AIR INDIA CHARTERS LIMITED - AICL - Air India Express
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AICL AIR INDIA CHARTERS LIMITED
AICL
CONTENTS
Page No.
1. Board of Directors 1
2. Directors’ Report 2
3. Comments of the Comptroller & Auditor General of India 25
4. Independent Auditors’ Report 26
5. Balance Sheet as at 31 March 2015 47
6. Statement of Profit & Loss for the year ended 31 March 2015 48
7. Cash Flow Statement 49
8. Notes forming part of the Financial Statements for the year ended 31 March 2015 50AICL
BOARD OF DIRECTORS (as on 29 DECEMBER 2015)
Shri Ashwani Lohani Chairman
Shri V. Hejmadi
Dr. (Smt.) Shefali Juneja
Smt. Puja Jindal
SECRETARY
Smt. Aditi Khandekar
AUDITORS
M/s. Kirtane & Pandit
Chartered Accountants
Mumbai.
LEGAL ADVISORS
M/s. Kini & Co.
BANKERS
ICICI Bank
HDFC Bank
State Bank of India
Bank of Baroda
Dena Bank
Bank of India
Indian Overseas Bank
REGISTERED OFFICE
21st Floor, Air India Building,
Nariman Point,
Mumbai 400 021.
1AICL
DIRECTORS' REPORT 2014-15
The Directors take pleasure in presenting the 44th Annual Report of the Company together with the Audited
Accounts and Auditor's Report for the year ended 31 March 2015.
INDIAN CIVIL AVIATION SCENARIO
Financial year 2014-15 has been a very satisfactory one for most airlines in India including Air India Express as
nd
the year saw progressive decline in fuel rates starting from the middle of the 2 Quarter leading to lower fares
and increased demand. As per the air traffic statistics published by the DGCA, India, the Indian domestic air
market registered growth of about 10.5% in the year 2014, with the domestic passenger traffic rising from about
60.1 million in 2013 to about 66.4 million in 2014 while the international traffic to and from India estimated at
about 46.3 million in 2014-15, also registering a growth of about 9% over the 2013-14 level. In this connection, it
is pertinent to note that the eight countries to which Air India Express operates contribute to about 50% of the
total traffic to and from India. Furthermore, the air market on the routes between the countries served by Air
India Express and India grew at a far higher rate of over 14% in the year 2014-15.
In a forecast report released in 2013, IATA had estimated that the international traffic to and from India would
grow at CAGR of 6.6% between 2013 and 2020. The forecast for the on-line markets of Air India Express upto
2020 was well above the national average, ranging between 7 and 8%. Going by the actual growth seen in
2014-15 and in the current financial year up to August 2015, the traffic growth in these markets could well end
up closer to double digit. Responding to the opportunities presented by the markets between Kerala and
destinations in the Gulf region, the larger Indian private carriers such as Indigo, Jet Airways and Spice jet and
Etihad have commenced competitive direct international flights to the Gulf from Airports in Kerala – Kochi and
Kozhikode effective Winter 2014-15 schedule. They have further added to their presence in these markets in
the Summer 2015 schedule.
Air India Express would be in a position to take advantage of the growing opportunities in the international
markets to / from India with the induction of 6 dry leased aircraft in its fleet. The dry leased aircraft are scheduled
to be delivered to the Airline between March and November 2016.
REVIEW OF PERFORMANCE
For the first time in the history of AICL, the Company has recorded an Operating Profit of Rs. 662.12 crores
(before Revenue Sharing) besides generating a Cash profit of Rs. 172.49 crores (as against a net loss of Rs.
345.32 crores in FY 2013-14) mainly through increased revenue of Rs. 257.01 crores during FY 2014-15. The
company has doubled the Cargo Revenue in the current fiscal over the previous year and also surpassed the
excess baggage revenue by 39.22 % compared to previous year. The Scheduled Services Revenue, before
revenue sharing with AI, increased substantially from Rs. 2,359.45 crores in 2013-14 to Rs. 2,616.46 crores in
2014-15, representing an increase of 10.8%. The total expenditure of the Company was Rs. 2,356.12 crores as
against Rs. 2,412.43 crores for the year 2013-14, representing a decrease of 2.33 %.
The turnaround in the financial performance of the Company may be attributed to more intense asset / resource
utilization, greater operational efficiency, robust demand, lower ATF costs and elimination of lease rentals.
In the year 2014-15 the demand on the routes served by Air India Express was strong enough to enable the
Airline to not only improve the passenger load factor but achieve significant improvement in yield. The
Company has also achieved “Excellent” Grade as per the MoU parameters defined for the year 2014-15.
SUMMARISED FINANCIAL PERFORMANCE
Rupees in crores
Operating Revenue (before Rev. Sharing) 2,621.88
Operating Expenses 1,959.76
Operating Profit (before Revenue Sharing) 662.12
2AICL
Operating Revenue (after Revenue Sharing) 2,294.82
Operating Expenses 1,959.76
Operating Profit (after Revenue Sharing) 335.06
Total Revenue 2,294.96
Total Expenses 2,356.12
Loss before taxation & Exceptional Items 61.16
Less: Exceptional Items (0.13)
Provision for Taxation -
Net Loss 61.03
Add: Balance brought forward from previous years 2,404.90
Net Loss carried forward 2,465.93
Cash Profit of AICL for 2014-15 172.49
SUMMARISED PHYSICAL / REVENUE PERFORMANCE (FY 2014-15 Vs. FY 2013-14)
APR-MAR 2014-15 APR-MAR 2013-14 Variance
ASK (million) 8,161 8,121 0.5%
Carriage (million) 2.62 2.72 -3.7%
RPK (millions) 6,639 6,396 3.8%
Load Factor (%) 81.4% 78.8% 3.3%
Revenue (Rs. Cr.) 2,560 2,287 11.9%
Yield/RPK (Rs) 3.82 3.62 5.5%
RASK (Rs.) 3.11 2.81 10.7%
Flying Hours 66,620.63 67,316.00 -1.0%
SHARE CAPITAL
Authorised Share Capital
As on 31 March 2015, the Authorised Capital of the Company was Rs.800 crores divided into 8 Crores Equity
Shares of Rs.100 each.
Issued, Subscribed and Paid up Share Capital
As on 31 March 2015, the Issued, Subscribed and Paid up Share Capital of the Company was Rs.780 crores
divided into 7.8 Crores Equity Shares of Rs.100 each.
AIRCRAFT FINANCING
As on 31 March 2015, the position of foreign currency borrowing for Aircraft was as under:
Rupees in Cr.
Total Loan due as on 1April 2014 2,008.05
Less: Amount repaid during April 2014 to March 2015 (319.48)
Add: Exchange adjustments due to revision in rates of currencies 79.13
Balance as on 31 March 2015 1,767.70
3AICL
AIR INDIA EXPRESS OPERATIONS
Fleet Size
As on 31 March 2015 the Airline's fleet strength stood reduced from 21 to 17 B737-800 aircraft, as 4 leased
aircraft were grounded to prepare them for return to the lessors.
Operations
Despite a reduction of nearly 20% in the Airline's fleet size, there was only a marginal (1%) decline in the
number of flying hours in FY 2015. As a result, the average daily utilization of the aircraft on the Airline's fleet
went up sharply from 8.9 hours per day to 10.5 hours per day in Summer 2014 and further to 10.7 hours per
day in the Winter 2013-14 Schedule. The number of weekly services operated by the Airline rose from 159 to
165 round-trip flights/week. With concerted focus on increasing resource utilization and judicious
rationalization of domestic services, the Airline was able to restore the direct services between Mangalore and
Kuwait besides improving the timings / increasing frequency of flights in several of its core markets.
Summer 2014 schedule
Between 1 May and 20 July 2014, Notice to Airmen (NOTAM) issued at Dubai International Airport had resulted
in partial closure of the runway at that airport. Air India Express was able to obtain alternative slots at Sharjah
International Airport and thereby continued its scheduled services from Tiruchirapalli, Amritsar, Lucknow,
Pune, Jaipur and Mangalore.
The Summer 2014 schedule comprised of 149 international flights and 11 domestic flights. The average aircraft
utilization was approximately 10.5 hours per day per aircraft.
Winter 2014 schedule
In the Winter Schedule aircraft rotations were further rationalized so as to increase aircraft utilization and cater
to the traffic demands for direct links / increased frequencies. The notable highlights of the Winter 2013-14
Schedule were as follows:
l Kochi/Muscat/Kochi – Frequency of flights increased to 4 flights per week from 3 flights per week.
l Trivandrum/Muscat/Trivandrum – Frequency of flights increased to 4 flights per week from 3 flights per
week.
l Mangalore / Abu Dhabi – Muscat/Mangalore - Frequency of flights increased to 4 flights per week from 3
flights per week.
l Mangalore/Doha/Bahrain/Mangalore - These flights have been restructured to operate 2 non-stop
flights per week between Mangalore and Doha and 3 non-stop flights per week from Mangalore to
Bahrain extended in round-robin fashion to Kuwait. This schedule initiative helped to meet the
legitimate and increasingly strident demand for restoring direct air links between Mangalore and
Kuwait.
l Kozhikode / Doha/ Kozhikode – Two additional terminator flights per week in addition to the daily flight
operated on the Kochi / Kozhikode/Bahrain /Doha / Kozhikode / Kochi route.
l Mumbai / Doha / Mumbai – Frequency of flights increased to 4 flights per week from 3 flights per week.
The route-wise breakup of the flights operated by the Airline at the end of the Winter 2014-15 schedule was as
under:
4AICL
Sr.No. Sector Flights / week
01 India/Dubai 61
02 India/Abu Dhabi 21
03 India/Sharjah 18
04 India/Abu Dhabi/Muscat 04
05 India/Muscat 15
06 India/Dammam 04
07 India/Doha/Bahrain 07
08 India/Doha 08
09 India/Al Ain 01
10 India/Salalah 01
11 India/Kuwait 03
12 India/Bahrain/Kuwait/India 03
13 India/Singapore 07
14 India/Kuala Lumpur 04
15 Domestic 08
TOTAL 165
On Line Stations
As on 31 March 2015 the online stations were as under:
India Kozhikode, Kochi, Thiruvananthapuram, Mangalore, Chennai, Tiruchirapalli, Mumbai, Pune,
Amritsar, Lucknow, Jaipur.
Foreign Dubai, Abu Dhabi, Sharjah , Al Ain, Muscat, Salalah, Bahrain, Doha, Kuwait, Dammam,
Singapore, Kuala Lumpur.
Capacity offered, PLF, Yields and Revenues
Due to the non-availability of 4 leased aircraft that had been grounded during the last quarter of FY 2013-14, the
schedule in FY 2014-15 was operated with 17 owned B 737 – 800 aircraft. Despite this, the Airline achieved a
nominal increase of 0.5% in the capacity offered as compared to the level achieved in FY 2013-14. However,
there was a marginal decline in the number of passengers carried - 2.62 million in FY 2014-15 as against 2.68
million in FY 2013-14. The decline of about 2.2% in the number of passengers carried was also partially due to
increase in average stage length as some of the capacity deployed on domestic services were moved to
international routes giving rise to a reduction in the number of seats offered although the capacity in terms of
ASK rose marginally by 0.5%.
Favorable market conditions in terms of both demand and supply coupled with improved schedule reliability
and on-time performance enabled the Airline to achieve higher Passenger Load Factor (PLF) and higher yields.
While the PLF increased by 3.3% from 78.8% in 2013-14 to 81.4% in 2014-15; the Yield per RPK rose by 5%
5AICL
from Rs. 3.62 to Rs. 3.80. Consequently the passenger revenue including revenues on-line earned through
sales of excess baggage and preferred seats increased by 11.9% from Rs. 2,287 crores achieved in 2013-14 to
Rs. 2,560 crores in 2014-15.
Notable service improvements implemented during the year, include the following:
Launch of call center facility, appointment of representative agents in key foreign markets and introduction of
on-line advance seat reservation facility to passengers.
With unwavering focus on improving productivity and efficiency, the Airline has been able to further improve its
operations / performance during the period April – August 2015 as compared to the results achieved during the
same period last year. The average aircraft utilization has risen to about 11.5 hours per day with no adverse
impact on schedule reliability which has been retained at the high levels of well over 99%. As a result the Airline
has achieved a 9% increase in the capacity offered and a proportionate increase of 9% in passenger revenues.
Aircraft despatch reliability
The aircraft despatch reliability for FY 2014-15 was 99.85%.
HUMAN RESOURCES
Staff Strength
The staff strength as on 31 March 2015 was as under:
SC 220
ST 92
OBC 224
General 606
-----------
TOTAL 1142
======
In addition to the above there were 261 employees (Pilots, Engineers and Ground Staff) on deputation from the
holding Company, Air India Limited.
As on 1 January 2015 there was one employee with disabilities in the services of the Company.
IMPLEMENTATION OF OFFICIAL LANGUAGE
The Company is taking effective steps for the implementation of the provisions of the Official Language Act and
Rules framed under the Act.
VIGILANCE
During the year under review there was no vigilance case in the Company.
DISCLOSURE OF PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of
The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is set out in the
Annexure to the Directors' Report.
6AICL
COMPLIANCE WITH THE RTI ACT, 2005
During the year 29 cases of requests were received. Out of these, 21 cases were replied to.
COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL ) ACT, 2013
In line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition &
Redressal) Act, 2013, an Internal Complaints Committee (ICC) has been set up to redress complaints received
regarding sexual harassment. All employees ( permanent, contractual, temporary & trainees) are covered
under this policy.
During the year 2014-15 one complaint of sexual harassment was received on 20 March 2015 and the same
was under consideration of the ICC.
AUDITORS
The Comptroller & Auditor General of India has appointed M/s Kirtane & Pandit, Mumbai as Statutory
Auditors of the Company for the financial year 2014-15.
COMMENTS OF COMPTROLLER AND AUDITOR GENERAL
The Comments of the Comptroller and Auditor General of India under Section 143(6) of the Companies Act,
2013 on the accounts of the Company for the year ended 31 March 2015 are annexed to this report.
CORPORATE GOVERNANCE
A Report on Corporate Governance is annexed at Annexure A.
DIRECTORS' RESPONSIBILITY STATEMENT
(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed
along with proper explanations relating to material departures ;
(ii) The Directors have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that
period;
(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities ;
(iv) The Directors have prepared the Annual Accounts on a 'going concern' basis.
ACKNOWLEDGEMENTS
The Board sincerely appreciates the Company's valued customers in India and abroad for using the services of
Air India Express and looks forward to their continued support and confidence.
The Board also gratefully acknowledges the support and guidance received from parent Company viz. Air India
Ltd., various Ministries of the Government of India and the Ministry of Civil Aviation in particular, in Company's
7AICL
operations and development plans. The Board expresses their grateful thanks also to the DGCA, Comptroller
and Auditor General of India, the Ministry of Corporate Affairs, the Statutory Auditors, Airports Authority of India,
other Govt. Departments, airlines, agents, Indian Financial Institutions and banks including the EXIM bank of
USA.
For & on behalf of the Board
(Ashwani Lohani)
Chairman
Place : Delhi
Dated : 14 January 2016
8AICL
ANNEXURE A
REPORT ON CORPORATE GOVERNANCE
1. BOARD OF DIRECTORS
As per the Articles of Association of the Company, the number of Directors shall not be less than three
and not more than fourteen.
BOARD OF DIRECTORS AS ON 31 MARCH 2015
Shri Rohit Nandan Chairman
Dr Shefali Juneja Director, Ministry of Civil Aviation
Smt Puja Jindal Director, Ministry of Civil Aviation
Shri S. Venkat Director (Finance), Air India Ltd.
During the year, all meetings of the Board were chaired by the Chairman .The Board met four times
during the year to periodically review the performance of the Company and to discuss important issues
which inter alia included Lease Return of ILFC aircraft, Dry Lease of Aircraft, Cabin Crew-Salary &
Career Progression, Appointment of Key Managerial Personnel & Secretarial Auditor, etc.
Details regarding the Board Meetings, Annual General Meeting, Directors' attendance thereat,
Directorships and Committee positions held by the Directors are as under :
Board Meetings :
Four Board Meetings were held during the financial year 2014-15 on the following dates:
th
25 June 2014 (194 Meeting)
25 November 2014 (195th Meeting)
th
06 February 2015 (196 Meeting)
th
27 March 2015 (197 Meeting)
Particulars of Directors including their attendance at the Board/Shareholders' Meetings during the
financial year 2014-15
Name of the Academic Attendance Details of Directorships Memberships
Director Qualifications out of 4 Board held in other Companies held in Committees
Meetings
Non Executive
Directors
(Ex officio)
Shri Rohit Post 4 Chairman & Managing Member
Nandan Graduation Director Audit Committee
CMD – in History & Air India Limited
Air India Ltd. MBA from Part-Time Chairman
UK Air India Air Transport
Chairman Services Ltd.
Air India Engineering
Services Ltd.
9AICL
Name of the Academic Attendance Details of Directorships Memberships
Director Qualifications out of 4 Board held in other Companies held in Committees
Meetings
Airline Allied Services Ltd
Hotel Corporation of
India Ltd.
Air India SATS Airport
Services Pvt. Ltd.
Director
Air Mauritius Limited
Air Mauritius Holdings
Limited
Shri S Venkat B.Com,FCA, 3 Director Member
Director – FCWA,FCS& Air India Ltd Audit Committee
Finance CPA(US) Air India Air Transport
Air India Ltd. Services Ltd
Air India Engineering
Services Ltd
Airline Allied Services Ltd
Hotel Corporation of
India Ltd
Air India SATS Airport
Services Pvt Ltd
Dr Shefali Juneja M.A M(Phil) 1 Airline Allied Services Chairman
Director, Phd. Ltd. Audit Committee
Ministry of Civil
Aviation
Smt Puja Jindal Post 4 Director Member
Director, Graduate Airline Allied Services HR Committee
Ministry of Civil Ltd.
Aviation Pawan Hans
Helicopters Limited
2. AUDIT COMMITTEE
As part of the Corporate Governance process and in compliance with the povisions of the Companies
Act 2013 and DPE Guidelines, the Audit Committee of the Board has been constituted.
As on 31 March 2015 the following were the members of the Audit Committee :
Dr Shefali Juneja Chairperson
Shri Rohit Nandan Member
Shri S Venkat Member
Smt Puja Jindal Member
The Terms of Reference of the Audit Committee are:
l To recommend for appointment, remuneration and terms of appointment of auditors of the company;
10AICL
l To review and monitor the auditor's independence and performance, and effectiveness of audit
process;
l To discuss with the external auditor, before the audit commences, the nature and scope of the audit and
to ensure coordination where more than one audit firm is involved;
l To review the Internal Audit program & ensure co-ordination between the Internal & External Auditors as
well as determine whether the Internal Audit function is commensurate with the size and nature of the
Airlines Business and is provided adequate resources and representation within the company;
l To review/examine the half-yearly and annual financial statements and the auditors' report thereon;
l To discuss problems and reservations arising from the interim and final audits and any matter that the
auditor may wish to discuss in the absence of Management where necessary;
l To review the Statutory Auditor's Report, Management's response thereto and to take steps to ensure
implementation of the recommendations of the Statutory Auditors ;
l Approval or any subsequent modification of transactions of the company with related parties;
l Scrutiny of inter-corporate loans and investments;
l Valuation of undertakings or assets of the company, wherever it is necessary;
l Evaluation of internal financial controls and risk management systems;
l Monitoring the end use of funds raised through public offers and related matters;
l To consider other matters as defined by the Board.
The Audit Committee met two times during the year to review various issues including inter alia annual
accounts of the Company for the year before submission to the Board, on the following dates :
th
25 November 2014 (16 Meeting)
th
06 February 2015 (17 Meeting)
Attendance at the Audit Committee Meetings
Name of the Member No. of Meetings Attended
Dr Shefali Juneja, Chairman 1
Shri Rohit Nandan, Member 2
Shri S Venkat, Member 2
Smt Puja Jindal 2
3. ANNUAL GENERAL MEETINGS DURING THE LAST THREE YEARS
The details of these meetings are given below :
Date and time of the Meeting Venue
st nd
41 Annual General Meeting 19 December 2012 At 1200 hrs Conference Room, 22 Floor,
Air India Building, Nariman Point,
Mumbai-400 021.
42ndAnnual General Meeting 23 December 2013 At 1630 hrs Conference Room, 22ndFloor,
Air India Building, Nariman Point,
Mumbai-400 021.
43rd Annual General Meeting 19 December 2014 At 1400 hrs Conference Room, 22ndFloor,
Air India Building, Nariman Point,
Mumbai-400 021.
11AICL
4. SECRETARIAL AUDIT:
Pursuant to the provisions of section 204 of the Companies Act, 2013 and Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Vijay
Sonone & Company, Practicing Company Secretaries, Mumbai, to conduct Secretarial Audit for the
financial year 2014-2015.
The Secretarial Audit Report for the financial year ended 31 March, 2015 is annexed to this report.
The Managements' Comments on Secretarial Auditors' observations are as under:
Observations Management's Comments
The Company has not appointed Independent Air India Charters Limited (AICL) is a wholly
Directors as required under the provisions of owned Subsidiary of Air India Limited (AIL), a
Section 149(4) of the Companies Act, 2013 read Government Company.
with Rule 4 of the Companies (Appointment and
Qualification of Directors) Rules, 2014 and As per Article 22 of the Articles of Association of
hence, no meeting of the Independent Directors the Company, all the Directors of the Company
could be held during the Audit Period. are appointed by AIL in consultation with the
Government of India.
AICL has requested AI to nominate at least two
Independent Directors on its Board and the reply
from AI is awaited.
Since the Company has not appointed As per the provisions of Section 177(2) of the
Independent Directors, the Company has not Companies Act, Audit Committee shall consist of
complied with the provisions of Section 177(2) a minimum of three Directors with Independent
and Section 178 of the Companies Act, 2013 Directors forming a majority.
read with Rule 6 of the Companies (Meetings of
Board and its Powers) Rules, 2014 as regards As required under section 178, the Nomination
the composition of the Audit Committee and the and Remuneration Committee should consist of
Nomination and Remuneration Committee of the 3 or more Non Executive Directors out of which
Board. not less than one half should be Independent
Directors.
Presently there is no Independent Director on
the Board of AICL and the matter has been taken
up with AI.
The Company has not constituted a Corporate As required under section 135, the CSR
Social Responsibility Committee as required committee should consist of 3 Directors out of
under the provisions of Section 135 of the which at least one should be Independent
Companies Act, 2013 read with the Companies Director. Presently there is no Independent
(Corporate Social Responsibility) Rules, 2014 Director on the Board of AICL. Further the
and hence, no meeting of the Corporate Social Company has not earned profits for the past 3
Responsibility Committee could be held during years. In view of this the CSR committee has not
the Audit Period. been constituted.
5. EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management and Administration) Rules, 2014 the extract of annual return in form MGT 9 is also
annexed.
12AICL
ANNEXURE
Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (2) of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Director's Report
for the year ended 31 March 2015 list of staff whose salary exceeds Rs. 5,00,000 a month or Rs.60,00,000 annually.
S. Employee Name Remune- Designation Age Exp. Qualification Date of Last Employment
No Number ration in Years Joining
Rupees
1 85001047 Sunny Sharad Asaldekar 7,746,647 Instructor 33 10 B.COM 24.11.2004 N.A.
2 85001048 Sajneesh Sharma 6,837,589 Check pilot 39 10 HSC 24.11.2004 N.A.
3 85001049 Dheeraj Malviya 5,898,240 Captain 39 10 BA (ELEC.) 24.11.2004 FRESH
4 85001050 Brijesh Rambhai Rathod 6,686,918 Check pilot 39 10 HSC 24.11.2004 N.A.
5 85001051 V.S. Rajkumar 7,437,462 Instructor 39 10 B.SC 24.11.2004 CONTINENTAL WINES LTD.
6 85001052 Nirmal Jeet Singh 7,316,986 Check pilot 41 10 M.SC 14.12.2004 INDIAN NAVY
7 85001053 Dhiraj Rai Gupta 8,355,787 Examiner 55 10 M.SC 14.12.2004 INDIAN AIR FORCE
8 85001055 Om Kumar Singh 6,898,672 Check pilot 32 10 HSC 01.06.2005 N.A.
9 85001056 Syed Abu Thaher 7,459,387 Check pilot 39 10 B.SC 01.06.2005 N.A.
10 85001057 Harish Gupta 6,352,410 Captain 43 10 HSC 01.06.2005 ALLIANCE AIR
11 85001059 Ashish Gangurde 6,971,468 Check pilot 41 10 SSC 27.06.2005 BSF
12 85001060 Agraj Singh 5,885,435 Captain 38 10 HSC 26.07.2005 FRESH
13 85001062 Satinder Jit Singh 6,381,738 Captain 53 9 SSC 19.12.2005 BSF
14 85001064 Kushal Sharad Asaldekar 7,886,941 Instructor 31 9 BCOM 09.01.2006 N.A.
15 85001065 Nikhil N. Mane 5,914,282 Captain 31 9 BSC (AVIA.) 03.02.2006 FRESH
16 85001066 Akshay Kumar 5,994,282 Captain 32 9 BSC (AVIA.) 03.02.2006 FRESH
17 85001068 Kanak Chaturvedi 6,467,322 Captain 38 9 B.SC 21.08.2006 INDIAN COAST GUARD
18 85001069 Sandip Raja Sekaran 5,874,282 Captain 32 6 HSC 27.04.2009 JET AIRWAYS
19 85001095 A. Kochhar 6,950,676 Check pilot 50 10 B.TECH 11.04.2005 AIR SAHARA
20 85001096 Sharad Dogra 7,832,849 Examiner 42 10 HSC 22.04.2005 AIR SAHARA
21 85001097 Sameer Dogra 7,827,210 Examiner 40 9 HSC 01.03.2006 AIR SAHARA
22 85001098 Anand Kumar 7,960,319 Captain 45 9 B.SC 12.07.2006 AIR SAHARA
23 85001099 G. S. Sidhu 7,139,196 Check pilot 57 9 SSC 13.07.2006 ALLIANCE AIR
24 85001100 R P Singh 8,891,285 Examiner 53 9 M.SC 03.10.2006 INDIAN NAVY
25 85001102 Alok Nayak 6,478,973 Captain 52 8 B.A. 01.07.2007 INDIAN NAVY
26 85001103 Aju Cherian 6,573,736 Captain 54 8 B.SC 16.07.2007 INDIGO
27 85001107 Devender Singh Jain 6,218,365 Captain 60 8 M.SC 05.11.2007 INDIAN AIR FORCE
28 85001109 Rajesh Sobti 5,899,431 Captain 62 8 MSC 05.11.2007 INDIAN AIR FORCE
29 85001111 Jatinder Singh Dhillon 5,929,675 Captain 62 7 N.A 11.02.2008 INDIAN AIR FORCE
30 85001112 Jacob Paul 6,221,085 Captain 60 7 MPHIL, DEF. 11.02.2008 INDIAN AIR FORCE
31 85001113 Vikas Yajurvedi 5,893,270 Captain 64 7 MSC. DEF. 11.02.2008 INDIAN AIR FORCE
32 85001119 Pankul Nag 6,185,626 Captain 51 6 B.A. 06.01.2009 INDIAN NAVY
33 85001120 Kapil Gupta 8,444,057 Instructor 42 6 M.SC 05.05.2009 INDIAN AIR FORCE
34 85001121 Bindu Sebastian 6,116,507 Captain 44 6 HR 08.06.2009 INDIAN AIR FORCE
35 85001122 Gautam Sarma 6,013,468 Captain 56 5 GRADUATE 02.09.2010 INDIAN AIR FORCE
36 85001123 Javed Ahmad 5,322,669 Captain 64 3 BSC SCIE. 14.11.2011 ALLIANCE AIR
37 85001156 V. D. Kulkarni 7,370,874 Captain 61 3 B.SC 02.03.2012 AIR INDIA
38 85001199 V.S. Manoj Kumar 6,109,582 Captain 43 10 BSC CHEM. 01.06.2005 FRESH
39 85001217 Gurudarshan Kaur Sandhu 5,728,293 Captain 37 10 BSC (AVIA.) 24.11.2004 FRESH
40 85001235 Kavita Devanpalli 6,259,382 Captain 39 10 BSC 14.12.2004 FRESH
41 85001240 Amit Pandey 5,769,190 Captain 47 2 N.A 01.10.2013 N.A.
42 85001286 Deepak Vasant Sathe 5,326,101 Captain 54 2 N.A 01.10.2013 AIR INDIA
43 85001287 Arun Varghese 7,063,685 Captain 31 2 N.A 01.10.2013 AIR INDIA
44 85001288 Tanya Anand 6,582,369 Captain 27 2 N.A 01.10.2013 AIR INDIA
45 85001289 Anish Nair 6,596,820 Captain 40 2 N.A 01.10.2013 AIR INDIA
46 85001290 Gaurav Balkawde 8,712,857 Captain 27 2 N.A 01.10.2013 AIR INDIA
13AICL
SECRETARIAL AUDIT REPORT
ST
FOR THE FINANCIAL YEAR ENDED 31 MARCH, 2015
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Air India Charters Limited,
CIN-U62100MH1971GOI015328
21st Floor, Air India Bldg.,
Nariman Point,
Mumbai -400021
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to
good corporate practices by Air India Charters Limited [CIN-U62100MH1971GOI015328] (hereinafter called
'the Company').Secretarial Audit was conducted in a manner that provided me a reasonable basis for
evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other
records maintained by the Company and also the information provided by the Company, its officers, agents and
authorized representatives during the conduct of secretarial audit and as per the explanations given to me and
the representation made by the Management, I hereby report that in my opinion, the Company has, during the
st
Audit Period covering the financial year ended on 31 March, 2015 ('Audit Period') generally complied with the
statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-
mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the
Company for the financial year ended on 31st March, 2015 according to the applicable provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder (In so far as they are applicable);
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder (Not
applicable to the Company during the Audit Period);
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (Not applicable to
the Company during the Audit Period);
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent
of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (Not
applicable to the Company during the Audit Period);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of
India Act, 1992 ('SEBI Act'):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011 (Not applicable to the Company during the Audit Period);
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992
(Not applicable to the Company during the Audit Period);
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 (Not applicable to the Company during the Audit Period);
14AICL
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 (Not applicable to the Company during the Audit
Period);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008 (Not applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and dealing with client (Not applicable to the
Company during the Audit Period);
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009
(Not applicable to the Company during the Audit Period); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not
applicable to the Company during the Audit Period);
Having regard to the compliance system prevailing in the Company and on the basis of the Compliance
Certificates/Management Representation Letters issued by the designated officers of the Company, the
Company has complied with the following laws applicable specifically to the Company:
(a) Aircraft Act, 1934;
(b) Carriage by Air Act 1972;
(c) The Aircraft (Carriage of Dangerous Goods) Rules, 2003;
(d) Civil Aviation Requirements issued by DGCA.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India (Not applicable to the
Company during the Audit Period).
(ii) The Listing Agreements entered into by the Company with Stock Exchange(s) (Not applicable to the
Company);
During the Audit Period under review the Company has generally complied with the provisions of the Act, Rules,
Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:
i. The Company has not appointed Independent Directors as required under the provisions of Section
149(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment and Qualification
of Directors) Rules, 2014 and hence, no meeting of the Independent Directors could be held during the
Audit Period.
ii. Since the Company has not appointed Independent Directors, the Company has not complied with the
provisions of Section 177(2) and Section 178 of the Companies Act, 2013 read with Rule 6 of the
Companies (Meetings of Board and its Powers) Rules, 2014 as regards the composition of the Audit
Committee and the Nomination and Remuneration Committee of the Board.
iii. The Company has not constituted a Corporate Social Responsibility Committee as required under the
provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social
Responsibility) Rules, 2014 and hence, no meeting of the Corporate Social Responsibility Committee
could be held during the Audit Period.
I further report, that the compliance by the Company of applicable financial laws, like direct and indirect tax
laws, has not been reviewed in this Audit since the same have been subject to review by statutory financial audit
and other designated professionals;
15AICL
Subject to what is stated herein above as regards the appointment of Independent Directors, the changes in the
composition of the Board of Directors that took place during the period under review were carried out in
compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda
were sent at least seven days in advance and a system exists for seeking and obtaining further information and
clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the Board Meetings, as represented by the Management, were taken unanimously.
As represented and explained to us, I further report that there are adequate systems and processes in the
Company commensurate with the size and operations of the Company to monitor and ensure compliance with
applicable laws, rules, regulations and guidelines.
I further report that during the audit period, there are no specific events / actions having a major bearing on the
Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.
referred to above.
Vijay B. Sonone
Company Secretary in Practice
FCS No: 7301
Certificate of Practice No: 7991
Mumbai
th
20 November, 2015
This Report is to be read with our letter of even date which is annexed as 'Appendix A' and forms an integral
part of this report.
16AICL
'Appendix A’
To,
The Members,
Air India Charters Limited,
CIN-U62100MH1971GOI015328
21st Floor, Air India Bldg.,
Nariman Point,
Mumbai -400021
My report of even date is to be read along with this letter.
1. The maintenance of the secretarial records is the responsibility of the management of the Company. My
responsibility is to express an opinion on these secretarial records based on my audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable
assurance about the correctness of the contents of the secretarial records. The verification was done
on test check basis to ensure that the correct facts are reflected in the secretarial records. I believe that
the processes and practices, I followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of the financial records and books of accounts
of the Company.
4. Where ever required, I have obtained the Management Representations about the compliance of
laws, rules and regulations and occurance of events etc.
5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards
is the responsibility of the management. My examination was limited to the verification of procedures on
test check basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the
efficacy or effectiveness with which the management has conducted the affairs of the Company.
Vijay B. Sonone
Company Secretary in Practice
FCS No: 7301
Certificate of Practice No: 7991
Mumbai
th
20 November, 2015
17AICL
Annexure to Directors' Report for the year 2014-15
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2015
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
1. CIN U62100MH1971GOI015328
2. Registration Date 9 September 1971
3. Name of the Company AIR INDIA CHARTERS LIMITED (AICL)
Category/Sub-category of the
4. Government Company
Company
Address of the Registered office 21 Floor, Air India Building, Nariman Point, Mumbai -
5. 400021.
& contact details
Ph.No : 022-22796666.
6. Whether listed company No
Name, Address & contact details
7. of the Registrar & Transfer Agent, N.A.
if any.
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities
contributing 10 % or more of the total turnover of the company shall be stated) -
NIC Code % to total
Sr of the turnover of
Name and Description of main products / services
No Product/ the
Service Company
1. To establish, maintain and operate international and
domestic air transport services, scheduled and non
511 100
scheduled, in all the countries of the world for the carriage of
passengers, meals and freight and for any other purposes.
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:
Holding /
Sr. Name and Address of the Applicable
Subsidiary % of
No. Company CIN/GIN Section
/ Associate Shares
1 Air India Limited
113, Airlines House,
Gurudwara Rakabganj U62200DL2007GOI161431 Holding 100% 2 (46)
Road, New Delhi,
110 001.
18AICL
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total
Equity) : Category-wise Share Holding
Category of No. of Shares held at the beginning of No. of Shares held at the end of %
Shareholders the year [As on 01-04-2014] the year [As on 31-03-2015] Change
during
during % of % of the
Demat Physical the year Total Demat Physical Total Total year
Shares Shares
A. Promoters
(1) Indian
a) Individual/ HUF
b) Central Govt
c) State Govt(s)
d) Bodies Corp. - 30,00,000 30,00,000 100 - 7,80,00,000 7,80,00,000 100
e) Banks / FI
f) Any other
Total shareholding of
30,00,000 30,00,000 100 - 7,80,00,000 7,80,00,000 100
Promoter (A)
B. Public
Not Applicable
Shareholding
1. Institutions
a) Mutual Funds/UTI
b) Banks / FI
c) Central Govt.
d) State Govt.(s)
e) Venture Capital
Funds
f) Insurance
Companies
g) FIIs
h) Foreign Venture
Capital Funds
i) Others (specify)
Foreign Banks
Sub-total (B)(1):- - - - - - - - - -
19AICL
%
No. of Shares held at the beginning of the No. of Shares held at the end of the year
Category of Change
year [As on 01-04-2014] [As on 31-03-2015]
Shareholders during
% of % of the
Demat Physical Total Total Demat Physical Total Total year
Share Share
s s
2. Non-Institutions Not Applicable
a) Bodies Corp.
(Market
Maker + LLP)
i) Indian
ii) Overseas
b) Individuals
i) Individual
shareholders
holding nominal
share capital
upto Rs. 1 lakh
ii) Individual
shareholders
holding nominal
share capital in
excess of Rs. 1 lakh
c) Others (specify)
i) Non Resident
Indians
ii) Non Resident
Indians - Non
Repatriable
iii) Office Bearers
iv) Directors
v) HUF
vi) Overseas
Corporate Bodies
vii) Foreign Nationals
viii) Clearing Members
ix) Trusts
x) Foreign Bodies - R
R
Sub-total (B)(2):- - - - - - - - - -
Total Public
Shareholding (B) = - - - - - - - - -
(B)(1)+ (B)(2)
C. Shares held by
Custodian for - - - - - - - - -
GDRs & ADRs
Grand Total (A+B+C) 30,00,000 30,00,000 100 7,80,00,000 7,80,00,000 100
20AICL
B) Shareholding of Promoter-
Shareholding at the beginning of Shareholding at the end %
the year of the year change
%of %of in
Sr Shareholder's % of total Shares % of total Shares Share-
No Name No. of Shares Pledged/ No. of Shares Pledged/ holding
Shares of the encumber Shares of the encumber during
Company ed to total Company ed to total the
shares shares year
1 Air India Limited 30,00,000 100 NIL 7,80,00,000 100 NIL 0.00
along with its
nominees
C) Change in Promoters' Shareholding (please specify, if there is no change)
Shareholding at the Cumulative Shareholding at
beginning of the year end of the year
Sr No. of shares % of total No. of shares % of total
Particulars
No. shares of shares of
the the
company company
At the beginning of the year
Air India Limited 30,00,000 100 30,00,000
At the end of the year
Air India Limited 7,80,00,000 100 7,80,00,000
D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters
and Holders of GDRs and ADRs):
Shareholding at the Cumulative Shareholding at
beginning of the year end of the year
Sr
For Each of the Top 10 Shareholders % of total % of total
No No. of No. of
shares of the shares of the
shares shares
company company
1 NOT APPLICABLE
2
3
4
5
6
7
8
9
10
21AICL
E) Shareholding of Directors and Key Managerial Personnel:
Sr. Shareholding of each Directors and each Shareholding at the Cumulative Shareholding at
No. Key Managerial Personnel beginning of the year the end of year
No. of shares % of total No. of shares % of total
shares of the shares of the
company company
1 Shri Rohit Nandan 1 0.0003 1 0.0003
2 Shri S Venkat 1 0.0003 1 0.0003
Total 2 2
V. INDEBTEDNESS- Indebtedness of the Company including interest outstanding/
accrued but not due for payment.
(In Rs Crore)
Secured Loans
Unsecured Total
excluding Deposits
Loans Indebtedness
deposits
Indebtedness at the beginning of the financial year
i) Principal Amount 2257.44 1152.83 - 3410.27
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 41.42 - - 41.42
Total (i+ii+iii) 2298.87 1152.83 - 3451.70
Change in Indebtedness during the financial year
* Addition - - - -
* Reduction 226.66 55.75 - 282.41
Net Change 226.66 55.75 - 282.41
Indebtedness at the end of the financial year
i) Principal Amount 2017.92 1097.08 - 3115.00
ii) Interest d ue but not paid - - - -
iii) Interest accrued but not due 54.29 - - 54.29
Total (i+ii+iii) 2072.21 1097.08 - 3169.29
22AICL
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
( In figures)
Sr Particulars of Remuneration Name of MD/WTD/ Manager Total
No Amount
Gross salary
1
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act,
1961
(b) Value of perquisites u/s 17(2) of the
Income-tax Act, 1961
(c) Profits in lieu of salary under section
17(3) of the Income -tax Act, 1961
2 Stock Option
3 Sweat Equity
4 Commission as % of profit others, specify.
5 Others : (PF, DCS, House Perks tax etc)
Total (A)
Ceiling as per the Act
* There are no Managing, Whole Time Directors in the Company.
B. Remuneration to other directors
Sr Total
Particulars of Remuneration Name of Directors
No. Amount
1 Independent Directors - - - - - -
- - - - - -
Fee for attending board committee meetings
Commission - - - - - -
- - - - - -
Others, please specify (Fees for attending
Board Sub Committee Meetings)
Total(1) - - - - - -
2 Other Non-Executive Directors - - - - - -
- - - - - -
Fee for attending board committee meetings
Commission - - - - - -
Others, please specify - - - - - -
Total (2) - - - - -
Total (B)=(1+2) - - - - - -
Total Managerial Remuneration - - - - - -
Overall Ceiling as per the Act - - - - - -
- - - - - -
23AICL
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/
MANAGER/ WTD
( figures in Rs)
Sr. Key Managerial Personnel
No. Particulars of Remuneration
CEO CS CFO Total
*Not
1 Gross salary ** ** -
Applicable
(a) Salary as per provisions contained in section
- - - -
17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) of the
- - - -
Income-tax Act, 1961
(c) Profits in lieu of salary under section 17(3)
- - - -
of the Income-tax Act, 1961
2 Stock Option - - - -
3 Sweat Equity - - - -
4 Commission - - - -
- as % of profit - - - -
Others, specify. - - - -
5 Others: (PF, DCS, House Perks tax etc) - - - -
Total - - - -
* Not applicable to Government Companies. Only CFO and CS are KMPs.
** The Company Secretary is holding the position in addition to her responsibilities as AGM-Corporate
Affairs, Air India Ltd. Similarly, CFO is on deputation from Air India and no remuneration is paid to them
by AICL.
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Details of
Section Penalty / Appeal
Authority
of the Brief Punishment/ made,
Type [RD / NCLT/
Companies Description Compound- if any (give
COURT]
Act ing fees Details)
imposed
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
24AICL
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b)
OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENT OF AIR INDIA CHARTERS LIMITED
FOR THE YEAR ENDED 31ST MARCH 2015
The preparation of financial statement of Air India Charters Limited for the year ended 31 March 2015 in
accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the
responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and
Auditor General of India under section 139(5) of the Act is responsible for expressing opinion on the financial
statements under Section 143 of the Act based on independent audit in accordance with Standards on auditing
prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report
dated 20 November 2015.
I, on the behalf of the Comptroller and Auditor General of India (CAG), have conducted a supplementary audit
under section 143(6)(a) of the Act of the financial statements of Air India Charters Limited for the year ended 31
March 2015. This supplementary audit has been, carried out independently without access to the working
papers of the statutory auditor and is limited primarily to inquiries of the statutory auditors and company
personnel and a selective examination of some of the accounting records. On the basis of my audit nothing
significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory
Auditors’ Report.
For and on the behalf of
The Comptroller & Auditor General of India
Sd/-
Parama Sen
Principal Director of Commercial Audit
& ex-officio Member, Audit Board-II, Mumbai
Place : Mumbai
Date : 04 January 2016
25AICL
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AIR INDIA CHARTERS LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of “Air India Charters Limited” (“the
Company”), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss for the
period then ended, cash flow statement for the year then ended and a summary of significant accounting
policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Management and Board of Directors of the Company are responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that
give a true and fair view of the financial position, financial performance and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This
responsibility includes maintenance of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; design, implementation and maintenance of adequate internal financial
controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these Standalone Financial statements based on our audit. We
have taken into account the provisions of the Act, the accounting and auditing standards and matters which are
required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the
Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an
adequate internal financial controls system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified
opinion.
1. BASIS OF QUALIFIED OPINION
I. As stated in Note No.(1)(C)(1), the Company, since FY 2009-10, follows policy of
capitalizing the exchange difference on foreign currency long term borrowings, relating
to acquisition of depreciable assets and the same are depreciated over the remaining
useful life of respective asset, including the year, in which such exchange difference
arises. Hence, such exchange difference of Rs. 791.34 million, in respect of financial year
26AICL
2014-15 has been capitalized as at the beginning of the year instead of end of the year. As
a result, in current year, depreciation has been provided for the whole year on such
amount. This accounting policy is not in compliance with “AS 11 - The Effects of Changes
in Foreign Exchange Rates” read with “AS-6 Depreciation Accounting” and Notification
No. G.S.R. 225(E) dated 31st March 2009 issued by Ministry of Corporate Affairs. As such,
depreciation for the year, losses for the year and accumulated depreciation are
overstated by Rs. 53.80 million.
ii. Note No. 33, and in other cases wherever the Company has undertaken transactions with
holding company, the existence of arm's length relationship in such transactions has
not been determined. Precise impact on financial statements cannot be ascertained and
we are unable to form an opinion on the same.
iii. We invite attention to Note No. (1)(C)(3) read with Note No.31 regarding balances of
Inventories which are maintained & controlled by Parent Company and report as under:
a. With reference to Note No. 31 (a) to (m), the Company does not have any control
over the recording & reporting on the Inventory Accounting System.
b. The Management has not conducted the physical verification of Inventories
during as well as at the year end.
c. As regards Inventory lying with third parties, Management has neither conducted
any physical verification nor obtained confirmations for the balances as at the
year end.
d. In absence of adequate data, the Management has not made any provision
relating to balances lying in intermediary account for current financial year. We
are unable to comment on the adequacy and completeness or otherwise, of these
provisions on account of above mentioned observations.
e. The cumulative impact of points (a) to (d) above, on the financial statements
cannot be ascertained and we are unable to form an opinion on the same.
iv. As stated in Note No. (5), for non-reinstatement of most of the foreign currency liabilities,
at the year-end using FEDAI rate, as per the provisions of the Accounting Standard-11
“The Effect of Changes in Foreign Exchange Rates” issued by Institute of Chartered
Accountants of India. This is due to non- availability of payable amount in foreign
currency, Therefore, we are also unable to determine quantum and its impact on
st
understatement of the loss for the period ended 31 March, 2015.
v. As stated in Note No. (25)(b)(ii),The Company has provided excess Gratuity Liability of
Rs.61.32 million and excess provision for Leave Encashment of Rs.17.44 million against
the required provision based on the actuarial valuation as on 31st March 2015 which is
required to be determined and provided for as per Accounting standard 15 ”Employee
Benefits” issued by Institute of Chartered Accountants of India.
vi. We further report that in view of the observations as per paragraph (i) to (v) above,
cumulative impact to the extent quantifiable is as follows,
a. Depreciation for the year and Accumulated Depreciation is overstated by
Rs.53.80 million,
b. Gratuity and Leave Encashment liability is overstated by Rs.78.76 million,
27AICL
c. Losses for the year & Accumulated Losses are overstated by Rs.132.56 million.
d. The Earnings per share as computed in Note No. 49 is subject to observations
contained herein.
2. QUALIFIED OPINION
Subject to the “Basis for Qualified Opinion” paragraph above and unascertainable impact
thereof, in our opinion and to the best of our information and according to the explanations
given to us, the standalone financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India: -
i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March
2015;
ii. In the case of the Statement of Profit and Loss, of the Loss for the year ended on that
date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
3. EMPHASIS OF MATTER
We also invite attention to the following –
i. Note no. 36, 38, and 47 regarding confirmations and reconciliation including matching of
debits/credits in various balances in other assets / liabilities accounts at certain locations and
pending reconciliation of account payables & account receivables, balances of PSU Oil
Companies and intermediary accounts. The precise financial impact of the same on the
accounts / financial statements is not ascertainable. We are unable to comment on the impact
of adjustments arising out of reconciliation/confirmation of such balances, on the Financial
Statements.
ii. Note No. 55, regarding the financial statements of the Company having been prepared on a
going concern basis, notwithstanding the fact that its net worth is completely eroded. The
appropriateness of the said basis is, inter alia, dependent on the Company's ability to improve
operational and financial performance.
iii. Note No. 23(a) which describes the uncertainty related to the non-provision of interest and
penalty, if any, payable towards outstanding dues for service tax, tax deduction at source.
iv. Necessary certificate as prescribed under SA 402 issued by the Institute of Chartered
Accountants of India (ICAI) in respect of Inventory Accounting System being handled by parent
company were not made available for Audit Purposes.
v. Note No. 52 regarding non-disclosure of information as prescribed in clauses (a) to (e) except
(d) (which is not applicable to the Company) of Note 5 (viii) of Part II of Schedule III of the
Companies Act, 2013.
Our opinion is not qualified in respect of these matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's Report) Order, 2015 (“the Order”) issued by the Central Government
of India in terms of sub-Section (11) of Section 143 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
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