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Directors Report of Spicejet Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 31st Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2015.

1. FINANCIAL RESULTS AND STATE OF AFFAIRS

(Amount in Rs. Millions)

Particulars March 31, 2015 March 31, 2014

Total Revenue 53,818.30 63,985.93

Expenses

Operating Expenses 48,057.59 60,081.98

Employee Benefit Expenses 5,374.66 5,756.95

Selling Expenses 2,793.61 3,521.47

Other Expenses 2,371.65 2,193.82

Earnings before interest, tax, depreciation and amortization (4,779.21) (7,568.29)

Depreciation and amortization expense 1,266.25 1,482.60

Interest income on bank deposits 196.76 384.60

Finance costs 1,635.39 1,366.15

Profit/ (Loss) before taxation and extraordinary items (7,484.09) (10,032.44)

Tax Expenses - -

Extraordinary items 613.55 0 Profit/ (Loss) after taxation (6,870.54) (10,032.44)

Profit/ (Loss) brought Forward (25,213.08) (15,180.64)

Depreciation expense adjusted against reserve 24.40 0.00

Profit/ (Loss) for the year (6,870.54) (10,032.44)

Amount transferred to Balance Sheet (32,108.02) (25,213.08)

The Company has been in active operations since 2005 with a consistent safety record and as on September 2014 it had grown to become the second largest airline in the country in terms of domestic market share. The Company completed its tenth year of operations on May 23, 2015. The Company as on March 31, 2015 maintained its fleet size to 32 aircraft covering 42 destinations and operating 280 flights per day.

During the year ended March 2015, the Company carried 11.71 million passengers with an average load factor of 81% and a market share of 9.70% for the month of March 2015.

The innovative steps taken by the Company which include, among others, stimulating the market, have not only helped the airline reduce losses year-on-year, it has also helped the Indian aviation market grow much in excess of GDP growth last year, with positive impact for the entire travel industry and surrounding ecosystem, and for the economy as a whole. It is imperative to mention that the Company has been able to achieve 10-11% growth on unit revenues while at the same time reducing the unit cost by 8-9%. Despite the improving operational performance in the Financial Year 2014-15, legacy liabilities that could no longer be deferred coupled with extensive delays in expected funding and a hostile business environment during last fiscal faced by the airline industry, created immense cash flow pressure on the Company. Multiple reasons led to the financial distress of the Company leading to near closure situation in December 2014. This was mainly on account of non-receipt of the expected funding into the Company during the start of Financial Year 2014-15 due to reasons beyond the control of the Company. This consequently resulted in deference of tax liabilities payment (accumulated from the previous financial year), non-payment to key service providers, aircraft lassoers and banks. The operating cash flow position in the Financial Year 2014-15 was further distressed due to reduction of available fleet forced upon the Company reducing its ability to generate cash as it had to club its open bookings.

Due to the reasons set out above, the Company suffered deterioration in its financial affairs. While the Company explored various options for funding, investors continued to stay away from the Company.

Consequently, the lack of strategic and other funding led to cash flow pressure and the Company defaulted in the payment obligations to tax authorities, its employees, airport operators, suppliers and other creditors including aircraft lessors.

Such defaults and other circumstances, led to the return of multiple aircraft to lessors thereby causing high number of flight cancellations. The total number of daily flights reduced from 340 during July 2014 to 230 during December 2014 on an average, leading to reduction of revenues. Such cancellations not only resulted in loss of revenue but also in certain circumstances required us to refund amounts.

In light of all of the above and cancellations of flights, in early December 2014, the Directorate General of Civil Aviation ("DGCA"), being the Competent Authority under the provisions of the Aircraft Act, 1937, initiated regulatory actions and imposed restrictions on forward bookings, cancelled slots and announced increased safety surveillance against the Company. The regulatory actions initiated by DGCA led to immediate decline of about 90% of cash inflows creating uncertainty amongst its business partners. This also resulted in operational and fuelling crisis and the Company appealed to DGCA/Ministry of Civil Aviation ("MOCA") for relief.

While, some temporary relief was received from MOCA for continuing the operation for some time, the cash-inflow continued to remain below the normal levels and the impact of the regulatory actions severely affected the cash flow position while the pressure from the creditors continued to mount.

The cumulative effect of the above financial and operational distress resulted in the Company being forced to suspend its operations partially during mid-December 2014.

2. MATERIAL DEVELOPMENTS: REVIVAL AND RECONSTRUCTION OF THE COMPANY

As it can be noted from the facts leading up to the financial distress of the Company, the re-construction and revival of the Company assumed significant importance not only from a commercial and viability perspective but predominantly from a public interest perspective. Given the public interest, employee interest, public and private dues outstanding and to protect the airline and tourism industry, the board of the Company in its meeting held on January 29, 2015 approved the assistance of one of the shareholders and an erstwhile director of the Company, Mr. Ajay Singh (who has held shares in the Company since 2005), to take over the control and management of the Company from Mr. Kalanithi Maran and Kal Airways Private Limited (the "Previous Promoters") and implement a re-construction and revival plan in order to restore the Company's operations and its previous market position. Mr. Ajay Singh is a first generation entrepreneur and has extensive experience in the information technology and airline operations having successfully contributed to the launch of the Company during the year 2005.

Some of the key indicators which warranted the revival of the Company are as follows:

a) The Company had has over 139,000 shareholders whose value in the equity shares of the Company would have completed eroded;

b) Disruption of over 30,000 passengers every day in addition to 1.7 million passengers who had already made future bookings; thereby causing chaos and unjustly enriching the competitors due to inflated air fares;

c) Livelihood of over 10,000 families associated directly or indirectly with the Company was at stake;

d) Various agencies and stakeholders like trade players, banks, employees, statutory authorities would have incurred substantial losses.

e) Revival of the Company was important for a balanced market competition and to counter the growing risk of dominance by any single player. The Company was the second largest carrier until September 2014, which provides a strong counter balance to the market leader. There was an alarming rise in the air-fares while the Company was forced to suspend its operations partially in mid-December 2014;

f) Failure of the Company to revive from the existing financial distress will vitiate the investment climate in the aviation sector and create a negative perception of the Indian economy;

g) There would be a negative impact on the connectivity to various smaller airports in India, which are serviced by the Company's Bombardier Q400 regional aircraft;

h) Growth and well-being of a larger travel ecosystem i.e. hotels, tourist operators, cab agencies, airports etc which benefitted from the market stimulation brought about by the Company would also be affected;

The Company presented the "Scheme of Reconstruction and Revival for Takeover of Ownership, Management and Control of Spice Jet Limited" (the "Scheme") before the MOCA on January 15, 2015 which detailed the reconstruction and revival plan of the Company by the process of change in control and management of the Company from the Previous Promoters to Mr. Ajay Singh. The Scheme also contemplated infusion of fresh funds into the Company in a phased manner with the objective of supporting the turn-around plan and ensuring that the Company regains its pre- eminent positioning in the Indian aviation industry. The Scheme presented by the Company was approved by MOCA on January 22, 2015 acting in its capacity as the Competent Authority.

Pursuant to the order of MOCA approving the Scheme and subsequent order of the Competition Commission of India, the entire shareholding of Previous Promoters constituting 58.46% of the equity share capital of the Company was transferred to Mr. Ajay Singh on February 23, 2015.

Revival Plan and Way Forward

As a long term strategy to keep the Company insulated against similar circumstances in the future, the new management under the Chairmanship of Mr. Ajay Singh has undertaken and implemented various measures in revenue and cost management, customer retention and employee welfare immediately upon assuming control of the Company.

Since the change of ownership, management and control, the Company has entered into settlement agreements and deferred payment plans with certain lessors and vendors in respect of past overdue payments. The Company has also discharged its overdue statutory obligations in the last quarter of the Financial Year 2014-15. The Company continues to negotiate with its vendors for settlements, improved commercial terms and better credit facilities, and is in the process of arranging additional working capital finance, as well as by way of trade financing, to improve its short-term liquidity position.

Under the new management the Company will be focusing on increasing efficiency in the areas of customer experience, selling and distribution, revenue management, fleet rationalization, aircraft utilization, capacity deployment in key focus markets, contracts and other costs, to help the Company establish consistent profitable operations and cash flows. The Company is also exploring options to increase its aircraft fleet over the near short term in order to keep up with the demand growth. These measures along with improvement in the macroeconomic conditions for the airline industry in the markets in which the Company operates (such as the recent reduction in ATF prices, economic buoyancy), consistent improvement in capacity utilization and unit revenues, enhancement in ancillary revenues, reduction in unit cost as well as providing additional value added services to customers, are expected to increase operational efficiency and achieve profitability.

While many initiatives have been implemented under the new management there are more being considered for implementation which has not only has provided the much needed cash in the operations but has taken the Company to three successive quarters of profitability (being March 2015, June 2015 and September 2015).

3. BOARD OF DIRECTORS

a) Pursuant to the Share Sale and Purchase Agreement dated January 29, 2015 between the Company, Mr. Kalanithi Maran, Kal Airways Private Limited and Mr. Ajay Singh, the entire shareholding of erstwhile Promoters (i.e. Mr. Kalanithi Maran and Kal Airways Private Limited) has been transferred to Mr. Ajay Singh and consequently Mr. Kalanithi Maran, Mrs. Kavery Kalanithi and Mr. S. Natrajhen resigned from the Board of the Company with effect from January 29, 2015.

b) The Company has received necessary declaration from each Independent Director under Section 149(6) of the Companies Act, 2013, that he meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

c) Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees.

d) Mr. Ajay Singh and Mrs. Shiwani Singh were appointed as additional directors on the Board of the Company on May 21, 2015 and shall hold office up to the date of ensuing Annual General Meeting. The Company has received notice 160 of the Companies Act, 2013 proposing their candidature and the members are requested to consider the same.

e) Dr. Harsha Vardhana Singh was appointed as additional directors on the Board of the Company on May 21, 2015. Subsequently, Dr. Singh has resigned effective November 17, 2015.

f) Mr. Sasiprabhu was appointed as additional directors on the Board of the Company on December 1, 2015 and shall hold office upto the date of ensuing annual general meeting. The Company has received notice 160 of the Companies Act, 2013 proposing his candidature and the members are requested to consider the same.

g) Mr. M. K. Harinarayanan (Independent Director) and Mr. J. Ravindran (Independent Director) resigned from the directorship of the Company with effect from May 28, 2015 and May 29, 2015 respectively.

h) Mr. Nicholas Martin Paul (Independent Director) and Mr. R. Ravivenkatesh (Independent Director) resigned from the directorship of Company with effect from September 21, 2015.

i) The Company is in the process of inducting additional independent directors to have adequate mix of executive and independent director, subject to security clearance of applicable authority.

j) The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Details of the Remuneration Policy are provided in the Corporate Governance Report.

4. PARTICULARS OF CONTRACTS OR ARRANGEMENT MADE WITH RELATED PARTIES

All related party transactions that were entered into during the financial year under review were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company.

All Related Party Transactions have been placed before the Audit Committee and Board for their approval.

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in prescribed Form AOC-2, is annexed as "Annexure – A" to the Board's Report.

5. STATUTORY AUDITORS

a) The Statutory Auditors, M/s S.R. Batliboi & Associates LLP, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

b) In accordance with Section 134 (3) (f) of the Companies Act, 2013, information and explanations to various comments made by the Auditors in their Report to the Members are mentioned in the Notes to the Accounts, which form part of the Balance Sheet for the year ended March 31, 2015.

6. SECRETARIAL AUDIT

a) Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s. Lakshmmi Subramanian & Associates, Practicing Company Secretary to undertake the Secretarial Audit of the Company for financial year ended on March 31, 2015. The Report of the Secretarial Auditor is annexed as "Annexure – B" to the Board's Report.

b) In accordance with Section 134 (3) (f) of the Companies Act, 2013, response (wherever necessary) to the observations in the Secretarial Audit Report are as under:

(i) The Company had one woman director on its Board since November 15, 2010 who resigned on January 29, 2015. Immediately after her resignation, the Company filed an application with Ministry of Civil Aviation as per Civil Aviation Requirements, for security clearance of Mrs. Shiwani Singh for her appointment as director and appointed her as director on May 21, 2015 after said security clearance (refer Para 1 of the observation of Secretarial Audit Report).

(ii) The Company shall be making offer for issue of CRPS in due course subject to compliance of provisions of Companies Act, 2013 and other applicable rules and regulations (refer Para 3 of the observation of Secretarial Audit Report).

(iii) Subsequent to the end of Financial Year 2014-15, the Company has appointed Mr. Ajay Singh as Managing Director within the prescribed time limit of the Companies Act, 2013 (refer Para 5 of the observation of Secretarial Audit Report).

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not granted any loan, given guarantee or security or made investment under the provisions of Section 186 of the Companies Act, 2013 during the financial year under review.

8. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is annexed as "Annexure – C" to the Board's Report.

9. NUMBER OF MEETINGS OF THE BOARD

The Board met seven times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013.

10. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, in relation to the Audited Financial Statements of the Company for year ended March 31, 2015, the Directors of your Company hereby state that:

a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) 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 and loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the Annual Accounts of the Company on a 'going concern' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretary's Certificate regarding Compliance with the Code of Corporate Governance are made part of the Annual Report.

12. PUBLIC DEPOSITS

The Company has not invited/ accepted any deposits from the public during the financial year ended March 31, 2015.

13. TRANSFER TO RESERVES

The Company has made no transfers to reserves during the Financial Year 2014-15.

14. DISCLOSURES REQUIRED UNDER THE SEBI (EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999

S. No. a) b) c) d) e) f) g) h) i) j) k) l) m) n) Description R emark n Septembe n October 5 n Decembe d on April 1, g the year u ation has bee d under the S Grant 1, Gran 6.25 and Rs Options granted 5,200,000 op 1,804,884 op 5,422,954 op and 100,000 No grants we tions granted o tions granted o tions granted o options grante re made durin method for valu f option grante his method for Rs.24.85, Rs.4 r 11, 2007 ('Grant 1'), , 2009 ('Grant 2'), r 23, 2009 ('Grant 3'); 2010 ('Grant 4') nder review.

Pricing formula Intrinsic value the fair value o option as per t 4 is Rs.32.50, n used for determining cheme. The value per t 2, Grant 3 and Grant .27.90 respectively.

Options vested 1,276,050 Options exercised during the year Nil Total number of shares arising as a result of exercise of options Nil Total Options lapsed during the financial year. 320,975 Variations of terms of options Nil Money realized by exercise of options Not applicable Total number of options in force 955,075 Employee wise details of options granted to: senior management personnel No grants we during the ye re made to an ar under revie y senior management personnel w. any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year None identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Erstwhile CEO (since resigned and the options have lapsed) Diluted earnings per share pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 "Earning Per Share" (13.38)- before extraordinary items (12.28)- after extraordinary items Method of calculation of employee compensation cost No grants were made during the year under review. Exercise price and fair value of option No grants we re made during the year u s Option Valuation Mode air value of the options gra nder review.

Option valuation methodology Black Schole estimate the f l has been used to nted earlier.

Assumptions Grant 1 Grant 2 Grant 3 Grant 4

Dividend yield (%) 0 0 0 0

Expected life (no. of years) 2.5 1.0 2.7 2.00

Risk free interest rate (%) 7.9 8.0 8.0 8.00

Volatility (%) 55.00 67.86 67.86 94.17

Price of the underlying share in the market at the time of the grant (Rs) 57.85 34.85 56.25 57.90

12

31st Annual Report 2014-15

15. DIVIDEND

The Board of Directors have not recommended any dividend in view of the performance of the Company for the Financial Year 2014-15.

16. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

As required under Section 135 of the Companies Act, 2013, the Board of Directors of the Company constituted the CSR Committee consisting of Mr. S. Natrajhen, Mr. Nicholas Martin Paul and Mr. R. Ravivenkatesh as its Members.

The CSR Committee was reconstituted on May 28, 2015 comprising of Mr. Ajay Singh, Mr. Nicholas Martin Paul and Mr. R. Ravivenkatesh as Members. Effective, September 21, 2015 two of the Company's independent directors resigned from the Company pursuant to which the Company's CSR Committee was dissolved due to inadequacy of constituents.

Since the Company does not have net profit for the last three financial years, the Company is not mandatorily required to contribute towards CSR activities. However, the Company runs an initiative named "SpiceJet Cares" to contribute to society at large. Working in close harmony and partnering with various organizations who have done phenomenal work in this field, the Company reaches out to provide help and relief to the lesser privileged and to those in need. Few of such CSR activities are as follows:

a) Relief work and natural calamities

(i) In September 2014, the state of Jammu & Kashmir was ravaged by deadly floods. Volunteer employees of the Company were flown to assist rescue operations. Food and water were carried and distributed to the thronging masses at Srinagar airport irrespective of the airline they were flying. Commuters in need were extended all possible help at Srinagar airport and the airline assisted several NGOs in airlifting medicines and supplies for free.

(ii) During devastating earthquake in Nepal in April 2015, additional flights were operated between Kathmandu and Delhi, apart from those already scheduled. This helped in evacuation of huge number of people of various nationalities those were stranded without even basic amenities.

b) Special flights

(i) 24 underprivileged kids form the Navjyoti India Foundation and India Vision Foundation were flown to Goa on Holi 2015

(ii) In September 2015, the Company took 13 underprivileged children and 2 teachers of NGO, run by Sewa Bharati to Jaipur. This group got a privilege to meet the Chief Minister of Rajasthan.

c) Sapnon ki Udaan

In August 2015, the Company in cooperation with NDTV, operated special flight "Sapnon ki Udaan" for those who had never flown before, as 'Freedom to Fly' celebration to mark the Indian Independence Day.

17. PARTICULARS OF EMPLOYEES

We believe in building and sustaining a strong culture of positive working relationships between employees and recognize that the success of the Company is deeply embedded in the success of its human capital.

The Company had 4,185 employees as on March 31, 2015 (previous year 5,639).

The information required pursuant to Section 197(12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to all the Members of the Company, excluding the information on employees' particulars which is available for inspection by the Members at the Company's registered office on working days, except Saturday/ Sunday and other public holidays, between 10:00 a.m. to 12:00 noon up to the date of the Annual General Meeting.

18. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Policy in line with the requirements of the Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial Year 2014-15, four complaints were filed and disposed off accordingly.

19. RISK MANAGEMENT POLICY AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has laid down procedures to inform Board members about risk assessment and minimization procedures with regard to safety of its operations. These procedures are periodically reviewed to ensure that executive management is controlling risks through properly defined framework.

The system of risk assessment and follow-up procedure is in place and considering its increased operations the Company continues to reassess its risk management plan.

20. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The management is highly conscious of the criticality of the conversation of energy at all operational levels. Adequate measures are taken to reduce energy consumption whenever possible by using energy efficient equipments. The requirement of disclosure of particulars with respect to conservation of energy and technology absorption as prescribed in Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Account) Rules, 2014 are not applicable to the Company and hence not furnished.

21. FOREIGN EXCHANGE EARNINGS & OUTGO

The details of Foreign Exchange earnings and outgo are given under the Notes to Accounts.

22. ACKNOWLEDGEMENT

The Company has been through challenging and demanding times in the recent past and is on its course of revival going forward. It would have been impossible for the Company to attain normal operations without the support of Ministry of Civil Aviation, Director General of Civil Aviation, Airport Authority of India, all private Airport Operators, other Government Authorities, Aircraft and Engine Manufacturers, Aircraft Lessors, our Bankers and all our business partners. We thank each one of them for their confidence and grateful for their continued support in re-building the airline,

We are most grateful to our passengers for reposing their faith in the airline despite experiencing operational discomfort in the past and providing us with the opportunity to regain our position. We are overwhelmed by choice of our passengers making us the top performer in terms of seat utilization in the Industry.

And lastly we are overwhelmed by the passion, perseverance and continued support of each and every employee and their respective families, who worked tirelessly and contributed in best possible manner to ensure that we are able to rebuild the airline. The Directors express their sincere appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Place: Gurgaon Sd/-

Date : December 1, 2015 Ajay Singh

Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors hereby present the Thirtieth Annual Report of the Company and the Audited Accounts for the year ended March 31, 2014.

1. Financial Results

(Amount in Rs. Million)

Particulars March 31,2014 March 31,2013

Gross Income 64,370.53 58,051.41

Operating Expenses 60,081.98 48,104.77

Employee Benefit Expenses 5,756.95 5,267.99

Selling Expenses 3,521.47 2,791.45

Other Expenses 2,193.82 1,805.33

Finance Cost 1,366.15 1,157.18

Depreciation and Amortisation Expenses 1,482.60 835.45

Profit/ (Loss) before taxation and prior period items (10,032.44) (1,910.76)

Tax Expenses - -

Prior Period items - -

Profit/ (Loss) after taxation (10,032.44) (1,910.76)

2. Business

The Company completed its ninth year of operations on May 23, 2014. During its ninth year of operations, the Company focused on consolidating its operations on key routes and as on March 31, 2014 maintained its fleet size to 58 aircraft covering 51 destinations and operating 331 flights per day.

During the year ended March 2014, the Company carried 13.54 million passengers. Further, the average load factor of 72% was recorded, with a market share of over 17.8% for the month of March 2014. The Company also improved its average deployed fleet to 53.50 aircraft versus 45.90 aircraft for previous year.

Your Company also focused on processes to generate ancillary revenues which effectively offset cost of operations. The Company''s operating revenue per ASKM has come down to Rs. 3.42 from Rs.3.50 in previous year.

Members are also requested to refer to Section 3 under Management Discussion and Analysis for developments at SpiceJet.

3. Share Capital

Consequent upon exercise of option attached to Warrants, 15,000,000 (Fifteen Million) Warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 each at a premium of Rs.26.18 allotted to Mr. Kalanithi Maran, Promoter of the Company on preferential basis during the financial year 2012-13 were converted into equity shares on November 30, 2013.

In March 2014, the Company has also allotted (i) 45,000,000 (Forty Five Million) Warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 each at a premium of Rs.10.76 to M/s Kal Airways Private Limited, Promoter of the Company; and (ii) 19,169,000 (Nineteen Million One Hundred and Sixty Nine Thousand) Warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 each at a premium of Rs.10.76 to Mr. Kalanithi Maran, Promoter of the Company.

These Warrants are convertible into equity shares (at the option of Allottee) effective April 1, 2014 in accordance with terms of issue of these Warrants.

4. Postal Ballot

In February, 2014 the Members of the Company approved the following proposals by way of postal ballot:

(a) Create, offer, issue and allot upto (i) 45,000,000 Warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 each to M/s Kal Airways Private Limited; and (ii) 19,169,000 Warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 each to Mr. Kalanithi Maran; and

(b) Consent to the Board of Directors of the Company under Section 180(1)(c) of the Companies Act, 2013 to borrow money from time to time up to a limit not exceeding in aggregate Rs.5,000 Crore.

5. Dividend

The Board of Directors have not recommended any dividend in view of the performance of the Company for the financial year ended March 31, 2014.

6. Directors

In terms of the provision of Section 152(6) of the Companies Act, 2013, Mr. S. Natrajhen is liable to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, has offered himself for re-appointment.

The Company has received requisite notices under Section 160 of the Companies Act, 2013 in writing proposing the appointment of Mr. M. K. Harinarayanan, Mr. J. Ravindran, Mr. Nicholas Martin Paul and Mr. R. Ravivenkatesh as Independent Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

The profiles of these Directors, as required by Clause 49 of the Listing Agreement, are given along with the Notice of the Annual General Meeting.

7. Personnel

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, readwith Companies (Particulars of Employees) Rules, 1975 as amended, forms part of the Directors'' Report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the Members of the Company, excluding the statement of particulars under Section 217 (2A) of the Companies Act, 1956. The Statement is open for inspection at the Registered Office of the Company during working hours.

8. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management, confirm:

(i) that in the preparation of the accounts for the year ended March 31, 2014, except otherwise disclosed, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that except otherwise disclosed in the Notes to the Accounts, they 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) that, except otherwise disclosed in the Notes to the Accounts, they 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) that they have prepared the accounts for the year ended March 31, 2014 on a going concern basis.

9. Response on Auditors'' Report:

In accordance with Section 217(3) of the Companies Act, 1956, information and explanations to various comments made by the Auditors in their Report to the Members are mentioned in the Notes to the Accounts, which form part of the Balance Sheet for the year ended March 31, 2014.

10. Disclosures required under the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

a) Options granted :

5,200,000 options granted on September 11, 2007 (''Grant 1''), 1,804,884 options granted on October 5, 2009 (''Grant 2''), 5,422,954 options granted on December 23, 2009 (''Grant 3''); and 100,000 options granted on April 1, 2010 (''Grant 4'') No grants were made during the year under review.

b) Pricing formula :

Intrinsic value method for valuation has been used for determining the fair value of option granted under the Scheme. The value per option as per this method for Grant 1, Grant 2, Grant 3 and Grant 4 is Rs.32.50, Rs.24.85, Rs.46.25 and Rs.27.90 respectively.

c) Options vested : 1,407,225

d) Options exercised during the year : Nil

e) Total number of shares arising as a result of exercise o f options : Nil

f) Total Options lapsed during the : 131,175 financial year.

g) Variations of terms of options : Nil

h) Money realised by exercise of options : Not applicable

i) Total number of options in force : 1,276,050

j) Employee wise details of options granted to:

i) senior management personnel : No grants were made to any senior management personnel during the year under review.

ii) any other employee who None receives a : None grant in any one year of option amounting to 5% or more of option granted during that year

iii) identified employees who were granted option, du ring any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant : Erstwhile CEO (since resigned and the options have lapsed)

k) Diluted earnings per share pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standar d (AS) 20 "Earning Per Share" : (19.16)

l) Method of calculation of employee compensation cost : No grants were made during the year under review.

m) Exercise price and fair value of option : No grants were made during the year under review.

n) Option valuation methodology : Black Scholes Option Valuation Model has been used to estimate the fair value of the options granted earlier

Assumptions Grant 1 Grant 2 Grant 3 Grant 4

Dividend yield (%) 0 0 0 0

Expected life (no. of years) 2.5 1.0 2.7 2.00

Risk free interest rate (%) 7.9 8.0 8.0 8.00

Volatility (%) 55.00 67.86 67.86 94.17

Price of the underlying share 57.85 34.85 56.25 57.90 in the market at the time of the grant (Rs)

11. Conservation of Energy & Technology Absorption

The management is highly conscious of the criticality of the conversation of energy at all operational levels. Adequate measures are taken to reduce energy consumption whenever possible by using energy efficient equipments. The requirement of disclosure of particulars with respect to conservation of energy and technology absorption as prescribed in Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company and hence not furnished.

12. Foreign Exchange Earnings & Outgo

The details of Foreign Exchange earnings and outgo are given under the Notes to Accounts.

13. Public Deposits

The Company has not invited/ accepted any deposits from the public during the financial year ended March 31, 2014.

14. Auditors

The Auditors, M/s S.R. Batliboi & Associates LLP, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

15. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretary''s Certificate regarding Compliance with the Code of Corporate Governance are made part of the Annual Report.

16. Information as required under the listing agreement

Shares of the Company are presently listed at BSE Limited, P. J. Towers, Dalal Street, Mumbai and the Company has paid listing fee upto March 31, 2015 in respect of above stock exchange.

17. Acknowledgement

The Directors are thankful to the Members and Investors for their confidence and continued support. The Directors are grateful to Central and State Government, Stock Exchange, Securities & Exchange Board of India, Reserve Bank of India, Ministry of Civil Aviation, DGCA, Custom and other Government Authorities, Banks and last but not the least, its trusted passengers for their continued support.

The Directors would like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Sd/- Sd/- Place : Chennai S. Natrajhen Nicholas Martin Paul Date : August 14, 2014 Managing Director Director


Mar 31, 2013

Dear Shareholder,

The Directors hereby present the Twenty Ninth Annual Report and the Audited Accounts for the year ended March 31, 2013.

1. Financial Results

(Amount in Rs. Million)

Particulars March 31, 2013 March 31, 2012

Gross Income 58,051.41 40,191.14

Operating Expenses 48,104.77 37,079.00

Employee Benefit Expenses 5,267.99 4,028.72

Selling Expenses 2,791.45 2,704.20

Other Expenses 1,805.33 1,604.35

Finance Cost 1,157.18 522.57

Depreciation and Amortisation Expenses 835.45 309.98

Profit/ (Loss) before taxation and prior period items (1,910.76) (6,057.68)

Tax Expenses - -

Prior Period items - -

Profit/ (Loss) after taxation (1,910.76) (6,057.68)

Explanations to various comments made by the Auditors in their Report to the shareholders are mentioned in the Notes to the Accounts, which forms part of the Balance Sheet for the year ended March 31, 2013.

2. Business

The Company completed its eighth year of operations on May 23, 2013. In its eighth year of operations, the Company focused on consolidating its operations on key routes and maintained its fleet size to 55 aircraft covering 54 destinations and operating 370 flights per day, as on the date of this report.

During the year ended March 2013, the Company carried 12.75 million passengers. Further, the average load factor of 74.31% was recorded, with a market share of over 20.40% for the month of March 2013. The Company also improved its average deployed fleet to 45.90 aircraft versus 32.50 aircraft for previous year.

During the year under review, the Company also inducted additional Bombardier Q400 aircraft to its fleet to connect to Tier II and III cities in order to have wide market penetration and better connectivity.

Your company also focused on processes to generate ancillary revenues which effectively offset cost of operations. The Company has managed to improve the operating revenue per ASKM to Rs. 3.50 from Rs.2.88 in previous year.

3. Share Capital

- Preferential allotment:

During the year under review, 42,900,000 equity shares of Rs.10 each at a premium of Rs.13.18 per share were allotted to Mr. Kalanithi Maran, Promoter of the Company on preferential issue.

Further the Company allotted 13,000,000 14% Unsecured Compulsorily Convertible Debentures ("CCDs") of the face value of Rs.100 each to Mr. Kalanithi Maran, Promoter of the Company on preferential basis which are convertible into equity shares at a conversion price of Rs.36.18 per share. These outstanding CCDs as on March 31, 2013 represent 35,931,453 equity shares of Rs.10 each which have been duly converted into equity shares on April 18, 2013 pursuant to exercise of option by the allottee.

The Company has also allotted 15,000,000 (Fifteen Million) Warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 each at a premium of Rs.26.18 to Mr. Kalanithi Maran, Promoter of the Company on preferential basis.

- Authorised Share Capital:

During the year under review, the authorised share capital of the Company was increased to Rs.10,000,000,000 (Rupees Ten Thousand Million) divided into 1,000,000,000 (One Thousand Million) equity shares of Rs.10 (Rupees Ten) each.

4. Postal Ballot

In December 2012 the Members of the Company approved the following proposals by way of postal ballot:

- Increase in Authorised Share Capital of the Company to Rs.10,000,000,000 (Rupees Ten Thousand Million) divided into 1,000,000,000 (One Thousand Million) equity shares of Rs.10 (Rupees Ten).

- Issue and allotment of 13,000,000 (Thirteen Million) 14% Unsecured Compulsorily Convertible Debentures aggregating to Rs.1300,000,000 on preferential basis to Mr. Kalanithi Maran, Promoter of the Company.

- Allotment of 15,000,000 (Fifteen Million) Warrants with an option to apply for and be allotted equivalent number of equity shares on preferential basis to Mr. Kalanithi Maran, Promoter of the Company.

- Re-designation of Mr. S. Natrajhen as Managing Director.

- Election of Mr. Kalanithi Maran as director not liable to retire by rotation.

- Election of Mrs. Kavery Kalanithi as director not liable to retire by rotation.

5. Material Developments

- Import of Aviation Turbine Fuel:

The Company has received approval from the Director General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, Government of India, for importing aviation turbine fuel (ATF) directly from overseas market. SpiceJet Limited is the first airline in the country to apply for import of ATF and to get clearance for the same. The Company expects to import ATF in near future which will help to reduce its operating costs.

- Acquisition of Q400 Aircraft:

The Company has completed acquisition of fifteen Bombardier Q400 NextGen turboprop aircraft which have been deployed to connect Tier II and Tier III cities in India.

- International Operation:

The Company is expanding its operations to international destinations and now SpiceJet is connected to Colombo, Dubai, Guangzhou, Kabul, Kathmandu, Male, Riyadh and Sharjah and will shorty commence flights to other Asian destinations. The Company has developed certain innovative sectors which include Delhi-Guangzhou, Ahmedabad-Dubai and Varanasi-Sharjah.

6. Dividend

In view of loss during the fiscal year, Directors do not recommend any dividend.

7. Directors

- Mr. Kalanithi Maran and Mrs. Kavery Kalanithi were elected as director not liable to retire by rotation.

- Mr. S. Natrajhen was re-designated as Managing Director of the Company with effect from September 10, 2012 for the remainder period of his appointment i.e. upto November 10, 2014 without any change in the other terms and conditions including payment of remuneration.

- In terms of the provision of Section 256 of the Companies Act, 1956, Mr. Nicholas Martin Paul and Mr. R. Ravivenkatesh are liable to retire by rotation at the forthcoming Annual General Meeting of the Company. Mr. Nicholas Martin Paul and Mr. R. Ravivenkatesh being eligible, offer themselves for re-appointment.

8. Personnel

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, readwith Companies (Particulars of Employees) Rules, 1975 as amended, forms part of the Directors Report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the Members of the Company, excluding the statement of particulars under Section 217(2A) of the Companies Act, 1956. The Statement is open for inspection at the Registered Office of the Company during working hours and a copy of the same may be obtained by writing to the Company at its Registered Office.

9. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management, confirm:

i. that in the preparation of the accounts for the year ended March 31, 2013, except otherwise disclosed, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that except otherwise disclosed in the Notes to the Accounts, they 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. that, except otherwise disclosed in the Notes to the Accounts, they 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. that they have prepared the accounts for the year ended March 31, 2013 on a going concern basis.

11. Conservation of Energy & Technology Absorption

The management is highly conscious of the criticality of the conversation of energy at all operational levels. Adequate measures are taken to reduce energy consumption whenever possible by using energy efficient equipments. The requirement of disclosure of particulars with respect to conservation of energy and technology absorption as prescribed in Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company and hence not furnished.

12. Foreign Exchange Earnings & Outgo

The Company had foreign exchange earnings of Rs.1,791.53 million while the outgoings were Rs.15,118.63 million during the year under review.

13. Public Deposits

During the year, the Company has not invited/ accepted any deposit under Section 58A of the Companies Act, 1956.

14. Auditors

M/s S.R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

Your Directors recommend the re-appointment of M/s S.R. Batliboi & Associates LLP, Chartered Accountants as Statutory Auditors of the Company to hold the office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting.

15. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretary''s Certificate regarding Compliance with the Code of Corporate Governance are made part of the Annual Report.

16. Information as required under the listing agreement

Shares of the Company are presently listed at BSE Limited, P. J. Towers, Dalal Street, Mumbai and the Company has paid listing fee upto March 31, 2014 in respect of above stock exchange.

17. Acknowledgement

The Directors are thankful to the Members and Investors for their confidence and continued support. The Directors are grateful to Central and State Government, Stock Exchange, Securities & Exchange Board of India, Reserve Bank of India, Ministry of Civil Aviation, DGCA, Custom and other Government Authorities, Banks and last but not the least, its trusted passengers for their continued support.

The Directors would like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Sd/

Kalanithi Maran

Chairman

Place: Chennai

Date : August 5, 2013


Mar 31, 2012

Dear Shareholders,

The Directors hereby present the Twenty Eighth Annual Report and the Audited Accounts for the year ended March 31, 2012.

1. Financial Results

(Amount in Rs. Million)

Particulars March 31, 2012 March 31, 2011

Gross Income 40,191.14 29,639.15

Operating Expenses 37,079.00 22,546.60

Employee Benefit Expenses 4,028.72 2,439.26

Selling Expenses 2,704.20 2,094.67

Other Expenses 1,604.35 1,083.41

Finance Cost 522.57 104.42

Depreciation and Amortisation Expenses 309.98 89.10

Profit/ (Loss) before taxation and prior period items (6,057.68) 1,281.69

Tax Expenses - (247.37)

Prior Period items - (22.77)

Profit/ (Loss) for the year (6,057.68) 1,011.55

Explanations to various comments made by the Auditors in their Report to the shareholders are mentioned in the Notes to the Financial Statements, which form part of the Balance Sheet for the year ended March 31, 2012.

2. Business

The Company completed its seventh year of operations on May 23, 2012. In its seventh year of operations, the Company focused on consolidating its operations on key routes and maintained its fleet size to 47 aircraft covering 39 destinations and operating 281 flights per day, as on the date of this report.

During the year ended March 2012, the Company carried 10.89 million passengers. Further, the average load factor of 75% was recorded, with a market share of over 17.10% for the month of March 2012. The Company also improved its average deployed fleet to 34.74 aircraft versus 22.50 aircraft for previous year.

During the year under review, the Company also inducted Bombardier Q400 aircraft to its fleet to connect to Tier II and III cities in order to have wide market penetration and better connectivity.

Your company also focused on processes to generate ancillary revenues which effectively offset cost of operations. The Company has managed to improve the operating revenue per ASKM to Rs.2.92 from Rs. 2.75 in previous year.

3. Share Capital

-ESOP allotment:

During the year under review, 171,665 equity shares were allotted consequent upon exercise of stock options under the Employee Stock Option Scheme 2007.

-Preferential allotment:

During the year under review, 35,900,000 equity shares of Rs.10 each at a premium of Rs.26.48 per share were allotted to Mr. Kalanithi Maran, Promoter of the Company on preferential basis.

The Company has further allotted 42,900,000 equity shares of Rs. 10 each at a premium of Rs.13.18 per share on preferential basis to Mr. Kalanithi Maran, Promoter of the Company on April 10, 2012.

-Authorised Capital:

During the year under review, the authorised Capital of the Company was increased to Rs.5,650,000,000 (Rupees Five Thousand Six Hundred Fifty Million) divided into 565,000,000 (Five Hundred Sixty Five Million) equity shares of Rs.10 (Rupees Ten) each.

4. Postal Ballot

In April, 2012 the Members of the Company approved the following proposals by way of postal ballot:

-Allotment of equity shares not exceeding 42,900,000 to Mr. Kalanithi Maran, Promoter of the Company on preferential basis.

-Appointment of Mr. S. Natrajhen as a Whole-time Director of the Company to be designated as "Executive Director"

5. Material Developments

-Acquisition of Q400 Aircraft:

The Company had placed an order for fifteen Bombardier Q400 NextGen turboprop aircraft and out of said order the Company has taken delivery of twelve such aircraft. SpiceJet is the first airline to launch this aircraft in India.

-International Operation:

The Company is expanding its wings in international skies and apart from Kathmandu and Colombo; SpiceJet is now connected to Dubai with its daily flights from Delhi and Mumbai and will shortly commence flights to other Asian destinations.

6. Dividend

In view of loss during the fiscal year, Directors do not recommend any dividend.

7. Directors & Company Secretary

-On August 12, 2011, Mr. S. Sridharan resigned from the Board of Directors of the Company.

-Mr. S. Natrajhen was appointed as an Additional Director and Executive Director of the Company with effect from November 11, 2011 for a period of three years. His office as an Additional Director will expire at ensuing Annual General Meeting of the Company.

Further, Mr. R. Ravivenkatesh was also appointed as an Additional Director on the Board of the Company on April 19, 2012 and he shall hold office upto the date of ensuing Annual General Meeting.

The Company has received notice under Section 257 of the Companies Act, 1956 proposing their candidature and you are requested to consider the same.

-In terms of the provision of Section 256 of the Companies Act, 1956, Mr. M. K. Harinarayanan and Mr. J. Ravindaran are liable to retire by rotation at the forthcoming Annual General Meeting of the Company. Mr. M. K. Harinarayanan and Mr. J. Ravindaran being eligible, offer themselves for re-appointment.

-Mr. A. K. Maheshwary, Vice President (Legal) & Company Secretary has resigned from the Company effective January 1, 2012 and Mr. Chandan Sand has been appointed as GM (Legal) & Company Secretary of the Company.

8. Personnel

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of the Directors Report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the Members of the Company, excluding the statement of particulars under Section 217 (2A) of the Companies Act, 1956. The Statement is open for inspection at the Registered Office of the Company during working hours and a copy of the same may be obtained by writing to the Company at its Registered Office.

9. Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management, confirm:

i. that in the preparation of the accounts for the year ended March 31, 2012, except otherwise

disclosed, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that except otherwise disclosed in the Notes to the Accounts, they 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. that, except otherwise disclosed in the Notes to the Accounts, they 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. that they have prepared the accounts for the year ended March 31, 2012 on a going concern basis.

11. Conservation of Energy & Technology Absorption

The management is highly conscious of the criticality of the conversation of energy at all operational levels. Adequate measures are taken to reduce energy consumption whenever possible by using energy efficient equipments. The requirement of disclosure of particulars with respect to conservation of energy and technology absorption as prescribed in Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company and hence not furnished.

12. Foreign Exchange Earnings & Outgo

The Company had foreign exchange earnings of Rs.591.56 million while the outgoings were Rs. 8,831.29 million during the year under review.

13. Public Deposits

During the year, the Company has not invited/ accepted any deposit under Section 58A of the Companies Act, 1956.

14. Auditors

M/s S.R. Batliboi & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

Your Directors recommend the re-appointment of M/s S.R. Batliboi & Associates, Chartered Accountants as Statutory Auditors of the Company to hold the office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting.

15. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretary's Certificate regarding Compliance with the Code of Corporate Governance are made part of the Annual Report.

16. Information as required under the listing agreement

Shares of the Company are presently listed at BSE Limited, P. J. Towers, Dalal Street, Mumbai and the Company has paid listing fee upto March 31, 2013 in respect of above stock exchange.

17. Acknowledgement

The Directors are thankful to the Members and Investors for their confidence and continued support. The Directors are grateful to Central and State Government, Stock Exchange, Securities & Exchange Board of India, Reserve Bank of India, Ministry of Civil Aviation, DGCA, Custom and other Government Authorities, Banks and last but not the least, its trusted passengers for their continued support.

The Directors would like to express their sincere thanks and appreciation to all the employees for their commendable teamwork and professionalism.

For and on behalf of the Board

Sd/-

Kalanithi Maran Chairman

Place: Chennai

Date: July 30, 2012




Mar 31, 2011

Dear Shareholders,

The Directors hereby present the Twenty Seventh Annual Report and the Audited Accounts for the year ended March 31, 2011.

1. Financial Results

(Amount in Rs. Million)

Particulars March 31, 2011 March 31, 2010

Gross Income 29,606.04 22,420.91

Operating Expenses 22,535.94 16,939.56

Employee Remuneration and Benefits 2,406.15 1,814.11

Selling Expenses 2,237.19 1,921.52

Administrative Expenses 943.93 821.56

Finance Charges 112.04 113.82

Depreciation and Amortisation 89.10 76.43

Profit/ (Loss) before taxation 1,281.69 733.91

Minimum alternative tax 247.37 63.66

Prior Period Adjustments 22.77 55.76

Profit/ (Loss) after taxation 1,011.55 614.49

Explanations to various comments made by the Auditors in their Report to the shareholders are mentioned in the Notes to the Accounts, which forms part of the Balance Sheet for the year ended March 31, 2011.

2. Business

The Company completed its sixth year of operations on May 23, 2011. In its Sixth year of operations, the Company focused on consolidating its operations on key routes and maintained its fleet size to twenty three aircraft covering 22 destinations and operating 170 flights daily.

During the year ended March 2011, the Company carried 8.61 million passengers. Further, the average load factor of 82.5% was recorded, with a market share of over 13% for the month of March 2011. The Company also improved its average deployed fleet to 22.50 aircraft versus 18.82 aircraft for previous year.

Your Company also focused on processes to generate ancillary revenues which effectively offset cost of operations. The Company has managed to improve the Operating revenue per ASKM to Rs.2.75 from Rs.2.49 in previous year.

3. Share Capital

During the year under review, the paid-up share capital of the Company was increased by allotment of

- 15,360,715 equity shares of Rs.10 each at a price of Rs.39.46 per equity share consequent upon conversion of 15,360,715 warrants in terms of approvals accorded by the shareholders and FIPB;

- 147,215,040 equity shares of Rs.10 each at a price of Rs.25 per equity share consequent upon conversion of 798 Foreign Currency Convertible Bonds of US$ 100,000 each aggregating to US$ 79,800,000; and

- 919,600 equity share consequent upon conversion of exercise of stock options under the Employee

Stock Option Scheme 2007.

In view of above capitalization the net worth of the Company has become positive and stands at Rs.3,211.05 million as on March 31, 2011.

4. Other Material Developments

During the year under review, in terms of the Open Offer made by KAL Airways Private Limited and Mr. Kalanithi Maran (collectively referred to as the "Acquirers") through Public Announcement on June 14, 2010 and Corrigendum Public Announcements on October 16, 2010 under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, have acquired, in aggregate, 156,528,305 equity shares of the Company, including 31,077,500 equity shares acquired from Royal Holdings Services Limited (the "Erstwhile Promoter"). On account of the above acquisition, the Acquirers have become Promoters of the Company holding 38.60% of the current paid-up capital of the Company.

5. Dividend

In view of accumulated losses brought forward, your Directors do not recommend any dividend.

6. Directors

Subsequent to the change of control of the Company on November 15, 2010, Mr. B. S. Kansagra, Mr. Kishore Gupta, Mr. Mukkaram Jan and Mr. Vijay Kumar resigned from the directorship of the Company with effect from November 15, 2010.

Further, Mr. Kalanithi Maran, Mrs. Kavery Kalanithi, Mr. S. Sridharan (since then resigned on August 12, 2011), Mr. J. Ravindran, Mr. Nicholas Martin Paul and Mr. M. K. Harinarayanan were appointed as additional directors on the Board of the Company on November 15, 2010 and shall hold office upto the date of ensuing annual general meeting. The Company has received notice under section 257 of the Companies Act, 1956 proposing their candidature and you are requested to consider the same.

7. Personnel

Information as required under the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders excluding the statement of particulars under Section 217 (2A). The Statement is open for inspection at the registered office of the Company during working hours and a copy of the same may be obtained by writing to the Company at its registered office.

8. Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management, confirm:

i. that in the preparation of the accounts for the year ended March 31, 2011, except otherwise disclosed, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that except otherwise disclosed in the Notes to the Accounts, they 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 review period and of the profit or loss of the Company for that period;

iii. that, except otherwise disclosed in the Notes to the Accounts, they 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. that they have prepared the accounts for the year ended March 31, 2011 on a going concern basis.

9. Employee Stock Option Scheme

S. No. Description Remark

a) Options granted 5,200,000 options granted on September 11, 2007 ('Grant 1'), 1,804,884 options granted on October 05, 2009 ('Grant 2'), 5,422,954 options granted on December 23, 2009 ('Grant 3'); and 100,000 options granted on April 1, 2010 ('Grant 4)

b) Pricing formula Intrinsic value method for valuation has been used for determining the fair value of option granted under the Scheme. The value per option as per this method for Grant 1, Grant 2, Grant 3 and Grant 4 is Rs.32.50, Rs.24.85, Rs.46.25 and Rs.27.90 respectively.

c) Options vested 1,377,750

d) Options exercised during the year 919,600

e) Total number of shares arising as a result of exercise of options 919,600

f) Total Options lapsed 8,997,438

FY 2007-08: 389,000

FY 2008-09: 891,000

FY 2009-10: 300,800

FY 2010-11: 7,416,638

g) Variations of terms of options Nil

h) Money realised by exercise of options Rs.27,588,000

i) Total number of options in force 1,969,200

j) Employee wise details of options granted to:

i) senior management personnel

SN Name Designation Options Granted

1 Samyukth Sridharan CCO 200,000

2 Virender Pal CTO 50,000

Sr. VP & Head

3 Kamal Hingorani 50,000

Ground Services

ii) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year

None

iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the is s ued capit al (excluding outstanding warrants and conversions) of the Company at the time of grant Mr. Sanjay Aggarwal (since resigned and the options have lapsed)

k) Diluted earnings per share pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 "Earning Per 2.49

I) Method of calculation of employee compensation cost

The employee compensation is calculated based on intrinsic value of the options and the difference between the employee compensation cost so computed and the employee compensation cost as per fair value (as per Black Scholes Model) of options is as under:

No. of options Intrinsic Fair value Difference granted value

100,000 27.90 34.84 6.94

Had the compensation cost been determined in a manner consistent with the fair value method as above, the employee compensation cost would have been higher by Rs.0.9 million, profit after tax would have been lower by Rs.0.44 million and the diluted EPS would have been Rs.2.80.

m)Exercise price and fair value Stock option Weighted average fair Weighted average exercise of options (number) value per option price per option

- granted on April 1, 2010 100,000 34.84 30.00

n) Option valuation methodology Black Scholes Option Valuation Model has been used to estimate the fair value of the options granted

Assumptions Grant 1 Grant 2 Grant 3 Grant 4

Dividend yield (%) 0 0 0 0

Expected life (no of years) 2.5 1.0 2.7 2.00

Risk free interest rate (%) 7.9 8.0 8.0 8.00

Volatility (%) 55.00 67.86 67.86 94.17

Price of the underlying share in the 57.85 34.85 56.25 57.90 market at the time of the grant (Rs)

10. Conservation of Energy & Technology Absorption

Particulars as required under section 217(1) (e) of the Companies Act, 1956, relating to conservation of energy and technology absorption are not applicable for the year under review, and hence not furnished.

11. Foreign Exchange Earnings & Outgo

The Company had foreign exchange earnings of Rs.695.00 million while the outgoings were Rs.12,412.48 million during the year under review.

12. Deposits/ Borrowings

The Company has not accepted any deposit under provisions of Section 58A of the Companies Act,1956 during the year under review.

13. Auditors

M/s S. R. Batliboi & Associates, Auditors of the Company will retire at the forth coming Annual General Meeting. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956. On recommendation of the Audit Committee, the Board in its meeting held on May 27, 2011 proposes their name for re-appointment. You are requested to consider their appointment.

14. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd., Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretary's Certificate regarding Compliance with the Code of Corporate Governance are made part of the Annual Report.

15. Information as required under the listing agreement

Shares of the company are presently listed at Bombay Stock Exchange Limited, P. J. Towers, Dalal Street, Mumbai and the company has paid listing fee upto March 31, 2012 in respect of above stock exchange.

16. Acknowledgement

The Directors thank all government, regulatory bodies and shareholders for their consistent support in the smooth airline operations of the Company. We also place on record our appreciation to the contribution made by company's staff at all levels, without whom the Company would not have attained such great heights in such a short period of its operations.

For and on behalf of the Board

Sd/-

Kalanithi Maran

Date: August 26, 2011 Chairman










Mar 31, 2010

The Directors hereby present the Twenty Sixth Annual Report and the Audited Accounts for the year ended March 31, 2010.

1. Financial Results

(Amount in Rs. Million)

Particulars March 31, 2010 March 31, 2009

Gross Income 22,420.91 18,135.38

Operating Expenses 16,939.56 17,034.31

Employee Remuneration and Benefits 1,814.11 1,548.21

Selling Expenses 1,921.52 1,095.53 Administrative Expenses 821.56 1,408.00

Finance Charges 113.82 160.22

Depreciation and Amortisation 76.43 72.54

Loss on settlement of litigations - 187.82

Profi t/ (Loss) before taxation 733.91 (3,371.25)

Minimum Alternate Tax/ Fringe Benefit Tax 63.66 33.19

Prior Period Adjustments 55.76 121.23

Profi t/ (Loss) after taxation 614.49 (3,525.67)

Explanations to various comments made by the Auditors in their Report to the shareholders are mentioned in the Notes to the Accounts, which forms part of the Balance Sheet for the year ended March 31, 2010.

2. Business

The Company completed its fi fth year of operations on May 23, 2010. In fi fth year of operations, the Company focused on consolidating its operations on key routes and maintained its fl eet size to twenty aircraft covering 19 destinations and operating 122 fl ights daily.

During the year ended March 2010, the Company carried 6.63 million passengers. Further, the average load factor of 77.6% was recorded, with a market share of over 12% for the month of March 2010. The Company also improved its average deployed fl eet to 18.82 aircraft versus 17.02 aircraft for previous year.

Your Company also focused on processes to generate ancillary revenues which effectively offset cost of operations. The Company has managed to improve the operating revenue per ASKM to Rs.2.49 from Rs.2.34 in previous year.

3. Share Capital

During the year under review, the paid-up share capital of the Company was increased by 862,550 equity share consequent upon exercise of stock options under the Employee Stock Option Scheme 2007.

Post closure of the year under review, the Company allotted 15,360,715 equity shares of Rs.10 each at a price of Rs.39.46 per equity share consequent upon conversion of 15,360,715 warrants in terms of approvals accorded by the shareholders and FIPB.

Further, the Company allotted 127,843,840 equity shares of Rs.10 each at a price of Rs.25 per equity share consequent upon conversion of 693 Foreign Currency Convertible Bonds of US$ 100,000 each aggregating to US$ 69,300,000.

In view of above capitalization the net worth of the Company has now become positive.

4. Other Material Developments

(a) Royal Holdings Services Limited, the Promoter of the Company and certain other shareholders of the Company executed Share Purchase Agreements dated June 12, 2010 (SPA) with Mr. Kalanithi Maran and KAL Airways Private Limited (the "Acquirers") whereby the Acquirers have agreed to acquire 37.73% of the fully diluted equity share capital of the Company and consequently acquire management and control of the Company.

Consequently, the Acquirers have also made an open offer under Regulation 10 and 12 of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 to the public shareholders of the Company to acquire up to an additional 82,980,161 equity shares, representing 20% of the fully diluted equity share capital of the Company. Post completion of open offer, the Acquirers may hold upto 57.73% of the fully diluted equity capital of the Company.

Mr. Kalanithi Maran, the promoter of Sun Network is also the Chairman and Managing Director of the Sun TV Network Limited (Sun TV). Sun TV is a public Limited Company listed at the Mumbai and National Stock Exchanges and has a market cap of about Rs.16,750 crores (USD 3.6 billion). Mr. Maran has also other interests in the Media and Entertainment world and owns majority stake in Sun Direct TV Private Limited that has emerged as the fastest growing DTH player in the country with a subscriber base of about 5.5 million subscribers in a short span of 2 ½ years. He also runs the No.1 Tamil Daily, Dinakaran selling over 1.2 million copies every day. Mr. Maran is also the promoter of Kal Airways Private Limited.

(b) Reference note no.2.2 of the Notes to the Accounts (Schedule XVIII) forming part of the fi nancial statement for the year under review. The Review Petition fi led by Hindustan Development Corporation Limited ("HDCL") (now renamed as Mallanpur Steels Limited) against the Scheme of Settlement of the Company, has been dismissed by the Delhi High Court on July 16, 2010

5. Dividend

In view of accumulated losses brought forward, your Directors do not recommend any dividend.

6. Directors

Mr. Atul Sharma and Mr. Ajay Singh retire by rotation in the forthcoming Annual General Meeting and they do not seek reappointment. The Company has decided not to fill the vacancy, for the time being, caused by their retirement.

Mr. Tom Ronell ceased to be nominee director on the Board of the Company with effect from February 5, 2010 consequent upon sale of entire equity stake by Istithmar PJSC.

7. Personnel

Information as required under the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders excluding the statement of particulars under Section 217 (2A). The Statement is open for inspection at the registered offi ce of the Company during working hours and a copy of the same may be obtained by writing to the Company at its registered offi ce.

8. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the operating management, confi rm:

i. that in the preparation of the accounts for the year ended March 31, 2010, except otherwise disclosed, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that except otherwise disclosed in the Notes to the Accounts, they 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 review period and of the profi t or loss of the Company for that period;

iii. that, except otherwise disclosed in the Notes to the Accounts, they have taken proper and suffi cient 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. that they have prepared the accounts for the year ended March 31, 2010 on a going concern basis.

10. Conservation of Energy & Technology Absorption

Particulars as required under section 217(1) (e) of the Companies Act, 1956, relating to conservation of energy and technology absorption are not applicable for the year under review, and hence not furnished.

11. Foreign Exchange Earnings & Outgo

The Company had foreign exchange earnings of Rs.596.44 million while the outgoings were Rs.6,269.4 million during the year under review.

12. Deposits/ Borrowings

The Company has not accepted any deposit under provisions of Section 58A of the Companies Act, 1956 during the year under review.

13. Auditors

The Company has received a special notice under Section 225 of the Companies Act, 1956 from a shareholder proposing the name of M/s S. R. Batliboi & Associates, Chartered Accountants, New Delhi for appointment as Statutory Auditors of the Company. M/s Walker, Chandiok & Co, Chartered Accountants, retiring auditors have advised the Company that in view of special notice received under Section 225 of the Companies Act, 1956, they do not wish to offer themselves for re-appointment at the ensuing Annual General Meeting. The Directors place on record deep appreciation for the assistance and guidance extended by M/s Walker, Chandiok & Co., Chartered Accountants during their tenure as Auditors of the Company.

The Company has received a letter from M/s S. R. Batliboi & Associates, New Delhi to the effect that their appointment, if made, would be within the prescribed limits under section 224(1-B) of the Companies Act, 1956. On recommendation of the Audit Committee, the Board in its meeting held on July 27, 2010, proposed their appointment as the Statutory Auditors of the Company. You are requested to consider their appointment.

14. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd., Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretarys Certifi cate regarding Compliance with the Code of Corporate Governance are made part of the Annual Report.

15. Information as required under the listing agreement

Shares of the company are presently listed at Bombay Stock Exchange Limited, P. J. Towers, Dalal Street, Mumbai and the company has paid listing fee upto March 31, 2011 in respect of above stock exchange.

16. Acknowledgement

The Directors thank all government, regulatory bodies and shareholders for their consistent support in the smooth airline operations of the Company. We also place on record our appreciation to the contribu- tion made by companys staff at all levels, without whom the Company would not have attained such great heights in such a short period of its operations.

For and on behalf of the Board Sd/- Sd/- B. S. Kansagra Kishore Gupta Director Director

Place: Gurgaon, Haryana Date: July 27, 2010

 
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