AIRLINE ALLIED SERVICES LIMITED - Air India · Airline Allied Services Limited. ... The Authorised...
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AIRLINE ALLIED SERVICES LIMITED AASL
Transcript of AIRLINE ALLIED SERVICES LIMITED - Air India · Airline Allied Services Limited. ... The Authorised...
AIRLINE ALLIED SERVICES LIMITED
AASL
AASL
CONTENTS
Page No.
1. Board of Directors 1
2. Directors’ Report 2
3. Comments of the Comptroller & Auditor General of India 26
4. Independent Auditors’ Report 28
5. Balance Sheet as at 31 March 2015 51
6. Statement of Profit & Loss for the year ended 31 March 2015 52
7. Cash Flow Statement 53
8. Notes forming part of the Financial Statements for the year ended 31 March 2015 54
AASL
BOARD OF DIRECTORS (as on 28 DECEMBER 2015)
Shri Ashwani Lohani Chairman
Shri Vinod Hejmadi Director
Shri Pankaj Srivastava Director
Smt. Meenakshi Dua Director
Capt Arvind Kathpalia Director
Dr. (Smt.) Shefali Juneja Director
Smt. Puja Jindal Director
Chief Executive Officer
Shri C.S. Subbiah
Auditors
M/s. Chandra Gupta & Associates
Chartered Accountant
E-103, Palm Court Apartments
Plot No.-3, Sector-19-B, Dwarka
New Delhi-110 075.
Company Secretary
Shri Gagan Batra
Registered Office
Old Lufthansa Hanger Building,
(Adjacent to ED-NR Office)
I.G.I. Airport, T-1,
New Delhi-110 037
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DIRECTORS' REPORT 2014-15
The Shareholders,
Airline Allied Services Limited.
The Directors of your company have pleasure in presenting the Thirty Second Annual Report together with staudited Statement of Accounts of Airline Allied Services Ltd. for the year ended 31 March 2015.
During the year, the company incurred a net loss of Rs.183.92 crores (previous year Rs. 249.40 crores). Although the total revenue has decreased by Rs 14.44 crores, the total losses have also fallen due to decrease in operations. The decrease in losses can be attributed to the following reasons:
§ Passenger revenue decreased by Rs. 16.46 crores (Rs.178.09 crores against Rs.194.55 crores), due to lower passengers carriage by 0.054 million (0.310 million against 0.364 millions) and higher passenger yields by Rs. 401/- (Rs. 5746 against Rs. 5345).
§ Other income increased by Rs. 1.75 crores (approx) during the year 2014-15 due to :
- Increase by Rs. 19.17 crores on account of VGF operations.
- Decrease in sundry receipts by Rs. 17.42 crores on account of decrease in Sundry Receipts (Maintenance Reserve Refunds).
§ ATF cost decreased by Rs. 22.93 crores due to less operations and decrease in average ATF rate from Rs. 58149.36 to Rs. 51701.07 per Kl.
§ Decrease in provision for obsolescence of aircraft rotables, non-rotables & special tools by Rs. 7.07 crores due to redelivery of Aircraft and increase in the lease life of remaining Aircraft. Material consumed for Aircraft also decreased by Rs. 3.91 crores
§ Decrease in cost of repair of Aircraft, both, in-house and outside repairs by Rs. 61.16 crores during the year 2014-15.
§ Foreign exchange rate increased from Rs. 60.49 to Rs. 62.50 (closing rates) resulting in net foreign exchange loss of Rs. 0.68 Crores
§ Decrease in lease charges by Rs. 13.78 crores due to redelivery of Aircraft.
§ Decrease in Staff cost by Rs. 9.37 crores due to transfer of engineering staff to AIESL and decrease allowances & other payments of crew.
§ The amount of handling charges increased by Rs4.84 crores during the year.
§ Financial cost increased by Rs. 31.51 crores as Holding company debited a sum of Rs. 103.47 crores st
(previous year Rs. 71.96 crores) towards interest on the amount outstanding as on 31 March 2015.
Financial and Physical Performance
The Financial and Physical performance for the year under review vis-a-vis the previous year is given here under:
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Financial Performance
(Rs. in Crs.)
2014-15 2013-14
Operating Revenue 179.93 196.74
Passenger Revenue (ATR & CRJ) 178.09 194.55
Other Operating Revenue 1.84 2.19
Other Income including VGF 48.02 45.65
Total Revenue 227.95 242.39
Total Expenses 411.87 491.79
Net Profit/(Loss) for the year Before Tax -183.92 (249.40)
Net Profit/(Loss) for the year After Tax -183.92 (249.40)
Share Capital 2.25 2.25
Physical Performance
2014-15 2013-14
ASKMs (in millions) 289.614 340.892
RPKMs (in millions) 197.916 249.576
Passengers Carried (in millions) 0.310 0.364
Seat Factor (%) 68.3 73.2
Load Factor (%) 58.5 61.6
Share Capital:
Authorised Capital
The Authorised Share Capital of the company as on 31-03-2015 is Rs. 500,00,00,000/-(Five Hundred Crores) divided into 500,00,000 (Five Crores) equity shares of Rs.100/- each.
Issued, Subscribed and Paid-up Capital
stAs on 31 March 2015, the Issued, Subscribed & Paid-up Share Capital of the Company was Rs.2.25 crores divided into 225,000 fully paid up equity shares of Rs.100/- each. The entire Share Capital of the Company is held by Air India Limited, the holding company.
Amounts transferred to Reserves
The Board of the company has decided/proposed to carry Rs NIL to its reserves.
Fleet Position
The fleet position of the company as at the year end consisted of 10 leased aircraft was as under:-
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Aircraft Type No. of Aircraft Owner
ATR-42-320 04 Leased from M/s Abric Leasing Ltd, Ireland
Bombardier CRJ-700 04 Leased from different overseas lessors
ATR 72-600 02 Leased from M/s AVAP Leasing (Asia)
Ltd., Dublin, Ireland
Network/ New Links
As at the year end, the network of the company consisted of 25 domestic stations and has been operating around (ATR-42-36 +CRJ-94 & ATR-72-600-40 flights/ week) 170 flights per week.
Technical Reliability
Aircraft-wise Technical Reliability during the year 2014-15 was as under:
a) ATR 72-600 99.44%
b) ATR 42-320 99.24%
c) CRJ-700 99.15%
Aircraft Utilization
Aircraft utilization during the year 2014-15 was as under:
a) ATR 72-600 07:51�BH
b) ATR 42-320 07:40 BH
c) CRJ-700 04:58 BH
The company introduced services on the following new routes/additional flights during the year 2014-15:-
New Flights / Links
a) ATR-42-320 Aircraft
th§ Delhi / Pantnagar / Delhi – 4 times/week w.e.f 14 October 2014.
st§ More flights to North East reinstated under consultation with North Eastern Council w.e.f 1 August 2014. ATR flights were earlier withdrawn in January 2013 due to cessation of VGF receivable from North Eastern Council.
st§ Kolkata/Guwahati /Lilabari & rtn -4 times/week w.e.f 01 August 2014
st§ Kolkata/Silchar /Tezpur & rtn -3 times/week w.e.f 01 August 2014
§ Frequency increased to 6 times/week instead of 5 times/week on Kolkata/ Shilling / Kolkata st
w.e.f 01 August 2014.
b) ATR-72 Aircraft
rd§ Delhi/ Rajkot / Delhi -6 times/week w.e.f 23 February 2015
th§ Frequency increased to 7 times/week on Delhi/Rajkot/ Delhi w.e.f 18 March 2015
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c) CRJ Aircraft
th§ Mumbai/ Bhuj/ Mumbai – 5 times/week w.e.f. 15 May 2014
rd§ Frequency increased to 6 times/week instead of 3 times/week on Delhi/ Surat / Delhi w.e.f. 23
February 2015
th§ Portblair / Car Nicobar / Portblair - 1 times/week charter operation with CRJ w.e.f 24 July 2014
Operation of flights with VGF support/Charters:
During the year 2014-15, the following flights/routes continued to operate regularly under VGF support program with the respective State Governments/Government agencies.
1. Kochi/Agatti/Kochi with ATR-42 aircraft 6 times per week with support from Lakshadweep Administration.
2. With VGF support from North Eastern Council:
a. Kolkata/Silchar/Tezpur & return 3 times per week with ATR-42 aircraft.
b. Kolkata/Guwahati/Lilabari & return 4 times per week with ATR-42 aircraft
c. Kolkata/Shillong/Kolkata 6 times per week with ATR-42 aircraft
3. Charter operations on Portblair/Car Nicobar/Portblair with CRJ aircraft once per week on behalf of the st
Andaman and Nicobar Administration commenced on 21 July 2014. The charters are operating regularly.
Human Resources
The staff strength of the company at the close of the year was 664(938) including 17 (23) employees on deputation from the parent Company, Air India. Out of above, services of 474 (532) employees were seconded to Air India. Therefore, effectively, the Company had 190(406) employees at the close of the year for in its own operations. All the employees of the Company are on fixed term contract basis. Out of the 664 contractual
stemployees, 334 (50.30%) were female employees. Cadre-wise, as on 31 March, 2015, there were 59 Pilots, 401 cabin crew and remaining 204 were other categories of employees. The Company has been supplementing cabin crew and other manpower as required by Air India.
AASL had deployed 474 staff (356 cabin crew, 24 Operations, 08 VHF Operator, 57 Ground & Other stCommercial &29 Security Attendants) till 31 March 2015 on deputation to Air India.
AASL had transferred 165 staff (97 Licensed Engineers/AME/Dy. AME/Dy. Engineer & 68 Sr. Tech-1/1A, stTechnicians-I/II) to MRO, AIESL as on 1 January, 2015 & 40 (29 Licensed Engineers/AME/Dy. AME/Dy.
stEngineer & 11 Sr. Tech-1/1A, Technicians-I/II) deputed from AIESL to AASL as on 1 January, 2015.
Since the Company could not develop in-house expertise in the field, it had recruited 3 employees on contract who were superannuated from AIL, by virtue of their knowledge and long experience to handle some key positions, to satisfy/meet the regulatory requirements.
stAs on 31 March 2015, there were total 8 expatriate, out of which (7) expatriate commanders on ATR and 1 ex-patriate commander on CRJ Line Captain. Out of these 7, 4 are Training Captain. The company endeavors to keep the number of expatriate pilots to bare minimum to maintain minimum mandatory strength of commanders vis-à-vis aircraft fleet. There is no expatriate pilot in P2 category.
A Brief Note on Engineering and Maintenance Including Bases, New Shops, Major Works, Outstations
ATR-42-320 Aircraft
Kolkata is the main engineering base for maintenance activities on ATR 42-320 aircraft. The Scheduled Line Maintenance and Major Maintenance activities (upto '4C' Check i.e. 16000 FH) are being carried out in-house
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including special inspections, snag rectifications as per trouble shooting / maintenance manuals for continued airworthiness of the aircraft. The base has capability to carry out replacement of main elements of the aircraft i.e. engines, landing gears, propellers and Structural Repair etc. which are major maintenance tasks. Infrastructure and capability have been developed to carry out '1C' Check (4000 FH), '2C' Check (8000 FH), '4C' Checks (16000 FH) & '8' yearly check. The structural integrity of the aircraft is ensured by carrying out by Environmental Damage (Corrosions) and Fatigue Damage inspections.
ATR 72-600 Aircraft
stATR 72-600 aircraft commenced operation from Delhi on 31 Jan 2015. Delhi base was approved to carry out maintenance upto 'A' Check on ATR 72-600 aircraft during the year 2014-15.
ATR Component Shop Facilities
Alliance Air does not have any facilities for repair of components. To fulfill component repair and replacement requirement, AASL has Global Maintenance Support Agreement (GMSA) for ATR 42-320 aircraft fleet & Interim Maintenance Support Agreement for ATR 72-212A (600) aircraft fleet with M/s. ATR.
Bombardier CRJ 700 Aircraft
Delhi is the main engineering base for maintenance activities on CRJ 700 aircraft. The Main base has the required infrastructure and currently has the capability to carry out maintenance upto '4C' Check on this type of aircraft.
Bombardier CRJ 700 Component Shop Facilities
Alliance Air does not have any facilities for repair of components. To fulfill component repair and replacement requirement, AASL has Component maintenance and Support Agreement with M/s. Lufthansa Technik.
ATR & CRJ - Engine Repair Facilities
Alliance Air does not have any Repair/Refurbishment/performance restoration facility for PW121 engine of ATR aircraft and CF34-8C engine of CRJ 700 aircraft. The repair of PW 121 engine has been outsourced to Pratt and Whitney, (Original Engine Manufacturer) and that of CRJ 34-8C Engine to M/s.GE (Original Engine Manufacturer).
Infrastructure at Outstations
Necessary Line Maintenance infrastructure particularly with reference to transit maintenance has been developed. Necessary assistance is sought from AIESL, whenever needed.
Expansion of Aircraft Workshop Facilities :
As present fleet of AASL on lease and for each type of aircraft there exist component support agreement, hence there is no plan to develop such exclusive workshop facility.
Further, general workshop facility support is extended by AIESL on requirement basis.
Details of Engineers' Training Programme
Training Program for existing and for newly inducted aircraft is as following:-
a) Type training and Refresher Course for Engineers both for ATR 42-320 & CRJ 700 are carried out in-house at Air India Engineering Training School.
b) For ATR 72-600 12 A&C Engineer and 12 Avionics Engineer Total 24 AMEs have been trained at ATC, Toulouse, France in the FY 2014-15.
Disposal and Return of Aircraft and Spares and other Surplus/Obsolete Assets, if any
Two ATR 42 & One CRJ 700 aircraft are under redelivery process.
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Flight Safety
The company has an independent Flight Safety Department which functions as per the DGCA requirements in proactive manner. Flight Safety Department carries out preventive and investigative functions for the Airline. The preventive functions include, the cockpit voice recorder monitoring, flight data recorder monitoring, Airfield Safety Inspections and Internal Safety Audits of the stations, being operated by Airline which include Spot Checks, Ramp Inspection and Cockpit surveillance checks at regular interval.
All reported incidents are investigated by the Permanent Investigation Board (PIB) of the company and the recommendations of PIB are included in the operation procedures and policy to prevent recurrences. The investigations of incidents are carried out along with DGCA representatives. Only one case of ATR-42-320 aircraft is pending of the financial year 2014-2015 for PIB to investigate.
During the financial Year 2014-15, Alliance Air had no occurrence, classified as serious incident on CRJ-700 aircraft, ATR-42-320 and ATR-72-600 aircraft & NIL case of Bird Hit was reported. To ensure safety of aircraft, following are the activities being carried out on regular basis:
l The Flight Operation Quality Assurance (FOQA) programme with prime function of flight surveillance, if any anomaly is found in operations of Flight, the concerned operating crew is counseled.
l The flight occurrences which are classified as incidents by the regulatory norms are investigated by the Investigation Board of the Airline in coordination with the Air Safety Directorate of the DGCA.
l The recommendations of Investigation Board are circulated to the respective departments for their compliance to the applicable recommendations.
l The Airline has facility for downloading the data from the flight data recorder and same is monitored by Flight Safety Department.
l Regular Internal Safety Audit is conducted for safety evaluations of the Airline and the findings are reported to the concerned departments and the DGCA.
l Load and Trim Sheet of CRJ 700, ATR 42-320& ATR-72-600 aircraft fleet are being monitored on monthly basis.
l Ramp Inspection/Spot Check of Base Stations/ Line Stations are carried out randomly.
l Safety inspection of Line stations are being carried out as per regulatory requirements.
l Safety Action Group (SAG) meeting are being conducted to take up safety measures with respected to volunteers/Hazard reporting system and Pilot Voyage reports.
l Recommendation of DGCA Annual Air Safety review meet are being emphasized during counseling of Pilots.
Training
During the year, Alliance Air has converted 3 ATR 42-320 Co-Pilots into Commanders and 2 CRJ Co-Pilots into Commander. 2ATR Co-Pilot are under different stage of up-gradation to Commander, we were able to keep the number of foreigners (Expatriates) pilots to bare minimum level confined to Commander category including trainer/examiner.
Inventory Control
Aircraft inventory consisting of aircraft spare parts and consumable items has been monitored and controlled through an ERP package developed by RAMCO, which now maintains integrated aircraft inventory for AIL which is used for both Air India Limited and Airline Allied Services Limited inventories. AIL exercises its procurement and control procedures for AASL inventories also.
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Future Perspective
Plan for 2015-16 with Special Reference to Aircraft Utilization, Availability of Engineers, New routes/Services, Utilization of Facilities etc. And also plan for Fleet Expansion
As per AASL Board direction, process for induction of 8 new ATR 72-600 aircraft for lease period of 10-12 years, has been initiated, out of which 5 ATR 72-600 aircraft are already in the fleet of AASL by October 2015. Out of the remaining three new ATR 72-600 aircraft, two were also inducted in April, 2016 and residual One is expected by June, 2016. Further, as per Turn Around Plan (TAP) of AIL, Alliance Air should have a fleet of 40 Turbo Prop aircraft by the year 2020-21.
09 A/C engineers and 03 Instructors from Engineering Training Schools have already been trained in FY 2015-16. Remaining AMEs would be trained in house in due course on ATR 72-600.
As of today, Delhi base has the capacity to carry out maintenance upto '4A'Check and Hyderabad base has the capacity to carry out maintenance upto 'A' Check, which would be enhanced in due course as per requirement. Also, with addition of more ATR 72 aircraft in the fleet there would be an increase in the number of transit/night halt stations.
Plan for 2015-16
A further evaluation for ten more aircraft is currently in progress. As the Turn Around Plan envisages a fleet of 40 smaller aircraft to be inducted gradually in phases to complement the fleet of larger aircraft in order to enable operation of flights in a hub and spoke pattern. Apart from the introduction of services to new small routes, the ATR-72 will enable upgradation of existing routes on ATR-42 to this better aircraft type with higher seating capacity. The routes to be worked out based on economic viability, need to air link more Tier II and Tier III cities as the growth potential is much more larger than on the metro routes.
Use of Hindi
To fulfill the objectives of the Official Language policy of the Government, the Company played its role in promoting the usage of Hindi at all levels. Staff were encouraged to work in Hindi. To promote Hindi, a Hindi Pakhwara is conducted every year, wherein employees participate in various competition categories like essay writing, poem reciting etc. Prizes and awards are distributed during the function.
Contribution to Exchequer
The Company has contributed Rs. 3.32 cores (Rs. 4.55 crores) to Government exchequer by way of Sales Tax and other levies on Aviation Turbine Fuel.
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.
th ndIn 138 Board Meeting held on 22 September, 2015 ,Paid up Share capital of the company has been increased from Rs. 2, 25,00,000 to Rs. 4,02,25,00,000 by allotment of 4,00,00,000 (Four Crores) Equity Shares @ Rs. 100/- each.
Extract of Annual Return
The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed herewith for your kind perusal and information as Annexure 1.
Industrial Relations
Industrial relations in the Company have been cordial during the year.
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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.
Directors Responsibility Statement:
Your Directors confirm:
I. In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of
staffairs of the Company as at the 31 March, 2015 and of the profit or loss of the Company for that period.
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of the knowledge and ability of the Directors.
iv. The Directors have prepared the Annual Accounts on a going concern basis.
v. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Audit Committee
The constitution of Audit Committee as required under the Companies Act, 2013 was approved by the Board of rd stDirectors in its 133 Meeting held on 24th December, 2014 and following are its members as on 31 March,
2015:
Smt. (Dr.) Shefali Juneja - Chairperson
Ms. Puja Jindal - Member
Sh. S. Venkat - Member
Sh. Rohit Nandan - Permanent Invitee
Statutory Auditors
The Comptroller & Auditor General of India (CAG), has appointed M/s. Chandra Gupta & Associates, Chartered Accountants as Statutory Auditors of the Company for FY 2015-16.
Auditors Report
The Statutory Auditors have made certain observations in their Audit Report on the accounts for the year ending st
31 March, 2015.
Qualifications or adverse remarks in the Auditors' Report which require any clarification/ explanation along with reply of management thereto are attached herewith.
The Notes on financial statements are self-explanatory, and needs no further explanation.
Comments of Comptroller and Auditor General of India
The comments dated 5th August 2016 of the Comptroller and Auditor General of India (C&AG) under Section st619 (4) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 March 2015 along
with reply of management thereto is attached herewith.
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Secretarial Audit Report
Secretarial Audit Report as provided by Mr. Jiwan Parkash Saini, Practicing Company Secretary for the st
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 is annexed as Annexure 4.
The Managements' Comments on Secretarial Auditors' observations are as under:
Secretarial Auditor's Observation
There were few instance of delay in filing of e-forms under the Companies Act, 1956 and the Companies Act, 2013 ('the Act') and the rules made thereunder, but they were regularised by payment of additional fees under the Act.
Notices of Disclosure of Interest by directors pursuant to section 184(1) of Companies Act, 2013 in Form MBP-1 have to be place at the first meeting of the Board of the financial year, but such compliance is made in next board meeting.
Company has not appointed Independent directors pursuant to sub-section 4 of section 149 of Companies Act, 2013, hence no meeting of independent directors could be held during the period under audit. Since, the company has not appointed independent directors, the company has not complied with the provisions of section 177(2) and 178 of Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Power) Rules, 2014 as regard the composition of the Audit Committee and Remuneration and Nomination Committee of the Board.
Company has not constituted Remuneration and Nomination Committee of the Board pursuant to 178 of Companies Act, 2013 read with Rule 6 of Companies (Meetings of Board and its Power) Rules, 2014 as it meets the prescribe criteria as mentioned in such Rule 6.
Management's Reply
Some of the forms got delayed for filing due to technical glitches in MCA Server and were filed with additional filing fee. The provisions of act were thus complied with.
The notices could not be placed in the first Board Meeting but they were, however, placed in the very next Board Meeting and the compliance of law is made.
In terms of provisions of Article of Association, the appointment of Independent Directors will be done by Holding Company / Administrative Ministry.
Audit Committee was constituted by the Board in its meeting held on 24-12-2014 comprising of three members, with Govt Nominee Directors forming a majority, pending the appointment of Independent Directors.
The Audit Committee shall be reconstituted and the Nomination and Remuneration Committee shall be constituted upon appointment of Independent Directors.
Nomination and Remuneration Committee shall be constituted upon appointment of Independent Directors.
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Board of Directors
stAs on 31 March2015 the Board consisted of the following members:
i) Shri Rohit Nandan Chairman CMD, Air India Ltd.
ii) Smt (Dr.) Shefali Juneja Director Director (Finance), Ministry of Civil Aviation.
iii) Ms Puja Jindal Director Director, Ministry of Civil Aviation.
iv) Shri S. Venkat Director Director Finance, Air India Ltd.
v) Shri Pankaj Srivastava Director Director Commercial, Air India Ltd.
vi) Capt. A.K. Govil Director Executive Director-Operations, Air India Ltd.
vii) Smt Meenakshi Dua Director Executive Director-Northern Region, Air India Ltd.
stThe existing Board of Directors of the Company as on 1 June, 2016 comprises the following Members:
i) Shri Ashwani Lohani Chairman CMD, Air India Ltd.
ii) Smt (Dr.) Shefali Juneja Director Director (Finance), Ministry of Civil Aviation.
iii) Shri Vinod S. Hejmadi Director Director Finance, Air India Ltd.
iv) Shri Pankaj Srivastava Director Director Commercial, Air India Ltd.
v) Smt Meenakshi Dua Director Executive Director-Northern Region, Air India Ltd.
vi) Capt Arvind Kathpalia Director Executive Director-Operations, Air India Ltd.
Changes during 2014-15
stShri Pankaj Kumar ceased to be Director w.e.f. 1 August 2014 and Smt. Meenakshi Dua, Executive Director-Northern Region was appointed on the Board w.e.f 21-10-2014.
thCapt. S.P.S Suri ceased to be Director w.e.f. 30 November 2014 and Capt A.K. Govil, Executive Director (Ops)
stwas appointed on the Board w.e.f. date DIN is allotted to him i.e. 31 December, 2014.
Changes during 2015-16
thCapt Arvind Kathpalia, ED (Operations), was appointed on the Board of AASL w.e.f. 30 September, 2015, in th
place of Capt. A.K. Govil who ceased to be on Board w.e.f. 18 August, 2015.
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thShri Vinod S. Hejmadi, Director (Finance) AI was appointed on the Board of AASL w.e.f. 20 November 2015, in st
place of Shri S. Venkat who ceased to be Director w.e.f. 31 October 2015.
stShri Ashwani Lohani, CMD, AI was appointed as Chairman on the Board of AASL w.e.f 31 August, 2015, in st
place of Shri Rohit Nandan who ceased to be Chairman w.e.f. 31 August 2015.
The Board places on record its appreciation of the valuable services rendered by Shri Pankaj Kumar, Capt. S.P.S. Suri, Capt A.K. Govil and Shri S. Venkat during their tenure as Directors & and Shri Rohit Nandan during his tenure as Chairman of the Company.
Meetings of the Board of Directors
During the Financial Year 2014-15, the Company held six meetings of the Board of Directors as per Section 173 of Companies Act, 2013 which is summarized below.
S.No. Date of Meeting Board Strength No. of Directors Present
nd 1 22 May, 2014 7 6
th 2 26 September, 2014 7 4
th 3 24 December, 2014 6 6
nd 4 2 January, 2015 7 7
th 5 26 February, 2015 7 5
th 6 30 March, 2015 7 5
Related Party Transactions
All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large and Approval of the Board of Directors was obtained wherever required. Company does not have any details of transaction entered with the related parties which are required to be attached in Form No. AOC-2.
Conservation Of Energy, Technology Absorption and Foreign Exchange Outgo:
(A) Conservation of energy and Technology absorption
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review.
(B) Foreign exchange earnings and Outgo
(Rs. in Crores)
Earnings NIL
Outgo 137.76
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Risk Management
The Company does not have any Risk Management Policy as the element of risk threatening the Company's existence is very minimal.
Corporate Social Responsibility
The company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 so there is no requirement to constitute Corporate Social Responsibility Committee.
Independent Directors and its Declaration
Matter regarding appointment of Independent Directors on the Board of the Company has been taken up with the (holding company) Air India Ltd with the Ministry of Civil Aviation, Government of India.
Nomination and Remuneration Committee
Matter relating to Constitution of Nomination and Remuneration Committee shall be taken up after the appointment of Independent Directors as confirmed by holding company/Ministry of Civil Aviation, Govt. of India.
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.
Acknowledgment
The Board of Directors wish to express gratitude for the cooperation, guidance and support received from Ministry of Civil Aviation, Air India Ltd., Government Agencies, lessors and financial institutions. The Directors are pleased to place on record their appreciation of the sustained and dedicated efforts put in by all the employees.
For and on behalf of the Board of Directors
Sd/-Ashwani Lohani
ChairmanPlace: New DelhiDate: 23 August 2016
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Annexure to Directors' Report for the year 2014-15 Annexure-I
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2015 Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated) -
1. CIN U51101DL1983GOI016518
2. Registration Date 13/09/1983
3. Name of the Company AIRLINE ALLIED SERVICES LIMITED (AASL)
4. Category/Sub-category of the Company
Company Limited by shares/Union Government Company
5. Address of the Registered office & contact details
OLD LUFTHANSA HANGER BUILDING, (ADJECENT TO ED-NR OFFICE), IGI AIRPORT, T-1, NEW DELHI-110037, Ph.No : 011-25672287.
6 Whether listed company No
7. Name, Address & contact details of the Registrar & Transfer Agent, if any.
N.A.
Sr No
Name and Description of main products / services NIC Code
of the Product/
service
% to total turnover of
the company
1
To establish, maintain and operate international and domestic air transport services, scheduled and non scheduled, in all the countries of the world for the carriage of passengers, meals and freight and for
any other purposes.
621 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:
Sr. No.
Name and Address of the Company
CIN/GIN
Holding / Subsidiary / Associate
% of Shares
Applicable Section
1 Air India Limited 113, Airlines House, Gurudwara Rakabganj Road, New Delhi, 110 001.
U62200DL2007GOI161431
Holding
100%
2 (46)
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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) : Category-wise Share Holding
Category of Shareholders
No. of Shares held at the beginning of the year
[As on 01-04-2014]
No. of Shares held at the end of the year [As on 31-03-2015]
% Change during
the year
Demat
Physical
During the year
% of Total
Shares Demat Physical Total
% of Total
Shares
A. Promoters
(1) Indian
a) Individual/ HUF - - - - - - - - -
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - 225000 225000 100 - 225000 225000 100 0.00
e) Banks / FI - - - - - - - - -
f) Any other - - - - - - - - -
Total shareholding of Promoter (A)
- 225000 225000 100 - 225000 225000 100 0.00
B. Public Shareholding Not Applicable
1. Institutions
a) Mutual Funds/UTI - - - - - - - - -
b) Banks / FI - - - - - - - - -
c) Central Govt. - - - - - - - - -
d) State Govt.(s) - - - - - - - - -
e) Venture Capital Funds
- - - - - - - - -
f) Insurance Companies
- - - - - - - - -
g) FIIs - - - - - - - - -
h) Foreign Venture Capital Funds
- - - - - - - - -
i) Others (specify) Foreign Banks
- - - - - - - - -
Sub-total (B)(1):- - - - - - - - - -
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16
Category of Shareholders
No. of Shares held at the beginning of the year [As on 01-04-2014]
No. of Shares held at the end of the year [As on 31-03-2015]
% Change during
the year
Demat
Physical
Total
% of Total
Shares
Demat
Physical
Total
% of Total
Shares
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 -
D 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)
225000
225000
100
-
225000
225000
100
0.00
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B) Shareholding of Promoter-
C) Change in Promoters' Shareholding (please specify, if there is no change)
Sr No.
Particulars Shareholding at the beginning of the year
Cumulative Shareholding at end of the year
No. of shares
% of total shares of the
company
No. of shares
% of total shares of the
company
At the beginning of the year
Air India Limited 225000 100% 225000 100% At the end of the year
Air India Limited 225000 100% 225000 100%
D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sr. No.
Shareholder's Name
Shareholding at the beginning of the year
Shareholding at the end of the year % change
In Share- holding during
the year
No. of Shares
% of total Shares of the
company
% of Shares
Pledged / Encum- bered to
total shares
No. of Shares
% of total Shares of the
company
% of Shares
Pledged / Encum- bered
to total shares
1 Air India Limited
along with its
nominees
225000
100
NIL
225000
100
NIL
0.00
Sr No
For Each of the Top 10 Shareholders
Shareholding at the beginning of the year
Cumulative Share-holding at end of the year
No. of shares
% of total shares of
the company
No. of shares
% of total shares of
the company
1 NOT APPLICABLE
2
3
4 5
6
7
8
9
10
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E) Shareholding of Directors and Key Managerial Personnel:
S. No.
Shareholding of each Directors and each Key Managerial Personnel
Shareholding at the beginning of the year
Cumulative Shareholding at the end of year
No. of shares
% of total shares of
the company
No. of shares
% of total shares of
the company
NIL
Total
V. INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.
(In Rs Crore)
Secured Loans
excluding deposits
Unsecured Loans
Deposits Total
Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount - - - -
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 - - - -
Net Change - - - -
Indebtedness at the end of the financial year
- - - -
i) Principal Amount - - - -
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) NIL NIL NIL NIL
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19
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(In figures)
Sr No
Particulars of Remuneration Name of MD/WTD/ Manager Total
Amount
1 Gross salary - - - - - -
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 - - - - - -
(b)Value of perquisites u/s 17(2) 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 (A) - - - - - -
Ceiling as per the Act - - - - - -
*There are no Managing, Whole Time Directors in the Company.
B. Remuneration to other directors
Sr No.
Particulars of Remuneration Name of Directors Total
Amount
1 Independent Directors - - - - - -
Fee for attending board committee meetings
- - - - - -
Commission - - - - - - Others, please specify (Fees for attending Board Sub Committee Meetings)
- - - - - -
Total(1) - - - - - - 2 Other Non-Executive Directors - - - - - -
Fee for attending board committee meetings
- - - - - -
Commission - - - - - - Others, please specify - - - - - -
Total (2) - - - - - Total (B)=(1+2) - - - - - - Total Managerial Remuneration - - - - - -
Overall Ceiling as per the Act - - - - - -
- - - - - -
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20
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type
Section of the
Companies Act
Brief Description
Details of Penalty /
Punishment/ Compounding fees imposed
Authority [RD / NCLT/
COURT]
Appeal made, if
any (give Details)
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - - B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
* Not applicable to Government Companies. Only CFO has been designated as KMP. ** The Company Secretary is holding the position in addition to his responsibilities as Manager-Corporate Affairs, Air India Ltd. no remuneration is paid to him by AASL. Similarly, CFO is on deputation from Air India and no remuneration is paid to him by AASL.
( figures in Rs)
Sr. No.
Particulars of Remuneration Key Managerial Personnel
CEO CS CFO Total
1 Gross salary *Not
Applicable ** ** -
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
- - - -
(b) Value of perquisites u/s 17(2)
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 -
-
-
-
AASL
21
SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31ST 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,Airline Allied Services LimitedOld Lufthansa Hanger Building, (Adjacent To Ed-Nr Office), IGI Airport, T-1,New Delhi – 110037.
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Airline Allied Services Limited (CIN: U51101DL1983GOI016518) (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 Airline Allied Services Limited'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 authorised representatives during the conduct of secretarial audit and as per the explanations given to me and the representations made by the Management, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2015 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:
A. I have examined the books, papers, minute books, forms and returns filed and other records made available to me and maintained by the company for the financial year ended on 31st March, 2015 according to the applicable provisions of:
i. The Companies Act, 1956 and the Companies Act, 2013 ('the Act') and the rules made there
under;
During the period under review the Company has complied with the provisions of the Companies Act, 1956 and the Companies Act, 2013 ('the Act') and the rules made thereunder, as applicable, subject to the following observations:
a) There were few instance of delay in filing of e-forms under the Companies Act, 1956 and the Companies Act, 2013 ('the Act') and the rules made thereunder, but they were regularised by payment of additional fees under the Act.
b) Notices of Disclosure of Interest by directors pursuant to section 184(1) of Companies Act, 2013 in Form MBP-1 have to be place at the first meeting of the Board of the financial year, but such compliance is made in next board meeting.
c) Company has not appointed Independent directors pursuant to sub-section 4 of section 149 of Companies Act, 2013 , hence no meeting of independent directors could be held during the period under audit. Since, the company has not appointed independent directors , the company has not complied with the provisions of section 177(2) and 178 of Companies Act, 2013 read with Rule 6 of Companies( Meetings of Board and its Power) Rules, 2014 as regard the appointment of Independent directors in composition of the Audit Committee.
AASL
22
d) Company has not constituted Remuneration and Nomination Committee of the Board pursuant to 178 of Companies Act, 2013 read with Rule 6 of Companies( Meetings of Board and its Power) Rules, 2014 as it meets the prescribe criteria as mentioned in Rule 6.
Queries raised by Statutory auditors of the company in Audit Observations in relation to compliance of Companies Act, 2013 which has to be replied by the Management in Directors Report have not been reproduced here.
B. In aviation sector, following laws are specifically applicable to the Company:
l Aircraft Act, 1934
l Carriage by Air Act, 1972
l Tokyo Convention Act, 1975
l Anti-Hijacking Act, 1982
l Suppression of Unlawful Acts against Safety of Civil Aviation Act, 1982
l Civil Aviation Requirements issued by DGCA
Director General of Civil Aviation vide circular dated 21.12.2011 in connection with regulatory audit policy and programme under which regulatory audit are being carried out with an aim to carry out to ascertain the internal control of a organisation in its activities and to ensure compliance of regulatory requirements. It is explained by the company that the Regulatory audit of the company is done by the audit team of DGCA as per the audit programme and audit procedure as prescribed under regulatory audit policy of DGCA .
The Regulatory Audit Program (RAP) has been developed to promote conformance with the aviation regulations and standards that collectively prescribe an acceptable level of aviation safety. It also ensures that Civil Aviation audit policies and procedures are applied uniformly.
Regulatory Audits are conducted for the grant of approvals for Initial Certification, Additional Approval, Routine Conformance and Special Purpose Audit pursuant to the Aircraft Act 1934. The Director General of Civil Aviation or any other officer specially empowered in his behalf by the Central Government shall perform the safety oversight functions in respect of matters specified in this Act or the Rules made there under.
The Joint Director General Civil Aviation nominated by the Director General is responsible for all regulatory audits and inspections and is normally the Convening Authority.
The type of audits are Initial Certification Audit , Additional Approval Audit, Routine Conformance Audit and Special-Purpose Audit and is determined by the circumstances under which the audit is convened.
Regulatory audit includes Check Lists for of Airworthiness Audit policy and procedures and Operations audit policy and procedures .
DGCA has issued Civil Aviation Requirements ( CAR ) under section 4 of Aircraft Act, 1934 read with Rule 133A of Aircraft Rules, 1937 and the company is required to comply such requirements under DGCA check systems . While the broad principles of law are contained in the Aircraft Rules, 1937, Civil Aviation Requirements are issued to specify the detailed requirements and compliance procedures.
AASL
23
I further report, that the company is generally regular in compliance of aforesaid aviation laws and the compliance by the Company of such aviation laws have not been reviewed in this Audit which have been subject to review by DGCA and other designated professionals.
C. 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 notified, hence not applicable to the Company during the audit period). and
D) I have examined the framework, processes and procedures of compliance with respect to following laws applicable to the company on test basis.
Apprentices Act, 1961; Employees State Insurance Act, 1948; Payment of Wages Act,1948; Minimum Wages Act, 1948; Industrial Disputes Act, 1947; Payment of Bonus Act, 1965; Payment of Gratuity Act, 1972; Contract Labour (Regulation and Abolition) Act, 1970; Maternity Benefit Act, 1961; The Child Labour (Prohibition & Regulation) Act, 1986; Equal Remuneration Act, 1976; The Employment Exchange (Compulsory Notification of Vacancies) Act,1956,
Company has created separate Trusts to administer Provident Fund Contributions named Airline Allied Services Employees Provident Fund Trust Regulations, 1996 .
Sexual Harassment of Women at Workplace ( Prevention, Prohibition and Regulation ) Act, 2013: The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.
In connection with aforesaid laws, adequate systems and processes are in place to monitor and ensure compliance with such laws .
During the audit , it is observed that the Compliance Management System needs to be further strengthen by taking the following actions:
a) To establish Corporate Compliance Committee and designate a Chief Compliance officer and maintain centralised mechanism to ensure compliance with all applicable laws;
b) To establish and maintain effective co-ordination of functional units and the compliance department under the overall supervision of the Board;
c) To establish mechanisms to prevent, detect, report and to respond to non-compliances;
d) To present Quarterly compliance Report to the Board;
e) Identification and classification of various compliance risks;
f) Organisation of compliance Check list, Audit, feed back, remedies.
E) 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.
AASL
24
During the period under review and as per the explanations and clarifications given to me and the representations made by the Management, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, etc. mentioned above subject to the observation made therein.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Nominee 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 at least seven days in advance and where the Board meetings are called at shorter notice ,presence of at least one Nominee director is ensured, agenda and detailed notes on agenda were sent 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.
I further report that as per the explanations given to me and the representations made by the Management and relied upon by me 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. It is informed that the Company has responded to notices for demands, claims, penalties etc. levied by various statutory / regulatory authorities and initiated actions for corrective measures, wherever necessary.
I further report that during the audit period the company has :
(i) Company has increased its authorised capital from Rupees Five Crore (divided into Five Lac Equity shares of Rs. 100/- each ) to Rupees Five Hundred Crore (divided into Five Crore Equity shares of Rs. 100/- each ) vide Special Resolution passed in the AGM dt.29.12.2014.
(Jiwan Parkash Saini)Company Secretary
in practiceFCS No: 3671 CP No: 2100
Place : New DelhiDate : 27 May 2016
Note - 1 : Specific non compliances / observations / audit qualification, reservation or adverse remarks has been reported in respect of the above at appropriate place .
Note - 2 : This Report is to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report.
'Annexure A’
To,The Members,Airline Allied Services LimitedOld Lufthansa Hanger Building, (Adjacent To Ed-Nr Office), IGI Airport, T-1,New Delhi – 110037.
I report of even date is to be read along with this letter.
1. Maintenance of Secretarial record 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 process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. I believe that the process and practices, we followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Where ever required, I have obtained the Management representation about the Compliance of laws, rules and regulations and happening of events etc.
5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedure on test 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.
(Jiwan Parkash Saini)Company Secretary
in practiceFCS No: 3671 CP No: 2100
Place : New DelhiDate : 27 May 2016
AASL
25
AASL
26
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF THE AIRLINES ALLIED SERVICES LIMITED FOR THE YEAR ENDED 31 MARCH 2015
The preparation of financial statements of the Airlines Allied Services Limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditor 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 the 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 07 June 2016.
I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of the Airlines Allied 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. Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report:-
A. Comments on Financial Position Current Liabilities Trade Payables - ̀ 304.79 crore (Note no. 6)
(i) The above does not include an amount of ` 2.66 crore is respect of redelivery charges of $ 425,000 payable to lessor (M/s ABRIC Leasing co.). Although the final settlement was made in July, the liability of redelivery charges should have been booked in the accounts of the year 2014-15 in compliance of Accounting Standard-4 (Contingencies and Events Occurring After the Balance Sheet Date.
Omission to book, the above has resulted in understatement of Trade Payable and understatement of loss by ̀ 2.66 crore ($ 425.00 x ̀ 62.50).
(ii) As per MOU between Air India Limited and Airports Authority of India dated 26.08.2013, it was agreed that the company will pay interest @ 9% on delayed payment towards outstanding dues of Airport Authority of India. However, it was observed that the company has not provided any liability in respect of the same.
As the relevant data/information was not available with the audit, hence, the amount of interest could not be quantified.
B. Comment on Disclosure
The Company has made short payment of ` 0.99 crore in respect of bills raised by DIAL for the period May 2009 to March 2015 against the area allotted to AASL. The fact has not been disclosed in its notes to accounts or as a contingent liability.
For and on the behalf of the Comptroller & Auditor General of India
Place : New Delhi (Neelesh Kumar Sah)Dated : 05 August 2016 Principal Director of Commercial Audit
& ex-officio Member, Audit Board-I, New Delhi.
AASL
27
MANAGEMENT'S REPLIES OF CAG ON AASL
The settlement in respect of redelivery of MSN 315 was determined with lessor M/s Abric Leasing
thCompany on 14 of August' 2015 and not in July as stated by the Audit.
It is stated that proportionate provision for the re-delivery charges which is made year to year based on the terms of the lease agreement was already made in the Annual Accounts of 2014-15.
However, these expenses were duly booked in the books of accounts of the company in 2015-16 i.e. in the year when the payment to the party was actually made.
The parent company (AIL) has continuously contested its liability of payment of interest on its dues to AAI. This was based on the ground that the interest charged by AAI is totally disproportionate considering the financial position of the company, which is under a Financial Restructuring Plan (FRP). Based on the finality of the issue, the amount of payable interest (if any) will be shown as contingent liability.
This demand of DIAL relates to the difference in measurement of area occupied by AASL in the Lufthansa Hangar, IGI Airport, New Delhi. Therefore, the amount was not considered as payable. The amount will either be shown as provision / contingent liability or booked as expense as and when the decision is finalized by both the parties.
A. Comments on Financial Position Current Liabilities
Trade Payables – ̀ 304.79 crores (Note no. 6)
(i) The above does not include an amount of ` 2.66 crores in respect of redelivery charges of $ 425,000 payable to lessor (M/s ABRIC Leasing Co.). Although the final settlement was made in July, the liability of redelivery charges should have been booked in the accounts of the year 2014-15 in compliance of Accounting Standard -4 (Contingencies and Events Occurring After the Balance Sheet Date.
Omission to book, the above has resulted in understatement of Trade Payable and understatement of loss by ̀ 2.66 crores ($425,000 x ̀ 62.50).
(ii) As per MOU between Air India Limited and Airports Authority of India dated 26.08.2013, it was agreed that the company will pay interest @ 9% on delayed payment towards outstanding dues of Airport Authority of India. However, it was observed that the company has not provided any liability in respect of the same.
As the relevant data / information was not available with the audit, hence, the amount of interest could not be quantified.
B. Comment on Disclosure
The company has made short payment of ` 0.99 crore in respect of bills raised by DIAL for the period May 2009 to March' 2015 against the area allotted to AASL. The fact has not been disclosed in its notes to accounts or as a contingent liability.
Sl.No. Audit Observation Management Comments
AASL
28
INDEPENDENT AUDITOR'S REPORT
To, The Members of Airline Allied Services Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Airline Allied Services Limited, having registered address at Old Lufthansa Hangar Building, (Adjacent to ED-NR Office) IGI Airport, Terminal -1, New Delhi -110037 which comprises the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and 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 is 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 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, 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 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 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 accounting policies used and the reasonableness of the accounting estimates made by 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.
1. For Accounts relating to financial year 2013-14, in the first meeting of Audit Committee of the Board held ndon 2 Jan., 2015 – as per minutes, “The proposed Audit Report of the Statutory Auditors was also
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circulated. The Committee discussed the comments of auditors given in their Draft Audit Report”. We had not issued any Draft or Proposed Audit Report and the minutes of the Audit Committee are
ndmisrepresenting since on 2 Jan., 2015, the alleged Draft/Proposed Audit Report was non-est. This
ndmisrepresentation by the Audit Committee is further confirmed by the minutes of the 2 meeting of the th
Audit Committee held on 26 Feb., 2015.
nd As per the minutes of the 2 Audit Committee , the annual accounts of the Company were recommended to be placed before the Board.
th As per the minutes of the meeting of the Board of Directors dated 26 Feb., 2015, the non-est Draft
Audit Report was considered by the Board and it approved and adopted the unaudited final accounts of the Company for the financial year 2013-14 which were forwarded to us for our Statutory Audit Report.
The action/decision of the Audit Committee of the Company as well as of the Board of Directors of the Company is misrepresentation since the alleged Draft/Proposed Audit Report was non-est. We had
thissued the Independent Auditors Report on the 16 March, 2015 and no report whatsoever was
thsubmitted by us before 16 March, 2015. The Company has furnished 'photocopy of the Independent Auditors Report which is unsigned and undated by us without any mention of it being Draft or Proposed Audit Report.
The Company and the Directors who attended the first 2 Audit Committee Meetings and the Directors th th
who attended the 136 Meetings of the Board of Directors held on 26 Feb., 2015 have committed violation of the applicable provisions of the Companies Act, 2013 for misrepresentation. No liability has been provided in the final accounts of the Company for the financial year 2014-15 in respect of penalty to the Company and the Directors in default.
th2. The Board of Directors of the Company in its meeting held on 26 Feb., 2015 approved and adopted the Directors Report on the accounts of the Company for the financial year 2013-14, whereas Auditors have
thissued the Independent Auditors Report on the 16 March, 2015. The Company and the Directors have thus violated the provisions of the Companies Act, 2013 by misrepresenting the fact that it had approved and adopted the Directors Report before receipt of the Independent Auditors Report. No liability in respect of penalties to the Company and Directors in default have been provided for in the final accounts of the Company for the financial year 2014-15.
3. Air India Ltd. (AIL) has been providing funds to the Company and was not charging any interest on its stcredit balance with the Company till 31 March, 2013. For the financial year 2013-14, it has charged
interest @ 10.68% on its average credit balance. Since the Company had carry forwarded losses which had resulted into negative net worth, the company was required to comply with the provisions of the Companies Act, 2013 and Special Resolution was required to be approved by the members of the company before raising such loan. The company has thus violated provisions of the Companies Act, 2013. No liability in respect of penalties for such default has been provided which has been continued during financial year 2014-15 as well.
Basis for Qualified Opinion
(I) The financial statements of the Company under report have been drawn up on a 'Going Concern Basis'. The company was requested to furnish Revised Financial Viability Statement to ascertain if the company would turn around in near future which it was directed by the Chairman of the Company to
thfurnish. The company has informed vide Board Meeting dated 11 April, 2016, the Revenue and Capital Budget Estimates for the year 2016-17. Though the Budget Estimates for the year 2014-15 and 2015-16 are much higher than the actual (Provisional) for the financial year 2014-15 and Revised Estimates for 2015-16. The projected Budget Estimates for 2016-17 are few times of the Revised/Budget Estimates of 2015-16. However, the Company has projected a net profit of Rs.6.57 crores as per Budget Estimates of 2016-17 against loss of Rs.172.52 crores as per the Revised Estimates for the
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financial year 2015-16. The assumptions made for the Budget Estimates of 2016-17 though not satisfactory yet the contention of the company is accepted since Air India Ltd., the holding company of the AASL has assured its financial support to the Company.
(ii) Statement of Profit and Loss includes Traffic Revenue of Rs. 17,993.18 lacs (other than grant from NEC Shilong and Agati) accounted for on the basis of ledger account of Air India Limited and expenditure on Service charges of Rs. 130.24 Lacs and Other Operating and Administration expenses of Rs. 11,106.4 lacs [which includes Rs. 310.85 lacs on account of delayed payments to oil companies] accounted for only on the basis of credit and debit notes raised by Air India Limited. Although the Company is annually providing liability in respect of delayed payments to Oil companies on the basis of advices given by Air India Ltd., however, the IOCL has not accounted for the cumulative credit of Rs.256,962,436.00 as per their reconciliation statement with the company. Similarly, HPCL has not accounted for its credit of Rs.28,888,719.00 as per their provisional reconciliation statement. BPCL has provided only Rs.4,018,117.00 against company's gross provision of Rs.35,890,447.70 as per their reconciliation statement. In absence of basic records / vouchers / supporting documents and relevant details, the revenue and expenditure stated above remained unverified to that extent.
(iii) System of Inventory Accounting followed by the company is not proper/complete. In this respect our observations are as below -
a) In respect of ATR / CRJ aircraft inventories, procurement is made by Air India Limited and later on transferred to the company without any invoice and without charging of applicable sales tax (VAT) - amount and its impact on accounts is unascertainable. Moreover, sufficient control does not exist to ensure that all inventory transactions are authorized, processed and accounted completely.
b) Custom Duty and Freight on aircraft spare parts which form part of aircraft inventories, comprise of freight, duties, incidentals etc. on aircraft inventories owned by the company as well as those taken on lease from the manufacturers and also include freight, incidentals etc. on aircraft components and spares exported for repairs. In the absence of its item wise segregation and loading, the balance of custom duty and freight on aircraft spares amounting to Rs. 558.99 lacs lying at the end of the year under Current Assets and Rs. 17.65 lacs charged to material consumed during the year remained unverified and hence correctness of these amounts and their impact on financials could not be commented upon.
c) The company is not maintaining any record of Inventories at its stores in Delhi, Hyderabad and Kolkata and the financial figures are incorporated in its books at the year end on the basis of abstract received from Air India Limited showing the values of different categories of inventories. In absence of details, correctness of Inventory could not be verified and its impact on accounts could not be commented upon.
d) The consumption of inventory is booked at the year end on the basis of balance arrived at from opening stock plus purchases made during the year less closing stock (advised by Air India Limited) at the end of the year instead of accounting on the basis of actual consumption and disclosing the shortages or excesses, if any, separately. Thus it is not in accordance with the accepted inventory accounting practices and AS-2 (revised) on valuation norms issued by the ICAI. Hence, the consumption of inventory amounting to Rs. 795.12 lacs could not be verified and impact on accounts for variance, if any, cannot be commented.
e) Non-compliance of Accounting Standard AS-2 (Revised) on "Valuation of Inventories"-
i. Inventories have been valued without complete identification and allocation of freight, duties, incidentals etc. with respect to individual items (also refer sub-para (b) above).
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ii. Further, inventories have been valued at weighted average cost as against lower of cost or net realizable value.
Impact of the above on the accounts remained unascertained.
(iv) The accounts with the Airport Authority of India Ltd. and HPCL are unconfirmed and unreconciled which may impact elements of expenditure/income as well. In absence of confirmation and reconciliation as
ston 31 March, 2015, we are unable to comment on their impact thereon.
The balances with IOCL, BPCL and other oil supplying companies have been confirmed but the reconciliation statements furnished by them are not proper, which may, on proper reconciliation, include elements of expenditure/income. We are unable to comment on their impact on the accounts.
(v) Accounting of certain transactions on settlement basis (Refer Accounting Policy disclosed in Note No. 1.4 and 1.11 are not in accordance with accrual method of accounting prescribed under the Act, Accounting Standard AS-I on "Disclosure of Accounting Policies" and AS-6 (Revised) on "Net Profit or Loss for the period, prior period items and changes in Accounting Policies" issued by ICAI. Amount and impact on accounts unascertained by the Company.
(vi) Accounting policy of the company with respect to accounting of prior period items and prepaid / accrued expenses upto Rs.10,000/- for Individual items(refer Accounting Policy disclosed in Note No. 1.8 in the year of receipt / payment is not in accordance with accrual method of accounting prescribed under the Act and Accounting Standards AS-1 and AS-5 (Revised) Issued by the ICAI. Amount and impact on accounts is unascertained by the Company.
(vii) The internal control system and accounting procedures are in-adequate and not implemented / enforced resulting in lack of regular, complete and correct flow of information, especially in the following areas:
l Transactions relating to Traffic Revenue (except charter revenue);
l Expenditure on Service Charges;
l Expenditure relating to interrupted trips;
l Expenditure on SOD Tickets;
l Retrieval of catering dry stores; ATR / CRJ Aircraft Inventories;
l Delay in receipt and accounting of credits due from M/s ATR in terms of agreements and consequential delay in adjustments of withholding tax; Employee leave record and encashment of leave;
l Aircraft lease, Handling & Maintenance Charges
(viii) The company has not provided liability for leave encashment to the employees for year-end leave balance as required by AS-15 (revised) issued by the ICAI (Refer Accounting Policy disclosed in Note No 1.6). Amount and impact on accounts unascertained by the Company.
(ix) Non-accounting of advance passenger receipts, revenue from no show pax and income from cancellation fee, Income from refund administration fees and commission earned on PSF. Amount and impact on accounts unascertained by the Company.
(x) Non-confirmation of balances in respect of Other Long Term Liabilities, Trade Payables, Other Current Liabilities, Long Term. Loans & Advances, Other Noncurrent Assets, Trade Receivables, Short Term Loans & Advances and Other Current Assets. We are unable to comment on the impact of adjustments arising out of non-confirmation of such balances on the financial statements.
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(xi) The company has shown contingent liability amounting to Rs. 37,867.24 lacs in respect of which no provision has been made as these demands are said to be disputed by the company in appeals (refer Note No. 25 (I)), In view of pending appeals and legal opinion obtained by the company, we are unable to comment upon the liability of the company and its impact on accounts currently is not ascertainable. On the basis of Information available there is liability of tax, interest & penalty on account of TDS Rs.75.88 lacs in comparison with previous year which amounted to Rs 341.46 lacs as the same has been settled during the year.
(xii) Debtors include Rs. 2940.35 lacs recoverable from M/s Gati Limited outstanding since Feb'2009 for aircrafts operated by the Company. Air India Limited had invoked their bank guarantee and recovered Rs. 3000 Lacs which was transferred to the Company and the same has been kept by the Company in a separate account of "Security Deposit - Gati" under 'Other Long Term Liabilities'. The matter is stated to be in dispute between Air India Limited and M/s Gati Ltd. wherein the Arbitral Tribunal has given award of Rs. 2672.95 lacs (including interest etc.) against Air India Limited. An appeal has been filed by Air India Limited before the Hon'ble Delhi High Court against the arbitral award which is pending. Accordingly, we are unable to express our opinion on the impact on the company's accounts for non-recoverability of outstanding dues or amount to be refunded for guarantee invoked or payment of awarded amount.
(xiii) Transfer Pricing Documentation and Accountant's Report for 'Specified Domestic Transactions' entered into by the Company with persons referred to in Section 40A(2)(b) of the Income Tax Act, l961 for the year ended 31.03.2015 as required under Section 92 to 92E of the income Tax Act, 1961 has not been obtained by the company. Hence, we are unable to comment whether the specified domestic transactions were undertaken at Arm's Length Price and also on impact of transfer pricing adjustments, if any, on the financial statements for the year.
(xiv) Company is not accounting for TDS on expenses accounted for on provisional basis. The same is accounted for at the time of providing of actual expenses. The tax and interest liability on the same have not been accounted for in the books.
(xv) The company has accounted for interest amounting to Rs. 10,347.11 lacs being interest payable to Air India Limited. The company has failed to provide any agreement, and justification for providing the said interest. The said accounting of interest is without proper Board/members approval.
We are unable to comment on the impact on the financial statements referred to in this report for paras stated in 'Basis for Qualified Opinion' herein above for the reasons given in each paragraph.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matters described in our qualification on violation of Companies Act for Misrepresentation by the Company, Directors of Audit Committee and the Board of Directors and for non-compliance of the Companies Act, 2013 in regard to borrowings/loan raised by the Company as stated above and in the 'Basis for Qualified Opinion' paragraphs, the aforesaid financial statements read together with the significant accounting policies and notes thereon 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:
sta) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March'2015;
b) in the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date,
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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 term of section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraph 3 and 4 of the order.
As required by Section 143 (3) of the Act we report that :-
a) We have sought and obtained generally 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 except as stated in 'Basis for qualified opinion' have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.
d) 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 (Accounts) Rules, 2014 except as stated otherwise in above paras.
e) As informed by the Company, Section 164(2) of the Companies Act, 2013 is not applicable to the Company.
f) 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 has disclosed the impact, if any, of pending litigations as at March 31, 2015 on its financial position as per Note 25 & Note 36 in its financial statement.
ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii) There has been no cause for transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company since it has not declared any Dividend for more than last seven years.
For Chandra Gupta & AssociatesChartered Accountants
(Firm Regn. No:-000259N)
Sd/-(SC Gupta)
PartnerM. No. 013465
Place : New DelhiDated : 07 June 2016
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Annexure to the Auditors' Report
(Referred to in our report of even date to the members of Airline Allied Services Limited on the accounts of st
the company for the year ended 31 March, 2015).
I) In respect of its fixed assets:
(a) The records maintained by the Company in respect of its fixed assets are not considered to be proper in so far as these do not give full particulars of quantitative details, assets identification numbers and situation of fixed assets.
(b) According to the information and explanations given to us, physical verification of fixed assets has not been conducted on biennial basis as required by the accounting policy No. 1.2. However, we are informed that the physical verification of fixed assets has been conducted during financial year 2015-16 and discrepancies noticed are under reconciliation and shall be accounted for in the financial year 2015-16.
ii) In respect of inventories:
(a) According to information and explanations given to us, physical verification of inventories has not been conducted by the Company during the year. Accordingly, we are of the opinion that the frequency of verification is not reasonable.
(b) In view of sub-para (a) above, we are unable to comment on the reasonableness and adequacy of procedures of verification followed by the management in relation to the size of the company and the nature of its business. As reported, valuations are taken at book value.
(c) As explained to us, inventories for ATR/CRJ aircrafts are procured by Air India Ltd. and records relating to receipts, issues and closing stock are maintained by Air India Ltd. Further accounting entries by the company are made for receipts on the basis of advice from Air India Ltd. which is delayed in almost all cases and accounting of entries for issues is done at the year-end only. Accordingly, we are unable to comment whether the company has maintained proper records of inventory.
iii) According to the information and explanations given to us, the company has not granted loans to the parties covered in the register maintained under Section 189 of the Companies Act, 2013 hence clause 3 (a) & (b) are not applicable to the company.
iv) In our opinion and according to the information and explanations given to us, there are inadequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets.
v) According to the information and explanations given to us, the company has not accepted any deposits from the public. Hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other provisions of the Companies Act, 2013 and the rules framed there under are not applicable.
vi) We are informed that since no manufacturing activities were carried out, maintenance of cost records were not required by the company prescribed by the Central Government under clause (d) of sub
stsection (1) of section 148 of the Companies Act, 2013 as modified upto 31 March, 2015, since provisions of the section are not applicable to the company.
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vii) In respect of Statutory dues:
(a) According to the information and explanations given to us and according to the books and records produced before us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.
The company has generally made delay in depositing the Service Tax.
(b) According to the information and explanations given to us and as per our verification of the records of the company, there are no disputed statutory dues against the company in income tax/ wealth tax/ service tax/ custom duty / excise duty / Cess Department except as stated in Schedule of “Contingent Liabilities”.
(c) The company does not have any amount to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under.
viii) The company has accumulated losses at the year end and its net worth is negative. The company has incurred cash losses during the year under report and also in the immediately preceding financial year. According to the records of the company and on the basis of information and explanations given to us, there is no amount due to financial institutions or banks or debenture holders,
ix) According to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank. There are no debenture holders.
x) According to the information and explanations given to us and as per the verification of the records of the company, the company has not given any guarantee for loans taken by others from bank or Financial Institutions.
xi) According to the records of the company and on the basis of information and explanations given to us, the Company has not obtained any term loans during the year. Accordingly, the provisions of this clause are not applicable to the company.
xii) According to the information and explanations given to us and as per our verification of the records of the company, no fraud either on or by the company has been noticed or reported during the year.
For Chandra Gupta & AssociatesChartered Accountants
(Firm Regn. No:-000259N)
Sd/-(SC Gupta)
PartnerM. No. 013465
Place : New DelhiDated : 07 June 2016
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REPLIES TO INDEPENDENT AUDITOR'S REPORT
It is submitted that after auditing the Accounts for 2013-14, a letter was given by the Statutory Auditors on 30.12.2014 (Annexure -I) wherein the Auditor has stated that “We have completed the routine audit of the Accounts of AASL for the F.Y. 2013-14”. The Balance Sheet, Profit & Loss Account and Notes on Accounts etc. may be approved and adopted to enable us to submit our Statutory Audit Report thereon.” This is a clear indication that the Auditors had completed the routine audit of the Accounts of AASL as on 30.12.2014. Following this letter, the first meeting of the Audit Committee to consider the Accounts was held on 2.1.2015.
In the said meeting, the observations of the Statutory Auditors were also discussed and the management was advised to rectify certain deficiencies pointed out by the Auditors. The next meeting was held on 26.02.2015 in which inadvertently presuming the Audit Observations as a draft Audit Report got discussed and the same was also adopted by the Audit Committee as well as by the Board of Directors. Following the meeting of Statutory Auditor with Chairman, as a corrective measure the company applied for regularization to Company Law Board vide letter dated 30.03.2016. Thus the audit observations made by the Statutory Auditors were taken care of by the company as the same has already been taken up wi th Company Law Board for regularization. Thus, it can be stated that there is no malafide intention and there is no mis-representation or violation of the provisions of the Companies Act. However, if there is any misrepresentation or violation of the applicable provisions of the Companies Act 2013, the same has been applied for condonation to the Company Law Board. Corrective measures will be taken after getting the reply from Company Law Board.
1. For Accounts relating to financial year 2013-14, in the first meeting of Audit Committee of
ndthe Board held on 2 Jan., 2015 – as per minutes, “The proposed Audit Report of the Statutory Auditors was also circulated. The committee discussed the comments of the auditors given in their Draft Audit Report”. We had not issued any Draft or Proposed Audit Report and the minutes of the Audit
ndCommittee are misrepresenting since on 2 Jan., 2015, the alleged Draft / Proposed Audit Report was not-est. This mispresentation by the Audit Committee is further confirmed by
ndthe minutes of the 2 meeting of the Audit
thCommittee held on 26 Feb., 2015.
nd As per the minutes of the 2 Audit Committee,
the annual accounts of the Company were recommended to be placed before the Board.
As per the minutes of the meeting of the Board thf Directors dated 26 Feb., 2015, the non-est
Draft Audit Report was considered by the Board and it approved and adopted the unaudited final accounts of the Company for the financial year 2013-14 which were forwarded to us for our Statutory Audit Report.
The action / decision of the Audit Committee of the Company as well as of the Board of Directors of the Company is misrepresent-ation since the alleged Draft / Proposed Audit Report was non-est. We had issued the
thindependent Auditors Report on the 16 March, 2015 and no report whatsoever was
thsubmitted by us before 16 March' 2015. The Company has furnished 'photocopy of the Independent Auditors Report which is unsigned and undated by us without any mention of its being Draft or Proposed Audit Report.
Sl.No. Audit Observation Management Comments
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Sl.No. Audit Observation Management Comments
The company and the Directors who attended the first 2 Audit Committee Meetings and the
thDirectors who attended the 136 Meetings of th
the Board of Directors held on 26 Feb., 2015 have committed violation of the applicable provisions of the Companies Act, 2013 for misrepresentation. No liability has been provided to the final accounts of the Company for the financial year 2014-15 in respect of penalty to the Company and the Directors in default.
2. The Board of Directors of the Company is its th
meeting held on 26 Feb., 2015 approved and adopted the Directors Report on the accounts of the Company for the financial year 20113-14, whereas Auditors have issued the
thIndependent Auditors Report on the 16 March, 2015. The Company and the Directors have thus violated the provisions of the Companies Act, 2013 by misrepresenting the fact that it had approved and adopted the Directors Report before receipt of the Independent Auditors Report. No liability in respect of penalties to the Company and Directors in default have been provided for the final accounts of the Company for the financial year 2014-15.
3. Air India Ltd. (AIL) has been providing funds to the Company and was not charging any interest on its credit balance with the
stCompany till 31 March, 2013. For the financial year 2013-14, it has charged interest @ 10.68% on its average credit balances. Since the Company had carry forwarded losses which had resulted into negative net worth, the company was required to comply with the provisions of the Companies Act, 2013 and Special Resolution was required to be approved by the members of the company before raising such loans. The company has thus violated provisions of the Companies Act, 2013. No liability in respect of penalties for such default has been provided which has been continued during the financial year 2014-15 as well.
As already stated in reply to the para 1 above, it is reiterated that since it was an inadvertent error and there was no malafide intent ion or mis-representation as such there is no violation of the provisions of the Companies Act 2013. However, if Auditors feels so, it is stated that the company has already applied to the Company Law Board for the condonation for the inadvertent error and as such there is no liability in respect of penalties for violation of the Companies Act 2013. If the Company Law Board opines otherwise, then necessary accounting entries will be passed in the year 2015-16 in respect of penalties and charges as suggested by the Statutory Auditors.
Air India has been providing funds to AASL to meet its working capital requirements since the sale proceeds from the tickets sold on AASL are received by Air India.
Since Air India is also borrowing its Working Capital and paying interest at an average rate of 10.86% per annum, it was decided by AIL to debit AASL Current Account with an applicable amount of interest
The necessary Board Resolution as well as shareholders approval has been taken in the
th meeting held on 28 December'2015 and the requisite papers has also been filed with the Registrar of Companies. The contingent liability disclosure on account of delayed filing of papers to ROC, as pointed by the auditors will be reflected in 2015-16 annual accounts.
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MANAGEMENT'S REPLIES TO THE INDEPENDENT AUDITOR'S REPORT FOR THE FINANCIAL YEAR 2014-15
The Company is a wholly owned subsidiary of Air India Ltd (AIL). The parent Company, AIL has been supporting the operations of Alliance Air to full extent in terms of infrastructure, manpower and funds since its operationalisation.
The Turn Round Plan (TAP) approved by the Govt. of India which entails both operational & financial turnaround, covers AIL & its subsidiaries including AASL covering 10 years period from 2011 to 2020.
According to the TAP, the Govt. of India has already approved infusion of additional equity over the years and financial restructuring of AIL in improving its net worth/liquidity, which would also have impact on continued financial support to the subsidiaries including AASL. In the year 2015-16 Rs. 400 Crores due to Air India Ltd. has been converted into equity capital.
In view of the foregoing & the continued support of the GOI to AIL and assurance for operational / financial support from the parent company, accounts are being prepared on going concern basis.
The company has taken major expansion plans and Budgets for the last two years have been raised on the planned induction of the new aircraft. These budgets have been drawn keeping in view the growth in the airline industry in the country and thrust being given by the Government of India on the regional connectivity. Thus, the management is keen to keep the company running and thus drawn the accounts on going concern.
In terms of the MOU between Air India and AASL, Air India provides sales, marketing, booking facilities and other support services for the AASL operations.
(i) The financial statements of the Company under report are drawn up on a 'Going Concern Basis'. The company was requested to requested to furnish Revised Financial Viability Statement to ascertain if the company would turn around in near future which it was directed by the Chairman of the company to furnish. The company has
thinformed vide Board Meeting dated 11 April 2016, the Revenue and Capital Budget Estimates for the year 2016-17. Though the Budget Estimates for the year 2014-15 and 2015-16 are much higher than the actual (Provisional) for the financial year 2014-15 and Revised Estimates for 2015-16. The projected Budget Estimates for 2016-17 are few times of the Revised/Budget Estimates of 2015-16. However, the company has projected a net profit of Rs.6.57 crores as per Budget Estimates of 2016-17 against loss of Rs.172.52 crores as per the Revised Estimates for the financial year 2015-16. The assumptions made for the Budget Estimates of 2016-17 though not satisfactory yet the contention is accepted since Air India Ltd., the holding company of the AASL has assured its financial support to the company.
(ii) Statement of Profit and Loss includes Traffic Revenue of Rs. 17993.18 lacs (other than grant from NEC Shilong and Agati) accounted for on the basis of ledger account of Air India Limited and expenditure on Service charges of Rs. 130.24 lacs and Other Operating and
Sl.No. Audit Observation Management Comments
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Sl.No. Audit Observation Management Comments
Administration expenses of Rs. 11106.44 lacs (which includes Rs.310.85 lacs on account of delayed payments to o i l companies) accounted for only on the basis of credit and debit notes raised by Air India Limited. Although the company is annually providing liability in respect of delayed payments to Oil companies on the basis of advices given by Air India Ltd., however, the IOCL has not accounted for the cumulative credit of Rs.256962436.00 as per their reconciliation statement with the company. Similarly, HPCL has not accounted for its credit of Rs.28888719.00 as per their provisional reconciliation statement. BPCL has provided only Rs.4018117.00 against company's gross provision of Rs.35890447.70 as per their reconciliation statement. In absence of basic records/ vouchers/supporting documents and relevant details, the revenue and expenditure stated above remained unverified to that extent.
(iii) System of Inventory Accounting followed by the company is not proper / complete. In this respect our observations are as below -
(a) In respect of ATR / CRJ aircraft inventories, procurement is made by Air India Limited and later on transferred to the company without
Further, as explained in detail during audit, the computerized revenue accounting system introduced by AIL for its and AASL flights, the revenue for passengers flown, excess baggage and cargo carried on AASL flights are segregated flight-wise for AASL flights based on flight coupons, EBTs & AWBs. The revenue earnings for passenger revenue, excess baggage & freight are therefore segregated and credited by AIL to AASL on the basis of flight wise monthly revenue reports generated on said elaborate computerized revenue accounting system.
Further, revenue earnings of AASL flights accounted as per Para 1.4 of Note 1 (Accounting Policy), are supported by monthly revenue reports. As per terms of MoU between AIL & AASL, AASL flights are captured on the said elaborate common revenue accounting system with segregated detailed reports for AASL flights, thus avoiding parallel system.
The Air India makes payment to oil companies on behalf of AASL and advice AASL on account of amount payable for compensation for delayed payments. These entries are duly accounted by AASL and Air India in their respective accounts. Duly signed reconciliation statement with Air India is available. AI has been requested to advice the Oil companies accordingly to pass necessary entries for Compensation on delay charges in their books. AASL has been also following up directly with the oil companies to pass these entries in AASL account.
Air India provides administrative support in procurement & stocking of the aircraft inventory in terms of MoU. However, the payments to the vendors are mostly made by AASL itself, hence, no
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40
Sl.No. Audit Observation Management Comments
any invoice and without charging of applicable sales tax (VAT) - amount and i ts impact on accounts is unascertainable. Moreover, sufficient control does not exist to ensure that all inventory transactions are authorized, processed and accounted completely.
(b) Custom Duty and Freight on aircraft spare parts which form part of aircraft inventories, comprise of freight, duties, incidentals etc. on aircraft inventories owned by the company as well as those taken on lease from the manufacturers and also include freight, incidentals etc. on aircraft components and spares exported for repairs. In the absence of its item wise segregation and loading, the balance of custom duty and freight on aircraft spares amounting to Rs. 558.99 lacs lying at the end of the year under Current Assets and Rs. 17.65 lacs charged to material consumed during the year remained unverified and hence correctness of these amounts and their impact on financials could not be commented upon.
(c) The company is not maintaining any record of Inventories at its stores in Delhi, Hyderabad and Kolkata and the financial figures are incorporated in its books at the year end on the basis of abstract received from Air India Limited showing the values of different categories of inventories. In absence of details, correctness of Inventory could not be verified and its impact on accounts could not be commented upon.
sale is involved. Suitable disclosure made in Notes No. 27 (i)
Monthly computerized statements of inventory showing opening stock, closing stock and consumptions i.r.o. AASL fleet are received from AIL, as reflected in RAMCO system, which are used for accounting of inventory and consumption.
AIL systems have elaborate and adequate control and internal check procedures for procurement, issue, stocking, segregation etc. for all inventory which is subject to physical checks by internal audit and stock verification & such controls are applied on AASL inventory also.
Custom Duty, Freight and incidentals have been allocated on pro-rata basis on year end values of closing stock of aircraft spares, rotables and on their consumption. FDI cannot be segregated item wise as Freight and incidental expenses are incurred on a group of items and not item wise. Therefore, these have to be allocated on pro-rata basis. The same policy is also being followed in the Holding company, AIL.
Suitable disclosures have been made in Notes No. 27 (iii) and reference may also be made to reply to para (a) above.
Since, AASL inventory is procured and managed by AIL, suitable records are maintained for AASL inventory at all the inventory locations
Further, it is informed that their management would put in place a perpetual inventory system by which the actual inventory is physically verified and compared with the records and inventory practices will be upgraded by benchmarking the current practices to the best practices prevailing in the industry.
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41
Sl.No. Audit Observation Management Comments
(d) The consumption of inventory is booked at the year end on the basis of balance arrived at from opening stock plus purchases made during the year less closing stock (advised by Air India Limited) at the end of the year instead of accounting on the basis of actual consumption and disclosing the shortages / excesses, if any, separa-tely. Thus it is not in accordance with the accepted inventory accounting practices and AS-2 (revised) on valuation norms issued by the ICAI. Hence, the consumption of inventory amounting to Rs.795.12 lacs could not be verified and impact on accounts for variance, if any, cannot be com- mented.
(e) Non-compl iance of Account ing S t a n d a r d A S - 2 ( R e v i s e d ) o n “Valuation of Inventories”-
i. Inventories have been valued without complete identification and allocation of freight, duties, incidentals etc. with respect to individual items (also refer sub-para (b) above).
ii. Further, inventories have been valued at weighted average cost as against lower of cost and net realizable value.
Impact of the above on the accounts remained unascertained.
(iv) The accounts with the Airport Authority of India Ltd. and HPCL are un-confirmed and un-reconciled which may impact elements of expenditure / income as well. In absence of confirmation and reconciliation as on 31 March 2015, we are unable to comment on their impact thereon.
However, the details of monthly closing inventory which have been received from AIL are available in AASL.
Suitable disclosure made in Notes No. 27 (i) and reference may also be made to reply to para (a) above.
The consumption of inventory is booked on monthly basis, based on RAMCO generated monthly inventory reports received from AIL. Suitable disclosure has been made in Notes No. 27 (I).
As per the policy of the company which is also being followed in AIL, inventories are valued at weighted average cost, as disclosed in the Notes No. 1.9.
Suitable disclosure has also been made in Notes No. 27 (iii)
Reconciliation is an ongoing process with regular parties like Oil Companies and AAI.
The payments to AAI and HPCL are being made by our Holding company i.e. AIL, with whom the
streconciliation is completed upto 31 March 2015. Although concerted efforts are being made to
AASL
42
Sl.No. Audit Observation Management Comments
The balances with IOCL, BPCL and other oil supplying companies have been confirmed but the reconciliation statements furnished by them are not proper, which may, on proper reconciliation, include elements of expendi-ture/income. We are unable to comment on their impact on the accounts.
(v) Accounting of certain transactions on settlement basis (Refer Accounting Policy disclosed in Note No. 1.4 and 1.11 are not in accordance wi th accrua l method of accounting prescribed under the Act, Accounting Standard AS-1 on “Disclosure of Accounting Policies” and AS-6 (Revised) on “Net Profit or Loss for the period, prior period items and changes in Accounting Policies” issued by ICAI. Amount and impact on accounts unascertained by the Company.
(vi) Accounting policy of the company with respect to accounting of prior period items and prepaid / accrued expenses upto Rs. 10,000/- for individual items (refer Accounting Policy disclosed in Note No. 1.8 in the year of receipt / payment is not in accordance with accrual method of accounting prescribed under the Act and Accounting Standards AS-1 and AS-5 (Revised) issued by the ICAI. Amount and impact on accounts is unascertained by the Company.
(vii) The internal control system and accounting procedures are in-adequate and not implemented / enforced resulting in lack of regular, complete and correct flow of information, especially in the following areas :
reconcile these accounts with AAI and HPCL , as early as possible.
Reconciliation with all Oil companies has been st
completed upto 31 March 2015 except for HPCL. Reconciliation statements prepared with oil companies contain open items for which follow up has been made with Oil Companies to rectify their accounts
Further, Suitable disclosures have been also been made in Notes No. 32.
This policy is being consistently followed over the years in AASL. It may be mentioned here that same policy is also being followed in our Holding company.
The Prior period and pre-paid expenses have been accounted for as per Note No 1.8 & 1.11 of its Accounting policy which has consistently been followed in the company over the years.
The holding company, Air India provides flight handling, sales, marketing, booking and other services to the Company in terms of MoU signed between the two. The holding company applies its own control system & accounting procedures to AASL transactions also. The comments below, which are mainly arising out of transactions related to Air India, for only expenses booked by AASL for Rs.4.44 crores (debited by AIL) for which supporting/ vouchers are maintained at AIL regions and not with AASL.
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43
Sl.No. Audit Observation Management Comments
Ø Transactions relating to Traffic Revenue (except charter revenue);
Ø Expenditure on Service Charges;
Ø Expenditure relating to interrupted trips;
Ø Expenditure on SOD Tickets;
Ø Retrieval of catering dry stores;
Ø ATR / CRJ Aircraft Inventories;
Ø Delay in receipt and accounting of credits due from M/s ATR in terms of agreements and consequential delay in adjustments of withholding tax;
Ø Employee leave record and encashment of leave;
Ø Aircraft Lease, Handling and Maintenance Charges.
Revenue is accounted in terms of declared para 1.4 of Notes No. 1, which states that passenger revenue is accounted for on the basis of flown coupons for passengers travelled, reflecting realized revenue. Revenue for Excess baggage, Mail and Cargo is accounted for on the basis of revenue credited by Air India Ltd. at rates applicable thereat.
Service Charges (Commission to agents on sales) are reimbursed to Air India, as per the terms of MoU, for which relevant records are maintained.
The relevant records for interrupted trip expenses for the FY 2014-15 are available.
The SOD travel is as per SOD order authorised by competent authority. The expenditure is booked as per the debits received from Air India.
The accounting for retrieval of dry stores is done as per the advice from the respective regions and appropriate records are being maintained in this regard.
The inventory is specific to aircraft type. The procurement on behalf of AASL is made by Air India for which the accounting is made by AASL as already disclosed in Notes No 27(i). Also refer reply to para iii (a) above.
Follow up with ATR is made on regular basis for issuance of credit notes.
The records for employee leave and i ts encashment are maintained.
All Lease, Handling and Maintenance charges records are being maintained properly.
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Sl.No. Audit Observation Management Comments
(viii) The company has not provided liability for leave encashment to the employees for year-end leave balance as required by AS-15 (revised) issued by the ICAI (Refer Account-ing Policy disclosed in Note No. 1.6). Amount and impact on accounts unascertained by the Company.
(ix) Non-accounting of advance passenger receipts, revenue from no show pax and income from cancellation fee, Income from refund administration fees and commission earned on PSF. Amount and impact on accounts unascertained by the Company.
(x) Non-confirmation of balances in respect of Other Long Term Liabilities, Trade Payables, Other Current Liabilities, Long Term Loans & Advances, Other Non-current Assets, Trade Receivables, Short Term Loans & Advances and Other Current Assets. We are unable to comment on the impact of adjustments arising out of non-confirmation of such balances on the financial statements.
(xi) The company has shown contingent liability amounting to Rs.37867.24 lacs in respect of which no provision has been made as these demands are said to be disputed by the company in appeals (refer Note No. 25(I)). In view of pending appeals and legal opinion obtained by the company, we are unable to comment upon the liability of the company and its impact on accounts currently is not ascertainable. On the basis of information available there is liability of tax, interest & penalty on account of TDS amounting to Rs. 75.88 Lacs in comparison with previous year which amounted to Rs.341.46 lacs a the same has been settled during the year.
AASL employees are entitled to PL encashment up to a maximum of 15 days in a financial year subject to the rules laid down in this regard. It is further subject to prior approval of the Competent Authority and cannot be claimed as a right. The employees are under FTEA and any unused balance at the time of cessation of service before the age of 60 years (including resignation) in this regard lapses automatically.
Passenger revenue is accounted on the basis of flown passengers in terms of declared Accounting Policy in para 1.4 of Notes No 1. Accordingly, AASL is getting the revenue for flown passengers only from AIL. Since, the sales are accounted for by AIL, provision is not required for advance passenger receipt.
The reconciliation is a continuous process and the reconciliation with our Holding company, AIL is
stcompleted upto 31 March 2015. Reconciliation with Oil companies except HPCL and DIAL has
stbeen completed upto 31 March 2015.
Disclosed as Contingent liability in Notes No 25 (C) & 26.
AASL
45
Sl.No. Audit Observation Management Comments
(xii) Debtors include Rs. 2940.35 lacs recoverable from M/s Gati Limited outstanding since Feb'2009 for aircrafts operated by the Company. Air India Limited had invoked their bank guarantee and recovered Rs. 3000 lacs which was transferred to the Company and the same has been kept by the Company in a separate account of “Security Deposit - Gati” under 'Other Long Term Liabilities'. The matter is stated to be in dispute between Air India Limited and M/s Gati Ltd. wherein the Arbitral Tribunal has given award of Rs. 2672.95 Lacs (including interest etc.) against Air India Limited. An appeal has been filed by Air India Limited before the Honb'le Delhi High Court against the arbitral award which is pending. Accordingly, we are unable to express our opinion on the impact on the company's accounts for non-recoverability of outstanding dues or amount to be refunded for guarantee invoked or payment of awarded amount.
(xiii) Transfer Pr ic ing Documentat ion and Accountant's Report for 'Specified Domestic Transactions' entered into by the Company with persons referred to in Section 40A(2)(b) of the Income Tax Act'1961 for the year ended 31.03.2015 as required under Section 92 to 92E of the Income Tax Act, 1961 has not been obtained by the Company. Hence, we are unable to comment whether the specified domestic transactions were undertaken at Arm's Length Price and also on impact of transfer pricing adjustments, if any, on the financial statements for the year.
Appropriately disclosed in Note No. 36. This agreement was between Air India & GATI and the matter is subjudice.
The Transfer Pricing Documentation and accountant's report for specified domestic transactions entered into by the company with persons referred to in section 40A (2) (b) of the Income Tax Act 1961 for the FY 2013-14 has been obtained and a copy of the same has also been provided to Auditors during the course of audit. This certificate for the FY 2014-15 will be obtained after the completion of the Statutory audit.
It may also be mentioned that the Company is a wholly owned subsidiary of Air India Ltd. In terms of the MoU between two companies, AIL provides support towards collection & management of revenues for AASL flights through a common reservation system, providing funds to meet operational expenses, handling on behalf of the Company and claiming these amounts through debits / credits. The expenses incurred exclusively for one company is re-imbursed / advised through debit / credit advices exchanged between the two companies from time to time. The charges are as per the MoU agreed upon as followed in the previous years. The year-end amount shows a net result and represents a
AASL
46
Sl.No. Audit Observation Management Comments
running account. As such, the transactions being largely based on re-imbursements & transferred through debit / credit advices, it is, therefore, felt representing fair & reasonable charges / amount in respect of such transactions as being consistently followed. The management is thus of the opinion that the specified regulation shall not have any significant impact particularly on the amount of tax provision.
TDS has been booked when confirmed liability is established i.e when the amount is credited to party account, and hence the interest liability on the TDS is established in the same way.
As per Para No. 75 of the Notes on the Accounts of Air India Ltd. for the Financial Year 2014-15, duly approved by its Board, it was mentioned that Air India Ltd. had been forced to borrow higher amounts on account of dues from Subsidiary companies resulting in additional interest costs, hence, it was decided that from Financial Year 2013-14, the interest paid by Air India Ltd. on its Working Capital Loans will be apportioned to the Subsidiary Companies for appropriation to the outstanding recoverable balances of the Subsidiary companies as on 31.03.2015. Accordingly Alliance Air has been debited with an a m o u n t o f R s . 1 0 3 4 7 . 11 l a c s t o w a r d s reimbursements / sharing of interest cost on its outstanding dues.
(xiv) Company is not accounting for TDS on expenses accounted for on provisional basis. The same is accounted for at the time of providing of actual expenses. The tax and interest liability on the same have not been accounted for in the books.
(xv) The company has accounted for interest amounting to Rs 10347.11 lacs being interest payable to Air India Limited. The company has failed to provide any agreement, and justification for providing the said interest. The said accounting of interest is without proper Board/members approval.
We are unable to comment on the impact on the financial statements referred to in this report for paras stated in 'Basis for Qualified Opinion' herein above for the reasons give in each paragraph.
AASL
47
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER 'REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS' OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF
AIRLINE ALLIED SERVICES LIMITED ON THE FINANCIAL STATEMENTS FOR stTHE YEAR ENDING 31 MARCH, 2015)
Noted. Efforts are being made to complete the records.
The physical verification of assets has been conducted during the year 2014-15, and the report was submitted in 2015-16. The Management will take necessary action for correcting/adjusting any discrepancies noticed on the Physical verification report with the approval of the competent authority.
The aircraft inventory is procured, managed & controlled / warehoused by the parent company AIL
The exercise of physical verification of inventories is carried out on biennial period (2012-14) by independent firms of Chartered Accountants. Necessary accounting action of the discrepancy, if any, reported by AIL will be accounted for after obtaining necessary approvals.
Please refer reply to (a) above.
(I) In respect of its fixed assets :
(a) The records maintained by the company in respect of its fixed assets are not considered to be proper in so far as these do not give full particulars o f quan t i ta t i ve de ta i l s , asse t identification nos. and situation of fixed assets.
(b) According to the information and explanations given to us, physical verification of Fixed assets has not been conducted on biennial basis as required by Accounting policy no. 1.2. However, we are informed that the physical verification of Fixed Assets has been conducted during Financial Year 2015-16 and discrepancies noticed are under reconciliation and shall be accounted for in the financial year 2015-16.
(ii) In respect of Inventories :
(a) Accord ing to in fo rmat ion and explanations given to us, physical verification of inventories has not been conducted by the Company during the year. Accordingly, we are of the op in ion that the f requency of verification is not reasonable.
(b) In view of sub para (a) above, we are unable to comment on the reason-ableness and adequacy of procedures of ver ificat ion fol lowed by the Management in relation to the size of the company and the nature of its business. As reported, valuations are
Sl.No. Audit Observation Management Comments
AASL
48
Sl.No. Audit Observation Management Comments
taken at book value.
(c) As explained to us, inventories for ATR / CRJ Aircraft are procured by Air India Limited and records relating to receipts, issues and closing stock are maintained by Air India Limited. Further, accounting entries by the Company are made for receipts on the basis of advice from Air India Limited which is delayed in almost all cases and accounting of entries for issues is done at the year end only. Accordingly, we are unable to comment whether the company has maintained proper records of inventory.
(iii) According to the information and explanations given to us, the company has neither granted loans to the parties covered in the register maintained under section 189 of the Companies Act 2013 hence clause 3 (a) & (b) are not applicable to the company.
(iv) In our opinion and according to the information and explanations given to us, there are inadequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of fixed assets and inventory.
(v) According to the information and explanation give to us, the company has not accepted any deposits from the public. Hence, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other provisions of the Companies Act, 2013
The inventories mainly include Aircraft spares, rotables, consumables and tools of ATR and CRJ aircraft. The procurement is made by AIL on behalf of the company. Inventory of the company are maintained/ controlled by AIL in RAMCO system. The consumption and closing stock therefore is on the basis of records and details derived from the store records maintained/ controlled by Air India Ltd in RAMCO system. Since, inventory is maintained and controlled by AIL, action for discrepancies, if any, is taken after verification of records/monthly statements.
Also the Holding Company's management has assured that perpetual inventory system by which the actual inventory is physically verified and compared with the records and inventory practices will be upgraded by benchmarking the current practices, to the best practices prevailing in the industry.
Statement of Fact.
Noted. The company is committed to continuously strengthening its internal controls to make them commensurate with the size and nature of the company's business. For the FY 2015-16, scope of Internal Audit programme has already been enlarged suitably.
Statement of fact.
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49
Sl.No. Audit Observation Management Comments
and rules framed there under are not applicable.
(vi) We are informed that since no manufacturing activities were carried out, maintenance of cost records were not required by the company prescr ibed by the Centra l Government under clause (d) of sub section (1) of section 148 of the Companies Act, 2013
stas modified upto 31 March 2015, since provisions of the section are not applicable to the company.
(vii) In respect of Statutory dues
(a) according to the information and explanations given to us and according to the books and records produced before us, the company is generally regular in depositing wi th appropr iate author i t ies undisputed statutory dues includ-ing provident fund, employees state insurance, income tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it.
The company has generally made delay in depositing the Service Tax.
(b) Accordingly to the information and explanation given to us and as per our verification of the records of the company, there are no disputed statutory duty / excise duty / Cess Department except as stated in Schedule of “Contingent Liabilities.”
(c) The company does not have any amount to be transferred to investor education and protection fund in accordance w i th the re levant
Statement of fact.
Statement of fact.
Due to inevitable circumstances in some cases deposit of service tax has been delayed. However, the situation has improved during F.Y. 2015-16.
Statement of fact.
Statement of fact.
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50
Sl.No. Audit Observation Management Comments
provisions of the Companies Act 2013 and rules made thereunder;
(viii) The company has accumulated losses at the year end and its net worth is in negative. The company has incurred cash losses during the year under report and also in the immediately preceding financial year.
According to the records of the company and on the basis of information and explanations given to us, there is no amount due to financial institutions or banks or debenture holders.
(ix) According to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution or bank. There are no debenture holders.
(x) According to the information and explanations given to us and as per the verification of the records of the company, the company has not given any guarantee for loans taken by others from bank or Financial Institutions.
(xi) According to the records of the company and on the basis of information and explanation given to us, the Company has not obtained any term loans during the year. Accordingly, the provisions of this clause re not applicable to the company.
(xii) According to the information and explanations given to us and as per our verification of the records of the company, no fraud either on or by the company has been noticed or reported during the year.
The Company is a wholly owned subsidiary of Air India Ltd (AIL). The parent Company, AIL has been supporting the operations of the company.
The company has incurred losses as per the statement of Profit & Loss. The increase in excess of current liabilities over current assets includes increase of Rs. 20400.99 lacs on account of transactions with AIL. Therefore, it largely represents the support from the parent company. The balance represents the decrease in difference of other items of current liabilities over current assets.
Statement of fact.
Statement of fact.
Statement of fact.
Statement of fact.
Statement of fact.
AASL
51
BALANCE SHEET AS AT 31ST MARCH 2015 (Amount in Rupees)
Particulars Note No As at March 31, 2015 As at March 31, 2014
I. EQUITY AND LIABILITIES(1) Shareholder's Funds (a) Share Capital 2 22,500,000 22,500,000 (b) Reserves and Surplus 3 (12,643,369,185) (10,804,154,927) (c) Money received against share warrants - -(2) Share application money pending allotment - -(3) Non-Current Liabilities - - (a) Long-term borrowings - - (b) Deferred tax liabilities (Net) - - (c) Other Long term liabilities 4 322,548,326 322,548,326 (d) Long term provisions 5 39,547,741 35,633,110 (4) Current Liabilities - - (a) Short-term borrowings - - (b) Trade payables 6 3,047,883,121 2,603,375,930 (c) Other current liabilities 7 11,046,273,786 9,072,090,700 (d) Short-term provisions - - Total 1,835,383,789 1,251,993,139II. Assets (1) Non-current assets (a) Fixed assets (i) Tangible assets 8 3,699,542 3,887,520 (ii) Intangible assets - - (iii) Capital work-in-progress - - (iv) Intangible assets under development - - (b) Non-current investments - - (c) Deferred tax assets - - (d) Long term loans and advances 9 87,363,257 85,583,204 (e) Other non-current assets 10 11,310,875 11,369,830 (2) Current assets (a) Current investments - - (b) Inventories 11 81,373,458 1,861,646 (c) Trade receivables 12 1,165,821,012 950,842,525 (d) Cash and cash equivalents 13 296,905,811 54,528,795 (e) Short-term loans and advances 14 124,680,983 89,641,141 (f) Other current assets 15 64,228,851 54,278,478 Total 1,835,383,789 1,251,993,139
Significant Accounting Policies in Note no. 1 and notes refered to above form an integral part of these Financial Statements.
As per our report of even date attached
For and on behalf of For and on behalf of the Board Chandra Gupta & Associates Sd/- Sd/- Sd/- Chartered Accountants Ashwani Lohani Vinod Hejmadi C.S. SubbiahFRN No 00295N Chairman Director CEO Sd/- Sd/- Sd/-S. C. Gupta Gagan Batra Sunil DuaPartner Company Secretary E.D (Finance) Membership No. : 013465
Place: New Delhi Place: New DelhiDate: 07 June 2016 Date: 07 June 2016
AASL
5252
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2015(Amount in Rupees)
Particulars Note No As at March 31, 2015 As at March 31, 2014
Significant Accounting Policies in Note no. 1 and notes refered to above form an integral part of these Financial Statements.
As per our report of even date attachedFor and on behalf of For and on behalf of the Board Chandra Gupta & Associates Sd/- Sd/- Sd/- Chartered Accountants Ashwani Lohani Vinod Hejmadi C.S. SubbiahFRN No 00295N Chairman Director CEO Sd/- Sd/- Sd/-S. C. Gupta Gagan Batra Sunil DuaPartner Company Secretary E.D (Finance) Membership No. : 013465
Place: New Delhi Place: New DelhiDate: 07 June 2016 Date: 07 June 2016
I. Revenue from operations 16 2,266,292,372 2,416,895,538 II. Other Income 17 13,229,832 7,008,331
III. Total Revenue (I +II) 2,279,522,204 2,423,903,869 IV. Expenses:
Cost of materials consumed/Operational Expense 18 2,307,989,980 3,292,160,996 Employee benefit expense 19 377,530,564 471,238,244 Financial costs 20 1,083,435,192 765,136,606 Depreciation and amortization expense 2,146,476 1,019,907 Other expenses 21 297,242,904 368,435,755 Prior Period Expenses 22 95,824,639 55,554,284 Total Expenses 4,164,169,755 4,953,545,792
V. Profit before exceptional and extraordinary items and tax (III - IV) (1,884,647,551) (2,529,641,923)
VI. Exceptional Items 23 45,433,293 35,671,138
VII. Profit before extraordinary items and tax (V + VI) (1,839,214,258) (2,493,970,785)
VIII. Extraordinary Items - -
IX. Profit before tax (VII - VIII) (1,839,214,258) (2,493,970,785)
X. Tax expense:
(a) Current tax expense for current year - - (b) Current tax expense relating to prior years - - (c) Deferred tax Asset/ (Liability) - -
XI. Profit(Loss) from the period from continuing operations (1,839,214,258) (2,493,970,785)
XII. Profit/(Loss) for the period (1,839,214,258) (2,493,970,785)
XIII. Earning per equity share: 24
(1) Basic (8,174) (11,084) (2) Diluted (8,174) (11,084)
AASL
535353
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2015(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Previous year figures have been regrouped /rearranged whereever necessaryAs per our report of even date attachedFor and on behalf of For and on behalf of the Board Chandra Gupta & Associates Sd/- Sd/- Sd/- Chartered Accountants Ashwani Lohani Vinod Hejmadi C.S. SubbiahFRN No 00295N Chairman Director CEO Sd/- Sd/- Sd/-S. C. Gupta Gagan Batra Sunil DuaPartner Company Secretary E.D (Finance) Membership No. : 013465
Place: New Delhi Place: New DelhiDate: 07 June 2016 Date: 07 June 2016
a) Profit/(Loss) before tax for the year as per Profit & Loss A/C (1,839,214,258) (2,493,970,785)
b) Add:- Adjustment for :1 Depreciation and amortisation expenses 2,146,476 1,019,907 2 Provisions/Un-claimed Liabilities Written Back (45,433,293) (23,960,083)3 Fixed Assets Written Off - - 4 Interest Paid 1,083,435,192 765,136,606 5 Interest Earned 13,229,832 7,008,331 6 Prior Period Adjustments (Net) 95,824,639 55,554,284 7 Provision for obsolescence of spares 21,078,135 91,824,503 8 Excess Depreciation written Back (836,328)9 Provision for Doubtful debts & advances (Net) -
1,169,444,653 896,583,548
c) Operating Profit/(Loss) before Changes in working capital: (669,769,606) (1,597,387,237)
ADD: Adjustments for (increase) / decrease in operating assets: Inventories (100,589,947 (65,695,950) Trade receivables (214,978,487) (149,734,590) Short-term loans and advances (35,039,842) 29,877,651 Long-term loans and advances (1,780,053) (727,434) Other current assets (9,950,373) 13,263,573 Other non-current assets 58,955 3,151
ADD: Adjustments for increase / (decrease) in operating liabilities: Trade payables 489,940,484 (131,625,544) Other current liabilities 1,974,183,086 2,779,648,338 Other long-term liabilities - - Short-term provisions - - Long-term provisions 3,914,631 3,958,309
2,105,758,456 2,478,967,505 d) Cash generated from operations Prior Period Adjustments (Net) (95,824,639) (55,554,284)e) Net Cash from Operating Activities 1,340,164,211 826,025,983
CASH FLOW FROM INVESTING ACTIVITESa) Purchase of Fixed Assets (1,122,171) (186,090)b) Transfer of Fixed Asets to Air India Limited - - c) Interest Income (13,229,832) (14,352,003) (14,352,003) (7,008,331) (7,194,421) (7,194,421)
CASH FLOW FROM FINANCING ACTIVITESa) Interest Paid (1,083,435,192) (1,083,435,192) (1,083,435,192) (765,136,606) (765,136,606) (765,136,606)NET INCREASE IN CASH & CASH EQUIVALENTS (A+B+C) 242,377,016 53,694,957 CASH & CASH EQUIVALENTS AT BEGINNING OF THE YEAR 54,528,795 833,837 CASH & CASH EQUIVALENTS AT THE END OF THE YEAR (E + D) 296,905,811 54,528,795
AASL
54
stNotes forming part of the Financial Statements for the year ended on 31 March 2015
NOTE-1SIGNIFICANT ACCOUNTING POLICIES
1.1 Accounting Convention and Basis of accounting
These Financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the Standards of Accounting or any addendum thereto are prescribed by the Central Government in consultation and recommendation of the National Financial Reporting Authority, the Existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.Based on the nature of services, the Company has ascertained its normal operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
1.2 Fixed Assets
The company is having aircrafts on operating lease under Dry Lease arrangement.
Assets have been accounted for on the acquisition price basis. The assets transferred by Air India Ltd. has been capitalised on the charge debited.
Physical verification of the assets is done over a period of two years i.e. on biennial basis. The physical verification of assets was due in 2014-15. The verification has duly been carried out and the discrepancies observed in the course of the verification are adjusted in the year in which report is submitted.
1.3 Depreciation
a) Depreciation is provided on all assets on the straight line method ('SLM') over the useful life of the assets as prescribed in the Schedule II of the Companies Act, 2013, keeping the residual value of 5% of the original cost. Depreciation on the assets costing Rs.5,000/- and below, which were acquired prior to 1st April 2014 has been provided @ 100% in the year of acquisition itself.
b) The life of assets adopted are in accordance with the manner prescribed under schedule II of the Companies Act, 2013, except for the Ground Support Equipment (GSE). The life of these assets have been determined by qualified persons and approved by Board of Directors, keeping a residual value of 5% of the original cost.
c) The detail of life of assets is as under:
S.No. Type of Asset Life taken as per Schedule-II
1. Plant and Equipment 15 years
2. Furniture and Fixtures 10 years
3. Vehicles 8 years
4. Data Processing Equipment 3 years
5. Ground Support Equipment As per company policy*
6. Medical Equipment 15 years
*Depreciation on Ground Support Equipment (GSE) specific to leased CRJ & ATR aircraft is provided based on the completed aircraft lease months over the total aircraft lease months from the date of use with realisable value at end of lease taken as NIL.
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d) Assets of small value not exceeding Rs. 5000, in each case, are fully provided for in the year of purchase.
1.4 Revenue Recognition
Passenger revenue is accounted for on the basis of flown coupons report for passengers travelled, reflecting realized revenue. Revenue for Excess Baggage, Mail and Cargo is accounted for on the basis of revenue credited by Air India Ltd. at rates applicable thereat. Freighter and Charter revenue is accounted for on accrual basis as per the Freighter/Charter hours except for claims on parties which are accounted on settlement basis.
1.5 Provision for Doubtful Debts
Provision in respect to Trade Receivables pertaining to the Government, Government Departments and Public Sector Undertakings is provided for only when specifically known to be doubtful. All other Trade Receivables are provided for, if they are outstanding for either more than three years or specifically known to be doubtful.
1.6 Gratuity and Leave Encashment
Provision for gratuity is made on accrual/actuarial basis by the management for contractual employees on the basis of 15 days basic salary for each completed year of service or part thereof exceeding 6 months. Employees are entitled for encashment up to a maximum of 30 days privilege leave once in a financial year for Cockpit crew and maximum of 15 days for other employees
1.7 Training charges
Re-conversion and training charges are charged to the revenue in the year of incurrence of expenditure.
1.8 Prior Period Transaction
Transactions above Rs. 10,000/- for individual items related to the earlier period are accounted for in the year of transaction as per Accounting Standard 5 of ICAI.
1.9 Inventory
(a) Inventories are valued at weighted average cost except for ATF in aircraft as at the year-end.
(b) Expendables/consumables are charged off at the time of initial issue except those meant for repairs of repairable which are expensed when the work order is closed. At the year-end estimated cost of expendables/consumables required for restoration of repairable are provided for in respect of open work orders.
(c) Obsolescence provision for aircraft stores and spare parts:
i) Provision is made for the non-moving inventory exceeding a period of five years (net of realizable value of 5%) except for (ii) & (iii) and netted off from the value of inventory.
ii) Inventory of Aircraft Fleet which has been phased out, is shown at estimated realizable value unless the same can be used in other Aircraft.
iii) Obsolescence provision in respect of inventories including Rotables and Special Tools relating to aircraft on dry lease, is made on the basis of the completed lease period compared to the total lease period as at the year-end.
(d) Obsolescence provision for non-aircraft stores and spares is made for non-moving inventory exceeding a period of five years.
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1.10 Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any indication that an asset has been impaired. If any such indication exists, the provision for impairment is made in accordance with AS-28.
1.11 Accounting on Settlement Basis.
Settlement basis of accounting has been followed in the following cases: -
(a) For prepaid / accrued expenses up to Rs. 10,000/- for individual items.
(b) For arrears payable arising out of wage settlements for employees of Air India Ltd. on deputation and other deputationists.
(c) For interest and other claims on / from suppliers and other parties.
1.12 Foreign Currency Transactions :
Foreign currency Expenditure transactions are recorded at established monthly rates (based on published IATA rates).
Foreign currency monetary items other than those identified as long term at the year-end are converted at the year-end exchange rate circulated by Foreign Exchange Dealers Association of India (FEDAI), and the gains/losses arising out of fluctuations in exchange rates are recognized in the Statement of Profit and loss.
1.13 Accounting for Grants /Validity Gap Funding (VGF)
The Grants are accounted as Other Income on prorata basis over the agreed period of aircraft lease months. Viability Gap Funding (VGF) is accounted for difference between revenue and cost of operation (on the basis of the Block Hours operated), on accrual basis.
1.14 Provisions, Contingent Liabilities and Contingent Assets
(a) Provisions involving a substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources.
(b) Contingent liabilities in each case are disclosed in respect of possible obligations that arise from past events but their existence confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company.
(c) Contingent Assets are neither recognised nor disclosed in the financial statements.
1.15 Lease / Supplier credits
Lessor's / Suppliers Credits received which are not arising out of normal Lease and Maintenance Agreement are accounted as Income in the year of receipt.
1.16 Other Liabilities
Liabilities, which are more than three years old are written back under the head “ Exceptional Items” unless such liabilities are specifically known to be payable in the future.
1.17 Operating Lease
Leases where the lessor effectively retains all the risks and rewards of ownership of the leased assets are classified as operating lease and lease rental payable for the year is charged to Profit & Loss Account, Company is operating Aircraft under Dry Lease.
Contributions made to lessors on account of Maintenance Reserve for which, maintenance is expected to arise during the lease period is treated as Expense.
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NOTE “02” : SHARE CAPITAL (Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Authorised Share Capital5,00,000 Equity Shares of Rs.100/- each 50,000,000 50,000,000
50,000,000 50,000,000
Issued, Subscribed & Paid up Share Capital 2,25,000 Equity Shares of Rs.100/- each, fully paid-up 22,500,000 22,500,000
22,500,000 22,500,000
2 (a) Reconciliation of no. of shares
No. of equity shares at the beginning of year 225,000 225,000 Add No. of equity shares issued - - Less No. of equity shares redeemed - - No. of equity shares at the closing of the year 225,000 225,000
(Amount in Rupees)
Name of Shareholder As at March 31, 2015 As at March 31, 2014
Air India Limited, Holding Company and its nominees (on behalf of holding company) 225,000 225,000 No. of Share 225,000 225,000 Percentage of Holding 100% 100%
2 (b) Equity Shares
The company has only one class of equity shares having a par value of Rs. 100 per share. Each shareholder is eligible for one vote per share held. There is no restriction of payment of dividend. In the liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts proportionate of their shareholding.
2,25,000 Equity Shares (Previous Year 2,25,000 equity shares) are held by Air India Limited, the holding company and its nominees (on behalf of holding company)
2 (c) Equity Shares held by its Holding Company
2,25,000 Equity Shares (Previous Year 2,25,000 equity shares) are held by Air India Limited, the holding company and its nominees (on behalf of holding company)
Following are the Shareholders who hold more than 5% shares in share capital of company
Company has only one class of equity shares having a par value of Rs. 100/-. Each holder of equity shares is entitiled to one vote per share.
2 (d) Details of shareholder holding more than 5% of Equity Shares:
TOTAL
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NOTE “03” : RESERVE & SURPLUS (Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Surplus /(Deficit) in statement of profit & loss Opening balance (10,804,154,927) (8,310,184,142) Add:Profit / (Loss) for the year (1,839,214,258) (2,493,970,785)
Closing balance (12,643,369,185) (10,804,154,927)
(12,643,369,185) (10,804,154,927)
NOTE “04” : OTHER LOAN TERM LIABILITIES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Security Deposits 322,548,326 322,548,326 322,548,326 322,548,326
NOTE “05” : LONG TERM PROVISION(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Provision for Gratuity Liability 39,547,741 35,633,110
39,547,741 35,633,110
NOTE “06” : TRADE PAYABLES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Provision for Expenses - Fuel & Oil 827,552 172,788,945 Provision for Expenses - Landing & Parking 205,628,179 220,168,152 Provision for Expenses - Handling - - Provision for Expenses - Stores & Spares 60,056,961 38,349,914 Provision for Expenses - Others (Trade) 123,329,175 61,475,893 Vendor - India - Reconciliation Account 2,382,666,259 1,913,244,116 Vendor - Outside India- Reconciliation Acct 266,725,454 197,348,910 Supplier Suspense MRO - PBH 8,649,541 - 3,047,883,121 2,603,375,930
NOTE “07” : OTHER CURRENT LIABLITIES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Advance from Customers 91,553,558 77,585,885 Others (Net) 403,715,795 483,600,214 Air India Ltd. (Holding Company) Net 10,551,004,433 8,510,904,601
11,046,273,786 9,072,090,700
TOTAL
TOTAL
TOTAL
TOTAL
TOTAL
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NOTE “08” : FIXED ASSETS & DEPRECIATION SCHEDULE(Amount in Rupees)
Useful Gross Additions Sold/ Gross Salvage Depreci- Depreci- Accum. Excess Cumul- Net Block Net BlockParticulars of Assets Life as Block During Discarded Block Value ation upto ation Dep. Dep. of atives As on As on Per As on 2014-15 During As on 01.04.2014 For the on Previous As on 31.03.2015 31.03.2014 Sche- 31.03.2014 2014-15 31.03.2015 Year Assets Year wrt. 31.03.2015 dule-II 2014-15 Discarded Off
1 2 3 4 5 6 7 8 9 10 11 12 13
PLANT & EQUIPMENT 15 Years 5928123 651545 0 6579668 328983 3580350 1203012 0 -16155 4767207 1812460 2347773
FURNITURE & FIXTURES 10 years 5831216 17406 0 5848622 292431 5368388 268182 0 -207377 5429193 419428 462828
VEHICLE 8 Years 4533680 0 0 4533680 226684 4518361 0 0 -211365 4306997 226683 15319
DATA PROCESSING EQUIPMENT 3 Years 8863810 453220 0 9317030 465852 8336125 375088 0 -393595 8317618 999411 527685
GROUND SUPPORT (as per EQUIPMENT(ATR) policy) 15261819 0 0 15261819 0 14772252 295368 0 0 15067620 194199 489567
MEDICAL EQUIPMENT15 Years 271500 0 0 271500 13575 227152 4826 0 -7837 224141 47359 44348
F.A Pending Disposal - 0 0 0 0 0 0 0 0
TOTAL 40690148 1122171 0 41812319 1327525 36802628 2146476 0 -836329 38112777 3699542 3887519
1. The Motor vehicles include one car, original cost Rs.1,72,127/- and W.D.V Rs. NIL for which Registration is in the name of Indian Airlines.
2. Gross Block as on 31.03.2015 includes Rs. 11,22,171 which were purchased during the year and the depreciation on these assets has been calculated on the basis of days in accordance with their useful life.
3. Fixed Assets includes items procured by IA , accounted on the basis of debits.
NOTE “09” : LONG TERM LOANS & ADVANCES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Advance Payment of Income Tax and TDS (net of Provision for taxation) 46,759,369 46,759,369
Balances with Statutory / Govt AuthoritiesIncome Tax Deducted At Source-India 40,603,888 38,823,835
TOTAL 87,363,257 85,583,204
NOTE “10” : OTHER NON-CURRENT ASSETS(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
State Bank Of India - AASL Curr A/C 11094829072 (1,368) 57,473
State Bank Of India - AASL Curr A/C 10549873830-M 264,668 264,668
State Bank Of India - AASL Curr A/C 10775159792-M 2,852,437 2,852,437
Syndicate Bank - AASL Current A/C 90791010000217-M 7,686,366 7,686,480
Syndicate Bank - AASL Current A/C 90083050000024-M 202,169 202,169
Indian Overseas Bank-AASL CurA/C076202000002129 -M 306,603 306,603
11,310,875 11,369,830TOTAL
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NOTE “11” : INVENTORIES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Stores and Spare Parts 452,751,763 396,027,638
Loose Tools 239,564 239,564
Provision for Obsolescence (375,852,559) (396,729,003)
Goods in Transit 4,234,690 2,323,447
81,373,458 1,861,646
NOTE “12” : TRADE RECEIVABLES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Trade receivables outstanding for a period exceeding six months from the date they were due for payment
Secured, considered good - -
Unsecured, considered good 944,332,779 848,424,599
Doubtful - -
Less: Provision for doubtful trade receivables (2,731,196) (2,731,196)
941,601,583 845,693,403
Other Trade receivables -
Secured, considered good - -
Unsecured, considered good 224,219,429 105,149,122
Doubtful - -
Less: Provision for doubtful trade receivables - -
224,219,429 105,149,122
TOTAL 1,165,821,012 950,842,525
NOTE “13” : CASH AND CASH EQUIVALENTS(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
(I) Balance with Banks In Current Accounts 26,554,033 457,804
(ii) Cash in hand 189,071 27,989 Imprest Cash Floats With Staff
(iii) Fixed Deposits with Bank 270,162,707 54,043,002 (under lien against SBLC) 296,905,811 54,528,795
TOTAL
TOTAL
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NOTE “14” : SHORT TERM LOAN & ADVANCES(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Security Deposits 3,565,784 2,707,584 Advances Recoverable in Cash or Kind 58,446,631 66,170,998 Advances to Employee 406,729 28,015 Prepaid Expenses - Others 62,261,839 20,734,544
TOTAL 124,680,983 89,641,141
NOTE “15” : OTHER CURRENT ASSETS(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
Other Non Trade Receivables - -
Secured Considered Good
Outstanding Recoveries -Financial Accts/Foreign Parties 64,228,851 54,278,478
TOTAL 64,228,851 54,278,478
NOTE “16” : REVENUE FROM OPERATIONS(Amount in Rupees)
Particulars As at March 31, 2015 As at March 31, 2014
1. Operational Revenue i) Scheduled Traffic Services a) Passenger 1,780,914,797 1,945,507,331 b) Excess Baggage 15,209,128 15,308,023 c) Mail 288,554 638,783 d) Cargo 2,905,386 5,973,480
1,799,317,865 1,967,427,617 ii) Non-Schedule Traffic Services a) Charter 32,980,000 - b) Subsidy for Operation from Government 343,393,806 184,641,650
376,373,806 184,641,650 2. Handling,Servicing and Incidental Revenue a) Handling and Servicing - - b) Manufacturers Credit - - c) Incidental 90,600,701 264,826,271
90,600,701 264,826,271
TOTAL 2,266,292,372 2,416,895,538
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NOTE “17” : OTHER INCOME(Amount in Rupees)
Particulars 2014-15 2013-14
1. Interest Income from i) Bank Interest Interest on Call & Fixed Deposit-India 13,229,832 1,228,770 ii) Others Interest on Other Sundry Accounts - 5,779,5612. Profit on Sale of Fixed Asset (Net) Loss or Gain on Assets held for disposal - -
TOTAL 13,229,832 7,008,331
NOTE “18” : COST OF MATERIAL CONSUMED/OPERATIONAL EXPENSES(Amount in Rupees)
Particulars 2014-15 2013-14
Aircraft Fuel & Oil :Fuel (Ops) - Aircraft - Duty Paid 769,402,213 998,741,586 InsuranceInsurance - Aircraft 19,267,822 9,520,149Insurance General 75,737 32,281 19,343,559 19,552,430Material Consumed-Aircraft 13,655,194 52,722,177Aircraft Lease, Handling & Maintenance chargesLease 738,799,609 876,636,668 Handling 87,832,998 39,482,748 Maintenance 540,740,288 1,152,356,351
1,367,372,895 2,068,475,767Navigation, Landing, Housing & ParkingLanding Fees - Scheduled & Other Ops 40,776,093 42,920,552 Housing & Parking Fees 10,262,207 9,384,572 Flight Comm & Navigation Charges 58,184,322 61,546,433
109,222,622 113,851,557Passenger AmenitiesInflight & Hotel Consumables Consumption - 175,963 Pax Amenities - Catering On Ground 9,119,666 8,891,376 Pax Amenities - Catering On Board 4,584,306 12,213,691 Pax Amenities - Hotel Expenses - 109,827
Pax Amenities - Inflight Programme - Pax Amenities - News Paper & Magazines 825,215 690,113 14,529,187 22,080,970Other Communication ChargesTelephone Equipment Rental - 151,466 Postage Telegram & Courier Charges 38,804 55,112
Telephone & Trunk Call Charges 1,401,134 1,704,402 1,439,938 1,910,980Service chargeMisc. Taxes paid on Revenue Items - PO Based Inv 13,024,372 14,825,529
13,024,372 14,825,529
TOTAL 2,307,989,980 3,292,160,996
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NOTE “19” : EMPLOYEE BENEFIT EXPENSES(Amount in Rupees)
Particulars 2014-15 2013-14
1. Salary, Wages and Bonus
Salaries - Staff In India 297,099,382 348,002,347
Bonus Expense 1,965,160 2,192,174
299,064,542 350,194,521
2. Crew Allowances
Hourly Payments 1,898,883 13,189,795
Foreign Contract Pilots Fees & Claims 41,969,645 71,176,843
43,868,528 84,366,638
3. Contribution to Provident and Other Funds
CC Provident Fund-Staff in India 8,566,607 5,599,466
8,566,607 5,599,466
4. Staff Welfare Expenses (Net)
Other Staff Welfare Expenses 573,062 601,207
Staff Uniforms - Consumption 740 43,030
Staff Training Expenses 20,392,440 25,688,223
20,966,242 26,332,460
5. Provision for Gratuity 5,064,645 4,745,159
TOTAL 377,530,564 471,238,244
NOTE “20” : FINANCIAL COSTS(Amount in Rupees)
Particulars 2014-15 2013-14
(i) Interest on Loans:
Interest on AI Loan (Holding Company) 1,034,711,099 719,617,883
Bank Charges 5,235,415 4,017,595
Interest Charges - Others - 653,951
1,039,946,514 724,289,429
(ii) Delayed Payment Charges to Fuel Companies 31,085,252 39,316,883
(iii) Interest on Delayed Payment of TDS/Service Tax
Interest on delayed payment of TDS 231,848 230,117
Interest on delayed payment of Service Tax 12,171,578 1,300,177
12,403,426 1,530,294
TOTAL 1,083,435,192 765,136,606
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NOTE “21” : OTHER EXPENSES(Amount in Rupees)
Particulars 2014-15 2013-14
Travelling Expenses 40,925,619 25,619,465 Rent 12,014,419 16,412,820 Repair Charges 139,263 - Hire of Transport 15,578,638 15,276,068 Electricity / Heating & Fuel Charges 1,981,785 1,810,245 Water Charges 100,000 100,000 Printing and Stationary 1,107,202 494,926 Legal Charges 26,913 21,086 Auditors' Remuneration and Expenses 646,800 654,720 Provision for Redelivery & other charges 156,435,369 71,373,369 Provision for Obsolescence (Net) 21,078,135 91,824,503 Exchange Variation (Net) 6,787,226 101,663,605 Professional / Consultation Fees & Expenses 3,860,037 1,179,316 Fees to DGCA 1,207,500 91,500 Office Cleaning Expenses 30,644,907 28,532,449 Entertainment Expenses - General 360,349 294,058 Books & Periodicals - Jeppesen / Technical 2,424,875 8,015,072Other Misc. Expenses 1,923,867 5,072,553
TOTAL 297,242,904 368,435,755
NOTE “22” : PRIOR PERIOD EXPENSES(Amount in Rupees)
Particulars 2014-15 2013-14
Prior Period Expenses 92,880,135 55,554,284
Prior Period Revenue 2,944,504 - - - - -
TOTAL 95,824,639 55,554,284
NOTE “23” : EXCEPTIONAL ITEM(Amount in Rupees)
Particulars 2014-15 2013-14
Inventory Migration Surplus
Aircraft Inventory Written Back - -
Inventory Migration Account - MRO - (158,000,000)
Provision for Inventory Reconciliation (Expenses) - 146,288,945
Provisions No Longer Required (45,433,293) (23,960,083)
TOTAL (45,433,293) (35,671,138)
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NOTE “24” : DISCLOSURE OF EARNING PER SHARE(Amount in Rupees)
Particulars 2014-15 2013-14
a) Weighted average number of shares at the beginning of year 225,000 225,000
b) Weighted average number of shares at the end of year 225,000 225,000
c) Net profit after tax available for equity shareholders (Rupees) (1,839,214,258) (2,493,970,785)
d) Basic and Diluted Earning Per Share (Rupees) (8,174) (11,084)
e) Par Value of Share (Rupees) 100 100
25. I. CONTINGENT LIABILITY: (to the extent not provided for):-
(Rupees In Lacs)
A. Standby Letter of Credits under Aircraft Lease and Maintenance Rs. 3902.15 Support Agreement for ATR and CRJ operations (Rs. 2082.12) (Based on guarantee given by Air India Ltd. the parent company)
B. Claims against the company not acknowledged as debts : Rs. 352.55 Miscellaneous claims (Rs. 862.11) (including for unsettled legal claims Rs.48.47lacs and interest on delays in foreign remittances)
C. Income Tax demand for A.Y. 1997-98 Rs. 140.44 Appeal dismissed by ITAT in absence of COD approval (Rs. 140.44) (Total amount deposited under protest, application filed for restoration of Appeal).
Income Tax demand for A.Y. 2000-01 Rs. 174.31 Under appeal with ITAT. Miscellaneous Application filed for reopen. (Rs.174.31) Income Tax demand for A.Y. 2004-05
Under appeal before CIT (A) Rs. 31.99 Income Tax demand for A.Y. 2008-09 (Rs. 31.99)
Under appeal with ITAT Rs. 14851.53 Income Tax demand for A.Y. 2010-11 (Rs.4425.04)
Under appeal with ITAT. Rs. 17293.27 Income Tax demand for A.Y. 2011-12 (Rs. 10146.27)
Under appeal before CIT (A) Rs. 1121.00 (Rs. 1121.00)
D. Income Tax Demand on account of TDS defaults amounting Rs. 75.88 lacs
(Rs. 341.46 lacs).
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II. CAPITAL COMMITMENT Rs. NIL (Rs. Nil)
Estimated amount of contracts remaining to be executed on capital account and not provided for.
26. No provision has been considered necessary in respect of disputed demand of Income tax amounting Rs. 33612.54 lacs (Rs. 16039.05 lacs) in view of company's appeals pending with appellate authorities. However, the same is shown above under contingent Liabilities. Besides, bank balance amounting to Rs.113.11 lacs (Rs. 113.70 lacs) lacs held in 6 bank accounts have been attached by Income Tax Department against the demand for A.Y. 2008-09.
27. Aircraft Inventories:
i) The inventories mainly include Aircraft spares, rotables, consumables and tools of ATR and CRJ aircrafts. The procurement is made by AIL on behalf of the company. Inventory of the company are maintained/ controlled by AIL. The consumption and closing stock therefore is on the basis of records and details derived from the store records maintained/ controlled by Air India Ltd. at Kolkata, Delhi and Hyderabad.
ii) Goods in transit amounting to Rs. 42.35 lacs (Rs. 23.23 lacs) include items at High Seas, items lying with Customs and items under inspection based on certification by Air India Ltd.
iii) Custom Duties, Freight & Incidentals have been allocated on pro-rata basis on year end value of closing Aircraft spares, rotables and consumption. Unallocated custom duty paid on aircraft spares and rotables is shown under advance recoverable in cash or kind instead of forming value of inventory.
iv) Provision for Obsolescence of aircraft spares, rotables and special tools in respect of ATR and CRJ aircraft for the year 2014-15 amounting to Rs. 3758.52 lacs (Rs. 3967.29 lacs) have been made.
28. Other Current Liabilities:
i) Other Current Liabilities include Rs.105510.04 lacs (Rs. 85109.05 lacs) due to Air India representing net of transfers/disbursements of funds to/for the company after adjusting revenue earnings from flight operations.
The Holding Company, Air India Limited debited a sum of Rs. 10,347.11 lacs (Rs 7196.18 lacs) towards interest on account of delayed payment on the average of opening balance as on 01.04.2014 and closing balance as on 31.03.2015. The above interest has been calculated @ 10.86% per annum.
ii) Based on the information available with the Company, the balances outstanding as at the Balance Sheet date is Nil (Nil) with regard to Micro, Small and Medium Enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006.
29. The proportionate expenditure for redelivery cost for leased ATR and CRJ aircraft has been worked out for Rs. 2217.55 lacs up to 31.03.2015 (Rs.1885.60 lacs) on the basis of aircraft months in terms of the agreements executed with the parties and provision made for the same in the accounts.
30. The salaries of deputationists from Air India Ltd. are as per the terms of deputation and are accounted on the basis of the debits received from Air India Ltd. Retirement benefits including PF to the deputationists are accounted by Air India Ltd. The debit from Air India Ltd. for its employees on deputation includes charge for Provident Fund & Gratuity.
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31. For the employees on contract, the company has its own Employees Provident Fund Trust to which contributions are regular.
32. a) The Expenses/ Liability towards Landing and Parking charges, Navigation charges, License Fee, Electricity and other miscellaneous charges payable to Airport Authority of India (AAI) are provided on best possible estimates based on available information. The outstanding balance as per books is Rs. 2842.28 lacs and a provision of Rs. 1715.42 lacs (total Liability booked as on 31.03.2015 is Rs.4557.70 lacs).The account with Airport Authority of India is under reconciliation.
b) The outstanding balances with Oil Companies viz. Indian Oil Corporation Ltd. is Rs. 12083.28 lacs, Bharat Petroleum Corporation Ltd. Rs. 7320.53 lacs, Hindustan Petroleum Corporation Ltd. Rs. 536.60 lacs, Reliance Industries Ltd. Rs. 71.40 lacs and Shell MRPL Aviation Ltd. Rs. 1.69 lacs. The accounts IOCL, BPCL, RIL, and Shell MRPL have been reconciled till 31.03.2015 and reconciliation with HPCL is nearing completion
33. a) The grant receivable from NEC for ATR North East operations was accounted for as income sttaking into account the operations of ATR for the year ending 31 December 2012
amounting Rs. 4954.43 lacs. NEC contested the claim of Grant support for the year 2012, however, the committee set up under Planning Commission to resolve the issue, has recommended that MoCA may provide budgetary support to meet the VGF for the year 2012.
b) The North East Council has signed a MOU for VGF for operating fights in North East Sector effective August 2014. The Union Territory of Lakshadweep (UTL) has continued to sanction VGF for Agati operations for the year 2014-15.
34. Segment Reporting (As required by the AS -17 of ICAI):
i) The company is engaged in airline business, which is considered as a single whole business segment. All incomes are incidental to the above business. Details of the revenue earned from various activities related to airline business are given in Note-1 to the Accounts.
ii) The Company operates flights on domestic routes including charters on demand.
iii) The revenue earning is from the aircraft, which are on operating lease. These are deployed in various sectors. There is no appropriate basis for allocating the assets and related liabilities in geographical segments.
iv) Presentation of the Annual Accounts read with Directors' Report enables better understanding of the performance of the business, better assessment of risk and returns and makes more informed judgment about the activities of the Company as a whole.
35. The company operated leased aircraft, directly leased from Lessors. Air India Ltd. provides marketing, sales and reservations services for Alliance Air fights. While the work related to other support services like ground handling and engineering services are being done by the other
thsubsidiaries companies of AIL, i.e. AIATSL (Arrangement dated 7 Nov 2014) and AIESL th
(Arrangement 29 July 2013) respectively for AASL flights. For these services, the rates of charges have been laid down and have been signed with these companies.
36. The Company had undertaken freighter charter operations with freighter B737 aircraft on lease from Air India Ltd. under the agreements for the freighter charters exclusively between AIR INDIA LTD. and concerned parties. The agreement between AIR INDIA LTD. and M/s GATI was
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terminated by GATI in March 2009. Consequently, the Bank Guarantee of Rs. 30 Crores deposited by GATI with AIR INDIA LTD. under the agreement had been invoked by AIR INDIA LTD. for freighter dues. Accordingly, the amount realized from Bank Guarantee has been kept in a separate account in the books of the company (AASL) without adjusting against freighter due. The matter has been in dispute between GATI and AIR INDIA LTD. The Arbitral Tribunal has given award and an appeal has been filed by Air India Limited before the Hon'ble Delhi High Court against the Arbitral Award which also upheld the decision of Arbitral Tribunal. The claims / counter claims are exclusively for / against Air India Ltd. and M/s GATI being the parties to the agreement.
37. Related Party Disclosures (As required by the AS- 18 of ICAI):
a. Holding Company AIR INDIA LTD.
b. Subsidiaries/Fellow Subsidiaries/Associates Not applicable
c. Key Management Personnel Chairman, (Shri. Rohit Nandan), (as on 31.03.2015) CMD, Air India Ltd.
COO AASL( Cpt Arvind Kathpalia)
Director (Shri S. Venkat)
Director (Shri Pankaj Srivastava)
Director (Capt A. K Govil)
Director (Ms MeenakshiDua)
Director (Dr. Shefali Juneja)
Director (Ms. Puja Jindal)
d. Relatives of Key Management NIL
e. Transactions with related parties during the year:
(I) AIR INDIA LTD.
Nature of Transactions 2014-15 2013-14 (Rs./lacs) (Rs./lacs) (Rs./lacs) (Rs./lacs)
Balance payable as at year end 105510.04 85109.05
Purchase of Fixed Assets Nil Nil
Transfer of Fixed Assets Nil Nil
Debits received for expenditure Nil Nil
Debits/credits for funding
Funds Transfer Through Bank 22104.52 24775.00
Payments made to Oil Companies 5651.68 10109.97
Payments made to Foreign Vendors 1907.54 8119.61
Payments made to Vendors (AI SATS) 500.00 -
Payments made to Indian Vendors 444.08 472.80
30607.82 43477.38
AGENCIES ARRANGEMENT :
Traffic Revenue (Gross) 17993.18 19674.28
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Nature of Transactions 2014-15 2013-14 (Rs./lacs) (Rs./lacs) (Rs./lacs) (Rs./lacs)
JN Tax (Service Tax) 659.47 650.30
Less : Service Charges (130.24) (148.26)
Net : Traffic Revenue 18522.41 20176.32
Leasing arrangements :
Aircraft Lease, Handling & 96.20 536.06 Maintenance Charges
Management contracts including 219.05 359.74 for deputation of employees (pay & allowances)
Interest charged by Air India 10347.11 7196.18
Items pending acceptance by 288.74 209.41 Air India (debited by AASL)
Items pending acceptance by - - Air India (credited by AASL)
Guarantees
Standby Letter of Credits for ATR and CRJ operations
However, Air India Ltd. has also 3902.15 2082.12 provided corporate guarantees for the aircraft lease.
(ii) CMD, Air India Ltd. - There was no transaction with the party.
(iii) No Loans or credit transactions were outstanding with Directors or officers of the Company or their relatives at the end of the year which are required to be disclosed.
38. Lease Accounting (As required by the AS- 19 of ICAI):
a) The company has taken aircraft on non-cancelable operating lease as under:
Aircraft Type Lessor Valid upto
Ø ATR 42-320 ABRIC Leasing Limited VT-ABD Mar 15 VT-ABA Aug 15 VT-ABB May 15 VT-ABO Nov 15
Ø ATR 72-600 AVAP Leasing (Asia) Ltd VT-AII Dec,26 VT-AIT Feb,27 Celestial Aviation Trading 68 Ltd VT-AIU May,25
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Aircraft Type Lessor Valid upto
Ø CRJ 700 Regional One (earstwhile Amentum Sep, 2015 Aircraft Leasing No. Two Limited) VT-RJB Gladiator Leasing Limited, Malta Feb' 2015 VT-RJC
CILAN MSN 10048 Ltd., Ireland May' 2016 VT-RJD
Regional One July, 2015 (earstwhile SMBC,Ireland) VT-RJE
(b) The minimum lease payment under non-cancelable lease in terms of the agreements with lessors for future are as follows:
Aircraft Rotable/Engine Maintenance Lease rent* Lease Charges* & Other charges* (Rs./lacs) (Rs./lacs) (Rs./lacs)
Not Later than one year 5700.89 376.53 1540.62 (5654.53) (907.01) (1300.89)
Later than one year but not later 12436.71 39.84 4458.65 than 5 years (2059.68) (400.80) (386.47)
Later than 5 years. 20925.51 0.00 7593.83 (0.00) (0.00) (0.00)
*These amounts are taken as per the prevailing rates and are subject to annual reconciliation. The conversion rate used for the above purpose is the closing USD rate as at 31.03.2015.
(c) Aircraft Lease rental, other lease and maintenance charges recognized in Statement of Profit and Loss in the current year in respect of the aircraft lease:
Aircraft Lease & Maintenance charges Other Charges Rs. lacs Rs. lacs
ATR and CRJ 12130.79 878.32 (17126.43) (394.60)
(d) The lease rental payable for ATR and CRJ aircraft are fixed lease rentals payable monthly. There is no option for purchase of the aircraft at the end of the lease period. The aircraft are permitted to be subleased with prior consent of the lessors.
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39. Earning per share :
(Calculation of EPS - Basic and Diluted)
2014-15 2013-14
i) Net Profit/ (Loss) after tax for the year (Rs.) (1839214258) (2493970785)
ii) Number of Equity Shares o/s at the end of the year 225000 225000
iii) Nominal value per Eq. Share (Rs.) 100 100
iv) EPS Basic and diluted (Rs.) (8174) (11084)
Since the company does not have any dilutive securities, the basic and diluted earning per share are the same.
40. Deferred Taxation Accounting (As required by the AS-22 of ICAI) :
In view of the history of recent losses of the Company, there is no virtual certainty that sufficient future taxable income will be available against which the deferred tax assets can be realised. Hence the same have not been accounted for in the books.
41. Impairment of Assets (AS-28) : The company does not own any cash generating asset. The major revenue earning asset of the company is the aircraft fleet, which is taken on operating lease. As per the assessment of the company, there has been no impairment loss during the year. In respect of other Fixed Assets, the biennial verification of other Fixed assets are conducted and accordingly adjustments are made in the books.
42. In opinion of the Management, any of the assets other than fixed assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless specified otherwise.
43. The accounts with parties are subject to reconciliation and confirmation.
44. The figures have been rounded off to the nearest rupee.
45. The previous year figures have been regrouped/reclassified wherever considered necessary to make them comparable.
46. Previous year figures are indicated in the Notes within brackets.
47. ADDITIONAL INFORMATION
Information given below include amounts debited by Air India Ltd. and also include deemed expenditure and earnings in foreign currency
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CURRENT YEAR PREVIOUS YEAR (Rs. In lacs) (Rs. In lacs)
A. Expenditure on Imports (CIF) during the year ended 31st March 2015
- Aircraft Spares Parts & Tools 609.00 1059.00 - Capital Items-Ground Support Equipment Nil Nil
B. Expenditure on Consumption during the year ended 31st March,2015
- Imported Spares & Components 116.97 537.82 - Indigenous Spares Nil Nil
C. Earnings in Foreign Currency - Interline Revenue Not Available Not Available
D. Expenditure in Foreign Currency
- Aircraft Lease & Maintenance Charges 13009.11 16682.78 - Purchase of Stores & Equipment 609.00 1059.00 - Technical Literature 24.25 73.11 - Training & Travelling (including Ferry) 377.29 398.15 - Technical Services 419.69 711.77
48. Foreign currency exposures recognized by the company that have not been hedged by a derivative instrument or otherwise as under:-
st Particulars Currency Type As at 31 March 2015
Trade Payables US DOLLAR 5249639 AMOUNT IN INR 328102425
Audit Report :
As per our report of even date attached
For and on behalf of For and on behalf of the Board Chandra Gupta & Associates Sd/- Sd/- Sd/- Chartered Accountants Ashwani Lohani Vinod Hejmadi C.S. SubbiahFRN No 00295N Chairman Director CEO Sd/- Sd/- Sd/-S. C. Gupta Gagan Batra Sunil DuaPartner Company Secretary E.D (Finance) Membership No. : 013465
Place: New Delhi Place: New DelhiDate: 07 June 2016 Date: 07 June 2016
