Management Discussion and Analysis

Overview

In 2003-04, Unitech Limited (also referred to as ‘Unitech’ or ‘the Company’) was a leading player in real estate space of the National Capital Region of Delhi, with a consolidated turnover of Rs. 631.43 crore and a consolidated balance sheet size of Rs. 380.60 crore. In a short span of 4 years, the Company had charted an expansive growth path. This was achieved by creating a pan India brsence, building a wider portfolio of products and extending the scope of business to real estate related domains like retail and hospitality. By 2007-08, the Company’s consolidated turnover was Rs. 4,322.35 crore and the consolidated balance sheet size had grown to Rs. 14,188.30 crore. By any yardstick, this was a meteoric growth in both income flows and creation of asset base over a fairly short span of time.

Unfortunately, the global economy was rocked by the sub-prime crisis in 2008 and the real estate sector in India was also badly affected. While there have been certain green shoots and some pockets of improvement, the Indian real estate market has not fully recovered since the shocks of 2008. The situation got further aggravated with the macro-economic slowdown between 2011 and 2014 in an environment of high inflation and interest rates. During this span of time, for companies like Unitech there has been a major re-alignment of strategy. The focus has been on deriving the best value from its asset base while juggling with the constant crisis of cash flow management.

2014-15 was another chapter in this consolidation phase for Unitech. While there have been some positive signals from the macroeconomic environment, the recovery for the real estate sector on the ground has been very slow.

Macro-Economic Environment

In terms of macro-economics, 2014-15 was a step in the right direction. The Government of India has revised the methodology of calculating several macro-economic parameters. These new numbers, though yet to be wholly accepted by leading economists and statisticians in the country, do accurately brsent the general trend.

The traditional Gross Domestic Product (GDP) numbers have been replaced by Gross Value Added (GVA), which is conceptually similar. GVA data, in real terms suggests that the economic recovery in India is well on course. Data plotted in Chart A shows that after reaching a low of 4.8% in 2012-13, GVA growth recovered to 6.6% in 2013-14 and then to 7.2% in 2014-15. The business and consumer sentiments on the ground also suggest that economic growth is moving in the positive direction. This augurs well for a general improvement in demand for real estate.

Importantly, the revival in growth has been accompanied by positive developments in investments into assets that drive future economic growth. To illustrate this let us look at the data for Gross Fixed Capital Formation (GFCF). What was alarming in 2012-13 was that the economic slowdown was accompanied by reduction in GFCF. This was a direct reflection of the negative investment sentiments brvailing in the economy at that time. Since then, the situation has improved and GFCF growth increased to 3% in 2013-14 and to 4.6% in 2014-15. This is a positive trend, however, the growth in GFCF has to pick up even more for the country to sustain the high growth trajectory that it aspires for.

In line with GFCF, construction activities also witnessed a pick up after recording negative growth of -3.8% in 2012- 13. It has bounced back to 2.5% in 2013-14 and 4.8% in 2014-15. These growth levels, though, are nowhere close to the double-digit growth witnessed in the couple of years prior to 2012-13. Chart B plots construction growth data.

The other macro-economic parameter that has an all pervading effect for the real estate sector is interest rates. It affects developers in terms of costs of working capital or long term loans for financing projects and consumers who finance their property purchase through home loans. After a fairly long period of strict monetary policy that focused on controlling inflation, the Reserve Bank of India (RBI) has given some signals of moving to a lower interest rate regime. Given that inflation is mostly under control, in 2015 itself, the RBI has thrice reduced the repo rate, which is the benchmark interest rate – on 15 January from 8% to 7.75%; on 4 March from 7.75% to 7.5%; and then on 2 June from 7.5% to 7.25%.

Chart C shows that between 2009 and 2011, the RBI steadily increased the repo rate from below 5% to over 8%, and the rate remained around 8% for the last few years. Clearly, the reductions in 2015 are welcome for any investment driven enterprise. However, it must be noted that the absolute levels still remain fairly high and the rate reduction is still far from creating any major impact on economic growth.

The Real Estate Sector

The real estate sector in India has been tumultuous in many ways in the year 2014. In an unsure political environment, slow moving markets plagued most parts of the country during Q1 and Q2 of 2014. However towards the latter part of the year, newly elected Central Government initiated certain measures to improve the sentiment.

Affordable housing was considered on par with infrastructure in the Union Budget 2014-15. Real Estate Investment Trusts or REITs, which is an alternate investment vehicle, got a green signal from the Government in 2014, and this will help ease the brssure on the balance sheets of cash-starved developers.

However, the listing of new REITs will be slow and steady. In the recent past, two landmark legislations that were introduced by the central government were the Land Acquisition, Redevelopment and Rehabilitation (LARR) Bill and the Real Estate Regulatory Authority Bill.

However, after almost a year of these two bills being introduced, there has not been much progress. This is largely due to tough clauses included in both these bills, which were actively debated throughout 2014. Some of those clauses were seen as limiting the ability of the industry to function smoothly.

The newly-elected government has astutely identified the limiting factors within the two bills and attempted to rectify them rather than introduce new regulations.

Once finalised, the revised bills will appear more investor-friendly and create a favourable environment for developers, buyers and investors to operate in the coming years.

While these have been positive developments, much of it is still in the implementation phase and needs wider consensus across the political spectrum including state governments. The effects of these reforms on the ground will take some time and some implications are expected to be seen only by the end of 2015.

For the housing sector, 2014-15 witnessed a consistent fall in new launches of residential units every quarter as a consequence of the subdued demand and continued brvalence of high prices. While this was largely the case with high-end projects, the affordable housing segment definitely began to gain favour. This segment was firmly lodged under the priority schemes of the government and central bank, and buyers were seen finding comfort in investing in such projects given the smaller ticket sizes and improving connectivity in the suburbs of the major cities.

In the second half of 2014, many large developers who in the recent past concentrated on the mid-to-high segment due to better margins, were seen eager to play the volume game and entered into affordable-segment projects in the deeper suburbs. This development created the spade work for bridging the wedge between demand and supply in the major metropolitan cities.

Chart D shows that both new additions and absorptions reduced in calendar year (CY) 2014 resulting in marginal growth in unsold inventory. A large portion of the total unsold residential inventory is in the under-construction projects, while completed projects have only moderate vacancy. Home buyers looking for ready-possession property will therefore find limited room for negotiations when compared to buyers who can wait for some time to get possession. Many of the under construction projects have seen slow progress as the industry is reeling under severe liquidity crunch. However, pricing of existing projects has been maintained at existing levels, so in fact, with some demand pick up in the second half of 2014-15, the National Housing Bank (NHB) real estate price index called Residex has witnessed a slight upward trend for most major cities since July-August 2014.

Commercial real estate has seen continuously higher supply than demand over the last few years until 2014 by around 4 to 10 million sq ft. However, since the middle of 2013, commercial real estate developers began to strategically reduce the incoming supply to a new-normal level of occupier demand in the range of 27 to 30 million sq. ft. each year. This helped bring down the vacancy rate to 17% from more than 18.5% just a year ago, even though office real estate prices have largely failed to recover. In this sense, 2014 has been a turnaround year for commercial real estate. Interestingly, while office real estate have not recovered fully from the fall in prices post the economic slowdown, there is significant room for upside in the event of a positive change in business sentiment. In fact, such an improvement was already seen after the general elections and is already reflecting in year-end office market leases. The trend of improved leasing rates is expected to continue in 2015. Chart E plots the data for new additions, absorptions and vacancy in commercial real estate.

In 2014, the retail real estate sector was one of the biggest casualties to market conditions that increasingly favoured the online retail community, with the exclusion of wellmanaged and leasehold organised retail malls. Stratasold, poorly-managed, badly-located retail properties lost lustre as more retailers chose to avoid them.

2014 also saw a few of these malls either converting into Grade B office space or reeling under the compounding effect of rising vacancy rates. Vacancy in poorly-built and operated malls was as high as 20%, while good quality malls were relatively better off with about 10% of vacant space. The e-commerce frenzy that has been taking India by storm over the last two years was at its peak during 2014, and now poses a serious challenge to physical retailers and mall developers. The situation is compounded by the absence of adequate regulation on e-commerce in India currently.

However, a handful of mall developers have risen to this challenge by identifying key transitions that could help them sail through. The measures they have undertaken include a revamped tenant mix, adoption of the mixeduse format and delivering theme-based shopping experiences. These practices are now common in overseas markets, and Indian retail malls will be seen adapting to them more rapidly in 2015.

Overall, activity in the Indian real estate sector was low as key developers focused on reorganising their finances and streamlining to cater to a new market structure, which has much greater focus on affordable housing.

For most of its expansion, Unitech had been focusing on affordable housing since the global economic collapse of 2008. However, it still had large existing land assets and projects under execution that were not conducive to adopting the affordable housing model. These constituted a large part of the Company’s existing portfolio, whose execution has been affected due to a liquidity crunch. The Company has been structuring innovative financial models and stressing on improving execution to overcome the situation.

Clearly, Unitech is in a challenging phase of consolidation where it is reorienting its business, reducing its size of operations and working painstakingly to chart a gradual recovery. This is reflected in the financial performance.

Financial Review

Under these conditions, Unitech business performance was affected and the level of income achieved was not in line with the fixed costs of its large establishment.

Table 1 gives the Summarised Statement of Profit and Loss of the Company on consolidated basis.

The accounts are brpared according to the ‘percentage of completion’ method where revenues and costs are accounted for based on the progress of project execution. Given the fact that most of today’s sales are on construction linked plans, the launch of new projects and sales are a reflection of the order book, while project execution and delivery is what gets reported in the Statement of Profit and Loss.

The salient features of the performance are:

•Income from operations increased by 16.2% to Rs. 3,431.18 crore in 2014-15

• Consequently, EBIDTA (without other income and exceptional items) has increased significantly to Rs. 773.72 crore

• Profit after tax (before extraordinary items) was Rs. 828.06 crore, while net losses after accounting for extra-ordinary items and minority interests was Rs. (-)128.34 crore

• The Earnings per Share (EPS) for the 2014-15 was Rs. 3.30 before extraordinary items, and Rs. (-)0.49 after extra-ordinary items on an equity base of Rs. 523.26 crore

• Though the company’s net debt to equity ratio as at 31st March 2015 stands at a comfortable 0.58, its total quantum of consolidated debt of Rs. 6,332.4 crore puts brssure on cash flows due to servicing requirements.

During the year, two of the Company's affiliates transferred their economic interest in four IT SEZs/ Parks, which resulted in reduction of over Rs. 1,000 crores of consolideted debt and other liabilities. However, the extra-ordinary loss of Rs. 990.73 Crores due to the exit from the wireless business resulted in a net loss of Rs. 128.34 Crores. During the year, the Company extinguished all its liabilities and obligations related to wireless business to the tune of Rs. 1093.74 Crores. Going forward, the company shall have no liability in this regard.

From a continuing operations perspective most segments of the consolidated entity witnessed a reduction in revenues and profits. This is reflected in the segment performance given in Table 2.

Real Estate and Related Activiti es

In line with the trend in the last few years, given debrssed market conditions, Unitech focused on project delivery against launch and sale of new projects. In fact, since Q2, 2014-15, the Company has not launched any new projects and the total area sold in 2014-15 was almost half of what was sold in 2013-14. While the focus was on delivery, the Company has had to continuously grapple with cash flow and liquidity issues. Consequently, although completed area delivered increased marginally, revenues from this segment were down and at the PBIT level, the segment generated losses. Revenues from real estate reduced by (-) 24.3% from Rs. 2,347.27 crore in 2013-14 to Rs. 1,777.77 crore in 2014-15, while at the PBIT level, the Company generated Rs. (-)201.29 crore loss in 2014-15 against a profit of Rs. 119.88 crore in 2013-14.

The operational highlights in the real estate business for 2014-15 are:

• Delivered 3.16 million sq. ft. of completed area against 2.95 million sq ft of completed area in 2013-14

• Launched projects for total area of 0.64 million sq. ft.

• Achieved sales bookings of 1.3 million sq. ft.

• Total value of sales booked was Rs. 828 crore

Project Execution

Even though there was focus on the execution front, progress remained stymied due to liquidity crunch. Even then, the Company delivered more square feet in 2014-15 compared to 2013-14. In fact, the Company was successful in delivering 3.16 million sq. ft. during the year. Table 3 gives the details of the Company’s delivery status in FY 2015. By the end of 2014-15, handing over is in progress in 41 projects across various regions of the country.

As of 31st March 2015, a total of 37.49 mn sq. ft. of area is under development. Chart F gives the shares of total projects under execution in terms of the stages of development at the end of 2014-15. Of the total portfolio under execution, 51% of the projects were in the handover or finishing stages, 21% have their structure complete and internal work is in progress, 20% have piling finished and structure work is in progress, while for 8% land development activities are in progress.

New Project Launches and Sales

Unitech’s core strength in the real estate space is its large diversified pan India land base that gives the Company flexibility to develop various kinds of projects that are suitably designed to cater to the demand of the time. In the process, the company is careful in seeing to the fact that value creation is maximised.

With this philosophy, the Company has been developing a wide variety of properties that can be segmented differently. The segregation can be in terms of:

• Plots, low-rise, mid-rise and high-rise developments

• Suburban as well as city centre developments

• Low cost to luxury housing

Given the brvailing market conditions and the value generation capabilities of its land base, the Company reduced product launches and undertook a very few calibrated new project launches. As a result, the total area launched was 0.64 million sq. ft.

The Company’s traditional strength has been in the National Capital Region. It has a strong brsence in both Gurgaon and Noida. Over the years, the company has created good base in Kolkata and Chennai, and also developed affordable housing across Tier 2 cities. In 2014- 15, given a focus on affordable housing, major portion of the project launches were in cities other than the core cities. In fact, there were no launches in Kolkata and Delhi NCR, while 0.16 million sq. ft. was launched in Chennai.

In very difficult market conditions, Unitech managed to sell 1.3 million sq. ft. in 2014-15 with a total sales value of Rs. 828 crore.

Out of the total area sold in 2014-15, 0.31 million sq. ft. was sold in Gurgaon, 0.21 million sq. ft. in Noida and Greater Noida, 0.14 million sq. ft. in Chennai, 0.1 million sq. ft. in Kolkata and 0.54 million sq. ft. in other cities.

While the residential segment continued to dominate, its share in total sales in terms of area decreased from 73% in 2013-14 to 54% in 2014-15, while the proportion of non-residential sales increased from 27% in 2013-14 to 46% in 2014-15. However, the average realisation from the non-residential segment reduced from Rs. 8,700 per sq. ft. in 2013-14 to Rs. 7,233 per sq. ft. in 2014-15. For the residential segment the average realisation remained around Rs. 5,629 per sq. ft. in 2014-15.

In addition to the conventional sales channels, the Company continued to increasingly utilise digital media to promote sales and manage customers. Emphasis was also laid on strengthening the IT systems for supporting sales and CRM teams.

Construction

The Construction Division is being developed to primarily undertake in house civil construction for Unitech’s Real Estate Division for both residential and commercial projects. In addition to civil works, the division is also producing ready-mix concrete for captive consumption at its construction projects in Delhi NCR region. This is being done for maintaining high quality standards and timely delivery.

During 2014-15, the division continued to focus on strengthening the back end infrastructure of the division to improve the quality and output of the construction work. There was added thrust on restructuring the systems and procedures with periodic reviews to improve the overall working capabilities of the division.

The endeavour is to execute the work professionally, adhering to all established construction process manuals and complying with the applicable legal statutes. In fact, through this division, Unitech intends to establish and demonstrate best in class construction practices that need to be followed by all its construction contractors.

Currently the division is executing several residential and commercial projects in Delhi NCR and Chennai Region.

In line with the slowdown in overall pace of project execution at Unitech, the volume of work for this division reduced in 2014-15. However, with several projects under development, this is expected to increase in 2015-16.

Transmission Towers

Unitech Power Transmission Limited (UPTL), a subsidiary of the Company, is involved in the business of design, manufacturing and erection of transmission towers primarily for the power sector. This business is supported by a state-of-the-art manufacturing facility at Nagpur.

The wide range of services offered include site survey, soil investigation, access roads, foundations, tower design, tower testing, mobilization of manpower and equipment, testing and commissioning.

Key highlights of financial performance of UPTL during 2014-15 are:

• Total Income decreased by 24.79% from Rs. 389.38 crore in 2013-14 to Rs. 292.84 crore in 2014-15

• Profit before Interest and Tax (PBIT) was Rs. 19.17 crore in 2014-15 Against a total of 35,674 MT of towers and structures supplied in 2013-14, UPTL had a lower output in 2014- 15. In fact, it supplied during the year was 16,871 MT of towers and structures. The drop in production primarily because of major revamping of the galvanizing plant at the factory.

UPTL continued to aggressively pursue business development activities and despite severe market competition, it successfully secured the following projects worth around Rs. 400 crore in the recent past:

• Construction of 400 kV D/C (Triple Snow Bird Conductor) Darbhanga - Muzaffarpur Transmission Line worth Rs. 57.59 Crore from PAN India Infraprojects Private Limited (ESSEL GROUP)

• Construction of 400 kV D/C Kurukshetra - Malerkotla Transmission Line worth Rs. 74.88 Crore from PAN India Infraprojects Private Limited (ESSEL GROUP).

• Supply of Towers and other items for 66 kV Transmission line for NTPC, Lara for Super Thermal Power Project.

• Supply of towers for 132 kV Transmission Line Towers for Connection of Luangwa to the Grid, Zesco, Zambia.

• Construction of 55KM 400 kV D/C Quad Greater Noida to Pali Transmission Line on Turnkey basis worth Rs. 81.31 Crore from Uttar Pradesh Power Transmission Co. Ltd. (UPPTCL).

• Destringing and Stringing of Conductors for 400 kV D/C Farakka - Malda Transmission Line in association with Sterlite Technology Ltd. for PGCIL.

• Construction of 240 kms 220 kV / 132 kV SC/DC Transmission Lines on Turnkey basis worth Rs. 72.62 Crore from Uttar Pradesh Power Transmission Co. Ltd. (UPPTCL). Construction of 400 kV D/C Purulia - Ranchi Line worth Rs. 77.50 Crore from Sterlite Group With these orders in place, the Company has an unexecuted order book of around Rs. 450 crore as of 31st March 2015.

In view of the changed economic scenario and the Government’s thrust on the energy sector, the transmission and distribution segment (T&D) business is opening up in a big way. Estimates suggest that transmission line projects of more than Rs. 40,000 Crore are lined up by PGCIL, Electricity Boards and Private sector for bidding in 2015-16.

The Company is expected to grow its order book further and has already bid for projects worth Rs. 1,376 crore.

Hospitality

Elixir Hospitality Management Ltd. ("Elixir"), a subsidiary of Unitech, had five F&B Operations in IT SEZs located in Noida, Gurgaon and Kolkata during the year 2014- 15. Elixir was managing Food Courts and Institutional Catering for in house companies at different locations.

It had several brstigious clients like Bank of America, Amdocs, Mercer, Steria, Sapient & Barclays Bank. During the year, it expanded its operations and started operating a large Food Court at the IT SEZ in Gurgaon to service clients like AON and Accenture.

In April 2014, Elixir also took under its fold the operations of "THE DECK" at Unitech Golf and Country Club ("UGCC"), Noida, where apart from the Café for members and guests it opened out lawns for various functions like weddings, family & corporate events and annual days of companies.

Elixir along with UGCC also hosted a few Golf Tournaments for Members, Companies and Guests like the Oil India, Ryder Cup, Callaway Junior Golf Tournament, Rising Golf Junior Tournament, American School and Mahindra Golf Clinic which were well received by both the organizers and the players.

The Country Inn hotel on NH8 in Gurgaon has been operational since FY 2012. Another hotel – Courtyard in Noida is under construction. The strategy for the hospitality segment is to develop hotels to be managed by global operators for eventual monetization through exits to various investors.

Revenues from the hospitality division increased by 15.4% to Rs. 54.36 crore in 2014-15.

Amusement Parks

Entertainment City (NOIDA): The Entertainment city consisting of an amusement park including a water park and retail area sbrad over an area of 147.48 acres has completed 8 years of operations. This project (Noida SPV) is strategically located in the heart of NOIDA and is well connected with most parts of Delhi through Noida Link road, DND flyway and Delhi metro. With a world class shopping mall called “The Great India Place” which can easily fit into top five malls of the country in terms of the shopping area and the footfalls it receives annually, an amusement park having exciting rides for both adults and kids alike and the phenomenal water park which is the largest water park in north India, the project is one of its kind. The next phase of the retail component of the project named as “Gardens Galleria” with more than half a million square feet area of quality shopping destination including a boutique/ budget Hospitality facility would be ready and opened to public in FY 2016.

The Noida SPV has also tied-up with Imagination Edutainment India Pvt. Ltd. for having a ~ 96000 sq. ft. of indoor theme destination under brand name of Kidzania. PVR Ltd has signed an agreement with the company for setting up India’s biggest screen complex with 16-17 screens theatre. Both are expected to launch operations in 2016-17.

The total income of the SPV in 2014-15 was Rs. 222.12 crore. With new attractions coming up every year and still plenty of land available for future additions, Entertainment City surely is destined to become the most iconic brand in this industry in next few years.

Adventure Island and Metro Walk (Rohini):This amusement park cum shopping destination is sbrad over an area of 62 acres in North West Delhi. This project (Rohini SPV) is in its 9th year of operations. The project consists of a hugely successful amusement park called as Adventure Island and a picturesque shopping mall called as Metro Walk which is set aside a large man-made lake that divides the amusement park from the shopping complex.

The Rohini SPV is in the process of developing a water park on the lines of the hugely successful water park in Noida. It will be sbrad over an area on 7 acres. The initial drawings and land layout has been done. This water park is planned to be opened to public in FY 18. Also during he last financial year, Rohini SPV has acquired an old Airbus plane with a seating capacity of 210. The same will be placed on the lake with various attractions and will be commissioned in FY 16.

The total income of the SPV in 2014-15 was Rs. 45.47 crore.

Infrastructure Services

This includes property and facility management services and township management services.

QnS Facility Management Pvt. Ltd. ("QnS"), a subsidiary of Unitech, provides property management services to IT/ ITeS SEZs, commercial properties, residential properties, townships, retail developments and golf courses.

During FY 2015, QnS has embarked on certain water saving measures including utilization of grey water on all facilities, implementation of waterless urinals on various facilities, maintaining of rainwater harvesting system and recycling of grey water in construction projects as per required norms. Efficient energy management has already been implemented across facilities. QnS has successfully secured ISO certificate of its Facility Management process.

QnS has also taken advice on Global Best Practices with a view to upgrade & improve its operations. There has been particular emphasis on training across all levels of personnel. The standard operating systems and procedures have been evolved, documented in manuals and implemented.

Revenue from property management services was Rs. 377.84 Crores in FY 2015.

The focus of this business is to primarily grow with the Unitech’s portfolio along with acquiring some strategic third party facility management contracts. Five large IT/ITES SEZs that were under QnS management were handed over to Brookfield consequent to change in ownership of these SEZs. QnS added to its portfolio a large facility of 0.50 million square feet during the year.

Quality

Continuous upgrading and improvement of internal processes and systems is at the core of Unitech’s strategy to create competitive advantage. For this, it is very important to follow the best practices in terms of quality based management systems.

During the year, M/s TUV SUD South Asia Pvt Ltd. carried out the External ISO Surveillance Audit for Unitech Limited. Two days of gruelling audit covered not only project sites but also various corporate functions such as HR, CRM, Sales & Marketing, Finance, Land, Legal & Contracts. At the end of the audit, Unitech was recommended for continuation of validity of ISO: 9001:2008 Certificate.

M/s TUV has apbrciated Unitech Limited for good management initiatives like efficiency in design, value engineering, energy savings and labour welfare.

Human Resources

Human resource is critical to the success of any organisation. Accordingly, the Company lays strong emphasis on development of human resource. Training programs, both technical and managerial, are regularly conducted to enhance human potential. During the year, the Company also focussed on improving employee productivity.

Employee strength as of 31st March 2015 was 1215.

Corporate Social Responsibility

Over the years, Unitech has been actualizing various activities in order to contribute to society, where we live and work. Unitech has always been earnest for contributing towards the betterment of the society through various welfare initiatives and skill building training to empower communities.

Unitech’s CSR programme is being executed and implemented through its subsidiary Unitech Chandra Foundation under the name "Saankalp" extends its support to communities through various programs/initiatives that promote holistic development and sustainable growth. Saankalp’s key focus areas are Education, Healthcare, Environment and Community Outreach, Development & Welfare and will be foraying into Skill Development. Some of the key developments are as follows:

Community Outreach, Development and Welfare

Jammu & Kashmir Floods - Saankalp, organized a Relief Material Collection Drive for our fellow Indians impacted in the recent floods in Jammu and Kashmir. The Collection Drive was conducted across our offices and some project sites in NCR. We collected dry ration (food items like sugar, wheat-flour, rice, pulses etc) and ready to eat food. We partnered with two non-profit organizations ~ Ahmad and Haris Khan Charitable Trust, Srinagar and Responsenet which is working with the National Disaster Management Authority (NDMA) and Indigo Airlines for the transportation and distribution of the relief material to J&K. Blankets were also donated as a part of the reliefmaterial.

Nepal Earthquake - The Relief Material Collection Drive was organized by Saankalp, for those who were impacted by the Nepal Earthquakes in April 2015. The Collection Drive was conducted from May 6 to May 9, 2015 across all our offices in NCR. A total of around 530 Kgs of relief material comprising of dry-food items, medicines, blankets etc. were collected and dispatched, in two batches, through collaborations with National Disaster Management Authority (NDMA), Govt. of India and Federation of Indian Chambers of Commerce and Industry (FICCI).

Healthcare

We provide healthcare services, promote health awareness, and medical care to the socially and economically marginalized sections of society. In association with local Hospitals and NGOs, specialized medical camps are organized on a regular basis at the construction sites for the welfare of construction workers and their families.

7 Medical & Eye Care Camps were organized at Unitech Infospace, Sector-48, Gurgaon for the construction workers and their families in collaboration with the Service Wing of Sri Sathya Sai Organisation. These monthly camps were conducted mainly with the purpose of re-examination and monitoring so that health issues can be eradicated. A systematic record of patients was maintained for the same. Medicines and Spectacles were provided to the patients as per the need.

Energy Efficient Buildings

Two of our projects have been certified with LEED Gold Rating ~ Unitech Signature Towers II, Gurgaon & Infospace, Towers 3 & 4, Sector-48, Gurgaon. Most of our commercial developments in NCR are registered under LEED Core and Shell rating. Energy conservation measures are incorporated in building design, while construction waste is either reused or handed over to appropriate agencies.

Almost all our residential projects have rainwater harvesting, sewerage treatment plants as well as solar power panels for lighting, etc.

Awards & Accolades

Though recognition is not our objective, it is very humbling when our efforts are recognized.

Corporate Affairs Leadership Award 2015 – Unitech was recognized with ‘Corporate Affairs Leadership Award’ for Corporate Social Responsibility by the World CSR Congress on the World CSR Day.

Internal Controls and their Adequacy

Unitech has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition, and to ensure that all transactions are authorised, recorded and reported correctly and adequately.

The Company’s internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. The internal control is designed to ensure that financial and other records are reliable for brparing financial information and for maintaining accountability of assets. All financial and audit control systems are also reviewed by the Audit Committee of the Board of Directors of the company.

Risks and concerns

The Company is exposed to different types of risks such as credit risk, market risk (including liquidity risk, interest rate risk and foreign exchange risk), operational risk and legal risk. The Company monitors credit and market risks, as well as portfolio and operational risk through the oversight of senior management personnel in each of its business segments. Legal risk is subject to the review of the Company‘s legal department and external advisors. The Company is exposed to specific risks in connection with the management of investments and the environment within which it operates. The Company aims to understand, measure and monitor the various risks to which it is exposed and to ensure that it adheres, as far as reasonably and practically possible, to the policies and procedures established by it to mitigate these risks

Cautionary Statement

Statements in this Management Discussion and Analysis describing the company’s objectives, projections, estimates and expectations may be ‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those exbrssed or implied. Important developments that could affect the company’s operations include a downtrend in the real estate sector, significant changes in political and economic environment in India or key financial markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs.