TO THE MEMBERS OF UNITECH LIMITED

Report on the Audit of the standalone financial statements

Disclaimer of Opinion

We have audited the accompanying Standalone Financial Statements of the Company which comprise the Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows, and a summary of significant accounting policies and other explanatory information, in which are incorporated the financial information for the year ended on that date of the Company's branch office at Libya which are not yet audited by the branch auditor. As at 31st March 2023, the Company has made provision for non- recoverability of assets and provision for writeback of trade liabilities in respect of the Libya branch office (also refer sr no iii of other matters paragraph of this report for details).

Our audit indicates that, because of the substantive nature and significance of the matter described below, we have not been able to obtain sufficient appropriate evidence to provide a basis for expressing an opinion on the statement as to whether these Standalone Financial Statements are prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other recognized accounting practices and policies generally accepted in India and has disclosed the information required to be disclosed under the Companies Act, 2013 including the manner in which it is to be disclosed, or that it does not contain any material misstatement.

Basis for Disclaimer of Opinion

We conducted our audit of the Standalone Financial Statements in accordance with standard on auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor's Responsibility for the audit of the Standalone financial statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the institute of Chartered Accountant of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. Because of the significance of the matters described below we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

We draw your attention to the following matters:

(i) We draw attention to Note no. 55 of the Standalone Financial Statements, which have made references to the Resolution Framework (RF) for Unitech group which has been prepared under the directions of the Board of Directors of Unitech Limited appointed by the Central Government pursuant to the afore-said order of the Hon'ble Supreme Court and approved by the Board of Directors in their Meeting held on June 17, 2020/ September 10, 2020/ October 28, 2020/ April 27, 2022 and which has been filed with the Hon'ble Supreme Court. Through RF, the company has requested the Hon'ble Supreme Court to grant some concessions and reliefs so that the company is able to fulfil its obligations towards the construction of the projects and meet other liabilities.

As the RF has not yet been approved by the Hon'ble Supreme Court, the impact of the proposed reliefs, concessions etc. have not been considered in the books of accounts.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(ii) Material uncertainty related to going concern

We draw attention to Note no. 39 of the Standalone Financial Statements wherein the management has represented that the Standalone 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.

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. Also, the Board of Directors are exploring various possible options for completion of ongoing projects and are trying to generate additional possible revenues by construction of new flats. This activity is getting conducted under supervision of Justice A.M. Sapre, as appointed by Hon'ble Supreme Court of India.

Considering the above, we are unable to express an opinion on this matter.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(iii) We draw attention to Note no. 53 of the Standalone Financial Statements, Unitech Limited ("the Company") held its annual general meetings for last 2 years with delays. The company had not applied for any extension for these annual general meeting to the Registrar of Companies, NCT of Delhi & Haryana and is in the process of estimation of penalty and other implications due to delay in holding of annual general meeting.

Further, the Company also delayed in filling of its quarterly and annual/year to date results with Security and Exchange Board of India "SEBI". The Company has not taken any provision related to penalty on account of such delay and management is now planning to seek relief against such penalty from SEBI.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(iv) We draw attention to Note no. 61 of the Standalone Financial Statements, 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. 105,483.26 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. 6,682.10 Lakhs (net of repayment). No contract revenue has been recognized on this project.

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. 7,436.35 Lakhs (Rs. 6,682.10 Lakhs and interest @ 6% on the principal amount of Rs. 6,682.10 Lakhs), out of the monies paid by the Company, with the registry of the Hon'ble Supreme Court. Out of the amount received from GNIDA, the Hon'ble Supreme Court has refunded the amount received in advance along with the interest to those 342 homebuyers who has submitted the relevant documents, as per details of the position of accounts as on 22nd November, 2022 received from Hon'ble Supreme Court.

GNIDA has adjusted Rs. 9,200.00 Lakhs of Unitech group's liabilities towards the Company's other projects with GNIDA and forfeited Rs. 13,893.42 Lakhs.

The Company had paid a sum of Rs. 34,221.90 Lakhs, including Rs. 4,934.95 Lakhs of stamp duty on the land, for the said land.

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. 18,339.80 Lakhs as recoverable from GNIDA in its books of accounts including stamp duty of Rs. 4,934.95 Lakhs and lease rent paid of Rs. 61,13.11 Lakhs. Further, the Company is also carrying.

a) Other construction costs amounting to Rs. 80,575.05 Lakhs in respect of the projects to come upon the said land which also includes interest capitalized of Rs. 696,84.68 Lakhs.

b) Deferred liability on account of interest payable to GNIDA appearing in the books of accounts as on 31st March, 2023 amounting to Rs. 3,72,777.42 Lakhs (including Rs. 52,220.54 Lakhs booked on account of interest during the year ended 31st March, 2023). Out of the interest mentioned above Rs. 4,846.67 Lakhs has been capitalised in the books of accounts of the company. The same is in contravention of the provisions of Indian Accounting Standards 23 "Borrowing Costs".

The impact on the accounts viz. inventory, projects in progress, customer advances, amount payable to or receivable from GNIDA, and profit/(loss) for the year cannot be ascertained,

since the matter is still subjudice, as mentioned hereinabove, vis-a-vis dues of the Company, and hence we are unable to express an opinion on this matter.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(v) We draw attention to Note no. 71 of the Standalone Financial Statements, 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. 31,191.85 Lakhs deposited with the Hon'ble Supreme Court Registry ("Registry") is outstanding as at 31st March, 2023. Management has received certain details of payments made and monies received in the registry from the Court and has accrued the same in its books of accounts. However, there are still variations of Rs. 934.15 Lakhs between balance as per books of accounts vs balance as per registry details and management is in the process of reconciliation of the same.

Further, for the payments made from its registry, there was no deduction made on account of tax at source and no goods and services tax liability, wherever applicable on reverse charge basis have been complied with.

In view of the reconciliation exercise still in process, possible tax non compliances, 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 Standalone Financial Statements of the Company, and hence we are unable to express an opinion on this matter.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(vi) We draw attention to Note no. 2, 3 and 4 of the Standalone Financial Statements, according to information given and explanation provided to us by the management, in respect of Property, Plant and Equipment (PPE) including Investment Property having net value of Rs. 2,996.56 Lakhs (net of accumulated depreciation of Rs. 7,527.88 Lakhs), there is no physical verification conducted by the Company since last year. Further, the company does not maintain proper records showing full particulars, including quantitative details and situation of Fixed Assets comprising 'property, plant and equipment, 'Intangible Assets' & 'investment property''. In view of this and also of the fact that these PPE's are kept as security for obtaining bank loans and all the loan accounts of the Company (except loan obtained from Punjab National Bank) are at non performing levels, we are not able to express an opinion on this matter.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

Company has made investments and given loans to its subsidiaries, joint ventures, associates and other. Details as on 31st March, 2023 are as follows: -

We draw attention to Note no. 5, 6 and 13 of the Standalone 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 audited since last 4-5 years plus also taking into accounts the factors such as non exitance of any loan agreement stating terms, conditions and duration of loan, 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: -

• Equity investment - others include investment made in M/s Carnoustie Management (India) Private Limited (Carnoustie) of Rs. 310,05.45 Lakhs as on 31st March, 2023. 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. 1,000 - Rs. 1,500 per share including a premium of Rs. 990 - Rs. 1,490 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 subjudice.

• Investment - CIG - The Company made investment of Rs. 254,53.18 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 noncurrent loan and its consequential impact on the Standalone Financial Statement.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(viii) Impairment Assessment of Bank and Corporate Guarantees

We draw attention to Note no. 50 of the Standalone Financial Statements, wherein it is stated that the company is having outstanding bank and corporate guarantee of Rs. 1,07,059.26 Lakhs as per audited financials for year ending 31st March, 2023. 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 express an opinion on the same.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

The company has trade receivable and other financial assets as on 31st March, 2023 are as follows: -

We draw attention to Note no. 7, 10, 13 and 14 of the Standalone Financial Statements, the company has not assessed loss allowance for expected credit losses on financial assets in accordance with the principles of Indian Accounting Standards AS 109 - "Financial Instruments".

In view of non-existence of any expected credit loss policy in the Company, we are unable to express an opinion upon the adjustments, if any, that may be required to the carrying value of these financial assets and its consequential impact on the Standalone Financial Statement.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(x) Inventory and project in progress

We draw attention to Note no. 9 and 16 of the Standalone Financial Statements, Company, as on 31st March, 2023, has shown inventory of Rs. 62,517.96 Lakhs and project in progress "PIP" of Rs. 17,56,942.48 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 24-60 months, there are high indicators that such inventory and PIP assets should be tested for evaluating their respective net realisable value "NRV" in accordance with the requirement of Indian Accounting Standard 2 "inventories".

Further, management is in the process of verification of title documents for land and other immovable assets.

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 submitted their reports. Management was earlier 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 but the same is still awaited.

Further, the Company has during the year capitalized expenses to the tune of Rs. 11,249.80 Lakhs as construction expenses (including interest expense of Rs. 6,154.51 Lakhs). This Same is in contravention of the provisions of Indian Accounting Standard 16 "Property plant and equipment" and Indian Accounting Standard 23 "Borrowing cost" as construction activity for all the projects is stalled since last 5-6 years. This has resulted in understatement of current year loss by above said amount.

Also further, the Company, in its financial statements has bifurcated PIP under two headings - "Project in progress on which revenue is not recognized" and "Amount recoverable from project in progress (on which revenue is recognized)". We have not been provided with any basis on which this bifurcation is made.

In view of the absence of any NRV assessment by the management and absence of any physical verification report, capitalization of expenses and interest cost during the year, and absence of any basis of bifurcation of projects in financial statements, 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 Standalone Financial Statements.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(xi) External Confirmation

The company has not initiated the process of external confirmation for outstanding balances of following areas as on 31st March, 2023 are as follow:

We draw attention to Note no. 66 of the Standalone Financial Statements, the company has expressed its inability to send confirmation requests in respect of above-mentioned areas due to uncertainty about the amount receivable and payable appearing in the books of accounts which are outstanding for significantly long period of time. In view of non-existence of adequate supporting documents, we are unable to express an opinion upon completeness of the balances appearing in books of accounts of the Company.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

Bank confirmations

In respect to confirmation of bank balances, margin money balance and term deposits, the company has not sent confirmation requests to any of the banks. In view of nonexistence of supporting evidence related to bank balances, we are unable to comment upon completeness of the balances appearing in books of accounts of the Company and adjustments, if any, that may be required to the books of accounts and its consequential impact on the Standalone Financial Statements.

With respect to the loans and borrowings taken by the Company amounting to Rs. 2,79,186.01 Lakhs as on 31st March, 2023, no confirmation has been received till date of this report.

The company is accruing interest expense on the said loans is accrued at a provisional rate of interest. Such provisional rate of interest is based on the details available with the Company regarding interest rates charged by banks/ financial institutions and the same are 4-5 years old. The company, has before the date of approval of standalone financial statements for the year ended 31st March, 2023, obtained statement of accounts from several banks/financial institutions regarding its borrowings. The Company analysed the statements, obtained from banks/ financial institutions, and additional liability, related to interest and penal interest, was identified to the tune of Rs. 907,77.98 Lakhs. The company accrued the additional liability in the year ended 31st March, 2023 whereas the interest/ penal interest pertained to the earlier periods also. Non accounting of interest/ penal interest in earlier period, as part of error accounting, is in contravention to the provisions of Indian Accounting Standard 8 "Accounting policies, changes in accounting estimates and errors". The Company, is still in process of getting these statements from remaining banks/financial institutions. In view of these, we are unable to comment upon completeness of the balances appearing in books of accounts of the Company and adjustments, if any, that may be required to the books

of accounts and its consequential impact on the Standalone Financial Statements.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(xii) We draw attention to Note no. 50 of the Standalone Financial Statements, 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.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(xiii) We draw attention to Note no. 67 of the Standalone Financial Statements, Company has not appointed an internal auditor for the financial year 2020-21,2021-22 and 2022-23 which is in contravention of the provisions of section 138 of the Companies Act, 2013 which mandates appointment of internal auditor for all listed companies.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(xiv) We draw attention to Note no. 67 of the Standalone Financial Statements, the company has not yet appointed a Chief Financial Officer and the prescribed time period under section 203 of the Companies Act, 2013 has already expired. Further the company has not filed any application with Ministry of Corporate Affairs for compounding of the said offence.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(xv) We draw attention to Note no. 62 of the Standalone Financial Statements, The Company has accounted for its investment in one of its subsidiary M/s Unitech Power Transmission Limited, as non-current assets held for sale. Cost of investment as on 31st March, 2023 is Rs. 42,26.26 Lakhs. The Company is carrying said investment at cost and has not made any estimation of its fair value less cost to sell as required under provisions of Indian Accounting Standard 105 "Non-Current Assets Held for Sale and Discontinued Operations". The company, post as on 31st March, 2023, has received a binding offer of Rs. 6700.00 Lakhs from a buyer which is also approved by the directors of the company through circular resolution dated 14.08.2023. In the absence of any fair value assessment by the Company, we are unable to express an opinion on the matter.

We had given a disclaimer of opinion on the standalone financial statements for the year ended 31st March, 2022 in respect of this matter.

(xvi) The company has made many adjustments in accordance with