AIR INDIA ENGINEERING SERVICES LIMITED - AIESL
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AIESL AIR INDIA ENGINEERING SERVICES LIMITED
AIESL
CONTENTS
Page No.
1. Board of Directors 1
2. Directors’ Report 2
3. Comments of the Comptroller & Auditor General of India 16
4. Independent Auditors’ Report 18
5. Balance Sheet as at 31 March 2015 40
6. Statement of Profit & Loss for the year ended 31 March 2015 41
7. Cash Flow Statement 42
8. Notes forming part of the Financial Statements for the year ended 31 March 2015 43AIESL
BOARD OF DIRECTORS (as on 28 DECEMBER 2015)
Shri Ashwani Lohani Chairman
Shri Vinod Hejmadi Director
Smt. Gargi Kaul Director
Shri B S Bhullar Director
Chief Executive Officer
Shri H.R. Jagannath
Auditors
M/s. Jhawar Mantri & Associates
Chartered Accountants
Registered Office
Airlines House
113 Gurudwara Rakabganj Road
New Delhi 110 001
1AIESL
DIRECTORS' REPORT
The Directors take pleasure in presenting the Eleventh Annual Report of the Company, together with the
Audited Accounts, Auditors' Report and Comments by the Comptroller and Auditor General of India, for the year
ended 31st March, 2015.
OPERATIONALISATION:
The Board of Directors of Air India Limited, the parent company, at its Meeting held on 7 August 2010 approved
operationalisation of Air India Engineering Services Limited. Cabinet Note for operationalisation was submitted
to the Ministry of Civil Aviation. Cabinet had approved operationalisation of AIESL on 6 September 2012. It was
proposed that the assets and manpower from Air India Limited will be transferred to Air India Engineering
Services Limited as per the decision of the Cabinet. The Company will be treated as a separate profit centre for
carrying out the Maintenance, Repair and Overhaul (MRO) activities of Airbus and Boeing fleet. The process of
operationalisation has accordingly started w.e.f. 1st February, 2013. Further, steps have been initiated to
obtain/fulfil various Regulatory and Statutory approvals/compliances in order to start MRO activities. The
company got DGCA approval CAR 145 effective January 2015.
During the year 2013-14, the company (AIESL) had entered into a Memorandum of Understanding (MoU) with
its parent company viz. Air India Ltd. (AI) regarding the services to be provided on maintenance and repair and
overhaul facilities to Air India. The MoU inter-alia also includes the following:-
1. AI has decided to transfer its MRO business (including infrastructure) to AIESL.
2. AIESL shall obtain all necessary approvals / licenses etc. from all concerned statutory and regulatory
authorities / agencies including DGCA of India to carry out & perform MRO activities.
3. AI shall provide AIESL a total equity of Rs. 375 Cr. during first three years and support required for
Capital expenditure to the extent of Rs.974 crores till FY 2017.
4. AI shall transfer all its movable assets pertaining to MRO and the value of movable assets to be
transferred by AI to AIESL to constitute & form part of the initial equity / investment in AIESL.
5. AIESL to share 20% of its labour revenue from third parties from the fourth year of operations or as
mutually agreed.
An MoU has also been entered into with Airline Allied Services Ltd. (AASL), a wholly owned subsidiary of AIL,
wherein AASL has decided to transfer its MRO activities (including infrastructure) to AIESL and AASL agreed to
commit its fleet in entirety for all MRO work to AIESL.
Similarly, an MoU has also been entered into during 2014-15 with Air India Charters Ltd. (AICL), a wholly owned
subsidiary of AIL, wherein AICL has decided to transfer its MRO activities (including infrastructure) to AIESL
and AICL agrees to commit its fleet in entirety for all MRO work to AIESL.
As such, AIESL shall be having committed business from Air India group along with infrastructure and other
st
support. The company as of 1 January, 2015 as also obtained DGCA certificate for the repair and overhaul of
its facilities. Certificate of facilities for EASA and FAA would be procured shortly.
MRO FACILITY AT NAGPUR
As a part of commitment in the Purchase Agreement for fleet of 68 aircraft comprising 18 B737s, 23 B777s and
27 B787s with Air India Ltd., Boeing has invested about USD 107 million towards the MRO facility including
certain Equipment/Tooling required for Aircraft Maintenance and associated Overhaul Shops for maintenance
of aircraft and components. Additional investment of at least USD 10 Million is being made by Air India Ltd. to
make the facility functional.
The construction work commenced in March 2011 and the facility has been commenced and handed over to AI
in December, 2014.
2AIESL
The facility consists of two wide body Hangars (100mx100m each), Support Building (approx. 24000 sq. m),
Ground Support Equipment building and other Miscellaneous buildings. Initially the proposal is to take up the
task of B777 major check(C Check) along with certain back shop activities like Cabin Survival Equipment/
Compressed Gas Oxygen Shop.
The hangars are of international standard meeting NFPA 409 Fire standards (National Fire Protection
Association) and equipped with facilities such as mechanised sliding door, underground utility pits, aircraft
cabin cooling, hangar ventilation, Building Management System (BMS) etc.
There are other peripheral amenities like rain water harvesting, effluent treatment plant, solar water
heaters/street lights that contribute towards green initiatives.
The necessary manpower to run the Nagpur facility has already been identified & transferred.
AIESL will get right of use to these hangars in order to service the fleet of AI & third parties.
Recently, the Nagpur MRO was approved for carrying out up to 'D' Check of B777 aircraft. All the major
maintenance work of B777 aircraft shifted from January, 2016 to Nagpur. The process for seeking approval for
A320 family aircraft has also been initiated.
SETTING UP OF GEnx / GE90 ENGINE OVERHAUL AND TESTING FACILITY
In order to supplement this MRO Facility at Mihan SEZ, Nagpur, Air India Ltd. has decided to set up an Engine
Overhaul Facility for GEnx-1B Engine (powering B 787) and GE90 Engine (powering B 777), at an estimated
cost of USD 89 Million.
The Project will comprise following 3 stages:
I Setting up GE90 Engine Testing Facility (Expected completion - May, 2016)
II Upgrade of above I for testing GEnx Engines. (Expected completion -February, 2017)
III Setting up GEnx / GE90 Engine Overhaul Workshop (Expected completion – December, 2017)
Approx. USD 64.5 Million will be provided by GE Aviation as MRO Credit Allowance, as per the agreements
signed with Air India Ltd., towards setting up of GEnx Engine Overhaul Facility·
AIESL will get the right of use of these facilities.
Shamshabad – Hyderabad MRO
The MRO at Hyderabad was operationalised in May, 2015. Regular Checks of A319 and A320 aircraft of Air
India are being carried out at this facility.
FINANCIAL PERFORMANCE:
The engineering activities of AI were hived off to the company as per the Cabinet approved TAP / FRP of AI and
a MoU was executed for such hive-off indicating therein various supports from AI. In terms of the MoU, the
parent company viz. AI shall transfer the movable assets (Workshop, Plant & Machinery and Tools etc.) to the
company at its written down value (WDV) which shall form & constitute equity investment by AI. As per the MoU,
the Company expects to receive Equity from AI to the extent of Rs 375 Crs. in the first three years of its
operation in order to support its Capital acquisition program.
During the financial year 2014-15, the company got the DGCA approval CAR 145 as an MRO effective 1st
January, 2015, movable engineering assets were transferred from AI at the beginning of the financial year
besides the payroll of engineering personnel was transferred w.e.f. October, 2014 from AI.
The Share application money (deemed) of Rs. 166.62 Crs. is from AI on account of the assets transferred at its
WDV to AIESL during the year.
3AIESL
The company made concerted efforts and spent on the infrastructure facilities, overheads and the manpower
cost for its capabilities to acquire the DGCA approval CAR145. Based on the opinion from the Tax Consultants,
an expenditure of Rs. 271.38 Crs. incurred for practically making ready the MRO Set up for obtaining DGCA
License for its planned activities / work considered as directly attributable to DGCA License for future economic
benefits has been capitalized as Intangible Assets.
The company incurred a Net Loss after Tax has been Rs. 242.57 crores for the year 2014-15 i.e. the initial year
of start of its commercial activities.
The MRO is a Capital Intensive industry with high competitive environment with low returns and there is a long
payback / cost absorption period in view of the fixed overheads on infrastructure facilities and high wage costs
due to licensed manpower. Besides this, the Company has to depend on internally generated AI's business for
substantial portion of its Revenue. However, with the expected growth in third party business and the incentives
expected from GOI for the MRO industry, it is anticipated that AIESL will be operationally profitable in next few
years.
OTHER FINANCIAL INFORMATION:
Share Capital :
The Authorised Share Capital of the Company is Rs.10,00,00,000/-. The entire Paid-up Share Capital of the
Company, amounting to Rs.5,00,000/- (50000 Equity Shares of Rs.10/- each) has been subscribed and paid-
up by Air India Limited. The company has increased during the year 2015-16 its authorized share capital from
Rs. 10 Crores to Rs. 1000 Crores to enable the company to issue shares for transfer of engineering assets from
Air India.
Share Application Money from Air India Ltd.
In terms of the MoU executed, Air India shall transfer its movable assets (engineering - Workshop equipment,
Plant & Machinery and Tools) at written down value (WDV) to the company and the WDV of such asset transfer
shall constitute & form part of the initial equity / investment in the company by AI. Accordingly, the amount of Rs.
166.62 Cr. has been shown under this head representing the cost (WDV) of assets transferred.
Market
Q CAPA (Centre for Asia Pacific Aviation) projects Indian MRO Market to reach USD 2 billion by 2020 from
approximately US$800 million today.
Q India's scheduled airlines are expected to operate more than 1000 aircraft by 2020, up from 400 today.
Q Target customers are both from India and outside with in flying distance of 5 hours
Q It is prudent to tap the MRO market with the highly skilled manpower, vast infrastructure & wide spread
network.
AIESL Initiatives
Q AIESL is aggressively pursuing its objective to establish itself as leading MRO in the region.
Q Several initiatives taken to strengthen Line Maintenance, Base Maintenance, Cabin Maintenance to
provide better service to Air India to improve Aircraft Availability, OTP and Cabin ambience.
Q Some of the major initiatives by AIESL:
Q Obtained CAR 145 Approval to Operate as MRO w.e.f. 01 Jan, 2015
Q Worked to obtain Design Service Goal extension from Airbus to enhance the life of classic A320
aircraft by 3500 FH
Q Transferring All Contracts , FAA, EASA Approvals in the name of AIESL
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Q Dedicated marketing team formed to capture third party business. Process of hiring
Management consultant is underway
Q 11 profit Centers have been identified. They are:
DEL-1 (Line & Major), DEL-2 (Engines) ,DEL-3 (Components)
BOM-1 (Line & Major WB), BOM-2 (Engines), BOM-3 (Components), NEC BOM (Line & Major
NB)
CCU-1 (Line & Major NB)
HYD (Whole SR)
NAG MRO & TRV MRO
Q DGCA Approval of CAR 147 to operate as Aviation Maintenance Training Organisation – The
approval granted by DGCA effective 16 Sept., 2015.
Q AIESL has training facilities at Delhi, Mumbai, Kolkata, Hyderabad and Thiruvananthapuram.
Action Plan
Q AIESL intends to give top class MRO service to its customers
Q Dedicated Cabin maintenance Team
Q Dedicated Tools Van setup – On the lines of International MROs (Tyre pressure, Fuel Drain)
FAA / EASA (Federal Aviation Administration / European Aviation Safety Agency) Approvals:
Q FAA / EASA approved Jet Engine overhaul shops at Delhi and Mumbai
Q FAA approved Component overhaul shops at Delhi and Mumbai
Q FAA approval for Mumbai hangar for B777 aircraft obtained
Q FAA approval Nagpur hangar expected shortly for B777 aircraft (as extention to Mumbai).
Q EASA approval for Component Overhaul Shops at Delhi & Mumbai obtained
Future Plans
Q To capture business of all airlines within flying distance of 5 hrs.
Q Completion of GEnx / GE90 Testing & Overhaul Facility
Q Third Party jobs at Jet Shops at DEL and BOM
Q Third Party handling for Overhaul Shops
Q ATEC (Automatic Test Equipment Complex)
DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors of the Company confirm:-
1. that in the preparation of the Annual Accounts, the applicable accounting standards have been followed
and there has been no material departure.
2. that the selected accounting policies were applied consistently and the Directors 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 as at 31 March 2015 and of the profit or loss of the Company for the year ended on that date.
5AIESL
3. that proper and sufficient care has been taken for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities, and
4. that the annual accounts have been prepared according to the going concern basis.
5. Company being unlisted sub clause (e) of section 134(3) is not applicable.
6. The directors had devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.
STATUTORY AUDITOR REPORT
M/s. Jhawar Mantri & Associates, Chartered Accountants, Mumbai, were appointed as Statutory Auditors for
the year 2014-15 by the Comptroller & Auditor General of India.
The Statutory Auditors' Report on the Accounts of the Company for the Financial Year ended 31st March, 2015
along with observations/ Management's Replies thereon is attached.
COMMENTS OF THE CONTROLLER & AUDITOR GENERAL
The Comments of CAG dated 30-05-2016, were received pursuant to Section 143 (6) (b) of Companies Act
2013. The comments along with Management Reply thereon are attached.
CHANGE IN NATURE OF BUSINESS
There is no change in nature of business of the company.
DIVIDEND
The directors are not recommending any dividend as the company has not earned any profits.
AMOUNTS TRANSFERRED TO RESERVES
The Board of the company has decided/proposed to carry no amount to its reserves.
CHANGES IN SHARE CAPITAL, IF ANY
During the Financial Year 2014-15, there is no change in share capital of the Company.
INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY
Company does not have any Subsidiary, Joint venture or Associate Company.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the
Companies Act, 2013 do not apply.
MATERIAL CHANGES AND COMMITMENTS
The particulars as required under the provisions of Section 134(3)(l), following changes have occurred which
have affected the financial position of the company occurred between 31st March 2015 and the date of Board's
Report.
“Authorised Share capital of the company has been increased from Rs. 10 Crores to Rs. 1000 Crores.”
MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2014-15, the Company held Four meetings of the Board of Directors as per Section
173 of Companies Act, 2013 which is summarized below. The provisions of Companies Act, 2013 was adhered
to while considering the time gap between two meetings.
6AIESL
S No. Date of Meeting Board Strength No. of Directors Present
1 09.07.2014 4 4
2 05.11.2014 4 3
3 26.11.2014 4 4
4 31.03.2015 3 3
DIRECTORS AND KMP
The following changes a have occurred in the constitution of directors of the company:
S.No Name Designation Date of appointment Date of cessation
1. Shri Rohit Nandan Chairman 13/09/2011 31/08/2015
2. Shri G Asok Kumar Director 11/02/2014 23/04/2014
3. Ms. M Sathiyavathy Director 26/02/2014 11/02/2015
4. Shri Arun Kumar Director 23/04/2014 01/01/2015
5. Shri S Venkat Director 27/12/2013 31/10/2015
6. Shri B S Bhullar Director 03/02/2015
EXTRACT OF ANNUAL RETURN
In compliance with the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the
Companies (Management and Administration) Rules, 2014, extract of Annual Return is annexed at
Annexure-I.
STATEMENT SHOWING DETAILS OF EMPLOYEES
Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company is not applicable to Government Companies Vide
Notification No. G.S.R.463(E) Dated 5th June, 2015.
INDEPENDENT DIRECTORS AND DECLARATION
AIESL is a wholly owned Subsidiary of Air India Limited. As per the provisions of 97 Article of the Articles of
Association of the Company, the number of Directors of the Company shall not be less than three and not more
than fifteen all of whom shall be appointed by Air India Limited, who will prescribe the period for which they will
hold office as director and may remove them and appoint others in their places and fill in any vacancy that may
occur.
Accordingly, the matter regarding appointment of Independent Directors on the Board of AIESL has been taken
up by Air India Limited with the Ministry of Civil Aviation, Government of India.
NOMINATION REMUNERATION AND STAKEHOLDERS RELATIONSHIP COMMITTEE
As required under section 178, the Nomination and Remuneration Committee should consist of 3 or more Non
Executive Directors out of which not less than one half should be Independent Directors.
Presently there is no Independent Director on the Board of AIESL and the matter has been taken up with the
Ministry of Civil Aviation by Air India Limited.
7AIESL
REMUNERATION POLICY
Remuneration to Executive Directors and Non Executive Directors:
Section 197 in respect of remuneration to directors of the Company is not applicable to Government
Companies Vide Notification No.G.S.R.463(E) Dated 5th June, 2015
AUDIT COMMITTEE
The provisions of Section 177 of Companies Act, 2013 are not applicable on the Company. Therefore, the Audit
Committee was not constituted during the year.
VIGIL MECHANISM
Section 177(9) relating to establishment of Vigil Mechanism for directors and employees to report a genuine
concern is not applicable to the Company.
However, there is a separate Vigilance Department in Air India Ltd, Holding Company, which covers AIESL
also.
ORDER OF COURT
No significant and material orders have been passed by the regulators or courts or Tribunals impacting the
going concern status and company's operation in future during the year.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The system for adequacy of Internal Financial Controls with reference to the Financial Statements is yet to be
established as the company has been operationalised recently.
BOARD OF DIRECTORS:
st
During the year, the Board of Directors held four meetings. As on 31 March 2015, the Board consisted of the
following Members:-
Shri Rohit Nandan Chairman
Chairman & Managing Director
Air India Limited
Shri B. S. Bhullar Director
Joint Secretary
Ministry of Civil Aviation
Shri S. Venkat Director
Director (Finance)
Air India Limited
ACKNOWLEDGEMENTS:
The Board sincerely acknowledges the support and guidance received from the, Ministry of Civil Aviation,
Comptroller and Auditor General of India, Ministry of Corporate Affairs and other agencies.
For & on behalf of the Board
(ASHWANI LOHANI)
CHAIRMAN
Place : New Delhi
Date : 19 June 2016
8AIESL
Annexure to Directors' Report for the year 2014-15
Annexure
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 U74210DL2004GOI125114
2. Registration Date 11/03/2004
3. Name of the Company AIR-INDIA ENGINEERING SERVICES LIMITED (AIESL)
Category/Sub category of the
4. Company Limited by shares/Union Government Company
Company
Address of the Registered office & AIRLINES HOUSE, 113 GURUDWARA RAKABGANJ
5.
contact details ROAD, NEW DELHI –110001, Ph.No : 011-.23422109
6 Whether listed company No
Name, Address & contact details of
7. the Registrar & Transfer Agent, if N.A.
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 Name and Description of main products / services of turnover of
No the Product/ the
service company
1 Technical Handling, MRO and other Services 9987 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:
Holding /
Sr. Name and Address of the % of Applicable
Subsidiary /
No. Company CIN/GIN Shares Section
Associate
1 Air India Limited
113, Airlines House, U62200DL2007GOI161431 Holding 100% 2 (46)
Gurudwara Rakabganj
Road, New Delhi, 110 001.
9AIESL
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total
Equity) : Category-wise Share Holding
No. of Shares held at the No. of Shares held at the end of the %
Category of beginning of the year year [As on 31-03-2015] Change
Shareholders [As on 01-04-2014] during
the
During % of % of year
Demat Physical the 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. - 50,000 50,000 100 - 50,000 50,000 100 0.00
e) Banks / FI
f) Any other
Total shareholding of
50,000 50,000 100 - 50,000 50,000 100 0.00
Promoter (A)
B. Public 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):- - - - - - - - - -
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No. of Shares held at the beginning of No. of Shares held at the end of the
the year [As on 01-04-2014] year [As on 31-03-2015] %
Change
Category of
% of % of during
Shareholders Demat Physical Total Demat Physical Total
Total Total the
Shares Shares year
2. Non-Institutions Not Applicable
a) Bodies Corp.
(Market Maker +
LLP)
i) 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
vi) Foreign Nationals
vii) Clearing
Members
viii) Trusts
ix) Foreign Bodies -
DR
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) 50,000 50,000 100 - 50,000 50,000 100 0.00
11AIESL
B) Shareholding of Promoter-
Shareholding at the beginning Shareholding at the end
of the year of the year % change
% of % of In
Shares Shares Share-
Sr. Shareholder's % of total % of total
Pledged / Pledged / holding
No. Name No. of Shares No. of Shares
Encum- Encum- during
Shares of the Shares of the the
bered to bered
company company year
total to total
shares shares
Air India Limited
1 along with its 50,000 100 NIL 50,000 100 NIL 0.00
nominees
C) Change in Promoters' Shareholding (please specify, if there is no change)
Sr Particulars Shareholding at the Cumulative Shareholding
No. beginning of the year at end of the year
% of total % of total
No. of No. of
shares of the shares of the
shares shares
company company
At the beginning of the year
Air India Limited 50000 100% 50000 100%
At the end of the year
Air India Limited 50000 100% 50000 100%
D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters
and Holders of GDRs and ADRs):
Shareholding at the Cumulative Shareholding
beginning of the year at end of the year
Sr For Each of the Top 10 Shareholders % of total % of total
No No. of shares of No. of shares of
shares the shares the
company company
1 NOT APPLICABLE
2
3
4
5
6
7
8
9
10
12AIESL
E) Shareholding of Directors and Key Managerial Personnel:
Shareholding at the Cumulative
beginning of the year Shareholding at the end
S. Shareholding of each Directors and % of total % of total
No. each Key Managerial Personnel No. of shares of No. of shares of
shares the shares the
company company
NIL
Total
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 1030423
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the - - - -
financial year
* Addition
* Reduction 1030423
Net Change
Indebtedness at the end of the - - - -
financial year
i) Principal Amount NIL
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii) NIL NIL - NIL
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VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(In figures)
Sr Name of MD/WTD/ Manager Total
Particulars of Remuneration
No Amount
1 Gross salary - - - - - -
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act, 1961
(b)Value of perquisites u/s 17(2) Income-
tax Act, 1961
(c)Profits in lieu of salary under section
17(3) Income- tax Act, 1961
2 Stock Option
3 Sweat Equity
4 Commissionas % of profitothers, 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 - - - - - -
- - - - - -
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C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN
MD/MANAGER/WTD
( figures in Rs)
Sr. Key Managerial Personnel
Particulars of Remuneration
No. CEO CS CFO Total
Not Not Not
1 Gross salary -
Applicable Applicable 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)
Income-tax Act, 1961 - - - -
(c) Profits in lieu of salary under section
17(3) 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 - - - -
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Details of
Section of Appeal
Penalty / Authority
the Brief made, if
Type Punishment/ [RD / NCLT/
Companies Description any (give
Compounding COURT]
Act Details)
fees imposed
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
15AIESL
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 ENGINEERING
SERVICES LIMITED FOR THE YEAR ENDED 31 MARCH 2015.
The preparation of financial statement of Air India Engineering Services 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 31 March 2016.
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 Engineering Services 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 auditors 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 Auditor’s Report.
Balance Sheet
Current Liabilities
Other Current Liabilities Note No.8 Rs. 173.57 Crore
A reference is invited to Note No.21(1) wherein disclosure regarding contingent liability of Rs.33.42 crore on
account of 25 per cent balance payment of allowances to the employees from October 2014 has been made. As
75 per cent of the allowance payable to various categories of employees has already been paid and the revised
pay structure has been implemented in respect of technical officers and aircraft maintenance engineers, the
liability for service engineers should have been provided. Thus, non-provision has resulted in understatement
of other current liability and understatement of loss for the year by Rs.33.42 crore.
Sd/-
Parama Sen
Principal Director of Commercial Audit
& ex-officio Member, Audit Board-II, Mumbai
Place : Mumbai
Date : 30 May 2016
16AIESL
MANAGEMENT REPLIES TO THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF
INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE ACCOUNTS OF THE
COMPANY FOR THE YEAR ENDED MARCH 31,2015
Audit Observation Management Reply
Balance Sheet In terms of the rationalized Pay-Scales determined
Current Liabilities by the AI Management in line with the recommend-
Other Current Liabilities Note No.8 Rs. 173.57 ations of the Justice Dharamadhikari Report (JDC),
Crore the AI Management has paid 75% of the allowances
payable to various categories effective July 2012 so
A reference is invited to Note No.21(1) wherein that any adjustments as a result of the implement-
disclosure regarding contingent liability of Rs.33.42 ation of the JDC Report could be made at the time of
crore on account of 25 per cent balance payment of final settlement. The JDC recommendations are for
allowances to the employees from October 2014 has AI as a whole prior to transfer of engineering payroll
been made. As 75 per cent of the allowance payable to AIESL effective Oct. 2014. Therefore, in respect of
to various categories, of employees has already the remaining 25% of the allowances, the Company
been paid and the revised pay structure has been has provided for contingent liability to the extent of
implemented in respect of technical officers and Rs.334.2 million from the date of transfer of
aircraft maintenance engineers, the liability for Engineering Employees Payroll to the Company ie
service engineers should have been provided. effective October-2014 on the basis of advice from
Thus, non-provision has resulted in understatement the parent company.
of other current liability and understatement of loss
for the year by Rs.33.42 crore. Based on the JDC recommendations, the revised
pay structure for Technical Officers (Support Service)
and Aircraft Maintenance Engineers (AMEs) has
since been implemented w.e.f. November-2014 and
January 2015 respectively during the year under
audit. The revised pay structure for Service
Engineers was yet to be implemented.
It may be mentioned that effective the date of
implementation of the new Pay Structure for AMEs,
Technical Officers, there is no liability to pay 25% as
the Revised Pay Structure is already in line with the
JDC recommendations & DPE Pay Scale. In respect
of the period prior to this, the calculation of amount of
25% is yet to be completed since there would be
deductions in respect of certain allowances which
has already been made during past period and
discontinued under the new pay structure.
Unless the exercise of working out the arrears
payable to all the employees is completed, the total
quantum of liability on this account is not exactly
ascertainable / quantifiable.
It is also disclosed in Note 21.1-3rd para- “....Unless
the exercise of working out the arrears payable to all
the employees is completed, the total quantum of
liability on this account is not exactly ascertainable”.
17AIESL
REPORT OF THE AUDITORS OF THE MEMBERS OF AIR INDIA ENGINEERING SERVICES LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Air India Engineering Services Limited ('the
st
Company') which comprises the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended and a summary of significant accounting policies and other
explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors are responsible for the matters stated in Section 134(5) of the Companies
Act, 2013 (“the Act”) with respect to the preparation and presentation 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 the Companies (Accounts) Rules, 2014. This responsibility also
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; and design, implementation and maintenance of adequate internal financial controls,
that were 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 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 thereunder.
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 our audit
opinion on the financial statements.
BASIS FOR QUALIFIED OPINION
Attention is drawn to point no. 9 and 11 (C) of note no. 21 of notes to accounts and particularly note no. 9 (b)
regarding capitalization of revenue expenditure incurred during the period from October 2014 to December
2014 as “other intangible assets” of Rs. 271,38,28,069/- which in our opinion is not in conformity with the
18AIESL
Accounting Standard -26 “Intangible Assets”, basic accounting assumptions, principles and qualitative
characteristics of financial statements. Consequently expenses and losses are understated by Rs.
271,38,28,069, in the Profit & Loss account and Reserves and Surplus, negative balance in Profit & Loss
Account is understated by Rs. 271,38,28,069 in the Balance Sheet.
QUALIFIED OPINION
In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matters described in the Basis for Qualified Opinion paragraph above, the aforesaid 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, of the state of affairs of the Company as at
March 31, 2015, and its loss and its cash flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. 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, and on the basis of such
checks of the books and records of the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure 1 a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. We are enclosing our report in terms of section 143(5) of the Act, on the basis of such checks of the
books and records of the Company as we considered appropriate and according to the information and
explanations given to us, we give in the Annexure 2 on the directions issued by the Comptroller and
Auditor General of India.
3. As required by section 143(3) of the Act, we report that :
a. We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so
far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by
this Report are in agreement with the books of account;
d. Except for the effects of the matters described in the Basis for Qualified Opinion paragraph
above, in our opinion, the aforesaid financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Account) Rules,
2014;
e. In our opinion there is no adverse effect on the functioning of the company.
f. On the basis of the written representations received from the directors as on 31 March 2015
taken on record by the Board of Directors, none of the Director is disqualified as on 31st March
2015, from being appointed as a Director in terms of Section 164 (2) of the Act;
g. Except for the effects of the matters described in the Basis for Qualified Opinion paragraph
above, there is no qualification, reservation or adverse remark relating to maintenance of
accounts and other matters connected therewith; and
19AIESL
h. With respect to the other matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i) The Company does not have any pending litigations which would impact its financial
position.
ii) The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; and
iii) There has not been an occasion in case of the Company during the year under report to
transfer any sums to the Investor Education and Protection Fund. The question of delay
in transferring such sums does not arise.
For Jhawar Mantri & Associates
Chartered Accountants
(Firm Regn. No. 113221W)
Sd/-
Place : Navi Mumbai B. P. Mantri
Date : 31 March 2016 Partner
M. No. 045701
20AIESL
ANNEXURE 1 – TO INDEPENDENT AUDITOR'S REPORT
THE ANNEXURE REFERRED TO IN OUR INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF
ST
THE COMPANY ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015, WE
REPORT THAT:
1. (a) The Company has maintained proper records of fixed assets showing full particulars including
quantitative situation of Fixed Assets in the SAP system.
(b) All the fixed assets have been transferred to the company during the year from its parent
company. As informed to us the physical verification of major fixed assets has been conducted
by the parent company for the biennial period of 2012-2014.
2. (a) The Company is not carrying on any trading or manufacturing activities. Accordingly clause
relating to inventory is not applicable.
3. As informed to us, the Company has not granted any loans, secured or unsecured to the companies,
firms and other parties covered in the register maintained under section 189 of the Companies Act,
2013.
(a) Since there are no such loans, question of regular in repaying the principal or interest amounts
as stipulated does not arise.
(b) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to
the body corporate, firm and other parties listed in the register maintained under section 189 of
the Act.
4. In our opinion and according to the information and explanations given to us, there is adequate internal
control system commensurate with the size of the company and the nature of its business with regard to
purchases of inventory, fixed assets and for sale of goods and services. We have not observed any
continuing failure to correct weakness in the internal control system during the course of our audit.
5. The Company has not accepted any deposits from the public covered under section 73 to 76 of the
Companies Act, 2013.
6. The Central Government has not prescribed the maintenance of cost records under section 148(1) of
the Act, for of the goods and services dealt in by the Company.
7. (a) The Company is not regular in depositing undisputed statutory dues including provident
fund, income tax, service tax and any other statutory dues with the appropriate
authorities. There are no amounts in arrears as at 31st March 2015 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no material dues of income
tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax or cess
which have not been deposited with the appropriate authorities on account of any dispute
(c) According to the information and explanations given to us, there are no amount which required
to be transferred to investor education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.
8. The Company is having accumulated losses of Rs. 242,67,09,080/- which is more than 50% of its
net worth. During the year, the Company has incurred cash losses of Rs. 221,61,86,688/-. Cash
Loss in the immediately preceding financial year was Rs. 31,059/-.
21AIESL
9. The Company has not defaulted in repayment of dues to financial institution or bank or debenture
holders.
10. In our opinion and according to the information and the explanations given to us, the Company has not
given any guarantee for loans taken by others from banks or financial institutions.
11. In our opinion and according to the information given to us, the term loans have been applied for the
purpose for which the loans were obtained.
12. To the best of our knowledge and belief and according to the information and explanations given to us,
no fraud on or by the company was noticed or reported during the year.
For Jhawar Mantri & Associates
Chartered Accountants
(Firm Regn. No. 113221W)
Sd/-
Place : Navi Mumbai B. P. Mantri
Date : 31 March 2016 Partner
M. No. 045701
22AIESL
ANNEXURE-2 TO THE INDEPENDENT AUDITORS’ REPORT
Annexure referred to in our report of even date to the members of Air India Engineering Services Limited on the
accounts for the year ended 31 March 2015.
S. Directions under Section 143(5) Auditor’s Comment Impact on
No. of Companies Act 2013 Financial
Statement
1. If the Company has been selected for The Company has not been selected Not Applicable
disinvestment, a complete status report in for disinvestment during the financial
terms of valuation of Assets (including year 2014-15.
intangible assets and land) and Liabilities
(including Committed & General
Reserves) may be examined including the
mode and Present stage of disinvestment
process
2. Please report whether there are any cases According to information and Nil
of waiver/write off of debts/loans/interest explanations given to us, there are
etc., if yes, the reasons there for and the no cases of waiver/write off of
amount involved. debts/loans/interest etc.
3. Whether proper records are maintained According to information and Nil
for inventories lying with third parties & explanations given to us, there is no
assets received as gift from Govt. or other inventory lying with third parties and
authorities. there is no assets received as gift
from Govt. or other authorities.
4. A report on age-wise analysis of pending According to information and Nil
legal/arbitration cases including the explanations given to us, there are
reasons of pendency and existence/ no legal/arbitration cases pending
effectiveness of a monitoring mechanism against the Company or filed by the
for expenditure on all legal cases (foreign Company.
an local) may be given.
For Jhawar Mantri & Associates
Chartered Accountants
(Firm Regn. No. 113221W)
Sd/-
Place : Navi Mumbai B.P. Mantri
Partner
Date : 31 March 2016 M.N. 045701
23AIESL
MANAGEMENT’S COMMENTS ON OBSERVATIONS OF THE STATUTORY AUDITORS
The management’s comments to the observations of the Auditors are as under :
Most of the points raised by the Auditors are self-explanatory/statement of facts. Additional
information/explanation wherever required are furnished below :
Audit Observations Management’s Comment
Report on the Financial Statements Statement of fact
We have audited the accompanying financial
statements of Air India Engineering Services
Limited (’the Company’) which comprises the
Balance Sheet as at 31st March 2015, the Statement
of Profit and Loss, the Cash Flow Statement for the
year then ended and a summary of significant
accounting policies and other explanatory
information.
Management’s Responsibility for the Financial Statement of fact
Statements
The Company’s Board of Directors are responsible
for the matters stated in Section 134(5) of the
Companies Act, 2013 (”the Act”) with respect to the
preparation and presentation 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 the
Companies (Accounts) Rules, 2014. This
responsibility also 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 judgements and estimates that are
reasonable and prudent; and design, implement-
ation and maintenance of adequate internal financial
controls, that were 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 Statement of fact
Our responsibility is to express an opinion on these
24AIESL
Audit Observations Management’s Comment
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
thereunder.
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
judgement, 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 our
audit opinion on the financial statements.
Basis for Qualified Opinion
Attention is drawn to point no. 9 and 11© of note Any MRO prior to its operationalization has to take a
no. 21 of notes to accounts and particularly note certification from DGCA and other Regulatory
no. 9 (b) regarding capitalization of revenue authorities that it has the basic infrastructure and
expenditure incurred during the period from licensed manpower support to start the operations of
October 2014 to December 2014 as “other the Company. Though the manpower of AI was
intangible assets” of Rs. 271,38,28,069/- which in transferred to the subsidiary company in February
2013, the Company could not commence business
on a stand alone basis due to the various Court cases
25AIESL
Audit Observations Management’s Comment
our opinion is not in conformity with the and Company not possessing the requisite license
Accounting Standard-26 “Intangible Assets”, from DGCA and other authorities. After the Company
basic accounting assumptions, principles and resolved its Court cases in May 2013 it took
qualitative characteristics of financial considerable time to comply with the various
statements. Consequently expenses and losses requirements of the licensing authorities before the
are understated by Rs. 271,38,28,069, in the CAR 145 certification was issued by DGCA. This
Profit & Loss account and Reserves and Surplus, required the Company to show that considerable
negative balance in Profit & Loss Account is trained, licensed and experienced manpower along
understated by Rs. 271,38,28,069 in the Balance with the infrastructure existed in the Company which
Sheet. qualifies the Company for a Certification as MRO. It
is, therefore, proposed to Capitalize the expenditure
incurred by the Company mainly on manpower at
least three months before it obtained the license for
certification as License Cost. In this connection
Management had relied on an opinion from the tax
consultants wherein the revenue expenditure
incurred including manpower cost directly
attributable to DGCA License for CAR-145 MRO with
certification for practically making ready the MRO
Set up for obtaining DGCA License for its planned
activities / work has been capitalized as Intangible
Assets.
The main conditions for capitalizing an internally
generated asset as per As (Accounting Standard) 26
corresponding to IAS 38 (International Accounting
Standard) as “Intangible Asset” is
l Assets will generate future Economic
benefits.
l The Intangible asset is available for use
l Ability to measure the expenditure attribut-
able to the Intangible Asset.
Since all these conditions are satisfied in the relevant
case it has been decided to Capitalise the cost of
obtaining a License under CAR 145.
(A separate explanatory note along with the Opinion
of Tax Consultants attached)
Based on the clarifications given by the Management
on the qualifications by the Auditors, the Manage-
ment is of the view that there is no understatement of
expenses, loss, Reserve & Surpluses and negative
balance in Profit & Loss Account.
26AIESL
Audit Observations Management’s Comment
Qualified Opinion
In our opinion and to the best of our information and Audit Comments are noted.
according to the explanations given to us, except for
the effects of the matters described in the Basis for
Qualified Opinion paragraph above, the aforesaid
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, of the state of affairs of
the Company as at March 31, 2015, and its loss and
its cash flows for the year ended on that date.
1. 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, and
on the basis of such checks of the books and
records of the Company as we considered
appropriate and according to the information
and explanations given to us, we give in the
Annexure 1 a statement on the matters
specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. We are enclosing our report in terms of Statement of fact
section 143(5) of the Act, on the basis of such
checks of the books and records of the
Company as we considered appropriate and
according to the information and
explanations given to us, we give in the
Annexure 2 on the directions issued by the
Comptroller and Auditor General of India.
3. As required by section 143(3) of the Act, we Statement of fact
report that :
(a) We have sought and obtained all the
information and explanations which
to the best of our knowledge and
belief were necessary for the purpose
of our audit;
(b) In our opinion, proper books of
account as required by law have been
kept by the Company so far as it
appears from our examination of
those books;
(c) The Balance Sheet, the Statement of
Profit and Loss and Cash Flow
Statement dealt with by this Report
are in agreement with the books of
account;
27AIESL
Audit Observations Management’s Comment
(d) Except for the effects of the matters
described in the Basis for Qualified
Opinion paragraph above, in our
opinion, the aforesaid financial
statements comply with the Account-
ing Standards specified under
Section 133 of the Act, read with Rule
7 of the Companies (Account) Rules,
2014;
(e) In our opinion there is no adverse
effect on the functioning of the
company.
(f) On the basis of the written represent-
ations received from the directors as
on 31 March 2015 taken on record by
the Board of Directors, none of the
Director is disqualified as on 31st
March 2015, from being appointed as
a Director in terms of Section 164 (2)
of the Act;
(g) Except for the effects of the matters
described in the Basis for Qualified
Opinion paragraph above, there is no
qualified, reservation or adverse
remark relating to maintenance of
accounts and other matters con-
nected therewith; and
(h) With respect to the other matters to
be included in the Auditor’s Report in
accordance with Rule 11 of the
Companies (Audit and Auditors)
Rules 2014, in our opinion and to the
best of our information and according
to the explanations given to us:
(i) The company does not have any
pending litigations which would
impact its financial position.
(ii) The Company did not have any long-
term contracts including derivative
contracts for which there were any
material foreseeable losses; and
(iii) There has not been an occasion in
case of the Company during the year
under report to transfer any sums to
the Investor Education and Protec-
tion Fund. The question of delay in
transferring such sums does not
arise.
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