AIR INDIA BOOK...HDFC Bank State Bank of India Bank of Baroda Dena Bank Bank of India Indian...
81
AIR INDIA CHARTERS LIMITED AICL
Transcript of AIR INDIA BOOK...HDFC Bank State Bank of India Bank of Baroda Dena Bank Bank of India Indian...
AIR INDIA CHARTERS LIMITED
AICL
AICL
CONTENTS
Page No.
1. Board of Directors 1
2. Directors’ Report 2
3. Comments of the Comptroller & Auditor General of India 25
4. Independent Auditors’ Report 26
5. Balance Sheet as at 31 March 2015 47
6. Statement of Profit & Loss for the year ended 31 March 2015 48
7. Cash Flow Statement 49
8. Notes forming part of the Financial Statements for the year ended 31 March 2015 50
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BOARD OF DIRECTORS (as on 29 DECEMBER 2015)
Shri Ashwani Lohani Chairman
Shri V. Hejmadi
Dr. (Smt.) Shefali Juneja
Smt. Puja Jindal
SECRETARY
Smt. Aditi Khandekar
AUDITORS
M/s. Kirtane & PanditChartered AccountantsMumbai.
LEGAL ADVISORS
M/s. Kini & Co.
BANKERS
ICICI BankHDFC BankState Bank of IndiaBank of BarodaDena BankBank of IndiaIndian Overseas Bank
REGISTERED OFFICE
21st Floor, Air India Building,Nariman Point,Mumbai 400 021.
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DIRECTORS' REPORT 2014-15
The Directors take pleasure in presenting the 44th Annual Report of the Company together with the Audited Accounts and Auditor's Report for the year ended 31 March 2015.
INDIAN CIVIL AVIATION SCENARIO
Financial year 2014-15 has been a very satisfactory one for most airlines in India including Air India Express as nd
the year saw progressive decline in fuel rates starting from the middle of the 2 Quarter leading to lower fares and increased demand. As per the air traffic statistics published by the DGCA, India, the Indian domestic air market registered growth of about 10.5% in the year 2014, with the domestic passenger traffic rising from about 60.1 million in 2013 to about 66.4 million in 2014 while the international traffic to and from India estimated at about 46.3 million in 2014-15, also registering a growth of about 9% over the 2013-14 level. In this connection, it is pertinent to note that the eight countries to which Air India Express operates contribute to about 50% of the total traffic to and from India. Furthermore, the air market on the routes between the countries served by Air India Express and India grew at a far higher rate of over 14% in the year 2014-15.
In a forecast report released in 2013, IATA had estimated that the international traffic to and from India would grow at CAGR of 6.6% between 2013 and 2020. The forecast for the on-line markets of Air India Express upto 2020 was well above the national average, ranging between 7 and 8%. Going by the actual growth seen in 2014-15 and in the current financial year up to August 2015, the traffic growth in these markets could well end up closer to double digit. Responding to the opportunities presented by the markets between Kerala and destinations in the Gulf region, the larger Indian private carriers such as Indigo, Jet Airways and Spice jet and Etihad have commenced competitive direct international flights to the Gulf from Airports in Kerala – Kochi and Kozhikode effective Winter 2014-15 schedule. They have further added to their presence in these markets in the Summer 2015 schedule.
Air India Express would be in a position to take advantage of the growing opportunities in the international markets to / from India with the induction of 6 dry leased aircraft in its fleet. The dry leased aircraft are scheduled to be delivered to the Airline between March and November 2016.
REVIEW OF PERFORMANCE
For the first time in the history of AICL, the Company has recorded an Operating Profit of Rs. 662.12 crores (before Revenue Sharing) besides generating a Cash profit of Rs. 172.49 crores (as against a net loss of Rs. 345.32 crores in FY 2013-14) mainly through increased revenue of Rs. 257.01 crores during FY 2014-15. The company has doubled the Cargo Revenue in the current fiscal over the previous year and also surpassed the excess baggage revenue by 39.22 % compared to previous year. The Scheduled Services Revenue, before revenue sharing with AI, increased substantially from Rs. 2,359.45 crores in 2013-14 to Rs. 2,616.46 crores in 2014-15, representing an increase of 10.8%. The total expenditure of the Company was Rs. 2,356.12 crores as against Rs. 2,412.43 crores for the year 2013-14, representing a decrease of 2.33 %.
The turnaround in the financial performance of the Company may be attributed to more intense asset / resource utilization, greater operational efficiency, robust demand, lower ATF costs and elimination of lease rentals.
In the year 2014-15 the demand on the routes served by Air India Express was strong enough to enable the Airline to not only improve the passenger load factor but achieve significant improvement in yield. The Company has also achieved “Excellent” Grade as per the MoU parameters defined for the year 2014-15.
SUMMARISED FINANCIAL PERFORMANCE Rupees in crores Operating Revenue (before Rev. Sharing) 2,621.88
Operating Expenses 1,959.76Operating Profit (before Revenue Sharing) 662.12
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Operating Revenue (after Revenue Sharing) 2,294.82Operating Expenses 1,959.76Operating Profit (after Revenue Sharing) 335.06
Total Revenue 2,294.96
Total Expenses 2,356.12Loss before taxation & Exceptional Items 61.16
Less: Exceptional Items (0.13) Provision for Taxation - Net Loss 61.03
Add: Balance brought forward from previous years 2,404.90
Net Loss carried forward 2,465.93
Cash Profit of AICL for 2014-15 172.49 SUMMARISED PHYSICAL / REVENUE PERFORMANCE (FY 2014-15 Vs. FY 2013-14)
APR-MAR 2014-15 APR-MAR 2013-14 Variance
ASK (million) 8,161 8,121 0.5%
Carriage (million) 2.62 2.72 -3.7%
RPK (millions) 6,639 6,396 3.8% Load Factor (%) 81.4% 78.8% 3.3%
Revenue (Rs. Cr.) 2,560 2,287 11.9%
Yield/RPK (Rs) 3.82 3.62 5.5%
RASK (Rs.) 3.11 2.81 10.7%
Flying Hours 66,620.63 67,316.00 -1.0%
SHARE CAPITAL
Authorised Share Capital
As on 31 March 2015, the Authorised Capital of the Company was Rs.800 crores divided into 8 Crores Equity Shares of Rs.100 each.
Issued, Subscribed and Paid up Share Capital
As on 31 March 2015, the Issued, Subscribed and Paid up Share Capital of the Company was Rs.780 crores divided into 7.8 Crores Equity Shares of Rs.100 each.
AIRCRAFT FINANCING
As on 31 March 2015, the position of foreign currency borrowing for Aircraft was as under: Rupees in Cr.
Total Loan due as on 1April 2014 2,008.05Less: Amount repaid during April 2014 to March 2015 (319.48)Add: Exchange adjustments due to revision in rates of currencies 79.13Balance as on 31 March 2015 1,767.70
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AIR INDIA EXPRESS OPERATIONS
Fleet Size
As on 31 March 2015 the Airline's fleet strength stood reduced from 21 to 17 B737-800 aircraft, as 4 leased aircraft were grounded to prepare them for return to the lessors.
Operations
Despite a reduction of nearly 20% in the Airline's fleet size, there was only a marginal (1%) decline in the number of flying hours in FY 2015. As a result, the average daily utilization of the aircraft on the Airline's fleet went up sharply from 8.9 hours per day to 10.5 hours per day in Summer 2014 and further to 10.7 hours per day in the Winter 2013-14 Schedule. The number of weekly services operated by the Airline rose from 159 to 165 round-trip flights/week. With concerted focus on increasing resource utilization and judicious rationalization of domestic services, the Airline was able to restore the direct services between Mangalore and Kuwait besides improving the timings / increasing frequency of flights in several of its core markets.
Summer 2014 schedule
Between 1 May and 20 July 2014, Notice to Airmen NOTAM) issued at Dubai International Airport had resulted (in partial closure of the runway at that airport. Air India Express was able to obtain alternative slots at Sharjah International Airport and thereby continued its scheduled services from Tiruchirapalli, Amritsar, Lucknow, Pune, Jaipur and Mangalore.
The Summer 2014 schedule comprised of 149 international flights and 11 domestic flights. The average aircraft utilization was approximately 10.5 hours per day per aircraft.
Winter 2014 schedule
In the Winter Schedule aircraft rotations were further rationalized so as to increase aircraft utilization and cater to the traffic demands for direct links / increased frequencies. The notable highlights of the Winter 2013-14 Schedule were as follows:
l Kochi/Muscat/Kochi – Frequency of flights increased to 4 flights per week from 3 flights per week.
l Trivandrum/Muscat/Trivandrum – Frequency of flights increased to 4 flights per week from 3 flights per week.
l Mangalore / Abu Dhabi – Muscat/Mangalore - Frequency of flights increased to 4 flights per week from 3 flights per week.
l Mangalore/Doha/Bahrain/Mangalore - These flights have been restructured to operate 2 non-stop flights per week between Mangalore and Doha and 3 non-stop flights per week from Mangalore to Bahrain extended in round-robin fashion to Kuwait. This schedule initiative helped to meet the legitimate and increasingly strident demand for restoring direct air links between Mangalore and Kuwait.
l Kozhikode / Doha/ Kozhikode – Two additional terminator flights per week in addition to the daily flight operated on the Kochi / Kozhikode/Bahrain /Doha / Kozhikode / Kochi route.
l Mumbai / Doha / Mumbai – Frequency of flights increased to 4 flights per week from 3 flights per week.
The route-wise breakup of the flights operated by the Airline at the end of the Winter 2014-15 schedule was as under:
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Sr.No. Sector Flights / week
01 India/Dubai 61
02 India/Abu Dhabi 21
03 India/Sharjah 18
04 India/Abu Dhabi/Muscat 04
05 India/Muscat 15
06 India/Dammam 04
07 India/Doha/Bahrain 07
08 India/Doha 08
09 India/Al Ain 01
10 India/Salalah 01
11 India/Kuwait 03
12 India/Bahrain/Kuwait/India 03
13 India/Singapore 07
14 India/Kuala Lumpur 04
15 Domestic 08
TOTAL 165
On Line Stations
As on 31 March 2015 the online stations were as under:
India Kozhikode, Kochi, Thiruvananthapuram, Mangalore, Chennai, Tiruchirapalli, Mumbai, Pune, Amritsar, Lucknow, Jaipur.
Foreign Dubai, Abu Dhabi, Sharjah , Al Ain, Muscat, Salalah, Bahrain, Doha, Kuwait, Dammam, Singapore, Kuala Lumpur.
Capacity offered, PLF, Yields and Revenues
Due to the non-availability of 4 leased aircraft that had been grounded during the last quarter of FY 2013-14, the schedule in FY 2014-15 was operated with 17 owned B 737 – 800 aircraft. Despite this, the Airline achieved a nominal increase of 0.5% in the capacity offered as compared to the level achieved in FY 2013-14. However, there was a marginal decline in the number of passengers carried - 2.62 million in FY 2014-15 as against 2.68 million in FY 2013-14. The decline of about 2.2% in the number of passengers carried was also partially due to increase in average stage length as some of the capacity deployed on domestic services were moved to international routes giving rise to a reduction in the number of seats offered although the capacity in terms of ASK rose marginally by 0.5%.
Favorable market conditions in terms of both demand and supply coupled with improved schedule reliability and on-time performance enabled the Airline to achieve higher Passenger Load Factor (PLF) and higher yields. While the PLF increased by 3.3% from 78.8% in 2013-14 to 81.4% in 2014-15; the Yield per RPK rose by 5%
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from Rs. 3.62 to Rs. 3.80. Consequently the passenger revenue including revenues on-line earned through sales of excess baggage and preferred seats increased by 11.9% from Rs. 2,287 crores achieved in 2013-14 to Rs. 2,560 crores in 2014-15.
Notable service improvements implemented during the year, include the following:
Launch of call center facility, appointment of representative agents in key foreign markets and introduction of on-line advance seat reservation facility to passengers.
With unwavering focus on improving productivity and efficiency, the Airline has been able to further improve its operations / performance during the period April – August 2015 as compared to the results achieved during the same period last year. The average aircraft utilization has risen to about 11.5 hours per day with no adverse impact on schedule reliability which has been retained at the high levels of well over 99%. As a result the Airline has achieved a 9% increase in the capacity offered and a proportionate increase of 9% in passenger revenues.
Aircraft despatch reliability
The aircraft despatch reliability for FY 2014-15 was 99.85%.
HUMAN RESOURCES
Staff Strength
The staff strength as on 31 March 2015 was as under:
SC 220
ST 92
OBC 224
General 606
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TOTAL 1142 ======
In addition to the above there were 261 employees (Pilots, Engineers and Ground Staff) on deputation from the holding Company, Air India Limited.
As on 1 January 2015 there was one employee with disabilities in the services of the Company.
IMPLEMENTATION OF OFFICIAL LANGUAGE
The Company is taking effective steps for the implementation of the provisions of the Official Language Act and Rules framed under the Act.
VIGILANCE
During the year under review there was no vigilance case in the Company.
DISCLOSURE OF PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is set out in the Annexure to the Directors' Report.
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COMPLIANCE WITH THE RTI ACT, 2005
During the year 29 cases of requests were received. Out of these, 21 cases were replied to.
COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL ) ACT, 2013
In line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, an Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees ( permanent, contractual, temporary & trainees) are covered under this policy.
During the year 2014-15 one complaint of sexual harassment was received on 20 March 2015 and the same was under consideration of the ICC.
AUDITORS
The Comptroller & Auditor General of India has appointed M/s Kirtane & Pandit, Mumbai as Statutory Auditors of the Company for the financial year 2014-15.
COMMENTS OF COMPTROLLER AND AUDITOR GENERAL
The Comments of the Comptroller and Auditor General of India under Section 143(6) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 March 2015 are annexed to this report.
CORPORATE GOVERNANCE
A Report on Corporate Governance is annexed at Annexure A.
DIRECTORS' RESPONSIBILITY STATEMENT
(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures ;
(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;
(iv) The Directors have prepared the Annual Accounts on a 'going concern' basis.
ACKNOWLEDGEMENTS
The Board sincerely appreciates the Company's valued customers in India and abroad for using the services of Air India Express and looks forward to their continued support and confidence.
The Board also gratefully acknowledges the support and guidance received from parent Company viz. Air India Ltd., various Ministries of the Government of India and the Ministry of Civil Aviation in particular, in Company's
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operations and development plans. The Board expresses their grateful thanks also to the DGCA, Comptroller and Auditor General of India, the Ministry of Corporate Affairs, the Statutory Auditors, Airports Authority of India, other Govt. Departments, airlines, agents, Indian Financial Institutions and banks including the EXIM bank of USA.
For & on behalf of the Board
(Ashwani Lohani) Chairman
Place : Delhi
Dated : 14 January 2016
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ANNEXURE A
REPORT ON CORPORATE GOVERNANCE
1. BOARD OF DIRECTORS
As per the Articles of Association of the Company, the number of Directors shall not be less than three and not more than fourteen.
BOARD OF DIRECTORS AS ON 31 MARCH 2015
Shri Rohit Nandan Chairman Dr Shefali Juneja Director, Ministry of Civil AviationSmt Puja Jindal Director, Ministry of Civil AviationShri S. Venkat Director (Finance), Air India Ltd.
During the year, all meetings of the Board were chaired by the Chairman .The Board met four times during the year to periodically review the performance of the Company and to discuss important issues which inter alia included Lease Return of ILFC aircraft, Dry Lease of Aircraft, Cabin Crew-Salary & Career Progression, Appointment of Key Managerial Personnel & Secretarial Auditor, etc.
Details regarding the Board Meetings, Annual General Meeting, Directors' attendance thereat, Directorships and Committee positions held by the Directors are as under :
Board Meetings :
Four Board Meetings were held during the financial year 2014-15 on the following dates:
th25 June 2014 (194 Meeting)
th25 November 2014 (195 Meeting)th
06 February 2015 (196 Meeting)th27 March 2015 (197 Meeting)
Particulars of Directors including their attendance at the Board/Shareholders' Meetings during the financial year 2014-15
Name of the Academic Attendance Details of Directorships Memberships Director Qualifications out of 4 Board held in other Companies held in Committees Meetings
Non Executive Directors (Ex officio)
Shri Rohit Post 4 Chairman & Managing MemberNandan Graduation Director Audit CommitteeCMD – in History & Air India LimitedAir India Ltd. MBA from Part-Time Chairman UK Air India Air TransportChairman Services Ltd. Air India Engineering Services Ltd.
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Name of the Academic Attendance Details of Directorships Memberships Director Qualifications out of 4 Board held in other Companies held in Committees Meetings
Airline Allied Services Ltd Hotel Corporation of India Ltd. Air India SATS Airport Services Pvt. Ltd.
Director Air Mauritius Limited Air Mauritius Holdings Limited
Shri S Venkat B.Com,FCA, 3 Director MemberDirector – FCWA,FCS& Air India Ltd Audit CommitteeFinance CPA(US) Air India Air Transport Air India Ltd. Services Ltd Air India Engineering Services Ltd Airline Allied Services Ltd Hotel Corporation of India Ltd Air India SATS Airport Services Pvt Ltd
Dr Shefali Juneja M.A M(Phil) 1 Airline Allied Services ChairmanDirector, Phd. Ltd. Audit CommitteeMinistry of Civil Aviation
Smt Puja Jindal Post 4 Director MemberDirector, Graduate Airline Allied Services HR CommitteeMinistry of Civil Ltd.Aviation Pawan Hans Helicopters Limited
2. AUDIT COMMITTEE
As part of the Corporate Governance process and in compliance with the povisions of the Companies Act 2013 and DPE Guidelines, the Audit Committee of the Board has been constituted.
As on 31 March 2015 the following were the members of the Audit Committee :
Dr Shefali Juneja ChairpersonShri Rohit Nandan MemberShri S Venkat MemberSmt Puja Jindal Member
The Terms of Reference of the Audit Committee are:
l To recommend for appointment, remuneration and terms of appointment of auditors of the company;
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l To review and monitor the auditor's independence and performance, and effectiveness of audit process;
l To discuss with the external auditor, before the audit commences, the nature and scope of the audit and to ensure coordination where more than one audit firm is involved;
l To review the Internal Audit program & ensure co-ordination between the Internal & External Auditors as well as determine whether the Internal Audit function is commensurate with the size and nature of the Airlines Business and is provided adequate resources and representation within the company;
l To review/examine the half-yearly and annual financial statements and the auditors' report thereon;
l To discuss problems and reservations arising from the interim and final audits and any matter that the auditor may wish to discuss in the absence of Management where necessary;
l To review the Statutory Auditor's Report, Management's response thereto and to take steps to ensure implementation of the recommendations of the Statutory Auditors ;
l Approval or any subsequent modification of transactions of the company with related parties;
l Scrutiny of inter-corporate loans and investments;
l Valuation of undertakings or assets of the company, wherever it is necessary;
l Evaluation of internal financial controls and risk management systems;
l Monitoring the end use of funds raised through public offers and related matters;
l To consider other matters as defined by the Board.
The Audit Committee met two times during the year to review various issues including inter alia annual accounts of the Company for the year before submission to the Board, on the following dates :
th25 November 2014 (16 Meeting)
th06 February 2015 (17 Meeting)
Attendance at the Audit Committee Meetings
Name of the Member No. of Meetings Attended
Dr Shefali Juneja, Chairman 1Shri Rohit Nandan, Member 2Shri S Venkat, Member 2Smt Puja Jindal 2
3. ANNUAL GENERAL MEETINGS DURING THE LAST THREE YEARS
The details of these meetings are given below :
Date and time of the Meeting Venue
st nd41 Annual General Meeting 19 December 2012 At 1200 hrs Conference Room, 22 Floor, Air India Building, Nariman Point, Mumbai-400 021.
nd nd42 Annual General Meeting 23 December 2013 At 1630 hrs Conference Room, 22 Floor, Air India Building, Nariman Point, Mumbai-400 021.
nd43rd Annual General Meeting 19 December 2014 At 1400 hrs Conference Room, 22 Floor, Air India Building, Nariman Point, Mumbai-400 021.
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4. SECRETARIAL AUDIT:
Pursuant to the provisions of section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Vijay Sonone & Company, Practicing Company Secretaries, Mumbai, to conduct Secretarial Audit for the financial year 2014-2015.
The Secretarial Audit Report for the financial year ended 31 March, 2015 is annexed to this report.
The Managements' Comments on Secretarial Auditors' observations are as under:
Observations Management's Comments
Air India Charters Limited (AICL) is a wholly owned Subsidiary of Air India Limited (AIL), a Government Company. As per Article 22 of the Articles of Association of the Company, all the Directors of the Company are appointed by AIL in consultation with the Government of India.
AICL has requested AI to nominate at least two Independent Directors on its Board and the reply from AI is awaited.
As per the provisions of Section 177(2) of the Companies Act, Audit Committee shall consist of a minimum of three Directors with Independent Directors forming a majority. As required under section 178, the Nomination and Remuneration Committee should consist of 3 or more Non Executive Directors out of which not less than one half should be Independent Directors.
Presently there is no Independent Director on the Board of AICL and the matter has been taken up with AI.
As required under section 135, the CSR committee should consist of 3 Directors out of which at least one should be Independent Director. Presently there is no Independent Director on the Board of AICL. Further the Company has not earned profits for the past 3 years. In view of this the CSR committee has not been constituted.
The Company has not appointed Independent Directors as required under the provisions of Section 149(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and hence, no meeting of the Independent Directors could be held during the Audit Period.
Since the Company has not appointed Independent Directors, the Company has not complied with the provisions of Section 177(2) and Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 as regards the composition of the Audit Committee and the Nomination and Remuneration Committee of the Board.
The Company has not constituted a Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 and hence, no meeting of the Corporate Social Responsibility Committee could be held during the Audit Period.
5. EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 the extract of annual return in form MGT 9 is also annexed.
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Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Director's Report for the year ended 31 March 2015 list of staff whose salary exceeds Rs. 5,00,000 a month or Rs.60,00,000 annually.
S. Employee Name Remune- Designation Age Exp. Qualification Date of Last EmploymentNo Number ration in Years Joining Rupees
1 85001047 Sunny Sharad Asaldekar 7,746,647 Instructor 33 10 B.COM 24.11.2004 N.A.
2 85001048 Sajneesh Sharma 6,837,589 Check pilot 39 10 HSC 24.11.2004 N.A.
3 85001049 Dheeraj Malviya 5,898,240 Captain 39 10 BA (ELEC.) 24.11.2004 FRESH
4 85001050 Brijesh Rambhai Rathod 6,686,918 Check pilot 39 10 HSC 24.11.2004 N.A.
5 85001051 V.S. Rajkumar 7,437,462 Instructor 39 10 B.SC 24.11.2004 CONTINENTAL WINES LTD.
6 85001052 Nirmal Jeet Singh 7,316,986 Check pilot 41 10 M.SC 14.12.2004 INDIAN NAVY
7 85001053 Dhiraj Rai Gupta 8,355,787 Examiner 55 10 M.SC 14.12.2004 INDIAN AIR FORCE
8 85001055 Om Kumar Singh 6,898,672 Check pilot 32 10 HSC 01.06.2005 N.A.
9 85001056 Syed Abu Thaher 7,459,387 Check pilot 39 10 B.SC 01.06.2005 N.A.
10 85001057 Harish Gupta 6,352,410 Captain 43 10 HSC 01.06.2005 ALLIANCE AIR
11 85001059 Ashish Gangurde 6,971,468 Check pilot 41 10 SSC 27.06.2005 BSF
12 85001060 Agraj Singh 5,885,435 Captain 38 10 HSC 26.07.2005 FRESH
13 85001062 Satinder Jit Singh 6,381,738 Captain 53 9 SSC 19.12.2005 BSF
14 85001064 Kushal Sharad Asaldekar 7,886,941 Instructor 31 9 BCOM 09.01.2006 N.A.
15 85001065 Nikhil N. Mane 5,914,282 Captain 31 9 BSC (AVIA.) 03.02.2006 FRESH
16 85001066 Akshay Kumar 5,994,282 Captain 32 9 BSC (AVIA.) 03.02.2006 FRESH
17 85001068 Kanak Chaturvedi 6,467,322 Captain 38 9 B.SC 21.08.2006 INDIAN COAST GUARD
18 85001069 Sandip Raja Sekaran 5,874,282 Captain 32 6 HSC 27.04.2009 JET AIRWAYS
19 85001095 A. Kochhar 6,950,676 Check pilot 50 10 B.TECH 11.04.2005 AIR SAHARA
20 85001096 Sharad Dogra 7,832,849 Examiner 42 10 HSC 22.04.2005 AIR SAHARA
21 85001097 Sameer Dogra 7,827,210 Examiner 40 9 HSC 01.03.2006 AIR SAHARA
22 85001098 Anand Kumar 7,960,319 Captain 45 9 B.SC 12.07.2006 AIR SAHARA
23 85001099 G. S. Sidhu 7,139,196 Check pilot 57 9 SSC 13.07.2006 ALLIANCE AIR
24 85001100 R P Singh 8,891,285 Examiner 53 9 M.SC 03.10.2006 INDIAN NAVY
25 85001102 Alok Nayak 6,478,973 Captain 52 8 B.A. 01.07.2007 INDIAN NAVY
26 85001103 Aju Cherian 6,573,736 Captain 54 8 B.SC 16.07.2007 INDIGO
27 85001107 Devender Singh Jain 6,218,365 Captain 60 8 M.SC 05.11.2007 INDIAN AIR FORCE
28 85001109 Rajesh Sobti 5,899,431 Captain 62 8 MSC 05.11.2007 INDIAN AIR FORCE
29 85001111 Jatinder Singh Dhillon 5,929,675 Captain 62 7 N.A 11.02.2008 INDIAN AIR FORCE
30 85001112 Jacob Paul 6,221,085 Captain 60 7 MPHIL, DEF. 11.02.2008 INDIAN AIR FORCE
31 85001113 Vikas Yajurvedi 5,893,270 Captain 64 7 MSC. DEF. 11.02.2008 INDIAN AIR FORCE
32 85001119 Pankul Nag 6,185,626 Captain 51 6 B.A. 06.01.2009 INDIAN NAVY
33 85001120 Kapil Gupta 8,444,057 Instructor 42 6 M.SC 05.05.2009 INDIAN AIR FORCE
34 85001121 Bindu Sebastian 6,116,507 Captain 44 6 HR 08.06.2009 INDIAN AIR FORCE
35 85001122 Gautam Sarma 6,013,468 Captain 56 5 GRADUATE 02.09.2010 INDIAN AIR FORCE
36 85001123 Javed Ahmad 5,322,669 Captain 64 3 BSC SCIE. 14.11.2011 ALLIANCE AIR
37 85001156 V. D. Kulkarni 7,370,874 Captain 61 3 B.SC 02.03.2012 AIR INDIA
38 85001199 V.S. Manoj Kumar 6,109,582 Captain 43 10 BSC CHEM. 01.06.2005 FRESH
39 85001217 Gurudarshan Kaur Sandhu 5,728,293 Captain 37 10 BSC (AVIA.) 24.11.2004 FRESH
40 85001235 Kavita Devanpalli 6,259,382 Captain 39 10 BSC 14.12.2004 FRESH
41 85001240 Amit Pandey 5,769,190 Captain 47 2 N.A 01.10.2013 N.A.
42 85001286 Deepak Vasant Sathe 5,326,101 Captain 54 2 N.A 01.10.2013 AIR INDIA
43 85001287 Arun Varghese 7,063,685 Captain 31 2 N.A 01.10.2013 AIR INDIA
44 85001288 Tanya Anand 6,582,369 Captain 27 2 N.A 01.10.2013 AIR INDIA
45 85001289 Anish Nair 6,596,820 Captain 40 2 N.A 01.10.2013 AIR INDIA
46 85001290 Gaurav Balkawde 8,712,857 Captain 27 2 N.A 01.10.2013 AIR INDIA
ANNEXURE
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SECRETARIAL AUDIT REPORT
STFOR THE FINANCIAL YEAR ENDED 31 MARCH, 2015
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,The Members,Air India Charters Limited,CIN-U62100MH1971GOI015328
st21 Floor, Air India Bldg.,Nariman Point, Mumbai -400021
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Air India Charters Limited [CIN-U62100MH1971GOI015328] (hereinafter called 'the Company').Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit and as per the explanations given to me and the representation made by the Management, I hereby report that in my opinion, the Company has, during the
stAudit Period covering the financial year ended on 31 March, 2015 ('Audit Period') generally complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the stCompany for the financial year ended on 31 March, 2015 according to the applicable provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder (In so far as they are applicable);
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder (Not applicable to the Company during the Audit Period);
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (Not applicable to the Company during the Audit Period);
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (Not applicable to the Company during the Audit Period);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Not applicable to the Company during the Audit Period);
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (Not applicable to the Company during the Audit Period);
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to the Company during the Audit Period);
AICL
15
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (Not applicable to the Company during the Audit Period);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client (Not applicable to the Company during the Audit Period);
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit Period); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to the Company during the Audit Period);
Having regard to the compliance system prevailing in the Company and on the basis of the Compliance Certificates/Management Representation Letters issued by the designated officers of the Company, the Company has complied with the following laws applicable specifically to the Company:
(a) Aircraft Act, 1934;
(b) Carriage by Air Act 1972;
(c) The Aircraft (Carriage of Dangerous Goods) Rules, 2003;
(d) Civil Aviation Requirements issued by DGCA.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India (Not applicable to the Company during the Audit Period).
(ii) The Listing Agreements entered into by the Company with Stock Exchange(s) (Not applicable to the Company);
During the Audit Period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:
i. The Company has not appointed Independent Directors as required under the provisions of Section 149(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and hence, no meeting of the Independent Directors could be held during the Audit Period.
ii. Since the Company has not appointed Independent Directors, the Company has not complied with the provisions of Section 177(2) and Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 as regards the composition of the Audit Committee and the Nomination and Remuneration Committee of the Board.
iii. The Company has not constituted a Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 and hence, no meeting of the Corporate Social Responsibility Committee could be held during the Audit Period.
I further report, that the compliance by the Company of applicable financial laws, like direct and indirect tax laws, has not been reviewed in this Audit since the same have been subject to review by statutory financial audit and other designated professionals;
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16
Subject to what is stated herein above as regards the appointment of Independent Directors, the changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the Board Meetings, as represented by the Management, were taken unanimously.
As represented and explained to us, I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period, there are no specific events / actions having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.
Vijay B. SononeCompany Secretary in Practice
FCS No: 7301Certificate of Practice No: 7991
Mumbai
th 20 November, 2015
This Report is to be read with our letter of even date which is annexed as 'Appendix A' and forms an integral part of this report.
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17
'Appendix A’
To,The Members,Air India Charters Limited,CIN-U62100MH1971GOI015328
st21 Floor, Air India Bldg.,Nariman Point, Mumbai -400021
My report of even date is to be read along with this letter.
1. The maintenance of the secretarial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test check basis to ensure that the correct facts are reflected in the secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of the financial records and books of accounts of the Company.
4. Where ever required, I have obtained the Management Representations about the compliance of laws, rules and regulations and occurance of events etc.
5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. My examination was limited to the verification of procedures on test check basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
Vijay B. Sonone
Company Secretary in Practice
FCS No: 7301Certificate of Practice No: 7991
Mumbaith
20 November, 2015
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Annexure to Directors' Report for the year 2014-15
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2015
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management & Administration) Rules, 2014.
I.
REGISTRATION & OTHER DETAILS:
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities
contributing 10 % or more of the total turnover of the company shall be stated) -
1.
1.
CIN U62100MH1971GOI015328
2. Registration Date 9 September 1971
3. Name of the Company AIR INDIA CHARTERS LIMITED (AICL)
4. Category/Sub-category of the Company
Government Company
5. Address of the Registered office & contact details
21 Floor, Air India Building, Nariman Point, Mumbai -400021. Ph.No : 022-22796666.
6. Whether listed company No
7. Name, Address & contact details of the Registrar & Transfer Agent, if any.
N.A.
Sr No
Name and Description of main products / services
NIC Code of the
Product/ Service
% to total turnover of
the Company
To establish, maintain and operate international and domestic air transport services, scheduled and non scheduled, in all the countries of the world for the carriage of passengers, meals and freight and for any other purposes.
511 100
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:
Sr. No.
Name and Address of the Company
CIN/GIN
Holding / Subsidiary / Associate
% of
Shares
Applicable Section
1 Air India Limited 113, Airlines House, Gurudwara Rakabganj Road, New Delhi, 110 001.
U62200DL2007GOI161431
Holding
100%
2 (46)
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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) : Category-wise Share Holding
Category of Shareholders
No. of Shares held at the beginning of the year [As on 01-04-2014]
No. of Shares held at the end of
the year [As on 31-03-2015]
% Change during
the year
Demat
Physical during
the year % of Total
Shares
Demat
Physical
Total % of Total
Shares
A. Promoters
(1) Indian
a)
Individual/ HUF
b)
Central Govt
c)
State Govt(s)
d)
Bodies Corp.
-
30,00,000
30,00,000
100
-
7,80,00,000
7,80,00,000
100
e)
Banks / FI
f)
Any other
Total shareholding of Promoter (A)
30,00,000
30,00,000
100
-
7,80,00,000
7,80,00,000
100
B.
Public
Shareholding
Not Applicable
1.
Institutions
a)
Mutual Funds/UTI
b)
Banks / FI
c)
Central Govt.
d)
State Govt.(s)
e)
Venture Capital
Funds
f)
Insurance
Companies
g)
FIIs
h) Foreign Venture
Capital Funds
i) Others (specify)
Foreign Banks
Sub-total (B)(1):-
-
-
-
-
-
-
-
-
-
Category of Shareholders
No. of Shares held at the beginning of the year [As on 01-04-2014]
No. of Shares held at the end of the year [As on 31-03-2015]
% Change during
the year
Demat
Physical
Total
% of Total Share
s
Demat
Physical
Total
% of Total Share
s 2. Non-Institutions Not Applicable
a) Bodies Corp. (Market Maker + LLP)
i) Indian
ii) Overseas
b) Individuals
i) Individual
shareholders holding nominal share capital upto Rs. 1 lakh
ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh
c)
Others (specify)
i)
Non Resident
Indians
ii)
Non Resident
Indians -
Non
Repatriable
iii)
Office Bearers
iv)
Directors
v)
HUF
vi)
Overseas
Corporate Bodies
vii)
Foreign Nationals
viii) Clearing Members
ix) Trusts
x)
Foreign Bodies -
R
R
Sub-total (B)(2):-
-
-
-
-
-
-
-
-
-
Total Public Shareholding (B) = (B)(1)+ (B)(2)
-
-
-
-
-
-
-
-
-
C. Shares held by
Custodian for
GDRs &
ADRs
-
-
-
-
-
-
-
-
-
Grand Total (A+B+C)
30,00,000
30,00,000
100
7,80,00,000
7,80,00,000
100
AICL
20
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21
B) Shareholding of Promoter-
C)
Change in Promoters' Shareholding (please specify, if there is no change)
D)
Sr
No.
Particulars
Shareholding at the beginning of the year
Cumulative Shareholding at end of the year
No. of shares
% of total shares of
the company
No. of shares
% of total shares of
the company
At the beginning of the year
Air India Limited
30,00,000
100
30,00,000
At the end of the year
Air India Limited
7,80,00,000
100
7,80,00,000
Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sr
No Shareholder's
Name
Shareholding at the beginning of
the year Shareholding at the end
of the year % change
in
Share-
holding during
the year
No. of
Shares
% of total
Shares
of the Company
%of Shares
Pledged/
encumbered to total
shares
No. of Shares
% of total
Shares
of the Company
%of Shares
Pledged/
encumbered to total
shares
1
Air India Limited along with
its
nominees
30,00,000
100
NIL
7,80,00,000
100
NIL
0.00
Sr No
For Each of the Top 10 Shareholders
Shareholding at the beginning of the year
Cumulative Shareholding at
end of the year
No. of shares
%
of total shares of the
company
No. of shares
% of total
shares of the company
1
NOT APPLICABLE
2
3
4
5
6
7
8
9
10
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22
E) Shareholding of Directors and Key Managerial Personnel: Sr. No.
Shareholding of each Directors and each Key Managerial Personnel
Shareholding at the beginning of the year
Cumulative Shareholding at the end of year
No. of shares % of total shares of the
company
No. of shares % of total shares of the
company
1
Shri Rohit
Nandan
1
0.0003
1
0.0003
2
Shri S Venkat
1
0.0003
1
0.0003
Total
2
2
V. INDEBTEDNESS- Indebtedness of the Company including interest outstanding/ accrued but not due for payment.
Secured Loans
excluding deposits
Unsecured Loans Deposits Total
Indebtedness
Indebtedness at the beginning of the financial year
i)
Principal Amount
2257.44
1152.83
-
3410.27
ii)
Interest due but not paid
-
-
-
-
iii)
Interest accrued but not due
41.42
-
-
41.42
Total (i+ii+iii)
2298.87
1152.83
-
3451.70
Change in Indebtedness during the financial year
* Addition
-
-
-
-
* Reduction
226.66
55.75
-
282.41
Net Change
226.66
55.75
-
282.41
Indebtedness at the end of the financial year
i)
Principal Amount
2017.92
1097.08
-
3115.00
ii)
Interest d ue but not paid
-
-
-
-
iii)
Interest accrued but not due
54.29
-
-
54.29
Total (i+ii+iii)
2072.21
1097.08
-
3169.29
(In Rs Crore)
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23
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(In figures)
Sr No
Particulars of Remuneration Name of MD/WTD/ Manager Total
Amount
1 Gross salary
(a)
Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b)
Value of perquisites u/s 17(2) of theIncome-tax Act, 1961
(c)
Profits in lieu of salary under section 17(3) of the Income-
tax Act, 1961
2
Stock Option
3
Sweat Equity
4
Commission
as % of profit
others, specify.
5
Others : (PF, DCS, House Perks tax etc)
Total (A)
Ceiling as per the Act
*There are no Managing, Whole Time Directors in the Company.
B. Remuneration to other directors
Sr
No. Particulars of Remuneration Name of Directors Total
Amount
1
Independent Directors -
-
-
-
-
-
Fee for attending board committee meetings -
-
-
-
-
-
Commission
-
-
-
-
-
-
Others, please specify (Fees for attending Board Sub Committee Meetings)
-
-
-
-
-
-
Total(1)
-
-
-
-
-
-
2
Other Non-Executive Directors
-
-
-
-
-
-
Fee for attending board committee meetings
-
-
-
-
-
-
Commission
-
-
-
-
-
-
Others, please specify
-
-
-
-
-
-
Total (2)
-
-
-
-
-
Total (B)=(1+2)
-
-
-
-
-
-
Total Managerial Remuneration
-
-
-
-
-
-
Overall Ceiling as per the Act
-
-
-
-
-
-
-
-
-
-
-
-
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24
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/ MANAGER/ WTD
*
Not applicable to Government Companies. Only CFO and CS are KMPs.
** The Company Secretary is holding the position in addition to her responsibilities as AGM-Corporate Affairs, Air India Ltd. Similarly, CFO is on deputation from Air India and no
remuneration is paid to them by AICL.
( figures in Rs)
Sr.
No.
Particulars of Remuneration Key Managerial Personnel
CEO
CS
CFO
Total
1
Gross salary *Not
Applicable **
**
-
(a)
Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
-
-
-
-
(b)
Value of perquisites u/s 17(2) of the Income-tax Act, 1961
-
-
-
-
(c)
Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961
-
-
-
-
2
Stock Option
-
-
-
-
3
Sweat Equity
-
-
-
-
4
Commission
-
-
-
-
-
as % of profit
-
-
-
-
Others, specify.
-
-
-
-
5
Others: (PF, DCS, House Perks tax etc)
-
-
-
-
Total
-
-
-
-
Type
Section
of the Companies
Act
Brief Description
Details of Penalty /
Punishment/ Compound-
ing fees imposed
Authority [RD / NCLT/
COURT]
Appeal made,
if any (give Details)
A.
COMPANY
Penalty
-
-
-
-
-
Punishment
-
-
-
-
-
Compounding
-
-
-
-
-
B.
DIRECTORS
Penalty
-
-
-
-
-
Punishment
-
-
-
-
-
Compounding
-
-
-
-
-
C.
OTHER OFFICERS IN DEFAULT
Penalty
-
-
-
-
-
Punishment
-
-
-
-
-
Compounding
-
-
-
-
-
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
AICL
25
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENT OF AIR INDIA CHARTERS LIMITED
STFOR THE YEAR ENDED 31 MARCH 2015
The preparation of financial statement of Air India Charters Limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act is responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with Standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 20 November 2015.
I, on the behalf of the Comptroller and Auditor General of India (CAG), have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of Air India Charters Limited for the year ended 31 March 2015. This supplementary audit has been, carried out independently without access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ Report.
For and on the behalf ofThe Comptroller & Auditor General of India
Sd/-Parama Sen
Principal Director of Commercial Audit& ex-officio Member, Audit Board-II, Mumbai
Place : Mumbai
Date : 04 January 2016
AICL
26
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AIR INDIA CHARTERS LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of “Air India Charters Limited” (“the Company”), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss for the period then ended, cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these Standalone Financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified opinion.
1. BASIS OF QUALIFIED OPINION
I. As stated in Note No.(1)(C)(1), the Company, since FY 2009-10, follows policy of capitalizing the exchange difference on foreign currency long term borrowings, relating to acquisition of depreciable assets and the same are depreciated over the remaining useful life of respective asset, including the year, in which such exchange difference arises. Hence, such exchange difference of Rs. 791.34 million, in respect of financial year
AICL
27
2014-15 has been capitalized as at the beginning of the year instead of end of the year. As a result, in current year, depreciation has been provided for the whole year on such amount. This accounting policy is not in compliance with “AS 11 - The Effects of Changes in Foreign Exchange Rates” read with “AS-6 Depreciation Accounting” and Notification
stNo. G.S.R. 225(E) dated 31 March 2009 issued by Ministry of Corporate Affairs. As such, depreciation for the year, losses for the year and accumulated depreciation are overstated by Rs. 53.80 million.
ii. Note No. 33, and in other cases wherever the Company has undertaken transactions with holding company, the existence of arm's length relationship in such transactions has not been determined. Precise impact on financial statements cannot be ascertained and we are unable to form an opinion on the same.
iii. We invite attention to Note No. (1)(C)(3) read with Note No.31 regarding balances of Inventories which are maintained & controlled by Parent Company and report as under:
a. With reference to Note No. 31 (a) to (m), the Company does not have any control over the recording & reporting on the Inventory Accounting System.
b. The Management has not conducted the physical verification of Inventories during as well as at the year end.
c. As regards Inventory lying with third parties, Management has neither conducted any physical verification nor obtained confirmations for the balances as at the year end.
d. In absence of adequate data, the Management has not made any provision relating to balances lying in intermediary account for current financial year. We are unable to comment on the adequacy and completeness or otherwise, of these provisions on account of above mentioned observations.
e. The cumulative impact of points (a) to (d) above, on the financial statements cannot be ascertained and we are unable to form an opinion on the same.
iv. As stated in Note No. (5), for non-reinstatement of most of the foreign currency liabilities, at the year-end using FEDAI rate, as per the provisions of the Accounting Standard-11 “The Effect of Changes in Foreign Exchange Rates” issued by Institute of Chartered Accountants of India. This is due to non- availability of payable amount in foreign currency, Therefore, we are also unable to determine quantum and its impact on
stunderstatement of the loss for the period ended 31 March, 2015.
v. As stated in Note No. (25)(b)(ii),The Company has provided excess Gratuity Liability of Rs.61.32 million and excess provision for Leave Encashment of Rs.17.44 million against the required provision based on the actuarial valuation as on 31st March 2015 which is required to be determined and provided for as per Accounting standard 15 ”Employee Benefits” issued by Institute of Chartered Accountants of India.
vi. We further report that in view of the observations as per paragraph (i) to (v) above, cumulative impact to the extent quantifiable is as follows,
a. Depreciation for the year and Accumulated Depreciation is overstated by Rs.53.80 million,
b. Gratuity and Leave Encashment liability is overstated by Rs.78.76 million,
AICL
28
c. Losses for the year & Accumulated Losses are overstated by Rs.132.56 million.
d. The Earnings per share as computed in Note No. 49 is subject to observations contained herein.
2. QUALIFIED OPINION
Subject to the “Basis for Qualified Opinion” paragraph above and unascertainable impact thereof, in our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -
st i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2015;
ii. In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
3. EMPHASIS OF MATTER
We also invite attention to the following –
i. Note no. 36, 38, and 47 regarding confirmations and reconciliation including matching of debits/credits in various balances in other assets / liabilities accounts at certain locations and pending reconciliation of account payables & account receivables, balances of PSU Oil Companies and intermediary accounts. The precise financial impact of the same on the accounts / financial statements is not ascertainable. We are unable to comment on the impact of adjustments arising out of reconciliation/confirmation of such balances, on the Financial Statements.
ii. Note No. 55, regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. The appropriateness of the said basis is, inter alia, dependent on the Company's ability to improve operational and financial performance.
iii. Note No. 23(a) which describes the uncertainty related to the non-provision of interest and penalty, if any, payable towards outstanding dues for service tax, tax deduction at source.
iv. Necessary certificate as prescribed under SA 402 issued by the Institute of Chartered Accountants of India (ICAI) in respect of Inventory Accounting System being handled by parent company were not made available for Audit Purposes.
v. Note No. 52 regarding non-disclosure of information as prescribed in clauses (a) to (e) except (d) (which is not applicable to the Company) of Note 5 (viii) of Part II of Schedule III of the Companies Act, 2013.
Our opinion is not qualified in respect of these matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-Section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
AICL
29
As required by Section 143(3) of the Act, we further report that:
a) we have sought and obtained, to the extent provided by the Management, all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except as indicated in the matters described in the Basis for Qualified Opinion paragraph;
b) except as indicated in the matters described in the Basis for Qualified Opinion paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper information / returns adequate for the purposes of our audit have been received from Business Areas / Stations / Locations;
c) the Balance Sheet, Statement of Profit and Loss dealt with by this Report are in agreement with the books of account and with the returns received from Business Areas / Stations which were not visited by us.
d) in our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except as mentioned in the Basis of Qualified Opinion paragraph above.
e) The Company being a Government Company as defined in section 2(45) of the Companies Act,2013 is exempted from the applicability of the provision of the section 164 (2) of the said Act, vide Circular No.
thG.S.R. dated 5 June 2015 issued by the Ministry of Corporate Affairs;
f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:
i. The Company does not have any pending litigations which would impact its financial position except as disclosed in the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise;
iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.
OTHER MATTERS
The Company has not filed its report on Domestic Transfer Pricing regulations under the Income Tax Act, 1961 for the Assessment Year 2014-15.
For Kirtane & Pandit LLPChartered Accountants
FRN: 105215W/W100057
Sd/-Suhrud G. Lele
PartnerMembership No.: 121162
Place: New Delhith
Date: 20 Nov 2015
AICL
30
ANNEXURE TO INDEPENDENT AUDITOR’S REPORT
Annexure referred to in paragraph 9 of the Independent Auditor's Report to the members of Air India st
Charters Limited for the year ended 31 March, 2015
As required by the Companies (Auditor's Report) Order, 2015 and amendments thereto and according to the information and explanations given to us during the course of the audit and on the basis of such checks of the books and records as were considered appropriate we report that:
I. In respect of the fixed assets,
a. The records relating to fixed assets including rotables maintained by the Company are inadequate with reference to locations of the assets thereof. The Company has not yet updated fair value of assets in the Fixed Assets register at certain locations and it is informed by the Management that the same is in process. Further, the reconciliation of Fixed Assets Register for aircraft rotables and other fixed assets with financial records is stated to be in progress.
b. The Company has a program of Physical verification of fixed assets on rotational basis so that every asset is verified once every two years which in our opinion is adequate. It is observed that during the current financial year which belongs to biennial period 2014-16, physical verification of fixed assets has not been conducted. Material discrepancies, if any, may have remained undetected & unadjusted. We are unable to comment upon the precise financial impact of the same.
II. In respect of inventories,
a. The Company has a program of physical verification of inventory on rotational basis so that complete inventory is verified once every two years. However, it is observed that physical verification of inventory for the previous biennial period 2012-14, is still in process.
b. The procedures designed by the management of the Company, in our opinion, are adequate considering the size of the Company and nature of its business however as mentioned in clause (a) the same are not being followed effectively.
c. As informed to us, the Inventory and its records are being managed and controlled by the Holding Company (Air India Ltd.) and are certified by them as adequate. In light of qualified opinion mentioned in Paragraph 6 (iii) in the Auditor's Report, we are unable to comment upon adequacy or otherwise of such records. It is observed that physical verification of inventory for the previous biennial period 2012-14, is still in process. Further, as stated in Note No. 31(g), accounting entries for the discrepancies identified by Internal Auditors of the holding company will be carried out in due course by the Management. Pending completion of physical verification process, material discrepancies, if any, may have remained undetected & unadjusted.
III. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
IV. In our opinion and according to the information and explanations given to us, the Internal Control procedures, commensurate with the size of the Company and the nature of its business, needs to be prescribed, followed and strengthened in respect of the fixed assets.
AICL
31
As regards to Inventory, in view of the fact that procurement, consumption, physical custody is totally controlled by the Holding Company. Further, the Company has not obtained the necessary certificate as prescribed under SA 402 of the Institute of Chartered Accountants of India (ICAI) in respect of Inventory Accounting System. Hence we are unable to comment on the adequacy of Internal Control system of the same.
The management needs to take a corrective action on continuing weaknesses in Internal Control system. The financial statements are subject to Clause 6 & 8 of the Auditor's Report which gives details of qualified opinion in respect of Inventory, Fixed Assets.
V. The Company has not accepted any deposits from the public within the meaning of the sections 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules framed there or under any directives report issued by the Reserve Bank of India. Therefore the provision of the Clause (V) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 is not applicable to the Company.
VI. The Central Government has not prescribed for maintenance of cost records under section 148 (1) of the Companies Act, 2013 for the Company. Therefore the provision of the Clause (VI) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 is not applicable to the Company.
VII. In respect of the statutory dues:
a. According to the records of the Company, the undisputed statutory dues have been regularly deposited with the appropriate authorities except for the following:
i. Regarding TDS - In absence of proper linkage between deductions and deposits of Income tax deducted at source and reconciliations of balances outstanding and due to recording expenses on payment basis in the books, year-end recording of expenses in books, we are not in a position to offer any comments, including delay if any.
ii. Regarding non reversal of service tax input credit under Rule 6 (3) of Cenvat Credit Rules, 2004 – Company is not maintaining separate books of accounts for exempted and taxable services respectively. As such, Rule 6 (3) of Cenvat Credit Rules, 2004 requires the Company to pay an amount equal to 6% of value of exempted service reverse or shall pay an amount equivalent to the CENVAT credit attributable to input services used in, or in relation to provision of exempted services subject to the conditions and procedure specified in sub-rule (3A). In absence of adequate details, adequacy or otherwise of such reversal cannot be ascertained and we are unable to form an opinion on the same.
iii. In respect of the statutory dues, if any, at foreign stations, since the records are kept at respective stations and which were not available for verification during the audit, we are unable to comment whether the dues are timely deposited.
iv. As informed to us and based on explanations received, the Company has deducted Profession Tax in respect of few locations but the same has not been deposited to the concerned authorities. Unpaid amount of Profession Tax as on
st31 March 2015 is Rs.1.39 million.
v. According to the information and explanations given to us, no undisputed amounts payable in respect of above except for Profession Tax, as mentioned n
stclause (v) above, which were in arrears, as at 31 March, 2015 for a period of more than six months from the date on which they became payable.
b. According to the records of the Company and information and explanation given to us there are no dues outstanding in respect of Income Tax, Wealth Tax, Service Tax, Cess or other statutory dues on account of any dispute except as mentioned below:
AICL
32
Sr. Name of Statute Amount (Rs. In millions) Nature and form where No. dispute is pending 1 Tax deducted at Source as 322.44 Commissioner of Income Tax per Income tax for Assessment (Appeals) Year 2007-08 to 2014-15
2 Tax deducted as Source as 29.10 Income Tax department per Income tax for Assessment Year 2009-10 and Assessment Year 2010-11
3 Service Tax for Financial Year 523.50 Directorate General of Central 2005-06 to 2014-15 Excise Intelligence
4 Customs Duty for various 17.18 Customs & Excise Dept. transactions
Total 892.22
c. According to the information and explanation given to us, the Company is not covered by the provisions of laws relating to Investor Education and Protection Fund and Employees State Insurance.
VIII. The accumulated losses (inclusive of deferred tax liability) of the Company, as at the end of the financial year exceed fifty percent of its net worth. Subject to our qualified opinion, there is cash profit during the financial year covered by our audit however there were cash losses during immediately preceding financial year. As per representations given by the Management, there is no adverse impact on going concern assumption.
IX. In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of its dues to banks and financial institutions.
X. In our opinion and according to the information and explanations given to us, The Company has not given any guarantee for loan taken by others from banks and financial institutions. Accordingly, the provision of clause 3(X) of the Companies (Auditor's Report) Order, 2015 are not applicable to the Company.
XI. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.
XII. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have not come across any instances of material frauds on or by the Company, noticed or reported during the year nor we have been informed of such cases by the management.
For Kirtane & Pandit LLPChartered Accountants,
FRN:-105215W / W100057
Sd/-(Suhrud G. Lele)
Partner Membership No: - 121162
Place: New Delhith
Date: 20 Nov 2015
AICL
33
Management comments to the Auditors’ Report of the Statutory Auditors for the Financial Year 2014-15
Sr.No. Audit Observation
Management Comments
1.
2.
3.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of “Air India Charters Limited” (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss for the period then ended, cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements
The Management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility
Our responsibility is to express an opinion on these Standalone Financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are
required to be included in the audit report
This is a statement of fact.
This is a statement of fact.
This is a statement of fact.
AICL
34
Sr.No. Audit Observation
Management Comments
4.
5.
6.
under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified opinion.
Basis of Qualified Opinion i.
As stated in Note No.(1)(C)(1), the Company, since FY 2009-10, follows policy of capitalizing the exchange difference on foreign currency long term borrowings, relating to acquisition of depreciable assets and the same are depreciated over
the
remaining useful life of respective asset, including the year, in which such exchange difference arises. Hence, such exchange difference of Rs. 791.34 million, in respect of financial year 2014-15 has been capitalized as at the beginning of the year instead of end of
This is a statement of fact.
This is a statement of fact.
The accounting of Depreciation on the exchange impact capitalised during the year since FY 2009-10 was done in accordance with the Accounting policy of the Company which is in line with the consistent
practice and Accounting
policy of the Holding Company - Air
India Ltd.
However, in view of the Audit observation, this aspect would be
AICL
35
Sr.No. Audit Observation
Management Comments
the year. As a result, in current year, depreciation has been provided for the whole year on such amount. This accounting policy is not in compliance with “AS 11 - The Effects of Changes in Foreign Exchange Rates” read with “AS-6 Depreciation Accounting” and Notification No. G.S.R. 225(E) dated 31st
March 2009 issued by Ministry of Corporate Affairs. As such, depreciation for the year, losses for the year and accumulated depreciation are overstated by Rs. 53.80 million.
ii. Note No. 33, and in other cases wherever the Company has undertaken transactions with holding company, the existence of arm’s length relationship in such transactions has not been determined. Precise impact on financial statements cannot be ascertained and we are unable to form an opinion on the same.
iii. We invite attention to Note No. (1)(C)(3) read with Note No.31 regarding balances of Inventories which are maintained & controlled by Parent Company and report as under: a. With reference to Note No. 31 (a) to (m),
the Company does not have any control over the recording & reporting on the Inventory Accounting System.
b. The Management has not conducted the physical verification of Inventories during as well as at the year end.
c. As regards Inventory lying with third parties, Management has neither conducted any physical verification nor obtained confirmations for the balances as at the year end.
referred to Holding Company for compliance of AS-11 and AS-6.
The Company has already established the process of identifying the areas where Arm’s length relationship with the holding company as well as associate companies are required to be maintained as per statute. For instance agreements have been entered into with AIATSL , for Ground handling and AIESL for Engineering. However further refinements to these agreements will be carried out based on the nature of transactions with the Companies. The required control relating to accounting, recording and reporting on the Inventory accounting system are managed by holding company through RAMCO and the information generated from the system. The RAMCO system maintains the inventory of the holding company as well as subsidiary companies. Since the type of fleet maintained by AICL is different from the parent company many of the aircraft spares and rotables are distinguishable and separately identified for usage. The RAMCO system is being upgraded to 5.7 / 5.8 system in which it is possible to maintain inventory in different operating units for the purpose of recording, storage and consumption. The company proposes to engage a professional firm for undertaking the physical verification process during the current period.
AICL
36
Sr.No. Audit Observation
Management Comments
d. In absence of adequate data, the Management has not made any provision relating to balances lying in intermediary account for current financial year. We are unable to comment on the adequacy and completeness or otherwise, of these provisions on account of above mentioned observations.
e. The cumulative impact of points (a) to (d) above, on the financial statements cannot be ascertained and we are unable to form an opinion on the same.
iv. As stated in Note No. (5), for
non-reinstatement of most of the foreign currency liabilities, at the year-end using FEDAI rate, as per the provisions of the Accounting Standard-11 “The Effect of Changes in Foreign Exchange Rates” issued by Institute of Chartered Accountants of India. This is due to non- availability of payable amount in foreign currency, Therefore, we are also unable to determine quantum and its impact on understatement of the loss for the period ended 31st
March, 2015.
v. As stated in Note No. (25)(b)(ii),The Company has provided excess Gratuity Liability of Rs.61.32 million and excess provision for Leave Encashment of Rs.17.44 million against the required provision based on the actuarial valuation as on 31st March 2015 which is required to be determined and provided for as per Accounting standard 15 ”Employee Benefits” issued by Institute of Chartered Accountants of India.
Inventory lying with third parties are continuously followed up for repair/return.
All open work orders are frequently reviewed and closed as and when completed As per the practice, an amount of Rs.241.67 Million has been provided in respect of Expendables (@ 50 %) which were issued on work orders and remained open as at year end. Further, the company is of the view that the provision made in the books is adequate.
Foreign Currency GL balances which consist of Vendors, Debtors, Loans and Bank Balances were revalued as on 31.03.2015 as per the AS 11 issued by ICAI. However, certain foreign currency monetary items have not been accounted for/ translated at the date of transaction in accordance with the provisions of AS 11 due to complexity of transaction. The impact of the same is not ascertainable. The provision for Gratuity and Leave encashment was made in the books of accounts as confirmed by the Actuarial valuer which includes Discontinuance Liability and Projected Benefit obligation to the tune of Rs. 104.28 million and Rs. 30.17 million respectively for Gratuity and Leave encashment. This is in line with the existing practice followed by AICL. Ás such the company is of the opinion that excess provision has not been made and the amount provided by the company is adequate.
AICL
37
Sr.No. Audit Observation
Management Comments
7.
a. Depreciation for the year and Accumulated Depreciation is overstated by Rs.53.80 million,
b. Gratuity and Leave Encashment liability is overstated by Rs.78.76 million,
c. Losses for the year & Accumulated Losses are overstated by Rs.132.56 million.
d. The Earnings per share as computed in Note No. 49 is subject to observations contained herein.
Qualified Opinion – Subject to the “Basis for Qualified Opinion” paragraph above and unascertainable impact thereof, in our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: - i. In the case of the Balance Sheet, of the state
of affairs of the Company as at 31st March 2015;
ii. In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matter –
We also invite attention to the following – i. Note no. 36, 38, and 47 regarding confirmations
and reconciliation including matching of debits/credits in various balances in other assets / liabilities accounts at certain locations and pending reconciliation of account payables & account receivables, balances of PSU Oil Companies and intermediary accounts. The precise financial impact of the same on the accounts / financial statements is not ascertainable. We are unable to comment on
Audit comments are noted.
The balances as per books of accounts of various parties including the Fuel vendors are reconciled as on 31.03.2015. However the confirmation of balances was received from few parties only.
vi. We further report that in view of the
observations as per paragraph (i) to (v) above, cumulative impact to the extent quantifiable is as follows,
This is the summary of the above mentioned Para (i to v). Please refer to the comments provided for the respective Para.
AICL
38
Sr.No. Audit Observation
Management Comments
8.
ii. Note No. 55, regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. The appropriateness of the said basis is, inter alia, dependent on the Company’s ability to improve operational and financial performance.
iii. Note No. 23(a) which describes the uncertainty
related to the non-provision of interest and penalty, if any, payable towards outstanding dues for service tax, tax deduction at source .
iv. Necessary certificate as prescribed under SA 402
issued by the Institute of Chartered Accountants of India (ICAI) in respect of Inventory Accounting System being handled by parent company were not made available for Audit Purposes.
v. Note No. 52 regarding non -disclosure of
information as prescribed in clauses (a) to (e) except (d) (which is not applicable to the Company) of Note 5 (viii) of Part II of Schedule III of the Companies Act, 2013.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-Section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
During the current financial year the Operating Revenue of the Company has increased by 10.8 % and the EBIDTA has increased by 90.70 %. In addition, the company has also recorded a Cash profit of Rs. 1724.9 million during the FY 2014-15. In addition, during the F.Y.2014-15 Rs. 7500 million worth of capital infusion done by the holding company. As such the financial performance of the company is showing an increasing and positive trend and thus the accounts are prepared on ‘Going Concern’ basis. As a matter of Prudence, the management has disclosed these items in Contingent Liability. The Company is of the opinion that certificate as per SA 402 of ICAI is not required as the Inventory Management / Accounting System - RAMCO was procured for Holding & Group Companies thus the same is not to be considered as outsourced to Holding Company. In terms of the directive of the Ministry of Corporate affairs, Govt. Companies are exempted and the related clauses do not apply. This is a statement of fact.
the impact of adjustments arising out of reconciliation/confirmation of such balances, on the Financial Statements.
AICL
39
Sr.No. Audit Observation
Management Comments
9.
As required by Section 143(3) of the Act, we further report that:
a) we have sought and obtained, to the extent provided by the Management, all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except as indicated in the matters described in the Basis for Qualified Opinion paragraph;
b) except as indicated in the matters described in the Basis for Qualified Opinion paragraph,
in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper information / returns adequate for the purposes of our audit have been received from Business Areas / Stations / Locations;
c) the Balance Sheet, Statement of Profit and Loss
dealt with by this Report are in agreement with the books of account and with the returns received from Business Areas / Stations which were not visited by us.
d) in our opinion, the aforesaid financial statements
comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except as mentioned in the Basis of Qualified Opinion paragraph above.
e) The Company being a Government Company as
defined in section 2(45) of the Companies Act,2013 is exempted from the applicability of the provision of the section 164 (2) of the said Act, vide Circular No. G.S.R. dated 5th
June 2015 issued by the Ministry of Corporate Affairs;
f) In our opinion and to the best of our information
and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:
AICL
40
Sr.No. Audit Observation
Management Comments
10.
i. The Company does not have any pending litigations which would impact its financial position except as disclosed in the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise;
iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.
Other Matters
The Company has not filed its report on Domestic Transfer pricing regulations under the Income Tax Act, 1961 for the Assessment Year 2014-15.
This is a statement
Kindly refer to the reply to point 6, Para (ii).
This is a statement
of fact.
of fact.
AICL
41
Annexure referred to in paragraph 9 of the Independent Auditor’s Report to the members of Air India Charters Limited for the year ended 31st March, 2015
Sr.No. Audit Observation
Management Comments
I
II.
In respect of the fixed assets,
a. The records relating to fixed assets including rotables maintained by the Company are inadequate with reference to locations of the assets thereof. The Company has not yet updated fair value of assets in the Fixed Assets register at certain locations and it is informed by the Management that the same is in process. Further, the reconciliation of Fixed Assets Register for aircraft rotables and other fixed assets with financial records is stated to be in progress.
b. The Company has a program of Physical verification of fixed assets on rotational basis so that every asset is verified once every two years which in our opinion is adequate. It is observed that during the current financial year which belongs to biennial period 2014-16, physical verification of fixed assets has not been conducted. Material discrepancies, if any, may have remained undetected & unadjusted. We are unable to comment upon the precise financial impact of the same.
In respect of inventories,
a. The Company has a program of physical
verification of inventory on rotational basis so that complete inventory is verified once every two years. However, it is observed that physical verification of inventory for the previous biennial period 2012-14, is still in process.
b. The procedures designed by the management of the Company, in our opinion, are adequate considering the size of the Company and nature of its business however as mentioned in clause (a) the same are not being followed effectively.
This is a statement of fact.
The company proposes to engage a professional firm for undertaking physical clarification process during the current period.
The company proposes to engage a professional firm for undertaking physical verification process during the current period.
AICL
42
Sr.No. Audit Observation
Management Comments
III. IV.
c. As informed to us, the Inventory and its records are being managed and controlled by the Holding Company (Air India Ltd.) and are certified by them as adequate. In light of qualified opinion mentioned in Paragraph 6 (iii) in the Auditor’s Report, we are unable to comment upon adequacy or otherwise of such records. It is observed that physical verification of inventory for the previous biennial period 2012-14, is still in process. Further, as stated in Note No. 31(g), accounting entries for the discrepancies identified by Internal Auditors of the holding company will be carried out in due course by the Management. Pending completion of physical verification process, material discrepancies, if any, may have remained undetected & unadjusted.
The Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
In our opinion and according to the information
and explanations given to us, the Internal Control procedures, commensurate with the size of the Company and the nature of its business, needs to be prescribed, followed and strengthened in respect of the fixed assets. As regards to Inventory, in view of the fact that procurement, consumption, physical custody is totally controlled by the Holding Company. Further, the Company has not obtained the necessary certificate as prescribed under SA 402 of the Institute of Chartered Accountants of India (ICAI) in respect of Inventory Accounting System. Hence we are unable to comment on the adequacy of Internal Control system of the same. The management needs to take a corrective action on continuing weaknesses in Internal Control system. The financial statements are subject to Clause 6 & 8 of the Auditor’s Report which gives details of qualified opinion in respect of Inventory, Fixed Assets.
This is a statement of fact.
This is a statement of fact.
This is a statement of fact.
Kindly refer our reply to point 8, para ‘iv’
AICL
43
Sr.No. Audit Observation
Management Comments
V.
VI. VII.
The Company has not accepted any deposits from the public within the meaning of the sections 73 to 76 or
any other relevant provision of the Companies Act, 2013 and the rules framed there or under any directives report issued by the Reserve Bank of India. Therefore the provision of the Clause (V) of paragraph 3 of the Companies (Auditor’s Report) Order, 2015 is not applicable to the Company.
The Central Government has not prescribed for maintenance of cost records under section 148 (1) of the Companies Act, 2013 for the Company. Therefore the provision of the Clause (VI) of paragraph 3 of the Companies (Auditor’s Report) Order, 2015 is not applicable to the Company. In respect of the statutory dues:
a. According to the records of the Company, the undisputed statutory dues have been regularly deposited with the appropriate authorities except for the following:
i. Regarding TDS - In absence of proper
linkage between deductions and deposits of Income tax deducted at source and reconciliations of balances outstanding and due to recording expenses on payment basis in the books, year-end recording of expenses in books, we are not in a position to offer any comments, including delay if any.
ii. Regarding non reversal of service tax
input credit under Rule 6 (3) of Cenvat Credit Rules, 2004 – Company is not maintaining separate books of accounts for exempted and taxable services respectively. As such, Rule 6 (3) of Cenvat Credit Rules, 2004 requires the Company to pay an amount equal to 6% of value of exempted service reverse or shall pay an amount equivalent to the CENVAT credit attributable to input services used in, or in relation to provision of exempted services subject to the conditions and procedure specified in sub-rule (3A). In absence of adequate
This is a statement of fact. This is a statement of fact. Action would be initiated during the FY 2015-16. The matter has been referred to the Service Tax Consultants and suitable action will be initiated during the FY 2015-16.
AICL
44
Sr.No. Audit Observation
Management Comments
details, adequacy or otherwise of such reversal cannot be ascertained and we are unable to form an opinion on the same.
iii. In respect of the statutory dues, if any,
at foreign stations, since the records are kept at respective stations and which were not available for verification during the audit, we are unable to comment whether the dues are timely deposited.
iv. As informed to us and based on
explanations received, the Company has deducted Profession Tax in respect of few locations but the same has not been deposited to the concerned authorities. Unpaid amount of Profession Tax as on 31st
March 2015 is Rs.1.39 million.
v. According to the information and
explanations given to us, no undisputed amounts payable in respect of above except for Profession Tax, as mentioned n clause (v) above, which were in arrears, as at 31st
March, 2015 for a period of more than six months from the date on which they became payable.
b. According to the records of the Company and
information and explanation given to us there are no dues outstanding in respect of Income Tax, Wealth Tax, Service Tax, Cess or other statutory dues on account of any dispute except as mentioned below:
Sr.No.
Name of Statute Amount (Rs. In millions)
Nature and form where dispute is pending
1 Tax deducted at Source as per Income tax for Assessment Year 2007-08 to 2014-15
322.44 Commissioner of Income Tax (Appeals)
There had not been any default in making payment of Statutory dues at any foreign stations. During the FY 2014-15, the company has made efforts to remit the Profession Tax deducted from various employees relating to previous period. However, the concerned authorities are not accepting the payments. This is a statement of fact. The matters are adequately being addressed and represented by the Tax Consultants of the Company. As the company is of firm opinion that such amount is not payable, as a matter of prudence, same has been disclosed in Contingent Liability.
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Sr.No. Audit Observation
Management Comments
VIII.
2 Tax deducted as Source as per Income tax for Assessment Year 2009-10 and Assessment Year 2010-11
29.10
Income Tax depart-ment
3 Service Tax for Financial Year 2005-06 to 2014-15
523.50 Directo-
rate General of Central Excise Intelli-
gence
4 Customs Duty for various transactions
17.18 Customs & Excise Dept.
Total 892.22 c. According to the information and explanation
given to us, the Company is not covered by the provisions of laws relating to Investor Education and Protection Fund and Employees State Insurance.
The accumulated losses (inclusive of deferred tax liability) of the Company, as at the end of the financial year exceed fifty percent of its net worth. Subject to our qualified opinion, there is cash profit during the financial year covered by our audit however there were cash losses during immediately preceding financial year. As per representations given by the Management, there is no adverse impact on going concern assumption.
In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of its dues to banks and financial institutions.
In our opinion and according to the information and explanations given to us, The Company has not given any guarantee for loan taken by others from banks and financial institutions. Accordingly, the provision of clause 3(X) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the Company. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.
The Company is confident of sustaining its growth due to the increase in the LCC segment of travel and has plans for acquiring aircraft on dry lease in the near future to increase its market share. With the decrease in fuel prices and increase in the number of passengers travelled the Company is budgeted to achieve substantial growth in revenue in 2015-16 which would add to its profitability. The Company is therefore confident of recuperating some of its accumulated losses in the coming years.
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Sr.No. Audit Observation
Management Comments
records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have not come across any instances of material frauds on or by the Company, noticed or reported during the year nor we have been informed of such cases by the management.
IX. During the course of our examination of the books and This is a statement of fact.
X.
XI.
XII.
This is a statement of fact.
This is a statement of fact.
This is a statement of fact.
In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of its dues to banks and financial institutions.
In our opinion and according to the information and explanation given to us, the Company has not given any guarantee for loan taken by others from banks and financial institutions. Accordingly, the provision of clause 3(X) of the Companies (Auditor’s Report) Order, 2015 are not applicable to the Company.
In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.
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BALANCE SHEET AS AT 31 MARCH 2015
Note No.
I EQUITY AND LIABILITIES :Shareholders' Fundsa) Share Capital 2 7,800.00 300.00 b) Reserves and Surplus 3 (24,336.64) (23,705.40)
(16,536.64) (23,405.40) Non-current Liabilitiesa) Long Term Borrowings 4 17,725.20
20,389.80
b) Long Term Provisions 6 129.40
98.60
17,854.60
20,488.40
Current Liabilitiesa) Short Term Borrowings 7 10,020.80
10,578.30
b) Trade Payables 5 8,809.07
5,700.80
c) Other Current Liabilities 5 18,504.10
25,115.00 d) Short Term Provisions 6 5.10
4.50
37,339.07
41,398.60
TOTAL 38,657.03
38,481.60 II ASSETS :
Non-current Assetsa) Fixed Assets 8 (i) Tangible Assets 32,633.35
34,148.30 (ii) Intangible Assets 7.97
8.40 32,641.33
34,156.70 b) Long Term Loans and Advances 9 363.40
335.20
33,004.73
34,491.90
Current Assetsa) Inventories 12 1,876.70
1,516.00
b) Trade Receivables 10 634.20
352.40
c) Cash and Bank Balances 13 894.00
803.10
d) Short Term Loans and Advances 9 2,238.30
1,317.80
e) Other Current Assets 11 9.11
0.40
5,652.31
3,989.70
TOTAL 38,657.03
38,481.60
Significant Accounting Policies 1
Notes forming part of the Financial Statement 23-59
The accompanying notes are an integral part of the Financial Statements
This is the Balance Sheet referred to in our report of even date.
Kirtane & Pandit LLP
For and on behalf of the BoardFor and on behalf of
Chartered Accountants FRN : 105215W / W100057
Sd/-
Sd/-Ashwani LohaniChairman
Sd/-Dr.Shefali JunejaDirector
Sd/-K.Shyam SundarCEO
Suhrud G. LelePartnerM.No. 121162
Place : New Delhi Place : New Delhi
Sd/-M.ManoharanCFO
Sd/-Aditi KhandekarCompany Secretary
Date : 20 November 2015 Date : 20 November 2015
(Rupees in Million)
Particulars As at March 31, 2014As at March 31, 2015
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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2015
Note No.
I Revenue1. Revenue from Operation 14
i) Scheduled Traffic Services 22,894.00 20,645.20 ii) Non-Schedule Traffic Services 5.00 22,899.00 - 20,645.20
2. Handling, Servicing and Incidental Revenue 15 49.20 48.80 Operating Revenue 22,948.20 20,694.00
II 3. Other Income (Net) 16 1.40 2.10 III Total Revenue (I+II) 22,949.60 20,696.10
IV Expenses1. Aircraft Fuel & Oil 9,461.20 10,521.30 2. Operation Expenses 17 5,117.00 5,017.10 3. Employee Benefit Expenses 18 1,529.40 1,583.40 4. Finance Costs 19 3,963.50 4,156.10 5. Depreciation and Amortization Expense 20 2,335.18 2,280.10 6. Other Expenses 21 1,189.30 471.40 7. Prior Period Adjustments (Net) 22 (35.60) 119.90 -
Total Expenses 23,559.98 24,149.30 V Profit / (Loss) before Exceptional and Extraordinary (III-IV) (610.38) (3,453.20)
Items and Tax
VI Exceptional Items - -
VII Profit / (Loss) before Extraordinary Items and Tax (V+VI) (610.38) (3,453.20) VIII Extra Ordinary Items (Net) - -
IX Profit / (Loss) before Tax (VII+VIII) (610.38) (3,453.20) X Tax Expenses : - XI Profit / (Loss) after Tax for the year (IX-X) (610.38)
(3,453.20)
XII Earning per Share of Rs. 10 each
- Basic and Diluted 56 (39.37) (1,151.11)
Significant Accounting Policies 1
Notes forming part of the Financial Statement 23-59
(Rupees in Million)
2014-15 Particulars 2013-14
The accompanying notes are an integral part of the Financial Statements - -
This is the Profit & Loss referred to in our report of even date.
Kirtane & Pandit LLP
For and on behalf of the BoardFor and on behalf of
Chartered Accountants FRN : 105215W / W100057
Sd/-
Sd/-Ashwani LohaniChairman
Sd/-Dr.Shefali JunejaDirector
Sd/-K.Shyam SundarCEO
Suhrud G. LelePartnerM.No. 121162
Place : New Delhi Place : New Delhi
Sd/-M.ManoharanCFO
Sd/-Aditi KhandekarCompany Secretary
Date : 20 November 2015 Date : 20 November 2015
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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2015(Rupees in Million)
Particulars
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit /(-) Loss Before Taxation (610.38) (3,453.34)
Adjustments for :Depreciation 2,335.18 2,280.19 Finance Cost 3,963.50 4,156.04 Profit/(Loss) on sale of AssetsInterest on Bank & Other Deposits (1.44) 6,297.24 (2.09) 6,434.15
Cash surplus/(-) defecit before variation in Net Working 5,687.06 2,980.81
Changes in Working Capital
(-) Increase / Decrease in Trade Receivable (281.80) 61.39 (-)Increase / Decrease in Loans & Advances - Long Term (28.18) (21.07) (-)Increase / Decrease in Loans & Advances - Short Term (920.53) 1,881.08 (-)Increase/Decrease in Other Assets (8.66) (0.04) (-)Increase / Decrease in Inventories (360.69) (667.23)
Increase /(-)Decrease in Current Liabilities & Provisions
Long Term provision 30.78
36.33
Trade payables 3,108.11
(485.22)
Other Current Liabilities (6,610.90)
4,598.86
Short Term provison 0.59
2.66
(5,071.28) 5,406.76
Net cash (-)outflow / Inflow from Operations 615.78 8,387.57
B. CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets (49.33)
(144.28) Interest received on Bank & Other Deposits 1.44
2.09
Net cash (-)outflow / Inflow from Investing Activities (47.89) (142.19)
C. CASH FLOW FROM FINANCING ACTIVITIES
Finance Cost (3,963.60)
(4,156.04) Issue of Share Capital 7,500.00
Write back of excess Tax of earlier year ---
Repayment of Aircraft Loans (3,194.84)
(3,010.57) Net cash (-)outflow / Inflow from Financing Activities 341.56
(7,166.62)
Foreign Exchange Impact of Working capital Loan 27.27
1,749.26
Foreign Exchange Impact of Aircraft Loan 791.34
(2,169.09) Net Increase / (-)Decrease in Cash & Cash equivalents 90.84
658.93
Add : Cash at the beginning of the year 803.10
144.17
Cash at the end of the year 893.94
803.10 1
2013-14
The cash flow statement has been prepaid under the 'Indirect Method' as set out in the Accounting Standard 3 (AS-3) on 'Cash Flow Statements' and presents cash flows from operating, investing and financing activities.
2014-15
Kirtane & Pandit LLP
For and on behalf of the BoardFor and on behalf of
Chartered Accountants FRN : 105215W / W100057
Sd/-
Sd/-Ashwani LohaniChairman
Sd/-Dr.Shefali JunejaDirector
Sd/-K.Shyam SundarCEO
Suhrud G. LelePartnerM.No. 121162
Place : New Delhi Place : New Delhi
Sd/-M.ManoharanCFO
Sd/-Aditi KhandekarCompany Secretary
Date : 20 November 2015 Date : 20 November 2015
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NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31 MARCH, 2015
NOTE “1” : SIGNIFICANT ACCOUNTING POLICIES
A. Corporate Information
Air India Charters Limited is a wholly owned subsidiary of Air India Limited. It commenced airline operations on April 29, 2005 with a brand name “ Air India Express”. The company mainly operates between Tier-2 and Tier-3 cities in India and destinations in Gulf & South East Asia. Presently company has a fleet of 17 Boeing 737-800 NG owned aircraft.
B. Accounting Convention
i) These Financial Statements have been prepared on going concern concept on accrual basis (except as specifically stated) under historical cost convention and are in compliance with generally accepted accounting principles and the Accounting Standards notified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.
ii) The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of Contingent liabilities at the date of the financial statement and the reported amounts of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which results are known / materialized.
iii) The Company being in service sector, there is no specific operating cycle, 12 months period has been adopted as “the Operating Cycles” in-terms of the provisions of Schedule III to the Companies Act, 2013.
C. Significant Accounting Polices
1) Fixed Assets and Depreciation:
a) Fixed Assets are stated at historical cost.
b) (i) Aircraft Fleet and Equipment are stated at purchase price. Other incidental costs including interest wherever applicable are also capitalized up to the date of first commercial flight.
(ii) Other Assets including aircraft rotables are capitalized and stated at historical cost.
c) Aircraft fleet and equipment under leases, in respect of which substantially all the risks and reward of ownership are transferred to the company are considered as Finance lease and are capitalized.
d) Credits allowed by the Manufacturers / Vendors are reviewed and evaluated by the Company and directly identifiable credits are adjusted towards the Cost of the Asset. Other credits in the nature of Operational Support are credited to the Profit & Loss Account.
e) Physical Verification of Assets is done on a rotational basis so that every asset is verified once in every two years and the discrepancies observed in the course of the verification are adjusted in the year in which report is submitted.
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f) Depreciation on Fixed Assets
i) Depreciation is provided on all assets on straight-line method over the useful life of assets as prescribed in Schedule II of the Companies Act 2013, keeping a residual value of 5% of the original cost.
The details of such assets are given hereunder:
S.No Type of Asset Life Prescribed by Schedule II
1 Aircraft Fleet & Equipments 20 Yrs
2 Airframe Equipment – 'Rotables' & ' Aero Engine Equipment Rotables' 20 Yrs
3 VEHICLES 6 Yrs 4 Computer System 6 Yrs
5 Electrical Fittings 10 Yrs
6 Furniture & Fixtures 10 Yrs
7 Office Equipment 5 Yrs
8 Plant & Machinery 13 Yrs
9 Workshop Equipment 15 Yrs
II) The next generation 737-800 aircraft are depreciated up to 95% of the block value over 20 years .
III) Airframe Equipment – 'Rotables' & 'Aero Engine Equipment Rotables' relating to
aircraft are also depreciated up to 95% of the base value over the remaining average useful life of the fleet (737-800) aircraft is estimated as 20 years.
IV) Depreciation on additions to the Fixed Assets and Rotables is provided for the full year in the year of capitalization and no depreciation is provided in the year of disposal.
V) Motor Cars are depreciated at 20% instead of 9.5 % upto 95% of the value. Tractors have been treated as Workshop Equipment.
g) Assets of value not exceeding Rs. 5000/- in each case are depreciated fully in the year of purchase.
h) Intangible assets are amortized over the estimated useful life.
i) The Exchange difference on Foreign Currency long term borrowing relating to acquisition of depreciable assets is depreciated over the remaining useful life of related asset including the year in which such exchange difference arises.
2) Impairment of Assets:
The carrying value of Fixed Asset is reviewed for impairment at each Balance Sheet date to determine whether there is any indication of impairment.
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If the carrying value of a Fixed Asset exceeds its estimated recoverable amount an impairment loss is recognized in the Profit & Loss account and the Fixed Assets are written down to their recoverable amount.
3) Inventory:
i. Inventories are valued at cost or Net Realizable Value (NRV) whichever is lower. Cost is determined using the weighted average formula.
ii. Repairable spares (serviceable and unserviceable awaiting repairs) are those which have an economic life greater than the operating cycle and can be reused after repairs and are expensed at the time of scrappage and are however classified as Current Assets, which were hitherto charged to consumption at the time of initial issue. The cost of repairs of such spares continues to be charged off as and when incurred.
iii. Expendables / consumables are charged off at the time of initial issue except those meant for repairs of repairable which are expensed when the work order is closed. At the year end estimated cost of expendables / consumables required for restoration of repairable are provided for in respect of open work orders.
iv. Obsolescence provision for aircraft stores and spare parts.
a) Provision is made for the non-moving inventory exceeding a period of five years (net of realizable value of 5% ) except for (b) & (c).
b) Provision is made in full (net of estimated realizable value) for aircraft fleet which has been phased out unless the same can be used in other Aircraft.
c) Obsolescence provision in respect of inventories exclusively relating to aircraft on dry/wet lease, is made on the basis of the completed lease period compared to the total lease period as at the year end.
v. Obsolescence provision for non-aircraft stores and spared is made for non-moving inventory exceeding a period of five years.
4) Provision for Doubtful Debts:
Debts pertaining to the Govt. / Govt. Departments / Public Sector Undertakings are provided for if they are more than three years old except for debts which are known to be recoverable with certainty. All other debts are provided for, if they are either more than three years old or specially known to be doubtful.
5) Foreign Currency Translation:
a) Current Assets and Current Liabilities :
Foreign currency denominated current assets and current liabilities balances at the year end are translated at the year-end exchange rate circulated by Foreign Exchange Dealer Association of India (FEDAI) and the gains /losses arising out of fluctuations in exchange rates are recognized in the Profit and Loss Account.
b) Foreign Currency Loans:
The Outstanding balances of foreign currency loans (including loans availed for acquisitions of assets) at the year end are translated at FEDAI Rate at the year end.
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The company has opted for accounting the exchange differences arising on reporting of long-term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules,2009 relating to Accounting standard 11 (AS-11) notified by Government of India on 31 March 2009 and further as amended form time to time. Accordingly , the effect of exchange difference s arising on settlement or reporting of long term monetary items at the rates different from those at which they were initially recorded during the period ,or reported in previous financial statements, is accounted by addition or deduction to the cost of assets so far as it relates to acquisition of depreciable capital assets and is depreciated over the balance life of the asset calculated at the beginning of the year.
c) Revenue and Expenditure Translations :
(i) Based on the exchange rates published by the IATA, exchange rates are established for translating the foreign currency revenue and expenditure transactions during the year and the exchange differences are transferred to the Profit & Loss Account.
(ii) Interline settlement with Airlines for transportation is carried out at the exchange rate.
Published by IATA for specific month.
6) Revenue Recognition :
a) Passenger Revenue is recognized on flown basis. At the year end , the value of advance pax sales are assessed as forward sales. Subsequent refunds/Un claimed tickets have been Recognized in year of refund/Cancellation.
b) Other Revenue are accounted on accrual basis.
7) Operating Leases :
a) Leases where assets are acquired without an option to purchase are considered as operating leases and lease rentals payable for the year are charged to Profit and Loss Account.
b) Contributions made to lessors on account of Maintenance Reserve for which maintenance is expected to arise during the lease period is treated as a prepaid Expenses. These contributions are expensed whenever the Maintenance expenditure arises or at the end of the expiry of the lease period.
8) Borrowing Cost:
a) Borrowing costs that are directly attributable to acquisition, construction or production of qualifying assets including capital work in progress are capitalized up to the time the asset gets ready for its intended use.
b) Borrowing cost other than stated above is treated as period cost.
9) Retirement Benefits :
a) Short term employee's benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.
b) Post employment benefits are recognized as an expense in the Profit and Loss Account
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for the year in which employee has rendered services. The estimated liability on account of long term benefits is discounted to the current value using the yield on government bonds as the discounting rate.
c) Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss Account.
10) Other Liabilities:
Liabilities, which are more than three years old, are reversed unless such liabilities are specifically known to be payable in the future.
11) Taxes on Income : Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between book and taxable profit using the tax
rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. The Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty that the assets will be realized in the future.
12) Provisions and Contingent Liabilities:
Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.
Contingent liabilities are not provided for and are stated by way of notes to accounts. Contingent liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
13) Prior period Items: The Income and Expenditure which arise in the current period as a result of errors and
omissions in preparation of financial statements of one or more prior period are considered as Prior Period Items and are shown separately in the financial statements.
14) Prepaid Expenses/Liability for Expenses:
Pre-paid Expenses/Liabilities for expenses are recognized as under:
a) Foreign Stations -Rs.50,000/- and above in each case. b) Domestic Stations -Rs.10,000/- and above in each case.
15) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular operating, financing and investing activities of the company are segregated.
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NOTE "2" : SHARE CAPITAL(Rupees in Million)
Particulars As at March 31, 2015
As at March 31, 2014
AUTHORISED
80.0 Million Equity Shares of Rs.100 each 8,000.0 300.0 (Previous Year : 3.0 Million Equity Shares of Rs.100 each)
8,000.0 300.0
ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARES78.0 Million Equity Shares of Rs.100 each 7,800.0
300.0
(Previous Year : 3.0 Million Equity Shares of Rs.100 each) (The entire Share Capital is held by Air India Limited, previously known asNational Aviation Co. of India Limited a company formed under theCompanies Act, 2013 and its nominees)
TOTAL 7,800.0 300.0
2.1 Share holding more than 5% of Equity Share Capital and Shares held by Holding-Ultimate Holding Company
Name of the Shareholders No.of Shares % of Holding No.of Shares % of Holding
Air India Limited 78.0 Million 100 3.0 Million 100.0
(including shares held by nomineeshareholders)
2.2
2.3
2.4
Particulars 2014-15 2013-14 2014-15 2013-14
Equity Shares (face value Rs.100/- each):
At the beginning of the period 3.00 3.00
300.00 300.00
Add : Allotted during the period 75.00 - 7,500.00 -
At the end of the period 78.00
3.00
7,800.00
300.00
2.5
2.6
The Company has only one class of share having face value of Rs.100/- each with equal rights of voting and dividend.
During the year Company has issued 75.0 Million Shares to Air India Limited @ Rs.100 each ,share pursuant to partial conversion of amount due to Air India Limited.
As at March 31, 2014As at March 31, 2015
Reconciliation of number of shares outstanding at the beginning and end of the reporting period is as given below :
(Number of Shares in Millions) (Share Value Rupees in Millions)
During last five years no shares were issued as Bonus shares on capitalization of Reserve or Surpluses.
No shares were bought back in the last five years.
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NOTE "3" : RESERVES AND SURPLUS
Particulars As at March 31, 2015 As at March 31, 2014
1. CAPITAL RESERVE
Balance as per Last Balance Sheet 343.50 364.40
Add : Additions during the year -
Less : Transfer to the Statement of Profit and Loss as 20.90 20.90
reduction from Depreciation (Refer Note 20)
Closing Balance 322.60 343.50
2. Surplus / (Deficit) in the Statement of Profit and (Loss)
Balance as per last financial statements (24,049.00) (20,595.60)
Loss/ Profit for the year (610.30) (3,453.30)
Net deficit in the Statement of Profit and Loss (24,659.30) (24,048.90)
TOTAL (1+2) (24,336.70) (23,705.40)
(Rupees in Million)
NOTE "4" : LONG TERM BORROWINGS
Particulars
As at March 31, 2015
As at March 31, 2014
As at March 31, 2015
As at March 31, 2014
I Bonds / Debentures 950.00 950.00 - 7000 @ 9.13% Redeemable, Non-convertible Debentures
of face value of Rs.10 lakhs each (Unsecured)
(Redeemable on 26th March 2020)
(Fully Guaranteed by the Government of India)
II Term Loansa) from Banks (Secured) 2,502.10
2,493.80
-
-
b) from Banks (Unsecured) -
-
-
-
III Finance Lease Obligations 14,273.10
16,946.00
3,404.00
3,134.60
TOTAL 17,725.20
20,389.80
3,404.00
3,134.60
(Rupees in Million)
Non-Current Current
4.1 Bonds/Debentures
950 Redeemable, Unsecured Non-convertible Debentures of face value of Rs.1 Million each (Previous Year : 950
Debentures), are guaranteed by Government of India. Debentures are redeemable on 26th March 2020. Maturity
Profile and Rate of interest of Non-Convertible Debentures are set out below :
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(Rupees in Million)
Rate of
Interest
Payment Due
Upto
Repayment
Mode
Security Number of
Instalment
Balance
9.38% 26 March 2020 Bullet GOI Guarantee N.A.
Term Loan of Rs. 2,500.0 Million (Previous Year Rs.2,500.0 Million) taken from Indian Overseas Bank against the Corporate Guarantee given by Air India Limited (Holding Company) and the collateral security of A320 Aircraft (VT-ESH) owned by Air India Limited (Holding Company) with payment term - Bullet payment due on 30 March 2016 i.e. five years after the first disbursement.
Finance Lease Obligations of Rs. 17,677.1 Million (Previous Year 20,080.6 Million) are guaranteed by the Government of India to the extent of Rs. 17,677.1 Million (Previous Year Rs.20,080.6 Million)
(Rupees in Million)
Name of Loan
Rate of Interest Security Number of Instalment
Balance as on 31.03.2015
Amount Payable
1-5 Years
Amount Payable
beyond 5 Years
Exim Tr. I
Fixed for each loan ranging
between 2.46%
to 2.73%
86 8,852.7 -
Exim Tr. II Libor -0.05 / 0.75 45 4,114.6 502.0
Assest based
finance structure
& GOI Guarantee
Exim Tr. III Libor + 0.93 27 3,103.0 1,104.9
16,070.2 1,606.9
Current Maturities of long term borrowings have been grouped under the head Other Current Liabilities (Refer Note 5)
NOTE "5" : LIABILITIES
Particulars
As at March
31, 2015
As at March
31, 2014
Trade Payable 8,809.07 5,700.80 (Refer Note No.26 regarding MSME) ( Refer Note 5.1)
(A) 8,809.07 5,700.80 Other Liabilities
a) Current maturities of finance lease obligations 3,404.00 3,134.60 b) Interest accrued but not due on borrowings 542.90 414.20
c) Forward Sales (Net) [Passenger / Cargo] 3,795.80 2,981.10 d) Advance from customers (Net) 171.20 72.80
e) Others Liabilities (Net)
i) Payable to Air India Ltd. (Holding Company) 10,527.40 18,320.00 ii) Others ( Refer Note 5.2) 62.80 192.30
(B) 18,504.10 25,115.00 TOTAL (A + B) 27,313.17
30,815.80
5.1
5.2
Other Current Liabilities
Trade Payables includes payables for goods purchased, services received and other expenses.
(Rupees in Million)
Others includes Statutory Dues.
4.2
4.3
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NOTE "6" : PROVISIONS
Particulars
As at March
31, 2015
As at March
31, 2014
As at March
31, 2015
As at March
31, 2014
Provision for Employee Benefits
a) Gratuity 101.20 73.50 3.10 2.70
b) Leave Encashment 28.20 25.10 2.00 1.80
TOTAL 129.40 98.60 5.10 4.50
Long-term Provisions
(Rupees in Million)
Short-term Provisions
NOTE "7" : SHORT TERM BORROWINGS(Rupees in Million)
Particulars As at March 31, 2015 As at March 31, 2014
I Loans repayable on demand :
a) from Banks in foreign currencies (Unsecured) 1,199.50 1,198.30
b) from Banks in Indian Rupees (Unsecured) 5,307.50 9,380.00
II Loans and Advances from Bank & Others
a) from Banks in Indian currencies 3,513.80 -
TOTAL 10,020.80 10,578.30
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NOTE "8" : FIXED ASSETS
Sl. Particulars
No. As at Additions Deductions / As at As at For Deductions/ Total Upto As at As atApril 01,
2014Adjustments March 31,
2015April 01,
2014the year Adjustments March 31,
2015March 31,
2015March 31,
2014
TANGIBLE ASSETS :
A. AIRCRAFT FLEET & ROTABLES
1 Airframes
(a) Owned & Self Operated 27,135.05 542.70 - 27,677.75 7,210.07 1,376.82 - 8,586.89 19,090.86 19,924.98
(b) Leased - - - -
2 Aero Engines & Power Plants -
(a) Owned & Self Operated 17,324.81 248.64 - 17,573.45 4,695.30 866.94 - 5,562.24 12,011.21 12,629.51
(b) Leased - - - - - -
3 Simulators & Link Trainers 440.01
-
-
440.01
96.49
20.90
-
117.39
322.63
343.53
4 Airframe Rotables 1,548.51 46.50 - 1,595.02 504.31 75.76 - 580.07 1,014.95 1,044.21 5 Aero-Engine Rotables 180.78
-
180.78
37.88
8.59
-
46.46
134.31
142.90
6 Simulator Rotables - - - - -
SUB TOTAL "A" 46,629.16 837.85 - 47,467.01 12,544.04 2,349.01 - 14,893.05 32,573.96 34,085.12
B. VEHICLES
1. Vehicles 9.03
-
9.03
5.77
0.26
6.03
3.01
3.26
SUB TOTAL "B" 9.03
-
-
9.03
5.77
0.26
-
6.03
3.01
3.26
C. OTHER- FIXED ASSETS
1 Workshop Equipment, Instru- 37.09
0.75
-
37.84
9.25
2.41
-
11.66
26.18
27.84
ments Machinery and Plants
2 Ground Support & Ramp Equipment
22.28
-
-
22.28
9.61
1.33
10.94
11.34
12.67
3 Furniture & Fixtures 9.21
-
-
9.21
2.52
0.47
2.98
6.23
6.69
4 Electrical Fittings & Installations 0.07
-
-
0.07
0.02
0.00
0.02
0.05
0.06
5 Computer System 18.67
0.02
-
18.69
14.16
1.51
15.67
3.03
4.52
6 Office Appliances & Equipment 10.16
2.05
-
12.21
2.01
0.65
2.66
9.56
8.15
SUB TOTAL "C" 97.49
2.82
-
100.32
37.56
6.37
-
43.93
56.39
59.93
TOTAL FOR TANGIBLE ASSETS 46,735.69
840.67
-
47,576.36
12,587.37
2,355.63
-
14,943.00
32,633.35
34,148.32
INTANGIBLE ASSETS :
A. COMPUTER SOFTWARE 9.42
-
-
9.42
1.00
0.45
1.45
7.97
8.43
TOTAL ASSETS 46,745.11
840.67
-
47,585.78
12,588.36
2,356.09
-
14,944.45
32,641.33
34,156.74
Previous Year 44,431.74
2,313.37
-
46,745.11
10,287.27
2,301.09
-
12,588.36
34,156.74 Capital Work-in-Progress
Intangible Assets under Development
GRAND TOTAL 32,641.33
34,156.74
GROSS BLOCK DEPRECIATION NET BLOCK
(Rupees in Millions)
8.1 Additional to and deductions from "Aircraft Fleet and Rotables" includes Exchange Rate Fluctuations on underlying loans in foreign currency : addition Rs.791.34 Million (Previous year Rs.2169.0 Million)
8.2 Aircraft Fleet and Rotables includes 17 Aircraft (Previous Year : 17 Aircraft) B737-800 (Registration No's VT-AXH,AXI,AXJ,AXM,AXN,AXP,AXQ,AXR,AXT,AXU,AXW,AXX,AXZ,AYA,AYB,AYC and AYD) acquired on finance lease continues to be in the name of SPV company for which beneficial ownership is with Air India Charters Limited Gross Block : Rs.27,677.75 Million (Previous Year : 27,135.0 Million ), Depreciation : 8,586.89 Million ( Previous Year Rs.7,210.1 Million ), Net Block : Rs.19,090.86 Million (Previous Year : 19,925.0 Million) Future Lease rental obligation aggregate to Rs.17,677.1 Million (Previous Year : Rs.20,080.6 Million) for which liability of an equal amount is included in the year end balance of Future Lease Obligation.
8.3 Depreciation during the year amounts to Rs. 20.9 Million (Previous Year : 20.9 Million) on Simulatior has been adjusted from Capital Reserve created for Capitalization of Simulator.
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NOTE "9" : LOANS AND ADVANCES
Particulars
As at March 31, 2015
As at March 31, 2014
As at March 31, 2015
As at March31, 2014
Security DepositsUnsecured Considered Good 283.10 267.60 1.50 - Doubtful - - - -
283.10 267.60 1.50 - Less : Provision for Doubtful Advances - - - -
(A) 283.10 267.60 1.50 - Advance to Related PartiesUnsecured Considered Good 13.00 0.70 - - Doubtful - - - -
13.00 0.70 - - Less : Provision for Doubtful Advances - - - -
(B) 13.00 0.70 - -
Advances recoverable in Cash or KindUnsecured Considered Good - - 1,671.30 402.80 Doubtful - - - -
- - 1,671.30 402.80
Less : Provision for Doubtful Advances - - - - (C) - - 1,671.30 402.80
Loans and Advances to EmployeesUnsecured Considered Good - - 11.30 0.50 Doubtful - - - -
- - 11.30 0.50 Less : Provision for doubtful employee Advances - - - -
(D) - - 11.30 0.50 Other Loans and AdvancesPrepaid Expenses - - 554.20 914.50 Balances with Statutory / Government Authorities 67.30 66.90 - -
(E) 67.30 66.90 554.20 914.50
TOTAL (A + B + C + D + E) 363.40 335.20 2,238.30 1,317.80
Long Term Loans & Advances
(Rupees in Million)
Short Term Loans & Advances
NOTE "10" : TRADE RECEIVABLES
Particulars As at March 31, 2015 As at March 31, 2014
Outstanding for a period exceeding six months from the date they are due for payment
Secured, Considered Good - -
Unsecured, Considered Good -
-
Doubtful -
-
-
-
Less : Provision for Doubtful Receivables -
-
-
-
Other ReceivablesSecured, Considered Good 634.20
352.40
Unsecured, Considered Good -
-
Doubtful 50.30
57.80
684.50
410.20
Less : Provision for Doubtful Receivables 50.30
57.80
Total 634.20
352.40
(Rupees in Million)
Current Receivables
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NOTE "11" : OTHER CURRENT ASSETS
Particulars
As at March 31, 2015 As at March 31, 2014
1. Interest Accrued on
i) Fixed Deposits 0.20 0.40
iii) Others - -
2 Interest Paid in advance 8.70 -
3 Others 0.21 -
9.11 0.40 3. Surplus Assets - - 4. Foreign Currency Monetary Items Translation Difference Account - - 5. Other Non-Trade Receivables
Unsecured, Considered Good - - - - Less : Provision for Doubtful Receivables -
-
- -
TOTAL 9.11
0.40
(Rupees in Million)
Other Current Assets
NOTE "12" : INVENTORIES (As taken, valued & certified by the Management)
Particulars As at March 31, 2015 As at March 31, 2014
Stores and Spare Parts 2,178.70 1,891.50
Loose Tools 0.30 -
2,179.00 1,891.50 Less : Provision for Obsolescence / Inventory Reconciliation (282.50) 375.50
1,896.50 1,516.00 Outstation Purchases for India (19.80) -
TOTAL 1,876.70 1,516.00
NOTE : "13" : CASH AND BANK BALANCES
Particulars As at March 31, 2015 As at March 31, 2014
Cash and Cash Equivalents1. Balances with Banks :
a) On Current Accounts 822.80 665.00 b) Deposit Accounts (Maturity less than 3 months) - -
2 Cash on Hand (as certified by the Management) 1.40 1.40
3 Remittances in Transit 65.30 125.60 (A) 889.50 792.00
Other Bank Balances
Margin Money Deposits (more than 3 months but less than 12 months) 4.50 11.10 (Under lien against Bank Guarantee/Letter of Credit with SBI)
(B) 4.50 11.10 TOTAL (A + B) 894.00
803.10
(Rupees in Million)
(Rupees in Million)
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NOTE "14" : TRAFFIC REVENUE
Scheduled Services
1 Passenger 25,488.40 23,166.10 2 Excess Baggage 411.40 295.50 3 Mail 0.30 0.40 4 Cargo 264.50 132.50
26,164.60 23,594.50
Less : Revenue Sharing with Air India Limited (Holding Company) 3,270.60 2,949.30
22,894.00
20,645.20
Non Scheduled Traffic Services
1 Charter 5.00 -
5.00 -
Particulars 2014-15 2013-14
(Rupees in Million)
Particulars 2014-15 2013-14
(Rupees in Million)
(Rupees in Million)
NOTE "15" : HANDLING, SERVICING AND INCIDENTAL REVENUE
1 Handling and Servicing 10.90 15.00
2 Incidental 38.30 33.80
TOTAL 49.20
48.80
Particulars 2014-15 2013-14
NOTE "16" : OTHER REVENUE
Interest Income on Bank Deposit 1.40 2.10
TOTAL 1.40 2.10
NOTE "17" : OPERATING EXPENSES
1 Insurance 146.90 157.70
2 Material Consumed - Aircraft 1,107.50 507.40 3 Outside Repairs - Aircraft 545.80 427.10 4 Navigation, Landing, Housing and Parking 1,178.20 1,186.90 5 Hire of Aircraft 207.60 859.10 6 Handling Charges 1,268.50 1,270.60 7 Passenger Amenities 422.00 400.10 8 Booking Agency Commission 190.70 182.30 9 Communication Charges
i) Reservation System 47.10 23.30 ii) Others 2.70
2.60
TOTAL 5,117.00 5,017.10
Particulars 2014-15 2013-14
(Rupees in Million)
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NOTE "18" : EMPLOYEE BENEFIT EXPENSES
1 Salaries, Wages and Bonus 1,130.80 869.70
2 Crew Allowances 344.50 654.80
3 Contribution to Provident and Other Funds 21.00 16.70
4 Staff Welfare Expenses 1.70 2.10
5 Provision for Gratuity 28.10 33.20
6 Provision for Leave Encashment 3.30 6.90
TOTAL 1,529.40 1,583.40
NOTE "19" : FINANCE COST
1 Interest on :
a) Debentures 89.10 89.10
b) Aircraft Loans 494.70 558.70
c) Other Loans 3,199.90 3,325.60
3,783.70 3,973.40
2 Other Borrowing Costs 1.90 -
3 Delayed Payment Charges to Fuel Companies 177.90 182.70
TOTAL 3,963.50 4,156.10
Particulars 2014-15 2013-14
(Rupees in Million)
Particulars 2014-15 2013-14
(Rupees in Million)
Particulars 2014-15 2013-14
(Rupees in Million)
NOTE "20" : DEPRECIATION AND AMORTIZATION EXPENSE
1 Depreciation of Tangible Assets 2,355.60 2,300.60
2 Amortization of Intangible Assets 0.40 0.40
(A) 2,356.00 2,301.00
Less : Recoupment from Capital Reserve (Refer Note 3) 20.90 20.90
(B) 20.90 20.90
TOTAL (A- B) 2,335.10 2,280.10
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Particulars 2014-15 2013-14
(Rupees in Million)NOTE "21" : OTHER EXPENSES
1 Travelling Expenses
i) Crew 228.20 219.10 ii) Others 26.50 27.50
2 Rent 9.20 6.903 Rates and Taxes 0.10 0.104 Repairs to :
i) Buildings - 0.20ii) Others 164.30 10.20
5 Hire of Transport 42.30 36.706 Electricity & Heating Charges 13.60 18.607 Water Charges 0.30 0.208 Publicity and Sales Promotion 8.80 3.909 Printing and Stationery 2.30 1.80
10 Legal Charges 5.70 0.3011 Auditors' Remuneration and Expenses 0.50 0.4012 Provision for Bad & Doubtful Receivables and Advances 410.20 -13 Provision for Obsolescence (Net) - 37.5014
Exchange Variation (Net) 58.70 (73.10)15 Provision for Inventory Migration Surplus / Written back 49.30 100.7016 Provision No Longer Required (50.60) (75.70)17
Miscellaneous Expenses 219.90
156.10
TOTAL 1,189.30 471.40
NOTE "22" : PRIOR PERIOD ADJUSTMENTS (Net)
Revenue Heads
1) Passenger Revenue - (6.70) 2) Others (240.90) -
(A) (240.90) (6.70) Expenditure Heads
1) Handling Charges 0.50 34.70 2) Stores and Equipments 0.10 -
3) Passenger Amenities 9.30 9.90 4) Crew Hotel Expenses 1.30 5.90 5) Publicity - - 6) Delayed Payment Charges to Fuel Companies - 47.80
7) Hire of Transport - - 8) Salaries/Staff Welfare Expenses 0.90 0.20
9) Landing, Parking and Navigation 4.90 128.10 10) Professional and Consultancy 4.50 - 11) Fuel (Ops.) - Aircraft 151.20 (177.00) 12) Rent, Rates and Taxes (36.30) 1.40 13) Expenses on Computer Reservation 14.50 - 14) Interest - 72.60 15) Outside repair 0.70 2.70
16) Others (Net) 53.80 0.60
(B) 205.40 126.90
TOTAL (A+B) (35.50) 120.20
Particulars 2014-15 2013-14
(Rupees in Million)
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NOTES TO FINANCIAL STATEMENTS FOR F.Y.2014-15
23. CONTINGENT LIABILITY:
A. Claims against the Company not acknowledged as debts (excluding interest and penalty wherever applicable) and being contested to the extent ascertainable and quantifiable:
(Rupees in Million)
Description 2014-15 2013-14
Directorate General of Central Excise Intelligence on applicability of Service Tax on various fees paid to External Commercial Borrowings (ECB) loans under Banking & Financial Services, Management, and Maintenance & Repair Service etc. For the period 2005 to 2015 (FY 2014-15 - Rs.10.25 Million). Waiver request from Air India Charters Limited is pending with
Service Tax Department. 523.50 513.30
Customs and Excise Department has sent notices for the payment of Customs Duty on the consumption of the fuel on Domestic Flights and the same is under appeal. Air India Charters Limited is also eligible to claim the duty free credit under SFIS scheme that is granted by the Ministry. (FY 2014-15 - Rs. 3.68 Million). Appeal filed with Commissioner of Customs,
Cochin. 17.18 13.50
The Company has received the demand notice vide Ref No. 72-00593 dated 9.12.2014 towards:
a. TDS dues for Assessment Year 2007-08 to 2014-15. Vide Ref No. 72-00593 dated 9.12.2014 New ref no. DCIT
(TDS) 1 (1)/Recovery/2015-16 for F.Y.2014-15 322.44 115.40
b. TDS dues for Assessment Year 2009-2011 (FY 2014-15 Rs. NIL) (Notice no.MUM/DCIT(TDS) 1(1)/ Recovery/
2013-14), u/s 194 H 29.10 29.10
c. TDS dues for the period 2009-2011 (FY 2014-15 NIL) 6.40 6.40
Request for waiver / rectification for the demands is pending with Income Tax Department are being followed.
Court Cases pending and the claim amount. 24.80 ----
(a) Letter of Credits issued by Bank of Baroda for Exim Tranche II loan outstanding amount to Rs. 750.00 Million (Previous Year: Rs. 719.00 Million)
(b) Foreign bank guarantee issued by State Bank of India towards outstanding balance of Tranche III loan Rs. 563.4 Million.
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(c) Pending reconciliation with various airport authorities, quantum of delayed payment charges payable, if any, has not been provided as the amount is not ascertainable.
24. CAPITAL COMMITMENTS:
Aircraft Projects:
Capital Commitments are in respect of estimated amount of contracts remaining to be executed on Capital Account (Net of Advances) Rs. 652.50 Million (Previous Year Rs. 625.50 Million) being cost of one spare engine.
25. RETIREMENT BENEFITS:
(a) Contributions to Defined Contribution Schemes such as Provident Fund are charged to the Profit & Loss Account as follows:
Provident Fund Rs.21.0 Million (Previous Year Rs. 16.70 Million).
(b) The Company also provides retirement benefits in the Form of Gratuity and Leave Encashment on the basis of valuation, as at the Balance Sheet Date, carried out by independent Actuaries, as per revised AS15 issued by the Institute of Chartered Accountants of India. Net liability as per Actuarial Valuation is given in following table:
i. Privilege Leave Encashment is payable to all eligible employees at the time of retirement upto a maximum of 84 days. Leave Encashment provided for Rs. 30.20 Million (Previous Year Rs. 26.90 Million).
ii. Defined Benefit Plan-Gratuity (Unfunded)
(Rupees in Million)
Sr. Particulars As at As at No. 31. 03. 2015 31. 03. 2014
A Change in Benefit Obligation· l Liability at the beginning of the year Interest Cost 76.2 43.0· l Current Service cost - - · l Benefit Paid - -· l Actuarial gain/(Loss) on Obligations 28.1 33.2 l Liability at the end of the year 104.3 76.2
B Fair Value of Plan Assets
l Fair Value of Plan Assets at the beginning of the year - - l Expected return on Plan Assets Contributions - - l Benefit Paid - - l Actuarial gain/(Loss) on Plan Assets - - l Fair Value of Plan Assets at the end of the year - -
Total Actuarial gain/(Loss) on Plan Assets – -
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Sr. Particulars As at As at No. 31. 03. 2015 31. 03. 2014
C Actual return on Plan Asset
Expected return on Plan Asset Actuarial gain/ (Loss) on Plan Asset - -
l Actual return on Plan Asset - -
D Amount recognized in the Balance Sheet Liability at the end of the year
l Fair Value of Plan Assets at the end of the year 104.3 76.2
l Difference - - Amount recognized in the Balance Sheet 104.3 76.2
E Expenses recognized in the Profit & Loss Account
Current Service cost Interest Cost Expected return on Plan Asset Net Actuarial gain/(Loss) to be recognized 28.1 33.2
Expenses recognized in the Profit & Loss Account 28.1 33.2
F Balance Sheet reconciliation Opening Net Liability 76.2 43.0
Expense as above 28.1 33.2
Employer's contribution - - Closing Net Liability 104.3 76.2
G Actuarial Assumptions for the year: Discount rate 7.94% 9.31% Rate of return on Plan Asset Salary Escalation 9.31 % 5.00 %
Note: The provision for Gratuity and Leave encashment was made in the books of accounts as confirmed by the Actuarial valuer which includes Discontinuance Liability and Projected Benefit obligation to the tune of Rs. 104.28 Million in respect of Gratuity and Rs. 30.17 million towards Leave encashment as on 31.03.2015. The liability created towards the Discontinuance would be reviewed during the Financial Year 2015-16 and necessary adjustments would be undertaken.
26. In the absence of information of supplier's status, as defined under the Interest on Delayed payments to Micro Medium and Small Enterprises (MSME) Act 2006, the disclosure for unpaid amounts together with interest on delayed payments, if any, to such suppliers, could not be made in the Accounts.
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27. On 26th March, 2010, the Company had issued 950 Privately Placed , Rated, Listed, Unsecured, Taxable, Redeemable, Non-Convertible Debentures with face value of Rs.1 million each, aggregating to Rs.950 million. These bonds are guaranteed by Government of India. The Bond issue has been rated by CRISIL as AAA (SO) and Fitch Ratings as AAA (ind) (SO) (Exp).
These debentures are redeemable at par on March 26, 2020. Redemption Reserve as required under section 71 of the Companies Act 2013 has not been created since there are no profits.
28. During the current financial year the company has billed Air India Air Transport Services Limited (Subsidiary Company of AI) of Rs10.94 million towards various man power services. The amount so billed has been recognized as handling revenue and the cost incurred of Rs10.01 million has been debited to the Staff Cost.
29. While the company has opened independent bank accounts at various Indian/foreign locations, there are still some transactions carried out by Air India Limited for and behalf of the company and vice-versa. Expenditure/collections at some stations are made by Air India Limited on behalf of the company and same has been routed through the Current Account/Inter Company Payable and Receivable, based on information provided by Air India Limited.
30. Cargo Revenue and Mail Revenue has been accounted based on information received from Air India Limited. Whereas the Excess Baggage collection at few stations are controlled and monitored by Air India Limited on behalf of the company and the same has been accounted based on information provided by Air India Limited.
31. INVENTORY & ROTABLES :
a) Procurement of Stores, Aircraft etc. is controlled and monitored by the Air India Limited (Holding Company).
b) The aircraft inventory of the company had been migrated to the ERP package developed by RAMCO, during 2012-13 except the inventory valued at Rs.8.1 Million (Previous Year Rs.8.1 Million) which is still being maintained in legacy system.
c) During the migration process in 2012-13, no physical verification of the inventory was conducted and the migration was done based on sign off reports related to legacy systems/manual records or data compiled at different locations. The documented bases for quantities and values migrated to RAMCO system were not readily available mainly in case of inventory of unserviceable items. The physical verification of migrated inventory has since been completed and the discrepancies noticed are under verification and necessary accounting adjustments are to be done for after due process. The balances in SAP with RAMCO data base is under reconciliation. The financial impact of the same is not ascertainable at this stage. The data migration audit of the process is also to be conducted and discrepancies if any would be adjusted in due course.
d) During the migration process in 2012-13, wherever applicable weighted average cost in respect of unserviceable inventory was not readily available, the valuation rates in these cases had been taken as per latest available weighted average rates / catalogue price. There are cases wherein Free of Cost (FOC) items, cannibalized items and items of inventory received with Aircraft have also been valued and taken into inventory at the values as stated above. However, as informed by the Air India Limited, items where rates / quantities were still to be corrected have been identified and corrective entries have been passed during the year 2014-15. Impact of such entries has been given in material consumption account. consequently the provision of Rs.91.7 million has been reversed. (Previous year Rs.91.7 Million).
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e) As per the accounting practice followed by the company in order to comply with the laid down accounting policy, the repairable items issued, are debited to consumption account at the time of closure of work order while the parts received back against the issue are taken back in the inventory. Consequent to the practice followed, there are unserviceable parts being carried as inventory and valued at latest weighted average cost. As the process is continuous, it is not possible to match the items/values charged to consumption and taken back. The difference on account of change in weighted average as well time-lag between the issue of material and its return in the inventory remains unascertained due to the volume of transactions. The same is adjusted at the time when respective accounting actions are taken as at the year end, the precise impact thereof has not been determined.
f) The data relating to the last five years' movement of inventory is not available in RAMCO systems. Based on the movement data available in the legacy system, items have been identified as non-moving and provision towards the same has been carried to the extent of Rs.40.86 Million (Previous Year Rs.91.4 Million during the year).
g) As confirmed by Material Management Department of Air India Ltd., physical verification of inventories for the biennial period 2012-14 is under process and necessary accounting treatment of the discrepancies observed by the internal auditors of Air India Limited, are to be carried out in due course.
h) The holding company has engaged outside consultants to advise on streamlining the entire system of inventory accounting to benchmark the industry best practices and system of ordering and controls. RAMCO software is also being upgraded suitably. The management is taking required steps to ensure that the discrepancies noticed during migration/ post migration with regard to physical verification and valuation of inventory balances being carried in the books of accounts and necessary accounting treatment shall be carried out at the time of reconciliation. The precise financial impact of the same on the financial statements is not ascertainable at this stage.
I) Inventories at the year end include balances under in-house repairing jobs being carried as “Work order Suspense Internal / External” which contains materials issued and repair charges valued at Rs. 1070.76 million issued in respect of closed/ completed/ pre-closed/ cancelled/ initiated/ in-progress Work Orders having completion date till the year end, lying unadjusted. These items are to be accounted for as consumption of material/ Repairs, as per the accounting process followed in the RAMCO system. Further to aforesaid, the work order suspense account, include expendable items of Rs. 483.35 Million which are to be charged off to consumption on issuance. As against the above, a provision of Rs 241.67 million has been made in the books for the FY 2014-15 as per the existing practice and accounting for the remaining items shall be done as and when these work-orders are closed in the RAMCO system.
j) Pending reconciliation / rectification of inventory balances, no provision has been made towards the inventory balances aggregating to Rs. 121.4 Million lying under various intermediary heads for which consumption / issue / scrappage has not been updated in RAMCO system till Mar 2015. Necessary accounting adjustments shall be carried out in due course.
k) Liability for Goods/Expenses for all materials received have been provided as per the values in GRANs & Store-in-Transit statement as on 31.3.2015 as per RAMCO generated data. The system of delay in preparation of GRANs and accounting of GRANs outside RAMCO database and consequential effect thereon on recognition of liability is under review at appropriate level. As the entries in SAP are being posted at summary level, vendor-wise reconciliation of balances of advances and payable outstanding at the year-end is pending. Accounting of exchange
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difference relating to transactions settled during the year and translation of liabilities denominated in foreign currency at the year end has also been done to the extent of available data. There are various vendor related accounts which are being reconciled. The accounting of FDI (Freight Duty and Incidentals) is also being streamlined by capturing such cost in RAMCO. The precise financial impact of the above is being ascertained and shall be accounted for in due course.
l) The interface between SAP and RAMCO is yet to be stabilized and hence stores accounting data as received from RAMCO is being entered through summary level entries in SAP. Closing balance of inventory as per the books of accounts is being reconciled with RAMCO data base and necessary adjustment shall be carried out after such reconciliation. The delay in the interface is mainly due to the exact nature of accounting to be finalized in view of the RAMCO system being ideally suited for MRO applications.
m) The value of Rotables migrated to SAP is available on consolidated block basis. Post migration to RAMCO/ SAP, the item-wise details of Rotables are being worked out as per data generated from RAMCO. The item-wise details of Rotables as generated from RAMCO software are being compared with financial records. Necessary reconciliation of data as per Finance records with RAMCO generated data shall be carried out in due course and necessary accounting adjustment in that respect will be carried out thereafter.
32. As per MOU between Air India Limited (Holding Company) and Air India Charters Limited, revenue earned from Scheduled Services of Air India Charters Limited has been shared between Air India Limited and Air India Charters Limited in the ratio 12.50% and 87.50% respectively effective FY 2012-13.. During the FY 2014-15 an amount of Rs. 3270.60 Million (Previous Year - Rs.2,949.31 million) was shared by AICL with AI towards Revenue Sharing.
33. Pursuant to the Undertaking between Air India Charters Limited and Air India Limited, and commercial decisions, Air India Charters Limited was to share cost towards common facilities and services till 31st March, 2007. No cost towards common facilities and services has been allotted to Air India Charters Limited. However, in a phased manner, the stations which have only Air India Express flight operations, the complete station expenditure is being debited to Air India Charters Limited. In addition, during the current year, Air India Charters Limited has reimbursed an amount of Rs. 400.00 Million to Air India Ltd (Previous Year Rs.624.30 Million) towards the manpower deputed to the company. Similarly during the year 2014-15 (Jan to Mar 2015) Air India Engineering Services Limited has raised invoices on Air India Charters Limited towards the man power cost to the tune of Rs. 185.00 Million (Previous year NIL). Air India Charters Limited has claimed reimbursement towards engineers deputed for the similar revenue period to the tune of Rs.55.00 Million (Previous year NIL).
34. Claim for reimbursement of employees for availing medical insurance, lost baggage claims and crew allowances are accounted on Cash Basis.
35. During the FY 2012-13 the company has migrated to three new system viz. SAP for accounting, Reservation System and RAMCO for Inventory Management. The company is still in the process of implementing and strengthening the internal controls and carrying out System/Migration audit. The Company has carried out the Migration Audit of SAP System during the year 2013-14. The Company proposes to carry out the System Audit as suggested, through qualified professional firm/s in due course of time.
36. The Company has sought confirmation of balances for most of the major receivables and payables and in this respect parties have been requested to confirm the balances. However, in many cases the parties have not responded. Wherever the balances confirmed by the parties are not in agreement, the reconciliation is under process and effect of consequential adjustments is not ascertainable as of now.
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37. As per the consistently followed practices, the ageing of debtors is arrived based on due date of the invoice. In certain cases there are unmatched / identified credits which are not netted against the debit outstanding and reconciliation of balances in the debtors account is in progress. The impact of the above on the age of debts as due as computed in accordance with the accounting policy of the company could not be ascertained.
38. Confirmation of Balances with fuel suppliers - Indian PSU Oil companies have been sought for the period ending 31.03.2015 for AICL / Air India group companies. However, the confirmation from some vendors have been received and completed. As regards the confirmation from other Oil companies, the balance confirmation and reconciliation of the same would be undertaken in due course of time.
39. SEGMENT REPORTING:
i) In terms of AS-17, the company is engaged in airline related business, which is its primary business segment and hence segment results are not discussed. The details of geographical area wise gross revenue earned (derived by allocating revenue to the area in which the safe was made) are given here under:
(Rupees in Million) Particulars FY 2014 – 15 FY 2013 – 14
a) Gulf 13,417.10 12,177.1
b) India 10,819.83 9,967.5
c) S.E. Asia 1,251.48 1,021.5
TOTAL 25,488.41 23,166.1
ii) The major revenue earning asset of the company is aircraft fleet which is Flexibly and optimally deployed across its route network. There is no suitable basis for allocation of assets and liabilities to geographical statement, consequently, area-wise assets and liabilities are not disclosed.
iii) Presentation of Annual Accounts read with the Directors Report every year enables better understanding of the performance of the enterprise, better assessment of risk and returns, and makes more informed judgment about the activities of the company as a whole.
40. LEASES:
i. Finance Leases:
Aircraft Fleet and Equipment acquired under finance leases are treated as if they had been purchased outright. The cost of these assets taken on lease was Rs. 45,251.2 million (Previous year Rs. 44,459.8 million). The future lease obligation is worked out at Rs. 17,677.2 million as at 31st March 2015 (Previous year Rs. 20,080.6 million).
st The breakup of total minimum lease payments due as on 31 March 2015 and their
corresponding present values are as follows:
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(Rupees in Million) Sl. No. Particulars As at March 31, 2015 As at March 31, 2014
a) Outstanding balance of minimum lease payments including interest there on:
Not later than one year 3,713.5 3,495.4
Later than 1 year and not later than 5 years. 13,210.2 14,405.3
Later than 5 years. 1,624.4 3,409.7
TOTAL 18,548.1 21,310.4
b) Present Value of (a) above
Not later than 1 year 3,404.0 3,134.6
Later than 1 year and not later than 5 years 12,666.2 13,590.7
Later than 5 years. 1,606.9 3,355.3
TOTAL 17,677.1 20,088.6
c) Finance Charges 870.9 1,229.8
Note: 1) Interest has been calculated assuming LIBOR as 0.5%.
2) As per the terms of the lease Agreement, the Holding Company – Air India Ltd, has given a Corporate Guarantee on behalf of the Company in respect of lease of the Aircraft.
ii. Operating Leases:
Aircraft :
The Company has taken Aircrafts on non cancelable lease. The future minimum lease rental payment as on 31st March, 2015 is as under:-
(Rupees in Million)
Details Current Year Previous Year
Payable within 1 year NIL 177.5
Payable later than 1 year and not later than 5 years NIL NIL
Later than 5 years NIL NIL
TOTAL NIL 177.5
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Lease rental recognized in the Profit and Loss Account is Rs. 207.6 Million (Previous Year Rs . 859.1 Million). Contribution to Maintenance Reserve to the extent not utilized is amounting to
stRs.385.17 million and on dry lease is amounting to Rs 197.50 million as on 31 march 2015, The Company has raised invoices for the Maintenance Reserve Claims and the excess amount charged by the lessor for the delayed redelivery of Aircraft. The same is under negotiation with the lessor and the same are going to be resolved in due course of time however during the year adhoc provision of Rs 400 million has been provided for.
iii. Arrangement for Finance Leases:
The aircraft capitalized (737-800) were delivered to Air India Charters Limited between December 2006 to December 2009. 85% of aircraft financing package provided by the financial institutions is guaranteed by US Exim which in turn is guaranteed through a GOI guarantee in favour of US Exim. The balance 15% is arranged through Commercial loans. Under the financing arrangement with US Exim the company has to form a Special Purpose Vehicle Company (SPV Company) which would be located in a tax free jurisdiction which would own the asset. A two tier structure was therefore putin place whereby the head lessor (SPV Company) was situated in Delaware which could lease the aircraft to an Irish SPV (established in order to make the transaction tax neutral). Since the issue of settling the GOI guarantee took considerable time, the company in the meanwhile had to take delivery of the aircraft in its books through a temporary financing arrangement. When the US Exim guaranteed loan was in place it was decided to cover all the delivered aircraft in the fleet up to that point by transferring the assets to the SPV Company based in Delaware and lease it again through the Irish SPV. There was as such, no actual sale to the SPV Company but this had to be done to complete and comply with the formalities of putting together a financial arrangement which was guaranteed through the US Exim. All costs related to the acquisition of the aircraft including the setting up of the SPV Companies have been capitalized in the books since it pertained to the acquisition of the aircraft. The lease has been structured as a financial lease so that the ownership in the aircraft would pass on to Air India Charters Limited at the end of the lease period. In the meanwhile, i.e. the time from when the asset was initially acquired by the company in its books to the date the asset was transferred to the SPV Company certain installments in the form of principal and interest fell due which were paid off. Thus, there was no impairment loss suffered by the company in this transaction.
41. Depreciation on Fixed Assets:
During the year company has changed the accounting polices for charging depreciation on fixed assets, depreciation is provided on all assets on straight-line method over the useful life of assets as prescribed in the Schedule II of the Companies Act 2013, keeping a residual value of 5% of the original cost.
The life of assets adopted is in accordance with the manner prescribed under Schedule II of the Companies Act, 2013 except for the assets given below.
S.No Type of Asset Life Adopted by Company Life Prescribed by Schedule II
1 Electrical Fittings 20 Yrs 10 Yrs
2 Furniture & Fixtures 16 Yrs 10 Yrs
3 Office Equipment 20 Yrs 5 Yrs
4 Plant & Machinery 20 Yrs 13 Yrs
5 Workshop Equipment 13 Yrs 15 Yrs
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Note:- For the differences in the life of assets as given above the Company is in a process of adopting the depreciation rate as prescribed under schedule II of the Company Act 2013 and the same will be implemented in the due course.
42. Related Party Transactions:
Disclosure as required by Accounting Standard 18 (AS18) "Related Party Disclosures" issued by the Institute of Chartered Accountants of India, are given below:
I. Related Party:
Where Control Exists: Air India Ltd., 100% Holding Company
a) Board Of Directors
st I) Shri Rohit Nandan Chairman ( up to 31 Aug 2015)st
ii) Shri Ashwani Lohani Chairman (w.e.f 31 Aug 2015) iii) Dr. Shefali Juneja Director iv) Smt. Puja Jindal Director
st v) Shri S. Venkat Director ( up to 31 Oct 2015)
st vi) Shri Vinod Hejmadi Director (w.e.f. 1 Nov. 2015)
b) Key Managerial Personnel:
Shri K. Shyam Sundar Chief Executive Officer
II. Related Party Transactions:
i) There are no Transactions with Key Managerial Personnel except remuneration and perquisites to Chief Executive Officer. During the year 2014-15, an amount of Rs. 3 million has been paid as remuneration to Chief Executive Officer.
ii) The Holding Company and its other subsidiaries companies are State Controlled enterprise as defined under AS-18 (Para 9) and hence transactions undertaken by the company with them do not fall within the definition of related party transactions.
iii) Transactions such as providing airline related services in the normal course of airline business are not included above.
III. No Loans or Credit Transactions were Outstanding with Directors or Officers of the Company or their relatives at the end of the year which is required to be disclosed in accounts under the Companies Act, 2013.
43. Deferred Tax Asset (Liability) is as under:
(As worked out by the Management) (Rupees in Million)
st st Particulars As on 31 March 15 As on 31 March14
Deferred Tax Liability: (DTL)
i) Depreciation 10472.0 10,915.0
Deferred Tax Assets: (DTA)
Disallowancesas per I.T.Act'61(Net) 10.0 13.0
Loss 10462.0 10,902.0
Total DTA 10472.0 10,915.0
Net DTA/(DTL) Nil Nil
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Note: i. Deferred Tax Liability (DTL) attributable to difference in the book and tax depreciation is
considered to give rise to situation of virtual certainty to Deferred Tax Assets (DTA), to the extent attributable to tax loss arising from such differential depreciation on account of direct nexus between such DTA and DTL. Hence, DTA for tax losses is recognized to the extent of DTL arising from depreciation difference.
ii. Losses does not include the Business Losses older than 8 years.
44. As per the practice followed, as prudence the company has charged-off the CENVAT credit up to 31st March, 2012. However, effective FY 2012-13, the amount to the extent of CENVAT credit claimed has been retained in the books of accounts and the balance amount has been charged off. This is due to the fact that, due to the amendment in the Service Tax Act, service tax has also been levied on economy class travel. Notwithstanding the above, the company reserves the right to claim accumulated CENVAT credit.
45. During the FY 2012-13, Air India Limited has billed the company towards reimbursement of cost along with service tax of Rs. 71.9 Million, which has been contested by the Company necessary action will be taken after conclusion of discussion with the holding company.
46. Pending final reconciliation with vendors, an amount of Rs. 407. 09 Million has been paid as 'On Account Payment' which has been shown under 'Advance to Supplier' and corresponding liability of same has been shown under respective Vendor Liability.
47. The following balances need to be confirmed and reconciled and adjusted for in the books –
(Rupees in Million)
Account Code Short Text Debit Bal. Credit Bal.
1109001000 AP Liability 51.14 0.00
1110003151 TDS 194 Clearing-Old 39.39 0.00
2212001505 Unidentified Receipt 0.00 28.96
2214005010 TDS – India 67.25 0.00
2214002280 Inter Station Account** - 254.83
2214005075 194 I TDS Certif Recble - 0.05
1110003110 TDS 194 C – Payable - 6.5
1110003115 TDS 194 I – Payable - 18.3
1110003125 TDS 194 J – Payable - 21.3
1110003130 TDS on Commission - 0.4
GRAND TOTAL 157.78 330.34
**Interstation account includes the amounts related to certain transactions, which could not be specifically identified as such.
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The impact on Profit & Loss Account on such reconciliation/confirmation, if any, is not ascertained. However, the Management doesn't expect any material adjustment on receipt of confirmation/ reconciliation of such balances.
48. Income Tax deducted at source India ( 2214005010 ) :
This account shows a balance of Rs. 67.2 million as refundable from the income tax authorities. However, as per the assessment orders available, the income tax authorities have determined nil refund. Necessary follow up action is being taken in consultation with the Tax Consultants. However, during the financial year 2014-15 an Adhoc provision of Rs. 20 million created in the books of Accounts.
49. EARNING PER SHARE:
(Rupees in Million)
Details As at 31.03.15 As at 31.03.14 Profit / (Loss) after tax & before Extra – ordinary items (610.38) (3453.20) LESS: Extra Ordinary items-
Profit/ (Loss) after tax & extra ordinary items (610.38) (3453.20)
Weighted Average no. of equity shares 15500000 3000000
EPS Basic & Diluted
Before Extra Ordinary items (Rs. Per Share) (39.37) (1151.1)
After Extra Ordinary items (Rs. Per Share) (39.37) (1151.1)
50. REMUNERATION TO STATUTORY AUDITORS:
The details of the audit fees and out of pocket expenses for the year 2014-15 are as under:
(Rupees in million)
Statutory Auditors: 2014-15 2013-14
Audit Fees for the year (Provision) 0.47 0.32
Out of Pocket Expenses 0.04 0.03
Total 0.51 0.35
51. In the opinion of the management, the year end balances of Current Assets, Loans and advances are expected to realize in the ordinary course of business and current liabilities expected to arise, at least to the extent the amount at which they are stated.
52. As per the notification issued by the Ministry of Corporate Affairs, Government of India, dated September 04, 2015, and as the consent given by the Board with regard to non-disclosure of
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information referred in paragraph 5(viii) (a) to (e), except (d) of Part II, Schedule III to the Companies Act, 2013, the same is not applicable to company.
53. There is no remittance during the year in foreign currency on account of dividend.
54. The details of turnover of in-flight items, as required vide paragraph 3(iii) (b) of Schedule VI of the Companies Act, 1956, are not disclosed as the turnover of such items is insignificant.
55. GOING CONCERN:
In the financial year 2012-13, the company has reviewed the Revenue Sharing arrangement with its holding company and reduced the Revenue Sharing from 25% to 12.5 %, as such, during the current financial years, the EBDITA has improved and also due to the various measures taken, the Company's operational and financial position would substantially improve in the future. The Accounts have therefore being prepared on the 'Going Concern' basis. Further to the above, the holding Company has invested Rs. 7500 Million by way of equity infusion during the financial year 2014-15. Also the Company has signed lease agreement for the Dry lease of 6 additional Aircrafts with M/s. GECAS and the delivery of the Aircrafts will be in the Calender year 2016.
For the first time in the history of AICL, the Company has not only recorded a Cash profit of Rs. 1724.9 million burt EBIDTA Rs 5688.50 million through an increased revenue of Rs. 2570.1 million during FY 2014-15. The company has doubled the Cargo Revenue in the current fiscal over the previous year and also surpassed the EB revenue by 39.22 % compared to previous FY. In addition, the fuel rates / expenses has contributed significantly to achieve the profitability. The Company has also achieved “Excellent” Grade as per the MoU parameters defined for FY 2014-15.
The company has signed the Dry Lease agreement with M/s. GECAS for 6 Aircrafts which are lined up
for delivery during the Calender year 2016 and additional routes were envisaged with clear marketing plan drawn up.
The Company is also exploring avenues to augment more ancillary revenue through on board sales, advertisements on board, other value added services to the customers etc. which would not only go a long way in the success of the Airline but also ensure credibility in the market.
56. SHARE CAPITAL:
The Holding Company vide 196th Board meeting held on 29th Jan .2015 has approved the conversion of dues of Rs. 750 Crores into Equity. With this the Share Capital of the Company has risen from Rs. 300 million to Rs. 7800 million which are fully owned by Holding Company.
57. As the Revenue Reconciliation/Accounting System is out sourced to an Outside Agency, the Company's accounts are getting recorded on the information/ periodical Trial Balances submitted by them. The required subsidiary ledgers are available with the Outsourced Agency, The Agency has provided the certificate as prescribed under SA 402 of the Institute of Chartered Accountants of India (ICAI) for the FY 2014-15.
58. RESERVATION SYSTEM :
Effective April 1st, 2012, Reservation System is migrated to a new Reservation System.
At the time of matching sales made by Cash Upfront Agent vis-a-vis Reservation System, it was observed that one of the leading agent has sold tickets but the amount of the sale had not been depleted
ndin Reservation System (Citrix). As a result, during the period 2012-13, 16,366 PNRs starting from 2
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April, 2012 onward, had not appeared in the Reservation system having a value of Rs. 207.9 Million. The matter had been rigorously taken up with the concern agent and the amount to the tune of Rs. 194.1 Millions has already been recovered in 2013-14 and the balance amount of Rs. 13.8 Million has been recovered in 2014-15.
At the initial stage of migration of Reservation System, due to a bug, the Transaction Fees had not been st
captured in respect of the new agent created after 1 April, 2012. As a result, during April to June 2012, the Company has suffered a loss of approximately Rs. 27.5 Million (as per report provide by Reservation System provider). The Reservation System has not admitted the Liability and instead has offered the support of US $ 25,000 towards any future development. Since the amount has not been admitted the liability, the Company has made provision for Doubtful debts. However efforts are being made continuously with the party to recover / adjust the same through software and related man hour costs.
59. INTEREST ON DELAYED PAYMENT TO FUEL COMPANIES:
During the year delayed Payment charges paid/payable to Oil companies amounting to Rs. 177.92 million (Previous Year Rs. 182.79 Million) has been included under "Finance Cost". Liability towards TDS on such payment has not been recognized as per the practice followed in this regard.
Signatures to the Schedules forming part of the Balance Sheet and Statement of Profit and Loss and to the above notes.
Kirtane & Pandit LLP
For and on behalf of the BoardFor and on behalf of
Chartered Accountants FRN : 105215W / W100057
Sd/-
Sd/-Ashwani LohaniChairman
Sd/-Dr.Shefali JunejaDirector
Sd/-K.Shyam SundarCEO
Suhrud G. LelePartnerM.No. 121162
Place : New Delhi Place : New Delhi
Sd/-M.ManoharanCFO
Sd/-Aditi KhandekarCompany Secretary
Date : 20 November 2015 Date : 20 November 2015
