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AIR INDIA CHARTERS LIMITED AICL
AIR INDIA CHARTERS LIMITED
AICL
AICL
CONTENTS
Page No.
1. Board of Directors 1
2. Directors’ Report 2
3. Comments of the Comptroller & Auditor General of India 25
4. Independent Auditors’ Report 26
5. Balance Sheet as at 31 March 2015 47
6. Statement of Profit & Loss for the year ended 31 March 2015 48
7. Cash Flow Statement 49
8. Notes forming part of the Financial Statements for the year ended 31 March 2015 50
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BOARD OF DIRECTORS (as on 29 DECEMBER 2015)
Shri Ashwani Lohani Chairman
Shri V. Hejmadi
Dr. (Smt.) Shefali Juneja
Smt. Puja Jindal
SECRETARY
Smt. Aditi Khandekar
AUDITORS
M/s. Kirtane & PanditChartered AccountantsMumbai.
LEGAL ADVISORS
M/s. Kini & Co.
BANKERS
ICICI BankHDFC BankState Bank of IndiaBank of BarodaDena BankBank of IndiaIndian Overseas Bank
REGISTERED OFFICE
21st Floor, Air India Building,Nariman Point,Mumbai 400 021.
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DIRECTORS' REPORT 2014-15
The Directors take pleasure in presenting the 44th Annual Report of the Company together with the Audited Accounts and Auditor's Report for the year ended 31 March 2015.
INDIAN CIVIL AVIATION SCENARIO
Financial year 2014-15 has been a very satisfactory one for most airlines in India including Air India Express as nd
the year saw progressive decline in fuel rates starting from the middle of the 2 Quarter leading to lower fares and increased demand. As per the air traffic statistics published by the DGCA, India, the Indian domestic air market registered growth of about 10.5% in the year 2014, with the domestic passenger traffic rising from about 60.1 million in 2013 to about 66.4 million in 2014 while the international traffic to and from India estimated at about 46.3 million in 2014-15, also registering a growth of about 9% over the 2013-14 level. In this connection, it is pertinent to note that the eight countries to which Air India Express operates contribute to about 50% of the total traffic to and from India. Furthermore, the air market on the routes between the countries served by Air India Express and India grew at a far higher rate of over 14% in the year 2014-15.
In a forecast report released in 2013, IATA had estimated that the international traffic to and from India would grow at CAGR of 6.6% between 2013 and 2020. The forecast for the on-line markets of Air India Express upto 2020 was well above the national average, ranging between 7 and 8%. Going by the actual growth seen in 2014-15 and in the current financial year up to August 2015, the traffic growth in these markets could well end up closer to double digit. Responding to the opportunities presented by the markets between Kerala and destinations in the Gulf region, the larger Indian private carriers such as Indigo, Jet Airways and Spice jet and Etihad have commenced competitive direct international flights to the Gulf from Airports in Kerala – Kochi and Kozhikode effective Winter 2014-15 schedule. They have further added to their presence in these markets in the Summer 2015 schedule.
Air India Express would be in a position to take advantage of the growing opportunities in the international markets to / from India with the induction of 6 dry leased aircraft in its fleet. The dry leased aircraft are scheduled to be delivered to the Airline between March and November 2016.
REVIEW OF PERFORMANCE
For the first time in the history of AICL, the Company has recorded an Operating Profit of Rs. 662.12 crores (before Revenue Sharing) besides generating a Cash profit of Rs. 172.49 crores (as against a net loss of Rs. 345.32 crores in FY 2013-14) mainly through increased revenue of Rs. 257.01 crores during FY 2014-15. The company has doubled the Cargo Revenue in the current fiscal over the previous year and also surpassed the excess baggage revenue by 39.22 % compared to previous year. The Scheduled Services Revenue, before revenue sharing with AI, increased substantially from Rs. 2,359.45 crores in 2013-14 to Rs. 2,616.46 crores in 2014-15, representing an increase of 10.8%. The total expenditure of the Company was Rs. 2,356.12 crores as against Rs. 2,412.43 crores for the year 2013-14, representing a decrease of 2.33 %.
The turnaround in the financial performance of the Company may be attributed to more intense asset / resource utilization, greater operational efficiency, robust demand, lower ATF costs and elimination of lease rentals.
In the year 2014-15 the demand on the routes served by Air India Express was strong enough to enable the Airline to not only improve the passenger load factor but achieve significant improvement in yield. The Company has also achieved “Excellent” Grade as per the MoU parameters defined for the year 2014-15.
SUMMARISED FINANCIAL PERFORMANCE Rupees in crores Operating Revenue (before Rev. Sharing) 2,621.88
Operating Expenses 1,959.76Operating Profit (before Revenue Sharing) 662.12
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Operating Revenue (after Revenue Sharing) 2,294.82Operating Expenses 1,959.76Operating Profit (after Revenue Sharing) 335.06
Total Revenue 2,294.96
Total Expenses 2,356.12Loss before taxation & Exceptional Items 61.16
Less: Exceptional Items (0.13) Provision for Taxation - Net Loss 61.03
Add: Balance brought forward from previous years 2,404.90
Net Loss carried forward 2,465.93
Cash Profit of AICL for 2014-15 172.49 SUMMARISED PHYSICAL / REVENUE PERFORMANCE (FY 2014-15 Vs. FY 2013-14)
APR-MAR 2014-15 APR-MAR 2013-14 Variance
ASK (million) 8,161 8,121 0.5%
Carriage (million) 2.62 2.72 -3.7%
RPK (millions) 6,639 6,396 3.8% Load Factor (%) 81.4% 78.8% 3.3%
Revenue (Rs. Cr.) 2,560 2,287 11.9%
Yield/RPK (Rs) 3.82 3.62 5.5%
RASK (Rs.) 3.11 2.81 10.7%
Flying Hours 66,620.63 67,316.00 -1.0%
SHARE CAPITAL
Authorised Share Capital
As on 31 March 2015, the Authorised Capital of the Company was Rs.800 crores divided into 8 Crores Equity Shares of Rs.100 each.
Issued, Subscribed and Paid up Share Capital
As on 31 March 2015, the Issued, Subscribed and Paid up Share Capital of the Company was Rs.780 crores divided into 7.8 Crores Equity Shares of Rs.100 each.
AIRCRAFT FINANCING
As on 31 March 2015, the position of foreign currency borrowing for Aircraft was as under: Rupees in Cr.
Total Loan due as on 1April 2014 2,008.05Less: Amount repaid during April 2014 to March 2015 (319.48)Add: Exchange adjustments due to revision in rates of currencies 79.13Balance as on 31 March 2015 1,767.70
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AIR INDIA EXPRESS OPERATIONS
Fleet Size
As on 31 March 2015 the Airline's fleet strength stood reduced from 21 to 17 B737-800 aircraft, as 4 leased aircraft were grounded to prepare them for return to the lessors.
Operations
Despite a reduction of nearly 20% in the Airline's fleet size, there was only a marginal (1%) decline in the number of flying hours in FY 2015. As a result, the average daily utilization of the aircraft on the Airline's fleet went up sharply from 8.9 hours per day to 10.5 hours per day in Summer 2014 and further to 10.7 hours per day in the Winter 2013-14 Schedule. The number of weekly services operated by the Airline rose from 159 to 165 round-trip flights/week. With concerted focus on increasing resource utilization and judicious rationalization of domestic services, the Airline was able to restore the direct services between Mangalore and Kuwait besides improving the timings / increasing frequency of flights in several of its core markets.
Summer 2014 schedule
Between 1 May and 20 July 2014, Notice to Airmen NOTAM) issued at Dubai International Airport had resulted (in partial closure of the runway at that airport. Air India Express was able to obtain alternative slots at Sharjah International Airport and thereby continued its scheduled services from Tiruchirapalli, Amritsar, Lucknow, Pune, Jaipur and Mangalore.
The Summer 2014 schedule comprised of 149 international flights and 11 domestic flights. The average aircraft utilization was approximately 10.5 hours per day per aircraft.
Winter 2014 schedule
In the Winter Schedule aircraft rotations were further rationalized so as to increase aircraft utilization and cater to the traffic demands for direct links / increased frequencies. The notable highlights of the Winter 2013-14 Schedule were as follows:
l Kochi/Muscat/Kochi – Frequency of flights increased to 4 flights per week from 3 flights per week.
l Trivandrum/Muscat/Trivandrum – Frequency of flights increased to 4 flights per week from 3 flights per week.
l Mangalore / Abu Dhabi – Muscat/Mangalore - Frequency of flights increased to 4 flights per week from 3 flights per week.
l Mangalore/Doha/Bahrain/Mangalore - These flights have been restructured to operate 2 non-stop flights per week between Mangalore and Doha and 3 non-stop flights per week from Mangalore to Bahrain extended in round-robin fashion to Kuwait. This schedule initiative helped to meet the legitimate and increasingly strident demand for restoring direct air links between Mangalore and Kuwait.
l Kozhikode / Doha/ Kozhikode – Two additional terminator flights per week in addition to the daily flight operated on the Kochi / Kozhikode/Bahrain /Doha / Kozhikode / Kochi route.
l Mumbai / Doha / Mumbai – Frequency of flights increased to 4 flights per week from 3 flights per week.
The route-wise breakup of the flights operated by the Airline at the end of the Winter 2014-15 schedule was as under:
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Sr.No. Sector Flights / week
01 India/Dubai 61
02 India/Abu Dhabi 21
03 India/Sharjah 18
04 India/Abu Dhabi/Muscat 04
05 India/Muscat 15
06 India/Dammam 04
07 India/Doha/Bahrain 07
08 India/Doha 08
09 India/Al Ain 01
10 India/Salalah 01
11 India/Kuwait 03
12 India/Bahrain/Kuwait/India 03
13 India/Singapore 07
14 India/Kuala Lumpur 04
15 Domestic 08
TOTAL 165
On Line Stations
As on 31 March 2015 the online stations were as under:
India Kozhikode, Kochi, Thiruvananthapuram, Mangalore, Chennai, Tiruchirapalli, Mumbai, Pune, Amritsar, Lucknow, Jaipur.
Foreign Dubai, Abu Dhabi, Sharjah , Al Ain, Muscat, Salalah, Bahrain, Doha, Kuwait, Dammam, Singapore, Kuala Lumpur.
Capacity offered, PLF, Yields and Revenues
Due to the non-availability of 4 leased aircraft that had been grounded during the last quarter of FY 2013-14, the schedule in FY 2014-15 was operated with 17 owned B 737 – 800 aircraft. Despite this, the Airline achieved a nominal increase of 0.5% in the capacity offered as compared to the level achieved in FY 2013-14. However, there was a marginal decline in the number of passengers carried - 2.62 million in FY 2014-15 as against 2.68 million in FY 2013-14. The decline of about 2.2% in the number of passengers carried was also partially due to increase in average stage length as some of the capacity deployed on domestic services were moved to international routes giving rise to a reduction in the number of seats offered although the capacity in terms of ASK rose marginally by 0.5%.
Favorable market conditions in terms of both demand and supply coupled with improved schedule reliability and on-time performance enabled the Airline to achieve higher Passenger Load Factor (PLF) and higher yields. While the PLF increased by 3.3% from 78.8% in 2013-14 to 81.4% in 2014-15; the Yield per RPK rose by 5%
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from Rs. 3.62 to Rs. 3.80. Consequently the passenger revenue including revenues on-line earned through sales of excess baggage and preferred seats increased by 11.9% from Rs. 2,287 crores achieved in 2013-14 to Rs. 2,560 crores in 2014-15.
Notable service improvements implemented during the year, include the following:
Launch of call center facility, appointment of representative agents in key foreign markets and introduction of on-line advance seat reservation facility to passengers.
With unwavering focus on improving productivity and efficiency, the Airline has been able to further improve its operations / performance during the period April – August 2015 as compared to the results achieved during the same period last year. The average aircraft utilization has risen to about 11.5 hours per day with no adverse impact on schedule reliability which has been retained at the high levels of well over 99%. As a result the Airline has achieved a 9% increase in the capacity offered and a proportionate increase of 9% in passenger revenues.
Aircraft despatch reliability
The aircraft despatch reliability for FY 2014-15 was 99.85%.
HUMAN RESOURCES
Staff Strength
The staff strength as on 31 March 2015 was as under:
SC 220
ST 92
OBC 224
General 606
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TOTAL 1142 ======
In addition to the above there were 261 employees (Pilots, Engineers and Ground Staff) on deputation from the holding Company, Air India Limited.
As on 1 January 2015 there was one employee with disabilities in the services of the Company.
IMPLEMENTATION OF OFFICIAL LANGUAGE
The Company is taking effective steps for the implementation of the provisions of the Official Language Act and Rules framed under the Act.
VIGILANCE
During the year under review there was no vigilance case in the Company.
DISCLOSURE OF PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is set out in the Annexure to the Directors' Report.
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COMPLIANCE WITH THE RTI ACT, 2005
During the year 29 cases of requests were received. Out of these, 21 cases were replied to.
COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL ) ACT, 2013
In line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, an Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees ( permanent, contractual, temporary & trainees) are covered under this policy.
During the year 2014-15 one complaint of sexual harassment was received on 20 March 2015 and the same was under consideration of the ICC.
AUDITORS
The Comptroller & Auditor General of India has appointed M/s Kirtane & Pandit, Mumbai as Statutory Auditors of the Company for the financial year 2014-15.
COMMENTS OF COMPTROLLER AND AUDITOR GENERAL
The Comments of the Comptroller and Auditor General of India under Section 143(6) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 March 2015 are annexed to this report.
CORPORATE GOVERNANCE
A Report on Corporate Governance is annexed at Annexure A.
DIRECTORS' RESPONSIBILITY STATEMENT
(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures ;
(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;
(iv) The Directors have prepared the Annual Accounts on a 'going concern' basis.
ACKNOWLEDGEMENTS
The Board sincerely appreciates the Company's valued customers in India and abroad for using the services of Air India Express and looks forward to their continued support and confidence.
The Board also gratefully acknowledges the support and guidance received from parent Company viz. Air India Ltd., various Ministries of the Government of India and the Ministry of Civil Aviation in particular, in Company's
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operations and development plans. The Board expresses their grateful thanks also to the DGCA, Comptroller and Auditor General of India, the Ministry of Corporate Affairs, the Statutory Auditors, Airports Authority of India, other Govt. Departments, airlines, agents, Indian Financial Institutions and banks including the EXIM bank of USA.
For & on behalf of the Board
(Ashwani Lohani) Chairman
Place : Delhi
Dated : 14 January 2016
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ANNEXURE A
REPORT ON CORPORATE GOVERNANCE
1. BOARD OF DIRECTORS
As per the Articles of Association of the Company, the number of Directors shall not be less than three and not more than fourteen.
BOARD OF DIRECTORS AS ON 31 MARCH 2015
Shri Rohit Nandan Chairman Dr Shefali Juneja Director, Ministry of Civil AviationSmt Puja Jindal Director, Ministry of Civil AviationShri S. Venkat Director (Finance), Air India Ltd.
During the year, all meetings of the Board were chaired by the Chairman .The Board met four times during the year to periodically review the performance of the Company and to discuss important issues which inter alia included Lease Return of ILFC aircraft, Dry Lease of Aircraft, Cabin Crew-Salary & Career Progression, Appointment of Key Managerial Personnel & Secretarial Auditor, etc.
Details regarding the Board Meetings, Annual General Meeting, Directors' attendance thereat, Directorships and Committee positions held by the Directors are as under :
Board Meetings :
Four Board Meetings were held during the financial year 2014-15 on the following dates:
th25 June 2014 (194 Meeting)
th25 November 2014 (195 Meeting)th
06 February 2015 (196 Meeting)th27 March 2015 (197 Meeting)
Particulars of Directors including their attendance at the Board/Shareholders' Meetings during the financial year 2014-15
Name of the Academic Attendance Details of Directorships Memberships Director Qualifications out of 4 Board held in other Companies held in Committees Meetings
Non Executive Directors (Ex officio)
Shri Rohit Post 4 Chairman & Managing MemberNandan Graduation Director Audit CommitteeCMD – in History & Air India LimitedAir India Ltd. MBA from Part-Time Chairman UK Air India Air TransportChairman Services Ltd. Air India Engineering Services Ltd.
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Name of the Academic Attendance Details of Directorships Memberships Director Qualifications out of 4 Board held in other Companies held in Committees Meetings
Airline Allied Services Ltd Hotel Corporation of India Ltd. Air India SATS Airport Services Pvt. Ltd.
Director Air Mauritius Limited Air Mauritius Holdings Limited
Shri S Venkat B.Com,FCA, 3 Director MemberDirector – FCWA,FCS& Air India Ltd Audit CommitteeFinance CPA(US) Air India Air Transport Air India Ltd. Services Ltd Air India Engineering Services Ltd Airline Allied Services Ltd Hotel Corporation of India Ltd Air India SATS Airport Services Pvt Ltd
Dr Shefali Juneja M.A M(Phil) 1 Airline Allied Services ChairmanDirector, Phd. Ltd. Audit CommitteeMinistry of Civil Aviation
Smt Puja Jindal Post 4 Director MemberDirector, Graduate Airline Allied Services HR CommitteeMinistry of Civil Ltd.Aviation Pawan Hans Helicopters Limited
2. AUDIT COMMITTEE
As part of the Corporate Governance process and in compliance with the povisions of the Companies Act 2013 and DPE Guidelines, the Audit Committee of the Board has been constituted.
As on 31 March 2015 the following were the members of the Audit Committee :
Dr Shefali Juneja ChairpersonShri Rohit Nandan MemberShri S Venkat MemberSmt Puja Jindal Member
The Terms of Reference of the Audit Committee are:
l To recommend for appointment, remuneration and terms of appointment of auditors of the company;
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l To review and monitor the auditor's independence and performance, and effectiveness of audit process;
l To discuss with the external auditor, before the audit commences, the nature and scope of the audit and to ensure coordination where more than one audit firm is involved;
l To review the Internal Audit program & ensure co-ordination between the Internal & External Auditors as well as determine whether the Internal Audit function is commensurate with the size and nature of the Airlines Business and is provided adequate resources and representation within the company;
l To review/examine the half-yearly and annual financial statements and the auditors' report thereon;
l To discuss problems and reservations arising from the interim and final audits and any matter that the auditor may wish to discuss in the absence of Management where necessary;
l To review the Statutory Auditor's Report, Management's response thereto and to take steps to ensure implementation of the recommendations of the Statutory Auditors ;
l Approval or any subsequent modification of transactions of the company with related parties;
l Scrutiny of inter-corporate loans and investments;
l Valuation of undertakings or assets of the company, wherever it is necessary;
l Evaluation of internal financial controls and risk management systems;
l Monitoring the end use of funds raised through public offers and related matters;
l To consider other matters as defined by the Board.
The Audit Committee met two times during the year to review various issues including inter alia annual accounts of the Company for the year before submission to the Board, on the following dates :
th25 November 2014 (16 Meeting)
th06 February 2015 (17 Meeting)
Attendance at the Audit Committee Meetings
Name of the Member No. of Meetings Attended
Dr Shefali Juneja, Chairman 1Shri Rohit Nandan, Member 2Shri S Venkat, Member 2Smt Puja Jindal 2
3. ANNUAL GENERAL MEETINGS DURING THE LAST THREE YEARS
The details of these meetings are given below :
Date and time of the Meeting Venue
st nd41 Annual General Meeting 19 December 2012 At 1200 hrs Conference Room, 22 Floor, Air India Building, Nariman Point, Mumbai-400 021.
nd nd42 Annual General Meeting 23 December 2013 At 1630 hrs Conference Room, 22 Floor, Air India Building, Nariman Point, Mumbai-400 021.
nd43rd Annual General Meeting 19 December 2014 At 1400 hrs Conference Room, 22 Floor, Air India Building, Nariman Point, Mumbai-400 021.
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4. SECRETARIAL AUDIT:
Pursuant to the provisions of section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Vijay Sonone & Company, Practicing Company Secretaries, Mumbai, to conduct Secretarial Audit for the financial year 2014-2015.
The Secretarial Audit Report for the financial year ended 31 March, 2015 is annexed to this report.
The Managements' Comments on Secretarial Auditors' observations are as under:
Observations Management's Comments
Air India Charters Limited (AICL) is a wholly owned Subsidiary of Air India Limited (AIL), a Government Company. As per Article 22 of the Articles of Association of the Company, all the Directors of the Company are appointed by AIL in consultation with the Government of India.
AICL has requested AI to nominate at least two Independent Directors on its Board and the reply from AI is awaited.
As per the provisions of Section 177(2) of the Companies Act, Audit Committee shall consist of a minimum of three Directors with Independent Directors forming a majority. As required under section 178, the Nomination and Remuneration Committee should consist of 3 or more Non Executive Directors out of which not less than one half should be Independent Directors.
Presently there is no Independent Director on the Board of AICL and the matter has been taken up with AI.
As required under section 135, the CSR committee should consist of 3 Directors out of which at least one should be Independent Director. Presently there is no Independent Director on the Board of AICL. Further the Company has not earned profits for the past 3 years. In view of this the CSR committee has not been constituted.
The Company has not appointed Independent Directors as required under the provisions of Section 149(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and hence, no meeting of the Independent Directors could be held during the Audit Period.
Since the Company has not appointed Independent Directors, the Company has not complied with the provisions of Section 177(2) and Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 as regards the composition of the Audit Committee and the Nomination and Remuneration Committee of the Board.
The Company has not constituted a Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 and hence, no meeting of the Corporate Social Responsibility Committee could be held during the Audit Period.
5. EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014 the extract of annual return in form MGT 9 is also annexed.
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Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Director's Report for the year ended 31 March 2015 list of staff whose salary exceeds Rs. 5,00,000 a month or Rs.60,00,000 annually.
S. Employee Name Remune- Designation Age Exp. Qualification Date of Last EmploymentNo Number ration in Years Joining Rupees
1 85001047 Sunny Sharad Asaldekar 7,746,647 Instructor 33 10 B.COM 24.11.2004 N.A.
2 85001048 Sajneesh Sharma 6,837,589 Check pilot 39 10 HSC 24.11.2004 N.A.
3 85001049 Dheeraj Malviya 5,898,240 Captain 39 10 BA (ELEC.) 24.11.2004 FRESH
4 85001050 Brijesh Rambhai Rathod 6,686,918 Check pilot 39 10 HSC 24.11.2004 N.A.
5 85001051 V.S. Rajkumar 7,437,462 Instructor 39 10 B.SC 24.11.2004 CONTINENTAL WINES LTD.
6 85001052 Nirmal Jeet Singh 7,316,986 Check pilot 41 10 M.SC 14.12.2004 INDIAN NAVY
7 85001053 Dhiraj Rai Gupta 8,355,787 Examiner 55 10 M.SC 14.12.2004 INDIAN AIR FORCE
8 85001055 Om Kumar Singh 6,898,672 Check pilot 32 10 HSC 01.06.2005 N.A.
9 85001056 Syed Abu Thaher 7,459,387 Check pilot 39 10 B.SC 01.06.2005 N.A.
10 85001057 Harish Gupta 6,352,410 Captain 43 10 HSC 01.06.2005 ALLIANCE AIR
11 85001059 Ashish Gangurde 6,971,468 Check pilot 41 10 SSC 27.06.2005 BSF
12 85001060 Agraj Singh 5,885,435 Captain 38 10 HSC 26.07.2005 FRESH
13 85001062 Satinder Jit Singh 6,381,738 Captain 53 9 SSC 19.12.2005 BSF
14 85001064 Kushal Sharad Asaldekar 7,886,941 Instructor 31 9 BCOM 09.01.2006 N.A.
15 85001065 Nikhil N. Mane 5,914,282 Captain 31 9 BSC (AVIA.) 03.02.2006 FRESH
16 85001066 Akshay Kumar 5,994,282 Captain 32 9 BSC (AVIA.) 03.02.2006 FRESH
17 85001068 Kanak Chaturvedi 6,467,322 Captain 38 9 B.SC 21.08.2006 INDIAN COAST GUARD
18 85001069 Sandip Raja Sekaran 5,874,282 Captain 32 6 HSC 27.04.2009 JET AIRWAYS
19 85001095 A. Kochhar 6,950,676 Check pilot 50 10 B.TECH 11.04.2005 AIR SAHARA
20 85001096 Sharad Dogra 7,832,849 Examiner 42 10 HSC 22.04.2005 AIR SAHARA
21 85001097 Sameer Dogra 7,827,210 Examiner 40 9 HSC 01.03.2006 AIR SAHARA
22 85001098 Anand Kumar 7,960,319 Captain 45 9 B.SC 12.07.2006 AIR SAHARA
23 85001099 G. S. Sidhu 7,139,196 Check pilot 57 9 SSC 13.07.2006 ALLIANCE AIR
24 85001100 R P Singh 8,891,285 Examiner 53 9 M.SC 03.10.2006 INDIAN NAVY
25 85001102 Alok Nayak 6,478,973 Captain 52 8 B.A. 01.07.2007 INDIAN NAVY
26 85001103 Aju Cherian 6,573,736 Captain 54 8 B.SC 16.07.2007 INDIGO
27 85001107 Devender Singh Jain 6,218,365 Captain 60 8 M.SC 05.11.2007 INDIAN AIR FORCE
28 85001109 Rajesh Sobti 5,899,431 Captain 62 8 MSC 05.11.2007 INDIAN AIR FORCE
29 85001111 Jatinder Singh Dhillon 5,929,675 Captain 62 7 N.A 11.02.2008 INDIAN AIR FORCE
30 85001112 Jacob Paul 6,221,085 Captain 60 7 MPHIL, DEF. 11.02.2008 INDIAN AIR FORCE
31 85001113 Vikas Yajurvedi 5,893,270 Captain 64 7 MSC. DEF. 11.02.2008 INDIAN AIR FORCE
32 85001119 Pankul Nag 6,185,626 Captain 51 6 B.A. 06.01.2009 INDIAN NAVY
33 85001120 Kapil Gupta 8,444,057 Instructor 42 6 M.SC 05.05.2009 INDIAN AIR FORCE
34 85001121 Bindu Sebastian 6,116,507 Captain 44 6 HR 08.06.2009 INDIAN AIR FORCE
35 85001122 Gautam Sarma 6,013,468 Captain 56 5 GRADUATE 02.09.2010 INDIAN AIR FORCE
36 85001123 Javed Ahmad 5,322,669 Captain 64 3 BSC SCIE. 14.11.2011 ALLIANCE AIR
37 85001156 V. D. Kulkarni 7,370,874 Captain 61 3 B.SC 02.03.2012 AIR INDIA
38 85001199 V.S. Manoj Kumar 6,109,582 Captain 43 10 BSC CHEM. 01.06.2005 FRESH
39 85001217 Gurudarshan Kaur Sandhu 5,728,293 Captain 37 10 BSC (AVIA.) 24.11.2004 FRESH
40 85001235 Kavita Devanpalli 6,259,382 Captain 39 10 BSC 14.12.2004 FRESH
41 85001240 Amit Pandey 5,769,190 Captain 47 2 N.A 01.10.2013 N.A.
42 85001286 Deepak Vasant Sathe 5,326,101 Captain 54 2 N.A 01.10.2013 AIR INDIA
43 85001287 Arun Varghese 7,063,685 Captain 31 2 N.A 01.10.2013 AIR INDIA
44 85001288 Tanya Anand 6,582,369 Captain 27 2 N.A 01.10.2013 AIR INDIA
45 85001289 Anish Nair 6,596,820 Captain 40 2 N.A 01.10.2013 AIR INDIA
46 85001290 Gaurav Balkawde 8,712,857 Captain 27 2 N.A 01.10.2013 AIR INDIA
ANNEXURE
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SECRETARIAL AUDIT REPORT
STFOR THE FINANCIAL YEAR ENDED 31 MARCH, 2015
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,The Members,Air India Charters Limited,CIN-U62100MH1971GOI015328
st21 Floor, Air India Bldg.,Nariman Point, Mumbai -400021
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Air India Charters Limited [CIN-U62100MH1971GOI015328] (hereinafter called 'the Company').Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit and as per the explanations given to me and the representation made by the Management, I hereby report that in my opinion, the Company has, during the
stAudit Period covering the financial year ended on 31 March, 2015 ('Audit Period') generally complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the stCompany for the financial year ended on 31 March, 2015 according to the applicable provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder (In so far as they are applicable);
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder (Not applicable to the Company during the Audit Period);
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (Not applicable to the Company during the Audit Period);
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (Not applicable to the Company during the Audit Period);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Not applicable to the Company during the Audit Period);
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (Not applicable to the Company during the Audit Period);
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to the Company during the Audit Period);
AICL
15
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (Not applicable to the Company during the Audit Period);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client (Not applicable to the Company during the Audit Period);
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit Period); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to the Company during the Audit Period);
Having regard to the compliance system prevailing in the Company and on the basis of the Compliance Certificates/Management Representation Letters issued by the designated officers of the Company, the Company has complied with the following laws applicable specifically to the Company:
(a) Aircraft Act, 1934;
(b) Carriage by Air Act 1972;
(c) The Aircraft (Carriage of Dangerous Goods) Rules, 2003;
(d) Civil Aviation Requirements issued by DGCA.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India (Not applicable to the Company during the Audit Period).
(ii) The Listing Agreements entered into by the Company with Stock Exchange(s) (Not applicable to the Company);
During the Audit Period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:
i. The Company has not appointed Independent Directors as required under the provisions of Section 149(4) of the Companies Act, 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and hence, no meeting of the Independent Directors could be held during the Audit Period.
ii. Since the Company has not appointed Independent Directors, the Company has not complied with the provisions of Section 177(2) and Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 as regards the composition of the Audit Committee and the Nomination and Remuneration Committee of the Board.
iii. The Company has not constituted a Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 and hence, no meeting of the Corporate Social Responsibility Committee could be held during the Audit Period.
I further report, that the compliance by the Company of applicable financial laws, like direct and indirect tax laws, has not been reviewed in this Audit since the same have been subject to review by statutory financial audit and other designated professionals;
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Subject to what is stated herein above as regards the appointment of Independent Directors, the changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the Board Meetings, as represented by the Management, were taken unanimously.
As represented and explained to us, I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period, there are no specific events / actions having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.
Vijay B. SononeCompany Secretary in Practice
FCS No: 7301Certificate of Practice No: 7991
Mumbai
th 20 November, 2015
This Report is to be read with our letter of even date which is annexed as 'Appendix A' and forms an integral part of this report.
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17
'Appendix A’
To,The Members,Air India Charters Limited,CIN-U62100MH1971GOI015328
st21 Floor, Air India Bldg.,Nariman Point, Mumbai -400021
My report of even date is to be read along with this letter.
1. The maintenance of the secretarial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test check basis to ensure that the correct facts are reflected in the secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of the financial records and books of accounts of the Company.
4. Where ever required, I have obtained the Management Representations about the compliance of laws, rules and regulations and occurance of events etc.
5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. My examination was limited to the verification of procedures on test check basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
Vijay B. Sonone
Company Secretary in Practice
FCS No: 7301Certificate of Practice No: 7991
Mumbaith
20 November, 2015
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Annexure to Directors' Report for the year 2014-15
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2015
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management & Administration) Rules, 2014.
I.
REGISTRATION & OTHER DETAILS:
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities
contributing 10 % or more of the total turnover of the company shall be stated) -
1.
1.
CIN U62100MH1971GOI015328
2. Registration Date 9 September 1971
3. Name of the Company AIR INDIA CHARTERS LIMITED (AICL)
4. Category/Sub-category of the Company
Government Company
5. Address of the Registered office & contact details
21 Floor, Air India Building, Nariman Point, Mumbai -400021. Ph.No : 022-22796666.
6. Whether listed company No
7. Name, Address & contact details of the Registrar & Transfer Agent, if any.
N.A.
Sr No
Name and Description of main products / services
NIC Code of the
Product/ Service
% to total turnover of
the Company
To establish, maintain and operate international and domestic air transport services, scheduled and non scheduled, in all the countries of the world for the carriage of passengers, meals and freight and for any other purposes.
511 100
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:
Sr. No.
Name and Address of the Company
CIN/GIN
Holding / Subsidiary / Associate
% of
Shares
Applicable Section
1 Air India Limited 113, Airlines House, Gurudwara Rakabganj Road, New Delhi, 110 001.
U62200DL2007GOI161431
Holding
100%
2 (46)
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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) : Category-wise Share Holding
Category of Shareholders
No. of Shares held at the beginning of the year [As on 01-04-2014]
No. of Shares held at the end of
the year [As on 31-03-2015]
% Change during
the year
Demat
Physical during
the year % of Total
Shares
Demat
Physical
Total % of Total
Shares
A. Promoters
(1) Indian
a)
Individual/ HUF
b)
Central Govt
c)
State Govt(s)
d)
Bodies Corp.
-
30,00,000
30,00,000
100
-
7,80,00,000
7,80,00,000
100
e)
Banks / FI
f)
Any other
Total shareholding of Promoter (A)
30,00,000
30,00,000
100
-
7,80,00,000
7,80,00,000
100
B.
Public
Shareholding
Not Applicable
1.
Institutions
a)
Mutual Funds/UTI
b)
Banks / FI
c)
Central Govt.
d)
State Govt.(s)
e)
Venture Capital
Funds
f)
Insurance
Companies
g)
FIIs
h) Foreign Venture
Capital Funds
i) Others (specify)
Foreign Banks
Sub-total (B)(1):-
-
-
-
-
-
-
-
-
-
Category of Shareholders
No. of Shares held at the beginning of the year [As on 01-04-2014]
No. of Shares held at the end of the year [As on 31-03-2015]
% Change during
the year
Demat
Physical
Total
% of Total Share
s
Demat
Physical
Total
% of Total Share
s 2. Non-Institutions Not Applicable
a) Bodies Corp. (Market Maker + LLP)
i) Indian
ii) Overseas
b) Individuals
i) Individual
shareholders holding nominal share capital upto Rs. 1 lakh
ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh
c)
Others (specify)
i)
Non Resident
Indians
ii)
Non Resident
Indians -
Non
Repatriable
iii)
Office Bearers
iv)
Directors
v)
HUF
vi)
Overseas
Corporate Bodies
vii)
Foreign Nationals
viii) Clearing Members
ix) Trusts
x)
Foreign Bodies -
R
R
Sub-total (B)(2):-
-
-
-
-
-
-
-
-
-
Total Public Shareholding (B) = (B)(1)+ (B)(2)
-
-
-
-
-
-
-
-
-
C. Shares held by
Custodian for
GDRs &
ADRs
-
-
-
-
-
-
-
-
-
Grand Total (A+B+C)
30,00,000
30,00,000
100
7,80,00,000
7,80,00,000
100
AICL
20
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21
B) Shareholding of Promoter-
C)
Change in Promoters' Shareholding (please specify, if there is no change)
D)
Sr
No.
Particulars
Shareholding at the beginning of the year
Cumulative Shareholding at end of the year
No. of shares
% of total shares of
the company
No. of shares
% of total shares of
the company
At the beginning of the year
Air India Limited
30,00,000
100
30,00,000
At the end of the year
Air India Limited
7,80,00,000
100
7,80,00,000
Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sr
No Shareholder's
Name
Shareholding at the beginning of
the year Shareholding at the end
of the year %
change in
Share-
holding during
the year
No. of
Shares
% of total
Shares
of the Company
%of Shares
Pledged/
encumbered to total
shares
No. of Shares
% of total
Shares
of the Company
%of Shares
Pledged/
encumbered to total
shares
1
Air India Limited along with
its
nominees
30,00,000
100
NIL
7,80,00,000
100
NIL
0.00
Sr No
For Each of the Top 10 Shareholders
Shareholding at the beginning of the year
Cumulative Shareholding at
end of the year
No. of shares
%
of total shares of the
company
No. of shares
% of total
shares of the company
1
NOT APPLICABLE
2
3
4
5
6
7
8
9
10
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22
E) Shareholding of Directors and Key Managerial Personnel: Sr. No.
Shareholding of each Directors and each Key Managerial Personnel
Shareholding at the beginning of the year
Cumulative Shareholding at the end of year
No. of shares % of total shares of the
company
No. of shares % of total shares of the
company
1
Shri Rohit
Nandan
1
0.0003
1
0.0003
2
Shri S Venkat
1
0.0003
1
0.0003
Total
2
2
V. INDEBTEDNESS- Indebtedness of the Company including interest outstanding/ accrued but not due for payment.
Secured Loans
excluding deposits
Unsecured Loans
Deposits Total
Indebtedness
Indebtedness at the beginning of the financial year
i)
Principal Amount
2257.44
1152.83
-
3410.27
ii)
Interest due but not paid
-
-
-
-
iii)
Interest accrued but not due
41.42
-
-
41.42
Total (i+ii+iii)
2298.87
1152.83
-
3451.70
Change in Indebtedness during the financial year
* Addition
-
-
-
-
* Reduction
226.66
55.75
-
282.41
Net Change
226.66
55.75
-
282.41
Indebtedness at the end of the financial year
i)
Principal Amount
2017.92
1097.08
-
3115.00
ii)
Interest d ue but not paid
-
-
-
-
iii)
Interest accrued but not due
54.29
-
-
54.29
Total (i+ii+iii)
2072.21
1097.08
-
3169.29
(In Rs Crore)
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23
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(In figures)
Sr No
Particulars of Remuneration Name of MD/WTD/ Manager Total
Amount
1 Gross salary
(a)
Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b)
Value of perquisites u/s 17(2) of theIncome-tax Act, 1961
(c)
Profits in lieu of salary under section 17(3) of the Income-
tax Act, 1961
2
Stock Option
3
Sweat Equity
4
Commission
as % of profit
others, specify.
5
Others : (PF, DCS, House Perks tax etc)
Total (A)
Ceiling as per the Act
*There are no Managing, Whole Time Directors in the Company.
B. Remuneration to other directors
Sr
No. Particulars of Remuneration Name of Directors
Total Amount
1
Independent Directors -
-
-
-
-
-
Fee for attending board committee meetings -
-
-
-
-
-
Commission
-
-
-
-
-
-
Others, please specify (Fees for attending Board Sub Committee Meetings)
-
-
-
-
-
-
Total(1)
-
-
-
-
-
-
2
Other Non-Executive Directors
-
-
-
-
-
-
Fee for attending board committee meetings
-
-
-
-
-
-
Commission
-
-
-
-
-
-
Others, please specify
-
-
-
-
-
-
Total (2)
-
-
-
-
-
Total (B)=(1+2)
-
-
-
-
-
-
Total Managerial Remuneration
-
-
-
-
-
-
Overall Ceiling as per the Act
-
-
-
-
-
-
-
-
-
-
-
-
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24
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/ MANAGER/ WTD
*
Not applicable to Government Companies. Only CFO and CS are KMPs.
** The Company Secretary is holding the position in addition to her responsibilities as AGM-Corporate Affairs, Air India Ltd. Similarly, CFO is on deputation from Air India and no
remuneration is paid to them by AICL.
( figures in Rs)
Sr.
No.
Particulars of Remuneration Key Managerial Personnel
CEO
CS
CFO
Total
1
Gross salary *Not
Applicable **
**
-
(a)
Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
-
-
-
-
(b)
Value of perquisites u/s 17(2) of the Income-tax Act, 1961
-
-
-
-
(c)
Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961
-
-
-
-
2
Stock Option
-
-
-
-
3
Sweat Equity
-
-
-
-
4
Commission
-
-
-
-
-
as % of profit
-
-
-
-
Others, specify.
-
-
-
-
5
Others: (PF, DCS, House Perks tax etc)
-
-
-
-
Total
-
-
-
-
Type
Section
of the Companies
Act
Brief Description
Details of Penalty /
Punishment/ Compound-
ing fees imposed
Authority [RD / NCLT/
COURT]
Appeal made,
if any (give Details)
A.
COMPANY
Penalty
-
-
-
-
-
Punishment
-
-
-
-
-
Compounding
-
-
-
-
-
B.
DIRECTORS
Penalty
-
-
-
-
-
Punishment
-
-
-
-
-
Compounding
-
-
-
-
-
C.
OTHER OFFICERS IN DEFAULT
Penalty
-
-
-
-
-
Punishment
-
-
-
-
-
Compounding
-
-
-
-
-
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
AICL
25
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENT OF AIR INDIA CHARTERS LIMITED
STFOR THE YEAR ENDED 31 MARCH 2015
The preparation of financial statement of Air India Charters Limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act is responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with Standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 20 November 2015.
I, on the behalf of the Comptroller and Auditor General of India (CAG), have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of Air India Charters Limited for the year ended 31 March 2015. This supplementary audit has been, carried out independently without access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ Report.
For and on the behalf ofThe Comptroller & Auditor General of India
Sd/-Parama Sen
Principal Director of Commercial Audit& ex-officio Member, Audit Board-II, Mumbai
Place : Mumbai
Date : 04 January 2016
AICL
26
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AIR INDIA CHARTERS LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of “Air India Charters Limited” (“the Company”), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss for the period then ended, cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these Standalone Financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified opinion.
1. BASIS OF QUALIFIED OPINION
I. As stated in Note No.(1)(C)(1), the Company, since FY 2009-10, follows policy of capitalizing the exchange difference on foreign currency long term borrowings, relating to acquisition of depreciable assets and the same are depreciated over the remaining useful life of respective asset, including the year, in which such exchange difference arises. Hence, such exchange difference of Rs. 791.34 million, in respect of financial year
AICL
27
2014-15 has been capitalized as at the beginning of the year instead of end of the year. As a result, in current year, depreciation has been provided for the whole year on such amount. This accounting policy is not in compliance with “AS 11 - The Effects of Changes in Foreign Exchange Rates” read with “AS-6 Depreciation Accounting” and Notification
stNo. G.S.R. 225(E) dated 31 March 2009 issued by Ministry of Corporate Affairs. As such, depreciation for the year, losses for the year and accumulated depreciation are overstated by Rs. 53.80 million.
ii. Note No. 33, and in other cases wherever the Company has undertaken transactions with holding company, the existence of arm's length relationship in such transactions has not been determined. Precise impact on financial statements cannot be ascertained and we are unable to form an opinion on the same.
iii. We invite attention to Note No. (1)(C)(3) read with Note No.31 regarding balances of Inventories which are maintained & controlled by Parent Company and report as under:
a. With reference to Note No. 31 (a) to (m), the Company does not have any control over the recording & reporting on the Inventory Accounting System.
b. The Management has not conducted the physical verification of Inventories during as well as at the year end.
c. As regards Inventory lying with third parties, Management has neither conducted any physical verification nor obtained confirmations for the balances as at the year end.
d. In absence of adequate data, the Management has not made any provision relating to balances lying in intermediary account for current financial year. We are unable to comment on the adequacy and completeness or otherwise, of these provisions on account of above mentioned observations.
e. The cumulative impact of points (a) to (d) above, on the financial statements cannot be ascertained and we are unable to form an opinion on the same.
iv. As stated in Note No. (5), for non-reinstatement of most of the foreign currency liabilities, at the year-end using FEDAI rate, as per the provisions of the Accounting Standard-11 “The Effect of Changes in Foreign Exchange Rates” issued by Institute of Chartered Accountants of India. This is due to non- availability of payable amount in foreign currency, Therefore, we are also unable to determine quantum and its impact on
stunderstatement of the loss for the period ended 31 March, 2015.
v. As stated in Note No. (25)(b)(ii),The Company has provided excess Gratuity Liability of Rs.61.32 million and excess provision for Leave Encashment of Rs.17.44 million against the required provision based on the actuarial valuation as on 31st March 2015 which is required to be determined and provided for as per Accounting standard 15 ”Employee Benefits” issued by Institute of Chartered Accountants of India.
vi. We further report that in view of the observations as per paragraph (i) to (v) above, cumulative impact to the extent quantifiable is as follows,
a. Depreciation for the year and Accumulated Depreciation is overstated by Rs.53.80 million,
b. Gratuity and Leave Encashment liability is overstated by Rs.78.76 million,
AICL
28
c. Losses for the year & Accumulated Losses are overstated by Rs.132.56 million.
d. The Earnings per share as computed in Note No. 49 is subject to observations contained herein.
2. QUALIFIED OPINION
Subject to the “Basis for Qualified Opinion” paragraph above and unascertainable impact thereof, in our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -
st i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2015;
ii. In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
3. EMPHASIS OF MATTER
We also invite attention to the following –
i. Note no. 36, 38, and 47 regarding confirmations and reconciliation including matching of debits/credits in various balances in other assets / liabilities accounts at certain locations and pending reconciliation of account payables & account receivables, balances of PSU Oil Companies and intermediary accounts. The precise financial impact of the same on the accounts / financial statements is not ascertainable. We are unable to comment on the impact of adjustments arising out of reconciliation/confirmation of such balances, on the Financial Statements.
ii. Note No. 55, regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. The appropriateness of the said basis is, inter alia, dependent on the Company's ability to improve operational and financial performance.
iii. Note No. 23(a) which describes the uncertainty related to the non-provision of interest and penalty, if any, payable towards outstanding dues for service tax, tax deduction at source.
iv. Necessary certificate as prescribed under SA 402 issued by the Institute of Chartered Accountants of India (ICAI) in respect of Inventory Accounting System being handled by parent company were not made available for Audit Purposes.
v. Note No. 52 regarding non-disclosure of information as prescribed in clauses (a) to (e) except (d) (which is not applicable to the Company) of Note 5 (viii) of Part II of Schedule III of the Companies Act, 2013.
Our opinion is not qualified in respect of these matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor's Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-Section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
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29
As required by Section 143(3) of the Act, we further report that:
a) we have sought and obtained, to the extent provided by the Management, all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except as indicated in the matters described in the Basis for Qualified Opinion paragraph;
b) except as indicated in the matters described in the Basis for Qualified Opinion paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper information / returns adequate for the purposes of our audit have been received from Business Areas / Stations / Locations;
c) the Balance Sheet, Statement of Profit and Loss dealt with by this Report are in agreement with the books of account and with the returns received from Business Areas / Stations which were not visited by us.
d) in our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except as mentioned in the Basis of Qualified Opinion paragraph above.
e) The Company being a Government Company as defined in section 2(45) of the Companies Act,2013 is exempted from the applicability of the provision of the section 164 (2) of the said Act, vide Circular No.
thG.S.R. dated 5 June 2015 issued by the Ministry of Corporate Affairs;
f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:
i. The Company does not have any pending litigations which would impact its financial position except as disclosed in the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise;
iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.
OTHER MATTERS
The Company has not filed its report on Domestic Transfer Pricing regulations under the Income Tax Act, 1961 for the Assessment Year 2014-15.
For Kirtane & Pandit LLPChartered Accountants
FRN: 105215W/W100057
Sd/-Suhrud G. Lele
PartnerMembership No.: 121162
Place: New Delhith
Date: 20 Nov 2015
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ANNEXURE TO INDEPENDENT AUDITOR’S REPORT
Annexure referred to in paragraph 9 of the Independent Auditor's Report to the members of Air India st
Charters Limited for the year ended 31 March, 2015
As required by the Companies (Auditor's Report) Order, 2015 and amendments thereto and according to the information and explanations given to us during the course of the audit and on the basis of such checks of the books and records as were considered appropriate we report that:
I. In respect of the fixed assets,
a. The records relating to fixed assets including rotables maintained by the Company are inadequate with reference to locations of the assets thereof. The Company has not yet updated fair value of assets in the Fixed Assets register at certain locations and it is informed by the Management that the same is in process. Further, the reconciliation of Fixed Assets Register for aircraft rotables and other fixed assets with financial records is stated to be in progress.
b. The Company has a program of Physical verification of fixed assets on rotational basis so that every asset is verified once every two years which in our opinion is adequate. It is observed that during the current financial year which belongs to biennial period 2014-16, physical verification of fixed assets has not been conducted. Material discrepancies, if any, may have remained undetected & unadjusted. We are unable to comment upon the precise financial impact of the same.
II. In respect of inventories,
a. The Company has a program of physical verification of inventory on rotational basis so that complete inventory is verified once every two years. However, it is observed that physical verification of inventory for the previous biennial period 2012-14, is still in process.
b. The procedures designed by the management of the Company, in our opinion, are adequate considering the size of the Company and nature of its business however as mentioned in clause (a) the same are not being followed effectively.
c. As informed to us, the Inventory and its records are being managed and controlled by the Holding Company (Air India Ltd.) and are certified by them as adequate. In light of qualified opinion mentioned in Paragraph 6 (iii) in the Auditor's Report, we are unable to comment upon adequacy or otherwise of such records. It is observed that physical verification of inventory for the previous biennial period 2012-14, is still in process. Further, as stated in Note No. 31(g), accounting entries for the discrepancies identified by Internal Auditors of the holding company will be carried out in due course by the Management. Pending completion of physical verification process, material discrepancies, if any, may have remained undetected & unadjusted.
III. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
IV. In our opinion and according to the information and explanations given to us, the Internal Control procedures, commensurate with the size of the Company and the nature of its business, needs to be prescribed, followed and strengthened in respect of the fixed assets.
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As regards to Inventory, in view of the fact that procurement, consumption, physical custody is totally controlled by the Holding Company. Further, the Company has not obtained the necessary certificate as prescribed under SA 402 of the Institute of Chartered Accountants of India (ICAI) in respect of Inventory Accounting System. Hence we are unable to comment on the adequacy of Internal Control system of the same.
The management needs to take a corrective action on continuing weaknesses in Internal Control system. The financial statements are subject to Clause 6 & 8 of the Auditor's Report which gives details of qualified opinion in respect of Inventory, Fixed Assets.
V. The Company has not accepted any deposits from the public within the meaning of the sections 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules framed there or under any directives report issued by the Reserve Bank of India. Therefore the provision of the Clause (V) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 is not applicable to the Company.
VI. The Central Government has not prescribed for maintenance of cost records under section 148 (1) of the Companies Act, 2013 for the Company. Therefore the provision of the Clause (VI) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 is not applicable to the Company.
VII. In respect of the statutory dues:
a. According to the records of the Company, the undisputed statutory dues have been regularly deposited with the appropriate authorities except for the following:
i. Regarding TDS - In absence of proper linkage between deductions and deposits of Income tax deducted at source and reconciliations of balances outstanding and due to recording expenses on payment basis in the books, year-end recording of expenses in books, we are not in a position to offer any comments, including delay if any.
ii. Regarding non reversal of service tax input credit under Rule 6 (3) of Cenvat Credit Rules, 2004 – Company is not maintaining separate books of accounts for exempted and taxable services respectively. As such, Rule 6 (3) of Cenvat Credit Rules, 2004 requires the Company to pay an amount equal to 6% of value of exempted service reverse or shall pay an amount equivalent to the CENVAT credit attributable to input services used in, or in relation to provision of exempted services subject to the conditions and procedure specified in sub-rule (3A). In absence of adequate details, adequacy or otherwise of such reversal cannot be ascertained and we are unable to form an opinion on the same.
iii. In respect of the statutory dues, if any, at foreign stations, since the records are kept at respective stations and which were not available for verification during the audit, we are unable to comment whether the dues are timely deposited.
iv. As informed to us and based on explanations received, the Company has deducted Profession Tax in respect of few locations but the same has not been deposited to the concerned authorities. Unpaid amount of Profession Tax as on
st31 March 2015 is Rs.1.39 million.
v. According to the information and explanations given to us, no undisputed amounts payable in respect of above except for Profession Tax, as mentioned n
stclause (v) above, which were in arrears, as at 31 March, 2015 for a period of more than six months from the date on which they became payable.
b. According to the records of the Company and information and explanation given to us there are no dues outstanding in respect of Income Tax, Wealth Tax, Service Tax, Cess or other statutory dues on account of any dispute except as mentioned below:
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Sr. Name of Statute Amount (Rs. In millions) Nature and form where No. dispute is pending 1 Tax deducted at Source as 322.44 Commissioner of Income Tax per Income tax for Assessment (Appeals) Year 2007-08 to 2014-15
2 Tax deducted as Source as 29.10 Income Tax department per Income tax for Assessment Year 2009-10 and Assessment Year 2010-11
3 Service Tax for Financial Year 523.50 Directorate General of Central 2005-06 to 2014-15 Excise Intelligence
4 Customs Duty for various 17.18 Customs & Excise Dept. transactions
Total 892.22
c. According to the information and explanation given to us, the Company is not covered by the provisions of laws relating to Investor Education and Protection Fund and Employees State Insurance.
VIII. The accumulated losses (inclusive of deferred tax liability) of the Company, as at the end of the financial year exceed fifty percent of its net worth. Subject to our qualified opinion, there is cash profit during the financial year covered by our audit however there were cash losses during immediately preceding financial year. As per representations given by the Management, there is no adverse impact on going concern assumption.
IX. In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of its dues to banks and financial institutions.
X. In our opinion and according to the information and explanations given to us, The Company has not given any guarantee for loan taken by others from banks and financial institutions. Accordingly, the provision of clause 3(X) of the Companies (Auditor's Report) Order, 2015 are not applicable to the Company.
XI. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.
XII. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have not come across any instances of material frauds on or by the Company, noticed or reported during the year nor we have been informed of such cases by the management.
For Kirtane & Pandit LLPChartered Accountants,
FRN:-105215W / W100057
Sd/-(Suhrud G. Lele)
Partner Membership No: - 121162
Place: New Delhith
Date: 20 Nov 2015
AICL
33
Management comments to the Auditors’ Report of the Statutory Auditors for the Financial Year 2014-15
Sr.No. Audit Observation
Management Comments
1.
2.
3.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of “Air India Charters Limited” (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss for the period then ended, cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements
The Management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility
Our responsibility is to express an opinion on these Standalone Financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are
required to be included in the audit report
This is a statement of fact.
This is a statement of fact.
This is a statement of fact.
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Sr.No. Audit Observation
Management Comments
4.
5.
6.
under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for qualified opinion.
Basis of Qualified Opinion i.
As stated in Note No.(1)(C)(1), the Company, since FY 2009-10, follows policy of capitalizing the exchange difference on foreign currency long term borrowings, relating to acquisition of depreciable assets and the same are depreciated over
the
remaining useful life of respective asset, including the year, in which such exchange difference arises. Hence, such exchange difference of Rs. 791.34 million, in respect of financial year 2014-15 has been capitalized as at the beginning of the year instead of end of
This is a statement of fact.
This is a statement of fact.
The accounting of Depreciation on the exchange impact capitalised during the year since FY 2009-10 was done in accordance with the Accounting policy of the Company which is in line with the consistent
practice and Accounting
policy of the Holding Company - Air
India Ltd.
However, in view of the Audit observation, this aspect would be
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Sr.No. Audit Observation
Management Comments
the year. As a result, in current year, depreciation has been provided for the whole year on such amount. This accounting policy is not in compliance with “AS 11 - The Effects of Changes in Foreign Exchange Rates” read with “AS-6 Depreciation Accounting” and Notification No. G.S.R. 225(E) dated 31st
March 2009 issued by Ministry of Corporate Affairs. As such, depreciation for the year, losses for the year and accumulated depreciation are overstated by Rs. 53.80 million.
ii. Note No. 33, and in other cases wherever the Company has undertaken transactions with holding company, the existence of arm’s length relationship in such transactions has not been determined. Precise impact on financial statements cannot be ascertained and we are unable to form an opinion on the same.
iii. We invite attention to Note No. (1)(C)(3) read with Note No.31 regarding balances of Inventories which are maintained & controlled by Parent Company and report as under: a. With reference to Note No. 31 (a) to (m),
the Company does not have any control over the recording & reporting on the Inventory Accounting System.
b. The Management has not conducted the physical verification of Inventories during as well as at the year end.
c. As regards Inventory lying with third parties, Management has neither conducted any physical verification nor obtained confirmations for the balances as at the year end.
referred to Holding Company for compliance of AS-11 and AS-6.
The Company has already established the process of identifying the areas where Arm’s length relationship with the holding company as well as associate companies are required to be maintained as per statute. For instance agreements have been entered into with AIATSL , for Ground handling and AIESL for Engineering. However further refinements to these agreements will be carried out based on the nature of transactions with the Companies. The required control relating to accounting, recording and reporting on the Inventory accounting system are managed by holding company through RAMCO and the information generated from the system. The RAMCO system maintains the inventory of the holding company as well as subsidiary companies. Since the type of fleet maintained by AICL is different from the parent company many of the aircraft spares and rotables are distinguishable and separately identified for usage. The RAMCO system is being upgraded to 5.7 / 5.8 system in which it is possible to maintain inventory in different operating units for the purpose of recording, storage and consumption. The company proposes to engage a professional firm for undertaking the physical verification process during the current period.
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Sr.No. Audit Observation
Management Comments
d. In absence of adequate data, the Management has not made any provision relating to balances lying in intermediary account for current financial year. We are unable to comment on the adequacy and completeness or otherwise, of these provisions on account of above mentioned observations.
e. The cumulative impact of points (a) to (d) above, on the financial statements cannot be ascertained and we are unable to form an opinion on the same.
iv. As stated in Note No. (5), for
non-reinstatement of most of the foreign currency liabilities, at the year-end using FEDAI rate, as per the provisions of the Accounting Standard-11 “The Effect of Changes in Foreign Exchange Rates” issued by Institute of Chartered Accountants of India. This is due to non- availability of payable amount in foreign currency, Therefore, we are also unable to determine quantum and its impact on understatement of the loss for the period ended 31st March, 2015.
v. As stated in Note No. (25)(b)(ii),The
Company has provided excess Gratuity Liability of Rs.61.32 million and excess provision for Leave Encashment of Rs.17.44 million against the required provision based on the actuarial valuation as on 31st March 2015 which is required to be determined and provided for as per Accounting standard 15 ”Employee Benefits” issued by Institute of Chartered Accountants of India.
Inventory lying with third parties are continuously followed up for repair/return.
All open work orders are frequently reviewed and closed as and when completed As per the practice, an amount of Rs.241.67 Million has been provided in respect of Expendables (@ 50 %) which were issued on work orders and remained open as at year end. Further, the company is of the view that the provision made in the books is adequate.
Foreign Currency GL balances which consist of Vendors, Debtors, Loans and Bank Balances were
