INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF AIRJET GROUND SERVICES LIMITED Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of Airjet Ground Services Limited ( the Company ), which comprises the Balance Sheet as at 31 st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Standalone Financial Statements The Company s Board of s is responsible for the matters stated in Section 134(5) of the Companies Act, 2013( the Act ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these 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 thereunder. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company s s, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at 31 st March, 2017; and its loss and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s Report) Order, 2016 ( the Order ), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. 2. As required by Section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) 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. c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account. d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) On the basis of the written representations received from the directors as on 31 st March, 2017 taken on record by the Board of s, none of the directors is disqualified as on 31 st March, 2017, from being appointed as a director in terms of section 164(2) of the Act. f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B ; and g) With respect to the other matters to be included in the Auditor s Report in accordance with Rules 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company does not have any pending litigations which would impact the financial position. ii. iii. iv. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. The disclosure related to Specified Bank Notes as defined in the Notification S.O. 3407(E) dated 8 th November, 2016 of the Ministry of Finance, during the period from 8 November, 2016 to 30 December, 2016, is not applicable to the Company as the Company is incorporated on 10 th March, 2017.( Refer Note 13 to the financial statements)
For Chaturvedi & Shah Chartered Accountants Firm Registration no. 101720W Parag D. Mehta Partner Membership No.: 113904 Mumbai Date: 30 th May, 2017
Annexure A to the Independent Auditors Report (Referred to in paragraph 1, under Report on Other Legal and Regulatory Requirements section of our Report of even date) (i) (ii) (iii) (iv) (v) (vi) (vii) The Company does not hold any fixed assets. Accordingly, paragraph 3(i) of the order is not applicable to the Company. The Company does not hold any inventory. Accordingly, paragraph 3(ii) of the order is not applicable to the Company. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to any companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Consequently, the provisions of clause (iii) (a) to clause (iii) (c) of paragraph 3 of the Order are not applicable to the Company. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees or securities granted in respect of which provisions of Section 185 and 186 of the Act are applicable to the Company. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits as per the directions issued by the Reserve Bank of India from the public in accordance with relevant provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company. As informed to us by the management, the Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services/activities rendered by the Company. According to the information and explanations given to us, in respect of Statutory dues: a) Undisputed statutory dues including Income Tax, cess and any other material statutory dues, as applicable, have generally been regularly deposited with appropriate authorities. As explained to us, the Company did not have any dues on account of Service Tax, Provident Fund, Sales Tax, Value Added Tax, Employee State Insurance, Profession Tax, Duty of Custom and Duty of Excise. b) There were no undisputed statutory dues, including Income Tax, cess and any other material statutory dues, in arrears as at 31 st March, 2017 for a period of more than six months from the date they became payable. c) There are no material dues of Income Tax which have not been deposited on account of any dispute. (viii) (ix) (x) In our opinion and according to the information and explanations given to us, the Company has no dues payable to banks, financial institution, government and the Company did not have any outstanding debentures during the year. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term Loan and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practice in India and according to the
information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit, nor have been informed of any such case by the management. (xi) According to the information and explanations given to us, the Company has not paid / provided managerial remuneration. Accordingly, paragraph 3(xi) of the Order is not applicable to the Company. (xii) (xiii) (xiv) (xv) (xvi) According to the information and explanations given to us, the Company is not a nidhi company as prescribed under section 406 of the Act. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company. According to the information and explanations given to us the Company s transactions with its related party are in compliance with Sections 177 and 188 of the Companies Act, 2013, wherever applicable, and details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company. According to information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company. For Chaturvedi & Shah Chartered Accountants Firm Registration no. 101720W Parag D. Mehta Partner Membership No.: 113904 Mumbai Date: 30 th May, 2017
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF AIRJET GROUND SERVICES LIMITED (Referred to in paragraph 2 (f) under Report on Other Legal and Regulatory Requirements of our report of even date) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the Internal Financial Control over financial reporting of Airjet Ground Services Limited ( the company ) as of 31 st March, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year then ended. Management Responsibility for the Internal Financial Controls The Company s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note ) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor s Responsibility Our responsibility is to express an opinion on the Company s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, maintained an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 st March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal financial controls over Financial Reporting issued by the ICAI. For Chaturvedi & Shah Chartered Accountants Firm Registration no. 101720W Parag D. Mehta Partner Membership No.: 113904 Mumbai Date: 30 th May, 2017
Balance Sheet as at 31 st March, 2017 Note No. As at 31 st March, 2017 EQUITY AND LIABILITIES Shareholders' Funds Share Capital 2 5,000,000 Reserves and Surplus 3 (313,946) 4,686,054 Non-Current Liabilities Long-term borrowings 4 249,446 Current Liabilities Trade Payables 5 64,500 ASSETS TOTAL 5,000,000 Current Assets Cash and Cash equivalents 6 5,000,000 TOTAL 5,000,000 Significant accounting policies 1 The accompanying notes are an integral part of 2-13 the Financial Statements As per our attached report of even date For CHATURVEDI & SHAH On behalf of Board of s Chartered Accountants (Firm s Registration No 101720W ) N Ravichandran DIN:01676139 Ashokkumar Barimar DIN:06967048 M Shivkumar DIN:01673809 Parag D. Mehta Partner (Membership no- 113904) Date: 30 th May, 2017 Place: Mumbai 1
Statement of Profit and Loss for the Period ended 31st March, 2017 Income Total Revenue Note No. For the Period Ended 31 st March, 2017 Expenses Other Expenses 7 313,946 Total Expenses 313,946 Profit/(Loss) before Tax (313,946) Tax Expense - Current Tax - Profit/(Loss) for the period (313,946) Earnings per Equity Share: (Face value ` 10 Per Share) Basic and Diluted (in ` ) 8 (0.63) Significant accounting policies 1 The accompanying notes are an integral part of 2-13 the Financial Statements As per our attached report of even date For CHATURVEDI & SHAH On behalf of Board of s Chartered Accountants (Firm s Registration No 101720W ) N Ravichandran DIN: 01676139 Ashokumar Barimar DIN: 06967048 Parag D. Mehta Partner (Membership no- 113904) Date: 30 th May, 2017 Place: Mumbai M Shivkumar DIN: 01673809 2
Cash Flow Statement for the Period ended 31st March, 2017 For the Period Ended 31 st March,2017 Cash Flow from Operating Activities : Net Profit/(loss) Before Tax (313,946) Adjustment for: Depreciation / Amortisation - Operating (Loss) before Working Capital Changes (313,946) Changes in Trade payables 64,500 (249,446) Cash Generated from Operations - Direct Taxes (Paid) / Refund Received (249,446) Net Cash Flow from / (used in) operating activities Cash Flow from Investing Activities - Net Cash Flow from / (used in) Investing Activities - Cash Flow from Financing Activities Proceeds from Long Term Borrowing 249,446 Proceeds from Issue of Share Capital 5,000,000 Net Cash Flow from / (used in) Financing Activities 5,249,446 Net Increase in Cash & Cash Equivalents 5,000,000 Cash and Cash Equivalents as at Beginning of the period - Cash and Cash Equivalents as at End of the period 5,000,000 Note: The Company was incorporated 10 th March, 2017. This being the first accounting period of the company, figures of the previous year are not applicable. As per our attached report of even date For CHATURVEDI & SHAH Chartered Accountants (Firm s Registration No 101720W ) On behalf of Board of s Parag D. Mehta N Ravichandran Ashokkumar Barimar Partner (Membership no- 113904) DIN:01676139 DIN:06967048 Date: 30 th May, 2017 Place: Mumbai M Shivkumar DIN:01673809 3
Notes to the Financial Statements for the Period ended 31st March, 2017 1. Significant Accounting Policies A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS : The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and complies with Accounting Standards specified under section 133 of the Companies Act, 2013 ( the Act ) read with rule 7 of the Companies (Accountants) Rules 2014, read with Companies (Accounting Standards) Amendment Rules, 2016 applicable with effect from 1 April 2016 and other generally accepted accounting principles (GAAP) in India, to the extent notified and applicable. The financial statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the nearest rupees in lakhs. All assets and liabilities have been classified as current or non-current as per the Company s normal operating cycle and other criteria set out in schedule III to the Act. Based on the nature of the services and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or noncurrent classification of assets and liabilities. B. USE OF ESTIMATES : The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized. C. REVENUE RECOGNITION : Revenue is recognized on accrual basis. D. TAXES : Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing differences between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable / virtual certainty, as the case may be, that the asset will be realized in future. E. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS : Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. F. BORROWING COSTS : Borrowing costs attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred G. PRELIMINARY EXPENSES: Preliminary expenses are written off in the period in which it incurred. 4
2. Share Capital Authorised 1,000,000 Equity Shares of ` 10/- each (Previous Year NIL) As at 31 st March, 2017 10,000,000 10,000,000 Issued, subscribed and Fully Paid up: 500,000 Equity Shares: Face value of ` 10/- each 5,000,000 (Previous Year NIL) TOTAL 5,000,000 a. Reconciliation of Number of Shares Number of shares Issued, Subscribed and Fully Paid up: Equity Shares: Face value of ` 10/- each Outstanding as at the beginning of the period / year Add : Issued during the period / year 500,000 5,000,000 Outstanding as at the end of the period / year 500,000 5,000,000 b. Shareholders holding more than 5% of equity share capital Name of the Shareholder Equity Shares Jet Airways (India) Limited (Holding Company) and its nominee As at 31 st March, 2017 Number of shares Percentage of holding 500,000 100.00% Terms and Rights attached to Equity Shares The Company has equity shares having a par value of ` 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends if any, in Indian rupees. The dividend proposed, if any, by the Board of s is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amount. 3. Reserves and Surplus As at 31 st March, 2017 Deficit in Statement of Profit and Loss Balance as per Last Balance Sheet - Profit / (Loss) for the period / year (313,946) Deficit at the end of the period / year (313,946) 5
4. Long Term Borrowings As at 31 st March, 2017 Loans and advances from Holding Company 249,446 249,446 5. Trade Payables As at 31 st March, 2017 Trade payables Total outstanding dues to Micro, Small and Medium Enterprises - Others for Goods and Services 64,500 TOTAL 64,500 6. Cash and Cash Equivalents As at 31 st March, 2017 Balances with Banks In Current Accounts 5,000,000 TOTAL 5,000,000 7. Other Expenses For the Period ended 31 st March, 2017 Preliminary Expenses Written-off 256,446 Audit Fees 57,500 TOTAL 313,946 8. Earnings Per Share (EPS) The earnings per equity share, computed as per the requirements of Accounting Standard 20 Earnings Per Share issued by the Institute of Chartered Accountants of India, is as under: For the Period ended 31 st March, 2017 Profit/(Loss) after tax (313,946) Amount available for Equity Share holders A (313,946) Weighted Average No. of Equity Shares outstanding during the period B 500,000 Nominal Value of Equity Shares (`) 10 Basic and Diluted EPS (`) (A/B) (0.63) 6
9. Related Party Transactions As per Accounting Standard - 18 on Related Party Disclosures, the disclosure of transactions with the related party as defined in the Accounting Standard are given below: i. List of Related Parties with whom transactions have taken place and Relationships Sr. No. Name of the related party Nature of relationship 1.. Jet Airways (India) Limited Holding Company ii. List of Related Parties with whom no transactions have taken place and Relationships Sr. No. Name of the related party Nature of relationship 1.. Naresh Goyal Controlling Shareholders of Holding Company 2. Jet Lite India Limited Fellow Subsidiary 3. Jet Privilege Private Limited Enterprise over which Holding Company having significant Influence 4. Etihad Airways PJSC (w.e.f.20 th November, 2013) Enterprise which exercises Significant Influence iii. Transactions during the period ended 31st March, 2017 and balances with related parties Holding company Jet Airways (India) Limited 2016-17 Transactions during the period/year : - Loans and advances received 249,446 - Investments in Equity 5,000,000 Closing Balance - Interest accrued but not due - - Loans and advances 249,446 10. Segment Reporting: The Company operates in single business segment of providing Ground Handling services. It also operates in a single geographical segment viz. India since all its customers and assets are located in India. 11. As a matter of prudence, deferred tax asset on account of preliminary expenses has not been recognized. 12. The Company was incorporated 10 th March, 2017. The Statement of profit and loss accordingly covers the period from 10 th March, 2017 to 31 st March, 2017. This being the first accounting period of the company, figures of the previous year are not applicable. 13. Since, the Company was incorporated 10 th March, 2017. The requirement of disclosing the Details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30 th December,2016 is not applicable to the company. As per our attached report of even date For CHATURVEDI & SHAH On behalf of Board of s Chartered Accountants (Firm s Registration No 101720W ) Parag D. Mehta Partner (Membership no- 113904 ) Date : 30 th May, 2017 Place: Mumbai N Ravichandran DIN:01676139 Ashokkumar Barimar DIN:06967048 7
M Shivkumar DIN:01673809 8