NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE ... · NOTES FORMING PART OF...

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NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016

NOTE “1”

1. PRINCIPLES OF CONSOLIDATION �

The consolidated financial statements relate to Air India Limited (Holding Company), its subsidiaries and interest in Joint Venture Company. The Company, its Subsidiaries and Joint Ventures constitute the Group and hereinafter referred to as “the Group”.

i. The financial statements of the Holding Company and its Subsidiary Companies have been combined on a line – by – line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating the intra- group balances, intra-group transactions and unrealised profits & losses in accordance with the Accounting Standard/Policies on “Consolidated Financial Statements” and Financial Reporting of interests in Joint Ventures numbered as AS 21 and 27.

ii. The consolidated financial statement are prepared using uniform accounting policies for like transaction and other events in similar circumstances and are presented to the extent possible, in the manner as the company's separate financial statement of the parent company viz. Air India Ltd except as otherwise stated.

iii. The excess of the Equity of the Subsidiary/Joint Venture over the cost of investment in the Subsidiary Company/Joint Venture at the date on which investment is made is recognized as Capital Reserve in the Consolidated Financial Statement. Similarly, the excess of cost of investment in Subsidiary CO/Joint Venture over the equity of the subsidiary/Joint Venture at the date on which investment is made is recognized as Goodwill in the Consolidated Financial statement.

iv. Government of India is the only Minority Shareholder in one of the Subsidiary of Air India. Since the Govt of India is the sole shareholder of Air India Ltd also, the Govt of India is not considered as a Minority Shareholder and hence the minority interest is not segregated and disclosed separately.

2.� The Subsidiaries and Joint Venture Companies considered in the preparation of the Consolidated Financial Statement are as follows:-

Name of the Company Proportion (%) Proportion (%) of Share Holding of Share Holding as on 31.3.2016 as on 31.3.2015

Subsidiaries Incorporated in India

Airline Allied Services Limited (AASL) 100% 100%

Air India Air Transport Services Limited (AIATSL) 100% 100%

Air India Charters Limited (AICL) 100% 100%

Air India Engineering Services Limited (AIESL) 100% 100%

Hotel Corporation of India Limited (HCI) 64.86% 80.24%

Joint Ventures Incorporated in India

Air India SATS Airport Services Private Limited (AI- SATS) 50% 50%

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A. ACCOUNTING CONVENTION

i) Basis of Preparation�These Financial Statements of the Holding Company and its Subsidiary Cos have been prepared on going concern concept on accrual basis, (except as stated elsewhere), under historical cost convention, and are in compliance with generally accepted accounting principles and the Accounting Standards notified under the Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.

ii) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in India requires management of each of the companies in the Group 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 statements 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/materializes.

iii) Operating Cycle

The Group being in the service sector, there is no specific operating cycle; 12 months period has been adopted as “the Operating Cycle” in-terms of the provisions of Schedule III to the Companies Act 2013.

B. SIGNIFICANT ACCOUNTING POLICIES�

1. FIXED ASSETS

i) a) Fixed Assets (including major components) are stated at cost including incidental costs incurred pertaining to their acquisition and bringing them to the location for use and interest on loans borrowed, in terms of Accounting Policy No 11(b) where applicable, upto the date of putting the concerned asset to use.

b) Aircraft Rotables/Repairables are considered as components and shown as fixed assets.

ii) Expenditure on major modernization/modification/conversion of aircraft engines resulting in increased efficiency/economic life, is capitalized according to AS 10.

iii) Assets under leases, in respect of which substantially all the risks and rewards of ownership are transferred to the Company, are considered as Finance Leases and are capitalized.

iv) Physical Verification of Assets

Physical Verification of Assets by each of the companies in the Group is done on a rotational basis, at the end of such period (not exceeding two years) as considered appropriate by the management of each of the companies in the Group. The discrepancies observed in the course of the verification are adjusted in the year in which report is submitted.


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v) “Assets held for Sale”

In respect of assets held with an intention to sale, the net book value of the asset is transferred from block of the fixed assets to “Assets held for Sale”, when the sale becomes highly probable are classified as Current Assets. No depreciation is provided for if the price at which the Asset is sold exceeds its cost.

2. DEPRECIATION / AMORTIZATION

a) Depreciation is provided on all assets of the companies in the Group 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 except for the assets given below in Sub-Para (i) to (iii) as the life of these assets are not prescribed in Schedule II and has been determined by technically qualified persons as approved by the Board of Directors of the companies concerned, keeping a residual value of 5% of the original cost.

I) Rotables:

- Aircraft Rotables relating to Air bus family are depreciated over the residual average useful life of the aircraft fleet relating to respective engineering base, from relevant year of purchase.

- Aircraft Rotables relating to Boeing are depreciated over the residual average useful life of the related aircraft fleet from the relevant year of purchase.

ii) Depreciation on additions to “Rotables” and assets classified under “Other Fixed Assets” is provided for the full year in the year of acquisition and no depreciation is provided in the year of disposal.

iii) Aircraft Repairable are amortized over a period of 10 years (in case of post thmigration i.e. Boeing Repairable acquired after 28 May 2012 and Airbus

thRepairable acquired after 25 Nov 2012) and 5 years (in case of pre-migration) from the date of its purchase unless scrapped earlier.

iv) However, in the case of following subsidiaries, depreciation has been provided for on straight line method on the basis of useful life estimated by the management / technically qualified persons. The details of subsidiaries and such assets are as under :

S.No Type of Asset Life Adopted by Life Prescribed by Company Schedule II

A. AI-SATS

(i) Buildings 15 yrs 60yrs

(ii) Computers (including Software) 3-6 yrs 6 yrs

(iii) Furniture & Fittings 3-7 yrs 10 yrs

(iv) Plant & Machinery 3-7 yrs 15 yrs

(v) Vehicles 5-7 yrs 8yrs


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S.No Type of Asset Life Adopted by Life Prescribed by Company Schedule II

B. AICL

(i) Plant & Machineries 13 yrs 15 yrs

C. AASL

(i) Data Processing Unit 3yrs 6yrs

(ii) Ground Support Equipment Dep rec ia t i on on Ground Suppo r t Equipment specific to leased CRJ & ATR aircraft is provided based on the completed aircraft lease months over the total aircraft lease months from the date of use with realizable value at end of lease taken as NIL.

b) Machinery Spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets.

c) Major modifications/refurbishment, modernization/conversion carried to leased assets are shown under improvement to leasehold assets and amortized over the balance period of lease.

d) Leasehold Land other than perpetual lease is amortized over the period of lease.

e) Intangible assets which have a useful economic life are amortized over the estimated useful life, as determined by the management, Software of Passenger Services System over 10 years and in other cases over 5 years.

f) No depreciation needs to be provided on “Assets held for Sale” as stated by Accounting Standard.

3. INVESTMENTS

a) Long-term investments are stated at cost less permanent diminution in value, if any. Diminution in value is considered to be permanent only when the possibility of restoring the value of the Investment to its original face value becomes a distant possibility.

b) Current investments are valued at lower of cost and fair value.

4. INVENTORIES

i) Inventories are valued at weighted average cost. However, Aircraft Turbine Fuel (ATF) in aircraft as at the year-end are valued at closing prevailing rate, since the average rates would not be appropriate.

ii) Expendables/consumables are charged off at the time of initial issue except those issued for repairs of repairable items which are expensed when the work order is closed along with the repair costs.


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iii) 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) below and netted off from the value of inventory.

b) Inventory of Aircraft Fleet which has been phased out, is shown at estimated realizable value 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.

iv) Obsolescence provision for non-aircraft stores and spares is made for non-moving inventory exceeding a period of five years.

v) Spares retrieved from the cannibalization of the scrapped aircraft are taken into stock at zero value.

5. MANUFACTURER'S CREDIT

Manufacture's credit entitlements are recognized as 'Incidental Revenue' on accrual basis by treating the same as 'Advances', which is adjusted when such entitlements are used to discharge the liability relating to acquisition of assets or incurring of expenditure.

6. REVENUE RECOGNITION

a) Passenger, Cargo and Mail Revenue are recognized when transportation service is provided. At the end of each financial year, based on available historical statistical data, a certain estimated percentage of the value of tickets/airway bills which remained unutilized, is recognized as Revenue.

b) Freighter and Charter Revenue are accounted for on accrual basis as per the freighter/charter hours except on claims from parties which are accounted for on settlement basis.

c) Ground Handling, Security Handling and other related services are recognized when the services are provided and billed. Un-billed services in respect of the above services at the end of each financial year, based on available data, are estimated and are recognized as Revenue.

d) Loss or gain on reissue/refund/ involuntary transfer of passengers to other carriers is deducted or included as the case may be in the revenue.

e) Blocked Space arrangements/Code share revenue/expenditure is recognized on an actual basis, based on uplift data received from the code share partners. Wherever details from code share partners are not available, revenue/expenditure is booked to the extent of documents/information received, and adjustments when required, are carried out at the time of such information being received.

f) Income from Interest is recognized on a time proportion basis.


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g) Dividend is recognized as income if the right to receive is established before the close of the year.

h) The claims receivable from Insurance Company are accounted for on the acceptance of the claims by the Insurance Company.

i) Warranty claims /credit notes received from vendors are recognized on acceptance of such claim/receipt of credit note.

j) Other Operating Revenue is recognized when goods are delivered or services are rendered.

k) Haj Operations Amount receivable from the Government of India and Central Haj Committee towards actual expenses incurred by the Company for carrying Haj Ballottee pilgrims is accounted for as Charter Revenue.

l) Gain or loss arising out of sale/scrap of Fixed Assets including aircraft over the net depreciated value is taken to Statement of Profit & Loss as Non-Operating Revenue or Expenses.

m) Other Items:

i) Scrap sales, reimbursement from employees availing medical, educational and other leave without pay, claims of interest from suppliers, other staff claims and lost baggage claims are recognized on cash basis.

ii) Liability for amounts payable towards IATA dues, liabilities for expenses and manufacturers' credits are recognized to the extent of claims/ invoices received.

n) Rental Income is recognized as per the underlying lease contracts as and when accrued on time proportionate basis.

7. GRANTS

a) Viability Gap Funding (VGF) is accounted for on the basis of difference between revenue and cost of operations on accrual basis and the same is treated as Operating Income.

b) Grants are recognized in accordance with the terms of the respective Grants on accrual basis considering the status of compliance of conditions prescribed and ascertainment that the Grant will be received.

8. PROVISION FOR DOUBTFUL DEBTS

Debts are provided for if they are either more than three years old or specifically identified as doubtful even within three years.

However, in respect of debts pertaining to Govt., whether State or Central Departments or Public Sector undertakings which are known to be recoverable with certainty (at the time of preparation of Financial Statements), are not provided for, in spite of their age exceeding three years.


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9. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency transactions of Integral Foreign Operations

a)� Foreign currency Revenue and Expenditure transactions relating to Integral Foreign Operations are recorded at established monthly rates (based on published IATA rates).

b) Interline settlement with Airlines for transportation is carried out at the exchange rate published by IATA for respective month.

ii) Foreign Currency Monetary Items:

a) The Group has opted for accounting the exchange differences arising on reporting of long-term foreign currency monetary items in line with Accounting Standards notified under the Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 pertaining to AS-11 notified by

st ththe Govt. of India on 31 March 2009 (as amended on 29 December 2011) and further as amended from time to time.

i) Accordingly, the effect of exchange differences 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 as addition or deduction to the cost of the assets so far as it relates to acquisition of depreciable capital assets and is depreciated over the balance useful life of the concerned asset and in other cases such difference is accumulated by transfer to “Foreign Currency Monetary Items Translation Difference Account” to be amortized over the balance period of such long term Assets or Liability.

ii) Foreign currency monetary items other than those identified as long term at the year-end are converted at the year-end exchange rate circulated by Foreign Exchange Dealers Association of India (FEDAI), and the gains/losses arising out of fluctuations in exchange rates are recognized in the Statement of Profit and Loss.

b) Exchange variation is not considered at the year-end in respect of Debts and Loans & Advances for which doubtful provision exists since they are not expected to be realized.

10. EMPLOYEE BENEFITS

The Employee Benefits comprise of Defined Contribution Plans and Defined Benefit Plans.

a) Defined Contribution Plans consist of contributions to Employees Provident Fund and Employees State Insurance Scheme. The Company has created separate Trusts to administer Provident Fund contributions to which contributions are made. ESI dues are deposited with government authorities.


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b) The Defined Benefit Plans, which are not funded, consist of Gratuity, Leave Encashment including Sick Leave and Post Retirement Medical Benefits and other benefits. The liability for these benefits except for (c) below is actuarially determined under the Projected Unit Credit Method at the year-end as per Indian Laws.

c) Liability for Gratuity, Leave Encashment, Pension and other retirement Benefits for staff directly recruited at foreign stations is provided in compliance with local laws prevailing in the respective countries based on available information as at the year end.

d) Voluntary Retirement Scheme, wherever applicable is accounted for in the year of announcement of scheme by the company and acceptance of the same by the employees.

11. BORROWING COST

a) Borrowing cost that are directly attributable to acquisition, construction of qualifying assets including capital work–in-progress are capitalized upto the date of commencement of commercial use of the assets.

b) Interest incurred on borrowed funds that are used for acquisition of qualifying assets exceeding the value of Rs.10.0 million is capitalized at the weighted average borrowing rate on loans outstanding at the time of acquisition.

c) Borrowing Cost other than those stated in Para (a) is treated as period cost.

12. IMPAIRMENT OF ASSETS

The Company assesses at each Balance Sheet date whether there is any indication that an asset has been impaired. If any such indication exists, the provision for impairment is made in accordance with AS-28.

13. OPERATING LEASE

a) Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased assets are classified as Operating Lease and Lease rental payable for the year is charged to Statement of Profit and Loss. In respect of leases which have been extended by paying a termination/release sum, by which the company acquires, a residual right in the aircraft, such amount is amortized over the remaining useful life of the aircraft determined by flying hours.

b) Contributions made to lessors on account of Maintenance Reserve for which, maintenance is expected to arise during the lease period is treated as Expense.

14. COMMODITY HEDGING TRANSACTIONS

Premium relating to commodity hedging contracts are accounted for as expense on the date of entering into contract. However, gains / losses in respect of settled contracts are recognized in the Statement of Profit and Loss in the year of realization.

15. TAXES ON INCOME

Provision for current tax is made in accordance with the provisions of Income Tax Act, 1961.


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Deferred tax is recognised 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 recognised and carried forward to the extent that there is a virtual certainty based on operational and financial restructuring, revenue generation and cost reduction programme of the group companies that the assets will be realised in the future.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The MAT credit available is recognized as an asset only to the extent that there is reasonable certainty that normal income tax would be paid during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which MAT credit is recognized as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement.” The “MAT credit entitlement” asset is reviewed at each reporting date and adjusted to the extent the company does not have reasonable certainty that it will pay normal tax during the specified period.

16. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

a) Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

b) Contingent liabilities exceeding Rs.0.1 million in each case are disclosed in respect of possible obligations that may 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.

c) Contingent Assets are neither recognized nor disclosed in the financial statements as per Accounting Standard 29.

17. FREQUENT FLYER PROGRAMME

The Company operates Frequent Flyer programme that provides travel awards to its members based on accumulated mileage points. The estimated pax amenities and legal liability, if any, for free travel under this programme are provided for on valuation basis and charged to Statement of Profit and Loss.

18. OTHER LIABILITIES

Liabilities which are more than three years old are written back under the head “Provision no Longer Required Written Back” unless such liabilities are specifically known to be payable in the future.

19. 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.


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20. 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.

21. EARNINGS PER SHARE

Basic earnings per share is computed by dividing the Net Profit/(Loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.


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NOTE "2" : SHARE CAPITAL

(Rupees in Million)

As at As atParticulars

March 31, 2016 March 31, 2015

AUTHORISED

25,000.0 Million Equity Shares of Rs.10 each 250,000.0 250,000.0

(Previous Year : 25,000.0 Million Equity Shares of Rs.10 each)

250,000.0

250,000.0

ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARES

21,496.0 Million Equity Shares of Rs. 10 each 214,960.0

171,780.0

(Previous Year : 17,178.0 Million Equity Shares of Rs.10 each)

214,960.0

171,780.0

B.i)

(Number of Shares in Million) (Share Value Rupees in Million)

Particulars 2015-16 2014-15 2015-16 2014-15

Equity Shares at the beginning of the year 171,780.0

14,345.0

171,780.0

143,450.0

Add : Equity Shares Allotted during the

year4,318.0

2,833.0

43,180.0

28,330.0

Equity Shares at the end of the year 21,496.0

17,178.0

214,960.0

171,780.0

ii) Term/rights attached to equity shares

iii) Share Holding Pattern :

Reconciliation of number of shares :

The company has single class of shares i.e. Equity Shares having a par value of Rs. 10 per share. Each

holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, equity shares will be entitled to receive remaining assets of

the company, after distribution of all preferential amounts. The distribution will be in proportion to the

number of equity shares held by the shareholders.

The

C) Share Application Money:

Share application money amounting to Rs. 29,290.0 Million (Previous Year Rs.39,470.0 Million) represents money paid by the Government of India towards capital infusion during 2015-16 but allotment of shares not yet decided.

Company is a Government Company with 100% share held by President of India and his nominees,

through administrative control of Ministry of Civil Aviation.


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NOTE "3" : RESERVES AND SURPLUS(Rupees in Million)


March 31, 2016 March 31, 2015

* Includes MRO Allowance received from GE towards Test Cell facility at Nagpur.

**Represents Minority Interest of a Subsidiary Co.


1. CAPITAL RESERVE

Opening Balance 6,870.5 2,166.3

Add : Additions during the year* 494.1 4,924.7

Less : Transfer to the Statement of Profit and Loss as reduction 322.0 220.5

from Depreciation (Refer Note 20)

Closing Balance 7,042.6 6,870.5

2. GENERAL RESERVE

Opening Balance (1,404.3) (1,417.7)

Add : Additions during the year - 13.4

Closing Balance (1,404.3) (1,404.3)

3. OTHER RESERVES#REF!#REF!

a) Foreign Currency Monetary Item Translation Difference Account

Opening Balance (3,465.0) (3,401.9)

Exchange gain/(loss) during the year (527.4) (297.4)

Amortisation during the year 285.8 234.3

Closing Balance (3,706.6) (3,465.0)

4. Surplus / (Deficit) in the Statement of Profit & Loss Opening Balance (415,380.6) (352,547.2)

Add : GOI share in Equity infused during the year ** 120.0 -

Profit/Loss for the year (43,106.5) (62,804.2) Adjustment in Depreciation as per Schedule II 3.3 (3.7)

Less : Appropriations

Final dividend on equity shares 60.6 -

Tax on dividend 6.0 12.1

Transfer to Reserve - 13.4

Net deficit in the Statement of Profit & Loss (458,430.4) (415,380.6)

TOTAL (1+2+3+4) (456,498.7) (413,379.4)

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NOTE "4" : LONG TERM BORROWINGS(Rupees in Million)

Particulars

As at As at As at As at March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015

I Bonds / Debentures 136,950.0

136,950.0

-

-

-

II Term Loans -

a) from Banks (Secured) 121,341.6

122,265.1

2,538.5

2,527.6

b) from Banks (Unsecured) 24,130.7

5,379.9

5,693.0

167.9

c) from Other Parties (Unsecured) 233.9

230.5

10.5

9.9

-

III Finance Lease Obligations 87,823.4

101,848.7

20,144.4

18,749.9

-

TOTAL 370,479.6

366,674.1

28,386.4

21,455.3

Non-Current Current

4(I) Debentures

(Rupees in Million)

Month of

Redemption

Amount to be

Redeemed

Rate of Interest

Dec-2031 4,714.0

9.08%

Nov-2031 10,086.0 9.08%

Sep-2031 15,000.0 10.05%

Dec-2030 4,714.0

9.08%

Nov-2030 10,086.0 9.08%

Dec-2029 4,714.0

9.08%

Nov-2029 10,086.0 9.08%

Dec-2028 4,714.0

9.08%

Nov-2028 10,086.0 9.08%

Dec-2027 4,714.0

9.08%

Nov-2027 10,086.0 9.08%

Sep-2026 40,000.0 9.84%

Mar-2020 7,000.0

9.13%

Mar-2020 950.0 9.38%

Total 136,950.0

136,950 Redeemable, Unsecured Non-convertible Debentures of face value of Rs.1 Million each (Previous

Year : 136,950 Debentures), are guaranteed by Government of India. Maturity Profile and Rate of interest are

as set out below :

b) Debenture Redemption Reserve as required under Section 71(4) of the Companies Act, 2013

has not been created in the absence of earned profits by the Company.


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4(IIa) Details of Secured Term Loans from Banks are as under :

(Rupees in Million)

SR NO As at 31.03.2016 As at 31.03.2015Restructuring Lender

For all Secured Term Loans from Banks, interest rate is linked to respective Bank's Prime Lending Rate / Base Rate / Libor plus Margin. These loans are repayable in Quarterly Instalments starting from 31st December 2013 and ending in 30th September 2026. Disclosure as regards amount of repayment instalment and rate of interest are not made due to complexity of repayment schedules and confidentiality clause with the banks as regards interest rate.

Term Loans from above Banks are secured by hypothecation of 29 aircrafts and 12 immovable properties at market value and all Current Assets (Previous Year 29 aircraft, 12 immovable properties and all Current Assets). However equitable mortgage for 7 immovable properties with banks are yet to be created.

Secured Term Loan from Banks also includes Rs.92.0 Million taken from State Bank of India carries interest at 11.65% (1.65% over base rate). It is repayable in 36 equal installments starting from April 2018 to March 2021. It is secured by first pari-passu charge on all the movable fixed assets of the company including plant and machinery created and/or to be created out of the term loan and 1st pari-passu residual hypothecation charge on entire current assets of the Company. Further it also includes Rs. 31.7 Million (Previous Year Rs. Nil) taken from Bank of Baroda carries interest at 12.25% (2.25% over base rate). It is repayable in equal installments upto Feburary 2018. It is secured by fixed assets of the constructed /purchased out of term loan and pari-passu charge on movable equipments, furniture and fittings of the Company, existing as well as future.


1 Allahabad Bank 2,841.7 2,871.9

2 Andhra Bank 3,434.8 3,458.2

3 Bank of Baroda 12,768.1 12,924.1

4 Bank of India 16,795.8 16,556.6

5 Canara Bank 8,340.3 8,439.3

6 Central Bank of India 9,082.8 9,191.6

7 Corporation Bank 7,384.2 7,477.8

8 Dena Bank 1,313.7 1,340.3

9 The Federal Bank Limited 2,040.2 1,994.7

10 IDBI Bank Limited 4,256.3 4,308.0

11 Indian Bank 4,247.5 4,302.4

12 Indian Overseas Bank 6,974.2 7,064.1

13 Oriental Bank of Commerce 8,680.3 8,781.5

14 Punjab National Bank 11,971.9 12,103.8

15 Punjab & Sind Bank 2,696.3 2,726.7

16 State Bank of India 6,461.8 6,596.8

17 Syndicate Bank 6,231.6 6,312.4

18 UCO Bank 5,675.1 5,744.3

19 United Bank of India 2,559.8 2,598.1

TOTAL 123,756.4 124,792.6

21 1,132.1 Libor + 2.13455 Apr-15 Apr-21 20 1,186.6 Libor + 2.15 Mar-15 Mar-21 20 1,198.0 Libor + 1.55 Mar-16 Mar-21 20 1,325.5 Libor + 1.55 Mar-16 Mar-21 17 19,876.5 Libor + 1.80 Jun-16 Mar-20 Bullet 4,575.9 Libor + 1.45/2.5 Jul/Sep-2011 Sep-16 4 529.1 Libor + 3.82-4.01% Jan-16 Jul-17TOTAL 29,823.7

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4(IIb) Total Unsecured Term Loan from Banks of Rs.29,823.7 Million (Previous Year Rs.5,547.8 Million) has been guaranteed by the Government of India..

4(IIc) Unsecured Term Loan from Others of Rs.244.3 Million (Previous Year Rs.240.4 Million) are guaranteed by the Government of India to the full extent.

4(III) Long Term Maturities of Finance Lease Obligations of Rs.107967.8 Million (Previous Year Rs.120598.6 Million) are guaranteed by the Government of India to the extent of Rs.90032.0 Million (Previous Year Rs.100,148.1 Million).

(Rupees in Million)

Equal Number Amount of Rate of Interest Starting Month ofof Loan Loan as at Month of Maturity

Instalments 'March 31, 2016 Repayment

(Rupees in Million)

Equal Number Month ofof Loan Maturity

Instalments

Amount of Loan as at

'March 31, 2016

Rate of Interest Starting Month of

Repayment

(Rupees in Million)

Number of Amount of Rate of Starting Month ofEquated Interest Month of Maturity

Loan Loan as at

Repayment Instalments

March 31, 2016

*Current maturities of long term borrowings have been grouped under the head Other Current Liabilities (Refer Note No.5)


48 168.3 Interest Free Oct-1990 Oct-2039

42 76.0 Interest Free Oct-1987 Mar-2037

TOTAL 244.3

54 14,826.6 Libor + 0.24 Aug-2011 Jul-2022

74 28,738.5 Libor + 0.93 Mar-2010 Sep-2021

20 19,636.3 Libor + 0.75 Feb-2008 Feb-2021

37 6,078.3 Libor - 0.05+0.55 Jan-2009 May-2020

53 9,490.1 2.46% to 2.89% Fixed Oct-2007 Dec-2019

15 14,067.3 Libor + 0.75 Mar-2007 Dec-2019

11 7,217.2 Fixed for each Loan ranging VT-AXH/AXJ/ Nov-18

between 2.46% to 2.73% AXP-FEB 2008

12 VT-AXQ - FEB 2008 Feb-19

11 VT-AXI/AXN-DEC 2007 Dec-18

13 VT-AXR - DEC 2007 Jun-19

12 VT-AXM - JAN 2008 Jan-19

14 VT-AXT - JAN 2008 Jul-19

15 VT-AXU - JAN 2008 Oct-19

20 4,064.4 Libor -0.05/0.75 VT-AYA -JUN2009 Mar-21

19 VT-AXZ - MAR 2009 Dec-20

17 VT-AXW/AXX-FEB 2009 May-20

22 3,849.1 Libor + 0.93 VT-AYB/AYC-APR 2010 Jul-21

23 VT-AYD-APR 2010 Oct-21

TOTAL 107,967.8

CFS

102

NOTE "5" : LIABILITIES(Rupees in Millions)

(Rupees in Millions)

Particulars Other Long Term Liabilities


*

**

NOTE "6" : PROVISIONS

Particulars


Long Term Provisions Short Term Provisions

Details of Current maturities of long term debts / Finance Lease Obligation have been grouped under Other Current Liabilities. (Refer Note No.4).Interest accrued and due includes :

Other Current Liabilities

Rs.NIL Million being interest on Secured Term Loans from Banks (Previous Year : Rs.43.9 Million), paid subsequently (Refer Note 4).Rs.253.0 Million being interest on Secured Loans repayable on demand from Banks (Previous Year : Rs. 270.4 Million), paid subsequently (Refer Note 7).Rs.96.9 Million being interest on Unsecured Loans repayable on demand from Banks (Previous Year : Rs. 116.3 Million), paid subsequently (Refer Note 7).


Trade Payable - - 89,134.1 79,635.0

(A) - - 89,134.1 79,635.0

Other Liabilities

a) Current maturities of long-term debts* - - 10,740.1 5,207.5

b) Current maturities of finance

lease obligations - - 20,144.4 18,749.9

c) Interest accrued but not due on borrowings - - 7,423.8 7,099.1

d) Interest accrued and due on borrowings** - - 349.9 430.6

e) Forward Sales (Net) [Passenger / Cargo] - - 26,350.7 23,670.9

f) Advance from customers (Net) - - 791.6 823.1

g) Others Liabilities (Net) 1,074.9 1,055.8 28,990.0 22,722.8

h) Advance Against Share Capital - - 50.0 120.0

(B) 1,074.9 1,055.8 94,840.5 78,823.9

TOTAL (A + B) 1,074.9 1,055.8 183,974.6 158,458.9

Provision for Employee Benefits

a) Gratuity 9,143.5 9,276.3 1,621.1 1,099.7

b) Leave Encashment 5,797.2 6,261.4 1,150.8 808.9

c) Post Employment Medical and Other Benefits 2,640.1 2,127.3 363.3 529.3

(A) 17,580.8 17,665.0 3,135.2 2,437.9

Other Provisions

a) Wealth Tax - - - 17.1

b) Frequent Flyer Programme - - 269.6 291.9

c) Dividend Distribution Tax - - 6.0 12.1

(B) - - 275.6 321.1

TOTAL (A + B) 17,580.8 17,665.0 3,410.8 2,759.0

CFS

103

NOTE "7" : SHORT TERM BORROWINGS(Rupees in Million)


March 31, 2016 March 31, 2015

1.

(Rupees in Million)

Sr.No. As at 31.03.2016 As at 31.03.2015

Secured loans repayable on demand from Banks are to the tune of Rs.64,827.2 Million (Previous Year Rs.66,517.5 Million). Details of Secured Loans from Banks are as under :

List of Lender


I Loans repayable on demand :

a) From Banks (Secured) 1 / 2 / 3 / # 120,327.5 121,999.6

b) From Banks (Unsecured) # 36,288.6 32,640.6

TOTAL 156,616.1 154,640.2

1 Allahabad Bank 3,850.0 3,850.0

2 Andhra Bank 1,002.9 1,010.0

3 Bank of Baroda 4,009.9 3,917.5

4 Bank of India 5,596.2 6,797.8

5 Canara Bank 4,810.4 4,754.1

6 Central Bank of India 2,716.5 2,716.5

7 Corporation Bank 2,185.7 2,210.0

8 Dena Bank 3,641.2 2,300.4

9 HDFC Bank Ltd. 166.8 232.3

10 The Federal Bank Limited 662.6 625.1

11 IDBI Bank Limited 1,262.6 1,264.2

12 Indian Bank 1,280.0 1,280.0

13 Indian Overseas Bank 2,041.2 5,085.8

14 Oriental Bank of Commerce 2,597.7 2,597.7

15 Punjab National Bank 3,813.8 3,757.5

16 Punjab & Sind Bank 789.9 806.4

17 Standard Chartered Bank 18,390.6 17,380.7

18 State Bank of India 2,443.7 2,266.5

19 Syndicate Bank 1,867.7 1,867.7

20 UCO Bank 1,697.8 1,697.8

21 United Bank of India - 9.5

TOTAL (1) 64,827.2 66,517.5

The loans to the tune of Rs.64,827.2 Million are secured by Hypothecation of 34 aircraft, 12 immovable properties at market value and all Current Assets (Previous Year : 35 aircraft, 12 immovable properties and all Current Assets). However equitable mortgage for 7 immovable properties with banks are yet to be created.

CFS

104

(Rupees in Million)

(Rupees in Million)

Sr.No.

Sr.No.

As at 31.03.2016

As at 31.03.2016

As at 31.03.2015

As at 31.03.2015

Name of the Lender

Name of the Lender


1 Bank of India 13,118.5 12,375.0

2 Deutsche Bank/Standard Chartered Bank 41,707.5 36,718.7

3 Investec Bank - 5,937.5

TOTAL (2) 54,826.0 55,031.2

1 Bank of Baroda/State Bank of India* 368.4 204.7

2 State Bank of India** 45.0 -

3 Buyer's Credit Facility*** 260.9 246.2

TOTAL (3) 674.3 450.9

TOTAL (1 + 2+3) 120,327.5 121,999.6

The loans to the tune of Rs.54,826.0 Million (Previous Year Rs.55,031.2 Million) are secured by Hypothecation of 9 aircraft at market value (Previous Year : 9 aircraft).

3 Secured loan repayable on demand from Bank is to the tune of Rs.674.3 Million (Previous Year Rs.450.9 Million). Details of Secured Loans from Banks are as under :

2. Secured loan repayable on demand from Bank is to the tune of Rs.54826.0 Million (Previous Year Rs.55031.2 Million). Details of Secured Loans from Banks are as under :

* Cash credit facility amounting to Rs. 368.40 million from Bank of Baroda carried interest rate of 12.25% (2.25% over base rate) and from State Bank of India carries interest rate of 12.40% (2.40% over base rate). It is secured against hypothecation of movable current assets including book debts, pari-passu charge on alll receivables arising out of ground handling and cargo handling services and residual hypohecation charge on movable fixed assets of the Company.

** Working capital demand loan of Rs. 45 million from state Bank of India carries interest rate between 10.10% to 10.65%. It is repayable within 30 days to 90 days from drawdown. It is secured against hypothecation of movable current assets including book debts, pari-passu charge on all receivables arising out of ground handling and cargo handling services and residual hypothecation charge on movable fixed assets of the Company.

*** Buyers credit facility amounting to Rs. 260.9 million carries interest at the rate of LIBOR +spread . It is repayable in 180 days draw down. It is secured against on all the movable fixed assets of the Company including plant and machinery created and/or to be created out of the term loan, pari-passucharge on movable equipments, furniture and fittings of the company, existing as well as future.

# Disclosure as regards Bank wise amount and period of default is not made due to complexity of data & confidentiality clause with the banks. (Also refer Note 4 & 5).

TANGIBLE ASSETS

(A) AIRCRAFT FLEET & ROTABLES

1 Airframes

(a) Owned & Self Operated 254,742.7 21,146.7 51,384.9 224,504.5 67,596.0 10,861.9 1,176.0 77,281.9 147,222.6 187,146.7

2 Aero Engines & Power Plants

(a) Owned - Fixed Cost 95,912.5 10,843.2 20,204.7 86,551.0 24,403.4 3,998.3 959.5 27,442.2 59,108.8 71,509.1

(b) Owned - Vairable Cost (Component) 5,518.7 542.6 - 6,061.3 1,461.8 1,750.4 - 3,212.2 2,849.1 4,056.9

(c) Owned - Repair Cost - 2,275.3 - 2,275.3 - 326.2 - 326.2 1,949.1 -

3 Simulators & Link Trainers 2,871.3 - - 2,871.3 832.7 118.9 - 951.6 1,919.7 2,038.6

4 Airframe Rotables 8,042.9 1,808.6 112.4 9,739.1 2,795.7 485.4 9.7 3,271.4 6,467.7 5,247.2

5 Aero-Engine Rotables 1,589.6 - - 1,589.6 637.8 69.5 - 707.3 882.3 951.8

6 Simulator Rotables - - - - - - - - - -

7 Aircraft Repairables 8,338.9 2,921.1 427.0 10,833.0 2,510.7 1,319.0 441.6 3,388.1 7,444.9 5,828.2 SUB TOTAL "A" 377,016.6 39,537.5 72,129.0 344,425.1 100,238.1 18,929.6 2,586.8 116,580.9 227,844.2 276,778.5

(B) LAND, BUILDINGS & VEHICLES

1. Land-Freehold 7,158.6 648.5 147.0 7,660.1 - - - - 7,660.1 7,158.6

2. Land-Leasehold 63,460.7 19.7 648.5 62,831.9 957.9 - 956.9 1.0 62,830.9 62,502.8

3. Buildings 21,367.7 87.2 377.2 21,077.7 6,588.5 810.9 65.3 7,334.1 13,743.6 14,779.2

4 Lease Hold Improvement 31.1 - (0.7) 31.8 16.8 6.3 (0.3) 23.4 8.4 14.3

SUB TOTAL "B" 92,018.1 755.4 1,172.0 91,601.5 7,563.2 817.2 1,021.9 7,358.5 84,243.0 84,454.9

(C) OTHER- FIXED ASSETS

1 Workshop Equipment, Instruments, 5,309.6 495.5 77.5 5,727.6 1,096.2 706.3 44.4 1,758.1 3,969.5 4,213.4

Machinery and Plants

2 Ground Support & Ramp Equipment 5,116.2 9.4 2.1 5,123.5 2,676.9 517.8 1.0 3,193.7 1,929.8 2,439.3

3 Furniture & Fixtures 360.1 12.4 2.1 370.4 227.1 32.5 2.1 257.5 112.9 133.0

4 Vehicles 302.9 14.8 (42.4) 360.1 251.6 20.4 (30.1) 302.1 58.0 51.3 5

5 Office Appliances & Equipment 824.8 33.6 11.1 847.3 519.5 206.8 8.6 717.7 129.6 305.3

6 Computer System 1,618.3 68.9 13.0 1,674.2 1,219.2 295.0 11.1 1,503.1 171.1 399.1

7 Electrical Fittings & Installations 703.6 5.8 - 709.4 200.6 61.9 - 262.5 446.9 503.0

SUB TOTAL "C" 14,235.5 640.4 63.4 14,812.5 6,191.1 1,840.7 37.1 7,994.7 6,817.8 8,044.4

TOTAL FOR TANGIBLE ASSETS 483,270.2 40,933.3 73,364.4 450,839.1 113,992.4 21,587.5 3,645.8 131,934.1 318,905.0 369,277.8

INTANGIBLE ASSETS

(A) Computer Software 2,889.0 80.2 2.0 2,967.2 1,641.0 480.1 2.0 2,119.1 848.1 1,248.0

(B) Others 3,353.6 - 0.8 3,352.8 127.9 127.9 255.8 3,097.0 3,225.7

TOTAL FOR INTANGIBLE ASSETS 6,242.6 80.2 2.8 6,320.0 1,768.9 608.0 2.0 2,374.9 3,945.1 4,473.7

TOTAL ASSETS 489,512.8 41,013.5 73,367.2 457,159.1 115,761.3 22,195.5 3,647.8 134,309.0 322,850.1 373,751.5

Previous Year 465,842.2 71,240.5 47,569.9 489,512.8 100,289.6 22,325.6 6,853.9 115,761.3 373,751.5

Capital Work in Progress* 6,813.9 12,637.1

Intangible assets under development 13.5 13.5

GRAND TOTAL 329,677.5 386,402.1

CFS

105

NOTE "8" : FIXED ASSETS

(Rupees in Million)Sl. ParticularsNo. As at Additions Deductions / As at As at For Deductions/ Total Upto As at As at

April 01, 2015 - Adjustments March 31, 2016 April 01, 2015 the year Adjustments March 31, 2016 March 31, 2016 March 31, 2015

GROSS BLOCK DEPRECIATION NET BLOCK

1 The Company has during the year capitalized translation difference of Rs.9,166.2 Million (Previous Year : Rs.7,336.2 Million) arising on settlement and reporting of long term monetary items. Additions to "Aircraft Fleet, Rotables & Repairables" includes Exchange Rate Fluctuations (Net of Debit & Credit) on underlying loans in foreign currency : Rs. 9,167.3 Million (Previous Year: Rs. 7,298.8 Million).

2 "Aircraft Fleet, Rotables & Repairables" includes 54 Aircraft (Three B777-200LR, Twelve B777-300 ER, Ten A-319, Twelve A-321 and Seventeen B737-800) (Previous Year : 54 Aircraft - {Three B777-200LR, Twelve B777-300ER, Ten A-319, Twelve A-321 and Seventeen B737-800}) & 5 GE Spare Engines (Previous Year 5 GE Spare Engines) and Registration of these 54 Aircraft & 5 Spare Engines continues to be in the name of SPV Company for which beneficial ownership is with Group Companies.

3 Borrowing costs capitalized during the year are Rs.603.1 Million (Previous Year : Rs.8,345.8 Million).

4 Deductions under the block of "Aircraft Fleet, Rotables & Repairables" includes 1 GE Engine scrapped during the year (Previous Year : 2 B777-200 LR). Gross Block Rs.1,278.8 Million (Previous Year : Rs.15,076.1 Million), Provision for Depreciation Rs.455.5 Million (Previous Year : Rs.4,046.1 Million).

5 Deductions under the block of "Aircraft Fleet, Rotables & Repairables" includes 1 B787-8 aircraft (Previous Year : 4 B787-8 aircraft) which were transferred under a Sale & Lease back arrangement during the year. Gross Block Rs.6,550.0 Million (Previous Year : Rs.26,293.4 Million), Provision for Depreciation Rs.409.3 Million (Previous Year : Rs.1,376.4 Million).


CFS

106

6. Deductions under the block of "Aircraft Fleet, Rotables & Repairables" also includes 9 B787-800 aircraft reclassified as held for sale during the year (Refer Note No.31). Gross Block Rs.63,760.9 Million, Provision for Depreciation Rs.1,270.7 Million.

7 Land (Freehold/Leasehold) and building includes Gross Block Rs. 76,463.5 Million (Prev. YR. Rs. 76,821.4 million), Accumulated Depreciaion Rs. 498.3 Million (Previous Year Rs. 589.5 million) for which title deed to be registered.

8 A) Building on lease hold Land includes cost of residential flats :-

i) 4 flats in Sher-e-Punjab Society, Andheri, Mumbai: conveyance deeds in respect there of are pending execution. Share Certificates have not been received by the Company

ii) 2 flats in Everest Apartments Cooperative Housing Society, Andherit, Mumbai: The Company has received 10 equity shares (previous year- 10 equity shares) at a cost of Rs. 500 (Previous Year-Rs. 500).

B) Mutation in respect of the property of housing colony at Srinager is not required since records of rights have been obtained in favour of the Company from the concerned Niab Tehsildar. Some part of the land has been encroached by a school for which the Company has filed a suit in the Court.

9 Depreciation includes credit of Rs.947.8 Million (Previous Year : Credit of Rs. 31.8 Million) for Prior Period and debit of Rs.301.2 Million (Previous Year : Debit of Rs.199.6 Million) to Capital Reserve.

10 As per Accounting Policy, the Company has carried out an impairment test, however, there is no impairment of assets as required under AS 28.

11 "Intangible Asset - Others" includes Membership Fees for joining Star Alliance.

12 Special tools included in Workshop Equipment, Instrument Machinery & Plants and Other Fixed Assets are being Depreciated at year wise total Block Amount.

13 As per the Company Act 2013, an amount of Rs.6,066.1 Million has been transferred from Engine fixed cost to Engine Variable Cost with a transfer of Reserve for Depreciation of Rs.1,461.8 Million as on 01.04.2015. The Depreciation charged during the year on Engine Variable Component is Rs.1,750.4 Million.

14 "Aircraft Fleet, Rotables & Repairables" includes 2 B777-300 aircraft and 1 Engine (MSN 906791) for which discussion for sale to Ministry of Defence for VVIP operations at written down value on the date of sale is under progress. Gross Block Rs.21,435.1 Million, Provision for Depreciation Rs.5,289.7 Million and Net Block Rs.16,145.3 Million.

15 "Land and Buildings" includes few properties identified for monitization in Joint Venture with NBCC, for which Company is taking necessary action to obtain approval from Competent Authority

16 Deprecitation on Simulator during the year amounting to Rs. 20.9 Million(Previous Year: 20.9 Million) has been adjusted from Capital Reserve created from Capitalization of Simulator.

17 In case of Subsidiary, Grant of Rs.20.5 Million out of total sanctioned Grant of RS 90.0 million from Visvesvaraya Trade Promtion Centre, Bangalore, Govt. of Karnataka, till 31-03-2016 towards construction of "Perishable Cargo Airfrieght Handling Centre" at Bangalore has been reduced from 'Capital Work in Progress'.


CFS

107

NOTE "9" : NON-CURRENT INVESTMENTS

(Rupees in Million)

Particulars As at As at

March 31, 2016 March 31, 2015


A (Unquoted Equity Instruments) (at cost)

TRADE INVESTMENTS 1) 271,915 Equity Shares (Previous Year : 271,854 Equity Shares) 13.9 13.9 of EUR 5.00 each fully paid up in SITA (Societe Internationale de Telecommunications Aeronautiques). (61 Shares redeemed during the year)

2) 618,460 Depository Certificates of SITA Information 28.8 28.8 Network Computing N.V

3) 1,896 class B Shares (Previous Year : 2,216 Shares) of BHT 100 0.3 0.3 each fully paid up in Aeronautical Radio of Thailand Ltd. (320 Shares redeemed during the year)

4) 2,617,098 Equity Shares of MAR 10 each fully paid up in 9.5 9.5 Air Mauritius Ltd.

5) 2,301,244 Equity Shares of MAR 10 each fully paid up in 16.7 16.7 Air Mauritius Holding Ltd.

6) 6% Debenture Bonds of Banco De Roma face value EUR 15.49 *0.0 *0.0 guaranteed by the Government of Italy (Deposited with Civil Aviation Department, Italy). * (Rs. 3,057.69).

7) 12,500,000 Equity Shares of Rs. 10 each fully paid up in 225.0 100.0 Cochin International Airport Limited. (previous Year : 10,000,000 Equity Shares) (2,500,000 Equity Shares of Rs. 10 issued and subscribed at a premium of Rs 40 per share)

8) 50 Equity Shares of EUR 152.45 each fully paid up in Association 0.4 0.4 Sportive Du Golf Isabella. TOTAL OF UNQUOTED INVESTMENTS 294.6 169.6B QUOTED (AT COST-TRADE)

375,407 Shares of EUR 0.48 each fully paid up in France Telecom 7.6 7.6 (Market Value Rs.435.7 Million, Equivalent to EUR 5.8 Million). (Previous Year: Rs. 377.5 Million, Equivalent to EUR 5.6 Million) TOTAL 302.2 177.2

Aggregate amount of unquoted investments 294.6 169.6 Aggregate amount of quoted investments: 7.6 7.6 (Market value : Rs.435.7 Million Equivalent to EUR 5.8 Million) (Previous Year: Rs. 377.5 Million) (Equivalent to EUR 5.6 Million)

CFS

108

NOTE "10" : LOANS AND ADVANCES(Rupees in Million)

Particulars As at As at As at As at

March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015

Long Term Loans & Advances Short Term Loans & Advances


Capital Advances

Unsecured Considered Good 3,660.0 1,706.3 - -

Doubtful 7.6 7.6 - -

3,667.6 1,713.9 - -

Less : Provision for Doubtful Advances 7.6 7.6 - -

(A) 3,660.0 1,706.3 - -

Security Deposits

Unsecured Considered Good 5,701.8 5,125.3 491.4 149.5

Doubtful 43.4 43.5 - -

5,745.2 5,168.8 491.4 149.5


(B) 5,701.8 5,125.3 491.4 149.5

Advances recoverable in Cash or in Kind

Unsecured Considered Good 11,823.6 11,653.0 7,502.4 4,544.5

Doubtful 572.1 594.0 - -

12,395.7 12,247.0 7,502.4 4,544.5


(C) 11,823.6 11,653.0 7,502.4 4,544.5

Loans and Advances to Employees

Secured Considered Good 0.2 0.2 0.0 -

Unsecured Considered Good 38.1 22.5 407.2 270.3

Doubtful 22.3 19.5 - -

60.6 42.2 407.2 270.3


(D) 38.3 22.7 407.2 270.3

Other Loans and Advances

Unsecured Considered Good

Advance Payment of Income Tax and TDS

(net of provision for taxation) 2,122.1 1,388.9 434.8 103.8

Prepaid Expenses 25.7 161.3 1,508.5 1,785.1

Balances with Statutory/Government Authorities 2,814.4 2,636.3 22.5 5.8

Advance to Related Parties

Unsecured Considered Good - 1,688.8 - -

(E) 4,962.2 5,875.3 1,965.8 1,894.7

TOTAL (A + B + C + D + E ) 26,185.9 24,382.6 10,366.8 6,859.0

CFS

109

NOTE "11" : TRADE RECEIVABLES(Rupees in Million)

ParticularsAs at As at As at As at


* Trade Receivables amounting to Rs. 630.4 Million (Previous Year Rs. 423.8 Million ) are backed by Bank Guarantees.

Non-current Receivables Current Receivables

NOTE "12" : OTHER ASSETS(Rupees in Million)

Particulars Other Non-current Assets

As at As at As at As at


Other Current Assets

* “Surplus Assets/Assets held for sale" includes aircraft classified as Assets Held for sale (Refer Note No.31).


Outstanding for a period exceeding six months from the date they are due for paymentSecured, Considered Good* - - 50.1 - Unsecured, Considered Good 44.3 22.1 8,822.1 10,287.8Doubtful 7,045.2 6,166.4 94.6 - 7,089.5 6,188.5 8,966.8 10,287.8Less : Provision for Doubtful Receivables 7,045.2 6,166.4 94.6 - (A) 44.3 22.1 8,872.2 10,287.8Other ReceivablesSecured, Considered Good* - - 1,136.1 -Unsecured, Considered Good 3.1 - 12,526.3 13,402.2Doubtful 20.6 149.6 50.6 - 23.7 149.6 13,713.0 13,402.2Less : Provision for Doubtful Receivables 20.6 149.6 50.6 - (B) 3.1 - 13,662.4 13,402.2 Total (A + B) 47.4 22.1 22,534.6 23,690.0

1. Deposits - Others (having maturity of more than 12 months) * 43.8 26.5 - - Less : Provision for Doubtful Deposits 0.1 0.1 - - 43.7 26.4 - -2. Interest Accrued on i) Fixed Deposits 0.9 - 72.2 61.7 ii) Loan to Employees 3.3 6.1 13.5 17.2 4.2 6.1 85.7 78.9 3. Surplus Assets/Assets held for Sale* 105.7 171.0 62,777.7 229.1 Less:Provision for Diminution in Value of Asset 105.7 171.0 - - - - 62,777.7 229.1 4 Other Non-Trade Receivables Unsecured, Considered Good - - 12,530.3 5,873.6 Doubtful 2,569.0 2,580.5 - - 2,569.0 2,580.5 12,530.3 5,873.6 Less : Provision for Doubtful Receivables 2,569.0 2,580.5 - - - - 12,530.3 5,873.6 TOTAL 47.9 32.5 75,393.7 6,181.6

Stores and Spare Parts 20,194.9 18,732.0

Loose Tools 806.5 195.7

21,001.4 18,927.7

Less : Provision for Obsolescence / Inventory Reconciliation 4,973.6 5,860.7

16,027.8 13,067.0

Goods-in-Transit 903.9 1,181.8

TOTAL 16,931.7 14,248.8

CFS

110

NOTE "13" : INVENTORIES (As taken, valued & certified by the Management)

(Rupees in Million)


March 31, 2016 March 31, 2015

NOTE : "14" : CASH AND BANK BALANCES

(Rupees in Million)


March 31, 2016 March 31, 2015


Cash and Cash Equivalents

1. Balances with Banks :

a) On Current Accounts 4,803.5 3,933.7

b) Deposit Accounts (Maturity less than 12 months) 2,112.9 1,858.1

2. Cheques, Drafts on Hand 122.8 75.3

3. Cash on Hand 29.6 41.2

4. Remittances in Transit 66.1 65.3

(A) 7,134.9 5,973.6

Other Bank Balances

1. Margin money deposits 3,692.8 2,595.7

(B) 3,692.8 2,595.7

TOTAL (A + B) 10,827.7 8,569.3

CFS

111

NOTE "15" : TRAFFIC REVENUE(Rupees in Million)

Particulars 2015-16 2014-15

NOTE "16" : OTHER REVENUE(Rupees in Million)


* Profit on Sale of Fixed Assets (Net) includes :

a) Rs 1,342.8 Million (Previous Year : Rs. 4,047.3 Million) Profit on Sale & Lease Back of one B787-800 (Previous Year :four B787-800) Dreamliner Aircraft. (Refer Note 42 Ba)

b) Rs.640.6 MillionProfit on sale of four flats at Sterling Apartments, Mumbai.

c) Rs. 82.6 million profit on sale of one GE Engine.


I) Scheduled Traffic Services

1 Passenger 187,036.1 185,202.9

2 Excess Baggage 1,643.2 1,686.4

3 Mail 901.0 797.0

4 Cargo 10,792.9 11,817.7

(A) 200,373.2 199,504.0

ii) Non-Scheduled Traffic Services

1 Charter 10,776.9 11,401.0

2 Block Seat Arrangement 419.7 583.9

3 Subsidy for Operation from Government 730.4 343.4

(B) 11,927.0 12,328.3

iii) Other Operating Revenue

1 Handling and Servicing 6,378.5 5,385.5

2 Hotels and Flight Kitchen 109.4 273.4

3 Manufacturers Credit 2,728.2 2,240.2

4 Incidental 11,510.0 7,186.2 (C) 20,726.1 15,085.3

TOTAL (A+B+C) 233,026.3 226,917.6

1 Interest Income on :

Bank Deposits 372.6 284.8

Others 35.1 149.5

2 Dividend from Long Term Investments (Trade) 97.6 106.5

3 Rent Receipts 641.1 411.1

4 Profit on Sale of Fixed Assets (Net) * 2,048.4 4,582.9

5 Other Income 165.0 -

TOTAL 3,359.8 5,534.8

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NOTE "17" : OTHER OPERATING EXPENSES(Rupees in Million)


NOTE "18" : EMPLOYEE BENEFIT EXPENSES(Rupees in Million)


NOTE "19" : FINANCE COST(Rupees in Million)



1 Insurance 1,705.8 1,676.7

2 Material Consumed - Aircraft 5,792.4 10,159.0

3 Outside Repairs - Aircraft 14,229.5 13,732.8

4 Navigation, Landing, Housing and Parking 17,460.3 15,824.9

5 Hire of Aircraft 12,916.4 11,929.1

6 Handling Charges 9,654.9 7,933.6

7 Passenger Amenities 8,413.6 7,535.9

8 Booking Agency Commission (Net) 4,183.5 4,151.6

9 Communication Charges i) Reservation System 8,686.6 7,392.3 ii) Others 1,903.6 1,715.5

10 Cost of Material Consumed 175.6 91.1 TOTAL 85,122.2 82,142.5

1 Salaries, Wages and Bonus 26,137.3 20,366.3

2 Crew Allowances 8,424.9 8,229.4

3 Contribution to Provident and Other Funds 1,421.0 1,314.9

4 Staff Welfare Expenses 2,152.9 2,035.0

5 Provision for Gratuity 1,772.4 1,389.2

6 Provision for Leave Encashment 1,360.1 1,001.8

7 Provision for Retirement Benefit 350.0 500.0 TOTAL 41,618.6 34,836.6

1 Interest on :

a) Debentures 12,906.8 12,890.9

b) Aircraft Loans 431.8 494.7

c) Other Loans 25,909.0 24,900.4

39,247.6 38,286.0

2 Other Borrowing Costs 5,279.3 1,672.4

3 Interest on Delayed Payment 2,652.5 2,868.6

TOTAL 47,179.4 42,827.0

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NOTE "20" : DEPRECIATION AND AMORTIZATION EXPENSE

(Rupees in Million)


NOTE "21" : OTHER EXPENSES(Rupees in Million)



1 Depreciation of Tangible Assets 21,571.3 21,725.7

2 Amortization of Intangible Assets 606.6 598.7

(A) 22,177.9 22,324.4

Less : Recoupment from Capital Reserve (Refer Note 3.1) 322.0 220.5

(B) 322.0 220.5

TOTAL (A- B) 21,855.9 22,103.9

1 Travelling Expenses

i) Crew 2,100.3 2,027.1

ii) Others 942.7 1,004.7

2 Rent 1,280.7 1,315.2

3 Rates and Taxes 212.8 359.8

4 Repairs to :

i) Buildings 265.1 170.7

ii) Others 1,655.7 1,721.7

5 Hire of Transport 799.2 793.7

6 Electricity & Heating Charges 1,080.4 1,200.2

7 Water Charges 18.8 19.1

8 Directors' Fees 0.4 0.9

9 Publicity and Sales Promotion 934.7 634.8

10 Printing and Stationery 143.8 163.3

11 Legal Charges 189.2 144.0

12 Auditors' Remuneration and Expenses 15.3 16.4

13 Provision for Bad & Doubtful Receivables and Advances 1,289.8 1,553.4

14 Write -Off/Write back of Obsolete Inventory (943.0) 81.5

15 Expenses on Block Seat Arrangements 351.9 458.9

16 Exchange Variation (Net) 3,890.4 2,994.7

17 Miscellaneous Expenses 3,096.6 2,058.5

18 Provision for Redelivery & other charges 224.3 156.4

19 Bank Charges 961.7 820.1

TOTAL 18,510.8 17,695.1

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NOTE "22" : PRIOR PERIOD ADJUSTMENTS (Net)


(Rupees in Million)


Revenue Heads

1) Passenger Revenue (1.4) (222.0)

2) Cargo Revenue 0.9 11.0

3) Mail 17.5 7.7

4) Handling, Servicing and Incidental Revenue 6.9 5.5

5) Others 303.6 152.6

(A) 327.5 (45.2)

Expenditure Heads

1) Handling Charges 58.1 58.2

2) Depreciation (947.8) (31.8)

3) Stores and Equipments (376.7) 52.9

4) Passenger Amenities 79.5 (0.3)

5) Publicity 7.1 13.7

6) Delayed Payment Charges to Fuel Companies 1.5 (157.8)

7) Insurance 11.8 (151.6)

8) Salaries/Staff Welfare Expenses 1,051.4 62.7

9) Landing, Parking and Navigation 11.1 19.9

10) Commission 0.4 42.1

11) Communication Charges - Others 30.5 80.0

12) Rent, Rates and Taxes (29.8) (27.3)

13) Exchange variation (5.1) 225.9

14) Legal and professional Charges 10.0 5.5

15) Interest 67.3 208.6

16) Crew Hotel Expenses 1.0 1.3

17) Fuel (Ops.) - Aircraft 24.1 151.2

18) Expenses on Computer Reservation 6.0 14.5

19) Others (Net) (77.9) 159.7

(B) (77.5) 727.4

TOTAL (B - A) (405.0) 772.6

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NOTE "23" : EXCEPTIONAL ITEMS

(Rupees in Million)


1 Inventory Migration Surplus / Written Back - 403.1

2 Provision No Longer Required 966.7 1,618.4

3 Loss on Sale of B777-200LR Aircraft * - (2,475.4)

TOTAL 966.7 (453.9)

NOTE "24" : EXTRA ORDINARY ITEMS (NET)(Rupees in Million)


1 Arbitration awards - (20.0)

2 Settlment of Cargo Anti Trust Case (857.7) -

3 Compensation / Liquidated Damages from Vendors (Refer Note 30a)

69.0 459.3

TOTAL (788.7) 439.3


25. CONTINGENT LIABILITIES NOT PROVIDED FOR:

A. Claims against the Group not acknowledged as debts (excluding interest and penalty wherever likely to be applicable) and being contested to the extent ascertainable and quantifiable:

(Rupees in Million)

Sr.No Description 2015-16 2014-15

(i) Claims on account of denied boarding, loss of passenger baggage, mishandled baggage, delayed flight, cancellation of flights, damaged consignments and late receipt of cargo etc. 341.9 335.8

(ii) Income Tax Demand Notices received by the Company which are under Appeal # 4,593.8 4,238.6

(iii) Customs Duty and Service Tax demanded by the Tax Authorities 8,119.7 3,033.8 (iv) Property Taxes/House Tax demanded by the Municipal Authorities 374.3 429.5

(v) Claims of Licence Fees, X-Ray, TNLC, Landing Charges, Parking Charges, Levies etc. (*) 5,298.0 5,009.6

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Sr.No Description 2015-16 2014-15

(vi) Other Claims on account of:-

a) Staff/Civil/Arbitration/Labour Cases pending in Courts (*****) 1,392.0 4,785.1

b) Claim for Vasant Vihar Colony (**) 3,736.0 3,736.0

(vii) Government Guarantee Fee (***)

a) Difference between Applicable Rate & the rate of 0.5% at which Guarantee Fee has been provided 1,526.7 4,171.2

b) Additional Guarantee Fee 8,014.9 6,043.8

(viii) Estimated Claims of employees towards rationalization of pay structure to be made in line with Justice Dharamadhikari Committee Report since the company has filed the case in the Supreme Court (****)(ix)Others (*****) 161.3 110.7

Total 33,558.6 31,894.1

# Includes Rs.52.1 Million relating to JV AI-SATS.

EXPLANATORY STATEMENT IN RESPECT OF CONTINGENT LIABILITIES

th a) Airports Authority of India (*): As per the MOU between AI and AAI dated 28 Aug'13, an amount of Rs.760.0 Million towards interest on delayed payments to AAI for the year 2012-13 has been disclosed as contingent liability as AI has not agreed for the payment of the interest on delayed payments to AAI. AI has not received any further demand/claim for interest on delayed payments from AAI and the same will be contested as and when received.

b) Claim for Vasant Vihar Colony (**): L&DO has raised a demand vide notice dated 26.11.2014 for unauthorized occupational charges amounting to Rs.3,736.0Million (Previous year Rs.3,736.0Million), which AI has contested because this demand has been raised without considering their own breaches/notices & its replies by Air India, hence the same has been shown as Contingent Liability.

c) Govt Guarantee Fee (***): AI has provided for Guarantee Fee @ 0.5% on all aircraft loans and working capital loans guaranteed by the Govt. The company has taken up the issue for waiver of Guarantee Fees over and above 0.5% in respect of working capital and ECB loans with the Ministry of Civil Aviation/Finance. Accordingly, the Guarantee Fee over and above 0.5% amounting to Rs.1,526.7Million (PY: Rs.4,171.2 Million) has been disclosed as Contingent Liability. Further, the additional liability on account of the delayed payments amounting to Rs.8,014.9 Million (PY: Rs.6,043.8 Million) has also been shown as Contingent Liability.

d) Estimated Claims of Employees (****): Based on the Justice Dharamadhikari Committee recommendations, the Revised Basic Pay (RBP) has been implemented for most of the categories of the employees from different dates. However, the same is yet to be implemented for the remaining categories comprising of the Pilots of the Wide Body aircraft (Non Executive) and Cabin Crew (Non Managerial). These remaining categories of employees have contested the implementation of the recommendations in the Supreme Court by way of SLP. The Hon'ble Supreme Court has referred the matter to a bench of three Hon'ble Judges for disposal.

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The total amount payable, if any, to all categories of employees cannot be worked out until the agreement with all the categories of employees (including the remaining categories) are entered into. The amount disclosed as contingent in last year's accounts was a very rough estimate; hence the same has been omitted. In view of this and as the matter is sub-judice the final amount payable could not be ascertained.

e) M/s GATI (*****): An agreement for freighter charter operations (undertaken by AASL) between Air India Ltd and M/s GATI was terminated by GATI in March 2009, consequent to which AI invoked the Bank Guarantee of Rs. 300 million deposited by GATI. The Arbitral Tribunal has given it's award against which an appeal has been filed by Air India Limited before the Hon'ble Delhi High Court which has also upheld the decision of Arbitral Tribunal. To file an appeal in Delhi High court (Double Bench) against the subject order, AIL has deposited Rs. 220 million with Hon'ble High Court as deposit money on 17.11.2015. No provision has been made for Debtors of Rs. 294.0 million though the same is more than 3 years, since an appeal has been filed and the matter is sub-judice. The management is hopeful for a favorable judgment and guarantee invoked amount is lying with AASL. However, Rs 267.5 million has been shown as Contingent Liability by Air India Ltd on this account.

f) HCI (*****): The Employees Provident Fund Organization had raised on HCI demands for interest/damages for belated payments made by Centaur Delhi and Chefair Delhi over the period April 2008 to March 2016 aggregating to Rs.18.9 million towards interest and Rs 37.4 million towards damages. During the year, the HCI has made a provision for interest of Rs 7.0 million. The company has filed appeals with the Provident Fund Authorities for waiver of damages. Since, the company is hopeful of positive outcome, no provision for the said damages has been made in the books of accounts.

g) AIATSL: Contingent liability, if any, in respect of pending legal cases/litigation/disputes of AIATSL has not been disclosed.

26. (i) CAPITAL COMMITMENTS: Estimated amount of contracts remaining to be executed on Capital Account are given hereunder:

(Rupees in Million)


i) For Aircraft Projects 111,401.3 92,865.7 ii) Others* 2,262.0 1,179.2

Total 113,663.3 94,044.9

* Includes Rs.160.9 Million relating to JV AI-SATS.

(ii) Other Long Term Commitments

Air India has entered into agreements have been entered into to take delivery of 14 A-320 NEO aircraft on operating lease for a period of 12 years with scheduled deliveries beginning from Jan'17 till Feb'19. An amount of Rs.46.4 Million has been given as security deposit during the year 2015-16 and another security deposit of Rs.231.9 Million has been paid in 2016-17. The lease rental of these aircraft is USD 0.37 Million per month for each aircraft.

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27. FIXED ASSETS

a) Land (Freehold/Leasehold) and Buildings of AI include Gross Block Rs.76,463.5Million (Previous Year: Rs.76,821.4Million)for which registration formalities are yet to be completed. Further, in some cases title deeds are not in the possession of AI.

b) HCI has got 4 Flats in Sher-e-Punjab Society, Andheri, Mumbai for which conveyance deed is yet to be executed.

c) AI had 508 flats constructed in Nerul on a portion of land admeasuring 28,626 sqmtrs and it has been decided to sell these flats to the employees of the company and organizations under the control of Ministry of Civil Aviation. In terms of the orders of Hon'ble High Court at Bombay (the Court), AI issued allotment letters to 332allottees out of 508 flats constructed and physical possession of 280 flats has also been handed over. However, title to the underlying land can only be conveyed by a tripartite conveyance deed between Societies, Air India and CIDCO which is not yet done. Therefore, in the opinion of management pending conveyance of title of land in favor of the registered societies, Air India continues to hold the title to the underlying land. The sale proceeds amounting to Rs.416.3Million received from the concerned members in respect of flats sold have not been appropriated against the cost and is being carried forward under the head “Other Non-Current Liabilities”. The cost of land and the cost of construction is being carried as Fixed Assets. Necessary adjustment entries (including reversal of depreciation amounting to Rs.76.8 Million) will be made in the books of accounts on completion of these formalities.

d) Long Term Loans & Advances include a sum of Rs.24.6 Million(Previous Year: Rs.24.6 million) being the advance paid by the company to CIDCO for the purchase of another plot of Leasehold Land at Nerul (apart from (b) above) for the purpose of construction of staff quarters. However, the possession of the plot allotted by CIDCO in this regard has not been handed over to AI and no agreement/lease deed has been executed so far.

e) Item-wise details of various fixed assets have been migrated to SAP to the extent of details available in respect of quantities/location/date of purchase. In some cases, block of assets were migrated into SAP as one item. However, subsequently line item details in respect of most of such items were updated in SAP but updation in respect of some items is still to be carried out.

f) Fixed Assets register is in the process of updation with respect to Components identified.

g) i) During 2013-14, Hotel Corporation of India had entered into an MOU with Airports Authority of India (AAI) for renovation of Centaur Delhi, Chefair Delhi and Centaur Srinagar. Accordingly, advance amounting to Rs 100.0Million each was given to Airports Authority of India for the renovation of these properties in 2013-14 and 2014-15 respectively. Out of the Rs 200.0Million, equipment worth of Rs 78.8 Million has been received and capitalized till 2015-16 and the balance amount of Rs 121.2 Million reported under Capital Advances will be used for further renovation.

Further, during the current year 2015-16, HCI received a further sum of Rs 50.0 Million from the Govt of India for renovation of Centaur Srinagar.

ii) Subsequent to the sale of Centaur Hotel Juhu Beach in 2002 by HCI, State Govt. of Maharashtra claimed an amount of Rs 44.8 Million from M/s V. Hotels and from the Company for premium payable on the transfer of 1810 sq.mtr of land attached to the hotel property which was on lease from the State Govt. and is to be kept open to sky - to

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be used only as garden. The same was disputed by the Company before the Revenue Minister, Government of Maharashtra. The Order of the State Government dated 1.6.2014 has directed M/s V. Hotels to make payment of the said premium which has been challenged by them in the Bombay High Court.

28. PHYSICAL VERIFICATION& RECONCILIATION

a) Fixed Assets:

Physical Verification and Reconciliation of major assets viz. Airframes, Aero-engines, APUs and Simulators was carried out at the year end and reconciliation of the same has also been completed. Further, reconciliation of land & buildings as per financial books vis-à-vis records of holding departments was also done. These assets of the Group together constitute around 95% of the Gross Block of Assets. No major discrepancies were found in the same.

Physical verification of the other assets, constituting around 5% of the Gross Block, are covered in the biennial exercise, accordingly the physical verification exercise for the biennial period is in progress in respect of the holding company and some of the subsidiary companies.

b) Inventory:

Physical Verification of inventory for the biennial period 2014-16 is in progress except in the case of AICL and AASL.

29. LOANS & ADVANCE - SFIS SCRIPS

a) AI was issued Duty Credit Scrips under the Serve From India Scheme (SFIS). The total st

unutilized Duty Credit Scrips for the year 2007-08, 2009-10 and 2010-11 as on 31 March 2015was amounting to Rs.11,551.5 Million. The company is actively followingup the matter of extension/renewal of the unutilized Scrips with the appropriate authorities due to which the company was issued SFIS Scrips for Rs.3,000.0Million in May/Jun 2016 pertaining to FY 2007-08. The company is vigorously pursuing for the renewal/extension of the balance amount of Scrips of Rs.8,551.5Million.

b) Further, during the year AIATSL has recognized an amount of Rs 131.5 Million in the books on account of entitlement under the SFIS Scheme 2015-16.

30. COMPENSATION/CREDITS

a) Compensation due to Delayed Delivery

th AI had signed a Delay Settlement Agreement on 5 September 2012 with Boeing for full and

final settlement on account of delay in delivery of 787 aircraft. As per the Delay Settlement, Boeing has agreed for an enhanced compensation in addition to the liquidated damages as per the original Purchase Agreement entered into with Boeing in December 2005 which is to accrue to the airline only on delivery of aircraft and in case of cancellation of any of the deliveries by AI, Boeing would only provide AI with the Liquidated Damages provided in the original Purchase Agreement and not the enhanced compensation. AI has accepted delivery of 1 (One) B787 aircraft during the current year. An amount of Rs.69.0 Million (Previous Year Rs.459.3 Million for 7 aircraft) provided by Boeing by way of a credit note on delivery towards enhanced compensation has been taken as Extraordinary Income and the debit has been shown under “Other Assets – Non Trade Receivables”.

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b) Fuel Burn allowance from GE

The B787 Purchase Agreement with Boeing provided for certain fuel burn guarantees with regard to performance of the aircraft. The shortfall in the fuel burn guarantees accrued upto FY 2015-16 has been taken as Miscellaneous Income to offset the additional fuel cost incurred by AI on account of fuel burn.

Likewise, GE the engine Manufacturer for B-787 aircraft has agreed to compensate AI with a fuel burn allowance in respect of the Block4 engines and PIP1 engines fitted on 21 B787 aircraft delivered to AI. Accordingly, in FY 2015-16 the accrued fuel burn allowance has been taken as Miscellaneous Income and the debit has been shown under “Other Assets – Non Trade Receivables”.

c) Grants Receivable by AASL

(i) The grant receivable from North East Council (NEC) for ATR aircraft North East operations was accounted for as incomes taking into account the operations of ATR for

stthe year ending 31 December 2012 amounting Rs. 495.4 Million. NEC contested the claim of Grant support for the year 2012, however, the committee set up under Planning Commission to resolve the issue, has recommended for Rs. 609.1 Million based on actual deficit that MoCA may provide budgetary support to meet the Viability Gap Funding(VGF) for the year 2012. However, the company as a prudent measure has continued to account for Rs. 495.4 Million as originally accounted since the recommended amount is also disputed.

(ii) The North-East Council has signed a MOU for VGF for operating flights in North East Sector effective August 2014 which is still continuing. The Union Territory of Lakshadweep (UTL) has continued to sanction VGF for Agatti operations for the year 2015-16.

(iii) Further, AASL has also operated the following operations on different sectors under VGF Arrangements with respective Govt bodies:

No VGF Signed With Sectors Operated Period

1 Union Territory of Daman & Diu Mumbai-Diu-Mumbai 25.10.15 to 24.10.16

2 Govt of Puducherry Bengaluru-Puducherry- Bengaluru 14.04.15 to 15.10.15

3 Govt of Karnataka Bengaluru-Mysuru- Bengaluru 03.09.15 to 17.11.15

4 Bengal Aerotropolis Projects Ltd Kolkata-Durgapur- Kolkata 15.05.15 to 21.12.15

31. SALE & LEASE BACK OF B-787-800 DREAMLINER AIRCRAFT

In terms of approved Turnaround Plan of Air India, the induction of 27 B-787-800 Dreamliner aircraft was to be done only under the Sale and Leaseback (SLB) basis and the same was discussed and

th thapproved by the Board in their 45 Meeting held on 14 May 2012.Out of 27 aircraft, SLB for 12 aircraft has already been completed in the earlier years. In respect to the 9 B787-8 aircraft which were delivered

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to Air India during the period from March 2014 to June 2015,the Board of Directors had finally approved the sale and lease back transaction backed by Government of India (GOI) Guarantee in its meeting held

rdon 23 November, 2015. Accordingly, Government of India was requested to issue the Guarantee for rdSLB in respect of these 9 aircraft in Jan'16but the GOI guarantee was finally issued only on 23 June

2016. Immediately on receipt of the GOI guarantee, the SLB transaction of these 9 aircraft has since th

been completed by 8 August 2016.

st As the SLB for 9 B787-800 aircraft was mandated before 31 March 2016 and the actual transaction took place after the Balance Sheet date but before the approval of Annual Accounts of2015-16 by the Board, the accounting treatment for these 9 aircraft has been afforded in the books of accounts as

stCurrent Assets w.e.f. 1 April 2015.Accordingly, these aircraft have been shown as “Assets held for Sale” and no depreciation have been provided on these Aircraft in accordance with the Accounting Standard.

32. COMPONENT ASSETS

Consequent to the changes in the Schedule II effective 2015-16, major components (except in the case of AICL) with different useful lives are to be treated as separate assets. Accordingly, on account of this the depreciation for the year is higher and aircraft maintenance expenditure is lower and hence the same are not comparable with the previous year figures.

In respect of AIATSL, the assets (Ground Handling Equipment) comprise of components which have no separate life or value if separated from the original assets. Hence, Component Accounting as per Schedule II of the Companies Act, 2013 is not applicable.

33. EFFECT OF CHANGES IN EXCHANGE RATES ( AS-11)

a) The Group as per the consistent practice, has been treating the bridge loans (short term borrowings) availed for acquisition of Aircrafts, during the intermediary period before arrangement of long term finance/ sale thereof , as borrowings and as such these are treated as long term monetary items for the purpose of capitalization under the amended AS-11.

b) Transactions relating to Foreign Inventory Procurements have not been translated at the date of transaction/in accordance with the provisions of AS-11 due to complexity of transactions. The difference if any could not be quantified due to the complexity of the transactions. However, the same is not likely to be material.

34. CONFIRMATIONS/RECONCILIATIONS

a) The process of identification of unmatched receivables and payables (including items migrated to SAP at block level instead of line items) is under process of matching/reconciliation. Impact, if any, of consequential adjustment arising out of reconciliation will be dealt with in the year concerned in which the same is identified till the whole process is completed.

b) The Group has sought the confirmation of balances for most of the receivables and payables including Oil Marketing Companies. However, some of the parties have only responded. Wherever the balances confirmed by the parties are not in agreement with those shown in the company's books, the reconciliation is under process.

c) The Service Tax including input credit to be availed, Tax deducted at Source (TDS), Employee Provident Fund and Revenue related taxes are being reconciled to be in line with the returns filed/statutory records maintained.

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d) During 2002-03, Hotel Corporation of India Ltd. accounted for Rs 29.8 Million as receivable from M/s Sahara Hospitality Ltd on account of Net Current Assets transferred to the respective buyers of Centaur Hotel Mumbai Airport. The buyers M/s Sahara Hospitality Ltd. disputed the same. Based on the Arbitration award the amount receivable from M/s Sahara Hospitality Ltd. is Rs 18.8 million plus legal costs Rs 4.0Million. The accounts have been suitably adjusted to the extent of award amount of Rs 18.8 Million in the earlier year. Against the said Award, the buyers preferred an appeal in the High Court of Bombay. In July 2015 the Company has received order from High Court which is in favour of the buyer, which has been challenged by the Company before the Division Bench of the Hon'ble High Court of Bombay. In the opinion of the Management, the amount receivable from M/s Sahara Hospitality Ltd Rs 18.8 Million are considered good for recovery and the effect of the appeal to the Division Bench will be accounted for in the year of receipt of the judgement.

35. INTERNAL CONTROL

AI has appointed external chartered accountants firms so as to strengthen the internal audit/control process to ensure the coverage of all the areas as envisaged in the Minimum Audit Programme at stations, regional offices, user departments and Central Accounts Office which are under progress.

36. IRREGULARITIES IN CASH AND BANK BALANCES

Shortages/Misappropriations/Irregularities in cash and bank balances amounting to Rs 17.9 Million in certain domestic and foreign stations which were detected in earlier years have not been considered good and the same have been provided for in the books.

37. INVENTORIES

a) The Work Order Suspense account represents inventory items issued to third parties/Subsidiary for the repair of owned assets which includes expendable items amounting to Rs.315.2 Million issued prior to Jan'15 for which process of reconciliation for closure of the open Work Order Suspense Account is under progress.

b) Inventory amounting to Rs.228.9 Million which is more than two years old is lying in the intermediate/suspense account for which process of reconciliation is under progress.

c) The difference of year-end inventory balances between SAP and RAMCO amounting to Rs.74.8 Million (PY: Rs.63.5 Million) to the extent quantified is under the process of reconciliation.

d) AI carries inventory of CF6 engines, relating to the phased out fleet of aircraft, amounting to Rs.503.3 Million(Previous Year: Rs.503.7 Million). As the company is hopeful that these spares can be used by the subsidiary AIESL for the repair of other aircraft types and also for third party work. Hence, these spares are not considered as obsolete.

e) In respect of AASL, a consolidated Provision for Obsolescence amounting to Rs 360.7 Million (PY: Rs 375.9 Million) towards aircraft spares, rotables and special tools in respect of ATR and CRJ aircraft has been made as on 31.3.2016. During the year there was a write back of Rs 15.1 Million in this provision. However, there are no non-moving spares.

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38. IMPACT DUE TO CHANGE IN ACCOUNTING POLICY

During the Financial Year Air India Charters Ltd has changed accounting policy in respect of Repairable Spares to bring the same in line with the parent company i.e. Air India Ltd. As such, Repairable Spares are being classified as Fixed Assets instead of inventories as classified earlier. As a result of this change in Accounting Policy, the total amount of Rs 33.69 Million has been provided for as depreciation on Repairable Spares as of 31st March 2016 (including Rs 18.92 Million pertaining for the opening balance of repairable spares). Similarly, an amount of Rs 307.73 Million was charged to consumption/ scrap page etc. has been written back. Had this change in Accounting Policy not been carried out the Profit for the year would have been lower by Rs 274.04 Million. Further, due to change in this policy Inventory has reduced by Rs 402.32 Million and Fixed Assets increased by the same amount.

39. STATUS OF RECONCILIATION WITH AIRPORT OPERATORS

a) The reconciliation of certain receivables and payables of the parent company i.e. Air India Ltd& AASL with various Airport Operators such as AAI, MIAL, DIAL, CIAL and GHAIL is in progress

stand the status of the same as on 31 March 2016 is given hereunder:

(Rupees in Million)

S.No. Name of Airport Operator Balance Payable Balance Receivable Difference as as per AI Group as per Airport on 31.3.16 Cos as on 31.3.16 Operator as on 31.3.16

1. Airport Authority of India (AAI) 15,864.5 NA -

2 Mumbai International Airport Ltd (MIAL) 3,477.3 3,649.9 (172.6)

3 Delhi International Airport Ltd (DIAL) 4,878.7 4,978.4 (99.7)

4 Cochin International Airport Ltd (CIAL) 241.4 242.1 (0.7)

5 Greater Hyderabad International Airport Ltd (GHIAL) 630.0 1507.3 (877.3)

The major reason for the differences in the balances as stated above is the claims of interest from the Airport Operators for delayed payments which Air India has not accepted, however, the same has been shown as contingent liability. Other reasons for differences are landing & parking charges, ground handling royalty, space rentals etc which are under reconciliation.

b) Due to the ongoing expansion and reconstruction of Airport Area by MIAL, relocation of land leased to Air India is in process, with surrender of a part of the existing premises. A comprehensive review of total leased premises ultimately held including compensation, if any, can be taken only after expansion work is completed/certified and handing/taking over is in place.

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c) HCI:The company has provided for Lease Rentals @ Rs 163/- per sqrmtrs and Turnover Levy @ 2% of annual turnover in the books of accounts. Accordingly, HCI has not made any provision

sttowards the Lease Rental/Turnover Levy differentials as well as Interest upto 31 March 2016 as given below:

(Amount in Rs Million)

No Airport Operators Lease Rental/Turnover Interest Levy Differential

a) Airports Authority of India Ltd 202.8 171.8

b) Mumbai International Airports Ltd 10.6 52.5

c) Delhi International Airports Ltd 53.1 153.4

40. SEGMENT REPORTING:

a) The Group is primarily engaged in airline related business, which is its single primary business segment. The details of geographical area wise revenue earned (derived by allocating revenue to the area in which the sales were made) are given hereunder:

(Rupees in Million)


a) USA/Canada 18,159.9 17,630.9

b) UK/Europe 14,572.0 16,191.7

c) Asia (excluding India) Africa & Australia 30,548.5 29,251.0

d) Gulf 14,948.4 13,417.1

e) India 154,797.5 150,426.9

Total 233,026.3 226,917.6

b) Major revenue-earning asset of the Group are the aircraft fleet, which is flexibly deployed across its worldwide route network. There is no suitable basis for allocation of expenditure, assets and liabilities to geographical segments. Consequently area-wise assets and liabilities have not been disclosed.

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41. RELATED PARTY TRANSACTIONS

A. Joint Working Group Arrangement:

Joint Working Group with M/s.Hindustan Aeronautics Ltd (HAL), Bengaluru.

The handling activities for HAL at Bengaluru which were earlier provided by Air India have been transferred to AIATSL effective 2014-15 and the revenue for the same will be shared by HAL with AIATSL for which agreements between both have been executed.

HAL has withheld an amount of Rs.111.2 Million (Previous Year: Rs.99.6 Million) from the settlement of AI profit share in the HAL-AI JWG due to pending disputes which has been provided for.

B. No loans or credit transactions were outstanding with Directors or Officers of the Group or their relatives at the end of the year which is required to be disclosed in accounts under the Companies Act, 2013.

C. In the opinion of the Group, the agreements with various Airlines, private parties termed as “Joint Operations/Code-share Agreements” do not fall within the definition of Joint Venture as mentioned in Accounting Standard (AS-18) and (AS-27), hence are not included in above disclosures.

D. In respect of Jointly Controlled Entities i.e. AI-SATS, the share of AI (after elimination) out of the Assets, Liabilities, Income and Expenditure of the JV Co is as follows:

(Rupees in Million)

No Particulars As at 31st March 2016 As at 31st March 2015

I Assets

Non Current Investments - -

Non Current Assets 1,476.3 1,114.5

Current investments - -

Current Assets 1,211.3 992.1

II Liabilities

Long Term borrowing 92.0 -

Non Current Liabilities & Provisions 56.2 50.1

Short Term Borrowings 674.3 450.9

Current Liabilities and provision 451.5 429.0

III Income 2,851.5 2,521.8

IV Expenses 2,578.1 2,253.7

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E. KEY MANAGEMENT PERSONNEL & RELATIVES :st

(as on 31 March 2016)

(i) List of Board of Directors of Air India Ltd. as on 31 March 2016

Sr.No. Name Designation

1. Shri Ashwani Lohani CMD

2. Smt. Gargi Kaul Government Nominee Director

3. Shri B.S. Bhullar Government Nominee Director

4. Shri Vinod Hejmadi Director Finance

5. Shri Pankaj Srivastava Director Commercial

6. Shri N.K.Jain Director Personnel

7. Shri Ravindra Dholakia Independent Director

8. Shri Prem Vrat Independent Director

9. Shri Gurcharan Das Independent Director

10. Air Marshal (Retd) K Knohwar Independent Director

11. Smt. Renuka Ramnath Independent Director

Changes during the year 2015-16

Sr.No Name Designation

1. Shri Rohit Nandan CMD ( Ceased to be CMD from 31 August 2015 )

2. Shri S.Venkat Director Finance (Ceased to be Director from 31 October 2015)

3. Shri S.Mohanty Government Nominee Director (Ceased to be Director from 6 May 2015 )

(ii) List of Board of Directors of Air India Charters Limited (AICL)


1. Shri Ashwani Lohani Part-time Chairman

2. Shri Vinod Hejmadi Nominee Director of Air India

3. Smt (Dr.) Shefali Juneja Government Nominee Director 4. Smt. Puja Jindal Government Nominee Director

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1. Shri Rohit Nandan Part-time Chairman ( Ceased to be Part-time Chairman from 31 August 2015 )

2. Shri S. Venkat Nominee Director of Air India (Ceased to be Director from 31 October 2015 )

(iii) List of Board of Directors of Airlines Allied Services Ltd. (AASL)




3. Shri Pankaj Srivastava Nominee Director of Air India

4. Smt. Meenakshi Dua Nominee Director of Air India

5 Capt. Arvind Kathpalia Nominee Director of Air India

6. Smt. (Dr.) Shefali Juneja Government Nominee Director



1. Shri Rohit Nandan Part-time Chairman ( Ceased to be Part-time Chairman from 31 August 2015)

2. Shri S.Venkat Nominee Director of Air India (Ceased to be Director from 31 October 2015)

3. Capt A K Govil Nominee Director of Air India(Ceased to be Director from 18 August 2015 )

(iv) List of Board of Directors of Air India Air Transport Services Ltd.(AIATSL)






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2. Shri S. Venkat Nominee Director of Air India (Ceased to be Director from 31 October 2015)

3. Shri S. Mohanty Government Director (Ceased to be Director from 6 May 2015 )

(v) List of Board of Directors of Air India Engineering Services Limited (AIESL)










(vi) List of Board of Directors of Hotel Corporation of India Limited (HCI)




3. Shri Pankaj Kumar Managing Director



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1. Shri Rohit Nandan Part-time Chairman (Ceased to be Part-time Chairman from 31 August 2015)


3. Shri S.Mohanty Government Director (Ceased to be Director from 6 May 2015 )

(vii) List of Board of Directors of AI-SATS


th 1. Mr Willy Do Tuck Chong Director and Chief Executive Officer (Upto 24 October 2015)

th 2. Mr Chew TeckChye – Director and Chief Executive Officer (w.e.f. 24 October 2015)

F. MANAGERIAL REMUNERATION:

The details of the Managerial Remuneration of the Holding Company i.e. Air India Ltd is:

S.No Particulars 2015-16 2014-15

(a) Chairman & Managing Director

Salaries and Allowance 2.1 2.1 (Including value of Perquisites Rs 0.02 million (PY : Rs 0.02 million)

(b) Functional Directors

i) Salaries and Allowance 11.7 7.8 (Including value of Perquisites Rs 0.16 million (PY : Rs 0.14 million)

ii) Contribution to Provident Fund 0.7 0.4

Note: As regards retirement benefits, other than Provident Fund, since they have been done on a global basis no allocation has been made.

42. LEASES

(A) Finance Leases

a) 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 is Rs.229,941.4

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Million (Previous Year: Rs.238,049.1 Million). The future lease obligation is Rs.107,967.8 Million as at March 31, 2016 (Previous Year: Rs.120,598.6 Million).

b) Liability on account of future minimum lease rentals is as under:

(Rupees in Million)

Particulars As at 31.3.2016 As at 31.3.2015

i) Not later than one year and 22,016.1 20,240.0 ii) Later than one year and not later than five years 84,281.1 84,831.4 iii) Later than five years 5,800.0 20,594.9

Total 112,097.2 125,666.3

b) Present Value of (a) above

i) Not later than one year 20,524.7 18,750.0 ii) Later than one year and not later than five years 81,673.9 81,447.7 iii) Later than five years 5,769.2 20,400.9

Total 107,967.8 120,598.6

c) Finance Charges 4,129.4 5,067.7

(B) Operating Lease

a) The Group has taken 31 aircraft (11 B-787, 5 A-320, 3 A-319, 1 B-737, 3 ATR-42-320, 5 ATR-72-600 and 3 CRJ-700) (Previous Year: 17 leased aircraft, 11 B787, 2 B747, 3 A-319 & 1 A-320 aircraft) on non-cancelable operating lease. The Group has entered into an arrangement for Sale and Lease Back of 1 B787-8 aircraft (Previous Year: 4 B787-8) aircraft during the FY 2015-16. This arrangement is for 12 year tenure and is structured as a non-cancelable operating lease. As the B787 aircraft are new generation aircraft which were introduced in the aviation market by Boeing during 2012, there has been no secondary market for re-sale of these aircraft. Hence the sale price for this transaction which was determined based on public tender fairly represents the fair market value for these aircraft.

Liability on account of future minimum lease rentals in respect of leases acquired after April 01, 2001:

(Rupees in Million)


i) Not later than one year 13,484.6 9,875.7 ii) Later than one year and not later than five years 51,374.7 37,179.3 iii) Later than five years 54,770.5 47,334.0

Total 119,629.8 94,389.0

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However, in case of premature termination, the Lessee is required to pay the Lessor as per the terms of the agreement

Lease rent expenses, in respect of aircraft taken on operating lease recognized in Profit & Loss Account for the year is Rs.12,916.4 Million (Previous Year : Rs.11,929.1 Million).

AI has taken various residential/commercial premises under cancellable operating lease. The details relating to expired leases out of the above are being compiled.

b) The re-delivery charges for the Sale & Lease Back (SLB) of 6 A-320 aircraft and 2 B-747, in terms of the termination agreements was paid in 2015-16 (including advance rentals towards premature lease termination). The same have been amortized as under on elapsed time basis over the remaining useful life of the Aircraft based on technical estimates i.e. design service life.

(Rupees in Million)

S. No Year Airbus Aircraft Boeing Aircraft 1 2015-16 495.1 729.2

2 2016-17 190.5 729.2

3 2017-18 11.5 729.2

c) The aircraft VT-ABO MSN-406 of AASL met with an accident on 22nd December, 2015, while it was parked in Kolkata Airport and was hit by passenger coach of Jet Airways and was badly damaged. Though the lease was due up to 31st March, 2017, however negotiation was held with the lessor for early cancellation of lease. The negotiated settlement was reached with the Lessor on 16th August, 2016 for Rs. 228.7 Million (US $3.36 Million) and accordingly being an extraordinary event under AS-4, necessary provision has been made in books of account as on 31st March, 2016 after adjustment of our share of insurance claim of 1.4 Million dollars ( Rs. 95.2 Million). Accordingly, the company has made provision of Rs. 133.5 Million as on 31.3.2016 towards the said loss and accounted for as redelivery and other charges under other expenses. The Company is also contesting with Jet Airways for necessary claims. The claim with Jet Airways will be accounted for on settlement basis.

d) AI has also taken Vehicles and Office Equipment on operating lease with option to purchase but title may or may not eventually be transferred. These assets are scattered at various stations and cumulatively not significant. Complete details of future obligation in this respect could not be compiled; amount thereof is not material, hence not disclosed.

43. PAYMENTS TO AND PROVISIONS FOR EMPLOYEES:

a) Liability for wage arrears, in respect of AI, includes Rs.2,623.8 Million (Previous Year : st

Rs.2,091.3 Million (Net) arrived on ad-hoc basis towards wage settlement up to period 31 December 2006 pending finalization of actual liability.

b) In view of Department of Public Enterprises (DPE) guidelines applicable to PSUs no wage revision can be granted to the employees of loss-making PSUs. AI has been making losses since 1st January 2007 hence no provision has been made towards wage revision/settlement.

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c) In terms of new wage agreement with Crew Union, an adhoc provision of Rs.500.4 Million is being carried in the books of accounts towards arrears of flying allowance.

44. EMPLOYEE BENEFITS

(A) General description of Defined Benefit Plan

a) Gratuity: Gratuity is payable to all eligible employees of the Group on superannuation, death, or permanent disablement, in terms of the provisions of the Payment of Gratuity Act.

b) Privilege Leave Encashment: Privilege Leave Encashment is payable to all eligible employees at the time of retirement. However, lapsable Privilege Leave which was

st sthitherto allowed to be encashed had been discontinued effective 1 April 2013 till 31 March 2015 (except the employees working in operational areas) and the employees had to avail the same. However, for FY 2015-16, the encashment of Privilege Leave for all categories of employees has been reinstated for a maximum period of 15 days.AASL has not provided liability for leave encashment to the employees.

c) Sick Leave Encashment: Sick Leave encashment is payable to all eligible employees at the time of retirement upto a maximum of 120 days subject to the condition that the employee should have at least 60 days of Sick Leave to his credit. It was also decided that sick leave standing to the credit of all existing employees as on 01.07.2012 shall stand frozen and the employee would be allowed to encash the same only at the time of retirement provided that he/she has not exhausted that leave by the time of retirement. Further, it was decided that encashment of sick leave which has accrued beyond 01.07.12 will not be allowed and the employee has to avail the same or the same will lapse.

d) AASL does not have a policy of encashment of leave hence no provision for encashment of leave has been made by it.

(B) Defined Contribution Plan

Employees Provident Fund: AI has Employees Provident Fund Trusts under the Provident Fund Act 1925, which governs the Provident Fund Plans for eligible employees. The Holding Company as well as its Subsidiary Cos and its employees contributes 10% of the PF Pay to the Provident Fund Trust/GovtFund ,as the case may be. The Confirmation/Reconciliation of Company's Accounts with Employees Provident Fund Trust Accounts is under progress.

(C) Defined Benefit Plans – Gratuity &Post Retirement Medical Benefits (Unfunded)

a) Necessary salient information in relation to AS-15 – Retirement Benefits for the entities in the group is not available in its entirety; hence, the same is not presented in the Consolidated Financial Statements.

b) In the absence of statistics for Post Retirement Medical Benefits (after amendment of the scheme i.e. for enhanced Contribution for Medical Benefits) the AI has decided to make an adhoc provision of Rs.350.0 Million (PY: Rs.500.0 Million) till:

(i) adequate statistics are collected; (ii) the actuarial valuation is done in due course, and

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c) HCI has introduced New Medical Benefit Scheme (Retired Employee Reimbursement Scheme) for those employees who superannuate as on 1st March, 2014 and thereafter. The Said Scheme is voluntary and contributory. Eligible employees are required to make a onetime non refundable contribution as per the said Scheme. Accordingly, the company has received an aggregate contribution of Rs. 5.1 Million (Previous Year Rs 3.2 Million) from 208 (Previous Year: 136) retired employees upto 31st March, 2016 which is accounted as a Current Liability. Further, Post Retirement Medical Benefits are accounted for by HCI as and when the claim arises.

d) Further, AASL and AIATSL have also not carried out any actuarial valuation for Post Retirement Medical Benefits.

e) The provision for Gratuity and Leave encashment has been provided based on the revised pay structure only for those employees for whom the JDC recommendations

sthad been implemented by the company as on 31 March 2016, however, reconciliation of number of employees eligible for gratuity is under progress. In respect of those categories i.e. Line Pilots and Cabin Crew for which recommendations are still to be implemented, the actuarial liability has been provided on the old pay structure as the impact could not be ascertained.

45. DEFERRED TAX ASSETS

During the year the Group has recognized Deferred Tax Asset only to the extent of Deferred Tax Liability as shown below:

(Rupees in Million)

S.No Particulars Recognized in DTA/DTL Total DTA Accounts Recognized in as on as on 31.3.2015 2015-2016 31.3.2016

(A) Deferred Tax Liability

(i) Related to Fixed Assets 75,241.0 (24,489.1) 50,751.9

(ii) Related to FCMI Account 1,070.7 74.6 1,145.3

Sub-Total (A) 76,311.7 (24,414.5) 51,897.2

(B) Deferred Tax Assets

(i) Unabsorbed Depreciation 57,578.0 (14,917.2) 42,660.8

(ii) Business Loss 42,589.9 (9,681.1) 32,908.8

(iii) Other Disallowances under IT Act 4,702.2 198.1 4,900.3

Sub-Total (B) 104,870.1 (24,400.2) 80,469.9

Deferred Tax Asset/(Liability) Net 28,558.4 14.3 28,572.7

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46. EARNINGS PER SHARE

(Rupees in Million)


Profit/(Loss) After Tax & Before Extra-Ordinary Items (42,317.7) (63,243.5)

Less: Extra-Ordinary Items 788.7 (439.3)

Profit/(Loss) After Tax & Extra-Ordinary Items (43,106.5) (62,804.2)

Weighted Average No. of Equity Shares 17,213,490,411 16,705,019,178

EPS Basic & Diluted

a) Before Extra-Ordinary Items (Rs. per Share) (2.46) (3.79)

b) After Extra-Ordinary Items (Rs. per Share) (2.50) (3.76)

47. REMUNERATION TO AUDITORS

The details of the audit fees and expenses of the Auditors:-(Rupees in Million)


Audit Fees - For the Year 12.3 11.5

Audit Fees - For Earlier Year 1.5 -

Out of Pocket Expenses (*) 1.5 4.9

Total 15.3 16.4

*Accounted on Payment Basis

48. GOING CONCERN

In order to improve its operational & financial performance, AI has formulated a TAP which entails both operational & financial turnaround of AI. Based on the company's assumption on Turnaround Plan (TAP) which has been independently vetted by consultant, a Financial Restructuring Plan (FRP) has been prepared and implemented effective 1st October 2011 which envisages aligning of the debt repayments of the Company in line with the projected Cash Flows.

Due to the support of GOI as well as the various measures taken by AI towards improving its operating and financial position, it is expected that the financial condition of AI would continue to improve in the future. During FY 2015-16, GOI has infused Equity to the tune of Rs.33,000.0 Million. Thus, total Equity Infusion under FRP as on 31st March 2016 aggregated to Rs.222,800.0 Million.

In view of the improvement in performance registered by Air India and due to the changed aviation environment such as fuel rates, exchange rates variation etc. SBI Caps was asked to prepare a Revised

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Turnaround Plan for Air India. This Revised Turnaround Plan has been placed before the Board of Directors of AI and the same has also been accepted by the Board. As per the Revised TAP, Air India is targeting improving upon the various targets laid down under the original TAP and the target of profitability has been advanced by two years.

Similarly, AICL has also firmed up the arrangements of taking 6 B-737-800 NG Aircraft on dry lease during the FY 2015-16 with the special feature of Wi-Fi facilities on board. Additionally, Board has approved for the induction of two more aircrafts on dry lease with the induction of which the total fleet size of AICL will become 25 aircraft.

On similar lines, AASL has inducted 3 ATR-72-600 aircraft during the FY 2016-17. Further, 10 Turbo-Prop aircraft are proposed to be leased, the process of which has been started in FY 2016-17 and these aircraft are likely to be inducted in FY 2017-18.

With regard to HCI it may be stated that the same is facing severe liquidity crunch due to various factors like operational losses and its financial and operating performance has been affected in recent years due to a number of external and internal factors. The accumulated losses have exceeded the net worth of the company.

However the management of the HCI with the support of the Government of India (GOI) is committed to the complete revival of the company by putting in place a Business Plan. Various initiatives have been taken by the management for improving the operational performance of the company and increasing the revenues leading to improved financial performance. Besides, HCI is upgrading all the properties of the company during the 12th Five Year Plan (2012-17) with the Equity Infusion of Rs 350 Million from the Govt of India. In order to facilitate this process, the Govt of India has infused Equity of Rs 100 Million in 2013-14, Rs 120 Million during 2014-15 and a further amount of Rs 50 Million has been sanctioned for 2015-16. This amount is being utilized for the renovation of its properties in Delhi and Srinagar.

The HCI had lowered its retirement age from 60 to 58 years which would result in a savings of Rs 50.0 Million per annum. The company is in the process of giving out on rent rooms of Centaur Hotel Delhi to the various Authorities which will earn incremental revenue and result in a reduction in loss. Further, AI has also decided that additional flights will be given to M/s Chefair Delhi and Mumbai with immediate effect for providing catering services. The value of the properties owned by HCI at Delhi Airport, Srinagar and Chefair in Mumbai are substantial in value. Further, the company is a going concern and is carrying out its normal activities of inflight catering and providing hotel accommodation to passengers and others.

However, it may also be mentioned that in the event of DIAL requiring additional land for a fourth runway, the Centaur Hotel, as per the terms of agreement of AAI and DIAL (OMDA)has to surrender this land to DIAL for which the compensation has to be determined.

Similarly, due to litigation in the Srinagar property, HCI is unable to give it on long term Management Contract.

But for these factors, in view of measures taken by HCI as well as AI to improve the operational/financial performance of HCI, Air India Ltd is hopeful that HCI will be able to sustain its requirements from its own revenues from the year 2016-17 onwards.

49. Pending reconciliation the difference between Holding Company and its Subsidiary Companies Inter-Company transactions amounting to Rs 525.5 Million has been provided for in the Profit & Loss Account.

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50. The Accounting Policies of the Holding Company and the Subsidiary Companies are identical in all respects except for the matters given below:

a) Fixed Assets and Depreciation:

(i) Componentization of Assets: AICL is in the process of identification of major components of assets, which is ongoing as at the year end. Pending completion of the same impact of the such componentization is not given effect to. However, the management estimates the same to be immaterial.

(ii) Assets of Small Value not exceeding Rs 5000: Such assets are being fully provided and charged off by AIATSL and AICL instead of providing depreciation as laid down in Schedule - II of the Companies Act. Since, the value of such items are negligible, the impact of such difference in treatment is not material.

(iii) Treatment of Aircraft Repairables: As against the Group's policy of capitalizing Aircraft Repairables and amortizing the same, AASL is treating the same as inventory. However, the impact of such change in method on the CFS cannot be ascertained.

st (iv) Depreciation: As against the actual installation date, of Fixed Assets acquired prior to 1

stApril 2014, HCI has assumed 1 April of each financial year as the date of installation for all Fixed Assets during the relevant financial years.

(v) Physical Verification of Assets: As against the Group's Policy of physical verification of assets at the end of a period not exceeding two years, HCI follows a policy of physical verification of assets at the end of every five years. However, the impact of this is not ascertainable.

b) Inventory Valuation:

(i) Determination of Cost: HCI is carrying out Inventory valuation at Cost (FIFO) as against the Group practice of weighted average cost. The overall net inventory of HCI is only Rs 22.1 Million as against the Group Net Inventory of Rs 16,931.8 Million and hence the impact of this difference in valuation of Inventory is not material.

(ii) Net Realizable Value: In case of AI-SATS, inventory is valued at lower of cost or net realizable value as against the Group policy of valuing inventory at cost.

c) Employee Benefits: In case of HCI and AIATSL, Post Retirement Medical Benefits Scheme is accounted for as and when the claim arises as against the Group's Policy of determining the same based on actuarial valuation. The impact of the same on the CFS is not ascertainable.

d) Operating Lease: In case AICL, contributions made to the Lessor on account of Maintenance Reserve for which, maintenance is expected to arise during the lease period is treated as pre-paid expenses. These contributions are expensed whenever the maintenance expenditure arises or at the end of expiry of the lease period. The impact of such deviation from the Group's policy on the CFS is not ascertainable.

In view of the above, since the impact is not material, no effect has been given in the consolidated financial statements.

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51. Additional Information as required under Schedule III of the Companies Act 2013 of enterprises consolidated as Subsidiary/Associates/Joint Ventures.

Statement of Net Assets and Profit and Loss attributable to Owners and Minority 2015-16

Name of the Entity Net Assets i.e. Total Assets minus Share in Profit or (Loss)* Total liabilities Amount Rs. in Millions

As % of Amount Rs. in As % of Amount Rs. in Consolidated Millions Consolidated Millions Net Assets Profit or (Loss)

A. Air India Limited (86.13) (168,019.50) (92.20) (38,367.80)

B. Subsidiaries

a) AASL (5.44) (10,608.73) (4.78) (1,987.51)

b) AIATSL 1.69 3,302.57 2.44 1,014.08

c) AICL (6.63) (12,940.72) 8.69 3,616.82

d) AIESL (3.25) (6,346.25) (13.42) (5,586.21)

e) HCI (0.96) (1,872.56) (1.39) (577.57)

C. Joint Venture

a) AISATS 0.72 1,413.61 0.66 273.39

(195,071.58) (41,614.80)

* The difference between the data mentioned in the above table and the consolidated loss given in the CFS Profit & Loss Account Statement amounting to Rs.1491.8 million is on account of certain inter-company items which could not be paired against the related Holding/Subsidiary Co.

52. The following Notes of the Subsidiary Cos although not material but Emphasis of the Matter on the same has been drawn upon by the Component Auditors are reproduced below:

(A) AIATSL

(i) Revenue shared by HAL AI JWG has been recognized during the year amount to INR 148.93 Lakhs (Previous Year INR 126.72 Lakhs has been reected under Prior Year Revenue during FY 2015-16).

(ii) Revenue Audit (Internal) for the FY 2015-16 is in progress and necessary accounting action, if any, will be taken once the Final Audit report is presented.

(iii) During the year in some instances, Levies and / or Service Tax have not been charged. Necessary billing and accounting action will be taken on identification of the invoices.

(iv) The Company charges Service Tax on Levies as directed by the Airport Authorities (AAI, DIAL, MIAL etc). The same is accounted along-with the levies.

(v) There are instances of Ground Handling and Security Contracts with 3rd parties that have expired and not been renewed. However services are continued to be provided

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and the parties are honoring the invoices based on the SGH agreement. Efforts are on to get the novated agreements duly signed by the Client Airlines.

(vi) During the year, Air India transferred revenue amounting to INR 3,047.30 Lakhs and expenditure to the tune of INR 23,173.64 Lakhs. The statutory dues such as Service Tax, VAT, TDS and Airport Royalties have not been transferred and the same have been complied by Air India.

(B) HCI

(i) Other Advances receivable Rs.158.49 lakhs (previous year Rs 147.14 lakhs) includes :

(a) Rs. 50.43 lakhs due from M/s Caribjet. The Company has taken legal steps for recovery of said sums.

(b) Rs. 38.42 lakhs due from AAI for the period from 1986-87 to 2005-06 and Rs. 9.54 lakhs due from MIAL for the period from 2006-07 to 2009-10 .

The Company is of the view that the above sums are good for recovery and hence no provision is required in respect thereof.

(ii) The company has presented Trade Receivables based on 'billing dates' as opposed to 'due date of payment' and hence, to the extent the requirement of Schedule III has not been complied with.

(iii) In earlier years, Catering and Handling Revenue was accounted on provisional basis at Chefair Delhi for the period April 2011 to November 2012 aggregating to Rs 6crores.The difference between the value of provisional billing and final billing (including applicable taxes) will be adjusted in the year in which final bills are raised.

(iv) The company is in the process of:

(a) streamlining the inventory reporting system in terms of generation of reports towards movement of item-wise store records and configuring of the stores ledger. Efforts are also being made to ensure that, at the year end consumption as per the stores records is fully reconciled with the financial records and adjustments are duly accounted for.

(b) clearing the billing backlog.

(c) instituting a maker checker process in order that a system of checks and balances is in place to prevent revenue leakage through Purchase and misuse and to ensure proper control over the Procurement and Consumption Cycles.

(v) Chefair Delhi acquired one Hi - lift TATA Chassis at a cost of Rs10,14,395/- during the financial year 2007-08. Based on operational considerations it was transferred to Chefair Mumbai on 21st March, 2009 for customisation to meet local requirements. This process has been inordinately delayed and hence it continues to reflect as Capital Work –in –Progress as on 31st March, 2016.

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© AICL

Inventory &Rotables:

a) Procurement of Stores, Aircraft etc. is controlled and monitored by the Air India Limited (Holding Company).

b) 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.

c) During the Financial Year Company has changed accounting policy in respect of Repairable Spares in line with the Parent company (Air India Ltd). A Repairable has been defined as an item whose operating cycle is more than 12 months and can be continuously repaired until scrapped. In case of opening balance as on 01st April 2015 of such repairable spares the remaining useful life has been estimated at 5 Years and in case of purchases of the repairable assets from 1st April 2015 on words the useful life has been estimated as 10 years. Henceforth, Repairable Spares are being classified as Fixed Assets instead of inventories as classified earlier. As a result of this change in Accounting Policy, the total amount of Rs 33.69 Million has been provided for as depreciation on Repairable Spares as of 31st March 2016 (including Rs 18.92 Million pertaining for the opening balance of repairable spares). Similarly, an amount of Rs 307.73 Million was charged to consumption/scrappageetc has been written back. Had this change in Accounting Policy not been carried out the Profit for the year would have been lower by Rs274.04 Million. Further, due to change in this policy Inventory has reduced by Rs 402.32 Million and Fixed Assets increased by the same amount.

d) 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.21.63 Million (Previous Year Rs.40.86 Million) during the year.

e) As confirmed by Material Management Department of Air India Ltd., physical verification of inventories from the biennial period 2012-14 has not been conducted and necessary accounting treatment of the discrepancies if any will remain undetected.

f) 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.

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g) Inventories at the yearend 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. 646.66 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. 430.82 Million which are to be charged off to consumption on issuance. As against the above, a provision of Rs 215.41 Million has been made in the books for the FY 2015-16 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.

h) Pending reconciliation / rectification of inventory balances, no provision has been made towards the inventory balances aggregating to Rs. 39.66 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.

i) Liability for Goods/Expenses for all materials received have been provided as per the values in GRANs & Store-in-Transit statement as on 31.3.2016 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 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.

j) 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 database 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.

k) 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.

53. In the case of AIATSL and HCIas per Companies Act 2013, Sec 149(4), the Company has not appointed independent director. Consequently, the Audit Committee has no independent director. There is no remuneration committee under Sec 177(2) and Sec 178 respectively.

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Corporate Social Responsibility committee has been formed by the Company during 2016-17. An amount of Rs. 37.82 Lakhs has been spent during the Financial Year 2015-16.

During the Financial Year 2015-16, Board meetings held on 26th Feb 2015 and 1st July 2015 were after a gap of more than 120 days.

54. Previous Year figures have been re-grouped/re-arranged wherever considered necessary to be compatible with the Schedule III of the Companies Act 2013, to the extent of information being available and practicable of compilation.

Signatures to the Schedules forming part of the Balance Sheet and Statement of Profit and Loss and to the

above notes.

For and on Behalf of For and on Behalf of For and on behalf of the Board

Sd/-(Ashwani Lohani)Chairman & Managing Director

Sd/-(V.S. Hejmadi)Director-Finance

Sd/-(Kalpana Rao)Company Secretary

For and on Behalf of

Thakur, Vaidyanath Aiyar & Co. Sarda and PareekChartered Accountants Chartered Accountants FRN : 000038N FRN : 109262W

Varma and VarmaChartered Accountants FRN : 004532S

Sd/- Sd/-(V. Rajaraman) (Sitaram Pareek)Partner PartnerM.No. 002705 M.No. 016617

Sd/-

(P.R. Prasanna Varma)PartnerM.No. 025854

Place : New DelhiDate : 25 April 2017

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Statement of Salient Features of the Financial Statement of Subsidiaries, Jvs and Associates (Form AOC-I)

PART A : Subsidiaries

(Rupees in Million)

S. Name of Subsidiary AASL AIATSL AICL AIESL HCI No.

1 Reporting Currency INR INR INR INR INR

2 Exchange Rate - - - - -

3 Closing as on 31.03.2016 - - - - -

4 Average Rate 2015-16 - - - - -

5 Share Capital 4,022.5 1,384.2 7,800.0 1,666.7 626.0

6 Reserve & Surplus (14,631.2) 1,918.3 (20,740.7) (8,012.9) (2,498.6)

7 Liabilities 13,562.5 2,837.4 51,310.4 11,533.5 3,203.9

8 Total Liabilities 2,953.8 6,139.9 38,369.7 5,187.3 1,331.3

9 Total Assets 2,953.8 6,139.9 38,369.7 5,187.3 1,331.3

10 Investments - - - - -

11 Turnover 2,677.7 5,943.0 29,097.8 6,202.7 464.2

12 Profit Before Taxation (1,987.5) 1,047.8 3,616.8 (5,586.2) (577.6)

13 Provision for Taxation - 33.7 - - -

14 Profit After Taxation (1,987.5) 1,014.1 3,616.8 (5,586.2) (577.6)

15 Proposed Dividend - - - - -

16 Percentage of shareholding 100% 100% 100% 100% 64.86%

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PART B : Statement of Salient Features of the Financial Statement of Jointly Controlled Entities and Associates (Form AOC-I)

(Rupees in Million)

S No. Name of Associates and Joint Ventures AI SATS

1 Reporting Currency INR

2 Latest Audited Balance Sheet Date 31-03-2016

3 Share of Associate/Joint ventures held by the company on the year end

i. No. 40,424,975

ii. Amount of Investment in Associates/Joint Venture 436.2

iii. Extent of Holding % 50%

4 Description of how there is significant influence Joint Control

5 Reason why the associate/joint venture in not consolidated Consolidated

6 Networth attributable to Shareholding as per latest audited Balance Sheet 2,827.2

7 Profit/(Loss) for the year 546.8

i. Considered in Consolidation 273.4

ii. Not Considered in Consolidation -

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