NOTE: A - Air India

117

AI

NOTE: A

AccountingPoliciesformingpartoftheStandaloneFinancialStatementsofAirIndiaLimitedfortheyearended 31st March 2020

(Rupees in Millions except otherwise stated)

1. Company Information / Overview

Background

AirIndiaLimited,(aGovernmentofIndiaCompany,hereinafterreferredtoasAI/Company/AIL/AirIndia)isaCompanyincorporatedinIndia,registeredundertheProvisionsofCompaniesAct,1956.TheGovtofIndiaholds100%ofEquityShareCapitaloftheCompany.DebenturesissuedbytheCompanyarelistedonNationalStockExchangeandBombayStockExchange.TheCompanyprovidesdomesticandinternationalairtransportservices,whichincludesmainlypassengerandcargoservicesandotherrelatedservices.TheaircraftfleetoftheCompanyconsistsofawiderangeofaircrafts.Theregisteredoffice of the Company is situated atAirlines House, 113, Gurudwara Rakabganj Road, New Delhi-110001.

2. Basis of preparation of Financial Statements

(i) Statement of Compliance ThefinancialstatementshavebeenpreparedinaccordancewiththeIndianAccountingStandards

(referred toas “IndAS”)prescribedunderSection133of theCompaniesAct,2013 readwithCompanies (Indian Accounting Standards) Rules, as amended from time to time and otherrelevant provisions of the Act.

The Standalone Financial Statements for the year ended 31stMarch,2020havebeenapprovedbytheBoardofdirectorsoftheCompanyintheirmeetingheldon27thJanuary,2021.

Theaccountingpolicies,assetoutinthefollowingparagraphsofthisnote,havebeenconsistentlyapplied, by theCompany, to all the periods presented in the said Financial Statements. TheFinancialStatementsarebasedontheclassificationprovisionscontainedinIndAS1,‘Presentationof Financial Statements’ and Division II of Schedule III of the Companies Act 2013.

(ii) Basis of Preparation of Financial Statements TheStandaloneFinancialStatementshavebeenpreparedunderthehistoricalcostconventionon

accrualbasisexceptforcertainfinancialassetsandliabilitieswhicharemeasuredatfairvalueoramortizedcostattheendofeachfinancialyear.

(iii) Critical Accounting Estimates /Judgments Inpreparingthesestandalonefinancialstatements,managementhasmadejudgments,estimates

and assumptions that affect the application of accounting policies and the reported amounts of assets,liabilities,incomeandexpensesandactualresultsmaydifferfromtheseestimates.

Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimates where necessary are recognized prospectively.

Significantareasofestimationandjudgments(asstatedintherespectiveAccountingPolicies)thathavethemostsignificanteffectontheFinancialStatementsareasfollows:

a) ImpairmentofAssetsandInvestmentsinsubsidiariesandJointVenture

118

AI

b) Estimateofrevenuerecognitionfrom“ForwardSalesAccount”

c) FairvalueofLiabilityonaccountofFrequentFlyerProgramme(FFP)

d) Measurement of useful life and residual values of property, plant and equipment andcomponents thereof

e) BasisofclassificationofaPropertyasInvestmentProperty

f) BasisofclassificationofNon-CurrentAssetsheldforsale

g) EstimationofCostsofRe-delivery,provisionofmaintenanceredeliveryandoverhaulcost

h) Recognition of Deferred Tax Assets

i) Recognitionandmeasurementofdefinedbenefitobligations

j) Judgementrequiredforascertainmentofcontractsinthenatureoflease,leasetermandfairvalue of lease as per Ind AS 116

k) MeasurementofFairValuesandExpectedCreditLoss(ECL)

l) Judgementisrequiredtoascertainwhetheritisprobableornotthatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettlethetaxationdisputesandlegalclaim.

m) EstimationofuncertaintiesonaccountoftheglobalhealthpandemicCovid-19

(iv) Functional Currency Currency of the primary economic environment in which the Company operates (“the Functional

Currency”) is Indian Rupee (Rs.) in which the Company primarily generates and expends cash.Accordingly,theManagementhasassesseditsfunctionalcurrencytobeIndianRupee(Rs.)TheStand-alone Financial Statements are presented in Indian Rupees (INR) which is Company’s Presentation and Functional currency and all amounts disclosed in the Financial Statements and NoteshavebeenroundedofftothenearestMillion(uptoonedecimal),unlessotherwisestated.

(v) Operating cycle & Classification of Current & Non-Current Presentationofassetsandliabilitiesinthefinancialstatementhasbeenmadebasedoncurrent

/ non-current classification provided under the CompaniesAct, 2013. The Company being inservicesector,thereisnospecificoperatingcycle;however,12monthsperiodhasbeenadoptedas “the Operating Cycle” in-terms of the provisions of Schedule III to the Companies Act 2013. Accordingly, current liabilities and current assets include the current portion of non-currentliabilitiesandassets.

3. Significant Accounting Policies

I. Property, Plant and Equipment (PPE)a) Anitemisrecognizedasaproperty,plantorequipment,ifandonlyif,itisprobablethatthe

futureeconomicbenefitsassociatedwiththeitemwillflowtotheCompanyanditscostcanbemeasured reliably. Items of property, plant and equipment aremeasured at cost, lessaccumulateddepreciationandimpairmentlosses,ifany.

b) Property,plantandequipmentarestatedatcostincludingincidentalcostsincurredpertainingtotheacquisitionandbringingthemtothelocationforuseandinterestonloansborrowedwhereeverapplicable,uptothedateofputtingtheconcernedassettoitsworkingconditionfor its intended use.

c) Significant parts which meet the definition of property, plant and equipment (i.e.AircraftRotables, Repairables (with Serialized Control) including the major cost incurred on

119

AI

modernization/modification/conversionofaircraftandengines)havebeencapitalizedasaseparate component.

d) PhysicalVerificationofAssetsisdoneonarotationalbasissothateveryassetisverifiedinblockoftwoyearsandthediscrepanciesobservedinthecourseoftheverificationadjustedintheyearinwhichreportisfinalized.

e) An itemofPPE isde-recognizedupondisposalorwhenno futureeconomicbenefitsareexpected to arise from the continued use of the asset. Any gain or loss arising on the disposal orretirementofanitemofPPEisdeterminedasthedifferencebetweenthesalesproceedsandthecarryingamountoftheassetandisrecognizedintheStatementofProfitandLoss

II. Depreciation / Amortizationa) Depreciationisprovidedonstraight-linemethodovertheusefullifeoftheProperty,plantand

equipmentasprescribedintheScheduleIIoftheCompaniesAct,2013(exceptasotherwisestated),keepingaresidualvalueof5%oftheoriginalcost,exceptincaseofcapitalizationofmajoroverhaulcostsrelatingtoenginesandairframeswhichare identifiedasseparatecomponents.Depreciation method, useful lives and residual value are reviewed by themanagement at each year end.

b) On the basis of technical assessment, the useful life of B-777, B-787 andA-320 familyaircraft(procured from 2006-07 onwards) are considered as 25 years (instead of the life of 20 yearsasprescribedunderScheduleIIoftheCompaniesAct2013)keepingaresidualvalueof5%oftheoriginalcost.

c) InthecasewherelifeoftheProperty,plantandequipment,hasnotbeenprescribedunderSchedule II of the CompaniesAct 2013 the same have been determined by technicallyqualifiedpersonsandapprovedbytheBoardofDirectorskeepingaresidualvalueof5%ofthe original cost as under:1. Rotables:

(i) AircraftRotablesrelatingtoAirbusfamilyaredepreciatedovertheresidualaverageusefullifeoftheaircraftfleetrelatingtotherespectivefamilyandoftherespectiveengineeringbase,fromtherelevantyearofpurchase.

(ii) AircraftRotablesrelatingtoBoeingfamilyaredepreciatedovertheresidualaverageusefullifeoftherelatedaircraftfleetfromtherelevantyearofpurchase.

2. AircraftRepairables: RepairablewhichareseriallycontrolledarerecognizedasProperty,Plant&Equipment

and are accordingly depreciated over a period of 10 years.

d) Depreciationonadditionsto“Rotables”and“Repairables”isprovidedfromthedateofreceiptsofProperty,PlantandEquipment.

e) Inrespectofleasesofaircraft/enginesinwhichtheCompanyacquires,aresidualrightintheaircraftbypayingatermination/releasesum,suchamountistreatedasPPEandamortizedover the remaining useful life of the aircraft/engines.

f) Majoroverhaulcostsrelatingtoengineandairframeareidentifiedasseparatecomponentsforownedaircraftsandaircraftsunderfinanceleaseandarefullydepreciatedovertheexpectedlivesbetweenmajoroverhauls

g) Costincurredonmajormodifications/refurbishment,modernization/conversioncarriedouttoowned and leased assets are depreciated over the useful life/period of lease of the asset.

120

AI

III. Assets Held for Sale Assetsincludedandidentifiedfordivestmentpurposesareclassifiedasheldforsaleifitishighly

probable that theywill be recovered primarily through salein its present condition rather thanthrough continuing use and are measured at the lower of carrying amount and fair value less costsincurredtosell.Nodepreciationisprovided,oncetheassetistransferredtoAssetsHeldforSale.

IV. Investment Properties Investment Properties are properties held to earn rentals and / or for capital appreciation.

Investment properties aremeasured initially at cost including transaction cost, Subsequently,Investmentpropertiesarestatedatcostlessaccumulateddepreciationandimpairmentlosses,ifany. Depreciation is provided as per Note No 3(II). Any gain or loss on disposal is recognized in StatementofProfit&Loss.

V. Intangible Assets Intangibleassetsarerecognizedwhenit isprobablethatthefutureeconomicbenefitsthatare

attributabletotheassetswillflowtotheenterprisesandthecostoftheassetscanbemeasuredreliably.Intangibleassetsarerecordedatcostofacquisitionincludingincidentalcostsrelatedtoacquisition and installation and are carried at cost less accumulated amortization and impairment losses,ifany.

Intangibleassetswhichhavefiniteuseful livesareamortizedonstraight linemethodover theestimatedusefullife,whichisreviewedbythemanagementeveryyeari.e.

a) SoftwareofPassengerServicesSystem,over10years,and

b) Othersoftware/website,over5years.

VI. Capital work-in-progress Cost of property, plant and equipment including intangible assets not ready for use as at the

reporting date are disclosed as capital work-in-progress.VII. Leases As a Lessee TheCompanyhasadoptedIndAS116“Leases”from1stApril2019asIndAS116introduceda

single,on-balancesheetleaseaccountingmodelforlesseeswitheffectfrom1stApril2019.Asaresult, theCompany,asa lessee,hasrecognized“Right-of-UseAssets”(ROU)representingitsrightstousetheunderlyingAssetsand“LeaseLiabilities”representingitsobligationtomakelease payments.

IndAS116hasbeenadoptedretrospectivelybytheCompanywiththecumulativeeffectofinitiallyapplyingthenewstandardasanadjustmenttotheopeningbalanceoftheretainedearningsasonthedateofinitialapplicationi.e.asonApril1,2019.Accordingly,theCompanyisnotrequiredto restate the comparative information for the year ended 31st March 2019.

The Company has adopted the “Grand father Approach” for the assessment as to which transactionsaretobecategorizedasleases.Accordingly,IndAS116isappliedonlytocontractsthatwerepreviouslyidentifiedasleasesunderIndAS17.

TheCompanyassesseswhetheracontractcontainsalease,atinceptionofacontract.Acontractis,orcontains,aleaseifthecontractconveystherighttocontroltheuseofanidentifiedassetfora period of time in exchange for consideration. To assess whether a contract conveys the right to controltheuseofanidentifiedasset,theCompanyassesseswhether:(i)thecontractinvolves

121

AI

theuseofanidentifiedasset,(ii)theCompanyhassubstantiallyalloftheeconomicbenefitsfromuse of the asset through the period of the lease and (iii) the Company has the right to direct the useofsuchasset.TheCompany’sleasedassetclassesprimarilyconsistofleasesforAircrafts,EnginesandLeaseholdLand.

Atthedateofcommencementofthelease,theCompanyrecognizesaRight-of-Useasset(“ROU”)andacorrespondingleaseliabilityforallleasearrangementsinwhichitisalessee,exceptforleases with a term of twelve months or less (short-term leases) and low value leases. For these short-termandlowvalueleases,theCompanyrecognizestheleasepaymentsasanoperatingexpenseonastraight-linebasisoverthetermoftheleaseoranothersystematicbasiswhichismore representative of the pattern of use of the underlying asset.

Certainleasearrangementsincludetheoptionstoextendorterminatetheleasebeforetheendoftheleaseterm.ROUassetsandleaseliabilitiesincludetheseoptionswhenit isreasonablycertainthattheywillbeexercised.

ROUassetsareinitiallyrecognizedatcost,whichcomprisestheinitialamountoftheleaseliabilityadjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs and estimated cost for re-delivery/removing/restoration of the underlying asset less any lease incentives. They are subsequently measured at cost less accumulateddepreciation and impairment losses.

ROUAssetsaredepreciatedfromthecommencementdateonastraight-linebasisovertheleaseterm.Forthepurposeofimpairmenttesting,therecoverableamount(i.e.thehigherofthefairvalue lesscost tosellandthevalue-in-use) isdeterminedonan individualassetbasisunlesstheassetdoesnotgeneratecashflowsthatarelargelyindependentofthosefromotherassets.In suchcases, the recoverableamount isdetermined for theCashGeneratingUnit (CGU) towhichtheassetbelongs.Leaseliabilitiesarere-measuredwithacorrespondingadjustmenttotherelated right of use asset if the Company changes its assessment if it exercises an extension or a termination option.

As a Lessor In the case of any leased assets transferred/sub-leased to Subsidiary Cos, the Subsidiaries

recognizethe lease liabilityassuch, transfer/sub-leaseddirectlyrelatedtothebusinessof therespectiveSubsidiaries.

Accounting Standard effective till 31stMarch 2019, Ind AS 17 – Leases

(i) Finance lease

a) Aleaseisclassifiedasfinanceleaseoroperatingleaseattheinceptiondate.Leasesofproperty,plantandequipment that transfer to theCompanysubstantiallyallof therisksandrewardsofownershipareclassifiedasfinancelease.

b) Assetsheldunderfinanceleaseareinitiallycapitalizedatthefairvalueattheinceptionofleaseor at the present value of the minimum lease payments whichever is lower.

c) Minimumleasepaymentsmadeunderfinanceleaseareapportionedbetweenthefinancecostsandthereductionoftheoutstandingliabilitytreatedasloan.Thefinancecostisallocatedtoeachperiodduringtheleaseterm.However,iftheyaredirectlyattributabletoqualifyingassets,thentheyarecapitalizedinaccordancewiththeCompany’sgeneralpolicyonborrowingcost.

(ii) Operating Lease

a) Leaseswherethelessoreffectivelyretainssubstantiallyalltherisksandrewardsofownershipof

122

AI

theleasedassetsareclassifiedasOperatingLease.

b) Leasepayments in respect of assets takenonoperating leaseare charged to theStatementof Profit and Loss on a straight-line basis over the period of the lease unless the paymentsarestructuredtoincreaseinlinewiththeexpectedgeneralinflationtocompensatethelessorsexpectedinflationarycostincreases.Anychangeintheleasetermsareaccountedprospectivelyover the remaining term of lease.

c) Contributionsmade to lessorsonaccountofMaintenanceReserve forwhich,maintenance isexpected to arise during the lease period is treated as Expense.

d) TheCompanyhasinitsfleet,aircraftsonoperatinglease.Ascontractuallyagreedundertheleasecontracts, theaircrafthavetoberedeliveredtothelessorsat theendoftheleasetermunderstipulated contractual return conditions. The redelivery costs are estimated by managementbasedonhistoricaltrendsanddataandarechargedtoStatementofProfit&Lossinproportiontotheexpiredleaseperiod.Thesearerecordedatthediscountedvalue,whereeffectofthetimevalue of money is material.

(iii) Sale and Lease Back (SLB)Transactions

Profitorlossesariseonsaleatfairvalueandleasebacktransactionsofassetresultinginanoperatingleaseofsuchassets,arerecognizedimmediatelyinthestatementofProfitandLoss.Wherethesalepriceisbelowfairvalue,anyprofits/lossesareimmediatelyrecognizedintheStatementofProfitandLossexceptwherethelossiscompensatedbyfutureleasepaymentsatbelowmarketprice.Insuchcases loss is deferred and amortized in proportion to the lease payments over the initial period for whichtheassetisexpectedtobeused.Inthecasewherethesalepriceisabovefairvalueoftheasset,the excess over fair value is amortized over the initial period of the lease period for which the asset is expectedtobeused.

VIII. Inventories

a) Inventories primarily consists of stores and spares and loose tools (other than those which meet thecriteriaofproperty,plantandequipment).Costofinventoriescompriseallcostsofpurchaseafterdeductingnon-refundablerebatesanddiscountsatthetimeofpurchaseandallothercostsincurredinbringingtheinventoriestotheirpresentlocationandconditionandisdeterminedonweightedaveragebasis.

b) InventoriesarevaluedatlowerofcostandNetRealizableValue('NRV').NRVforstoresandspares,loosetoolsandfuelusedinrenderingofservicesarenotwrittendownbelowcostexceptincaseswhere the price of such materials have declined and it is estimated that the cost of rendering of services will exceed their selling price.

c) Expendables/consumablesare chargedoff at the timeof initial issue, except thosemeant forrepairsofrepairableitemswhichareexpensedoffwhentheworkorderisclosedonthecompletionof repair work.

d) Obsolescenceprovisionforaircraftstoresandspareparts

(i) Provision ismade for the non-moving inventory exceeding a period of five years (net ofrealizablevalueof5%)exceptfor(ii)&(iii)belowandnettedofffromthevalueofinventory.

(ii) InventoryofAircraftFleetwhichhasbeenphasedout,isshownatestimatedrealizablevalueunlessthesamecanbeusedinotherAircrafts.

(iii) Provisioninrespectofinventoriesexclusivelyrelatingtoaircraftondry/wetlease,ismadeonthebasisofthecompletedleaseperiodcomparedtothetotalleaseperiodasattheyear-end.

123

AI

e) FullObsolescenceProvisionfornon-aircraftstoresandsparesismadefornon-movinginventoryexceedingaperiodoffiveyears.

f) Spares retrieved from thecannibalizationof thescrappedaircraftareaccounted foratRupeeOne.

IX. Investments in Subsidiaries, Associates &Joint Ventures

InvestmentsinSubsidiaries,AssociateandJointVenturesarecarriedatcost,lessimpairmentlosses,if any,in the value of investments.Where an indication of impairment exists, the carrying amount ofthe investment isassessedandwrittendown immediately to itsrecoverableamount.Ondisposalofinvestmentsinsubsidiaries,associatesandjointventure,thedifferencebetweennetdisposalproceedsandthecarryingamountsarerecognizedinthestatementofprofitandloss.

X. Impairment of Non-Financial Assets

The Company assesses at each Balance Sheet date whether there is any indication that carrying amount ofitsnon-financialassethasbeenimpaired.Ifanysuchindicationexists,theprovisionforimpairmentis made in accordance with IND AS-36.

An impairment loss is recognized for theamountbywhich theasset’s carryingamountexceeds itsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscostsofdisposalandvalue inuse. Inassessingvalue inuse, theestimated futurecashflowsarediscounted to theirpresentvalueusingadiscountratethatreflectscurrentmarketassessments.Forimpairmenttesting,assetsaregroupedtogetherintothesmallestgroupofassetsthatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsofotherassetsorCashGeneratingUnits(CGUs).Non-financialassetsthatsufferedanimpairmentarereviewedforpossiblereversaloftheimpairmentatthe end of each reporting period.

XI. Government Grants

GovernmentGrantsarerecognizedwherethereisreasonableassurancethatthegrantwillbereceivedandallattachedconditionswillbecompliedwith.

GovernmentGrantsarerecognizedinprofitorlossonasystematicbasisovertheperiodsinwhichtheCompany recognizes as expenses the related costs for which the grants are intended to compensate.

GovernmentGrants that become receivable as compensation for expenses or losses incurred in apreviousperiodarerecognizedinprofitorlossoftheperiodinwhichitbecomesreceivable.

GovernmentGrantsrelatedtoassetsarepresentedinthebalancesheetasdeferredincomeandarerecognizedinprofitorlossonasystematicbasisovertheexpectedusefullifeoftherelatedassets.

XII. Revenue Recognition

The Company recognizes revenue in accordance with Ind- AS 115. Revenue is recognized upon transfer ofcontrolofpromisedproductsorservicestocustomersinanamountthatreflectstheconsiderationthat the Company expects to receive in exchange for those products or services.The Company presents revenuesnetofindirecttaxesinitsStatementofProfitandloss.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to theCompanyandtherevenuecanbereliablymeasured,regardlessofwhenthepaymentisbeingmadeandRevenueisrecordedwhentherecoveryofconsiderationisprobableanddeterminable.

124

AI

a) The Company’s revenue primarily derives from transportation services for Passengers,CargoandMailRevenue.Revenueisrecognizedwhenthetransportationservicehasbeenprovided.Passengers tickets paid for in advance of transportation are recognized, net of discounts, asdeferred revenueon ticket sales in current liabilities until the customer has flown.At theendof each financial year, unutilized balance in Forward sales for more than two years is fullyrecognizedasRevenueandforbalanceamountRevenueisrecognizedatacertainestimatedpercentageofthevalueoftickets/airwaybillssoldbasedonavailablehistoricalstatisticaldata.The Company considers whether it is an agent or a principal in relation to transportation services byconsideringwhether ithasaperformanceobligationtoprovideservicesto thecustomerorwhethertheobligationistoarrangefortheservicestobeprovidedbyathirdparty.Otheroperatingrevenuesarerecognizedastherelatedperformanceobligationissatisfied(overthetime)usinganappropriatemethodologywhichreflectstheactivitythathasbeenundertakentosatisfytherelatedobligation.

b) The Company operates Frequent Flyer Programme that provides loyalty points based onaccumulated mileage points to those who have joined this facility.The revenue recognized when thetransportationserviceisprovidedisreducedbytheestimatedfairvalueofthemileagepointsissuedintheyearsuchloyaltypointsareearned.Thefairvalueattributedtotheawardedloyaltypointsistreatedasadeferredliabilityandrecognizedasrevenueonredemptionofthepoints.TheliabilityforFFPisprovidedbaseduponActuarialValuationattheyearend.

c) Lossorgainonreissue/refund/involuntarytransferofpassengerstoothercarriersisalsodeductedorincluded,asthecasemaybe,inthetransportrevenue.

d) BlockedSpacearrangements/Codesharerevenue/expenditureisrecognizedonanactualbasis,basedonupliftdatareceivedfromthecodesharepartners.Whereverdetailsfromcodesharepartnersarenotavailable,revenue/expenditureisbookedtotheextentofdocuments/informationreceived, and adjustments, if any,required are carried out at the time of availability of suchinformation.

e) IncomefromInterestisrecognizedusingtheeffectiveinterestmethodonatimeproportionbasis.IncomefromRentalsisrecognizedonatimeproportionbasis.

f) Dividendisrecognizedas, income, if therighttoreceiveisestablishedbeforethecloseoftheyear.

g) The claims receivable from InsuranceCompany are accounted for on the acceptance by theInsurance Company of such claims.

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

i) Gain or loss arising out of sale/scrap of PPE including aircraft over the net depreciated value is takentoStatementofProfit&LossasNon-OperatingRevenueorExpenses.

j) Other Items:

i) Scrapsales,reimbursementfromemployeesavailingmedical,educationalandotherleavewithoutpay,claimsofinterestfromsuppliers,otherstaffclaimsandlostbaggageclaims,arerecognizedoncashbasis.

ii) Liability/ Claims for amounts payable towards IATA dues are recognized to the extent ofclaims/ invoices received.

XIII. Segment Reporting

TheCompany is engaged in airline related businesswhich is the only reportable segment.Hence,

125

AI

the Company considers only geographical area wise revenue earned for the purposes of Segment Reporting.

OperatingsegmentsarereportedinamannerconsistentwiththeinternalfinancialreportingtotheChiefOperatingDecisionMaker"CODM"oftheCompanyi.e.theBoardofDirectorsoftheCompanyunderInd AS 108 “Operating Segments”.

XIV. Manufacturer’s Credit (Cash & Non-Cash Incentives)

Manufacturer’s credit entitlements are accounted for on accrual basis and credited to ‘IncidentalRevenue’bycontradebitto‘Advances’;whenthecreditentitlementisused,the‘advances’areadjustedagainsttheliabilitycreatedforeitheracquiringanassetorincurringanexpenditure.

XV. Borrowing Costs

a) Borrowing cost that are directly attributable to acquisition, construction of qualifying assetsincludingcapitalwork–in-progressarecapitalized,aspartofthecostofassets,uptothedateofcommencementofcommercialuseof theassets.Otherborrowingcostsare recognizedasexpenses in the period in which they are incurred.

b) Interestincurredonborrowedfundsorothertemporaryborrowingsinanticipationofthereceiptoflong-termborrowingsthatareusedforacquisitionofqualifyingassetsexceedingthevalueofRs.10.0millioniscapitalizedattheweightedaverageborrowingrateonloansoutstandingatthetime of acquisition.

XVI. Foreign Currency Transactions

a) Foreign Currency Monetary Items:

i) Foreign currency Revenue and Expenditure transactions relating to Foreign Stations are recordedatestablishedmonthlyrates(basedonpublishedIATArates).InterlinesettlementwithAirlines for transportation is carried out at the exchange rate published by IATA forrespective month.

ii) Foreign currency monetary items are translated using the exchange rate circulated byForeign Exchange Dealers Association of India (FEDAI). Gains/ (losses) arising on account of realization/settlement of foreign exchange transactions and on translation of monetary foreign currencyassetsandliabilitiesarerecognizedintheStatementofProfitandLoss.

iii) Inrespectoflongtermforeigncurrencymonetaryitemsoriginatingbefore1stApril,2016,theeffect of exchange differences arising on settlement or reporting of long term monetary items at theratesdifferent fromthoseatwhich theywere initially recordedduring theperiod,orreportedinpreviousfinancialstatements,isaccountedasadditionordeductiontothecostoftheassetssofarasitrelatestoacquisitionofdepreciablecapitalassetsandisdepreciatedover thebalanceuseful lifeof theconcernedassetand inother casessuchdifference isaccumulatedbytransferto“ForeignCurrencyMonetaryItemsTranslationDifferenceAccount”tobeamortizedoverthebalanceperiodofsuchlongtermAssetsorLiability.

b) Foreign Currency Non-Monetary Items

Non-monetary items denominated in Foreign Currency are stated at the rates prevailing on the date of the transaction/exchange rate at which transaction is actually affected.

c) Exchangevariationisnotconsideredattheyear-endinrespectofDebtsandLoans&Advancesforwhichdoubtfulprovisionexistssincetheyarenotexpectedtoberealized.

126

AI

XVII. Employee Benefits

TheRetirementBenefitstotheemployeescompriseofDefinedContributionPlansandDefinedBenefitPlans.

a) Defined Contribution PlansconsistofcontributionstoEmployeesProvidentFundandEmployeesState Insurance Scheme. The Company has created separate Trusts to administer Provident Fundcontributionstowhichcontributionsaremaderegularly.ESIduesareregularlydepositedwith government authorities.

b) Defined Benefit Planswhicharenotfunded,consistofGratuity,andPost-RetirementMedicalBenefitsandotherbenefits.The liability for thesebenefits isactuariallydeterminedunder theProjectedUnitCreditMethodattheyearendasperIndianLaws.

Theobligationismeasuredatthepresentvalueofestimatedfuturecashflows.Thediscountratesusedfordeterminingthepresentvalueofobligationunderdefinedbenefitplans,isbasedonthemarketyieldsonGovernmentsecuritiesasat thebalancesheetdate,havingmaturityperiodsapproximatingtothetermsofrelatedobligations.Re-measurementsgainsandlossesarisingfromexperience adjustments and changes in actuarial assumptions are recognized in the period in whichtheyoccur,directlyinOtherComprehensiveIncome.Theyareincludedin“OtherEquity”inthe Statement of Changes in Equity and in the Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from settlement orcurtailmentsarerecognizedimmediatelyinStatementofProfitandLossaspastservicecost.

Liability forGratuity,Pensionandother retirementBenefits forstaffdirectly recruitedat foreignstationsisprovidedincompliancewithlocallawsprevailingintherespectivecountriesbasedonavailableinformationasattheyearend.

c) Other Long-Term EmployeeBenefits: The Company’s net obligation in respect of LeaveEncashment is the amount of benefit to be settled in future, that employees have earned inreturnfortheirserviceinthecurrentandpreviousyears.Thebenefitisdiscountedtodetermineitspresent value.Theobligation ismeasuredon thebasisofanactuarial valuationusing theprojectedunitcreditmethod.Re-measurementsarerecognizedinStatementofProfitandLossinthe period in which they arise.

d) Short Term Benefits ShortTermEmployeeBenefitsareaccountedfor in theperiodduringwhichtheserviceshave

beenrendered.

XVIII. Taxes on Income

(i) Current Tax Currenttaxcomprisestheexpectedtaxpayableorreceivableonthetaxableincomeorlossfor

theyearandanyadjustmenttothetaxpayableorreceivableinrespectofpreviousyears.Theamountofcurrenttaxreflectsthebestestimateofthetaxamountexpectedtobepaidorreceivedafterconsideringtheuncertainty,ifany,relatedtoincometaxes.Itismeasuredusingtaxrates(andtaxlaws)enactedorsubstantivelyenactedbythereportingdate.Currenttaxassetsandcurrenttaxliabilitiesareoffsetonlyifthereisalegallyenforceablerighttosetofftherecognizedamounts,anditisintendedtorealizetheassetandsettletheliabilityonanetbasisorsimultaneously.

(ii) Deferred tax Deferredtaxisrecognizedinrespectoftemporarydifferencesbetweenthecarryingamountsof

assetsand liabilities forfinancial reportingpurposesand thecorrespondingamountsused for

127

AI

taxation purposes.

Deferredtaxliabilitiesarerecognizedforalltaxabletemporarydifferences.Deferredtaxassetsarerecognizedforunusedtaxlosses,unusedtaxcreditsanddeductibletemporarydifferencestotheextentthatisprobablethatfuturetaxableprofitswillbeavailableagainstwhichtheycanbeused.Thecarryingamountofdeferred taxassets is reviewedat theendofeach reportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferred tax is measured at the tax rates that are expected to apply to the period when the assets are realizedor liability is settled, basedon the laws that havebeenenactedor substantivelyenactedbythereportingdate.

ThemeasurementofdeferredtaxreflectsthetaxconsequencesthatwouldfollowfromthemannerinwhichtheCompanyexpects,atthereportingdate,torecoverorsettlethecarryingamountofitsassetsandliabilities.

Deferredtaxassetsandliabilitiesareoffsetifthereisalegallyenforceablerighttooffsetcurrenttaxliabilitiesandassets,andtheyrelatetoincometaxesleviedbythesametaxauthority,buttheyintendtosettlecurrenttaxliabilitiesandassetsonanetbasisortheirtaxassetsandliabilitieswillberealizedsimultaneously.

XIX. Provisions, Contingent Liabilities/Capital Commitments & Contingent Assets

a) Provisions involving a substantial degree of estimation inmeasurement are recognizedwhenthereisapresentobligation(legalorconstructive)asaresultofpasteventsanditisprobablethattherewillbeanoutflowofresources.Iftheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whenappropriate,therisksspecifictotheliability.Theseestimatesarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimates.Theexpenserelatingtoaprovisionispresentedinthestatementofprofitandloss.

b) Contingent liabilitiesaredisclosedbywayofanote in respectofpossibleobligations thatmayarisefrompasteventsbuttheirexistenceisconfirmedbytheoccurrenceornon-occurrenceofone or more uncertain future events not wholly within the control of the Company.

c) Contingent assets are possible assets that arises frompast events andwhose existencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheCompany.Acontingentassetisdisclosed,whenaninflowofeconomicbenefitsisprobable.

XX. Cash and Cash Equivalents

Cashandcashequivalentsconsistofcashatbankandinhandandshort-termdepositswithanoriginalmaturityofthreemonthsorless,whicharesubjecttoaninsignificantriskofchangesinvalue.

XXI. Earnings per Share

TheCompanypresentsbasicanddilutedearnings/(loss)pershare(EPS)dataforitsequityshares.Basicearningsperequity shareare computedbydividing thenet profit after taxattributable to theequity shareholdersby theweightedaveragenumberof equity sharesoutstandingduring the year.Dilutedearningsperequityshareiscomputedbydividingadjustednetprofitaftertaxbytheaggregateofweightedaveragenumberofequitysharesanddilutivepotentialequitysharesduringtheyear.

XXII. Fair Value Measurement

128

AI

TheCompanymeasures financial instruments and specific investments (other than subsidiary, jointventureandassociates),atfairvalueateachbalancesheetdate.

Allassetsandliabilitiesforwhichfairvalue ismeasuredordisclosed inthefinancialstatementsarecategorizedwithinthefairvaluehierarchy,describedasbelow,basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole:

Level1: Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities

Level2: Valuation techniques forwhich the lowest level input that is significant to the fair valuemeasurementisdirectlyorindirectlyobservable

Level3: Valuation techniques forwhich the lowest level input that is significant to the fair valuemeasurementisunobservable.

Forassetsandliabilitiesthatarerecognizedinthebalancesheetonarecurringbasis,theCompanydetermines whether transfers have occurred between levels in the hierarchy by re-assessingcategorization(basedonthelowest level inputthat issignificanttothefairvaluemeasurementasawhole) at the end of each reporting period.

Forthepurposeoffairvaluedisclosures,theCompanyhasdeterminedclassesofassetsandliabilitiesonthebasisofthenature,characteristicsandrisksoftheassetorliabilityandthelevelofthefairvaluehierarchyasexplainedabove.

XXIII. Financial Instruments

Afinancial instrument isanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.

A. Financial Assets(i) Classification TheCompanyclassifiesfinancialassetsassubsequentlymeasuredatamortizedcost,fairvalue

throughothercomprehensiveincomeorfairvaluethroughStatementofProfitandLossonthebasis of its businessmodel formanaging the financial assets and the contractual cash flowscharacteristicsofthefinancialasset.

(ii) Initial recognition and measurement Allfinancialassetsarerecognizedinitiallyatfairvalueplus, inthecaseoffinancialassetsnot

recordedatfairvaluethroughStatementofProfitandLoss,transactioncoststhatareattributabletotheacquisitionofthefinancialasset.

(iii) Subsequent measurement Forpurposesofsubsequentmeasurementfinancialassetsareclassifiedinbelowcategories:

(a) Financial assets carried at amortized cost: Afinancialassetother thanderivativesandspecificinvestments,issubsequentlymeasuredatamortizedcostifitisheldwithinabusinessmodelwhoseobjectiveistoholdtheassetinordertocollectcontractualcashflowsandthecontractual termsof thefinancialassetgive riseonspecifieddates tocashflows thataresolely payments of principal and interest on the principal amount outstanding.

(b) Financial assets at fair value through other comprehensive income: Afinancialassetcomprising specific investment is subsequently measured at fair value through othercomprehensiveincomeifitisheldwithinabusinessmodelwhoseobjectiveisachievedby

129

AI

bothcollectingcontractualcashflowsandsellingfinancialassetsandthecontractualtermsof the financial asset give rise on specifieddates to cash flows that are solely paymentsof principal and interest on the principal amount outstanding. The Company has made an irrevocableelectionforitsinvestmentswhichareclassifiedasequityinstrumentstopresentthesubsequentchangesinfairvalueinothercomprehensiveincomebasedonitsbusinessmodel.

(c) Financial assets at fair value through Statement of Profit and Loss:Afinancial assetcomprisingderivativeswhichisnotclassifiedinanyoftheabovecategoriesaresubsequentlyfairvaluedthroughprofitorloss.

(iv) De-recognition Afinancialassetisprimarilyderecognizedwhentherightstoreceivecashflowsfromtheasset

haveexpiredortheCompanyhastransferreditsrightstoreceivecashflowsfromtheasset

(v) Investment in subsidiaries, joint ventures and associates TheCompanyhasaccounted for its investment in subsidiaries, joint ventures andassociates

atcost.TheCompanyassesseswhetherthereisanyindicationthattheseinvestmentsmaybeimpaired.Ifanysuchindicationexists,theinvestmentisconsideredforimpairmentbasedonthefair value thereof.

(vi) Impairment of other financial assets TheCompanyassessesimpairmentbasedonexpectedcreditlosses(ECL)modelformeasurement

andrecognitionofimpairmentlossonthefinancialassetsthataretradereceivablesorcontractrevenuereceivables.

(vii) Write-off Thegrosscarryingamountofafinancialassetiswrittenoff(eitherpartiallyorinfull)totheextent

that there is no realistic prospect of recovery. This is generally the case when the Company determines that the counterparty does not have assets or sources of income that could generate sufficientcashflowstorepaytheamountssubjecttothewrite-off.However,financialassetsthatarewrittenoffcouldstillbesubjecttoenforcementactivitiesinordertocomplywiththeCompany'sprocedures for recovery of amounts due.

B. Financial Liabilities(i) Initial recognition and measurement Allfinancialliabilitiesarerecognizedinitiallyatfairvalueand,inthecaseofloansandborrowings

and payables, net of directly attributable transaction costs.TheCompany's financial liabilitiesincludetradeandotherpayables,loansandborrowingsincludingbankoverdrafts,andderivativefinancialinstruments.

(ii) Classification TheCompanyclassifiesallfinancialliabilitiesassubsequentlymeasuredatamortizedcost,except

forfinancialliabilitiesatfairvaluethroughStatementofProfitandLoss.Suchliabilities,includingderivativesshallbesubsequentlymeasuredatfairvalue.

(iii) Subsequent measurement Themeasurementoffinancialliabilitiesdependsontheirclassification,asdescribedbelow.

a) Financial liabilities at amortized cost After initial recognition, interest-bearing loansandborrowingsaresubsequentlymeasured

130

AI

at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognizedinStatementofProfitandLosswhentheliabilitiesarederecognizedaswellasthroughtheEIRamortizationprocess.Amortizedcostiscalculatedbytakingintoaccountanydiscount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIRamortizationisincludedasfinancecostsintheStatementofProfitandLoss.

b) Financial liabilities at fair value through Statement of Profit and Loss FinancialliabilitiesatfairvaluethroughStatementofProfitandLossincludefinancialliabilities

held for trading and financial liabilities designated upon initial recognition as at fair valuethroughStatementofProfitandLoss.Financialliabilitiesareclassifiedasheldfortradingifthey are incurred for the purpose of repurchasing in the near term. This category comprises derivative financial instruments entered into by the Company that are not designated ashedginginstrumentsinhedgerelationshipsasdefinedbyIndAS109.Separatedembeddedderivatives are also classified as held for trading unless they are designated as effectivehedging instruments.Gains or losses on liabilities held for trading are recognized in theStatementofProfitandLoss.

(iv) De-recognition Afinancialliabilityisderecognizedwhentheobligationundertheliabilityisdischargedorcancelled

or expires.

(v) Offsetting of financial instruments Financialassetsandfinancialliabilitiesareoffsetandthenetamountisreportedinthebalance

sheetifthereisacurrentlyenforceablelegalrighttooffsettherecognizedamountsandthereisanintentiontosellonanetbasis,torealizetheassetsandselltheliabilitiessimultaneously.

XXIV. Threshold Limits

The Company has adopted following materiality threshold limits in therecognition of expenses/incomes:

(Rs in Million)No Threshold Items Threshold Value

i) Fair Valuation of Financial Instruments 50.00ii) Prior Period Items

-Identificationbasedonindividuallimits 25.0-Restatementbasedonoveralllimits 1%ofTotalRevenueofPreviousFY

XXV. Recent Accounting Pronouncements

a) Changes in Accounting Standards Issued after 31st March 2020, however effective from 1st April 2019 � IndAS116Leases–ClarificationonwhetherrentconcessionsasadirectconsequenceofCOVID-19pandemiccanbeaccountedasleasemodificationornot.

b) Changes in Accounting Standards that may affect the Company after 31st March 2020 ThefollowingAccountingStandardshavebeenmodifiedonmiscellaneousissueswitheffectfrom

24thJuly2020.Suchchangesincludeclarification/guidanceon:

� IndAS1PresentationofFinancialStatements–Substitutionofthedefinitionofterm‘Material’

� IndAS 8Accounting Policies, Changes inAccounting Estimates and Errors – In order to

131

AI

maintainconsistencywithIndAS1,therespectivechangeshavebeenmadetoIndAS8also.

� IndAS10EventsaftertheReportingPeriod–Clarificationonthedisclosuresrequirementstobemadeincaseofamaterialnon-adjustingevent.

� IndAS34InterimFinancialReporting–InordertomaintainconsistencywiththeamendmentsmadeinotherIndAS,respectivechangeshavebeenmadetoIndAS34.

� IndAS 37 Provisions, Contingent Liabilities and ContingentAssets – Clarification on theaccounting treatment for restructuring plans.

� IndAS 103BusinessCombination –Detailed guidance on term ‘Business’ and ’BusinessCombination’alongwithprovidinganOptionaltesttoidentifyconcentrationofFairValue.

� IndAS 107 Financial Instruments:Disclosures –Clarification on certain disclosures to bemadeinrespectofuncertaintyarisingfrominterestratebenchmarkreforms.

� Ind AS 109 Financial Instruments – Clarification on temporary exceptions from applyingspecifichedgeaccountingrequirementsalongwithprovidingguidanceontransitionforhedgeaccounting.

TheCompanydoesnotexpectanysignificantimpactoftheseamendmentonitsfinancialstatements.

132

AI

NOTE “1” : (Rupees in Million)

Sl.No.

Particulars GROSS BLOCK DEPRECIATION NET BLOCKAs at

April 01, 2019

Additi-ons/

Reclassi-fication

Deducti-ons /

Reclassi-fication

Adjust-ments

relating to Ind AS 116

As at March 31,

2020

Upto April 01,

2019

For the year

Deductions / Reclassi-

fication

Adjust-ments

relating to Ind AS 116

Upto March

31, 2020

As at March 31,

2020

As at March 31,

2019

PROPERTY, PLANT & EQUIPMENTA. LAND & BUILDINGS * @1. Land-Freehold 2,994.0 - 2,711.4 - 282.6 - - - - - 282.6 2,994.02. Land-Leasehold 643.9 - 463.9 (180.0) - - - - - - - 643.9 3. Buildings 8,722.7 - 25.8 - 8,696.9 546.2 361.7 6.2 - 901.7 7,795.2 8,176.5

SUB TOTAL "A" 12,360.6 - 3,201.1 (180.0) 8,979.5 546.2 361.7 6.2 - 901.7 8,077.8 11,814.4B. AIRCRAFT FLEET, ROTABLES &

REPAIRABLES1. Airframes

Owned 174,014.3 553.0 (144,807.7) (144,807.7) 174,567.3 22,565.9 5,318.1 (62,914.5) (59,830.2) 30,968.3 143,599.0 151,448.4Leased - - - - - - - - - - - -

2. Aero Engines & Power Plants - - (a) Owned-Fixed Cost 72,415.3 1,492.6 (52,187.8) (52,187.8) 73,907.9 8,628.2 2,283.0 (22,161.3) (21,078.4) 11,994.1 61,913.8 63,787.1(b) Owned-VariableCost(Component) 3,231.5 - - - 3,231.5 2,862.7 188.2 - - 3,050.9 180.6 368.8 (c) Owned-Repair Cost 7,603.9 10,483.2 - - 18,087.1 3,472.7 2,576.2 - - 6,048.9 12,038.2 4,131.23. Simulators&LinkTrainers 2,732.4 - - - 2,732.4 279.7 158.6 - - 438.3 2,294.1 2,452.74. AirframeRotables 9,314.8 1,792.2 7.6 - 11,099.4 1,414.4 656.7 0.8 - 2,070.3 9,029.1 7,900.45. Aero-EngineRotables 757.0 - - - 757.0 181.5 60.5 - - 242.0 515.0 575.5 6. AircraftRepairables 10,379.9 2,774.3 644.1 - 12,510.1 2,829.4 1,124.6 110.9 - 3,843.1 8,667.0 7,550.57. SimulatorRotables - - - - - - - - - - - -

SUB TOTAL "B" 280,449.1 17,095.3 196,343.8) (196,995.5) 296,892.7 42,234.5 12,365.9 (84,964.1) (80,908.6) 58,655.9 238,236.8 238,214.6C. OTHERS *1. WorkshopEquipment,Instruments, 5,272.2 222.3 5.3 - 5,489.2 932.6 439.2 0.9 - 1,370.9 4,118.3 4,339.6

Plant & Machinery and Vehicles - - 2. Ground Support & Ramp Equipment 426.5 2.2 17.9 - 410.8 303.2 5.8 14.8 - 294.2 116.6 123.3 3. Furniture & Fixtures 223.3 4.9 0.1 - 228.1 84.9 21.3 0.1 - 106.1 122.0 138.4 4. OfficeAppliances&Equipment 169.9 10.7 0.4 - 180.2 75.3 19.9 0.1 - 95.1 85.1 94.6 5. Computer System 343.6 85.0 0.5 - 428.1 138.0 59.9 - - 197.9 230.2 205.6 6. Electrical Fittings & Installations 488.8 2.4 0.2 - 491.0 134.7 56.0 0.2 - 190.5 300.5 354.1 7. ObjectD'art(NetBlockRs.37,168.97)^ 0.6 - - - 0.6 0.6 - - - 0.6 - -

SUB TOTAL "C" 6,924.9 327.5 24.4 - 7,228.0 1,669.3 602.1 16.1 - 2,255.3 4,972.7 5,255.6TOTAL PROPERTY, PLANT & EQUIPMENT

299,734.6 17,422.8 (193,118.3) (197,175.5) 313,100.2 44,450.0 13,329.7 (84,941.8) (80,908.6) 61,812.9 251,287.3 255,284.6

RIGHT OF USE ASSETS #1. Aircraft Fleet - 811.6 197,807.2 425,473.2 228,477.6 - 29,919.4 85,075.8 80,908.6 25,752.2 202,725.4 - 2. Land-Leasehold - - - 180.0 180.0 - - - - - 180.0 -

TOTAL RIGHT OF USE ASSETS - 811.6 197,807.2 425,653.2 228,657.6 - 29,919.4 85,075.8 80,908.6 25,752.2 202,905.4 - INVESTMENT PROPERTY *1. InvestmentPropertyLand-Freehold 191.7 - - - 191.7 - - - - - 191.7 191.7 2. InvestmentPropertyLand-Leasehold 4,104.6 - - - 4,104.6 - - - - - 4,104.6 4,104.63. Investment Property - Buildings 102.4 - - - 102.4 21.0 2.0 - - 23.0 79.4 81.4 TOTAL FOR INVESTMENT PROPERTY 4,398.7 - - - 4,398.7 21.0 2.0 - - 23.0 4,375.7 4,377.7

INTANGIBLE ASSETS :A. COMPUTER SOFTWARE 950.3 - - - 950.3 755.6 130.4 - - 886.0 64.3 194.7 B. OTHERS 383.6 - - - 383.6 383.6 - - - 383.6 - -

TOTAL FOR INTANGIBLE ASSETS 1,333.9 - - - 1,333.9 1,139.2 130.4 - - 1,269.6 64.3 194.7 TOTAL ASSETS 305,467.2 18,234.4 4,688.9 228,477.7 547,490.4 45,610.2 43,381.5 134.0 - 88,857.7 458,632.7 259,857.0 Capital Work-in-Progress 726.7 274.4 - - 1,001.1 - - - - - 1,001.1 726.7 IntangibleAssetsunderDevelopment 12.5 - - - 12.5 - - - - - 12.5 12.5 GRAND TOTAL 306,206.4 18,508.8 4,688.9 228,477.7 548,504.0 45,610.2 43,381.5 134.0 - 88,857.7 459,646.3 260,596.2

1 Duringtheyear,theCompanyhascapitalizedtranslationdifferenceofRs.874.0Million(PreviousYear:Rs.4,047.0Million)arisingonsettlementandreportingoflongtermmonetaryitems.Additionsto“AircraftFleet,Rotables&Repairables”includesExchangeRateFluctuations(NetofDebit&Credit)onunderlyingloansinforeigncurrency:Rs.874.0Million(PreviousYear:Rs.(4,047.0Million).

2 37Aircraft(CarryingValueofRs.197,807.2Million)takenonleaseearlier,weretransferredto“Property,Plant&Equipment”duringtheyearupondischargeofloantolenders.However,thetitleof15Aircrafthavenotyetbeentransferredduetothecrossdefaultclauseinotherfacilities.

3 Borrowing costs capitalized during the year are Rs.35.0 Million (Previous Year : Rs.21.0 Million)4 DepreciationincludesdebitofRs.459.7Million(PreviousYear:DebitofRs.454.6Million)toCapitalReserve. 5 AsperAccountingPolicy,theCompanyhascarriedoutimpairmentofassetsasrequiredunderIndAS36.6 Specialtoolsincludedin“Property,Plant&Equipment”underthesubhead“Others”arebeingDepreciatedatyearwisetotalBlockAmount.7 LeaseholdlandonlongtermbasiswiththeoptiontoextendthesameareidentifiedasperpetualleaseandarenotamortisedduringtheperiodofLease.8 “IntangibleAsset-Others”representsMembershipFeesforjoiningStarAlliance.9 ObjectD’artreflectedin“Property,Plant&Equipment”NoteasaseparatelineitemareoldassetsandhavebeenfullydepreciatedappearingatNILvalue(Rs1).* Property,Plant&EquipmentidentifiedfortransfertoAIEngineeringServicesLtd.(ReferNote30(iv))^ ObjectD’artplannedtobetransferredtoAIAHL/NGMA@ LandandBuildingidentifiedformonitizationamountingtoRs.3,181.9Million(PreviousYear:Rs.68,066.3Million)havebeenreclassifiedasAssetHeldforSale# For movement of Right of Use Assets Refer Note 44

133

AI

NOTE “1”

(Rupees in Million)Sl.No.

Particulars GROSS BLOCK DEPRECIATION NET BLOCKAs at April 01, 2018

Additions/ Reclassi-fication

Deductions / Reclassi-

fication

As at March 31,

2019

Upto April 01,

2018

For the year

Deductions / Reclass-ification

Upto March

31, 2019

As at March

31, 2019

As at March 31,

2018PROPERTY, PLANT & EQUIPMENTA. LAND & BUILDINGS1. Land-Freehold 5,725.4 43.6 2,775.0 2,994.0 - - - - 2,994.0 5,725.42. Land-Leasehold 1,838.1 - 1,194.2 643.9 - - - - 643.9 1,838.13. Buildings 9,450.8 22.0 750.1 8,722.7 255.8 384.6 94.2 546.2 8,176.5 9,195.0

SUB TOTAL "A" 17,014.3 65.6 4,719.3 12,360.6 255.8 384.6 94.2 546.2 11,814.4 16,758.5B. AIRCRAFT FLEET, ROTABLES &

REPAIRABLES1. Airframes

Owned 171,908.4 2,829.1 723.2 174,014.3 14,938.3 8,225.1 597.5 22,565.9 151,448.4 156,970.1Leased - - - - - - - - - -

2. Aero Engines & Power Plants(a) Owned-Fixed Cost 69,119.3 6,129.3 2,833.3 72,415.3 5,445.5 3,182.7 - 8,628.2 63,787.1 63,673.8(b) Owned-VariableCost(Component) 3,231.5 - - 3,231.5 2,447.8 414.9 - 2,862.7 368.8 783.7 (c) Owned-Repair Cost 5,282.7 2,321.2 - 7,603.9 2,054.9 1,417.8 - 3,472.7 4,131.2 3,227.83. Simulators&LinkTrainers 2,732.4 - - 2,732.4 114.8 164.9 - 279.7 2,452.7 2,617.64. AirframeRotables 8,407.7 907.1 - 9,314.8 881.8 532.6 - 1,414.4 7,900.4 7,525.95. Aero-EngineRotables 757.0 - - 757.0 121.0 60.5 - 181.5 575.5 636.0 6. AircraftRepairables 9,498.2 1,085.4 203.7 10,379.9 2,007.5 958.2 136.3 2,829.4 7,550.5 7,490.77. SimulatorRotables - - - - - - - - - -

SUB TOTAL "B" 270,937.2 13,272.1 3,760.2 280,449.1 28,011.6 14,956.7 733.8 42,234.5 238,214.6 242,925.6C. OTHERS1. WorkshopEquipment,Instruments, 4,352.8 947.6 28.2 5,272.2 486.9 450.8 5.1 932.6 4,339.6 3,865.9

Plant & Machinery and Vehicles - 2. Ground Support & Ramp Equipment 442.7 3.1 19.3 426.5 273.5 45.1 15.4 303.2 123.3 169.2 3. Furniture & Fixtures 220.5 3.9 1.1 223.3 62.6 22.3 - 84.9 138.4 157.9 4. OfficeAppliances&Equipment 166.4 3.9 0.4 169.9 47.8 24.9 (2.6) 75.3 94.6 118.6 5. Computer System 328.0 24.1 8.5 343.6 76.4 61.6 - 138.0 205.6 251.6 6. Electrical Fittings & Installations 487.5 1.4 0.1 488.8 78.9 56.6 0.8 134.7 354.1 408.6 7. ObjectD'art(NetBlockRs.38,096.38) 0.6 - - 0.6 0.6 - - 0.6 - -

SUB TOTAL "C" 5,998.5 984.0 57.6 6,924.9 1,026.7 661.3 18.7 1,669.3 5,255.6 4,971.8TOTAL PROPERTY, PLANT & EQUIPMENT

293,950.0 14,321.7 8,537.1 299,734.6 29,294.1 16,002.6 846.7 44,450.0 255,284.6 264,655.9

INVESTMENT PROPERTY1. InvestmentPropertyLand-Freehold - 191.7 - 191.7 - - - - 191.7 2. InvestmentPropertyLand-Leasehold 4,213.0 - 108.4 4,104.6 - - - - 4,104.6 4,213.03. Investment Property - Buildings 6,569.4 - 6,467.0 102.4 862.8 59.6 901.4 21.0 81.4 5,706.6

TOTAL FOR INVESTMENT PROPERTY 10,782.4 191.7 6,575.4 4,398.7 862.8 59.6 901.4 21.0 4,377.7 9,919.6INTANGIBLE ASSETS :A. COMPUTER SOFTWARE 885.4 64.9 - 950.3 611.7 143.9 - 755.6 194.7 273.7 B. OTHERS 383.6 - - 383.6 255.8 127.8 - 383.6 - 127.8

TOTAL FOR INTANGIBLE ASSETS 1,269.0 64.9 - 1,333.9 867.5 271.7 - 1,139.2 194.7 401.5 TOTAL ASSETS 306,001.4 14,578.3 15,112.5 305,467.2 31,024.4 16,333.9 1,748.1 45,610.2 259,857.0 274,977.0Capital Work-in-Progress 813.6 423.3 510.2 726.7 - - - - 726.7 813.6 Intangible Assets under Development 82.9 - 70.4 12.5 - - - - 12.5 82.9 GRAND TOTAL 306,897.9 15,001.6 15,693.1 306,206.4 31,024.4 16,333.9 1,748.1 45,610.2 260,596.2 275,873.5

1 Duringtheyear,theCompanyhascapitalizedtranslationdifferenceofRs.4,047.0Million(PreviousYear:Rs.244.4Million)arisingonsettlementandreportingoflongtermmonetaryitems.Additionsto“AircraftFleet,Rotables&Repairables”includesExchangeRateFluctuations(NetofDebit&Credit)onunderlyingloansinforeigncurrency:Rs.4,047.0Million(PreviousYear:Rs.(244.4Million).

2 “AircraftFleet,Rotables&Repairables”includes34Aircraft(OneB777-300ER,SixB787-800,FourB747-400,TenA-319,FiveA320&EightA-321),22SpareEngines(includes10CFM-5B,2CFMLeapEngines)&4SpareAPUs(PreviousYear:39Aircraft(oneB777-300ER,SixB787-800,FiveB747-400,NineA-319,TenA320&EightA-321)20Spareengines&4APUs)ownedbyAirIndiaLtd.

3 “AircraftFleet,Rotables&Repairables”includes36Aircraft(ThreeB777-200LR,TwelveB777-300ER,NineA-319&TwelveA-321)(PreviousYear:37Aircraft-{ThreeB777-200LR,TwelveB777-300ER,TenA-319&TwelveA-321})&5GESpareEngines(PreviousYear5GESpareEngines)andRegistrationofthese36Aircraft&5SpareEnginescontinuestobeinthenameofSPVCompanyforwhichbeneficialownershipiswithAirIndiaLtd.(ReferNote43(i)(a))

4 BorrowingcostscapitalizedduringtheyearareRs.21.0Million(PreviousYear:Rs.1,636.8Million)5 DepreciationincludesdebitofRs.454.6Million(PreviousYear:DebitofRs.463.5Million)toCapitalReserve.6 AsperAccountingPolicy,theCompanyhascarriedoutimpairmentofassetsasrequiredunderIndAS36.7 Specialtoolsincludedin“Property,Plant&Equipment”underthesubhead“Others”arebeingDepreciatedatyearwisetotalBlockAmount.8 LeaseholdlandonlongtermbasiswiththeoptiontoextendthesameareidentifiedasperpetualleaseandarenotamortisedduringtheperiodofLease.9 “IntangibleAsset-Others”representsMembershipFeesforjoiningStarAlliance.10 ObjectD’artreflectedin“Property,Plant&Equipment”NoteasaseparatelineitemareoldassetsandhavebeenfullydepreciatedappearingatNILvalue(Rs1).

134

AI

NOTE “2” : NON-CURRENT INVESTMENTS

(Rupees in Million)Particulars As at March

31, 2020As at March 31,2019

1 INVESTMENTS at Cost 1.1 EQUITY INSTRUMENTS - UNQUOTED A IN SUBSIDIARIES i) 78,000,000EquityShares(PreviousYear:78,000,000EquityShares)

ofRs.100eachfullypaidupinAirIndiaExpressLimited. 7,800.0 7,800.0

SUB TOTAL 7,800.0 7,800.0 B IN JOINT VENTURE

40,424,975 Equity Shares (Previous Year : 40,424,975 EquityShares) of Rs.10 each

436.2 436.2

fullypaidupinAirIndiaSATSAirportServicesPrivateLtd. (40,419,975EquitySharesofRs.10each issuedatapremiumofRs.0.79 per share)

SUB TOTAL 436.2 436.2 TOTAL INVESTMENT at Cost (A) 8,236.2 8,236.2

2. INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

2.1 EQUITY INSTRUMENTS (QUOTED) 375,407 Equity Shares (Previous Year : 375,407 Equity Shares)of EUR 0.48 each fully paid up in Orange S.A. (formerly known as France Telecom)

346.0 422.8

SUB TOTAL 346.0 422.8 2.2 WITH OTHERS / STRUCTURED ENTITIES

TRADE INVESTMENTS i) 2,617,098EquityShares(PreviousYear:2,617,098EquityShares)

ofMAR10eachfullypaidupinAirMauritiusLtd. 131.4 131.4

ii) 2,301,244EquityShares(PreviousYear:2,301,244EquityShares)ofMAR10eachfullypaidupinAirMauritiusHoldingLtd.

45.5 45.5

176.9 176.9 Less:ProvisionforDiminution 176.9 -

- 176.9 iii) 12,500,000 Equity Shares (Previous Year : 12,500,000 Equity

Shares) of Rs. 10 each 477.2 451.2

fullypaidupinCochinInternationalAirportLimited.#(Includes2,500,000EquitySharesofRs.10issuedandsubscribedat a premium of Rs.40 per share)

iv) 302EquityShares(PreviousYear:277EquityShares)ofEUR5.00^ 0.1 0.1 each fully paid up in SITA (Societe Internationale de Telecommunications Aeronautiques). (25 Shares allotted during the year)

135

AI

Particulars As at March 31, 2020

As at March 31,2019

v) 890,139 Depository Certificates of SITA Information NetworkComputingN.V.^(PreviousYear:890139)

42.7 42.7

vi) 2299classBShares(PreviousYear:2348Shares)ofBHT100^ 0.4 0.4 eachfullypaidupinAeronauticalRadioofThailandLtd.(49Sharesredeemed during the year)

vii) 50 Equity Shares (Previous Year : 50 Equity Shares) of EUR 152.45 each^fullypaidupinAssociationSportiveDuGolfIsabella.

0.4 0.4

SUB TOTAL 520.8 671.7 2.3 DEBENTURES

6%DebentureBondsofBancoDeRomafacevalueEUR15.49^ * 0.0 * 0.0 guaranteedbytheGovernmentofItaly(DepositedwithCivilAviationDepartment,Italy)(*Rs.3,057.69)

SUB TOTAL - - TOTAL INVESTMENTS AT FAIR VALUE THROUGH OTHER

COMPREHENSIVE INCOME (FVTOCI) (B) 866.8 1,094.5

TOTAL INVESTMENTS (A + B) 9,103.0 9,330.7

Aggregate amount of unquoted investments (NET) 8,757.0 8,907.9Aggregate provision for diminution in value of investments 176.9 - Aggregate amount of quoted investments (Market value : Rs.346.0 Million 346.0 422.8 (Previous Year : Rs.422.8 Million)) (Equivalent to EUR 4.2 Million(Previous Year : EUR 5.5 Million))

# FairvaluationofInvestmentscarriedoutatnetassetvaluebasedonlatestavailableAuditedFinancialStatements of the entity.

^ Investments carried at cost.

NOTE “3” : TRADE RECEIVABLES

(Rupees in Million)Particulars Non-current Current

As at March 31, 2020

As at March 31,2019


As at March 31,2019

Considered Good - Unsecured * - - 13,756.1 20,133.8TradeReceivableshavingsignificantincreasein credit risk

- - 1,128.6 1,389.4

TradeReceivables-CreditImpaired 10,283.9 9,399.7 10,283.9 9,399.7 14,884.7 21,523.2

Less : Allowance for Significant increase incredit risk

- - 1,128.6 1,389.4

Less:AllowanceforCreditImpaired 10,283.9 9,399.7 - - TOTAL - - 13,756.1 20,133.8

136

AI

a) Also refer Note 57(i) for further details.

* TradeReceivablesamountingtoRs.81.8Million(PreviousYearRs.447.3Million)arebackedbyBankGuarantees.

* PreviousYearfigurehasbeenregroupedbyRs.212.8MilliononaccountofreclassificationofDebitBalancesin“ForwardSales(Net)[Passenger/Cargo]”from“OtherNonFinancialLiabilities(ReferNote17)

‘NOTE “4” : LOANS

Particulars Non-Current CurrentAs at March

31, 2020As at March 31,2019


As at March 31,2019

Security DepositsConsidered Good - Unsecured 4,039.9 3,316.4 175.5 145.8 ConsideredDoubtful 45.2 42.4 - -

4,085.1 3,358.8 175.5 145.8 Less:AllowanceforDoubtfulDeposits 45.2 42.4 - -

4,039.9 3,316.4 175.5 145.8 TOTAL 4,039.9 3,316.4 175.5 145.8

NOTE “5” : OTHER FINANCIAL ASSETS

(Rupees in Million)Particulars Non-Current Current


As at March 31,2019


As at March 31,2019

1 Advances Recoverable from PartiesUnsecured Considered Good - - 567.2 704.9 UnsecuredConsideredDoubtful 69.1 68.1 - -

69.1 68.1 567.2 704.9 Less:AllowanceforDoubtfulAdvances 69.1 68.1 - -

(A) - - 567.2 704.9 2 Advances Recoverable from Employees

Unsecured Advances Considered Good 102.5 117.0 563.1 591.5 UnsecuredConsideredDoubtful 10.8 10.8 - -

113.3 127.8 563.1 591.5 Less:AllowanceforDoubtfulAdvances 10.8 10.8 - -

(B) 102.5 117.0 563.1 591.5 3 Advance to Subsidiary Companies *

Unsecured Considered Good 10,362.7 10,586.1 - - UnsecuredConsideredDoubtful - - - -

10,362.7 10,586.1 - - Less:AllowanceforDoubtfulAdvances - - - -

(C) 10,362.7 10,586.1 - -

137

AI

Particulars Non-Current CurrentAs at March

31, 2020As at March 31,2019


As at March 31,2019

4 Deposit-Others (having maturity of more than 12 months) ***

203.7 74.3 - -

Less:AllowanceforDoubtfulDeposits^ 1.9 1.9 - - (D) 201.8 72.4 - -

5 Interest Accrued oni) Fixed Deposits 9.1 61.2 44.7 33.5 ii)LoantoEmployees 0.6 1.4 7.6 4.7 iii)AdvancestoSubsidiaryCompanies** - - 984.3 924.3

(E) 9.7 62.6 1,036.6 962.5 6 OtherNon-TradeReceivables

Unsecured Considered Good - - 707.7 863.6 OtherNon-tradeReceivables-Doubtful 2,046.4 2,653.6 - -

2,046.4 2,653.6 707.7 863.6 Less:AllowanceforDoubtfulNonTradeReceivables

2,046.4 2,653.6 - -

(F) - - 707.7 863.6 TOTAL (A + B + C + D + E + F) 10,676.7 10,838.1 2,874.6 3,122.5

* Details of Advances given to Subsidiary Companies/Joint Ventures are as under :

Name of the Subsidiary Company/Joint Ventures As at March 31, 2020

As at March 31,2019

1.AirIndiaExpressLimited 10,362.7 10,586.1Total 10,362.7 10,586.1

** Details of Interest Accrued on Advances to Subsidiary Companies/Joint Ventures are as under :

Name of the Subsidiary Company/Joint Ventures As at March 31, 2020

As at March 31,2019

1.AirIndiaExpressLimited 984.3 924.3 Total 984.3 924.3

*** Includes Rs.1.9Million (PreviousYear : Rs.1.9Million) towards blocked fund in bank accounts forrepatriation.

*** PreviousYearfigurehasbeenregroupedbyRs.1.8Milliononaccountofreclassificationofblockedfundfrom “Cash & Cash Equivalents” (Refer Note 9)

*** PreviousYearfigurehasbeenregroupedbyRs.362.2Milliononaccoutof reclassificationofMarginMoney transferred to “Other Bank Balances” (Refer Note 10)

^ PreviousYearfigurehasbeenregroupedbyRs.1.8Milliononaccountoftransferofdoubtfulprovisiontowardsblockfundinbankaccountfrom“OtherNonFinancialAssets”(ReferNote6).

138

AI

NOTE “6” : OTHER NON-FINANCIAL ASSETS






Capital AdvancesUnsecuredConsideredGood^ 89.6 75.4 - - Doubtful 21.2 28.7 - -

110.8 104.1 - - Less:AllowanceforDoubtfulAdvances 21.2 28.7 - -

(A) 89.6 75.4 - - Advances other than Capital AdvancesUnsecured Considered Good 0.2 14.4 6,230.6 5,071.2Doubtful* 630.2 581.4 - -

630.4 595.8 6,230.6 5,071.2Less:AllowanceforDoubtfulAdvances* 630.2 581.4 - -

(B) 0.2 14.4 6,230.6 5,071.2Non-Trade ReceivableUnsecured Considered Good - - 493.4 1,801.5Doubtful 12.5 149.3 - -

12.5 149.3 493.4 1,801.5Less : Allowance for Doubtful Non-TradeReceivable

12.5 149.3 - -

(C) - - 493.4 1,801.5Other AdvancesUnsecured Considered GoodPrepaid Expenses 79.9 5,765.0 768.5 2,280.3Balances with Statutory / Government Authorities

- - 5,771.9 3,504.0

(D) 79.9 5,765.0 6,540.4 5,784.3TOTAL (A + B + C + D) 169.7 5,854.8 13,264.4 12,657.0

* PreviousYearfigurehasbeenregroupedbyRs.1.8Milliononaccountoftransferofdoubtfulprovisiontowardsblockfundinbankaccountto“OtherFinancialAssets”(ReferNote5).

^ PreviousYearfigurehasbeenregroupedbyRs.24.6Milliononaccountoftransferofcapitaladvancepaid to CIDCO for land acquisition to “Assets Held for Sale” (Refer Note 10.1).

139

AI

NOTE “7” : INCOME TAX ASSETS (NET)



As at March 31,2019


As at March 31,2019

Advance Payment of Income Tax and TDS (net of provision for taxation)

1,918.1 2,264.1 746.2 1,458.8

TOTAL 1,918.1 2,264.1 746.2 1,458.8

NOTE “8” : INVENTORIES (Valued at cost or NRV whichever is lower)


31, 2020As at March 31,2019

Stores and Spare Parts * 15,319.9 16,417.9LooseTools 60.2 43.0

15,380.1 16,460.9Less:ProvisionforObsolescence/InventoryReconciliation 6,107.2 8,466.1

9,272.9 7,994.8 Goods-in-Transit 198.4 69.0

TOTAL 9,471.3 8,063.8* StoresandSparePartsincludesanamountofRs.1,367.5Million(PreviousYear:Rs.2,371.3Million)

asWorkOrderSuspenseaccountwhichrepresentsinventorieslyingwithasubsidiarycompanyi.e.AirIndiaEngineeringServicesLtd.andRs.180.9Million(PreviousYear:Rs.255.0Million)withthirdpartyforrepairworkforAirIndiaLtd.

NOTE : “9” : CASH AND CASH EQUIVALENTS


31, 2020As at March 31,2019

Cash and Cash Equivalents 1. Balances with Banks :

a) In Current Accounts * 5,943.1 2,140.0b)InDepositAccounts(Originalmaturitylessthan3months) 259.3 259.3

2. Cheques,DraftsonHand 26.0 28.3 3. Cash on Hand 20.0 22.8

TOTAL (A + B) 6,248.4 2,450.4

* PreviousYearfigurehasbeenregroupedbyRs.1.8Milliononaccountof transferofblockedfundin“Cash and Cash Equivalents” to “Deposit-Others (having maturity of more than 12 months)” (Refer Note 5)

140

AI

NOTE : “10” : BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS


31, 2020As at March 31,2019

Other Bank Balances1. Margin money deposits * 5,085.7 4,891.62. Deposits - Others 1,770.0 1,450.7

(Havingmaturityofmorethan3monthsbutLessthan12Months)TOTAL 6,855.7 6,342.3

* PreviousYearfigurehasbeenregroupedbyRs.362.2Milliononaccoutof reclassificationofMarginMoney transferred from “Deposit-Others (having maturity of more than 12 months)” (Refer Note 5)

NOTE “10.1” : ASSETS HELD FOR SALE


31, 2020As at March 31,2019

1. Properties * ^ 70,677.5 68,066.3Less:DiminutioninValueofAssets 94.3 -

70,583.2 68,066.32. Investment in Subsidiary Companies

a) 138,424,200 Equity Shares of Rs.10 each fully paid up inAIAirportServicesLimited

1,384.2 1,384.2

(PreviousYear:138,424,200EquityShares)b) 166,666,500 Equity Shares of Rs.10 each fully paid up inAIEngineeringServicesLimited

1,666.7 1,666.7

(PreviousYear:166,666,500EquityShares)c) 40,225,000 Equity Shares of Rs 100/- each fully paid up inAllianceAirAviationLimited

4,022.5 4,022.5

(PreviousYear:40,225,000EquityShares)d)11,060,000EquitySharesofRs.100eachfullypaidupinHotelCorporationofIndiaLimited

1,106.0 1,106.0

(PreviousYear:11,060,000EquityShares) 8,179.4 8,179.4

3. Advance to Subsidiary Companies (net) **a)AIEngineeringServicesLimited 14,942.5 17,181.7b)AllianceAirAviationLimited 17,060.7 16,681.9c)HotelCorporationofIndiaLimited 3,433.8 3,052.1

35,437.0 36,915.74. Others *** 35,864.7 35,584.7

Less:DiminutioninValueofAssets 11.4 11.4 35,853.3 35,573.3

TOTAL 150,052.9 148,734.7

141

AI

* IncludespropertiestransferredfromInvestmentPropertyduringtheyearamountingtoRs.NIL(PreviousYear:Rs.6,583.7Million)

** Advances to Subsidiary Companies includes Interest Accrued amounting to Rs. 3,088.7 Million(PreviousYearRs.2,998.9Million)

*** Othersincludes2B777-300SESFaircraftalongwithoneSpareEngine,QECKit,VTCEncriptorandotherassetsamountingtoRs.35,514.2Million(PreviousYear:Rs.35,223.6Million)(ReferNote31(iii))

*** PreviousYearfigurehasbeenregroupedbyRs.24.6Milliononaccountoftransferofcapitaladvancepaid to CIDCO for land acquition from “Other Non-Financial Assets” (Refer Note 6).

^ TheCharges over immovable properties is not yet released fromROCasNOC from few banks isawaited. (Refer Note 13.2(a))

NOTE “11” : SHARE CAPITAL


31, 2020As at March 31,2019

A. AUTHORISED 35,000.0MillionEquitySharesofRs.10each 350,000.0 350,000.0(PreviousYear:35,000.0MillionEquityShares)

350,000.0 350,000.0 B. ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARES

32,665.21MillionEquitySharesofRs.10each 326,652.1 326,652.1(PreviousYear:32,665.21MillionEquityShares)

TOTAL 326,652.1 326,652.1

B.i) Reconciliation of number of shares :

(Number of Shares in Millions)

(Share Value Rupees in Millions)

Particulars 2019-20 2018-19 2019-20 2018-19Equity Shares at the beginning of theyear

32,665.21 28,690.21 326,652.1 286,902.1

Add : Equity Shares Allotted during the year

- 3,975.00 - 39,750.0

Equity Shares at the end of the year 32,665.21 32,665.21 326,652.1 326,652.1

ii) Terms/rights attached to equity shares :

The Company has single class of shares i.e. Equity Shares having a par value of Rs. 10 per share. Each holderofequityshareisentitledtoonevotepershareandisentitledtodividenddeclared,ifany.ThepaidupequitysharesoftheCompanyrankpari-pasuinallrespects,includingdividend.

IntheeventofliquidationoftheCompany,theholdersofequityshareswillbeentitledtoreceiveremainingassetsoftheCompany,afterallthecreditorshavebeenpaid.Thedistributionwillbeinproportiontothe

142

AI

numberofequitysharesheldbytheshareholders.

iii) Share Holding Pattern :

TheCompany isaGovernmentCompanywith100%sharesheldby thePresidentof Indiaandhisnominees,throughadministrativecontrolofMinistryofCivilAviation.

iv) Non-Cash, Bonus shares & Shares bought back :

Aggregatenumberandclassofsharesallottedasfullypaid-upinpreviousyearpursuanttocontractswithoutpaymentbeingreceivedincash,bonussharesandsharesboughtbackforaperiodof5yearsimmediatelyprecedingthebalancesheetdateNIL(previousyearNIL).

NOTE “12” : OTHER EQUITY


31, 2020As at March 31,2019

1. Share Application Money Pending Allotment *BalanceasperLastBalanceSheet - - Add : Additions during the year 0.1 -

0.1 - Less:Sharesallottedduringtheyear - -

0.1 - 2. CAPITAL RESERVE

BalanceasperLastBalanceSheet 7,587.6 6,878.7Add : Additions during the year ** 186.6 1,163.5

7,774.2 8,042.2Less:TransfertotheStatementofProfitandLosstooffset 459.7 454.6 Depreciation (Refer Note 24)Closing Balance 7,314.5 7,587.6

3. GENERAL RESERVE ***BalanceasperLastBalanceSheet - (1,436.7)Add : Additions during the year - - Less:TransfertoRetainedEarnings - 1,436.7Closing Balance - -

4. OTHER RESERVESForeign Currency Monetary Item Translation Difference Account(FCMITDA)Balance as per last Balance Sheet (2,759.1) (2,137.3)Add : Exchange gain/(loss) during the year (315.1) (1,135.5)

(3,074.2) (3,272.8)Less:Amortizationduringtheyear 2,751.8 513.7 Closing Balance (322.4) (2,759.1)

143

AI

Particulars As at March 31, 2020

As at March 31,2019

5. Surplus / (Deficit)Balanceatthebeginningofthereportingperiod (626,936.3) (539,887.8)Add:ImpactofIndAS116-Leases(ReferNote44) (2,223.0) - Restatedbalanceatthebeginningofthereportingperiod (629,159.3) (539,887.8)(Loss)fortheyear (77,657.3) (84,748.0)Add : Transfer from General Reserve *** - (1,436.7)Re-measurements of the Defined Benefit Plans through OtherComprehensive Income

(1,943.2) (863.8)

Net deficit (708,759.8) (626,936.3)6. Fair value changes on Equity Instruments through Other

Comprehensive IncomeOpening Balance 792.1 743.9 For the year (227.7) 48.2

564.4 792.1 TOTAL (1+2+3+4+5+6) (701,203.2) (621,315.7)

* Share Application Money :

ShareapplicationmoneyamountingtoRs.0.1Million(PreviousYear:Rs.NIL)representsmoneypaidby theGovernment of India towards capital infusion during the year, but allotment of sharesmadesubsequently.

** Represents MRO Allowance received from GE towards construction of Test Cell Facility at Nagpur.

*** GeneralReserveofVayudootLtdtransferredtoRetainedEarnings.

NOTE “13” : BORROWINGS - NON CURRENT

(Rupees in Million)Particulars Non-Current Current *


As at March 31,2019


As at March 31,2019

I Debentures 55,000.0 55,000.0 74,000.0 81,000.0II Term Loans

a) from Banks (Secured) - - - 109,952.5b)fromBanks(Unsecured) - 7,597.9 3,662.2 8,751.5 c) from Other Parties (Unsecured) 118.4 108.3 13.9 12.7

III LongTermMaturities of FinanceLeaseObligations

- 20,293.4 - 23,539.2

TOTAL 55,118.4 82,999.6 77,676.1 223,255.9

13.1 Debentures

a) 129,000 Redeemable, Unsecured Non-convertible Debentures of face value of Rs. 1 Million each

144

AI

(PreviousYear:136,000Debentures),areguaranteedbyGovernmentofIndia.MaturityProfileandRateofinterestareassetoutbelow:

(Rupees in Million)Month of Redemption Amount to be Redeemed Rate of Interest

Dec-2031 4,714.0 9.08%Nov-2031 10,086.0 9.08%Sep-2031 15,000.0 10.05%Dec-2030 4,714.0 9.08%Nov-2030 10,086.0 9.08%Dec-2029 4,714.0 9.08%Nov-2029 10,086.0 9.08%Dec-2028 4,714.0 9.08%Nov-2028 10,086.0 9.08%Dec-2027 4,714.0 9.08%Nov-2027 10,086.0 9.08%Sep-2026 40,000.0 9.84%

Total 129,000.0

b) DebentureRedemptionReserveasrequiredunderSection71(4)oftheCompaniesAct,2013hasnotbeencreatedintheabsenceofearnedprofitsbytheCompany.

c) Currentmaturities includes74,000Redeemable,UnsecuredNon-convertibleDebenturesof facevalueofRs.1MillioneachamountingtoRs.74,000.0Million(PreviousYear:Rs.74,000.0Million)identifiedfortranfertoSPVAirIndiaAssetHoldingLimitedbywayofNovationAgreement(ReferNote28(iii)(b)(i))

13.2 (a) DetailsofSecuredTermLoansfromfollowingBankswhichareidentifiedfortransfertoSPVAirIndiaAssetsHoldingLimitedareclassifiedascurrentmaturities(ReferNote28(iii)(m)(i)):

(Rupees in Million) Sr No.

Restructuring Lender As at March 31, 2020

As at March 31,2019

1 AllahabadBank - 2,524.62 Andhra Bank - 3,021.73 Bank of Baroda - 11,346.54 Bank of India - 15,107.05 Canara Bank - 7,402.86 Central Bank of India - 8,022.47 Corporation Bank - 6,560.98 Dena Bank (Now merged with Bank of Baroda) - 1,180.69 TheFederalBankLimited - 1,864.1

10 IDBIBankLimited - 3,763.511 Indian Bank - 3,757.912 Indian Overseas Bank - 6,199.8

145

AI

Sr No.

Restructuring Lender As at March 31, 2020

As at March 31,2019

13 Oriental Bank of Commerce - 7,648.914 PunjabNationalBank - 10,561.915 Punjab&SindBank - 2,386.016 State Bank of India - 5,764.817 Syndicate Bank - 5,572.318 UCO Bank - 4,996.619 United Bank of India - 2,270.2

TOTAL - 109,952.5

FRPFundbased loansare fullypaidduringFY2019-20.However, theChargesover immovablepropertiesisnotyetreleasedfromROCasNOCfromfewbanksisawaited.

13.2(b)TotalUnsecuredTermLoanfromBanksofRs.3,662.2Million(PreviousYearRs.16,349.4Million) hasbeenguaranteedbytheGovernmentofIndia.

(Rupees in Million)Equal Number of Loan Installments

Amount of Loan as at March 31, 2020

Rate of Interest Starting Month of Repayment

Month of Maturity

5 3,662.2 Libor+1.80 Jun-2016 May-2020TOTAL 3,662.2

13.2(c) Unsecured Term Loan from Others of Rs.132.3 Million (Previous Year Rs. 121.0 Million) are guaranteedbytheGovernmentofIndia.

(Rupees in Million)Equal Number

of Loan Installments

Amount of Loan as at March 31,

2020

Discounted As per Ind AS as at March

31, 2020

Rate of Interest

Starting Month of Repayment

Month of Maturity

40 160.2 92.1 Interest Free

Oct-1990 Oct-2039

33 66.6 40.2 Interest Free

Oct-1987 Mar-2037

TOTAL 226.8 132.3

13.3LongTermMaturitiesofFinanceLeaseObligationsofRs.NIL(PreviousYearRs.43,832.6Million)areguaranteedbytheGovernmentofIndiatotheextentofRs.NIL(PreviousYearRs.36,932.9Million)

13.4 Disclosure as regards Bank wise rate of interest and period of default is not made due to complexity of data&confidentialityclausewiththebanks.(AlsoreferNote15)

* CurrentmaturitiesoflongtermborrowingshavebeengroupedundertheheadOtherCurrentFinancialLiabilities(ReferNoteNo.15)

146

AI

NOTE “14” : TRADE PAYABLES

(Rupees in Million)Particulars Non Current Current


As at March 31,2019


As at March 31,2019

Total outstanding dues of micro enterprises and small enterprises

- - 267.1 163.7

Total outstanding dues of creditors other than microenterprisesandsmallenterprises*^

- - 100,667.7 82,485.5

TOTAL - - 100,934.8 82,649.2

* Trade Payable includes :

NetpayabletoJointVentureAI-SATSRs.1,344.7MillionnetofTDS(PreviousYear:Rs.859.1Million).

NetpayabletowhollyownedsubsidiarycompanyAIAirportServicesLtd.(AIASL)Rs.1833.0Million(Previous Year : Rs. 606.2 Million) (Refer Note 28(iii) (h))

^ PreviousYearfigurehavebeenregroupedbyRs.606.2MilliononaccountofreclassificationofamountpayabletoAIASLfrom“LiabilitiesHeldforSale”to“TradePayable”

AlsoReferNoteNo.51-IdentificationofMicroandSmallEnterprises.

NOTE “15” : OTHER FINANCIAL LIABILITIES



As at March 31,2019


As at March 31,2019

Other Liabilitiesa)Currentmaturitiesoflong-termdebts* - - 77,676.1 199,716.7b) Current maturities of finance leaseobligations*

- - - 23,539.2

c)Interestaccruedbutnotdueonborrowings - - 5,452.8 6,557.6d)Interestaccruedanddueonborrowings** - - 7,728.2 1,981.0e)OtherLiabilities(Net)*** 43.5 47.9 52,205.0 51,669.9f) Book Overdraft - - - -

TOTAL 43.5 47.9 143,062.1 283,464.4

* FordetailsofCurrentmaturitiesoflongtermdebts/FinanceLeaseObligationReferNote13.

** Interest accrued and due includes :

Rs.663.1MillionbeinginterestonSecuredLoansrepayableondemandfromBanks(PreviousYear:Rs.236.6Million),paidsubsequently(ReferNote18).

Rs.7,065.1Millionbeing intereston UnsecuredLoans repayableondemand fromBanks (Previous

147

AI

Year:Rs.1,597.6Million),paidsubsequently(ReferNote18).

Rs.NILbeinginterestonFinanceLeaseObligation(PreviousYear:Rs.146.8Million).(ReferNote13)

*** Other Liabilities (Net) includes :

Rs.18,275.0MilliontowardsGuaranteeFeeLiability(PreviousYear:Rs.14,970.6Million)

Rs. 19,399.5 Million towards Provision for Employees including JDC impact (Previous Year : Rs.19,332.8Million)

Rs.4,702.8MilliontowardsDelayedPaymentInteresttoOilMarketingCompanies(PreviousYear:Rs.8,583.2Million)

NOTE “16” : PROVISIONS



As at March 31,2019


As at March 31,2019

Provision for Employee Benefits (Refer Note 48)a) Gratuity 6,489.1 6,101.4 1,024.0 1,054.1b)LeaveEncashment 3,963.8 3,039.2 503.5 471.0 c) Post Employment Medical and Other Benefits

12,787.6 11,559.0 645.3 592.1

(A) 23,240.5 20,699.6 2,172.8 2,117.2Other Provisionsa) Re-delivery of Aircraft (Refer Note 45) 14,336.0 7,572.2 - -

(B) 14,336.0 7,572.2 - - TOTAL (A + B) 37,576.5 28,271.8 2,172.8 2,117.2

NOTE “17” : OTHER NON FINANCIAL LIABILITIES



As at March 31,2019


As at March 31,2019

a)ForwardSales(Net)[Passenger/Cargo]^ - - 22,090.6 24,690.1b)Advancefromcustomers(Net)* - - 39,909.9 35,807.1c)OthersLiabilities(Net)** - - 3,399.8 1,218.8d) Frequent Flyer Programme (Refer Note 58) 401.9 - 834.1 828.7

TOTAL (A + B) 401.9 - 66,234.4 62,544.7* Advance from customers (Net) includes Rs.37,398.6 Million (Pevious Year : Rs.34,675.2 Million)

pertaining to 2 B777-300 SESF Aircraft.

** OtherLiabilities(Net)includesGovt.Taxes/StatutoryDuesamountingtoRs.2,942.9Million(PreviousYear : Rs.764.9 Million)

148

AI

^ PreviousYearfigurehasbeenregroupedbyRs.212.8MilliononaccountofreclassificationofDebitBalancesin“ForwardSales(Net)[Passenger/Cargo]”to“TradeReceivables”(ReferNote3)

NOTE “18” : BORROWINGS - CURRENT


31, 2020As at March 31,2019

I Loans repayable on demand :a) from Banks (Secured) # 74,479.2 113,992.6b)fromBanks(Unsecured)# 150,030.2 135,950.8c) from Other Parties (NSSF) (Unsecured) 26,360.0 26,360.0

TOTAL 250,869.4 276,303.41. SecuredloansrepayableondemandfromBanksaretothetuneofRs.22,724.3Million(PreviousYear

Rs.66,857.9Million).Detailsareasunder:

(Rupees in Million)Sr. No.

Name of the Lender As at March 31, 2020

As at March 31,2019

1 AllahabadBank 2,250.0 3,344.02 Andhra Bank - 1,005.23 Bank of Baroda 13,140.0 18,343.34 Bank of India - 5,345.55 Canara Bank 2,000.0 4,853.96 Central Bank of India - 2,688.87 Corporation Bank - 2,162.08 Dena Bank (Now merged with Bank of Baroda) - 381.9 9 HDFCBankLtd. - 40.5

10 TheFederalBankLimited - 698.3 11 IDBIBankLimited - 1,247.912 Indian Bank - 1,280.013 Indian Overseas Bank - 1,575.014 Oriental Bank of Commerce - 2,575.115 PunjabNationalBank - 3,854.116 Punjab&SindBank - 2,269.017 Standard Chartered Bank - 7,343.318 State Bank of India 2,184.3 3,807.219 Syndicate Bank - 1,845.920 UCO Bank 2,750.0 1,694.421 United Bank of India - 52.6 22 PNB Discounting 400.0 450.0

TOTAL (1) 22,724.3 66,857.9 The loans to the tune of Rs.22,724.3Million (Previous Year : Rs.66,857.9Million) are secured by

Hypothecationof27aircraft,2engines,11immovablepropertiesatmarketvalueandallCurrentAssets

149

AI

(PreviousYear : 30aircraft, 2engines, 11 immovablepropertiesandallCurrentAssets). Howeverequitablemortgagefor7immovablepropertieswithbanksareyettobecreated.

2. Secured loan repayableondemand fromBank is to the tuneofRs.51,754.9Million (PreviousYearRs.47,134.7Million).DetailsofSecuredLoansfromBanksareasunder:



As at March 31,2019

1 Investec Bank 35,865.2 32,779.52 First Gulf Bank 15,889.7 14,522.5

51,754.9 47,302.0Less:Deferredamountofupfrontfees - 167.3

TOTAL (2) 51,754.9 47,134.7TOTAL (1 + 2) 74,479.2 113,992.6

The loans to the tune of Rs.51,754.9Million (Previous Year : Rs.47,134.7Million) are secured byHypothecation of 6 aircraft at market value (Previous Year : 6 aircraft).

3. UnsecuredloanrepayableondemandfromBankofRs.150,030.2Million(PreviousYear:Rs.135,950.8Million)hasbeenguaranteedbytheGovernmentofIndiatotheextentofRs.143,927.6Million(PreviousYear:Rs.126,835.9Million).



As at March 31,2019

1 Bank of Baroda 21,750.0 21,750.02 Bank of Baroda 15,000.0 15,000.03 BankofBarodaODNYC*notguaranteedbyGOI 3,770.4 2,955.64 Bank of India 15,000.0 15,000.05 Indusind Bank 4,212.8 10,000.06 PunjabnationalBank 22,500.0 22,500.07 PunjabNationalBank 15,000.0 15,000.08 Uco Bank 10,000.0 10,000.09 Uco Bank 8,250.0 8,250.0

10 Andhra Bank 7,000.0 - 11 Punjab&SindBank 2,000.0 - 12 Punjab&SindBank 8,000.0 - 13 Punjab&SindBank 5,000.0 - 14 SBIBillDiscounting*notguaranteedbyGOI 2,332.2 6,159.315 SCB/FAB/MeshreqBridgeLoan 10,214.8 9,335.9

TOTAL 150,030.2 135,950.8

# Disclosure as regards Bank wise rate of interest and period of default is not made due to complexity of data&confidentialityclausewiththebanks.(AlsoreferNote13&15)

150

AI

NOTE “19” : REVENUE FROM OPERATIONS

(Rupees in Million)Particulars 2019-20 2018-19

i) Scheduled Traffic Services 1 Passenger 226,197.0 207,741.6 2 Excess Baggage 1,449.4 1,203.8 3 Mail 535.7 576.2 4 Cargo 14,850.6 14,484.0

(A) 243,032.7 224,005.6ii) Non-Scheduled Traffic Services 1 Charter 16,111.1 14,526.2 2 Block Seat Arrangement * 1,048.0 1,033.7 3 SubsidyforOperationsfromGovernment - 355.0

(B) 17,159.1 15,914.9iii) Other Operating Revenue 1 Handling and Servicing 1,987.9 1,653.7 2 Manufacturers Credit 674.4 356.7 3 Incidental^ 10,752.0 9,821.9 4 RevenueSharefromAirIndiaExpressLtd. 3,500.0 3,500.0

(WhollyOwnedSubsidiaryCompany) 5 RevenueSharefromAirIndiaAirTransportServicesLtd. 342.5 406.8

(WhollyOwnedSubsidiaryCompany)Less:TransferredtoAIAHL(ReferNote25) 342.5 -

- 406.8 (C) 16,914.3 15,739.1

TOTAL (A + B + C) 277,106.1 255,659.6

* PreviousYearfigurehasbeenregroupedbyRs.571.2Millionduetogrossingup“BlockSeatArrangement”Revenue&ExpenditureinrespectofAirIndiaExpressLtd.(ReferNote25)

^ IdentifiedincomeofRs.72.6MilliontransferredtoAIAHL(ReferNote25)

151

AI

NOTE “20” : OTHER INCOME


1 Interest Income on : a) Bank Deposits 447.1 369.0 b)Others* 595.3 693.4 c)AdvancestoSubsidiaryCompanies 4,073.0 3,923.2

2 DividendfromLongTermInvestments(Trade) 66.5 72.7 3 Rental Income 976.8 901.1

Less:TransferredtoAIAHL(ReferNote25) 975.2 - 1.6 901.1

4 Profit/(Loss)onSaleofAssets(Net) 409.0 1,225.6 5 ProvisionsNoLongerRequiredwrittenback 2,545.8 2,032.6

TOTAL 8,138.3 9,217.6

* Interest Income on Others includes interest pertaining to discounting of Security Deposits as per Ind AS amounting to Rs.286.9 Million (Previous Year : Rs.257.6 Million)

NOTE “21” : OTHER OPERATING EXPENSES


1 Insurance 1,581.9 941.3 2 Material Consumed - Aircraft 5,947.8 5,511.2 3 Outside Repairs - Aircraft 32,722.8 29,250.9 4 Navigation,Landing,HousingandParking 19,423.7 19,188.2 5 Hire of Aircraft (Refer Note 44) - 30,926.1 6 Handling Charges 16,519.8 15,878.3 7 Passenger Amenities 9,887.3 10,251.7 8 Booking Agency Commission (Net) 6,288.7 5,634.8 9 Communication Charges

i) Reservation System 10,659.3 11,847.1 ii) Others 2,108.7 1,684.3

TOTAL 105,140.0 131,113.9

NOTE “22” : EMPLOYEE BENEFIT EXPENSES


1 Salaries,WagesandBonus 15,859.3 14,284.8 2 Crew Allowances 11,449.1 11,459.2 3 ContributiontoProvidentandOtherFunds 1,005.5 1,043.5 4 Staff Welfare Expenses 714.5 1,291.1

152

AI

Particulars 2019-20 2018-19 5 Provision for Gratuity 740.5 760.7 6 ProvisionforLeaveEncashment 1,416.6 207.6 7 ProvisionforRetirementBenefit 1,068.2 1,005.4

TOTAL 32,253.7 30,052.3

NOTE “23” : FINANCE COST


1 Interest on :a)Debentures 12,798.7 12,801.8b)ShortTermandLongTermLoans 26,894.1 33,298.8

39,692.8 46,100.6Less: Interest Cost Reimbursement throughAIAHL (Refer Note28(iii))

15,574.7 13,000.0

24,118.1 33,100.62 Other Borrowing Costs 4,560.5 7,503.93 Interest on Right of Use Assets (Refer Note 44) 6,675.0 - 4 InterestonDelayedPaymentotherthanborrowings* 3,839.0 6,508.5

TOTAL 39,192.6 47,113.0

*IncludesanamountofRs.105.0Million(PreviousYear:Rs.20.5Million) interestchargedbySubsidiaryCompany,AIASLonoutstandingbalances.

a)Exchange ratedifference in thenatureof interestcosthasnotbeen reclassifieddue tocomplexityoftransactions.

NOTE “24” : DEPRECIATION AND AMORTIZATION EXPENSE


1 DepreciationofTangibleAssets 13,329.7 16,002.5 2 Depreciation of Right of Use Assets (Refer Note 44) 29,919.4 - 3 Depreciation of Investment Property 2.0 59.6 4 AmortizationofIntangibleAssets 130.4 271.8

(A) 43,381.5 16,333.9Less:RecoupmentfromCapitalReserve(ReferNote12) 459.7 454.6

(B) 459.7 454.6 TOTAL (A- B) 42,921.8 15,879.3

153

AI

NOTE “25” : OTHER EXPENSES


1 Travelling Expenses i) Crew 2,555.1 2,734.2 ii) Others 475.8 657.2

2 Rent 991.5 614.9 3 RatesandTaxes*^$ 429.9 77.3 4 Repairsto:^

i)Buildings$ 171.3 199.2 ii) Others # 1,039.5 699.2

5 Hire of Transport 775.4 837.3 6 Electricity&HeatingCharges^ 459.6 497.8 7 WaterCharges^ 27.6 7.2 8 Directors' Sitting Fees 0.5 0.7 9 PublicityandSalesPromotion 884.3 840.8 10 Printing and Stationery 135.4 118.8 11 LegalCharges 126.8 101.9 12 Payments to the Auditors' (Refer Note No.52)

i) Audit Fees 16.5 12.0 ii) Other Expenses 2.3 2.5

13 Provision forBad&DoubtfulReceivablesandAdvances

979.3 2,109.5

14 ProvisionforObsoleteInventory 32.8 1,907.7 15 Provision for Diminution in Value for Assets 94.3 - 16 Write-off of Duty Credit Entitlement under SFIS - 388.5 17 Expenses on Block Seat Arrangements *** 778.1 723.0 18 Exchange Variation (Net) ** 32,283.6 7,721.7 19 LossonSaleofInvestment 0.5 - 20 Bank Charges / Credit Card Discounts 2,638.2 2,030.5 21 Professional / Consultation Fees & Expenses 542.1 412.8 22 Miscellaneous Expenses # 3,372.2 2,427.4 23 Identified Income to be Transferred to AIAHL

(Refer Note 28(iii)) i) Revenue Share 545.8 - iI) Rental Income 1,424.8 -

1,970.6 -

154

AI

Particulars 2019-20 2018-19Less:RevenueShare(ReferNote19) 342.5 - Less:RentalIncome(ReferNote20) 975.2 -

652.9 - Less : Identified cost to be recovered fromAIAHL^

64.6 -

588.3 - TOTAL 49,400.9 25,122.1

* IncludesRs.221.8Million (PreviousYear :Rs.NIL) settledunderSabkaVishwas (LegacyDisputeResolution) Scheme 2019 of Govt. of India

** Includes exchange variation on bridge loans amounting to Rs.5,654.8 Million (Previous Year : Rs.3,272.4Million).AlsoreferNote44forexchangevariationrelatingtoLeaseLiability.

*** PreviousYearfigurehasbeenregroupedbyRs.571.2Millionduetogrossingup“BlockSeatArrangement”Revenue&ExpenditureinrespectofAirIndiaExpressLtd.(ReferNote19)

# PreviousYearfigurehasbeenregroupedbyRs.123.4Milliononaccountofdataprocessingchargesmoved from “Repair-Others” to “Miscellaneous Expenses”

^ Details of Identified cost to be recovered from AIAHL for the period 1st Oct 2018 to 31st March 2020 included in the following respective heads :

(Rupees in Million)Particulars 2019-20 2018-19 Total Rates & Taxes 21.5 10.9 32.4 Repairs to Buildings 7.1 4.7 11.8 Repairs to Others 10.8 4.0 14.8 Electricity & Heating Charges 47.8 24.9 72.7 Water Charges 3.2 2.3 5.5 Incidental (Refer Note 19) (47.7) (24.9) (72.6)

TOTAL 42.7 21.9 64.6

155

AI

NOTES FORMING PART OF THE STANDALONE FINANCIAL STATEMENTS OF AIR INDIA LIMITED FOR THE YEAR ENDED 31STMARCH 2020

(Rupees in Million except otherwise stated)

26. Contingent Liabilities& Contingent Assets:

A. Contingent Liabilities (to the extent not provided for): ClaimsagainstCompanynotacknowledgedasdebts(excluding interestandpenalty, incertain

cases)andtherequiredinformation,incomplianceofIndAS37,areasunder:

(Rs in million)No Description Balance as on

31st March 2020Balance as on

31st March 2019(i) Pax Claims on account of Misc. Commercial Reasons. 405.6 417.3 (ii) Income Tax Demand Notices received by the

Company which are under Appeal 1,122.4 1,240.4

(iii) Customs Duty, Octroi, Entry Tax, Service Tax, VATandGSTdemandedbytheTaxAuthorities

10,292.5 9,388.8

(iv) PropertyTaxes/HouseTaxdemandedbytheMunicipalAuthorities

107.7 111.0

(v) Claims of Airport Operators/Others (*) 1,250.0 1,221.1(vi) Other Claims on account of Staff/Civil/Arbitration/

LabourCasespendinginCourts1,627.4 1,931.4

(vii) Additional Govt Guarantee Fee (**) 20,769.9 17,470.4 Total 35,575.5 31,780.4

Explanatory Statement in respect of Contingent Liabilities Claims of Airport Operators/Others (*):Represents the difference in the reconciliation of

balanceswithrespectiveparties.

Government Guarantee Fee (**): The Company has taken up the issue of waiver of guarantee fee and related penal charges with the Ministry of Finance through the Ministry of Civil Aviation. Asregards thepenalchargeson thedelayedpaymentsofGuaranteeFee, theCompanyhasdisclosedaContingentLiabilityforthesameamountingtoRs.20,769.9million(PY:Rs.17,470.4million).

B. Contingent Assets Duringtheyear2017-18,theHon’bleSupremeCourtofIndiahasvacatedthestaygrantedbythe

Hon’bleHighCourtofDelhiinrespectofimplementationoftarifffixedbyAERAapplicablewitheffectfrom01/01/2016.Inthisregardthetarifffixedforthe2ndcontrolperiod(i.e.from1.1.2016),waslowerthanthetarifffixedforthe1stControlPeriod(tariffpriorto1.1.2016).Inviewofthisjudgment,DGCA issued AIC (Aeronautical Information Circular) for the implementation of 2ndControl period tariffwithimmediateeffect.IntheinterveningperiodDIALhascollectedfromAirIndia,anexcessamounttothetuneofRs2,298.7million(PY:Rs2,298.7million)(approx)onaccountofLanding&ParkingCharges.TheCompanyhasrequestedAERAthatwhilefixingthetariff,theairlineswhohaveshoulderedtheburdenofexcessamountcollectedmaybecompensatedbywayofdiscountintariffinproportiontotheexcessamountcollectedbyDIALfromrespectiveairlines.

156

AI

However,AERA has pointed out that, the realised non- aeronautical revenue in the past fewyearsdoesnotexhibitacleartrend,atrue-upwillbeprovidedforthenon-aeronauticalrevenuesbasedontheactualrealisednon-aeronauticalrevenues,atthetimeoftariffdeterminationinthethirdcontrolperiod.Inviewofaboveandsincetheinflowofeconomicbenefitsinrespectofsuchclaimscannotbemeasuredduetouncertaintiesthatsurroundtherelatedevents/circumstances,thesamehasbeenshownasContingentAssets.

27. Commitments:

(i) Capital Commitments EstimatedamountofcontractsremainingtobeexecutedonCapitalAccountaregivenhereunder:

Particulars (Rs in Million)

As on 31st March 2020 As on 31st March 2019Aircraft Related Payments 5,645.1 2,195.5Others 607.9 912.0Total 6,253.0 3,107.5

(ii) Other Long-TermCommitments CorporateGuarantees, Letters of Comfort given by the Company on behalf of its Subsidiary

Companies:

Particulars (Rs in Million)

As on 31stMarch 2020 As on 31stMarch 2019

AirIndiaExpressLtd 8,530.8 8,011.9AllianceAirAviationLtd 4,554.4 4,273.0

AgainsttheaboveGuaranteesgivenbyCompany,guaranteefee/commissionhasbeenchargedbytheCompanyattherateof0.5%.

28. Disinvestment of Air India Limited

(i) Background to Disinvestment a) The Government of India (GoI) had given an ‘In-Principle’ approval for the Strategic

DisinvestmentofAirIndiabywayoftransferofmanagementcontrolandsaleof100%equitysharecapitalofAirIndiaheldbyGoIwhichwillincludeAI’sshareholdinginterestof100%inAIXLand50%inAISATS.TheGoIhasappointedtheTransactionAdvisor,LegalAdvisorandAsset Valuer to guide the GoI and to carry forward the process of Disinvestment.

b) ASpecialPurposeVehicle(SPV)wascreatedforwarehousingaccumulatedworkingcapitalloansnotbackedbyanyassetalong-withfoursubsidiariesAIATSL,AIASL,AIESL,HCI,non-coreassets,paintingsandartifactsandothernon-operationalassets.Accordingly,AIAHL,AirIndiaAssetsHoldingLtd(AIAHL)wasformed.

c) The Preliminary Information Memorandum (PIM) was published in March 2018 to invitetheExpressionof Interest (EoI) from interestedparties tobid for theDisinvestmentof theCompany.However,nobidswerereceivedforthisEoI.

d) PursuanttothefactthatnobidswerereceivedontheaboveEoIissuedinMarch2018,theAirIndiaSpecificAlternateMechanism(AISAM)initsmeetingheldon18th June 2018 decided that:

157

AI

i) Inviewofthevolatilecrudepricesandadversefluctuationinexchangerates,thepresentenvironment is not conducive to stimulate interest amongst investors for strategic disinvestment of Air India in the near future.

ii) Toundertakenearandmedium-termefforts tocaptureoperationalefficienciesand toimprove the performance of Air India.

iii) Tomonetizenon-corelandandbuildingassets

iv) Toseparatelydecide thecontoursof themodeofdisposalof thesubsidiariesviz.AIEngineering Services Ltd (AIESL), AI Airport Services Ltd (AIASL) and Alliance AirAviationLtd(AAAL)

v) Oncetheglobaleconomicindicatorsincludingoilpricesandtheforexregimestabilizes,theoptionofstrategicdisinvestmentofAir IndiashouldbebroughtbeforeAISAM,fordeliberatingthefuturecourseofaction.

e) Accordingly, in line with the above decisions conveyed by AISAM, and in view of thedeterioratingfinancialhealthofAirIndiaLtd,aStrategicRevivalPlanwasformulatedtotakeAIbackonthepathofprofitability.Themainmodalities/directionsofthisPlanwerediscussedinthemeetingtakenbytheHon’bleFinanceMinistertodiscussthe“PlanforOperational&FinancialEfficiencyinAirIndia”on7thSeptember2018.

f) Afterdeliberations in themeetingheldon7thSeptember,2018under thechairmanshipofHon’bleFinanceMinister the “Plan forOperational&FinancialEfficiency inAir India”wasapproved.InthesubjectmeetingitwasdecidedthatDebtamountingtoRs294,640.0milliontobe transferred fromAir IndiaLtd toAIAHLvizAir IndiaAssetsHoldingLtdeffective1st October2018.

g) AFrameworkAgreementhasbeenexecutedtogiveeffecttothevarioustransactionsrelatingtoAIAHL.TheagreementcoverstheissueofpaymentofidentifiedloansfromthefundstobeprovidedbyAIAHL,novationoftheNCDs,transferofthefourSubsidiaryCompanies,thetransferofidentifiedassets/liabilities,transferoftheproceedsofmonetizationofpropertiesetctoAIAHL.

h) Accordingly,thevariousdecisionsoftheGoIonthedisinvestmentofAI,amountstovestingtoAIAHLofdebttotheextentofRs294,640.0millionagainsttransferofsubsidiaries,non-coreassets,paintingsandartifacts.ThespeciallyformedSPV-AIAHLhasthereforeacceptedliabilitiesofAirIndiaagainsttheInvestments/Assetsbeingtransferred.Theexactvaluewouldbedeterminedonly after the actualmonetization of properties and sale of subsidiaries iscompleted.

(ii) Revised Preliminary Information Memorandum (PIM) Issued for the Strategic Disinvestment of Air India Ltd in January 2020

Astheoveralloutlookforaviationsectorwasstable,theGovtdecidedtorenewtheprocessofdisinvestmentofAIandaccordingly,DepartmentofInvestmentandPublicAssetsManagement(DIPAM) has issued a fresh PIM on 27th January 2020 for the strategic disinvestment of Air India LtdincludingAI’sshareholdinginterestinAirIndiaExpressLtd(AIXL)andAISATS.

Thedisinvestment exerciseofAI hasbeenadversely impactedby theoutbreakofCOVID-19pandemic in India starting mid of March 2020. A nationwide lockdown in India was imposed from March 25th2020,followedbymultipleextensionsinthelockdown/restrictionsimposedbyvariousState Govts. Similar lockdowns were imposed in different parts of the world as well. Considering theprevailing situationarisingout ofCOVID-19, the last dateof submissionofEoI hasbeenperiodically extended and the last date for receipt of EoI is now 14thDecember2020.

158

AI

AsperthePIMthereisaprovisionthatfurtherdebt(tobedeterminedonthebasisofthebidsreceived)wouldbeallocatedtoAIAHL.Similarly,thecurrent&non-currentliabilitiesofAI&AIXLwouldbereallocatedtoAIAHLsuchthattheliabilitiesretainedinAI&AIXLwouldbeequaltothecurrentandnon-currentassetsofAIandAIXL.

(iii) Transactions with AIAHL relating to Disinvestment of Air India Ltda) InlinewiththedecisionofAISAM,aCompanybythenameofAirIndiaAssetsHoldingLtd

(AIAHL)hasbeenincorporatedwith100%shareholdingheldbytheGovernment.ThisentityisanSPVspeciallyformedforthepurposeofacquiringfromAirIndiaLimited

i) ItssharesheldinAIASL,AAAL,AIESLandHCI

ii) Paintingsartifactsandothernon-operationalassetsasmaybedecidedbyAirIndiaLtdand the Government of India

iii) Non-coreassetsasmaybedecidedbyAirIndiaLtdandtheGovernmentofIndia

iv) Immoveablepropertieswhetherleaseholdorfreehold

v) Accumulatedworkingcapitalloansnotbackedbyanyassetand

vi) Other assets / liabilities or of its subsidiaries, as may be decided byAir India Ltd/Government of India

b) PursuanttothedecisionstakeninthevariousAISAMmeetingsstatedabove,AirIndiabegantheexerciseoftransferofidentifieddebtamountingtoRs294,640.0millionason1stOctober2018.However, inviewof lendersapproval for transfernot forthcoming, thedebt transfercouldnottakeplaceandthedebtcontinuedtobeinthebooksofAirIndiaLimited.Inviewoftheseconstraints,theMinistryofFinanceapprovedarefinancingstrategyfortheidentifieddebt.Basedonthemeetingheldon30th May,2019intheMinistryofFinance,itwasdecidedthatAIAHLwouldraisefinancesinthefollowingmannertorefinancetheidentifieddebtofAirIndiaamountingtoRs294,640.0million:

i) Non-Convertible Debentures (NCD) of Rs 74,000.0 million to be novated to AIAHLagainst GoI guarantee

ii) IssueofGovtFullyServicedBondsforRs70,000.0millionagainstLetterofAuthorization

iii) Issue of Bonds worth Rs 150,640.0 million with full Government Guarantee for thepaymentofinterestandprincipalthereof,

c) AirIndiacontinuedtoservicetheinterestontheidentifiedloansandthesamewasreimbursedtoAIbyAIAHL.Accordingly,asumofRs13,000.0millioninFY2018-19andRs17,637.4millioninFY2019-20wasreceivedfromAIAHLasreimbursementforthepaymentofinterest/other costs on transferred loans.

d) ConsequenttotheissuanceofBondsbyAIAHL,AIreceivedfromAIAHLRs219,850.0milliontowardsrepaymentoftheLoans.

e) As seen fromParagraph (a) above alongwith the transfer of debt ofAir India toAIAHL,certainassetsofAirIndiaarealsopartofthetransfertoAIAHL.Someoftheseassetswhicharepartoftheproposedtransferareearningincomeincludingrentalincome,licenseefee,leaseamount,revenuesharingorotherrevenues.Theseassetswillbemonetizedandtheproceeds received after 1stOctober 2018are tobe credited toAIAHL throughanescrowmechanismforultimatelyservicingthetransferreddebts.

f) Accordingly,AirIndiahadidentified111suchpropertiesasnon-coreassetsformonetizationpurposes.Outof theseproperties22propertieshavealreadybeensoldand3properties

159

AI

havebeenalreadysurrenderedback to the respectiveallottingauthorities.The remaining86 properties are reflected in ‘Assets held for Sale/Transfer/Surrender’ and ‘InvestmentProperties’ as given hereunder:

Particulars No of Properties Net Block Value As on 31.03.2020 (Rs in Million)

Assets Held for Sale 84 70,583.2Investment Properties (*) 2 4,375.7

(*) Being redeveloped under an agreement prior to monetization

Further,outoftheabove84propertiesincludedinAssetsHeldforSale,41propertieshavingaNetBookValueRs3,563.8millionason31stMarch,2020havefurtherbeenidentifiedforsurrendertotherespectiveallottingauthoritiesandtheproceedsofthesamewillbetransferredtoAIAHL.

g) AspertheFrameworkAgreementthebeneficialinterestintheidentifiedassetsremainswithAir India until the legal effective date of transfer. Since the properties are still in the name of Air India,theCompanyi.e.AirIndiawillbedisposingoffthesepropertiesandthesaleproceedsof thesamewillbetransferredtotheAIAHLthroughtheescrowmechanismasandwhenreceived.TheRental Income and theRevenueSharing arrangementswith theSubsidiaryCompanyviz.AIASLisaccountedforasincomeinthebooksofAirIndia.However,aspertheFrameworkAgreementAIshallpayAIAHLsuchidentifiedincome(netofcost)onorafter1st October2018,andhencethesamehasbeenadjustedintheStatementofProfit&Loss(referNote 25).

h) AspartoftheproposaloftransferofdebttoAIAHL,theinvestmentsinSubsidiaryCompaniesincludinginvestmentinEquitySharesandanybalancereceivablefromtheSubsidiarieswillbetransferredtotheAIAHL.Accordingly,theinvestmentinSubsidiaryCompaniesalongwithreceivables relating to theSubsidiaryCompanieswhichareproposed tobe transferred toAIAHL,havebeenpresentedas“AssetsheldforSale”. therefore, thefollowingSubsidiaryCompaniesbalanceswillbetransferredtotheAIAHL:

(Rs in Million)No Name of Sub Co Investments Receivables

As on 31.3.2020 As on 31.3.2019 As on 31.3.2020 As on 31.3.2019a) Alliance Air Aviation

Ltd(AAAL)

(Formerly known as Airline AlliedServicesLtd(AASL))

4,022.5 4,022.5 17,060.7 16,681.9

b) AIAirportServiceLtd(AIASL)

(Formerly known as Air India Air Transport Services Ltd(AIATSL))

1,384.2 1,384.2 - -

c) AI Engineering Services Ltd(AIESL)

1,666.7 1,666.7 14,942.5 17,181.7

d) Hotel Corporation of India Limited(HCI)

1,106.0 1,106.0 3,433.8 3,052.1

Total 8,179.4 8,179.4 35,437.0 36,915.7

TheNetamountpayabletoAIASLofRs1,833.0million(PY:Rs606.2million)hasbeenincluded

160

AI

in“TradePayables”asonlyreceivablesfromsubsidiaryCompanyhavebeenclassifiedas“Assets Held for Sale”.

i) TheFrameworkAgreementexecutedbetweenAIandAIAHLlistsouttheobligationsofboththeparties.ThelegaltransferoftheSubsidiariesandnon-coreassetswouldfollowthedueprocessandrequiresapprovalsoftherelevantauthorities.ItisagreedbybothpartiesthatoncompletionofalltheobligationsbyAIlistedintheFrameworkAgreement,wouldbefullandadequateconsiderationfortheobligationsofAIAHL.AstheentireprocessoftransferofSubsidiaries,AssetsandnovationofNCDsisnotcompletedintheFY2019-20,thereceiptoffundsfromSPVandtheproceedsofAssetsmonetizedhavebeencreditedtoanewaccount“ReceiptsfromAIAHLTowardsRestructuringA/c”(RFATR).ThebalanceinthisaccountofRs218,434.8millionhasbeenshownasaseparatelineitembetween“Equity”and“Liabilities”intheFinancialStatements.AftertheentiretransactioniscompletedthebalanceintheRFATRA/cwillbetransferredto“OtherEquity”.

j) Similarly,theamountsdueto/fromAIAHLhavebeenshownintheFinancialStatementsunderthehead“Liabilities”intheaccountnamely“AIAHLIntermediarySettlementA/c”.

k) ThetwonewaccountsopenedtorecordthetransactionsrelatingtoAIAHLnamely“ReceiptsfromAIAHLTowardsRestructuring(RFATR)A/c”and“AIAHLIntermediarySettlementA/cason 31stMarch2020aresummarizedbelow:

No Particulars (Rs in Million)

(I) Receipts from AIAHL towards Restructuring (RFATR) A/c ReceiptsfromAIAHLtowardsRepaymentofLoans 219,850.0

Add:Amounttobeadjustedfrommonetizationproceeds 790.0Total amount received towards repayment of identified Loans 220,640.0

Less:Monetizationproceedsfromthesaleofidentifiedproperties 2,205.2 Net Balance in RFATR A/c 218,434.8


(II) Details of AIAHL Intermediary Settlement A/c Total amount of identified Loans repaid 2,20,640.0

Less: ReceiptsfromAIAHLtowardsRepaymentofLoans 2,19,850.0Less: Reimbursement received from AIAHL towards Interest/Other

Charges 30,637.4

Balance (29,847.4) Add:

a) InterestduefromAIAHL 28,574.7 b) MaintenanceexpensesrecoverablefromAIAHL 64.6 c) SalaryetcrecoverablefromAIAHL 1.6 d) LegalChargesrecoverablefromAIAHL 43.4 28,684.3

Less: a) RentpayabletoAIAHL 1,424.8 b) RevenueSharingamountpayabletoAIAHL 545.8 c) MonetizationproceedspayabletoAIAHL(Rs2205.2millionless

Rs 312.7 million directly transferred through Escrow)1,892.5 (3,863.1)

Net Amount Receivable/(Payable) from/to AIAHL (5,026.2)

161

AI

l) TheaboveamountduetoAIAHLwillbereconciledafteradjustmentofallexpensesincurredbyAirIndiatowardsnovationofBondsofRs74000.0million,maintenancecostofproperties,transfer charges, exchange adjustments if any, and impact of receivable/(payables)from/(to)SubsidiaryCompanieslikeAIESL,AAAL,HCIandAIASLaswellasanyreimbursementsreceivedfromAIAHL.

m) The effect of all the decisions of various AISAM meetings and decisions of the Government statedabovearereflectedintheFinancialStatementsassummarizedbelow:

i) OutoftheidentifiedloansproposedtobetransferredtoAIAHL,loansamountingtoRs220,640.0millionhavebeenrepaidoutoftheamountofRs219,850.0millionreceivedfromAIAHLduringtheyearandthesameisreflectedintheRFATRA/c.

ii) Out ofthe reimbursement of Rs 30,637.4million from theAIAHL during FY 2018-19andFY2019-20towardsinterestandotherloanrelatedcostspaidbyAirIndiaontheidentifiedloans,asumofRs13,000.0millionhasbeennettedoffagainstFinancecostforthefinancialyear2018-19andRs15,574.7millionforthefinancialyear2019-20.

iii) TheRentalIncomeofRs1,424.8millionreceivedfromtheidentifiedpropertiesandtheRevenue Sharing of Rs 545.8 million for the period from 1stOctober2018to31st March 2020payabletoAIAHLandrelatedcostamountingtoRs64.6millionrecoverablefromAIAHLhasbeenadjustedintheStatementofProfit&Loss(referNote25).

iv) Asstatedabovein28(iii)(f),thebookvaluesofthe84identifiedpropertiesamountingtoRs70,583.2million,areappearingunder“AssetsheldforSale”andthebookvaluesof2identifiedpropertiesamountingtoRs4,375.7millionareappearingunder“InvestmentProperties”.

v) Theaggregatevalueof investmentsin4subsidiariesamountingtoRs8,179.4millionandadvancesgiventothesubsidiariesalongwithinterestaccruedthereonamountingtoRs35,437.0millionareclassifiedas“AssetsheldforSale”.

vi) Assetsheld for sale/transfer/surrender identified tobe transferred to theAIAHLhavealsobeentakenatbookvalueason31st March 2020. The gain/loss on assets which havebeensoldfrom1stOctober2018to31stMarch2020havebeenaccountedforintheFinancial Statements of AI.

29. Impact of COVID-19 on Air India Ltd

TheglobaloutbreakofCOVID-19pandemicandthenation-widelockdownimposedfrom25thMarch 2020 andfollowedbymultipleextensionsinlockdown/restrictionsimposedbyCentral/StateGovernmentshad a major impact on the aviation industry. Similar lockdowns were imposed in the different parts of the worldaswell,leadingtoaseveredentonthebusinessoftheCompany.AIhadtoceaseallscheduleddomestic and international operations in compliancewith the directions issuedby theDGCA in theaftermath of the pandemic.

ThesuspensionofallairtrafficduringthisperiodsawtherevenuesoftheCompanyplummetingandatthesametime,committedandobligatedexpendituresuchasloanrepayments,paymentstoaircraftlessors,salariesetchadtobemetduringthisperiodleadingtoafurtherdentinthealreadystrainedfinancialpositionoftheCompany.

Nevertheless,theCompany,duringthisperiod,onthedirectionsoftheGovernment,conductedsomeessential air operations tomitigate the hardships brought forward by the unprecedented pandemictimes.Thisincludedtheoperationofnon-scheduledflightsundertheVandeBharatMissiontoevacuatestrandedfellowcitizensthroughouttheglobe.Inaddition,AIalsoconductedspecialcharterflightson

162

AI

domestic and some international sectors to facilitate the movement of essential medical and other suppliestovariouspartsofthecountryandtheworld.Subsequently,theDGCAalsopermittedresumptionofdomesticoperationsinacalibratedmannerwitheffectfrom25th May 2020.

In lightof theCOVID19pandemic,GOI restrictionsondomesticand international flightsandotherprevailingsituation,itisverydifficulttoassesstheairpassengerandcargotrafficvolumeforthecomingyears. This has directly affected the operations and revenues of aviation sector including AI.

However,on itsownpart, theCompanyduringtheCOVIDperiodhas introducedvariousmeasures/stepstopartiallyoffsettheadversefinancialimpactarisingoutofthesedifficulttimes.Theseincludethe introductionof salary/allowancecutsacross theboard forall employees, suspensionofall postretirementcontractualengagements,introductionoftheconceptofshorterworkingweek,encouragingtheemployeestotakeadvantageoftheLeavewithoutPaySchemeetc.TheCompanyalsoengageditsaircraftlessorsinnegotiationstosecurecutsinleasepayments,exercisedstrictcontrolovervendorpaymentstoensurebestpossibleuseofscarcefundsavailability.

AllairlinesincludingAirIndiahaveseenasteepdeclineintheirscaleofoperationsduringthefirsttwoquartersofFY2020-21.TheestimatesofrecoveryfromtheimpactofCOVID-19havebeenmadebyvariousstakeholdersandinmostcases,normalcyisprojectedtoreturnbyonlyaroundFY2024i.e.within4to5years.ScientificadvancementsinthefightagainstCOVID-19andthedevelopmentofavaccinetocontrolthepandemicwilldecidetheshapeandspeedofreturntonormalcyandwhichinturn,willdeterminethenatureandtractionofglobaleconomicrecoveryfromtheimpactofCOVID-19.

The Company has also assessed the impact of COVID-19 on the impairment in the carrying value of its assets,inventories,receivablesetcappearinginitsfinancialstatements.Indevelopingtheassumptionsandestimatesrelatingtothefutureuncertaintiesintheeconomicconditionsmanifestedbythepandemic,the Company has relied on various internal and external sources of information. Based on the current indicatorsoffutureeconomicconditions,themanagementexpectstofullyrecoverthecarryingvalueofallitsassets.However,giventheuncertainties,thefinalimpactontheCompany’sFinancialStatementsandCashFlowscannotbepredictedatthistimeandinfuturemaydifferfromthatestimatedasatthedateofapprovalofthesefinancialstatements.Further,theimpactassessmentdoesnotindicateanyadverseimpactontheabilityoftheCompanytocontinueasagoingconcern.

The COVID-19 pandemic is still impacting all economic activities worldwide in varied ways and any current estimatestomitigateitsimpactneedtobecontinuouslymonitoredandreassessed.Themanagementwillcontinuetocloselymonitoranymaterialchangesbasedonthefutureeconomicconditions.

30. Property, Plant and Equipment, ROU and Investment Properties

i) ROUAssets(LandLeasehold)includecertainpropertiesforwhichtitledeedsarenotavailable.Details of the same is as under:

(Rs in Million)

Particulars 31.03.2020 31.03.2019Area

(SqMtrs)Gross Block

Net Block

Area (SqMtrs)

Gross Block

Net Block

Land Leasehold 76,874.0 180.0 180.0 76,874.0 180.0 180.0

ii) AirIndiawasallottedleaseholdlandmeasuring1,00,021.60sq.mtrs.byCIDCOatNerulforStaffHousingColony.Ontheabovereferredland,AirIndiahadconstructed508flatsonaportionoflandadmeasuring28,626sq.mtrsandithasbeendecidedtoselltheseflatstotheemployees

163

AI

of the Company and organizations under the control of Ministry of Civil Aviation. In terms of theOrdersofHon’bleHighCourtatBombay(theCourt),theCompanyissuedallotmentlettersto334allotteesoutof508flats.However,titletotheunderlyinglandcanonlybeconveyedbya tripartite conveyance deed betweenSocieties,Air India andCIDCOwhich is not yet done.Pending conveyance of title of land in favour of the registered societies and completion of all legal formalitiesnecessaryadjustmentshavebeenmadeasattheTransitiondate(1st April 2016). The valueofthispropertyisbeingcarriedason31stMarch2020asgivenhereunder:

a) Net Value of 334 flats (including cost of land) amounting toRs.1,483.9million allotted inearlier years were transferred to Assets held for Sale.

b) CarryingValueofthebalance174flatsandthevacantlandamountingtoRs.4,176.2millionbeingdepreciatedcosthasbeenshownunderInvestmentProperty.

Necessaryentriesforthesaleoftheflatswillbemadeonthecompletionofthelegalformalities.

The Company had also paid an advance of Rs. 24.6 million (PY:Rs. 24.6 million) to CIDCO for purchase of another plot of lease hold land at Nerul for the purpose of construction of staff quarters.ThepossessionoftheplotallottedbyCIDCOinthisregardhasnotbeenhandedovertotheCompanyandnoagreement/leasedeedhasbeenexecutedtilldate.Thesamehasbeenshown as “Assets held for Sale-Others”.

ThemonetizationproceedswouldbecreditedtoAIAHL,throughescrowmechanism.

iii) Underdisinvestmentplan,monetizationof the identifiedproperties is in theprocess,hencefairvalueoftheinvestmentpropertiescouldnotbedisclosedasaconfidentialitymeasure.

iv) The Board of Directors has also decided that the Core Engineering Assets namely MRO at Nagpur,Trivandrum,HyderabadandHangarsatDelhi,Mumbai,KolkataandChennaiandallEngineering facilities includingworkshopequipmentatall airportswouldbe transferred to theSubsidiaryAIESLafterapproval/NOCfromtheAuthoritiesconcerned.Atpresenttheseassetsareappearing in PPE/CWIP Schedule in their respective heads.

v) Disclosure under IND-AS 40“Investment Property”

(Rs in Million)No Particulars 2019-20 2018-19

Properties Earning Rent

Properties not Earning Rent

Properties Earning Rent

Properties not Earning Rent

A Rent Earned 26.6 - - -B Operating Expensesi) Security Services - 3.1 - 5.2ii) Property Taxes - 2.6 - 2.6iii) LeasePremium - 24.6 - 24.6

vi) TheremovalofchargeontheAircrafttakenunderfinancelease,fullyrepaidduringtheyear,isunder process as lenders have not yet given the NOC for the title transfer due to cross-default clause in other facilities.

31. Assets Held for Sale (AHFS)

Assets held for sale mainly includes:

i) ImmovablePropertiesinrespectofwhichtheBoardhasaccordeditsapprovalforsale/monetization.Hence, thesepropertieshavebeen transferred to “AssetsHeld forSaleA/c”at lowerof their

164

AI

carrying value and fair value less cost to sell.“Assets held for Sale” include certain properties for whichtitledeedsarenotavailable.Thedetailsareasunder:

(Rs in Million)Particulars 31.03.2020 31.03.2019

Area (SqMtrs) Gross Block Net Block Area (SqMtrs)

Gross Block

Net Block

Land/Buildings Freehold 18,682.8 344.8 344.8 23,904.3 387.1 387.1Land/Buildings Leasehold 153,642.7 56,475.9 56,475.9 152,413.9 56,403.2 56,403.2Total 172,325.5 56,820.7 56,820.7 176,318.2 56,790.3 56,790.3

ii) Intermsofdecisiontaken,aspertherecordsofthediscussionsheldintheMinistryofFinanceon 1stJune2017for thedevelopmentofassetsofAI locatedatVasantViharHousingColony,121410sqmtrsRs51,295.1million(PY:Rs51,295.1million)andBabaKharagSinghMargLand14326.38sqmtrsRs4,770.7million(PY:Rs4,770.7million),thesepropertieshavebeenhandedovertotheMinistryofUrbanDevelopment(MoUD).TheMoUDhasbeenentrustedwiththeoverallresponsibilityofsaleofthesetwopropertiesbytheGovernmentandthemonetizationproceedswillbetransferredtoAIAHL.

iii) TwoB-777-300ERaircraftwhichhavebeenprocuredonbehalfofGovtofIndiahavebeenclassifiedas“AssetsheldforSale”.TheentirecostoftheseaircraftincludingthecostofmodificationwillbebornebytheGovtofIndia.

iv) Duringtheyear,therewasdiminutioninthevalueof2propertiesunderAHFSamountingtoRs94.3million,whichhasbeenaccountedforintheStatementofProfitandLoss.

v) Forthepurposeofdisclosureofnon-availabilityoftitledeedsinNoteNo30(i)and31(i)inrespectofLand&BuildingsincludedinAHFS,ROU,InvestmentPropertiesandPPE,certainpropertiesforwhichphotocopiesareavailableorforwhichregistrationformalitiesareyettobecompletedhavenotbeen included.Effortsarebeingmadeby theCompany toobtainduplicate certifiedcopies of such title deeds and other relevant records of properties in cases where original title deedsarenot inpossessionof theCompany.Further, theCompany isalso in theprocessofcompleting registration formalities in respect of such properties.

32. Vayudoot

AftercarryingoutalldisbursementsasperthedirectionsoftheMinistryofCivilAviationpertainingtothemergerofVayudootwithAirIndiaLtd,abalanceamountofRs28.2million(PY:Rs.28.2million)remainswhichhasbeenreflectedinthebooksofaccountsofAIas“Liability”under“VayudootSettlementAccount”.However,necessarydecisionregarding theadjustmentof thisoutstandingamountcanbetakenonlywhencertainContingentLiabilitiesrelatingtoVayudootLtdwhichcontinuetobedisclosedintheAccountsoftheAIaresettled.ThisismainlybecausethesemayleadtofutureliabilitiesforAIasthey mainly pertain to legal cases pending against Vayudoot.

33. Physical Verification & Reconciliation

i) Fixed Assets:

a) PhysicalVerificationandReconciliationofmajorassetsviz.Airframes,Aero-engines,APUsandSimulatorsiscarriedoutattheyearend.However,onaccountoftheCOVID-19pandemicand the lockdown imposed inMarch2020onwards throughout thecountry, theCompanycouldnotcarryoutthephysicalverificationofAirframes,Enginesetc.ason31st March 2020. However,basedoncertificationbyEngineeringDepartmentthereconciliationofthesemajor

165

AI

assetsvis-à-visfinancialrecordswascarriedoutinJune2020byInternalAuditDepartment.Further, in thecaseof landandbuilding (including InvestmentProperties)reconciliationofnumberofpropertiesasperfixedassets registervis-à-vis recordsofholdingdepartmentswasdone.Theseassetstogetherconstitutearound93%oftheGrossBlockofAssetsason31st March2020. No major discrepancies were found in the same.

b) Thephysicalverificationandreconciliationofassetsotherthanaboveconstitutingaround7%of the Gross Block as on 31stMarch2020,includingassetsmigratedinFixedAssetsRegisteratblock levelasone item forwhich line item identification isunderprogress.Further, thephysical verificationof theseassets for thebiennial period2018-20hasbeen completed.However,thenecessaryactiononthePhysicalVerificationReportreceivedisunderprogressandnecessaryactiononthesamewillbetakenonreceiptofapprovalfromtheCompetentAuthorityforshortagesidentifiedamountingtoRs111.7million.

ii) Inventory:

PhysicalVerificationofaircraft/non-aircraftinventory(exceptinventorylyingwiththirdparties)forthebiennialperiod2018-20hasbeencompletedandshortagesofRs32.2millionandexcessesRs15.5millionhavebeenobserved.Pendingreconciliation/adjustmentatsomeRegionsandapproval from thecompetentauthority,aprovisionamounting toRs29.8million (PY:Rs23.6million)forshortageshasbeenmade.

34. Effect of changes in Exchange rates (IndAS-21)

i) TransactionsrelatingtoForeignInventoryProcurementsandclosingbalancesofcertainforeigncurrencymonetaryitemshavenotbeentranslatedatthedateoftransaction/inaccordancewiththe provisions of Ind AS due to complexity of transactions. The impact of translation of the same isnotascertained;however,thesameisnotlikelytobematerial.

ii) TheCompanyhasnotadoptedAppendixBtoIndAS21–ForeignCurrencyTransactionsandAdvanceConsiderationwhichclarifiesthedateoftransactionforthepurposeofdeterminingtheexchangeratetouseoninitialrecognitionoftherelatedasset,expenseorincomewhenanentityhasreceivedorpaidadvanceconsiderationinaforeigncurrency.However,theeffectonaccountofnon-adoptionofthisamendmentisnotlikelytobematerial.

35. Confirmations/Reconciliations

i) Thereconciliationofreceivablesandpayablesincluding,suspense/controlledgersandstaffrelatedaccountsisunderprocess.Impact,ifany,ofconsequentialadjustmentarisingoutofreconciliationwillbedealtwithintheyearofcompletionofReconciliation.

ii) TheCompanyhassought theconfirmationofbalances for major receivables,payablesandinventorylyingwiththirdparties.However,onlysomeofthepartieshaveresponded.Whereverthe balances confirmed by the parties are not in agreement with the books, reconciliation ofdifference is under process.

iii) TaxDeductedatsource(TDS)credits in respectof IncomeTaxandProvidentFund liability inrespectofbothemployees’andemployer’scontributionarestillpendingtobereconciledwithtaxcreditstatement(Form26AS)andEmployees’ProvidentFundTrustsbooksrespectively.

36. Bank Accounts Confirmation

(i) The Company has requested for confirmation/Bank Statements/Direct confirmation as on31stMarch2020toStatutoryAuditors.TheCompanyhasobtainedconfirmation/bankstatementsin respect of bankaccounts/fixeddeposits/loanaccountsexcept for 17bankaccounts (PY:2bankaccounts)carryingaggregatebalanceofRs.30.6million(PY:Rs0.3million).However,as

166

AI

pertheStatutoryAuditorstheyhavenotreceivedtheconfirmationsdirectlyinrespectof219bankaccounts(PY:168BankAccounts)carryingaggregatebalanceofRs2,892.2million(PY:1,589.5million),FixedDepositaccountscarryingaggregatebalanceofRs1,280.1million(PY:Rs803.9million)andLoanstakenfromaforeignbankcarryingbalanceamountingtoRs3,662.0million(PY:Rs9,059.3million)ason31stMarch2020.

(ii) As on 31stMarch2020,theCompanyhasinoperativeBankaccountscarryingatotalbalanceofRs 5.8 million (PY: Rs 5.0 million).

37. Internal Control

The Company is in the process of strengthening the internal audit process so as to ensure the coverage of all the areas as envisaged in the Minimum Audit Programme and ensure effective internal controls atstations,regionaloffices,userdepartmentsandCentralAccountsOffice.Tocomplywiththesame,IndependentCharteredAccountantsfirmshavebeenappointedbytheCompany.SystemforuniformandtimelyaccountinginSAPaswellasothersoftware,includinginterfacewitheachother, isunderprocessofbeingstrengthened.

38. Inventories

i) TheWorkOrderSuspenseaccountincludesitemsofRs.1,367.5million(PY:Rs.2,371.3million)outofwhichprovisionhasbeenmadeforRs1,065.6(PY:Rs2,233.9million)forall theitemsirrespective of work completion status upto September 2019, items in completed status uptoMarch 2020, heavy checks upto December 2019 and in-transit checks/express checks uptoMarch 2020.

ii) Pendingreconciliation/rectification,provisionofRs.147.6million(PY:Rs246.1million)hasbeenmade towards the inventory balances lying under various intermediary /suspense accountsunderRAMCOsystem forwhichconsumption / issue /scrappagehasnotbeenupdateduntil31stMarch2020. The amount lying in such accounts as at 31stMarch2020 is Rs 472.7million(PY: Rs. 448.9 million).

iii) TheaccountingofFDI(Freight,DutyandIncidentals)inRAMCOisdoneonblocklevelinsteadofattransactionlevel.Attheyearend,FDIisexpensedoutonthebasisofratiooftheinventoryconsumed during the year to the total inventory. The total of FDI expensed out during the year amountstoRs959.9million(PY:Rs.1,031.0million).Thispracticehasbeenfollowedconsistentlyinviewofbulkandconsolidatedmovementofspares,anddifficultyinidentifyingandallocatingitem wise FDI.

39. Status of Reconciliation with Airport Operators

i) ThereconciliationwithvariousAirportOperatorshasbeencarriedoutduring theyearandthestatus of the same as on 31st March 2020 is given hereunder:

(Rupees in Million)No Name of Airport Operator Balance Payable as

per Air India Ltd as on 31.03.2020

Balance Receivable as per Airport

Operators as on 31.03.2020

Difference

1 Airport Authority of India (AAI) 15,920.0 22,381.7 (6,461.7)2 Mumbai International Airport Ltd

(MIAL)1,637.0 1,646.9 (9.9)

3 DelhiInternationalAirportLtd(DIAL) 1,828.3 1,827.1 1.2

167

AI

(Rupees in Million)No Name of Airport Operator Balance Payable as

per Air India Ltd as on 31.03.2020

Balance Receivable as per Airport

Operators as on 31.03.2020

Difference

4 CochinInternationalAirportLtd(CIAL) 223.9 205.9 18.05 Greater Hyderabad International

AirportLtd(GHIAL)310.9 361.9 (51.0)

6 BangaloreInternationalAirportLimited(BIAL)

137.3 147.4 (10.1)

7 MIHAN Nagpur 7.2 48.4 (41.2)

ii) Themajorreasonsforthedifferenceareduetopayments/creditsgivenbyAIupto31st March 2020forwhichaccountingeffectbytheAirportOperatorsisyettobegivenandthedifferenceduetodisputesinratesappliedforlandingandparkingcharges,groundhandling,royalty,spacerentals,etc.whicharenotaspertermsoftheAgreements.InthecaseofsomeAirportOperators,whereverun-reconcileddifferenceisthere,thesamehasbeendisclosedasContingentLiability.

iii) ThebalancesinrespectofAAIare intheprocessofreconciliation.Thedifferencesaremainlyonaccountofeffectof, ‘UmbrellaAgreement’signedbetweenAIandAAIinFY2018-19,MoUrelatingtorevenuesharingofCargoComplexMumbaiandTDScreditsnotconsideredbyAAI.The process of reconciliation and adjustment in regard to these issues is going on at all Regions withAAIandnecessaryeffectforthesamewillbegivenonthecompletionofthereconciliationof all balanceswithAAI.However, the un-reconciled difference ofRs 780.7million has beendisclosedasContingentLiability.

40. Segment Reporting:

i) TheCompanyisengagedinairlinerelatedbusinesswhichistheonlyreportablesegment.Thedetailsofgeographicalareawiserevenueearned(derivedbyallocatingrevenuetotheareainwhich the sales were made) are given hereunder:

(Rs in Million) Particulars 2019-20 2018-19

a) USA/Canada 32,171.1 31,177.6b) UK/Europe 25,902.7 23,338.4c) Asia(excludingIndia),AfricaandAustralia 29,992.5 34,268.6d) India 189,039.8 166,875.0 Total 277,106.1 255,659.6

ii) Majorrevenue-earningassetoftheCompanyistheaircraftfleet,whichisflexiblydeployedacrossitsworldwideroutenetwork.Othernon-currentassets(otherthanfinancialinstruments)locatedoutsideIndiaarenotmaterial,hence,notdisclosed.

iii) Therearenocustomershavingrevenueexceeding10%oftotalrevenuesincurrentyearaswellas previous year.

41. Related Party Transactions:

Disclosure of the names and relationship of the Related Parties as required under IND AS-24 are as under:

168

AI

A. Key Management Personnel &Relatives:

i) Key Management Personnel &Relatives:

Name Particulars(A) Whole-Time Directors1 Shri Pradeep Singh Kharola Chairman & Managing Director

(CeasedtobeCMDeffective14thFebruary2019)2 ShriAshwaniLohani Chairman & Managing Director

(CeasedtobeCMDeffective14thFebruary2020)3 Shri Rajiv Bansal Chairman & Managing Director

(Appointed as CMD effective 14thFebruary2020)4 Shri Vinod Hejmadi Director–Finance

5 Ms. Amrita Sharan Director-Personnel (Appointed on the Board effective 14thJuly 2020)

6 Ms. Meenakshi Mallik Director-Commercial(Appointed on the Board effective 14thJuly 2020)

7 Capt. Rajwinder Singh Sandhu Director Operations(Appointed on the Board effective 24thJuly 2020)

8 Shri Pankaj Srivastava Director Commercial (Ceased to be Director upon superannuation w.e.f.01.05.2018)

9 Shri Arvind Kathpalia Director Operations(CeasedtobeDirectoron13.11.2018))

(B) Government Nominee Directors10 Shri Praveen Garg AdditionalSecretary&FinancialAdvisor,MinistryofCivil

Aviation.(Appointed on the Board effective 30thAugust,2019andceasedtobeontheBoardeffective18February2020)

11 Shri Vimalendra Anand Patwardhan AdditionalSecretary&FinancialAdvisor,MinistryofCivilAviation.(Appointed on the Board effective 18thFebruary2020)

12 Shri Satyendra Kumar Mishra JointSecretary,MinistryofCivilAviation.

13 Ms Gargi KaulAdditionalSecretary&FinancialAdvisor,MinistryofCivilAviation.(CeasedtobeontheBoardeffective24th January 2019)

14 Shri Arun KumarAdditionalSecretary&FinancialAdvisor,MinistryofCivilAviation.(CeasedtobeontheBoardeffective10thJuly 2019)

(C) Independent Directors15 (Dr.) Shri Ravinder Kumar Tyagi CeasedtobeontheBoardeffective31stMay 202016 (Dr.) Shri Syed Zafar Islam CeasedtobeontheBoardeffective31stMay 202017 Shri Y.C. Deveshwar CeasedtobeontheBoardeffective11stMay 201918 Shri Kumar Mangalam Birla19 Smt.PurandeswariDaggubati

169

AI

ii) Transactions with Key Managerial Personnela) There are no transactions with key managerial personnel other than Remuneration and

PerquisitestoChairman&ManagingDirector,FunctionalDirectorsandSittingfeestoIndependent Directors.

b) NoloansorcredittransactionswereoutstandingwithDirectorsorofficersoftheCompanyor their Relatives as at 31stMarch,2020(PY:RsNil).

iii) Key Managerial Remuneration(a) Salary and Allowances


2019-20 2018-19(a) Chairman & Managing Director

Salaries & Allowances (including value of perquisites 2019-20: Rs 0.03 million (PY: Rs Nil million)

1.7 3.1

(b) Functional Directorsi) Salaries & Allowances

(including value of perquisites 2019-20: Rs 0.04 million (PY: Rs 0.06 million)3.0 15.7

ii) ContributiontoProvidentFund 0.2 0.6(c) Independent Directors

Sitting Fees paid to Independent Directors 0.5 0.7

Note: Transactions such as providing airline related services in the normal course of businessarenotincludedabove.

(b) EmployeeBenefitsObligations

(Rs in Million)No Particulars 2019-20 2018-19i) Gratuity Provision 1.7 3.4ii) LeaveEncashmentProvision 2.7 4.5iii) Salary Outstanding at year end 0.3 1.7

B. Name and Relationship of Group Companies and Joint Venture

No Particulars Relationshipi) AirIndiaExpressLtd(AIXL)

(FormerlyknownasAirIndiaChartersLtd(AICL))SubsidiaryCompany

ii) AIAirportServicesLtd(AIASL)(FormerlyknownasAirIndiaAirTransportServicesLtd(AIATSL))

SubsidiaryCompany

iii) AIEngineeringServicesLtd(AIESL) SubsidiaryCompanyiv) AllianceAirAviationLtd(AAAL)

(FormerlyknownasAirlineAlliedServicesLtd(AASL))SubsidiaryCompany

v) HotelCorporationofIndiaLtd(HCI) SubsidiaryCompanyvi) AirIndiaSATSAirportServicesPvtLtd Joint Venture (JV)

170

AI

Transactions with Group Companies

(Rs in Million)No Transactions 2019-20 2018-191 Air India Express Ltd (AIXL)a) Expenditure -b) Revenuei) RevenueSharingwithAirIndiaLtd 3,500.0 3,500.0ii) InterestCostReimbursementbySubsidiaries 984.3 924.3iii) Handling & Servicing 163.2 135.5iv) Others 172.7 102.3c) Closing Balance as on 31st March-Advances 11,347.0 11,510.42 Alliance Air Aviation Ltd (AAAL)a) Expenditurei) Staff Cost Pay and Allowances 6.7 -ii) Staff Cost Travelling Expenses 1.3 -b) Revenuei) InterestCostReimbursementbySubsidiary 1,446.3 1,382.9ii) Handling & Servicing 76.6 82.8iii) Others 206.5 60.7c) Closing Balance as on 31st March-Advances 17,060.7 16,682.03 Hotel Corporation of India Ltd (HCI)a) Expenditurei) Pax Amenities 403.0 304.2ii) Others 109.6 143.9b) Revenuei) InterestCostReimbursementbySubsidiary/Others 260.8 257.5ii) Others 0.3 -c) Closing Balance as on 31st March-Advances 3,433.8 3,052.14 AI Airport Services Ltd (AIASL)a) Expenditurei) Handling Charges 3,430.5 3,215.9ii) InterestPaidtoSubsidiary 105.0 20.5iii) Others 136.3 82.5b) Revenuei) Revenue Sharing with Air India 342.5 406.8i) Others 83.5 82.5c) Closing Balance as on 31st March- Liability 1,833.0 606.25 AI Engineering Services Ltd (AIESL)a) Expenditurei) Outside Repairs Aircraft 10,321.5 9,448.5ii) Others 174.2 -

171

AI

(Rs in Million)No Transactions 2019-20 2018-19b) Revenuei) InterestCostReimbursementbySubsidiary 1,381.7 1,358.6ii) Others 605.9 -c) Closing Balance as on 31st March- Advances 14,942.5 17,181.7

6 Joint Venture Air India SATS Airport Services Pvt Ltda) For transactions with JV AI-SATS refer Note 42(i)

Also Refer Note No 27 (ii) for Other Commitments.

C. Transactions with Provident Fund Trusts

(Rs in Million)Particulars 2019-20 2018-19

PF Contribution during the Year

Outstanding as on 31.03.2020

PF Contribution during the Year

Outstanding as on 31.03.2019

PFTrustsDues 951.1 2,541.8 742.9 382.9

D. Major Transactions with Govt/Govt Related Entities

S. No Name Relationship1 Airport Authority of India Central PSU2 IndianOilCoLtd Central PSU3 HindustanPetroleumCoLtd Central PSU4 BharatPetroleumCoLtd Central PSU5 AirIndiaAssetsHoldingCoLtd Central PSU6 National Small Savings Fund (NSSF) Govt Department7 Govt of India Promoter

The details of the major transactions of Revenue and Expenditure of the Company with Govt Related Entities are given hereunder:

(Rs in Million)No Name of Entity Nature of Transactions 2019-20 2018-19

Balance as on 31st

Mar’2020

Amount of Transactions

during the year

Balance as on 31st Mar’2019


during the year

1 Airport Authority of India

Airport Usage Charges 15,920.0 4,268.2 14,374.7 4,469.5

2 IndianOilCoLtd Fuel and ATF Purchases 23,447.0 41,312.5 18,369.2 44,214.3Interest on delayed payments

1,466.8 1,466.8 1,688.6 1,688.6

3 Hindustan PetroleumCoLtd

Fuel and ATF Purchases 7,576.0 9,831.7 6,302.0 11,770.8

172

AI

(Rs in Million)No Name of Entity Nature of Transactions 2019-20 2018-19

Balance as on 31st

Mar’2020


during the year

Balance as on 31st Mar’2019


during the year

Interest on delayed payments

491.1 491.2 649.1 649.1

4 Bharat Petroleum CoLtd

Fuel and ATF Purchases 8,610.6 8,203.6 6,244.4 8,990.2

Interest on delayed payments

569.8 569.9 545.5 545.5

5 Govt of India - Various Ministries and Departments

SESF Flights Revenue 6,478.6 9,082.0 6,467.9 8,824.2

CharterRevenue–Others

926.7 2,711.1 1,226.6 2,475.0

Mail Revenue 204.8 594.2 611.1 592.5LoanfromNationalSmallSavings Fund (NSSF)

26,360.0 - 26,360.0 26,360.0

InterestonLoanfromNSSF

2,240.6 2,240.6 847.7 847.7

6 Air India Assets HoldingCoLtd

ReimbursementofInterestonAILoanscarvedouttoAIAHL

- 17,637.4 - 13,000.0

Rental Income and Revenue Sharing net offrelatedcosttobetransferedtoAIAHL

- 1,906.0 - -

Monetization Proceeds tobetransferredtoAIAHL

- 2,205.2 - -

Other misc. transactions - 45.0 - -Funds received from AIAHLforrepaymentofidentifiedLoans

- 219,850.0 - -

BalanceinAIAHLIntermediary Settlement A/c

5,026.2 - - -

Advance for expenditure - - 0.45 0.457 Govt of India Equity Infusion from Govt 326,652.1 - 326,652.1 39,750.0

Share Application money pending allotment

- 0.01 - -

Advance received for 2 SESF Aircraft

37,398.6 2,723.4 34,675.2 4,675.2

Guarantee Fee 18,275.0 3,428.5 14,970.6 6,579.1

Note:The above transactionswith theGovt/GovtRelated entities cover transactions that aresignificant individuallyandcollectively.TheCompanyalsoentered intoother transactionswith

173

AI

variousotherGovtrelatedentities,however,thesetransactionsareinsignificanteitherindividuallyor collectively and hence not disclosed.

42. Interest in Joint Venture Air India SATS Airport Services Pvt Ltd

i) Disclosure relating to AI-SATS

(Rs in Million)No Transactions 2019-20 2018-19a) Expenditurei) Handling Charges 2,893.8 2,734.0b) Revenuei) Asset Usage Charges 42.6 -ii) Dividend 12.1 20.2iii) Others 429.8 729.5c) Payable as per AI Books 1,344.7 859.1

TheCompanyhasenteredintoJointVenture(JV)agreementwithSATS,Singaporeintheequityratioof 50:50 to provide ground handling services to airlines at certain airports and this was in pursuance of GOInotificationonthegroundhandlingpolicy.

ii) Capital Commitments and Contingent Liabilities in respect of Company share in AI-SATS Joint Venture

(Rs in million)

No Particulars 31st March, 2020

31st March, 2019

1. Estimated amount of contracts remaining to be executed in respect of PPE and Other Intangible Assets

27.9 -

2. Company's exposure in respect of performance bank guarantee issued to various parties

244.6 229.0

3. Claims against the Company not acknowledged as debts. -4. Taxation matters:(i) IncomeTaxAppealsbeingcontestedbytheJV 210.4 161.2

Less:PaymentunderprotestinrespectoftheseAppeals (75.4) (65.6)(ii) Other Income Tax Matters 109.5 109.55. Other than Taxation matters(i) Demand against the ESIC 11.4 2.7

Less:PaymentunderprotestinrespectoftheseDemands (1.7) (2.7)

43. In compliance with Ind AS – 27 ‘Separate Financial Statements’, the required information is as under:

No Particulars Country of Incorporation

Percentage (%) of Ownership Interest

As at 31st March 2020


(A) Subsidiary Companies

174

AI

No Particulars Country of Incorporation

Percentage (%) of Ownership Interest



i) AirIndiaExpressLtd(AIXL)(FormerlyknownasAirIndiaChartersLtd(AICL))

India 100 % 100%

ii) AIAirportServicesLtd(AIASL)(FormerlyknownasAirIndiaAirTransportServicesLtd(AIATSL))

India 100 % 100%

iii) AIEngineeringServicesLtd(AIESL)(FormerlyknownatAirIndiaEngineeringServicesLtd)

India 100 % 100%

iv) AllianceAirAviationLtd(AAAL)(FormerlyknownasAirlineAlliedServicesLtd(AASL))

India 100% 100%

v) HotelCorporationofIndiaLtd(HCI) India 80.38 % 80.38%(B) Joint Venture (JV)i) AirIndiaSATSAirportServicesPvtLtd India 50 % 50%

(ReferNote28(iii)(h)forInvestmentsinSubsidiarypresentedasAssetheldforSale.)

44. Ind AS 116 Leases

(I) Transition to Ind AS 116 IndAS116supersedesIndAS17Leases including itsAppendices.Thestandardsetsout the

principlesfortherecognition,measurement,presentationanddisclosureofleasesandrequireslesseestorecognizemostleasesonthebalancesheet.

TheCompanyhasappliedthestandardtoitsleases,retrospectively,withthecumulativeeffectofinitiallyapplyingthestandard,recognizedonthedateofinitialapplication(i.e.1stApril 2019). Accordingly, the Company has not restated comparative information; instead, the cumulativeeffectof initiallyapplying thisstandardhasbeen recognizedasanadjustment to theopeningbalanceofRetainedEarningsason1stApril 2019.

The Company has applied following other practical expedients on transition to Ind AS 116 on initial application:

a) The Company applied practical expedient to “Grandfather Approach” for the assessment as towhichtransactionsaretobecategorizedasleases.Accordingly,IndAS116isappliedonlytocontractsthatwerepreviouslyidentifiedasleasesunderIndAS17.

b) Useof a singleaveragediscounting rate toportfolioof leasesof similar assets in similareconomicenvironmentwithsimilarconditionsforenddates.Accordingly,asingleincrementalborrowingrateason1stApril2019hasbeenappliedfordiscountingthefutureleasepayments.The lease liability is initiallymeasuredatamortizedcostat thepresentvalueof the futurelease payments.

c) FollowingtherecognitionexemptionavailableunderIndAS116,regardingshorttermleases,lowvalueassetsandthoseassetswhichwerenotcoveredunderthepreviousIndAS17,theCompany has availed the same exemptions for the implementation of the new Ind AS 116.

d) The Company has used hindsight in determining the lease term where the contract contains options to extend or terminate the lease. Further, the Company has relied on previousassessments on whether leases are onerous as an alternative to performing an impairment review. There were no onerous contracts as on 1st April 2019.

175

AI

e) The Company has excluded initial direct costs for the measurement of the ROU Assets at the date of initial application.

TheCompanyasaLesseeat the timeofcommencementof the lease,hasrecognizedRight-of-Use(ROU)Assetsrepresentingtheunderlyingassetsandleaseliabilitiesasitsobligationtomaketheleasepayments.Theleasearrangementsforatermofmorethan12monthshavebeentreated as ROU Assets. The Right to Use Assets are recognized at the present value of the lease liabilityandtheestimatedamountpayableatthetimeofredeliveryoftheAircraftason1st April 2019,depreciatedonstraightlinemethodoverthe complete term of the lease.

Inrespectofotherleasesforvariousresidential/commercialpremises/vehicles/officeequipmentetc.(withoptiontopurchase/renewbuttitleofthesamemayormaynoteventuallybetransferred)whicharescatteredatvarious locations/stations/regions, themanagement is intheprocessofcollatingthenecessaryinformationforevaluatingtheapplicabilityoftheLeasestandard.Pendingevaluation thesehavenot been considered asROUunder IndAS116and rent of the samehasbeenchargedsystematically to theStatementofProfit&Losswithin the leaseperiod.Themanagementisoftheviewthattheimpactofthisisnotexpectedtobematerial.

(II) Disclosures under Ind AS 116(i) CumulativeeffectofinitialapplicationonLeaseLiabilities

Particulars (Rs in Million)Leasecommitmentsasat31st March 2019

Add: Recognition of ROU Assets

LeaseLiabilitiesason1st April 2019

43,832.5

226,573.1

270,405.6

(ii) The impact on the Financial Statements on account of the transition to Ind AS 116 is as follows:

(Rs in Million)Particulars As at 1st April, 2019DecreaseinProperty,PlantandEquipment(PPE)

Add:IncreaseinLeaseLiability

Less:IncreaseinRightofUse(ROU)Assets

Adjustments due to change in Discount rate for Redelivery Provisions

Adjustment to Opening Retained Earnings

(NetimpactofDepreciationandInterestofRs1,877.0millionandadjustmentofBorrowingrateon Redelivery of Rs 346.0 million respectively)

116,266.9

226,573.1

344,744.6

(318.)

(2,223.0)

(iii) MaturityAnalysisofLeaseLiabilitiesinrespectofAircraftonLease

(Rs in Million)Maturity Analysis of Contractual Undiscounted Cash

Flows (Principle Portion)As at 31st March,

2020As at 31st March,

2019LessthanoneyearOne to Five yearsMore than Five years

34,454.4129,191.375,462.6

54,261.5138,576.293,368.8

176

AI

(iv) AmountsrecognizedinStatementofProfitandLossandNetImpactofIndAS116

(Rs in Million)Particulars 2019-20

InterestonLeaseLiabilitiesinFinanceCosts(*)Depreciation on ROU AssetsForeignExchangeLossonaccountofyear-endrevaluation(onLeaseLiabilityincludingRedelivery)TotalamountrecognizedinStatementofProfitandLossforFY2019-20

6,675.029,919.420,014.8

56,609.2

(*)this includes thenet impactofRs556.8million towards thedifferencebetweenfloatinginterest rate and incremental borrowing rate applied for discountingwhich has also beenrecognizedasinterestonLeaseLiability

(v) Amounts recognized in Statement of Cash Flows

(Rs in Million)Particulars For FY 2019-20

TotalCashOutflowsforLeases 32,423.2

(vi) ImpactontheadoptionofIndAS116ontheStatementofProfit&Loss

(Rs in Million)Particulars For FY 2019-20

NetIncreaseincurrentyearLossduetoadoptionofIndAS116. 20,130.5

(III) Movement in Right of Use (ROU) Assets during the year

(Rs in Million)Particulars Aircraft Land

LeaseholdTotal

(A) Gross Carrying AmountAs at 31stMarch,2019 - - -Add: Transfer from Property, Plant& Equipment due toadoption of Ind AS 116

1,96,995.5 180.0 197,175.5

Add: On adoption of Ind AS 116 228,477.7 - 228,477.7As at 1stApril,2019 425,473.2 180.0 425,653.2Additions 811.6 - 811.6Disposal/Adjustments/Transfer to PPE (197,807.2) - (197,807.2)As at 31stMarch,2020 228,477.6 180.0 228,657.6

(B) Accumulated DepreciationAs at 31stMarch,2019 - - -Add: Transfer from Property, Plant& Equipment due toadoption of Ind AS 116

(80,908.6) - (80,908.6)

As at 1stApril,2019 (80,908.6) - (80,908.6)Depreciation charge for the year (29,919.4) - (29,919.4)Impairment - - -

177

AI

Disposal/Adjustments/Transfer to PPE 85,075.8 - 85,075.8As at 31stMarch,2020 (25,752.2) - (25,752.2)

(C) Net Book ValueAs at 31stMarch,2020 202,725.4 180.0 202,905.4As at 1stApril,2019 344,564.7 180.0 344,744.7

45. Re-Delivery Charges

Provision for re-delivery charges is made to meet the contractual maintenance and return conditions onaircraftheldunderoperating leases.Suchprovisionsaremadebasedonmanagementestimateofnumberofhoursorcycleseachenginewillhaveflownat the returndate, thecostofperformingthe required restoration work at that future date and discount rates commensurate with the expected obligationmaturityschedules.Judgment isexercisedbymanagementgiven the long-termnatureofassumptions that go into the determination of the provision. The assumptions made in relation to the current year are consistentwith those in the previous year. Expected timing of resulting outflow ofeconomicbenefitisFY2020to2030.

Themovementinprovisionmadeisasgivenbelow:

(Rs in Million)Particulars FY 2019-20 FY 2018-19

Opening Balance 7,572.2 5,210.3Add: Additional Provisions during the year 5,104.9 1,982.0Add: Interest accretion on Provisions 419.6 610.7Add/(less) Foreign Exchange Impact 1,239.3 (230.8)Closing balance 14,336.0 7,572.2

46. Subsidiary Companies

TheFourSubsidiaryCompaniesoftheAirIndiaLtd(excludingAIASL)namelyAAAL,AIXL,AIESLandHCI are having accumulated losses and the net worth of these companies has eroded as on 31st March 2020.TheCompanywisepositionofthesesubsidiariesisgivenhereunder:

i) Air IndiaExpressLtd (AIXL):TheprimarymandateofAir IndiaExpressLtd is to operate low-cost,direct,internationalservicestoMiddleEast/SouthEastAsiandestinationstoserveexpatpopulation/migrantworkersatcompetitivefares.TheCompanyhasbeenpostingNetProfitsinthelastfewyearsandtheNetProfit(includingOCI)forFY2019-20isRs4,127.7millionandinFY2018-19thesamewasRs.1,615.9million.TheCompanyhasalsosurpassedtheOperatingRevenueby25.12%comparedtothepreviousyear.AlthoughtheNetWorthwaserodedbecauseofthepastaccumulatedlosses,theCompanyiscontinuouslyshowingimprovementinoperationalandfinancialperformanceanditisexpectedthatduetoitsimprovedperformanceitsnetworthwillbecomepositiveinthenearfuture.

ii) AIEngineeringServicesLtd(AIESL):AIESListhelargestMROsetupinIndiathatcanserveasaone-stop-shopforallaircraftengineeringrequirements.Atpresent, in India,majorchecksofeverycommercialwidebodyaircraftofIndianOperatorsisdonebyAIESL.TheCompanyhasgothangarfacilitiesavailable inallmajorairports inMumbai,Delhi,Chennai,Hyderabad,Kolkata,

178

AI

TrivandrumandNagpur.AIESL commenced its operations from January 2015 after receivingitsDGCALicense.MRObusiness is ahighly capital-intensive industryand it generally hasagestation period of 4-5 years for consolidation of operations.

However,AIESLhastakenvariousinitiativestoimproveitsoverallrevenuessuchassigningofactivity-basedSLAwithAir IndiaLtd,startingMROfacility inSharjahandplanstoexpandthesametoDubai,developingdedicatedmarketingteamstocaptureMRObusiness,offeringtrainingservices,handlingVVIPflightstogenerateadditionalrevenue.

Further to theabove,Governmentof Indiaunder its recent initiativesunder its ‘Make in India’program,hasreducedtheGSTratefrom18%to5%w.e.f.1stApril,2020,whichislikelytoboostup the revenue from MRO Services in coming days.

During the Financial Year 2019-20 the MRO Revenue from outside parties (i.e. other than revenue fromgroupcompanies)hasincreasedfromRs1,064.3millionin2018-19toRs.1,831.4millionin2019-20,resultinganincreaseof72.07%ascomparedtopreviousyear.

AIESLhaspostedaNetProfit(includingOCI)ofRs758.6millioninFY2019-20,ascomparedtotheNetLoss(includingOCI)ofRs2,049.4millioninFY2018-19.Hence,inthecurrentyearitisshowingimprovementinitsperformanceonayeartoyearbasis.Withasteadyincreaseinrevenue and the Make in India thrust of the Govt. of India which will ensure that maintenance of aircraftiswithinthecountry,therapidgrowthofAviationinthecountryandlargenumberofaircraftordersbyIndiancarriers,AIESLisbestpoisedfortakingadvantageofthegrowthinmaintenanceactivitiesandMRObusinesswithinIndia.InviewofthisAIESLislikelytoearnenhancedrevenuesandbeprofitableinthenearfuture.

iii) AllianceAirAviationLtd(AAAL):AAALhasemergedasamajorplayerintheGovernmentofIndia’spremierschemeUDAN,whichconnectstovariousTierIIandTierIIIcitieswiththedevelopmentof unserved / underserved airports. The growth in Tier II and Tier III cities is still largely untapped andAllianceAirislikelytoemergeasalargestplayerwithitsATR72-600fleetsuitableforservingthese smaller airports.

AAALcarried1.64millionpassengersduring2019-20asagainst1.60millionpassengersduring2018-19.Theyear2019-20witnessedagrowthof2.65%inpassengercarriage.Similarly,networkalsoexpandedfrom55destinationsto61destinations,109departuresto126departuresperdayand607flightsperweekto735flightsperweek.Theaircraftutilizationhasincreasedto53477blockhoursfrom51758blockhoursatagrowthof3.32%in2019-20ascomparedto2018-19.

The increaseofoperative revenue in2019-20byRs1,714.1millionascompared to lastyearis principally due to increase in effective utilization of ATR72-600 aircraft from the average 8.78 hours to 9.20 hours per day apart from increase in ASKM.

During the year, theCompany has posted anOperatingProfit ofRs 650.9million as againstOperatingLossofRs1,473.5millioninFY2018-19,mainlybecauseofincreaseinrevenuefromRs8,362.8millioninFY2018-19toRs11,811.5millioninFY2019-20.TheairlineisconsciouslyincreasingtheyieldandasattheyearendtheaverageyieldstoodatRs4,132perpassenger.Further,theCompanyhasimplementedcostsavingmeasuresforthereductionofcosts.

The Company has continued to operate to the North Eastern region like Guwahati, Lilabari,TezpurinAssam,ShillonginMeghalayaandAgattiandDiuonrequestfromNEC,MHAandDiuAdministrationunderViabilityGapFunding(VGF)arrangements.Theseroutesareoperationallyprofitable.

The Company has strategized itself to invest major resources in Government of India’s UDAN scheme.TheperformanceoftheairlineunderUDANhasbeenexcellentwhereintheCompanyhasbeenoperationallypositive.TheCompanywasoperating29UDANroutesason31stMarch

179

AI

2019,whichatpresenthasrisento61routesason31st March 2020. Alliance Air is operating around58%UDANroutesatagrowthof10%fromtheFY2019-20.AllianceAirbydeployingmoreresourcesonUDANsectors.TheCompanyhasactivelyparticipatedinUDAN-4andawaitingfinalallotment.ThetotalUDANroutewonbytheCompanynowstandsat95.AllianceAirbydeployingmoreresourcesonUDANsectorsismovingtowardsprofitability.

Alliance Air is in the threshold of turnaround and poised to lead the regional connectivity in India inthenextdecadeandbealeadingregionalcarrierofAsia.AllianceAirisonitswaytoreversethe trendofadversefinancial parameters in this financial year2020-21and thereafter furtherconsolidate the gains.

iv) HotelCorporationofIndiaLtd(HCI):HCIisprimarilyengagedinthebusinessofowningoperating&managingHotelsandFlightCateringservices.TheCompanyhasbeenfacingsevereliquiditycrunchanditsfinancialandoperatingperformancehasbeenaffectedinrecentyearsduetoanumberofexternalandinternalfactors.

TheCompanyfacessignificantuncertaintiesduetoCOVID-19whichhaveimpactedtheoperationsof the Company adversely starting from the month of March 2020. Management has assessed the impact of existing and anticipated effects of COVID -19

However,inspiteofthenegativeNetWorthoftheCompanyasat31stMarch2020,consideringthecontinuoussupportoftheHoldingCompanyandtheGovernment,theCompanyisandwillcontinuetobeabletomeetitsfinancialobligationsastheyfalldue.Accordingly,theCompanyhasprepareditsaccountsona"GoingConcern"basis.Variousinitiativeshavealsobeentakenbythe management for improving the operational performance of the Company and increasing the revenues of the Company which are given hereunder:

a) Due to the renovation of 80 guest rooms and other allied works at Centaur Delhi and in view oftheequityinfusionofRs270.0millionbyGovernmentofIndiaoverthelastfewyears.TheRevenues of the Company increased to Rs. 676.2 million during FY 2019-20. Due to this the NetLoss(includingOCI)oftheCompanyalsoregisteredadeclinefromRs712.0millioninFY 2018-19 to Rs 655.5 million in FY 2019-20.

b) The Holding Company, Air India Limited (AIL)and Government of India is continuouslysupporting theCompanybywayoffinancialassistance in the formofequity infusionandprovidingfinancialassistanceasandwhenrequiredbyHCIandarealsocommitted

c) AILhasbeencontinuouslysupportingtheCompanybygivingbusinesswhichcontributestotheoperationalrevenueoftheCompany-nearly80%oftherevenueearnedbytheCompanyisfromAILandthiswouldcontinueinthefuturealso.

d) Presently the Company is in the process of inviting consultants to assist the Company to hand over Delhi properties on Management Contract upto 31.3.2031 i.e. upto the lease period of landleasedfromAAI.ThiswouldresultinsavingsoffixedandvariablecostsatDelhiunitsand also the Company would earn management contract fees. Any surplus after paying off its liabilitieswouldbetransferredtoAirIndiatowardsloanrepayment.

e) Also,intheprocessofdisinvestmentofAIL,HCIisoneofthesubsidiariesofAILwhichwouldnotbedivestedandwouldbetransferredtoAIAHL.Accordingly,upondisinvestmentofAIL,theCompanywouldbeadministeredbyAIAHL.

v) Thereconciliation/confirmationwiththeSubsidiaryCosandJVason31st March 2020 is given hereunder:

180

AI

(Rs in million)

No Name of Subsidiary/JV Balance (Payable)/Receivable as per Air India Ltd as on

31.3.2020

Balance (Payable)/Receivable as per Subsidiary Co. as

on 31.3.2020

Difference

1 Air India Express Ltd (AIXL)(Formerly known as Air India ChartersLtd(AICL))

11,347.0 (11,347.0) -

2 Alliance Air Aviation Ltd (AAAL)(Formerly known as Airline Allied ServicesLtd(AASL))

17,060.7 (16,903.3) (157.4)

3 HotelCorporationofIndiaLtd(HCI) 3,433.8 (3,433.8) -4 AIAirportServicesLimited (AIASL)

(Formerly known as Air India Air TransportServicesLtd(AIATSL))

(1,833.0) 1,833.0 -

5 AIEngineeringServicesLtd(AIESL)(Formerly known as Air India EngineeringServicesLtd)

14,942.5 (14,747.0) (195.5)

6 Air India SATS (AI-SATS) JV (1,344.7) 1,357.3 (12.6)

Note:Thedifferencesasstatedaboveareunderreconciliationason31st March 2020.

InviewofcontinuityoftheoperationsoftheseSubsidiaryCompanies,thetotaladvancesoutstandingasstatedaboveare,intheopinionofthemanagement,consideredgoodandrealizableinthenormalcourseofbusiness.

47. Payments to and Provisions for Employees:

i) LiabilityforwagearrearsincludesRs2,076.3million(Net),(PYRs.2,076.3millionNet)arrivedonad-hoc basis towardswage settlement up to period 31stDecember 2006 pending finalization of actualliability.

ii) InviewofDepartmentofPublicEnterprises(DPE)guidelinesapplicabletoPSUsnowagerevisioncanbegrantedtotheemployeesof loss-makingPSUs.TheCompanyhasbeenmakinglossessince1st January2007hencenoprovisionhasbeenmadetowardswagerevision/settlement.

iii) RevisedBasicPayonthebasisofJusticeDharamadhikariCommitteeReport

Based on Justice Dharamadhikari Committee (JDC) recommendations, the Revised Basic Pay(RBP)hadbeen implemented for all the categoriesof theemployees fromdifferent dates.The totalprovisiontowardsthebalancespayabletotheemployeesonaccountoftheimplementationoftheJDCrecommendations as on 31stMarch2020isRs13,319.1million(PY:Rs13,319.1million).IntheopinionoftheCompany,thisprovisionwillsubstantiallycoverallliabilitiesarisingontheimplementationoftheJDC recommendations.Air India has made an adhoc payment in previous years of Rs 173.4 million to employees against the referred provision

iv) A total amount of Rs 391.3million (PY:Rs 400.4million) is recoverable fromPilots on account ofPilotsTrainingCost.Thesame is recoverable in installmentsaspereach individualPilot’s termsofemployment.Thesame isbeing reconciledand reviewed foranynon- recovery.However, ina fewcasesduetopendinglitigationinHighCourt,thetrainingcostrecoveryhasbeenkeptinabeyanceas

181

AI

per Stay Order received.

48. Employee Benefits

i) General description of Defined Benefit Plan

a) Gratuity:GratuityispayabletoalleligibleemployeesoftheCompanyonsuperannuation,death,orpermanentdisablement.intermsoftheprovisionsofthePaymentofGratuityAct.

b) Post-Retirement Medical Benefits: The Company has a Post-Retirement Medical BenefitSchemeunderwhichmedicalbenefitsareprovidedtoretiredemployeesandtheirspouse.

ii) Defined Contribution Plan

a) Employees Provident Fund: The Company has Employees Provident Fund Trusts under the ProvidentFundAct1925,whichgovernstheProvidentFundPlansforeligibleemployees.TheCompanyaswellas theemployeescontributes10%of thePFPay to theFundoutofwhichProvident Fund is paid to the employees.

iii) Other Long-Term Employee Benefits

a) Privilege Leave Encashment:PrivilegeLeaveEncashmentispayabletoalleligibleemployeesat the time of retirement upto a maximum of 300 days.

b) Sick Leave Encashment:SickLeaveencashment ispayable toall eligibleemployeesat thetimeofretirementuptoamaximumof120dayssubjecttotheconditionthattheemployeeshouldhaveatleast60daysofSickLeavetohiscredit.However,theCompanyhaddecidedtofreezethe encashment of sick leave standing to the credit of all existing employees as on 01.07.2012. Accordingly,provisionforsickleavehasalsobeencomputedatthesefrozensickleavenumbers.

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

a) Disclosure as per Ind AS-19

(Rs in Million)Particulars Gratuity Post-Retirement

Medical BenefitsGratuity Disclosure Statement As

per IND AS 19As at

31.03.20As at

31.03.19As at

31.03.20As at

31.03.19(A) Actuarial Assumptions for the year:

Discount Rate 6.04% 7.64% 6.83% 7.78%Salary Escalation Rate 5.50% 5.50% - -MedicalCostInflationRate - - 4.00% 4.00%Attrition Rate/ Rate of Employee Turnover

2.00% 2.00% 2.00% 2.00%

(B) Other DetailsNumberofActiveMembers 9440 9802 8889 9802PerMonthSalaryforActiveMembers 600.9 605.2 594.0 605.2Weighted Average Duration of the ProjectedBenefitObligation

6 years 6 years 30.00 30.00

Average Expected Future Service 8 years 8 years 30.00 30.00

182

AI



per IND AS 19As at

31.03.20As at

31.03.19As at

31.03.20As at

31.03.19ProjectedBenefitObligation(PBO) 7397.4 7051.1 13402.6 12120.8PrescribedContributionforNextYear (12 Month)

- - - -

(C) Table for Change in Benefit Obligation:

Liabilityatthebeginningoftheyear 7051.1 6972.9 12120.8 11511.9Less: Liability transferred to AIESL/AIATSLNet Liability at the beginning of theyear

7051.1 6972.9 12120.8 11511.9

Interest Cost 538.7 543.9 943.0 893.3Current service cost 210.4 216.8 125.2 112.1PastServiceCost(VestedBenefit) - - - -Benefitpaid (967.5) (1182.9) (1164.9) (759.9)Actuarial(gain)/lossonobligations 160.4 52.6 1285.6 (25.1)Actuarial(gain)/lossonobligations 404.3 447.8 92.9 388.5Liabilityattheendoftheyear 7397.4 7051.1 13402.6 12120.8

(D) Amount Recognized in the Balance Sheet:Liabilityattheendoftheyear (7397.4) (7051.1) (13402.6) (12120.8)Fair value of Plan Assets at the end of the year

- -

FundedStatus(Surplus/(Deficit) (7397.4) (7051.1) (13402.6) (12120.8)Amount Recognized in the Balance Sheet

(7397.4) (7051.1) (13402.6) (12120.8)

(E) Net Interest Cost for Current PeriodPresentValueofBenefitObligationatthe Beginning of the Period

7051.1 6972.9 12120.8 11511.9

(Fair Value of Plan Asset at the Beginning of the Period)

- -

NetLiability(Asset)atthebeginning 7051.1 6972.9 12120.8 11511.9Interest cost 538.7 543.9 943.0 893.3(Interest Income) - - - -Net Interest Cost for current period 538.7 543.9 943.0 893.3

(F) Expense recognized in the P & L Account:Current service cost 210.4 216.8 125.2 112.1Interest cost 538.7 543.9 943.0 893.3

183

AI



per IND AS 19As at

31.03.20As at

31.03.19As at

31.03.20As at

31.03.19Expected return on Plan Assets - - - -Net actuarial (gain)/loss to berecognized

- - - -

PastServiceCost(VestedBenefit) - - - -AdjustmentrelatingtoAAALforearlierperiod

(8.6) - - -

Expense recognized in the P & LAccount

740.5 760.7 1068.2 1005.4

(G) Expense recognized in the Other Comprehensive Income (OCI) for Current PeriodActuarial(Gains)/Lossesonobligationfor the period

564.7 500.4 1378.5 363.4

Return on Plan Assets, ExcludingInterest Income

- - - -

Change in Asset Ceiling - - - -Net (Income)/Expense For the period recognized in OCI

564.7 500.4 1378.5 363.4

(H) Balance Sheet Reconciliation:OpeningNetLiability 7051.1 6972.9 12120.8 11511.9Expense Recognized in Statement of ProfitorLoss

749.1 760.7 1068.2 1005.4

Expense Recognized in OCI 564.7 500.4 1378.5 363.4NETLiability/(Asset)TransferIn - - -NETLiability/(Asset)TransferOut - - -BenefitPaid (967.5) (1182.9) (1164.9) (759.9)Expense recognized in OCI - - - -Net Liability/(Asset) as per BalanceSheet

7397.4 7051.1 13402.6 12120.8

(I) Net Interest Cost for Next YearPresentValueofBenefitObligationatthe Beginning of the Period

7397.4 7051.1 13402.6 12120.8

(Fair Value of Plan Asset at the Beginning of the Period)

- -

NetLiability (Asset)at theEndof theperiod

7397.4 7051.1 13402.6 12120.8

Interest cost 446.8 538.7 915.4 943.0(Interest Income) - - - -Net Interest Cost for current period 446.8 538.7 915.4 943.0

184

AI



per IND AS 19As at

31.03.20As at

31.03.19As at

31.03.20As at

31.03.19(J) Expense recognized in the

Statement of P & L A/C for Next YearCurrent service cost 210.3 210.4 118.1 125.2Interest cost 446.8 538.7 915.4 943.0(Expected Contribution by theEmployees)

- - - -

Expenses recognized 657.1 749.1 1033.5 1068.2(K) Maturity Analysis of the Benefit

Payments: From the EmployerProjected Benefits Payable in futureYear from the Date of Reporting 1st Following Year 1024.0 1045.6 641.2 587.52nd Following Year 659.9 654.8 661.7 607.93rd Following Year 1057.8 1029.8 700.2 648.64th Following Year 1011.4 1005.1 738.3 691.05th Following Year 927.9 950.2 775.6 732.4Sum of Years 6 To 10 2982.1 3261.3 4310.0 4189.8SumofYears11andabove 3092.5 3194.5

(L) Sensitivity AnalysisProjected Benefit Obligation on Current Assumptions

7,397.4 7,051.1 13,402.6 12,120.8

DeltaEffectof+1%ChangeinRateofDiscounting

(356.2) (315.3) (1346.7) (1140.5)

DeltaEffectof-1%ChangeinRateofDiscounting

397.7 349.2 1,661.3 1,388.9

DeltaEffectof+1%ChangeinRateofSalary Increase

287.2 272.2 - -

DeltaEffectof-1%ChangeinRateofSalary Increase

(283.4) (265.9) - -

DeltaEffectof+1%ChangeinRateofEmployee Turnover

35.7 60.7 - -

DeltaEffectof-1%ChangeinRateofEmployee Turnover

(39.9) (66.7) - -

DeltaEffectof+1%ChangeinMedicalCostInflation

- - 1,693.6 1,429.7

DeltaEffectof-1%ChangeinMedicalCostInflation

- - (1,391.8) (1,188.3)

185

AI

b) Risk Table TheseplanstypicallyexposetheCompanytoactuarial riskssuchas: InvestmentRisk,Interest

RateRisk,LongevityRiskandSalaryRisk.

Investment Risk Asthedefinedbenefitplansarenotfunded,theCompanyisnotexposedtoanyinvestment risk.

Interest Risk AdecreaseintheGovernmentSecuritiesbondinterestratewillincreasetheplanliability.

LongevityRisk Thepresentvalueofthedefinedbenefitplanliabilityiscalculatedbyreferenceto thebestestimateof themortalityofplanparticipantsbothduringandaftertheir employment. An increase in the life expectancy of the plan participants will increasetheplan’sliability.

Salary Risk Thepresentvalueofthedefinedbenefitplanliabilityiscalculatedbyreferencetothefuturesalariesofplanparticipants.Assuch,anincreaseinthesalaryoftheplanparticipantswillincreasetheplan’sliability.

49. DEFERRED TAX ASSETS / (LIABILITY)

TheCompanyhasrecognizedDeferredTaxAssetsinearlieryearsamountingtoRs28,425.2million.Inthesubsequentyears,theCompanyhascontinuedtocarrythisbalanceofNetDeferredTaxAssetsandnofurtheramountshavebeenrecognizedasamatterofprudence.Thedetailsofthesamearegivenbelow:

i) Deferred Tax Assets/Liabilities

(Rs in Million)S.No Particulars As at 31st

March 2020As at 31st

March 2019(A) Deferred Tax Liability(i) Related to Fixed Assets 56,701.7 70,508.1(ii) Related to Foreign Currency Monetary Items (FCMI) 81.1 860.8

Sub-Total (A) 56,782.8 71,368.9 (B) Deferred Tax Assets(i) UnabsorbedDepreciation 85,208.0 99,794.1

Sub-Total (B) 85,208.0 99,794.1 Net Deferred Tax Asset/(Liability) 28,425.2 28,425.2

Although,theCompanyisintheprocessofevaluatingadoptionoftheconcessionaltaxregimebutasamatterofprudencehasre-computedDeferredTaxAssets/Liabilitiesinconsonancewiththenewconcessionaltaxregimeandaccordinglycomputedtheabovefiguresatthenettaxrateof25.168%.

ii) Details of the Total DTA not recognized as on 31st March 2020: TheTotalDTAavailableagainstDepreciation/Business/OtherDisallowancesLossesason31st

March2020areRs.200,738.1million(PY:Rs242,628.3million).OutofthisavailableDTAamount,theCompanyhasonlyrecognizedDTAamountingtoRs.85,208.0million(PY:Rs99,794.1million)(Gross)asdetailedaboveagainstDepreciationLossesonly.Accordingly,asat31st March 2020 the CompanystillhasgottotalunrecognizedDTAamountofRs115,530.1million(PY:Rs142,834.2million),whichasamatterofprudencehasnotbeenrecognizedinthebooks.Thedetailsofthe

186

AI

unrecognizedDTAbalancesaregivenbelow:

(Rs in Million)Particulars As at 31st March,


2019UnabsorbedDepreciation 7,792.9 10,481.7BroughtForwardBusinessLosses 89,833.1 115,484.8Other Temporary Differences 17,904.1 16,867.7TOTAL 115,530.1 142,834.2

Theunused tax losses andunabsorbeddepreciation considered aboveare basedon the taxrecords and returns of the Company and does not consider the potential effect of matters under dispute/litigationwiththetaxauthoritieswhicharecurrentlysub-judiceatvariouslevels.

The Govt of India approved the Revival Plan of the Company through which a series of measures wereintroducedtoimprovetheoperationalandfinancialefficienciesasdetailedinNote28and53.Further,theCompanyisunderthedisinvestmentprocessasapprovedbytheGovtofIndia.TheCompanyisthereforehopefulofshowingimprovedperformanceinthefutureandaccordingly,hasreasonablecertaintythatthedeferredtaxassetsrecognizedwillberealizedagainstfuturetaxableprofits.Further,theDeferredTaxAssetshavebeencreatedagainstcarryforwardDepreciationonlywhichareavailabletotheCompanyindefinitelyaspertheprovisionsoftheIncomeTaxAct.

iii) Reconciliation of Effective Tax Rate Reconciliationoftaxexpenseandtheaccountingprofit/(loss)multipliedbyIndia'sdomestictax

rateasadoptedbytheCompanyfortheyearended31st March 2020 and 31st March 2019:

(Rs in Million)Particulars For the year ended 31st

March 2020For the year ended 31st

March 2019Rate (%) Amount Rate (%) Amount

Profit/(Loss)BeforeTax (77,657.3) (84,748.0)ApplicableTaxRate 31.20% 24,229.7 31.20% 26,441.4Deferred Tax asset not recognized on above

- (24,229.7) - (26,441.4)

Tax expense for the year - Nil - NilEffective Tax Rate Nil - Nil -

50. Earnings Per Share

Particulars For Year ended 31.03.2020

For Year ended 31.03.2019

Profit/(Loss)AfterTaxfortheyear(RsinMillion) (77,657.3) (84,748.0)Weighted Average No. of Equity Shares 32,665,210,000 29,238,360,685EPS (Rs. per Share) (Basic) (2.38) (2.90)EPS (Rs. per Share) (Diluted) (2.38) (2.90)

187

AI

51. The Micro and Small Enterprises Development Act

InformationasrequiredtobefurnishedasperSection22oftheMicro,SmallandMediumEnterprisesDevelopmentAct, 2006 (MSMEDAct) is given below.This information has beendetermined to theextentsuchpartieshavebeenidentifiedonthebasisofinformationavailablewiththeCompany.

Amount remaining unpaid to supplier covered under MSMED Act at the end of the year.

(Rs in Million)

Particulars As at 31st March, 2020

As at 31st March, 2019

Principal 267.1 163.7Interest Nil NilTotal 267.1 163.7Theamountofinterestpaidbythebuyerintermsofsection16,oftheMSMEDAct,2006alongwiththeamountsofthepaymentmadeto thesupplierbeyond theappointeddayduringeachaccountingyear.

- -

Theamountof interestdueandpayablefortheperiodofdelayinmakingpayment(whichhavebeenpaidbutbeyondtheappointeddayduringtheyear)butwithoutaddingtheinterestspecifiedunderMSMED Act.

- -

The amount of interest accrued and remaining unpaid at the end of each accounting year.

- -

Theamountoffurtherinterestremainingdueandpayableeveninthe succeeding years, until such datewhen the interest dues asaboveareactuallypaid to thesmallenterprise for thepurposeofdisallowanceasadeductibleexpenditureundersection23of theMSMEDAct,2006.

- -

Note:Therehavebeendelaysinmakingpaymentstosomeoftheseenterprises,however,intheopinionofthemanagementtheinterestisnotexpectedtobematerial.

52. Remuneration to Auditors

The details of the audit fees and expenses of the Auditors: -

(Rs in Million)Particulars 2019-20 2018-19

Audit Fee for the year 16.5* 12.0*Other Expenses 2.3 2.5Total 18.8 14.5

* includes FY 2018-19 arrears of Rs 3.0 million (PY: Rs.1.5 million)

53. Going Concern

The Company has received continuous support from the Government of India (GoI) initially through the introduction of the Turnaround Plan (TAP)/Financial Restructuring Plan (FRP) approved in 2012 and then under the Strategic Revival Plan in FY 2018-19 which has helped the Company to improve its

188

AI

operatingandfinancialparameters.

Theobjectiveof theStrategicRevivalPlanwastoestablishastrongcompetitiveandself-sustainingairlinewhich can be strategically divested or listed in the next few years. Focus on increasing theoperationalefficiencieswherebysubstantial increaseinrevenueorcostsavingcanbeachieved.TheRevival Plan contained the following major components:

a) Organizational Reforms

b) FinancialPackage

c) DisinvestmentofSubsidiaries

d) Sale of non-core Assets

e) ImprovingInternalEfficiencies

f) Tapping the human resource potential to the fullest

ThedetailsofthefinancialpackageundertheRevivalPlanbroadlyincludedthefollowing:

AtotaldebtamountingtoRs294,640.0milliontobetransferredfromAirIndiaLtdtoAIAHLvizAirIndiaAssetsHoldingCoLtdwitheffectfrom1stOctober2018

• CashSupportofRs39,750.0milliontoAirIndia

• ProvideaGovtGuaranteeofRs76,000.0million,

• Inaddition,theGoIalsoapprovedthatAIAHLwastofundtheinterestliabilityonthecarved-outdebtofRs294,640.0millionproposedtobetransferredtoAIAHLeffective1stOctober2018.

TheabovesupporthasbeendulyextendedtoAIbytheGovtofIndia.AlsorefertoNote28.

TheCompanyhasregularlyreceivedEquityInfusionfromtheGoI.Hence,itisevidentthattheGoIiscommitted topursue thepathofdisinvestmentand throughvarioussteps takenabove isaiding theCompanyinclearingitsbalancesheetandasmentionedinthePIMfordisinvestmenttheremaybefurtherre-allocationofdebtsandliabilitiesoftheCompany.FurtherstepstakenbytheCompanyasalsotheGoIinlightoftheprocessofdisinvestmenthavebeendiscussedindetailinNote28.Allthesestepsare aimed at creating a positive environment.

In viewof the above and the financial support from theGovt of India and variousmeasures takenby theCompany to improve its operational efficiencies, various revenueenhancingmeasures, costcontrol measures undertaken etc.the Company expects improvement in its Operational and Financial Performance, in the near future and hence, the Financial Statements of the Company have beenpreparedonthe‘GoingConcern’basis.

54. Impairment of Assets

TheCompanyhascarriedoutanassessmentoftheimpairmentofitsnon-financialassetsasontheBalanceSheetdateinaccordancewithIndAS36.Forthepurposeofsuchimpairmenttesting,allassetsoftheCompanyhavebeenconsideredasasingleCashGeneratingUnit(CGU)andthevalueinusehasbeendeterminedbasedon the futureprojections/forecasthaving regard to theRevivalPlan forOperational&FinancialEfficiencyasdescribedindetailinNote28&29.Basedonsuchassessment,thereisnoimpairmentinthecarryingvalueoftheassetstoberecognizedatthisstage.

Further, the Company has also assessed the impact of COVID on the impairment in the carryingvalueofitsassets,inventories,receivablesetcappearinginitsfinancialstatements.Indevelopingthe

189

AI

assumptionsandestimatesrelatingtothefutureuncertaintiesintheeconomicconditionsmanifestedbythepandemic,theCompanyhasreliedonvariousinternalandexternalsourcesofinformation.Basedontheseestimates,theCompanyasofnowexpectstorecoverthecarryingvalueofallitsassets.

55. Capital Management:

The objective of the Company is to maximize the shareholders' value by maintaining an optimumcapitalstructure.Managementmonitorsthereturnoncapitalaswellasthedebtequityratioandmakesnecessaryadjustmentsinthecapitalstructureforthedevelopmentofthebusiness.

Duringthefinancialyearended31stMarch2020,nosignificantchangesweremadeintheobjectives,policies or processes relating to the management of the Company’s capital structure.

Debt-Equity Ratio:

(Rs in Million)Particulars As at 31st March

2020As at 31st March

2019LongtermBorrowings 55,118.4 82,999.6Shorttermborrowings 250,869.4 276,303.4CurrentmaturityofLong-termBorrowings 77,676.1 199,716.7CurrentmaturitiesofFinanceLeaseObligations - 23,539.2Total Debt (A) 383,663.9 582,558.9Equity Share Capital 326,652.1 326,652.1Other Equity (701,203.3) (621,315.7)Share Application money pending Allotment 0.1 -Total Equity (B) (374,551.1) (294,663.6)Debt Equity Ratio (A/B) (1.0) (2.0)

Note: TheCompanyishighlyleveragedduetonegativeNetWorthandthenatureofthebusinessduetowhichtheDebtEquityRatioisnegative.

Pursuant to adoption of Ind AS 116, Finance Lease Obligations has been reclassified fromborrowingsandpresentedasapartofleaseliabilitieswhicharenotconsideredasdebtduringthe current year.

56. Fair Value Measurement and Financial Instruments

i) Financial instruments – by category and fair value hierarchy Thefollowingtableshowsthecarryingamountsandfairvalueoffinancialassetsandfinancial

liabilities,includingtheirlevelsinthefairvaluehierarchy.

a) As on 31stMarch 2020

190

AI

(Rs in Million)Particulars Note Carrying Value Fair value measurement

usingFVTPL FVTOCI Amortized

CostTotal Level

1Level 2 Level 3

Financial Assets

Non-Current a) Investments 2 866.8 8,236.2 9,103.0 346.0 520.8 8,236.2b)Loans 4 4,039.9 4,039.9 4,039.9c) Other Financial Assets

5 10,676.7 10,676.7 10,676.7

d)Trade Receivables

3 - - -

Current a) Trade Receivables*

3 13,756.1 13,756.1 13,756.1

b)Cashand Cash Equivalents*

9 6,248.4 6,248.4 6,248.4

c) Bank Balance otherthan(b)above*

10 6,855.7 6,855.7 6,855.7

d)Loans* 4 175.5 175.5 175.5 e) Others Financial Assets

5 2,874.6 2,874.6 2,874.6

Total 866.8 52,863.1 53,729.9 346.0 520.8 53,729.9Financial liabilities

Non-Current a) Borrowings# 13 55,118.4 55,118.4 55,118.4b)LeaseLiabilities

184,416.1 184,416.1 184,416.1

c) Others* 15 43.5 43.5 43.5 Current a) Borrowings# 18 250,869.4 250,869.4 250,869.4b)LeaseLiabilities

27,684.2 27,684.2 27,684.2

c) Trade Payables*

14 100,934.8 100,934.8 100,934.8

d)AIAHLIntermediary Settlement Account

28 (iii)

5,026.2 5,026.2 5,026.2

e) Others* 15 143,062.1 143,062.1 143,062.1Total 767,154.7 767,154.7 767,154.7

191

AI

Note:TheabovedisclosuresdonotincludebalanceinRFATRA/cofRs218,434.8million,refernote no 28(iii).

b) As on 31stMarch 2019(Rs in Million)

Particulars Note Carrying Value Fair value measurement using

FVTPL FVTOCI Amortized Cost

Total Level 1

Level 2 Level 3

Financial Assets

Non-Current a) Investments 2 1,094.5 8,236.2 9,330.7 422.8 671.7 8,236.2b)Loans 4 3,316.4 3,316.4 3,316.4c) Other Financial Assets

5 10,838.1 10,838.1 10,838.1

d)Trade Receivables

3 - - -

Current a) Trade Receivables*

3 20,133.8 20,133.8 20,133.8

b)Cashand Cash Equivalents*

9 2,450.4 2,450.4 2,450.4

c) Bank Balance other than(b)above*

10 6,342.3 6,342.3 6,342.3

d)Loans* 4 145.8 145.8 145.8 e) Others Financial Assets

5 3,122.5 3,122.5 3,122.5

Total 1,094.5 54,585.5 55,680.0 422.8 671.7 54,585.5Financial liabilities

Non-Current a) Borrowings# 13 82,999.6 82,999.6 82,999.6b)Others* 15 47.9 47.9 47.9 Current a) Borrowings# 18 276,303.4 276,303.4 276,303.4b)TradePayables*

14 82,649.2 82,649.2 82,649.2

c) Others* 15 283,464.4 283,464.4 283,464.4Total 725,464.5 725,464.5 725,464.5

Notes:

(#)Thecompanies’borrowingsandadvancestoSubsidiarieshavebeencontractedatmarketrateofinterest,whichresetsatregularintervals.Accordingly,thecarryingvalueofsuchborrowings

192

AI

(including interest accrued) approximates fair value.

(*) Thecarryingamountoftradereceivables,tradepayables,cashandcashequivalents,bankbalance other than cash and cash equivalents and other financial assets and liabilitiesapproximatesthefairvalues,duetotheirshort-termnature.

- Thefairvaluesforloanwerecalculatedbasedondiscountedcashflowusingacurrentlendingrate.Theyareclassifiedaslevel3fairvaluesinthefairvaluehierarchyduetotheinclusionofunobservable.

- Therehavebeennotransfersbetweenlevel1, level2and level3for theyearended31st March 2020 and 31st March 2019.

ii) Valuation Technique used to determine Fair Value: Thespecificvaluationtechniquesusedtovaluefinancialinstrumentsinclude:

• For unquoted Equity Shares, NetAssets Value (NAV) from the latest available FinancialStatements of the entity.

• TheFairValueofremainingfinancialinstrumentsisdeterminedusingDiscountedCashFlowmethod.

57. Financial Risk Management Objective and Policies

TheCompanyhasexposuretofollowingrisksarisingfromitsbusinessandfinancialinstruments:

i) Credit Risk

ii) LiquidityRisk

iii) MarketRisk–(a)ForeignCurrencyand(b)InterestRate

TheCompanyoperatestovariousinternationaldestinationsinmulti-currency,dynamicandchallengingenvironmentTheCompany’sprincipalfinancialliabilitiescompriseofloansandborrowings,tradeandotherpayables.TheLongtermborrowingfortheaircraftpurchaseismainlyUSDollarrelated.Apartof theborrowings for theworkingcapitalareUSDollardenominated.Nearly70%of theCompany’sexpensesarerelatedtotheUSDollar.Themainpurposeofthesefinancialliabilitiesistofinanceaircraftacquisition,receivableandcashandcashequivalentsthatderivedirectlyfromitsoperations.

TheCompanyisexposedtocreditrisk,liquidityrisk,marketriskandCommodityrisk.TheCompany’ssenior management oversees the management of these risks. The Company’s senior management is supported by a treasury team.TheTreasuryTeamprovides assurance to theCompany’s seniormanagement that the Company’s financial risk activities are governed by appropriate policies andprocedure and that financial risks are identified, measured and managed in accordance with theCompany’spoliciesandriskobjective.

i) Credit Risk CreditriskistheriskoffinanciallosstotheCompanyifacustomerorcounterpartytoafinancial

instrumentfailstomeetitscontractualobligation.

TheCompanyisexposedtocreditriskfromitsoperatingactivities(primarilytradereceivables)andfromitsinvestingactivities, includingdepositswithbanksandfinancial institutions,foreignexchangetransactionsandotherfinancialinstruments.

Themaximumexposure to thecreditat the reportingdate isprimarily from trade receivables.TradereceivablesaremostlyfromtravelagentsincludingIATAAgentsandGeneralSalesAgents,Government Parties and Credit Card Companies which are typically unsecured as no coverage

193

AI

isheldbytheCompanyandarederivedfromrevenueearnedfromcustomers.GeneralSales/CargoAgentsduesaresecuredbyBankGuaranteesbyAirlineand/orIATA.TheCompanydoesmonitor the economic environment in which it operates. The Company manages its credit risk throughcreditapprovals,establishingcreditlimitsandcontinuouslymonitoringcreditworthinessofagentstowhichtheCompanybrandscredittermsinthenormalcourseofthebusiness.

TheCompanysellsmajorityofitspassenger/cargoservicesagainstcreditworthinessandfinancialguaranteesmadebyagents(customers)toIATAthoughindividualguaranteesarealsotakenincertaincases.TheCompanyalsoextendscredittotheGovernmentonflightsoperatedandwhicharerealizedoveraperiodoftimedependingonbudgetaryprovisionsmadebytheGovttotherespective departments

TheCompanyusesexpectedcreditlossmodeltoassesstheimpairmentonfinancialInstruments.The Company uses a provision matrix to compute the expected credit loss allowance for trade receivable. The provision matrix considers available internal credit risk factors such as theCompany’shistoricalexperienceforcustomers.BasedonthebusinessenvironmentinwhichtheCompanyoperates,managementconsidersthatthetradereceivableisindefault(creditimpaired)if the payments are more than 36 months past due (in case of IATA dues more than 6 months past dues)

TheCompaniesexposuretocreditriskforTradeReceivablesisasfollows:(Rs in Million)

Particulars As at 31/03/2020 As at 31/03/2019Gross Carrying

AmountLoss

AllowanceGross Carrying

AmountLoss

AllowanceDebtsnotdue 1,937.8 - 7,933.5 -Debtsoverdue 23,230.8 11,412.5 22,989.3 10,789.0

MovementintheallowanceforimpairmentinrespectofTradeReceivables:(Rs in Million)

Particulars For the year ended 31st March 2020

For the year ended 31st March 2019

BalanceatthebeginningoftheYear (10,789.0) (10,328.0)Movement during the year (623.5) (461.0)Balance at the end of the Year (11,412.5) (10,789.0)

ii) Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligation

associatedwith itsFinancialLiabilities thataresettledbydeliveringcashoranotherFinancialAssets.

TheCompany’sapproachtomanageLiquidityistohavesufficientliquiditytomeetitsliabilitieswhentheyaredue,underbothnormalandstressedcircumstances,withoutincurringunacceptablelosses or risking damage to the Company’s reputation.

TheCompanyhasbeenexperiencing liquidityproblemsdue todelayedequity infusionby theGovtandthehighdebtburden

TheCompanybelieves that its liquidityposition, including total cashandcashequivalentandbankbalancesofRs.13,104.1millionasat31stMarch2020(PY:Rs.8,792.7million)anticipatedfutureinternallygeneratedfundsfromoperations,anditsfullyavailable,revolvingundrawncreditfacilitywillenableittomeetitsfutureknownobligationintheordinarycourseofbusinessprovided

194

AI

thereisequityinfusionandassistancefromtheGovernment.However,ifliquidityneedsweretoarise, theCompanybelieves it hasaccess tofinancingarrangement, valueofunencumberedassets,whichshouldenableittomeetitsongoingcapital,operating,andliquidityrequirement.TheCompanywillcontinuetoconsidervariousborrowingorleasingoptionstomaximizeliquidityandsupplementcashrequirementasnecessary.However,theCompanyreliesonGovernmentsupport to conserve its liquidity position.

The Company’s liquidity management process as monitored by management includes thefollowing: -

a) Daytodayfunding,managedbymonitoringfuturecashflowstoensurethatrequirementcanbemet.

b) MaintainingrollingforecastoftheCompany’sliquiditypositiononthebasisofexpectedcashflows.

c) Maintainingdiversifiedcreditlines.

Exposure to Liquidity Risk Thefollowingaretheremainingcontractualmaturitiesoffinancialliabilitiesatthereportingdate.

The contractual cash flow amount is gross and undiscounted (except Lease Liabilities), andincludes interest accrued


Carrying Amount as per Trial

Balance

Contractual Cash Out Flows (Rs in Millions)

Upto 1 year

1-2 Years

2-3 Years

3-4 Years

4-5 Years

More than 5 years

Total

Borrowings a) Non-ConvertibleDebentures(Note - 13)

129,000.0

74,000.0 - - - - 55,000.0 129,000.0

b)LongTermBorrowings(Note - 13)

- From Banks (Unsecured)

3,662.2 3,662.2 - - - - - 3,662.2

- From Other Parties

132.3 14.0 9.0 8.0 8.0 7.0 86.3 132.3

c) Short Term Borrowings (Note - 18)

- From Banks (Secured)

74,479.2 74,479.2 - - - - - 74,479.2


150,030.2 150,030.2 - - - - - 150,030.2

- From Other Parties (Unsecured)

26,360.0 26,360.0 - - - - - 26,360.0

195

AI

d)LongTermMaturitiesofLong-TermDebts(Note- 15)

77,676.1 77,676.1 - - - - - 77,676.1

e)LeaseLiabilities 212,100.3 27,684.0 28,004.0 28,601.0 28,955.0 27,481.0 71,375.3 212,100.3Trade Payables (Note - 14)

a) Trade Payables

100,934.8 100,934.8 - - - - - 100,934.8

Other Financial Liabilities (Note - 15)

a) Interest Accruedbutnotdueonborrowings

5,452.8 5,452.8 - - - - - 5,452.8

b)InterestAccrued and due onborrowings

7,728.2 7,728.2 - - - - - 7,728.2

c) Other Liabilities

52,248.5 52,205.0 - - - - 43.5 52,248.5

Totals 839,805.6 600,227.5 28,013.0 28,609.0 28,963.0 27,488.0 126,505.1 839,805.6


Carrying Amount as per Trial

Balance

Contractual Cash Out Flows (Rs in Millions)

Upto 1 year

1-2 Years

2-3 Years

3-4 Years

4-5 Years

More than 5 years

Total

Borrowings a) Non-ConvertibleDebentures(Note- 13)

1,36,000.0 81,000.0 - - - - 55,000.0 1,36,000.0

b)LongTermBorrowings (Note - 13)


109,952.5 109,952.5 - - - - - 109,952.5


16,349.4 8,751.5 2,822.0 4,775.9 - - - 16,349.4

- From Other Parties

121.0 12.7 10.0 10.0 10.0 10.0 68.3 121.0

c) Short Term Borrowings (Note - 18)


113,992.6 113,992.6 - - - - - 113,992.6

196

AI


135,950.8 135,950.8 - - - - - 135,950.8

- From Other Parties (Unsecured)

26,360.0 26,360.0 - - - - - 26,360.0

d)LongTermMaturities of FinanceLeaseObligation(Note - 13)

43,832.6 23,539.2 15,233.0 5,060.4 - - -

43,832.6

Trade Payables (Note - 14) a) Trade Payables

82,649.2 82,649.2 - - - - - 82,649.2

Other Financial Liabilities (Note - 15)

a) Interest Accruedbutnotdueonborrowings

6,557.6 6,557.6 - - - - -

6,557.6

b)InterestAccrued and due onborrowings

1,981.0 1,981.0 - - - - -

1,981.0

c) Other Liabilities

51,717.8 51,669.9 - - - - 47.9 51,717.8

d) Bank Overdraft - - - - - - - - Totals 725,464.5 642,417.0 18,065.0 9,846.3 10.0 10.0 55,116.2 725,464.5

iii) Market risk Marketriskisthatthefairvalueandfuturecashflowsoffinancialinstrumentwillfluctuatebecause

of changes in market prices. Market risk comprises two type of risk namely: currency risk and interestraterisk.Theobjectiveofmarketriskmanagementistomanageandcontrolmarketriskexposurewithinacceptableparameters,whileoptimizingthereturn.

a) Interest Rate Risk Interestrateriskistheriskthatthefuturecashflowsofafinancialinstrumentwillfluctuate

becauseofchangesinmarketinterestrates.TheCompany’sexposuretotheriskofchangesinmarketinterestratesrelatesprimarilytotheCompany’sborrowingswithfloatinginterestrates.

The Company’s interest rate risk arises majorly from the foreign currency term loan and finance leasecarryingfloatingrateof interestwhich is linked toLIBOR.TheseobligationsexposetheCompanytocashflowinterestraterisk.TheexposuretheCompany’sborrowingsto interest rate changes as reported to the management at the end of the reporting period are as follows:

197

AI

(Rs in Million)

Particulars As at 31st March 2020


Variable-rate instrumentsLongTermBorrowingsfromBank(Secured&Unsecured,includingcurrentmaturities)

- 7,290.1

Shorttermborrowings 68,072.3 65,585.5Financeleaseobligation(including current maturities)

- 41,538.7

Total Variable Rate Instruments 68,072.3 114,414.3

Interest Rate Sensitivity Analysis Areasonablypossiblechangeof0.50%ininterestratesatthereportingdatewouldhaveaffectedthe

profitorlossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticularsforeigncurrencyexchangerates,remainsconstant.

(Rs in Million)

Increase / (decrease) in the interest on foreign currency term loans-from others and on finance lease obligation.

Statement of Profit and losses

Increase by 0.50 %

Decrease by 0.50 %

- For the year ended 31stMarch 2020 340.4 (340.4)- For the year ended 31st March 2019 572.1 (572.1)

b) Currency Risk Currencyriskistheriskthatthefuturecashflowsofafinancialinstrumentwillfluctuatebecauseof

changes in foreign exchange rates. The Company is exposed to multi currencies on its operations andhenceisexposedtotheeffectsoffluctuationintheprevailingforeigncurrencyratesonitsfinancial position and cash flows. Exposure arises primarily due to exchange rate fluctuationbetweenthefunctionalcurrencyandothercurrenciesfromtheCompany’soperating,investingandfinancingactivities.

Exposure to Foreign Currency Risk Thesummaryofquantitativedataabout theCompany’sexposure tocurrency risk,asexpressed in

IndianRupees,asat31st March 2020 and 31stMarch2019areasbelow:

(Rs in Million)As at 31st March 2020Particulars USD EUR GBP AED OMR SGD THB CHF QAR AUD OTHERSFinancial AssetsTrade Receivables

11,828.0 936.4 35.1 289.4 87.0 55.0 43.2 27.4 10.1 42.9 1,093.3

Cash and Cash equivalents

438.9 794.0 337.5 9.5 31.5 19.2 11.6 3.0 - 99.4 588.1

198

AI

Bank Balances other than above

872.6 - - - - - - - - 45.9 63.1

Loans 3,552.2 64.0 1.6 12.4 - 4.3 1.2 0.1 0.4 0.1 76.1Other Financial Assets

3,865.9 26.1 21.3 4.2 1.0 5.0 0.1 - - 15.5 30.5

Total Financial Assets

20,557.5 1,820.5 395.5 315.5 119.5 83.5 56.1 30.5 10.5 203.8 1,851.1

F i n a n c i a l LiabilitiesBorrowings 69,531.7 - - - - - - - - - -Other Financial Liabilities

2,276.8 34.8 67.0 16.7 3.4 2.7 0.9 - 1.1 9.5 93.8

TradePayables 10,291.8 (10.8) 567.5 263.8 (64.0) 82.9 (240.6) (5.5) 4.2 214.1 433.3Total Financial Liabilities

82,100.3 24.0 634.5 280.5 (60.6) 85.6 (239.7) (5.5) 5.3 223.6 527.1

As at 31st March 2019 (Rs in Million)Particulars USD EUR GBP AED OMR SGD THB CHF QAR AUD OTHERSFinancial AssetsTrade Receivables

7,049.8 1,086.0 1,096.0 616.7 259.1 64.9 64.1 29.5 105.6 160.6 2,335.6

Cash and Cash equivalents

568.9 563.6 34.1 9.5 0.04 36.2 48.8 1.02 - 32.3 538.7

Bank Balances other than above

786.1 - - - - - - - - 51.9 420.6

Loans 5,856.2 58.3 3.4 13.9 - 6.5 1.1 0.1 0.4 0.2 45.3Other Financial Assets

3,652.1 20.1 11.2 9.6 0.8 3.2 0.9 1.5 - 14.2 34.5

Total Financial Assets

17,913.2 1,727.9 1,144.7 649.7 260.0 110.8 114.9 32.1 106.0 259.2 3,374.7

Financial LiabilitiesBorrowings 147,007.2 - - - - - - - - - -Other Financial Liabilities

2,290.6 45.4 72.8 16.8 3.1 3.3 0.9 - 1.0 9.9 13.9

TradePayables 11,010.4 465.3 661.3 573.5 39.8 256.5 124.7 - 3.5 264.8 975.7Total Financial Liabilities

160,308.3 510.7 734.1 590.3 42.9 259.8 125.6 - 4.5 274.7 989.7

Foreign Currency Sensitivity Analysis A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies at

31stMarch 2020 and 31stMarch2019wouldhaveaffected themeasurement of financial instrumentsdenominated in foreign currency and affectedStatement ofProfit and Loss by the amounts shownbelow. This analysis is performed on foreign currency denominatedmonetary financial assets andfinancial liabilitiesoutstandingasat theyearend.Thisanalysisassumes thatallothervariables, inparticularinterestrates,remainconstantandignoresanyimpactofforecastsalesandpurchases.

199

AI

(Rs in Million)0.5% Depreciation /

Appreciation in Indian Rupees against following

foreign currencies:

Statement of Profit and Loss for the year ended 31 March

2020

Statement of Profit and Loss for the year ended 31 March

2019

Gain/ (loss) on Appreciation

Gain/ (loss) on Depreciation

Gain/ (loss) on Appreciation

Gain/ (loss) on Depreciation

USD 307.7 (307.7) 712.0 (712.0)EUR (9.0) 9.0 (6.1) 6.1GBP 1.2 (1.2) (20.5) 20.5AED (0.2) 0.2 (0.3) 0.3OMR (0.9) 0.9 (1.1) 1.1SGD 0.0 (0.0) 0.7 (0.7)THB (1.5) 1.5 0.1 (0.1)CHF (0.2) 0.2 (0.2) 0.2QAR (0.0) 0.0 (0.5) 0.5AUD 0.1 (0.1) 0.1 (0.1)Other (6.6) 6.6 (11.9) 11.9

Note:USD:UnitedStatesDollar,GBP:GreatBritishPound,AED:ArabEmiratesDirhams,OMR:OmaniRiyal,THB:ThaiBaht,CHF:SwissFranc,SGD:SingaporeDollar,EUR:Euro,AUD:AustralianDollar,QAR:QatariRiyal.

58. Frequent Flyer Programme (FFP)

TheCompanyhasaFrequentFlyerProgrammeunderwhichmemberswhotravelonrevenueticketsearnmilesper travelasperFrequentFlyerProgram(FFP).Suchmilescanbe redeemedeitheronAir IndiaorStarAlliancecarriersaspertheredemptionchart.AsperFFPprogram,thelifeof thesemilesis3years,andifaMemberdoesnotusethesemileswithin3yearssuchmilesgetlapsed.Theunredeemedmileswhichhasnotlapsed,attheendoftheFinancialYearareprovidedfor.

DuringFY2018-19,theLiabilityforunexpiredFFPmileswasmadeonthebasisofaverage%ofmileslapsed during the last two yearswhich amounted toRs 828.7million.However, for FY 2019-20, itwas decided to carry out Actuarial Valuation for unredeemed miles of Flying Returns as on 31st March 2020.AsperActuarialvaluationReport,FFPLiabilityisRs1,236.0millionandaccordinglyincrementalprovisionofRs407.3millionduringtheyearismadetowardsdifferencebetweenexistingprovisionandthe actuarial valuation.

(Rs in Million)Details of FFP Provision As at 31st March, 2020 As at 31st March, 2019

Opening Balance 828.7 636.9Add: Additions during the year 407.3 191.8Closing Balance 1236.0 828.7

59. IND AS 115: Performance Obligations and remaining Performance Obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction

200

AI

priceyettoberecognizedasattheendofreportingperiodandanexplanationastowhentheCompanyexpects to recognize these amounts in revenue. Remaining performance obligation estimates aresubjecttochangeandareaffectedbytheseveralfactors,includingterminationsofcontract,changesinscope of contracts etc.

Theaggregatevalueofperformanceobligationsthatarecompletelyorpartiallyunsatisfiedasat31st March,2020,isRs23,326.6million(PY:Rs25,306.1million)andforwardsalesofwhichperformanceobligationarecompletelyunsatisfiedasat theendof reportingperiod isRs22,090.6million(PY:Rs24,477.4million)whichhasbeenclassifiedas“ForwardSaleunderCurrentLiabilities”,asdetailedintablegivenbelow:

(Rs in Million)As at 31st March,


2019Contractual Liabilities Forward Sales Opening Balance 24,690.1 22,445.3Add: Additions 232,769.2 225,309.7Less:RevenueRecognized (235,368.7) (223,277.6)Balance towards Forward Sales (A) 22,090.6 24,477.4Add: Adjustment due to re-grouping 0.0 212.8Closing Balance 22,090.6 24,690.1Add: Provision for FFP (Refer Note 58) (B) 1,236.0 828.7AggregatevalueofPerformanceObligations(A+B) 23,326.6 25,306.1

60. Additional Information:

a) AninstanceoffraudinvolvingpaymenttoathirdpartywasreportedinNewYorkofficeamountingtoUSD300,250(Rs19.4million)during2017-18.Thematterisunderinvestigation.However,asamatterofprudencefullprovisionhasbeenmadetowardsthesame.

b) InJanuary2020,discrepanciesinPettyCashandshortbankingofSalescollectionwasreportedbytheCityBookingOffice,GuwahatiStation.OnpreliminaryinvestigationbyFinanceDepartment,total cash loss of Rs 0.1 million was reported. Recovery action is pending.

61. TheCodeonSocialSecurity,2020(‘Code’)relatingtoemployeebenefitsduringemploymentandpost-employmentbenefitsreceivedPresidentialassentinSeptember2020.TheCodehasbeenpublishedintheGazetteofIndia.However,thedateonwhichtheCodewillcomeintoeffecthasnotbeennotified.The Company will assess the impact of the Code when it comes into effect and will record any related impactintheperiodtheCodebecomeseffective.

201

AI

62. PreviousYear’sfigureshavebeenre-casted/regrouped/re-arranged,wherevernecessary.

Signatures to theSchedules formingpartof theStandaloneFinancialStatementsand to theabovenotes.

For and on behalf of the Board

Sd/- Sd/- Sd/-

(Rajiv Bansal) (V.S. Hejmadi) (Kalpana Rao)Chairman & Managing Director Director-Finance Company SecretaryDIN: 00245460 DIN: 07346490 M.No: ACS8194

For and on behalf of For and on behalf of For and on behalf of

PKF Sridhar &Santhanam LLP Jagdish Chand & Co Khandelwal Jain & CoChartered Accountants Chartered Accountants Chartered Accountants FRN:003990S/S200018 FRN: 000129N FRN: 105049W

Sd/- Sd/- Sd/-(V Kothandaraman) (Praveen Kumar Jain) (Narendra Jain)Partner Partner PartnerM.No.025973 M.No.85629 M.No.048725

Place : New DelhiDate : 27 January 2021

NOTE: A - Air India

Documents

Transcript of NOTE: A - Air India