statement shall also be available for inspection at the registeredoffice of the Company during the working hours upto the date of the Annual GeneralMeeting.
ACKNOWLEDGEMENTS
The Board acknowledges with gratitude the co-operation and assistance provided to yourCompany by its bankers, financial institutions, government as well as non-governmentagencies. The Board wishes to place on record its appreciation to the contribution made byemployees of the Company and its subsidiaries during the year under review. Your Directorsthank the customers, clients, vendors and other business associates for their continuedsupport. Your Directors are thankful to the shareholders and deposit holders for theircontinued patronage.
For and on behalf of the Board of Directors
Ramesh Chandra
Chairman
Place: New Delhi
Date: 29th May 2011