Directors Report of InterGlobe Aviation Ltd.
Mar 31, 2023
Your Board of Directors are pleased to present the 20th Annual Report of InterGlobe Aviation Limited ("Company" or "we" or "IndiGo") along with the audited financial statements for the financial year ended March 31,2023 ("FY 2023"). Wherever required, the consolidated performance of the Company and its subsidiary has also been provided.
The standalone and consolidated financial highlights of the Company''s operations are summarised below:
|
(Rupees in million, except earnings per share) |
||||
|
Particulars |
Consolidated |
Standalone |
||
|
FY 2023 |
FY 2022 |
FY 2023 |
FY 2022 |
|
|
Revenue from operations |
544,464.53 |
259,309.27 |
544,464.53 |
259,309.27 |
|
Other Income |
14,349.65 |
7,255.98 |
14,314.35 |
7,245.42 |
|
Total Income |
558,814.18 |
266,565.25 |
558,778.88 |
266,554.69 |
|
Profit/ (Loss) before Tax |
(3,043.85) |
(61,536.84) |
(3,167.16) |
(61,710.25) |
|
Current Tax |
(14.04) |
(4.12) |
- |
- |
|
Deferred Tax Credit/ (Charge) |
- |
(77.49) |
- |
- |
|
Profit/ (Loss) after Tax |
(3,057.89) |
(61,618.45) |
(3,167.16) |
(61,710.25) |
|
Other Comprehensive Income / (Loss) net of Tax |
77.24 |
10.65 |
92.60 |
29.65 |
|
Total Comprehensive Income/ (Loss) |
(2,980.65) |
(61,607.80) |
(3,074.56) |
(61,680.60) |
|
Carnings per equity share of the face value of Rs. 10 each |
||||
|
Basic (Rs.) |
(7.93) |
(160.01) |
(8.22) |
(160.25) |
|
Diluted (Rs.) |
(7.93) |
(160.01) |
(8.22) |
(160.25) |
On a consolidated basis, we achieved a total income of Rs. 558,814.18 million for FY 2023, higher by 109.6% over the previous year''s total income of Rs. 266,565.25 million. We reported a net loss of Rs. 3,057.89 million for FY 2023 against a net loss of Rs. 61,618.45 million for the previous year.
On a standalone basis, we achieved a total income of Rs. 558,778.88 million for FY 2023, higher by 109.6% over the previous year''s total income of Rs. 266,554.69 million. We reported a net loss of Rs. 3,167.16 million for FY 2023 against a net loss of Rs. 61,710.25 million for the previous year.
3. Performance of Agile Airport Services Private Limited ("Agile" or "Subsidiary Company")
Agile is a wholly owned subsidiary of IndiGo and is engaged in the business of providing ground handling and other allied services to IndiGo at various airports in India.
The total income of Agile for FY 2023 was Rs. 5,124.66 million, higher by 37.8% over the previous year''s total income of Rs. 3,719.09 million. The net profit was Rs. 109.27 million indicating an increase of 19% over net profit of Rs. 91.80 million for FY 2022. Pursuant to Section 129(3) of the Companies Act, 2013 ("Act") read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended from time to time, a statement containing the details of performance and salient features of the financial statements of the Subsidiary Company in form AOC -1 is annexed to the consolidated financial statements.
In compliance with the provisions of Section 136 of the Act, the audited financial statements of Agile are uploaded on the Investor Relations section of the website of IndiGo at https://www.goindigo.in/content/dam/goindigo/investor-relations/subsidiary-financials/2022-23/Finanical-Statements-Agile-FY-22-23.pdf.
The Company has adopted a policy for determining material subsidiaries pursuant to Regulation 16(1)(c) of the SCBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SCBI LODR Regulations") which is available on the Investor Relations section of the website of IndiGo at https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/2021/InterGlobe-Aviation-Limited-Policy-on-Material-Subsidiary.pdf.
We have no material subsidiary as on date.
A. Operations and growth
IndiGo operated 1,815 (1,796 Scheduled, 18 Military, 1 Pax Charter) peak daily flights and carried over 85.59 million passengers during FY 2023 compared to 1,574 peak daily flights and 49.80 million passengers in FY 2022. Passenger Load Factor increased from 73.6% in FY 2022 to 82.1% in FY 2023. Total flights operated increased from 402,353 in FY 2022 to 597,829 in FY 2023.
IndiGo operated:
⢠Scheduled services to 104* destinations, including 7 new destinations
⢠456 cargo flights
⢠2,854 charter flights (2,681 Military Charter and 173 Pax Charter)
âOperations to 4 destinations are yet to resume (CAN, CTU, HKG and RGN)
B. Inducting aircraft and procedures to save fuel
Our fleet, as on March 31,2023, consists of 162 Airbus 320 NEO, 79 Airbus 321 NEO, 21 Airbus CEO, 39 ATR aircraft, 2 A321 Freighters (P2F) and 1 B777 (damp lease). During FY 2023, we inducted 47 new fuel-efficient Airbus NEO powered by CFM LEAP-1A engines, 4 ATR Aircraft, 2 P2F and 1 B777.
IndiGo ranked No.1 for On-Time Performance (OTP) of 86.8% for FY 2023 on DGCA metros. IndiGo also achieved technical dispatch reliability of 99.9%, as published by Airbus for FY 2023.
The Air Operating Certificate of the Company, which was due for renewal in August 2022, has been renewed for another five years (i.e. up to August 2027). IndiGo has obtained Extended Diversion Time Operations (EDTO) for 120 minutes from the Director General of Civil Aviation (DGCA) to fly on direct routes oversea for 120 minutes on A320 family aircraft. This would help in achieving shorter routes and result in fuel saving.
C. Operational initiatives
We established yet another industry benchmark with a new initiative on enhancing customer experience introduced on our 16th Anniversary. This was a third ramp to disembark passengers on arrival in order to reduce the disembarkation time and IndiGo is the first carrier in the world to introduce this service. This initiative saves an average of 3 minutes per flight and in turn improves the turnaround time for the aircraft. The implementation has helped us save 6.75 hours every day which can go towards more efficient aircraft utilisation.
IndiGo was the first organisation within India to receive DGCA approval for initial and recurrent training for the implementation of Competency Based Training and Assessment (CBTA) and Evidence Based Training (EBT). CBTA uses scenario-based training for more realism and facilitation techniques by the instructor to support the pilot''s development and enhances the pilot''s competence to demonstrate the right skills. This was implemented in line with International Civil Aviation Organisation (ICAO) and International Air Transport Association (IATA) standards to develop resilience amongst the pilots, which was required to tide over the last two years. This reaffirms our commitment towards the adoption of industry-leading initiatives to enhance safety and our training standard.
IndiGo is the first airline to get regulatory approval and successfully completed a Localizer Performance with Vertical Guidance (LPV) approach on ATR using the indigenous GAGAN Satellite to land at airports with no navigational infrastructure.
The Company continues its digitalisation journey with the aim of enhancing operational efficiency. IndiGo becomes the first organisation to Go-Live with the Direct and Automatic Data Transfer of flying hours from our crewing systems to the eGCA Pilot Logbook Portal. With this initiative, our pilots no longer need to maintain and carry physical logbooks. We are also in the process of attaining DGCA approval and launching the ''AvioBook'' Electronic Flight Folder - an integrated digital solution to optimise the entire flight operation, enhancing safety and improving decision-making and operational efficiency, along with reducing the weight onboard.
We continue to take additional measures to enhance fuel efficiency by inducting Fuel Monitoring and Management Software and improving current measures such as Fuel tankering, straightening of routes, onboard weight reduction, and pilot awareness.
During the year we invested in 16 Combo Units (Air-conditioning unit Ground power unit) that has helped us save more than 10,000 working hours on the Auxiliary power unit powered by ATF, resulting in cost savings of Rs. 105.30 million.
We have got into an agreement to take 2 Boeing 777 aircraft from Turkish Airlines on a damp lease to increase the capacity on the Istanbul route. 1 B777 is deployed on the DEL-IST-DEL route, effective February 1, 2023.
The Company ensured best-in-class onboard service by keeping customers at the centre of all its decisions.
We enhanced employment opportunities by successfully selecting and onboarding over 3,900 cabin crew across India.
We ensured strict enforcement of regulatory Covid-19 guidelines with follow-up review mechanisms to ensure continued implementation.
In FY 2023, IndiGo continued to focus on contactless travel experience at the airports. IndiGo increased the passengers'' awareness on how they can web check-in, pay for all ancillary products, add print baggage tags from home and process awareness videos. These initiatives ensured that nearly 50% of our customers used the self-check-in facility.
The Dividend Distribution Policy is available on the website of the Company and can be accessed at https://www.qoindiqo.in/content/ dam/qoindiqo/investor-relations/policies/2021/InterGlobe-Aviation-Limited-Dividend-Distribution-Policy.pdf. The Policy sets out the parameters and factors to be considered by the Board in determining the distribution of dividend to its Members and / or retaining profits. There has been no change in this Policy during the year under review.
Based on the Company''s performance, cash flow position and the losses carried forward from the previous years, the Board has not recommended any dividend on the equity shares.
6. Amount to be carried to Reserves
The Directors do not propose to transfer any amount to reserves.
7. Employee Stock Option Scheme
Pursuant to approval of the Members of the Company on June 25, 2015, the ''InterGlobe Aviation Limited - Employee Stock Option Scheme 2015'' ("Scheme") was adopted, which was amended on September 7, 2016. Under the Scheme, share-based benefits are granted to the eligible employees by granting stock options ("Options"), with a view to attract and retain talent and encouraging employees to align their individual performances with the Company''s broader growth objectives. During FY 2023, there has been no change in the Scheme and the Company continues to comply with the provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended ("SEBI SBEB Regulations").
The disclosure, in compliance with the SEBI SBEB Regulations, is uploaded on the Investor Relations section of the website of the Company at https://www.qoindiqo.in/content/dam/qoindiqo/investor-relations/other-related-documents/2022-23/statement-under-Req-14-of-the-Sâ¬BI-share-based-employee-benefits-and-sweat-equity-equlations-2021-2023.pdf.
Pursuant to the allotment of 292,370 equity shares of Rs. 10 each upon exercise of vested Stock Options by the eligible employees under the Scheme, the issued, subscribed, and paid-up share capital of the Company increased from 385,254,729 equity shares as on March 31,2022 to 385,547,099 equity shares of Rs. 10 each as on March 31,2023, aggregating to Rs. 3,855.47 million.
The Company had adopted ''InterGlobe Aviation Limited - Policy on dealing with Related Party Transactions'' ("RPT Policy") in compliance with Regulation 23 of the SEBI LODR Regulations. During FY 2023, there has been no change in the RPT Policy. The transactions entered by the Company with its related parties were in compliance with the RPT Policy and in the best interest of the Company. The RPT Policy is available on the Investor Relations section of the website of the Company at https://www.goindigo.in/ content/dam/qoindiqo/investor-relations/policies/2021/IGAL-Policy-on-Related-Party-Transactions-2019.pdf.
All the contracts/ arrangements/ transactions entered into by the Company with its related parties during FY 2023, were in its ordinary course of business and on an arm''s length basis and were approved by the Audit Committee. The necessary approvals were obtained in accordance with the RPT Policy.
During FY 2023, the Company has not entered into any arrangement / transaction / contract with its related parties which could be considered material and required approval of the Board or the Members. Accordingly, the disclosure of the particulars of the related party transactions in form AOC -2 as required under Section 134(3)(h) of the Act is not applicable.
For further details of related party transactions during the year, please refer to note number 35 of the notes forming a part of the financial statements, attached to the Annual Report.
Pursuant to Regulation 23 of the SEBI LODR Regulations, the details of related party transactions were filed with the stock exchanges on half yearly basis.
10. Directors and Key Managerial Personnel
a) Directors
As on March 31, 2023, the Board comprised of eight (8) members with an appropriate mix of Non-Executive Directors, Executive Directors and Independent Directors.
Mr. Meleveetil Damodaran stepped down as the Chairman and Independent Director of the Company on attaining the age of 75 years on May 03, 2022. He was later appointed as a Non-Executive Non-Independent Director of the Company by the Board w.e.f. July 16, 2022, which was approved by the shareholders at their Annual General Meeting (AGM) held on August 26, 2022.
Mr. Vikram Singh Mehta and Air Chief Marshal (Retd.) Birender Singh Dhanoa were appointed as Independent Directors on the Board w.e.f. May 27, 2022. Their appointment was approved by the shareholders at their AGM held on August 26, 2022.
Ms. Rohini Bhatia stepped down as a Non-Executive Director of the Company w.e.f. July 11,2022. The Board placed on record its appreciation for the guidance provided by her during her tenure as Director on the Board and its Committees, especially towards meeting its CSR objectives and activities.
Mr. Ronojoy Dutta stepped down as the Whole Time Director and CEO of the Company w.e.f. September 30, 2022. The Board placed on record sincere thanks to Mr. Dutta for effectively leading the Company with a steady hand through the most turbulent period in the Company''s history and the aviation industry globally.
Mr. Gregg Saretsky, Non-Executive Director, retires by rotation and being eligible, offers himself for reappointment at the ensuing AGM. The Notice of AGM includes the proposal for re-appointment of Mr. Saretsky as stated above.
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as laid down under Section 149 of the Act and Regulation 16 of the SEBI LODR Regulations and complied with the Code for Independent Directors prescribed in Schedule IV of the Act. During FY 2023, there has been no change in the circumstances affecting their status as Independent Directors.
None of the Directors of the Company is disqualified to act as a Director as per the requirement of Section 164 of the Act.
b) Key Managerial Personnel
Mr Pieter Elbers (Petrus Johannes Theodorus Elbers) was appointed as the Chief Executive Officer of the Company pursuant to the approval of the Board of Directors w.e.f. September 6, 2022.
11. Number of meetings of the Board
The Board met 13 times during FY 2023. The details of meetings of the Board and attendance of the Directors at the Board meetings are given in the Report on Corporate Governance which forms a part of the Annual Report.
As on March 31, 2023, the Board had the following five committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Risk Management Committee
iv. Corporate Social Responsibility Committee
v. Stakeholders Relationship Committee
The details of the composition, terms of references, and number of committee meetings held during FY 2023 and the attendance of the committee members at each meeting are given in the Report on Corporate Governance which forms a part of the Annual Report.
Pursuant to the provisions of the Act and the Sâ¬BI LODR Regulations, an evaluation process is carried out on an annual basis to evaluate the performance of the Board and the Board Committees, the Chairman of the Board and all Directors, including Independent Directors. The evaluation is aimed at improving the effectiveness of all these constituents and enhancing their contribution to the functioning of the Board.
For FY 2023 on the recommendation of the Nomination and Remuneration Committee, an independent external expert in Board evaluation, was engaged by the Management to undertake such evaluation. He carried out the exercise through questionnaires, both numeric as well as qualitative, that were sent directly to the Board members on a confidential basis. The independent external expert also had individual conversations with each Board member and developed separate evaluation reports. Subsequently, the independent external expert collated reports for (a) the Board as a whole, (b) Chairman of the Board, (c) Individual Directors, both Independent and Non- Independent, and (d) for each of the Board Committees separately. The assessment of individual Directors was sent separately to the concerned Directors. The results of evaluation of the Board and its various Committees were subsequently discussed by the Board at its meeting and the areas for improvement of the functioning of the Board and committees were noted.
In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, Chairman of the Board and the Board as a whole was also discussed, taking into account the views of Executive Directors and Non-Executive Directors.
The Company had adopted the ''InterGlobe Aviation Limited - Nomination and Remuneration Policy'' in compliance with Section 178 of the Act and Regulation 19(4) read with Part D of Schedule II to the SEBI LODR Regulations, for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management of the Company. The Policy lays down the process and parameters for the appointment and remuneration of the KMPs and other senior management personnel and the criteria for determining qualifications, highest level of personal and professional ethics, positive attributes, financial literacy and independence of a Director. The Policy is available on the Investor Relations section of the website of IndiGo at https://www. qoindiqo.in/content/dam/qoindiqo/investor-relations/policies/2021/InterGlobe-Nomination-and-Remneraion-Policy.pdf.
The Company has been following a rigorous process of leadership talent review, named "Talent Council". As an outcome of the Talent Council, we discuss and identify successors for all leadership roles. These successors are identified at three different levels of readiness. We focus on developing this pool of identified successors through diverse learning experiences and work on filling the gaps through external talent. We are consciously transitioning from a function vertical specific succession strategy to building a pool of fungible leaders who can assume new roles in any work context.
The Company has a structured Enterprise Risk Management framework ("ERM framework") based on the guiding principles from SEBI of identifying, assessing and mitigating the risks. It is an integral part of decision-making and is dynamic in nature, undergoing continuous improvement. We have strong and robust internal processes to monitor and manage risks. The ERM framework follows an annual process of setting objectives, identifying key risks on an ongoing basis, developing a mitigation action plan and monitoring.
The Risk Management Committee has been empowered to frame, implement and monitor the risk management practices. The Committee has been entrusted with systematically overseeing, reviewing and updating the risk management calendar, based on certain risks becoming more important during the year. The Committee meets on regular intervals and discusses risks relating to supply-chain disruptions, unfavourable fuel and forex movement, competition, adverse regulatory changes and litigations, pandemic, talent retention, cyber threat and data protection, employee health and labour relations, sustainability and climate change, airline safety and security, business continuity plan, reputation and any other new risk that may be identified by the Management.
The Audit Committee has additional oversight in the area of financial risks and the Nomination and Remuneration Committee ensures there is a succession plan in place for leadership team.
A note on key risks of the Company is given in the Management Discussion and Analysis Report which forms a part of the Annual Report.
17.Corporate Social Responsibility
A brief outline of the Corporate Social Responsibility ("CSR") Policy and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure - A to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
For other details regarding the CSR Committee, please refer to the Report on Corporate Governance, which forms a part of the Annual Report.
The Corporate Social Responsibility Policy as approved by the Board is available on the Investor Relations section of IndiGo''s websitehttps://www.qoindiqo.in/content/dam/qoindiqo/investor-relations/policies/InterGlobe-Aviation-Limited-Corporate-Social-Responsibility-Policy-2.pdf.
S.R. Batliboi & Co. LLP (Firm Registration no. 301003â¬/â¬300005) was appointed as the Statutory Auditors of the Company at the 16th AGM held on August 27, 2019, for a term of five consecutive years from the conclusion of the 16th AGM till the conclusion of the 21st AGM of the Company, in accordance with the provisions of Section 139 of the Act.
The Reports given by the Statutory Auditors on the standalone financial statements and the consolidated financial statements of the Company for FY 2023 form part of the Annual Report. The Reports do not contain any qualification, reservation or adverse remark or disclaimer by the Statutory Auditors.
The Board of Directors of the Company had appointed M/s. RMG & Associates, Company Secretaries for conducting secretarial audit of the Company for FY 2023. The Secretarial Audit Report issued by the aforesaid Secretarial Auditor is attached as Annexure - B to this Report. The Company has received a notice from the NS⬠and BS⬠imposing penalties for alleged non-compliance of Regulation 17(1 A) and Regulation 20 of the Sâ¬BI LODR Regulations. The Company has not paid any penalty and preferred to file the waiver application with the stock exchanges which is pending as on date. Cxcept as mentioned above, there has been no qualification, reservation, observation, disclaimer or adverse remark in the Secretarial Audit Report.
20. Non-applicability of maintenance of cost records
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and the Rules issued thereunder with respect to the aviation business.
21. Whistle blower Policy / Vigil Mechanism
The Company believes that it is critical to listen to whistle blowers to take the path to sustainable growth and good governance. Any actual or potential violation of the Code of Conduct, or any law governing IndiGo, howsoever insignificant, is a matter of serious concern. Timely reporting of such violations could avoid or minimise the Company''s reputational or financial losses. To this effect, and pursuant to Section 177(9) of the Act and Regulation 22 of the Sâ¬BI LODR Regulations, a robust whistle blower/ vigil mechanism has been laid down, which enables timely and reliable reporting of actual or suspected violations.
As part of this, the Company has laid down a Whistle blower Policy, which provides the procedures for employees and other stakeholders to report unacceptable practices, misconduct, or violation of its Code of Conduct or applicable laws, provides necessary safeguards to protect whistle blowers from victimization and retaliation, and provides for direct access to the Chairperson of the Audit Committee, in exceptional circumstances. During FY 2023, no person was denied access to the Chairperson of the Audit Committee. The policy is available on the Investor Relations section of IndiGo''s website https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/IGAL-WhistleBlower-Policy-clean-11-17-22.pdf.
The whistleblowing mechanism also comprises a whistle blower helpline, named as "6⬠Ethics Helpline". This provides whistle blowers five channels to report violations, including toll-free hotline, email, web portal, chatbot and postal mail. Four of these reporting channels provide whistle blowers the choice to report anonymously. The Company takes pride in successfully implementing its whistle blowing helpline in ways that have instilled confidence amongst employees and other stakeholders to raise their concerns.
All complaints of suspected violations are taken seriously and reviewed promptly. All investigations are carried out objectively and independently, following the principles of natural justice. Based on the nature and severity of the violation of the Code of Conduct, the Company policies and/or the law, appropriate action is taken. The Audit Committee oversees the implementation of the Policy and reviews the resolution of complaints on a quarterly basis.
22. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, as amended ("POSH Act")
There is a zero-tolerance policy towards cases of sexual harassment at workplace reported by any person. Accordingly, an Internal Committee has been constituted, which has a female Chairperson who is a member of our Senior Management team and also has an external female member who is a lawyer. The Internal Committee ensures that all matters are resolved in a timely manner.
There is a robust internal mechanism and policy on ''Prevention of Sexual Harassment at Workplace'' to deal with such matters. All employees are sensitized to the policy right from the day of employment. We also conduct awareness programs for employees on the policy and have awareness posters with details of how to report a complaint along with the details of the Internal Committee members, which are displayed across all our working locations. The Internal Committee ensures that all cases reported are resolved in a timely manner, in accordance with the POSH Act. All investigations are handled in a very objective, sensitive, and fair manner without attaching any prima-facie guilt to the respondent merely upon receipt of a complaint against the employee. Utmost confidentiality is maintained while handling these matters.
For details on the cases reported and resolved during FY 2023 and the mechanism followed while dealing with such cases, please refer to Business Responsibility and Sustainability Report forming part of the Annual Report.
23.Internal Financial Control and their adequacy
An adequate Internal Financial Control (IFC) system has been put in place to ensure compliance with various policies, practices, and statutes. The Company ensures that such IFC systems are commensurate with the size and complexity of our business and are adequate and operating effectively on an ongoing basis.
The Board has adopted policies and procedures for:
⢠effectiveness and efficiency of operations
⢠Adequacy of safeguarding Company''s assets
⢠Prevention and detection of frauds and errors
⢠Accuracy and completeness of accounting records
⢠Timely preparation of reliable financial information
The details in respect of IFC and their adequacy are included in the Management Discussion and Analysis Report, which forms a part of the Annual Report.
The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act and the Rules made thereunder.
25. Particulars of Loans, Investments and Guarantees
The particulars of loans, investments and guarantees as on March 31, 2023, covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as amended and Regulation 34(3) read with Schedule V of the SEBI LODR Regulations, are given in the notes to the standalone financial statements, which forms a part of the Annual Report.
26. Material changes and commitments affecting the financial position of the Company, between the end of FY 2023 and the date of this Report
Other than as stated elsewhere in this Report, there are no material changes and commitments affecting the financial position of the Company between the end of FY 2023 and the date of this Report.
27. Management Discussion and Analysis Report
The Management Discussion and Analysis Report on financial and operational performance, industry trends and other required details prepared in compliance with Regulation 34 of the SEBI LODR Regulations for FY 2023 forms a part of the Annual Report.
28. Report on Corporate Governance
In compliance with Regulation 34 read with Schedule V of the SCSI LODR Regulations, the Report on Corporate Governance, inter-alia, covering composition, details of meetings of the Board and its Committees, together with a certificate from the Secretarial Auditors regarding compliance of conditions of corporate governance, forms a part of the Annual Report.
A certificate from the Chief Executive Officer and the Chief Financial Officer in terms of Regulation 17 of the SCSI LODR Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, also forms a part of the Annual Report.
29. Business Responsibility and Sustainability Report
In compliance with Regulation 34 of the SCSI LODR Regulations read with SCSI Circular no. SCBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, the Business Responsibility and Sustainability Report of the Company for FY 2023 describing the various initiatives undertaken from an ethical, environment, social and governance perspective during FY 2023 forms part of the Annual Report.
In compliance with Section 92(3) and Section 134(3)(a) of the Act and the Rules made thereunder, a copy of Annual Return as on March 31, 2023, is available on the Investor Relations Section of the IndiGo''s website https://www.goindigo.in/content/dam/ qoindiqo/investor-relations/other-related-documents/2022-23/Annual-Return-MGT-7-FY-2022-23.pdf.
31.Significant material orders passed by the Regulators, Courts and Tribunals
There are no significant material orders passed by the regulators, courts or tribunals impacting the going concern status of the Company and its operations in future.
During FY 2023, the Company received multiple awards and recognitions. Details in respect of such awards and recognition received by the Company are captured at Page No._, which forms a part of the Annual Report.
33. Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Act, the Board, based on representations received from the Management, and the processes involving the Company''s statutory and internal audit functions, and to the best of its knowledge, ability, and due inquiry, confirms that:
i. In preparation of the annual accounts, applicable accounting standards have been followed and proper explanation for any material departures has been provided.
ii. Applicable accounting policies have been selected and applied consistently in order to form views/make judgments and estimates that are reasonable and prudent. This is intended to facilitate a true and fair view of the state of affairs of the Company at the end of FY 2023 including profit/loss of the Company for that period.
iii. Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act is taken for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. Annual accounts have been prepared on a going concern basis.
v. Internal Financial Controls (IFCs) to be followed by the Company have been laid down and such IFCs are adequate and operating effectively.
vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
The statement containing disclosure of remuneration under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014, as amended is given in Annexure - C forming a part of this Report. The information as per Rule 5(2) and Rule 5(3) of the abovementioned Rules pertaining to the names of top ten employees
and other particulars of employees is provided in a separate annexure. However, as per the provisions of Section 136(1) of the Act and the Rules made thereunder, the Annual Report and the financial statements, excluding the aforesaid annexure, are being sent to the Members, and other persons entitled thereto. Any Member interested in obtaining this statement, may write to the Company Secretary requesting for the same.
None of the employees listed in the Annexure is related to any Director of the Company.
35. Transfer of unpaid / unclaimed dividend to Investor Education and Protection Fund
The provisions to transfer unpaid / unclaimed dividend to the Investor Education and Protection Fund (Fund) under Section 124(5) of the Act do not apply to the Company for FY 2023 since there is no unpaid / unclaimed dividend which was due for transfer to the said Fund during FY 2023.
The Auditors of the Company have not reported any instances of fraud committed in the Company by its officers or employees as specified under Section 143(12) of the Act.
37. Conservation of Energy, Technology Absorption
We persistently strive to run our operations more efficiently to reduce its fuel consumption and resultant fuel emissions. This endeavour entails IndiGo''s continuous commitment towards conservation of energy and motivates it to embrace newer technological advances.
The Company has incorporated policies, including flight and ground procedures, for conservation of fuel and has trained flight crew and aircraft maintenance engineers to ensure that fuel is conserved to the extent possible.
The Company ensures that there is adequate fuel for its aircraft, after evaluating various traffic trends in the air and also on the ground, thus avoiding any additional/ unnecessary fuel upliftment. The Company has installed softwares for accurate flight planning. These softwares provide accurate maps and the most efficient flight path, employing continuous descent approaches and economy cruise speeds. It also provides recommendations for optimising engine settings for take-off and climb. Further, innovative statistical data driven solutions has been adopted along with recommended manufacturer upgrades for descent fuel optimisation. We are also working with Airbus on big data analytics using Airbus platforms like SKYWISE.
The Company has also adopted fuel policies designed to reduce costs on the ground, including the use of the Eco-Power Engine Wash process for aircraft engines, the use of ground equipment in place of aircraft auxiliary power units (which consume more fuel), use of single engine for taxiing on ground and introduction of other engineering/operating protocols. These policies are all designed to optimise fuel consumption and reduce our carbon footprint and thereby finally reducing costs.
We continue to use technology to enhance processes to ensure safe and comfortable travel by air which helped gain customer confidence in IndiGo. Innovation such as solar Baggage Freight Loader (BLF) and Combo unit [combined Ground Power Unit (GPU) and Aircraft Cooling Unit (ACU)], helped in saving ATF, reducing carbon emissions. We are investing in Combo units which reduce Auxiliary Power Unit (APU) usage on ground and helped in reducing APU fuel burn and reducing carbon footprint.
We are engaged with stakeholders to collaborate on multiple air space optimisation initiatives like shortening of routes, promulgation of required navigation performance (RNP) approaches, optimising flight routes through conditional route (CDR). We are the first operator to adopt LPV (localiser performance with vertical guidance) approaches on ATR Fleet. This shall enable our ATR aircraft to land under marginal weather conditions utilising indigenous satellite-based augmentation system GAGAN. The Government of India has promoted flexible use of airspace and we are using this opportunity to utilise every bit of airspace to reduce fuel consumption and simultaneously reducing carbon footprint.
Further, operational endeavours have helped save carbon emissions to the tune of approximately 37000 tonnes through single engine taxiing, optimized landing and focused fuel uplift.
The Company has sought to reduce the weight of its aircraft by selecting lighter seats and by choosing not to have in- flight entertainment systems. The aircraft weight has been further reduced by equipping the entire fleet with Electronic Flight Bags (EFB) and removing paper manuals weighing 40kg from each Airbus aircraft. As an example, this small initiative alone will save the Company fuel to the tune of 800 tonnes each year and 2,500 tonnes of carbon emissions approximately.
We continue to explore the feasibility of using ground vehicles on cleaner alternative fuels like CNG/ electricity to reduce carbon emissions at airports.
38. Compliance with Secretarial Standards on Board and General Meetings
Pursuant to the provisions of Section 118 of the Act, the Company has complied with all the applicable provisions of the Secretarial Standard - 1 on Board meetings, issued by the Institute of Company Secretaries of India and Secretarial Standard - 2 on General meetings.
39. Foreign exchange earnings and outgo
The details of foreign exchange earnings and outgo for FY 2023, on an accrual basis, are set out below:
|
Particulars |
Amount (Rs. in million) |
|
Foreign exchange earnings |
81,382.21 |
|
Foreign exchange outgo* |
191,726.43 |
*Foreign exchange outgo excludes foreign exchange gain/loss on reinstatement of assets and liabilities.
The Board is grateful for the continuous patronage of our valued customers and remains committed to ensuring that the Company provides an on-time, courteous and hassle-free experience. The Board acknowledges and appreciates the hard work and dedication of the employees of the Company who have stood strong and worked together as a team during FY 2023.
We take this opportunity to express our appreciation to the central and state governments, regulatory authorities, investors, bankers and all other stakeholders for their trust and support and reaffirm our commitment to be the airline of choice for all our stakeholders.
On behalf of the Board of InterGlobe Aviation Limited
Dr. Venkataramani Sumantran Anil Parashar
Chairman Director
DIN: 02153989 DIN: 00055377
Date: May 18, 2023 Place: Gurugram
Mar 31, 2022
Your Directors ("Board of Directors" or "Board") are pleased to present the nineteenth Annual Report of InterGlobe Aviation Limited ("your Company" or "we" or "IndiGo") along with the audited financial statements for the financial year ended March 31, 2022 ("FY 2022"). Wherever required, the consolidated performance of your Company and its subsidiary has also been provided.
The standalone and consolidated financial highlights of your Company''s operations are summarised below:
|
(Rupees in |
million, except earnings per share) |
|||
|
Particulars |
Consolidated |
Standalone |
||
|
FY 2022 |
FY 2021 |
FY 2022 |
FY 2021 |
|
|
Revenue from operations |
259,309.27 |
146,406.31 |
259,309.27 |
146,406.31 |
|
Other Income |
7,255.98 |
10,369.64 |
7,245.42 |
10,363.32 |
|
Total Income |
266,565.25 |
156,775.95 |
266,554.69 |
156,769.63 |
|
Profit / (Loss) before Tax |
(61,536.84) |
(58,180.70) |
(61,710.25) |
(58,297.92) |
|
Current Tax |
(4.12) |
78.68 |
- |
|
|
Deferred tax credit / (charge) |
(77.49) |
37.75 |
- |
- |
|
Profit / (Loss) after Tax |
(61,618.45) |
(58,064.27) |
(61,710.25) |
(58,297.92) |
|
Other Comprehensive Income / (Loss) net of tax |
10.65 |
(5.81) |
29.65 |
(16.65) |
|
Total Comprehensive Income / (Loss) Earnings per equity share of the face value of Rs. 10 each |
(61,607.80) |
(58,070.08) |
(61,680.60) |
(58,314.57) |
|
Basic (Rs.) |
(160.01) |
(150.89) |
(160.25) |
(151.49) |
|
Diluted (Rs.) |
(160.01) |
(150.89) |
(160.25) |
(151.49) |
On a consolidated basis, your Company achieved a total income of Rs. 266,565.25 million for FY 2022, higher by 70.03% over the previous year''s total income of Rs. 156,775.95 million. Your Company reported a net loss of Rs. 61,618.45 million for FY 2022 against a net loss of Rs. 58,064.27 million for the previous year.
On a standalone basis, your Company achieved a total income of Rs. 266,554.69 million for FY 2022, higher by 70.03% over the previous year''s total income of Rs. 156,769.63 million. Your Company reported a net loss of Rs. 61,710.25 million for FY 2022 against a net loss of Rs. 58,297.92 million for the previous year.
3. Performance of Agile Airport Services Private Limited ("Agile" or "Subsidiary Company")
Agile is a wholly owned subsidiary of your Company and is engaged in the business of providing ground handling and other allied services to your Company at various airports in India.
The total income of Agile for FY 2022 was Rs. 3,719.09 million, higher by 25.91% over the previous year''s total income of Rs. 2,953.87 million. The net profit was Rs. 91.80 million indicating a reduction of 60.71% over net profit of Rs. 233.65 million for FY 2021. Pursuant to Section 129(3) of the Companies Act, 2013 ("Act") read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended from time to time, a statement containing the details of performance and salient features of the financial statements of the Subsidiary Company in form AOC -1 is annexed to the consolidated financial statements.
In compliance with the provisions of Section 136 of the Act, the audited financial statements of the Subsidiary Company are uploaded on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/ subsidiary-financials/2021-22/Finanical-Statements-Agile-FY-21-22.pdf
Your Company has adopted a policy for determining material subsidiaries pursuant to Regulation 16(1)(c) of the SCBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SCBI LODR Regulations") which is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/2021/InterGlobe-Aviation-Limited-Policy-on-Material-Subsidiary.pdf. Your Company has no material subsidiary as on date.
RviQtion-Limited-Policy-on-MQteriQl-SubsidiQry.pdf. Your Company has no material subsidiary as on date.
A. Operations and growth
Your Company operated 1,574 peak daily flights and carried over 49.70 million passengers during FY 2022 as compared to 1,301 peak daily flights and 30.70 million passengers in FY 2021.
Your Company operated:
(a) Scheduled services to 88 destinations including 07 new destinations
(b) 30 unique non-scheduled destinations
(c) 3,237 cargo in cabin flights,
(d) 991 charter flights
B. Serving the nation for repatriation and bubble flights
Your Company operated 35 Operation Ganga flights and 22,183 flights under the Government''s bubble flights arrangements with other countries for FY 2022. Your Company also addressed the national need during the pandemic by operating ad-hoc repatriation flights to 04 new countries and 05 destinations outside its network.
C. Inducting aircraft and procedures to save fuel
Our fleet as on March 31, 2022, consists of 41 Airbus CEO, 199 Airbus NEO and 35 ATR aircraft. During FY 2022, your Company inducted 49 new fuel-efficient aircraft powered by PW1100G and CFM LEAP-1A engines.
Your Company ranked No.1 for On-Time Performance (OTP) at key metro cities. Additionally, your Company also achieved a technical dispatch reliability of 99.95% as published in AIRBUS IDOLS for reliability.
Your Company has obtained In-Principal approval for induction of P2F Freighter/CarGo aircraft under the existing Air Operator Certificate (AOC). Induction of CarGo aircraft under the same AOC will reduce the time and the process for separate AOC for dedicated and CarGo operations. Your Company would soon get the Extended Diversion Time Operations (EDTO), for 120 minutes from the Director General of Civil Aviation (DGCA), to fly on direct routes over-sea for 120 minutes on A320 family aircraft. This would help in achieving shorter routes and saving fuel. To achieve operational excellence, your Company launched awareness campaigns for adoption of fuel-efficient techniques and collaborated with the regulatory authorities and the Indian Air-Force to facilitate airspace optimisation, with a clear focus on efficiency and safety.
Your Company was quick to adapt to global travel requirements and operated repatriation flights to Ukraine to help Indians come home safe.
Your Company during the pandemic and past pandemic continued skilling Pilots to keep their knowledge and skills current. The period was transformational, multiple programs were converted from traditional classroom learning session to a blended learning training format which included - Classroom sessions, Virtual classes - Instructor led and E-learning (LMS), however keeping learning quality as paramount.
In the blending learning format, focus of the classroom session was to clear doubts, meet trainers and colleagues to ensure that the contact aspect of human connect is not missed. The E-Learning programs act as a knowledge retainer - As it gives our pilots access to learning information 24*7 an opportunity to revise their learning on the go and in the comfort and safety of their homes. Your Company has also converted our annual pilot recurrent training for both ATR and Airbus into blended learning, saving overall cost and time. The initial course was 05 days and post DGCA approval we have been able to create a blended format ensuring efficient use of pilot utilization.
Your Company also continued inducting junior first officers to ensure pipeline continuation and to effectively manage future requirements. Your Company has also created a virtual training program for conversion from A320 to A321, enabling Pilots to fly both type of variants seamlessly.
Your Company also revamped the recurrent simulator training program and ensured that new scenario-based training was incorporated for our Pilots to manage all types of environment & situations during line flying and enhance their learning experience at IndiGo. Your Company also launched a new enhanced command development course as per Global standards to enhance the quality of our new Captains.
Your Company was the first airline in India to implement the foundation of CBTA (Competency based training assessment) AND CAT (evidence based training), this was in line with ICAO and IATA standards. This develops the important quality of Resilience amongst the pilots which was required to tide over the last two years.
Your Company also trains all Pilots (ATR & Airbus) on Global Reporting Format (GRF) - a mandatory requirement to understand the reporting format on runway surface conditions for effective calculation of take-off and landing performance - fulfilling regulatory compliance, enhanced performance and safety.
Your Company has undertaken ground classes to revalidate Airbus Type Rating of Pilots issued with Letter of Intent (LOI) to ensure readiness of their availability in the future. Your Company also successfully added to its training capacity by getting approvals for training rooms for Engineering personnel and Cabin crew training at its Delhi hangar.
Covid-19 continues to keep the world on alert, however countries all over the world and India have been continuously finding ways to reduce the spread of the Covid-19, creating new processes to facilitate safety and security while ensuring business revival. Your Company saw revival of business post the second wave, while managing with limited visibility of scheduled operations and change in regulations month on month due to the dynamic spread of Covid-19 keeping operations fluid.
Employees: Your Company proactively communicated timely and accurate Covid-19 related messaging to its employees, providing the workforce with up-to-date news and information to provide reassurance throughout the pandemic.
Operations: Your Company experienced a high demand for charters from UAE and managed the demand successfully, with strict travel restriction, in terms of 03-point checks and reduced capacity.
Your Company, towards the end of 2021, saw excellent travel demand, however the sudden surge imposed a unique challenge of managing manpower and available resources. Innovative planning and optimum utilisation of resources kept our operations tight and turn arounds safe and quick.
Post the second wave, your Company continues to ensure that adequate crew/airport staff is available to ensure business continuity. Additionally, new processes are continuously being implemented and reviewed in compliance with the Ministry of Civil Aviation ("MOCA") guidelines.
Measures taken to mitigate the impact: Being India''s largest carrier by market share and carrying the largest number of passengers by air in India, we understood our responsibility to our customers, the industry, and the country.
Your Company continues disinfection and cleaning of all aircraft on arrival to help reduce the spread of the virus. Additionally, when parked at night, all aircraft undergo deep cleaning with focus on all touch points such as tray tables, arm rests, seat belts, lavatory doors and overhead nozzles. Every aircraft is fumigated once a week and all customer coaches are sanitized after each trip, to provide a safe travel experience. Your Company, as prescribed by the DGCA, eased the requirement of wearing face shield, however continued with wearing mask and maintenance of social distancing.
In FY 2022, your Company continued focus on contactless travel experience at the airports. Your Company created more awareness among the passengers on how they can web check-in, fill the health declaration form online, pay for all ancillary products and add a print baggage tags from home. These initiatives ensured that more than 83.1% check-ins were done online, and 37.80 million bag tags had been printed by our passengers.
With the continuous changes in the state and international travel regulations, your Company created a centralised page on its website which is updated regularly to help customers become aware of the latest travel guidelines. Additionally, relevant changes in state and international travel regulations were communicated to the passengers through various digital channels such as social media, emailers, SMS and WhatsApp. At the airports, we have introduced self-check-in and print baggage''s tags and also enabled UPI payment option for a true contactless experience.
Your Company also enabled customers to self-board at the boarding gate, further reducing human contact. In these difficult times, your Company announced a special offer - ''Tough Cookie'' and offered a 25% discount on airfare for all doctors and nurses, as a gesture to thank them for being at the forefront of the battle against the Covid-19 outbreak. These Covid Warriors were facilitated at various touch points by the operations and the marketing teams.
Your Company has transported the highest number of Covid Vaccines in India since January 2021. With the end of FY 2022 and start of summer schedule, your Company saw the opening of international markets and a steady revival of operations.
Your Company complied with the regulator regarding staggered meal service on board in order to restrict customers consuming meals together. Discontinued food service on flights less than 02 hours as staggered service was not practical on these flights due to short
flight duration. An Inflight Service Bubble was introduced restricting cabin crew to their service zones that minimised spread of virus between customer to crew and vice versa. Effective November 2021, we resumed service on flights less than 02 hours.
This year has been one of transition. With the pandemic easing out, and vaccination rates going up, the regulator enforced resumption of contact classes. Your Company has successfully blended contact classes with virtual training while ensuring optimum training quality and learning efficacy.
Your Company has worked with the regulator and has been approved to continue recurrent training/drills virtually. All non-mandatory and corporate trainings continue virtually, expertly balancing learning quality and cost efficiency. Our crew and ground employees were trained on various post Covid-19 scenarios, instilling in its employees a strong ability to create hassle free experiences for customers travelling with us. Your Company got an extraordinary approval for load and trim training (the only airline in India) to conduct conversion training, differences training and loading competency training virtually for international airports.
Your Company has adopted the ''InterGlobe Aviation Limited - Dividend Distribution Policy'' in compliance with Regulation 43A of the SEBI LODR Regulations. The Policy sets out the parameters and factors to be considered by the Board in determining the distribution of dividend to its Members and / or retaining profits of your Company. The Dividend Distribution Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/2021/ InterGlobe-Aviation-Limited-Dividend-Distribution-Policy.pdf.
Based on your Company''s performance, cash flow position and the loss incurred during FY 2022, the Board has not recommended any dividend on the equity shares of your Company.
6. Amount to be carried to Reserves
Your Directors do not propose to transfer any amount to reserves.
7. Arbitration Proceedings filed with the London Court of International Arbitration
InterGlobe Enterprises Private Limited and Mr. Rahul Bhatia (the "IGE Group") had submitted a Request for Arbitration dated October 01, 2019, to the London Court of International Arbitration under the Shareholders'' Agreement dated April 23, 2015 (as amended on September 17, 2015) ("Shareholders Agreement") executed between, inter-alia, the IGE Group, Mr. Rakesh Gangwal, The Chinkerpoo Family Trust, Ms. Shobha Gangwal (together with Mr. Gangwal and The Chinkerpoo Family Trust, the "RG Group"), and your Company. In the arbitration proceedings, the IGE Group had sought certain reliefs against the RG Group, including in relation to compliance with the Shareholders Agreement and your Company''s Articles of Association ("Articles") as well as damages. The RG Group also sought certain reliefs against the IGE Group, including to carry out all requisite steps and actions, provide consents and assistance to remove certain provisions from your Company''s Articles. The Company was named as a proper party to the arbitration and no monetary claim, including any compensation, was sought from the Company by the IGE Group or the RG Group.
The arbitral award was issued in the Arbitration proceedings on September 23, 2021 (the "Award"). The Award contains no directions to the Company. Further, the Award directs that the costs incurred by the Company in relation to the Arbitration proceedings be reimbursed by the IGE Group. The arbitration proceedings with respect to the Company have concluded, and as per the directions in the Award, the Company has received reimbursement of costs, from the IGE Group in relation to the arbitration. The Award does not adversely impact the financial results of the Company.
8. Amendment to the Articles of Association
Pursuant to the joint requisition dated November 25, 2021, made by the IGE Group and the RG Group (collectively the "Requisitionists"), collectively holding 74.44% of the paid-up equity shares of your Company on the date of requisition, an Extraordinary General Meeting of the Members of your Company was convened on Thursday, December 30, 2021, for removing the Transfer Restriction Articles from the Articles of Association of your Company. Transfer Restriction Articles means Articles 1.6 to 1.15 (Transfer of Equity Shares), 1.16 to 1.20 (Acquisition of Shares) and 2A (Other provisions on Equity Shares).
The Members of your Company, at the said Extraordinary General Meeting, had approved the Special Resolution for amendment in the Articles of Association of your Company by deletion of the Transfer Restriction Articles therefrom.
9. Employee Stock Option Scheme
Pursuant to approval of the Members of your Company on June 25, 2015, your Company had adopted ''InterGlobe Aviation Limited - Employee Stock Option Scheme 2015'' ("Scheme") which was amended on September 07, 2016. Under the Scheme, your Company grants share-based benefits to the eligible employees by granting stock options ("Options"), with a view to attract and retain talent and encouraging employees to align their individual performances with the Company''s broader growth objectives. During FY 2022, there has been no change in the Scheme and the Company continues to comply with the provisions of the SEBI (Share Based employee Benefits and Sweat Equity) Regulations, 2021, as amended ("SEBI SBEB Regulations").
The disclosure, in compliance with the SEBI SBEB Regulations, is uploaded on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/other-related-documents/2021-22/Statement-under-Reg-14-of-the-SEBI-Share-Based-Employee-Benefits-and-Sweat-Equity-Regulations-2021.pdf
Pursuant to the allotment of 344,729 equity shares of Rs. 10 each upon exercise of Options by the eligible employees under the Scheme, the issued, subscribed, and paid-up share capital of your Company increased from 384,910,000 equity shares as on March 31,2021, to 385,254,729 equity shares of Rs. 10 each as on March 31, 2022, aggregating to Rs. 3,852.55 million.
11. Related Party Transactions
Your Company had adopted ''InterGlobe Aviation Limited - Policy on dealing with Related Party Transactions'' ("RPT Policy") in compliance with Regulation 23 of the SEBI LODR Regulations. During FY 2022, there has been no change in the RPT Policy. The transactions entered by your Company with its related parties were in compliance with the RPT Policy and in the best interest of your Company. The RPT Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/2021/IGAL-Policy-on-Related-Party-Transactions-2019.pdf
All the contracts/ arrangements/ transactions entered into by your Company with its related parties during FY 2022, were in its ordinary course of business and on an arm''s length basis and were approved by the Audit Committee. Your Company has obtained necessary approval, as required, in accordance with the RPT Policy.
During FY 2022, your Company had not entered into any arrangement / transaction / contract with its related parties which could be considered material and required approval of the Board or the Members. Accordingly, the disclosure of the particulars of the related party transactions in form AOC -2 as required under Section 134(3)(h) of the Act is not applicable.
For further details of related party transactions during the year, please refer to note number 35 of the notes forming a part of the financial statements, attached to the Annual Report.
Pursuant to Regulation 23 of the SEBI LODR Regulations, your Company had filed to the stock exchanges the details of related party transactions on half yearly basis.
12. Directors and Key Managerial Personnel
a) Directors
As on March 31, 2022, the Board comprised of eight (8) members with an appropriate mix of Non-Executive Directors, Executive Directors, and Independent Directors, which is in compliance with the provisions of the Act, the SEBI LODR Regulations and is also aligned with the best practices of Corporate Governance.
In compliance with the provisions of Sections 196, 203 and Schedule V to the Act, Mr. Rahul Bhatia, Non-Executive Director was appointed as the Managing Director of your Company, not liable to retire by rotation, for an initial period of five years, effective from February 4, 2022. His appointment was approved by the Members of your Company through postal ballot on March 18, 2022.
Mr. Rakesh Gangwal tendered his resignation from the position of Non-Executive Director of your Company with effect from February 18, 2022. The Board appreciated the contribution made by Mr. Gangwal during his appointment as a Director on the Board of your Company.
Dr. Anupam Khanna completed his second term as an Independent Director of your Company on March 26, 2022. Consequently, Dr. Khanna ceased to be a Director of your Company from the said date. The Board places on record its appreciation for the contribution made by Dr. Khanna as an Independent Director on the Board of your Company.
Mr. Meleveetil Damodaran stepped down as Chairman and Independent Director of your Company on attaining the age of 75
years on May 3, 2022, in terms of Regulation 17(1fl) of the SEBI LODR Regulations. The Board places on record its appreciation for the contribution made by Mr. Damodaran as the Chairman and Independent Director on the Board of your Company. [Mir. Meleveetil Damodaran has been appointed by the Board as a Non-Independent Non-Executive Director (as Additional Director) with effect from July 16, 2022, subject to approval of the Mlembers of the Company at the ensuing Annual General Mleeting],
Pursuant to the provisions of Sections 149, 161 and other applicable provisions of the Act and the SEBI LODR Regulations and on the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on April 12, 2022, approved appointment of Mr. Vikram Singh Mehta and Air Chief Marshal (Retd.) Birender Singh Dhanoa as Independent Directors (as Additional Directors) on the Board, not liable to retire by rotation, subject to receipt of security clearance from the MOCA and further subject to approval of the Members of your Company. The appointments of Mr. Mehta and ACM Dhanoa (Retd.) will be effective from the date of receipt of security clearance from the MOCA [Pursuant to receipt of security clearance approval from MOCA, the appointment of Mr. Mehta and ACM Dhanoa (Retd.) as the Independent Directors on the Board is effective from May 27, 2022].
Mr. Mehta has been appointed in the vacancy caused due to completion of second term of Dr. Anupam Khanna as an Independent Director. ACM Dhanoa (Retd.) has been appointed in the vacancy caused due to Mr. Meleveetil Damodaran stepping down as an Independent Director on attaining the age of 75 years on May 3, 2022. As per Section 161 of the Act, Mr. Mehta and ACM Dhanoa (Retd.) will hold office till the ensuing Annual General Meeting ("AGM") and are eligible for appointment as the Independent Directors of your Company. The Board is of the opinion that Mr. Mehta and ACM Dhanoa (Retd.) have relevant experience, expertise and integrity for holding the position of the Independent Directors on the Board.
Mr. Ronojoy Dutta has decided to retire by resignation as the Whole Time Director and CCO of the Company with effect from September 30, 2022. The Board places on record sincere thanks to Mr. Dutta for effectively leading the Company with a steady hand through the most turbulent period in the Company''s history and the aviation industry globally.
Pursuant to Sections 161,196, 197, 203 read with Schedule V and other applicable provisions of the Act read with the rules made thereunder, the Board has approved the appointment of Mr. Petrus J.T. Clbers as the Chief executive Officer ("CEO") and as a Whole Time Director of the Company, subject to receipt of security clearance from MOCA, the approval of the Central Government, if required, and the approval of the Members of your Company. The appointment of Mr. Elbers as the CEO is expected to be effective from October 01,2022.
Mr. Anil Parashar, Non-Executive Director, retires by rotation and being eligible, offers himself for reappointment at the ensuing AGM.
The Notice of AGM includes the proposal for appointment and re-appointment of Directors as stated above.
Your Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as laid down under Section 149 of the Act and Regulation 16 of the SEBI LODR Regulations and complied with the Code for Independent Directors prescribed in Schedule IV of the Act. During FY 2022, there has been no change in the circumstances affecting their status as Independent Directors of your Company.
None of the Directors of the Company is disqualified to act as a Director as per the requirement of Section 164 of the Act.
b) Key Managerial Personnel
Mr. Gaurav Manoher Negi was appointed as the Chief Financial Officer of your Company with effect from March 29, 2022, in place of Mr. Jiten Chopra, who resigned with effect from March 28, 2022. Mr. Negi has been associated with your Company since December 2021 and has earlier held the position of Head - Governance, Risk and Compliance. The Board places on record its appreciation for the contribution made by Mr. Chopra during his tenure as the Chief Financial Officer of the Company.
13. Number of meetings of the Board
The Board met 13 times during FY 2022. The details of meetings of the Board and attendance of the Directors at the Board meetings are given in the Report on Corporate Governance which forms a part of the Annual Report.
As on March 31, 2022, the Board had the following five committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Risk Management Committee
iv. Corporate Social Responsibility Committee
v. Stakeholders Relationship Committee
The details of the composition, terms of references, and number of committee meetings held during FY 2022 and the attendance of the committee members at each meeting are given in the Report on Corporate Governance which forms a part of the Annual Report.
Pursuant to the provisions of the Act and the SEBI LODR Regulations, an evaluation process was carried out to evaluate performance of the Board and its committees, the Chairman of the Board, and all Directors, including Independent Directors. The evaluation was aimed at improving the effectiveness of all these constituents and enhancing their contribution to the functioning of the Board.
We had reported in the Board''s Report for FY 2021 that, during that year, on the recommendation of the Nomination and Remuneration Committee (Committee), an independent external expert in Board evaluation, was engaged by the Management to undertake such evaluation. He had carried out the exercise through questionnaires, both numeric as well as qualitative responses, that were sent directly to the Board members on a confidential basis. The independent external expert had then followed through with confidential individual conversations with each Board member and developed separate evaluation reports. Subsequently, the independent external expert had collated confidential reports for (a) the Board as a Whole, (b) Chairman of the Board, (c) Individual Directors, both Independent and Non- Independent, and (d) for each of the Board committees separately. The assessment of individual Directors was sent in separate sealed envelopes to the concerned Directors. The results of evaluation of the Board and its various committees were subsequently discussed by the Board at its meeting and the areas for improvement of the functioning of the Board and committees were noted.
In view of the in-depth evaluation conducted in the previous year, for FY 2022, upon the recommendation of the Committee, a robust internal evaluation of the Board was conducted. The questionnaires for this evaluation were developed based on improvement areas identified last year and coordinated directly by the Chairman of the Board.
In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, and the Board as a whole was also discussed, taking into account the views of Executive Directors and Non-Executive Directors.
Your Company had adopted the ''InterGlobe Aviation Limited - Nomination and Remuneration Policy'' in compliance with Section 178 of the Act and Regulation 19(4) read with Part D of Schedule II to the SEBI LODR Regulations, for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management of your Company. The Policy lays down the process and parameters for the appointment and remuneration of the KMPs and other senior management personnel and the criteria for determining qualifications, highest level of personal and professional ethics, positive attributes, financial literacy, and independence of a Director. The Policy is available on the Investor Relations section of the website of your Company at https://www. goindigo.in/content/dam/goindigo/investor-relations/policies/2021/InterGlobe-Nomination-and-Remneraion-Policy.pdf.
Your Company has been following a rigorous process of leadership talent review, named "Talent Councils" ever since FY 2019. We continue to follow an established process to identify and nurture talented employees at an early stage with the goal of succession planning. Once a year, we discuss succession planning for key positions with the various business function heads within your Company. Competencies, skills, and experience required for performing leadership roles, at the level of Vice President and above are clearly established. At the yearly Talent Council meetings, we take time to review the performance and potential of each senior leader in depth. We then compare this with the job specifications of the corresponding positions. This review process forms the basis of people identification and development for filling all top positions. In addition, your Company''s Human Resource function continually maps the external market to identify talent for which immediate internal candidate is not available. Ever since FY 2021, we have been focused on identifying talent at a lower than Vice President level and have been taking specific measures to ensure the development of these emerging leaders.
Your Company is in the forefront of developing talent across various levels of skills, both across Crew and Non-Crew. Our in-house training academy, ifly, aims to identify training gaps and solutions and provide learning opportunities to enhance skills and experience across behavioural and technical competencies, with enhancing leadership skills to create an army of leaders for IndiGo.
Your Company has put in place a structured Enterprise Risk Management framework ("ERM framework") based on the guiding principles from SEBI of identifying, assessing and mitigation of risks. It is an integral part of decision-making for your Company and is dynamic in nature, undergoing continuous improvement. The ERM Framework follows an annual process of setting objectives, identifying key risks on an ongoing basis, developing a mitigation action plan and monitoring.
The Risk Management Committee (Committee) has been empowered to frame, implement, and monitor the risk management practices of your Company. The Committee has been entrusted for systematically overseeing, reviewing, and updating the risk management calendar, based on certain risks becoming more important during the year. The Committee meets on regular intervals and discusses risks relating to liquidity & profitability, demand & revenue, cyber threat & data protection, business continuity plan, employee health & labour relations, sustainability & climate change, airline safety & security, adverse regulatory changes & litigation, competition, reputation, unfavorable fuel & forex movement and any other new risk that may be identified by the Management.
The Audit Committee has an additional oversight in the area of financial risks.
A note on key risks of your Company is given in the Management Discussion and Analysis Report which forms a part of the Annual Report.
19. Corporate Social Responsibility
A brief outline of the Corporate Social Responsibility ("CSR") Policy of your Company and the initiatives undertaken by your Company on CSR activities during the year are set out in Annexure - A to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
For other details regarding the CSR Committee, please refer to the Report on Corporate Governance, which forms a part of the Annual Report.
The Corporate Social Responsibility Policy as approved by the Board is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/InterGlobe-Aviation-Limited-Corporate-Social-Responsibility-Policy-2.pdf.
S.R. Batliboi & Co. LLP (Firm Registration no. 301003E/E300005) was appointed as the Statutory Auditors of your Company at the 16th AGM held on August 27, 2019, for a term of five consecutive years from the conclusion of the 16th AGM till the conclusion of the 21st AGM of your Company, in accordance with the provisions of Section 139 of the Act.
The Reports given by the Statutory Auditors on the standalone financial statements and the consolidated financial statements of your Company for FY 2022 form part of the Annual Report. The Reports do not contain any qualification, reservation or adverse remark or disclaimer by the Statutory Auditors.
Sanjay Grover & Associates, firm of practicing Company Secretaries (Firm Registration no. P2001DE052900) ("Secretarial Auditors"), carried out the secretarial audit for FY 2022 in compliance with the Act and the Rules made thereunder, the SEBI LODR Regulations and other applicable regulations as prescribed by the SEBI, Foreign Exchange Management Act, 1999, as amended and other laws specifically applicable to your Company. The Secretarial Audit Report in form MR-3 for FY 2022 is attached to this Report as Annexure - B. The said Report does not contain any qualification, reservation or adverse remark or disclaimer by the Secretarial Auditors.
In compliance with Regulation 24A of the SEBI LODR Regulations, read with SEBI circular no. CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Secretarial Auditors have also issued Annual Secretarial Compliance Report for FY 2022. The said Report does not contain any qualification, reservation or adverse remark or disclaimer by the Secretarial Auditors.
22. Non-applicability of maintenance of cost records
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and the Rules thereunder with respect to the aviation business.
23. Whistleblower Policy / Vigil Mechanism
Pursuant to Section 177(9) of the Act and Regulation 22 of the SEBI LODR Regulations, your Company has adopted a Whistleblower Policy / Vigil Mechanism for Directors, Senior Management and employees of your Company and its subsidiary. The Whistleblower Policy provides for adequate safeguards against victimisation of whistleblowers and provides for direct access to the Chairperson of the Audit Committee, in exceptional circumstances.
The policy provides for a mechanism to report concerns about unethical behaviour, actual or suspected fraud, instances of leak of Unpublished Price Sensitive Information ("UPSI") or violations of your Company''s Code of Conduct. The Whistleblower Policy also
enables suppliers, contractors, and other stakeholders to report unethical behaviour, misconduct, violation or legal or improper practices, actual or suspected fraud by a Company official without any fear of unfair treatment (including loss of business).
During FY 2022, no person was denied access to the Chairperson of the Audit Committee. The Audit Committee oversees the implementation of the policy and reviews the resolution of complaints on a quarterly basis.
Your Company has implemented a class-leading complaint resolution mechanism, which aims at resolving complaints promptly, transparently, independently and in accordance with the law. All complaints of suspected violations are taken seriously and reviewed promptly. Based on the nature and severity of the violation of the Code of Conduct, the Company policies and/or the law, appropriate action is taken.
The policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/ goindigo/investor-relations/policies/2021/IGAL-WhistleBlower-Policy-2.pdf
24. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, as amended ("POSH Act")
Your Company has a zero-tolerance policy towards cases of sexual harassment at workplace reported by any woman against an employee. Your Company has constituted an Internal Committee which has a female Chairperson who is a member of our Senior Management team and also has an external female member who is a lawyer.
Your Company has a robust internal mechanism and policy on ''Prevention of Sexual Harassment at Workplace'' to deal with such matters. All employees are sensitized to the policy right from the day of employment. We also conduct awareness programs for employees on the policy and have awareness posters with details of how to report a complaint along with the details of the Internal Committee members, which are displayed across all our working locations. The Internal Committee ensures that all cases reported are resolved in a timely manner, in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal), Act 2013. All investigations are handled in a very objective, sensitive, and fair manner without attaching any prima-facie guilt to the respondent merely upon receipt of a complaint against the employee. Utmost confidentiality is maintained while handling these matters.
For details on the cases reported and resolved during FY 2022 and the mechanism followed by your Company while dealing with such cases, please refer to Business Responsibility and Sustainability Report forming part of the Annual Report.
25. Internal Financial Control and their adequacy
Your Company has put in place an adequate Internal Financial Control (IFC) system, to ensure compliance with various policies, practices, and statutes. Your Company ensures that such IFC systems are commensurate with the size and complexity of our business and are adequate and operating effectively on an ongoing basis.
The Board has adopted policies and procedures for:
⢠effectiveness and efficiency of operations
⢠Adequacy of safeguarding Company''s assets
⢠Prevention and detection of frauds and errors
⢠Accuracy and completeness of accounting records
⢠Timely preparation of reliable financial information
The details in respect of your Company''s IFC and their adequacy are included in the Management Discussion and Analysis Report, which forms a part of the Annual Report.
Your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act and the Rules made thereunder.
27. Particulars of Loans, Investments and Guarantees
The particulars of loans, investments and guarantees as on March 31, 2022, covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as amended and Regulation 34(3) read with Schedule V of the SEBI LODR Regulations, are given in the notes to the standalone financial statements, which forms a part of the Annual Report.
28. Material changes and commitments affecting the financial position of your Company, between the end of the financial year and the date of this Report.
Other than as stated elsewhere in this Report, there are no material changes and commitments affecting the financial position of your Company between the end of the financial year and the date of this Report.
29. Management Discussion and Analysis Report
The Management Discussion and Analysis Report on your Company''s financial and operational performance, industry trends and other required details prepared in compliance with Regulation 34 of the SEBI LODR Regulations for FY 2022 forms a part of the Annual Report.
30. Report on Corporate Governance
In compliance with Regulation 34 read with Schedule V of the SEBI LODR Regulations, the Report on Corporate Governance of your Company, inter alia, covering composition, details of meetings of the Board and committees, together with a certificate from the Secretarial Auditors regarding compliance of conditions of Corporate Governance, forms a part of the Annual Report.
A certificate from the Whole Time Director and CEO and the Chief Financial Officer of your Company in terms of Regulation 17 of the SEBI LODR Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, also forms a part of the Annual Report.
31. Business Responsibility and Sustainability Report
In compliance with Regulation 34 of the SEBI LODR Regulations read with SEBI Circular no. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, the Business Responsibility and Sustainability Report of your Company for FY 2022 describing the various initiatives undertaken from an environment, social and governance perspective during FY 2022 forms part of the Annual Report.
In compliance with Section 92(3) and Section 134(3)(a) of the Act and Rules made thereunder, a copy of your Company''s Annual Return as on March 31,2022, is available on the Investor Relations Section of the website of your Company at https://www.goindigo. in/content/dam/goindigo/investor-relations/other-related-documents/2021-22/Annual-Return-MGT-7-FY-2021-22.pdf.
33. Significant material orders passed by the Regulators, Courts and Tribunals
There are no significant material orders passed by the regulators, courts or tribunals impacting the going concern status of your Company and its operations in future.
During FY 2022, your Company received multiple awards and recognition. Details in respect of such awards and recognition received by your Company are included in the Management Discussion and Analysis Report, which forms a part of the Annual Report.
35. Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Act, the Board, based on representations received from the Management and to the best of its knowledge, ability, and due inquiry, confirms that:
i. In the preparation of the annual accounts, applicable accounting standards have been followed and proper explanation for any material departures has been provided.
ii. Applicable accounting policies have been selected and applied consistently in order to form views/make judgments and estimates that are reasonable and prudent. This is intended to facilitate a true and fair view of the state of affairs of your Company at the end of the financial year including profit/loss of your Company for that period.
iii. Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act is taken for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.
iv. Annual accounts have been prepared on a going concern basis.
v. IFCs to be followed by your Company have been laid down and such IFCs are adequate and operating effectively.
vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
The statement containing disclosure of remuneration under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended is given in Annexure - C forming a part of this Report. The information as per Rule 5(2) and Rule 5(3) of the abovementioned Rules pertaining to the names of top ten employees and other particulars of employees is provided in a separate annexure. However, as per the provisions of Section 136(1) of the Act and the Rules thereunder, the Annual Report and the financial statements, excluding the aforesaid annexure, are being sent to the Members, and other persons entitled thereto. Any Member interested in obtaining this, may write to the Company Secretary at the Registered Office of your Company in this regard.
None of the employees listed in the Annexure are related to any Director of your Company.
37. Transfer of unpaid / unclaimed dividend to Investor Education and Protection Fund
The provisions to transfer unpaid / unclaimed dividend to the Investor Education and Protection Fund (Fund) under Section 124(5) of the Act do not apply to your Company for FY 2022 since there is no unpaid / unclaimed dividend which is due for transfer to the said Fund during the current financial year.
The Auditors of your Company have not reported any instances of fraud committed in your Company by its officers or employees as specified under Section 143(12) of the Act.
39. Conservation of Energy and Technology Absorption
Your Company persistently strives to run its operations more efficiently to reduce its fuel consumption and resultant fuel emissions. This endeavour entails your Company''s continuous commitment towards conservation of energy and motivates it to embrace newer technological advances.
Your Company has incorporated policies, including flight and ground procedures, for conservation of fuel and has trained flight crew and aircraft maintenance engineers to ensure that fuel is conserved to the extent possible.
Your Company ensures that there is adequate fuel for its aircraft, after evaluating various traffic trends in the air and also on the ground, thus avoiding any additional/ unnecessary fuel upliftment. Your Company has installed a software for accurate flight planning. This software provides accurate maps and the most efficient flight path, restricting use of auxiliary power units, employing continuous descent approaches and economy cruise speeds. It also minimises aircraft weight by providing recommendations for removing unnecessary equipment and optimising engine settings for take-off and climb. Further, your Company has adopted innovative statistical data driven solutions for descent fuel optimisation.
We are also working with Airbus on big data analytics using Airbus platforms like SKYWISE.
Your Company continues to use technology to enhance processes to ensure safe and comfortable travel by air which helped gain customer confidence in IndiGo. Innovation such as solar Baggage Freight Loader (BLF) and COMBO unit which can replace APU usage during turnaround (combined GPU and ACU unit), helped in saving ATF, reducing carbon emissions. Your Company is engaged with stakeholders to collaborate on multiple air space optimisation initiatives like shortening of routes, promulgation of required navigation performance (RNP) approaches optimising flight routes through conditional route (CDR). We are the first operator to adopt LPV (localiser performance with vertical guidance) approaches on ATR Fleet. This shall enable our ATR aircrafts to land aircraft under marginal weather conditions utilising indigenous satellite-based augmentation system GAGAN. The Government of India has promoted flexible use of airspace and your Company has been using this opportunity to utilise every bit of optimum airspace to reduce fuel consumption and simultaneously reducing carbon emissions. Since August 2020, your Company has been able to reduce carbon emissions by 29,000 tonnes by utilising direct routes.
Further Operational endeavors have helped us save Carbon emissions to the tune of 30,354 tonnes through reduction of onboard weight, single engine taxi, optimised landing, and focused fuel uplift.
Your Company has sought to reduce the weight of its aircraft by selecting lighter seats and by choosing not to have in- flight entertainment systems. Your Company has further reduced the aircraft weight by equipping the entire fleet with Electronic Flight Bags (EFB) and removing paper manuals weighing 25kg from each Airbus aircraft. As an example, this small initiative alone will save us fuel consumption to the tune of 341 tonnes each year and 10,76 tonnes of carbon emissions approximately.
Your Company has also adopted fuel policies designed to reduce costs on the ground, including the use of the Eco-Power Engine Wash process for aircraft engines, the use of ground equipment in place of aircraft auxiliary power units (which consume more fuel), use of single engine for taxiing on ground and introduction of other engineering/operating protocols.
These policies are all designed to optimise fuel consumption and reduce our carbon footprint and thereby finally reducing costs.
Your Company continues to explore the feasibility of using ground vehicles on cleaner alternative fuels like CNG/ electricity to reduce carbon emissions at airports.
Keeping with the commitment of replacing all A320 CEO aircraft expeditiously, your Company has re-delivered (retired from service) 55 A320 CEO aircraft during FY 2022 amounting to an aggregate of 97 aircrafts which have been re-delivered till FY 2022 from a fleet of 123 A320 CEOs. Your Company has also inducted 23 A320 NEO aircraft which are 15% more fuel efficient. During FY 2022, 143 A320 NEO aircraft have operated approximately 236,944 flights. During FY 2022, your Company has operated 35 ATR 72-600 turboprop aircraft on regional routes. These are more fuel efficient compared to jet aircraft.
Your Company is continuously working with government authorities in relation to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). In FY 2022, a successful external audit on fuel consumption on international operations was undertaken and was also reported to the DGCA.
40. Compliance with Secretarial Standards on Board and General Meetings
Pursuant to the provisions of Section 118 of the Act, your Company has complied with all the applicable provisions of the Secretarial Standard - 1 and Secretarial Standard - 2.
41. Foreign exchange earnings and outgo
The details of foreign exchange earnings and outgo for FY 2022, on an accrual basis, are set out below:
|
Particulars |
Amount |
|
(Rs. in million) |
|
|
Foreign exchange earnings |
27,620.41 |
|
Foreign exchange outgo* |
140,806.76 |
*Foreign exchange outgo excludes foreign exchange gain/loss on reinstatement of assets and liabilities
The Board is grateful for the continuous patronage of our valued customers and remains committed to ensuring that your Company provides an on-time, courteous and hassle-free experience. The Board acknowledges and appreciates the hard work and dedication of the employees of your Company who have stood strong and worked together as a team during FY 2022.
Your Company also takes this opportunity to express its appreciation for the support and co-operation extended by the Central and State governments, regulatory authorities, investors, bankers and other stakeholders.
On behalf of the Board of Directors of InterGlobe Aviation Limited
Dr. Venkataramani Sumantran Ronojoy Dutta
Chairman Whole Time Director and Chief Executive Officer
DIN: 02153989 DIN: 08676730
Date: May 25, 2022 Place: Gurugram
Mar 31, 2021
Your Directors ("Board of Directors" or "Board") are pleased to present the eighteenth Annual Report of InterGlobe Aviation Limited ("your Company" or "we") along with the audited financial statements for the financial year ended March 31, 2021 ("FY 2021"). Wherever required, the consolidated performance of your Company and its subsidiary has also been provided.
The standalone and consolidated financial highlights of your Company''s operations are summarised below:
|
(Rupees in million, except earnings per share) |
||||
|
Particulars |
Consolidated |
Standalone |
||
|
FY 2021 |
FY 2020 |
FY 2021 |
FY 2020 |
|
|
Revenue from operations |
146,406.31 |
357,560.01 |
146,406.31 |
357,560.01 |
|
Other Income |
10,369.64 |
15,355.09 |
10,363.32 |
15,362.42 |
|
Total Income |
156,775.95 |
372,915.10 |
156,769.63 |
372,922.43 |
|
Loss before tax |
(58,180.70) |
(2,556.69) |
(58,297.92) |
(2,750.89) |
|
Current Tax |
78.68 |
(91.30) |
- |
(8.21) |
|
Deferred tax credit/ (charge) |
37.75 |
311.21 |
- |
277.51 |
|
Loss after tax |
(58,064.27) |
(2,336.78) |
(58,297.92) |
(2,481.59) |
|
Other Comprehensive Income / (Loss) net of tax |
(5.81) |
10.99 |
(16.65) |
11.00 |
|
Total Comprehensive Income / (Loss) |
(58,070.08) |
(2,325.79) |
(58,314.57) |
(2,470.59) |
|
Warnings per equity shares of the face value of Rs.10 each |
||||
|
Basic (Rs.) |
(150.89) |
(6.07) |
(151.49) |
(6.45) |
|
Diluted (Rs.) |
(150.89) |
(6.07) |
(151.49) |
(6.45) |
On a consolidated basis, your Company achieved a total income of Rs. 156,775.95 million for FY 2021, lower by 57.96% over the previous year''s income of Rs. 372,915.10 million. Your Company reported a net loss of Rs. 58,064.27 million for FY 2021 against a net loss of Rs. 2,336.78 million for the previous year.
On a standalone basis, your Company achieved a total income of Rs. 156,769.63 million for FY 2021, lower by 57.96% over the previous year''s income of Rs. 372,922.43 million. Your Company reported a net loss of Rs. 58,297.92 million for FY 2021 against a net loss of Rs. 2,481.59 million for the previous year.
3. Performance of Agile Airport Services Private Limited ("Agile" or "Subsidiary Company")
Agile is a wholly owned subsidiary of your Company and is engaged in the business of providing ground handling services to your Company at various airports in India.
The total income of Agile for FY 2021 was Rs. 2,953.87 million, lower by 16.00% over the previous year''s income of Rs. 3,516.69 million. The PAT was Rs. 233.65 million indicating a growth of 61.35% over PAT of Rs. 144.81 million for FY 2020. Pursuant to Section 129(3) of the Companies Act, 2013 ("Act") read with Rule 5 of the Companies (Accounts) Rules, 2014, as amended from time to time, a statement containing the details of performance and salient features of the financial statements of the Subsidiary Company in form AOC -1 is annexed to the consolidated financial statements.
In compliance with the provisions of Section 136 of the Act, the audited financial statements of the Subsidiary Company are uploaded on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/ goindigo/investor-relations/subsidiary-financials/2019-20/Financial-Statements-Agile-FY-2020-21.pdf.
Your Company has adopted a policy for determining material subsidiaries pursuant to Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") which is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/ investor-relations/policies/2021/InterGlobe-Rviation-Limited-Policy-on-Material-Subsidiary.pdf. Your Company has no material subsidiary as on date.
Your Company operated 1,301 peak daily flights and carried over 30.70 million passengers during FY 2021 as compared to 1,674 peak daily flights and 75.10 million passengers in FY 2020. Post the lockdown of March-May 2020, your Company operated,
(a) scheduled services to 65 destinations including 4 new destinations
(b) 51 non-scheduled destinations
(c) ad-hoc repatriation flights to new countries and destinations outside its network
(d) 4,540 cargo in cabin flights, 1,906 charter flights, 509 Vande Bharat flights and 8,083 flights under the Government''s bubble flight arrangements with other countries.
Our fleet as on March 31, 2021, consists of 100 Airbus CEO, 159 Airbus NEO and 26 ATR aircraft. During FY 2021, your Company inducted 45 new fuel-efficient aircraft powered by PW1100G and CFM LEAP-1A engines. During the same period, your Company also replaced all unmodified P&W engines in its fleet as per the directives of DGCA to all airline operators flying P&W engines.
Based on data published by the DGCA, as of March 31,2021, your Company was consistently ranked No.1 for On-Time Performance (OTP) at key metro cities. In addition, your Company also achieved a technical dispatch reliability of 99.94% as published in AIRBUS IDOLS for reliability.
Your Company has now obtained the "Air Operator Certificate" to fly the A320 family aircraft to ''AFI'' African countries and ATR aircraft to ''ASIA'' Asian countries from the DGCA. Additionally, your Company has also obtained the EDTO (Extended Diversion Time Operations) from the DGCA to fly on direct routes over-sea for 90 Minutes on the A320 NEO family aircraft, thus achieving shorter routes and saving fuel.
To achieve operational excellence, your Company launched awareness campaigns for adoption of fuel-efficient techniques and collaborated with the regulatory authorities and the Indian Air-Force to facilitate airspace optimisation, with a clear focus on efficiency and safety.
Countries all over the world are trying to find ways and process to reduce the spread of the Covid-19 pandemic. Multiple travel curbs, new restrictions and rules have been introduced by the Government of India and other governments to help reduce the spread of the pandemic.
Being India''s largest carrier by market share and carrying the largest number of customers by air in India, we understood our responsibility to the industry, our customers, and the country. We introduced new processes and measures to ensure safe travel by air which helped gain customer confidence when travelling with IndiGo.
Your Company introduced disinfection and cleaning of all aircraft on arrival to help reduce the spread of the virus. Additionally, when parked at night, all aircraft are deep cleaned. All touch points such as tray tables, arm rests, seat belts, lavatory doors and overhead nozzles are wiped. Every aircraft is fumigated once a week and, all customer coaches are sanitized after each trip, so as to provide a safe travel experience.
Your Company provides PPE (Personal Protective Equipment) kit, which includes a face shield, surgical mask, and sanitizer at the boarding gate, to each passenger. Also, passengers seated on the middle seats are provided with an additional safety gown. Your Company also mandates that all staff and service partners wear PPE kits, as prescribed by the DGCA while carrying out their duties.
Understanding that the second wave has been stronger then the first wave, your Company has taken measures to ensure adequate crew/airport staff is available to ensure business continuity. Additionally, new processes are continuously being implemented and reviewed in compliance with the Ministry of Civil Aviation (MOCA) guidelines.
In FY 2021, your Company digitised most of its manual on-ground processes to create a contactless travel experience at the airports. The website of your Company was upgraded to ensure that the customers could complete the health declaration form online, pay for all ancillary products and also add and print baggage tags from home. These initiatives ensured that
more than 81.5% check-ins were done online, and 5.70 million bag tags had been printed by our passengers. In addition, your Company also provided customers with the option to purchase additional seats for their increased comfort and safety.
With the continuous changes in the state and international travel regulations, your Company created a centralised page on its website which is updated regularly to help customers become aware of the latest travel guidelines.
At the airport, we have introduced self check-in and print baggage''s tags and also enabled UPI payment option for a true contactless experience. Your Company also enabled customers to self-board at the boarding gate, further reducing human contact.
Your Company converted all in-flight menus to digital menus which could be accessed on WhatsApp or the Company''s website and a PDF version could be downloaded to ensure contactless experience.
In these difficult times, your Company announced a special offer - ''Tough Cookie'' and offered a 25% discount on airfare for all doctors and nurses till the end of 2020, as a gesture to thank them for being at the forefront of the battle against the coronavirus outbreak. These Covid Warriors were facilitated at various touch points by the operations and the marketing teams. Your Company has transported the highest number of Covid Vaccines in India since January 2021.
To ensure that all employees are trained as per prescribed guidelines, we obtained approval from the DGCA, to convert all non-regulatory trainings to an online virtual platform. Further, to reduce training time and cost, we obtained approval for a new facility at Hyderabad and added capacity at the existing facility at Bangalore. Your Company is the first airline to obtain permission to conduct UPRT (Upset Prevention and Recovery Training) in India. Your Company ensures that mandatory trainings are conducted so that all operational employees are updated periodically with the required skills necessary for maintaining a safe environment. Your Company''s employees have the necessary skills and expertise to continue to meet unknown future challenges and opportunities as they arise.
Your Company proactively communicated timely and accurate Covid-19 related messaging to its employees, providing the workforce with up-to-date news and information to provide reassurance throughout the pandemic.
For a detailed analysis of the operational performance of your Company, please refer to the Management Discussion and Analysis Report forming a part of the Annual Report.
Your Company has adopted the ''InterGlobe Aviation Limited - Dividend Distribution Policy'' in compliance with Regulation 43A of the SEBI LODR Regulations. The Policy sets out the parameters and factors to be considered by the Board in determining the distribution of dividend to its Members and / or retaining profits of your Company. The Dividend Distribution Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/ dam/goindigo/investor-relations/policies/InterGlobe%20Rviation%20Limited%20-%20Dividend%20Distribution%20 Policy.pdf.
For FY 2021, based on your Company''s performance, cash flow position and the loss incurred during the year, the Board has not recommended any dividend on the equity shares of your Company.
6. Qualified Institutions Placement (QIP)
The Board of your Company has approved the raising of funds for an aggregate amount not exceeding Rs. 3,000 Crore (Rupees Three Thousand Crore) through an issue of equity shares by way of a Qualified Institutions Placement ("QIP"), in accordance with the relevant provisions of applicable laws and subject to approval of the Company''s Members and receipt of applicable regulatory approvals, at its meeting held on May 10, 2021. The Postal Ballot Notice dated May 26, 2021, has been issued to the Members seeking their approval for raising of funds by way of QIP. (Approval of the Members has since been received).
7. Amount to be carried to Reserves
Your Directors do not propose to transfer any amount to reserves.
8. Complaint filed by a Promoter of your Company with the Securities and Exchange Board of India ("SEBI") and the Ministry of Corporate Affairs ("MCA")
Your Company had received communications from the SEBI, the MCA and the stock exchanges requesting for comments and/or information regarding some complaints and representations made by and on behalf of Mr. Rakesh Gangwal, the
Chinkerpoo Family Trust and Ms. Shobha Gangwal (promoters and/or members of the promoter group of your Company) (collectively, the "RG Group"). The complaints and representations relate to, among other things, certain Related Party Transactions entered into by your Company with InterGlobe Enterprises Private Limited and Mr. Rahul Bhatia, promoters of your Company (the "IGE Group"), the RG Group''s requisition for convening an extraordinary general meeting for the shareholders to consider resolutions recommending additional procedures to be incorporated in your Company''s Policy of dealing with Related Party Transactions ("RPTs") applicable to RPTs with the IGE Group, and the appointment of a Woman Independent Director to your Company''s Board of Directors. Your Company had responded to all the communications sent by concerned authorities within the prescribed timelines.
Subsequent to the above, your Company received a show cause notice from the SEBI vide its letter dated November 10, 2020, alleging certain contraventions of the provisions of the SEBI LODR Regulations. In this notice, your Company was advised that it could avail the settlement mechanism provided under the SEBI (Settlement Proceedings) Regulations, 2018. Your Company made an application to settle, which was accepted by the SEBI vide settlement order dated February 9, 2021 (the "Settlement Order") and accordingly, the Company, while neither admitting nor denying the alleged violations, as duly recorded in the Settlement Order, has paid an amount of Rs. 2,10,37,500 after which the adjudication proceedings have now concluded.
9. Arbitration Proceedings filed with the London Court of International Arbitration
The IGE Group had submitted a Request for Arbitration dated October 01, 2019, to the London Court of International Arbitration under the Shareholders'' Agreement dated April 23, 2015 (as amended on September 17, 2015) ("Shareholders Agreement") executed between, inter-alia, the IGE Group, the RG Group, and your Company. In the arbitration proceedings, the IGE Group has sought certain reliefs against the RG Group, including in relation to compliance with the Shareholders Agreement and your Company''s Articles of Association ("Articles") as well as damages. The RG Group also sought certain reliefs against the IGE Group, including to carry out all requisite steps and actions, provide consents and assistance to remove certain provisions from your Company''s Articles.
The Company has been named as a proper party to the arbitration and no monetary claim, including any compensation, has been sought from the Company by the IGE Group or the RG Group. Accordingly, the Company believes that the claims filed in the arbitration do not impact the financial results of the Company. The pleadings of the IGE Group, the RG Group and the Company in the arbitration have now been completed.
10. Employee Stock Option Scheme
Pursuant to approval of the Members of your Company on June 25, 2015, your Company had adopted ''InterGlobe Aviation Limited - Employee Stock Option Scheme 2015'' ("Scheme") which was amended on September 07, 2016. Under the Scheme, your Company grants share-based benefits to the eligible employees by granting stock options ("Options"), with a view to attract and retain talent and encouraging employees to align their individual performances with the Company''s broader growth objectives. During FY 2021, there has been no change in the Scheme and the Company continues to comply with the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended ("SEBI SBEB Regulations").
During FY 2021, the Nomination and Remuneration Committee (the "Committee") granted 1,474,894 Options to the eligible employees under the Scheme. The Committee further granted 185,000 Options to Mr. Ronojoy Dutta, Whole Time Director and CEO of your Company, which was approved by the Board on March 06, 2021. The Members of the Company by means of a special resolution through a postal ballot has approved these options granted to him on April 10, 2021.
The Committee also approved allotment of 113,721 equity shares upon exercise of 113,721 Options by eligible employees during FY 2021.
No employee has been granted Options equal to or exceeding one percent of the issued capital of your Company at the time of grant.
The disclosure, in compliance with the SEBI SBEB Regulations, is uploaded on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/press-releases/2020-21/ Statement-under-Reg-14-of-the-SEBI-Share-Based-Employee-Benefits-Regulations-2014.pdf.
Pursuant to the allotment of 113,721 equity shares of Rs. 10 each upon exercise of Options by the eligible employees under the Scheme, the issued, subscribed, and paid-up share capital of your Company increased from 384,796,279 equity shares as on March 31,2020, to 384,910,000 equity shares of Rs. 10 each as on March 31,2021, aggregating to Rs. 3,849.10 million.
12. Related Party Transactions
fill the contracts/ arrangements/ transactions entered into by your Company with its related parties during FY 2021, were in its ordinary course of business and on an arm''s length basis. Your Company has obtained necessary approval, whenever required, as per the related party transaction policy.
During FY 2021, your Company had not entered into any arrangement / transaction / contract with its related parties which could be considered material and required approval of the Board. Accordingly, the disclosure of the particulars of the related party transactions in form HOC -2 as required under Section 134(3)(h) of the Act is not applicable.
Your Company had adopted ''InterGlobe Aviation Limited - Policy on dealing with Related Party Transactions'' ("RPT Policy") in compliance with Regulation 23 of the SEBI LODR Regulations. During FY 2021, there has been no change in the RPT Policy. The transactions entered by your Company with its related parties were in compliance with the RPT Policy and in the best interest of your Company. The RPT Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/policies/IGRL-Policy-on-Related-Party-Transactions-2019.pdf.
For further details of related party transactions during the year, please refer to note number 34 of the notes forming a part of the financial statements, attached to the Annual Report.
Pursuant to Regulation 23 of the SEBI LODR Regulations, your Company had filed to the stock exchanges the details of related party transactions on half yearly basis.
13. Directors and Key Managerial Personnel
As on March 31, 2021, the Board comprised ten (10) members with an appropriate mix of Non-Executive Directors, Executive Director, and Independent Directors, which is in compliance with the provisions of the Act, the SEBI LODR Regulations and is also aligned with the best practices of Corporate Governance.
Pursuant to the provisions of Section 149, Section 161 and other applicable provisions of the Act and the SEBI LODR Regulations and on the recommendation of the Nomination and Remuneration Committee, the Board appointed Mr. Gregg Albert Saretsky as a Non-Independent Non-Executive Director, as an Additional Director on Board, liable to retire by rotation, with effect from October 01,2020, subject to the approval of the Members. As per Section 161 of the Act, Mr. Saretsky will hold office till the ensuing Annual General Meeting ("AGM") and is eligible for appointment as a Director of your Company. Mr. Saretsky is an aviation industry veteran, with an illustrious career spanning over 36 years. For detailed profile of Mr. Saretsky, please refer to the Notice of AGM.
The Board is of the opinion that Mr. Saretsky has relevant experience, expertise and integrity for holding the position of the Director on the Board. Your Company has received requisite notice under Section 160 of the Act from a Member, proposing the appointment of Mr. Saretsky as a Director of the Company at the ensuing AGM.
Your Company has obtained requisite prior security clearance approval from MOCA as required for the appointment of Mr. Saretsky.
Mr. Rakesh Gangwal, Non-Independent Non-Executive Promoter Director, retires by rotation and being eligible, offers himself for reappointment at the ensuing AGM.
The Notice of AGM includes the proposal for re-appointment and appointment of Directors as stated above.
Mr. Jiten Chopra was appointed as the Chief Financial Officer of your Company with effect from February 22, 2021, replacing Mr. Aditya Pande, who resigned with effect from February 21,2021. Mr. Jiten Chopra has been associated with your Company since February 2020 and has earlier held the position of Head - Governance, Risk and Compliance.
Your Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as laid down under Section 149 of the Act and Regulations 16 & 25 of the SEBI LODR Regulations and complied with the Code for Independent Directors prescribed in Schedule IV of the Act. During FY 2021, there has been no change in the circumstances affecting their status as Independent Directors of your Company.
None of the Directors of the Company is disqualified to act as a Director as per the requirement of Section 164 of the Act.
14. Number of meetings of the Board
The Board met twelve (12) times during FY 2021. The details of meetings of the Board and attendance of the Directors at the Board meetings are given in the Report on Corporate Governance which forms a part of the Annual Report.
As on March 31,2021, the Board had the following five committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Risk Management Committee
iv. Corporate Social Responsibility Committee
v. Stakeholders Relationship Committee
The details of the composition, terms of references, and number of committee meetings held during FY 2021 and the attendance of the committee members at each meeting are given in the Report on Corporate Governance which forms a part of the Annual Report.
The Board has constituted a Fund Raise Committee at its meeting held on May 10, 2021, for raising funds through a QIP under the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.
Pursuant to the provisions of the Act and the SEBI LODR Regulations, an evaluation process was carried out to evaluate performance of the Board and the Board Committees, the Chairman of the Board, and all Directors, including Independent Directors. The evaluation was aimed at improving the effectiveness of all these constituents and enhancing their contribution to the functioning of the Board.
On the recommendation of the Nomination and Remuneration Committee, an independent external expert in the area of Board evaluation, was engaged by the Management to undertake such evaluation. He carried out the exercise through questionnaires sent directly to the Board members on a confidential basis. These questionnaires were detailed and elicited both numeric as well as qualitative responses against a variety of evaluation parameters. The independent external expert then followed through with confidential individual conversations with each Board member and developed separate evaluation reports. The conversations were free-flowing and based on themes that were generated from reviewing the responses from the questionnaire. Subsequently, the independent external expert collated confidential reports for (a) the Board as a Whole, (b) Chairman of the Board, (c) Individual Directors, both Independent and NonIndependent Directors, and (d) for each of the Board Committees separately. The report of each Committee was shared by the Chairman of the Board with the Chairperson and members of each of the Committees. The assessment of individual Directors was sent by the external consultant to the Chairman in separate sealed envelopes, which the Chairman passed on to the concerned Directors. The results of evaluation of the Board and its various Committees were subsequently discussed by the Board at its meeting and the areas for improvement of the functioning of the Board and Committees were noted. The Board is committed to continuously looking at process improvements, rather than treating the Board evaluation as a one-off event.
In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, and the Board as a whole was also discussed, taking into account the views of Executive Director and Non-Executive Directors.
Your Company had adopted the ''InterGlobe Aviation Limited - Nomination and Remuneration Policy'' in compliance with Section 178 of the Act and Regulation 19(4) read with Part D of Schedule II to the SEBI LODR Regulations, for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management of your Company. The Policy lays down the process and parameters for the appointment and remuneration of the KMPs and other senior management personnel and the criteria for determining qualifications, highest level of personal and professional ethics, positive attributes, financial literacy, and independence of a Director. The Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/ policies/2021/InterGlobe-Nomination-and-Remneraion-Policy.pdf.
Your Company has been following a rigorous process of leadership talent review, named "Talent Councils" ever since FY 2019. We have established a process to identify and nurture talented employees at an early stage with the goal of succession planning. Once a year, we discuss succession planning for key positions with the various business function heads within your Company. Competencies, skills and experience required for performing leadership roles, at the level of
Vice President and above are dearly established. At the yearly Talent Council meetings, each senior leader is discussed in depth and compared with the job specifications of the corresponding positions. This review process forms the basis of people identification and development for filling all top positions. In addition, your Company''s Human Resource function continually maps the external market to identify talent for which immediate internal candidate is not available. In FY 2021, we focused in particular on identifying talent at a level lower than Vice Presidents and took specific measures to ensure the development of these emerging leaders.
Your Company has put in place a structured Enterprise Risk Management framework ("ERM framework") based on the guiding principles of identifying, assessing and mitigation of risks. It is an integral part of decision-making for your Company and is dynamic in nature, undergoing continuous improvement. The ERM Framework follows an annual process of setting objectives, identifying key risks on an ongoing basis, developing a mitigation action plan and monitoring.
The Risk Management Committee has been empowered to frame, implement and monitor the risk management practices of your Company. The Committee has been entrusted for systematically overseeing, reviewing, and updating the risk management calendar, based on certain risks becoming more important during the year. The Committee meets on regular intervals and discusses risks relating to liquidity and profitability, revenue, cyber threat & data protection, business continuity, employee relations and health, sustainability & climate change, airline safety and security, adverse regulatory changes and litigation, unfavorable fuel and forex movement and any other new risk that may be identified by the Management.
The Audit Committee has an additional oversight in the area of financial risks.
A note on key risks of your Company is given in the Management Discussion and Analysis Report which forms a part of the Annual Report.
20. Corporate Social Responsibility
A brief outline of the Corporate Social Responsibility ("CSR") Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure - A to this Report, in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.
For other details regarding the CSR Committee, please refer to the Report on Corporate Governance, which forms a part of the Annual Report.
Pursuant to recent amendments to Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board considered and approved the amendments in the CSR Policy at its meeting held on May 7, 2021. The revised Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo. in/content/dam/goindigo/investor-relations/policies/InterGlobe-Aviation-Limited-Corporate-Social-Responsibility-Policy-2. pdf.
S.R. Batliboi & Co. LLP (Firm Registration no. 301003E/E300005) was appointed as the Statutory Auditors of your Company at the 16th AGM held on August 27, 2019, for a term of five consecutive years from the conclusion of the 16th AGM till the conclusion of the 21st AGM of your Company, in accordance with the provisions of Section 139 of the Act.
The Reports given by the Statutory Auditors on the standalone financial statements and the consolidated financial statements of your Company for FY 2021 form part of the Annual Report. The Reports do not contain any qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors.
Sanjay Grover & Associates, a firm of practicing Company Secretaries (Firm Registration no. P2001DE052900) ("Secretarial Auditors"), carried out the secretarial audit for FY 2021 in compliance with the Act and the Rules made thereunder, the SEBI LODR Regulations and other applicable regulations as prescribed by the SEBI, Foreign Exchange Management Act, 1999, as amended and other laws specifically applicable to your Company. The Secretarial Audit Report in form MR-3 for FY 2021 is attached to this Report as Annexure - B. The said Report does not contain any qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditors.
In compliance with Regulation 24A of the SEBI LODR Regulations, read with SEBI circular no. CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Secretarial Auditors have also issued Annual Secretarial Compliance Report for FY 2021. The Report is a clean Report, and does not point to any deficiencies.
23. Non-applicability of maintenance of cost records
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and the Rules thereunder with respect to the aviation business.
24. Whistleblower Policy / Vigil Mechanism
Pursuant to Section 177(9) of the Act and Regulation 22 of the SEBI LODR Regulations, your Company has adopted a Whistleblower Policy/ Vigil Mechanism (Policy) for Directors, senior management and employees of the Company and its subsidiary. The Policy provides for adequate safeguards against victimisation of whistleblowers and provides for direct access to the Chairperson of the Audit Committee, in exceptional circumstances. The Policy provides for a mechanism to report concerns about unethical behaviour, actual or suspected fraud, instances of leak of Unpublished Price Sensitive Information ("UPSI") or violations of your Company''s Code of Conduct.
The Policy also enables suppliers, contractors, and other stakeholders to report unethical behaviour, misconduct, violation or legal or improper practices, actual or suspected fraud by a Company official without any fear of unfair treatment (including loss of business).
During FY 2021, no person was denied access to the Chairperson of the Audit Committee. The Audit Committee, which oversees the implementation of the Policy, on quarterly basis, reviews the status of complaints, summary of findings and action taken in accordance with the Policy.
The Policy is available on the Investor Relations section of the website of your Company at https://www.goindigo.in/ content/dam/goindigo/investor-relations/policies/IGAL-WhistleBlower-Policy.pdf.
25. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, as amended ("POSH Act")
Your Company has a zero-tolerance policy towards cases of sexual harassment at workplace and has a robust internal mechanism and gender-neutral policy on ''Prevention of Sexual Harassment at Workplace'' (the "Policy") to deal with such matters. Your Company has constituted an Internal Complaints Committee ("ICC"), which has a woman Chairperson who is a member of our senior management team and has an external woman lawyer. All employees are sensitised about the Policy from their first day of employment. Awareness programs are conducted for employees and awareness posters with details of how to file a complaint, along with the details of the ICC members, are displayed across all our working locations. The ICC ensures that all cases reported are resolved in a timely manner, in accordance with the POSH Act.
During FY 2021, a total of 15 complaints were received by your Company, out of which 13 complaints were resolved after complying with due process and well within the prescribed timelines and 2 complaints were under investigation as on March 31,2021 (which have since been resolved within the prescribed timelines). Your Company also has submitted the annual return to the local authority in compliance with the POSH Act.
Prevention of sexual harassment continues to be a core ethos of your Company and steps are continuously taken every year to make the policies, programmes, and awareness campaigns more and more robust. In FY 2021, your Company undertook the following initiatives and awareness programmes:
1. E-learning training module
For the first time, your Company launched an interactive and informative training module for all its employees across all locations. This training module was designed in a manner that it was accessible to all employees on a 24*7 basis since it was e-learning (online) module.
This module covered several critical aspects concerning prevention of sexual harassment at workplace, such as:
a. What constitutes sexual harassment at workplace.
b. Your Company''s POSH Policy and the relevant provisions of the POSH Act.
c. How to report incidents of sexual harassment at workplace without having the fear of retaliation.
d. Mental and emotional support from the ICC to a victim of sexual harassment at workplace.
2. ICC awareness programme
The ICC conducted awareness programme for all its members across locations in order to ensure that the members undertake their responsibilities in accordance with the applicable POSH Policy.
3. Communication
Important communication emails were sent on behalf of the ICC (including from the ICC Chairperson''s desk) to all the employees, emphasising the importance of prevention of sexual harassment at the workplace and the Company''s zero tolerance towards any acts of sexual harassment. Other than emails, posters underlying the same message have been placed at offices across all locations.
26. Internal Financial Control and their adequacy
Your Company has put in place an adequate Internal Financial Control (IFC) system, to ensure compliance with various policies, practices, and statutes. Your Company ensures that such IFC systems are commensurate with the size and complexity of our business and are adequate and operating effectively on an ongoing basis.
The Board has adopted policies and procedures for:
⢠Effectiveness and efficiency of operations
⢠Adequacy of safeguarding Company''s assets
⢠Prevention and detection of frauds and errors
⢠Accuracy and completeness of accounting records
⢠Timely preparation of reliable financial information
The details in respect of the Company''s IFC and their adequacy are included in the Management Discussion and Analysis Report, which forms a part of the Annual Report.
Your Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act and the Rules made thereunder.
28. Particulars of Loans, Investments and Guarantees
The particulars of loans, investments and guarantees as on March 31, 2021, covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as amended and Regulation 34(3) read with Schedule V of the SEBI LODR Regulations, are given at the notes in the standalone financial statements, which forms a part of the Annual Report.
29. Material changes and commitments affecting the financial position of your Company, between the end of the financial year and the date of this Report.
Other than as stated elsewhere in this Report, there are no material changes and commitments affecting the financial position of your Company between the end of the financial year and the date of this Report.
30. Management Discussion and Analysis Report
The Management Discussion and Analysis Report on your Company''s financial and operational performance, industry trends and other required details prepared in compliance with Regulation 34 of the SEBI LODR Regulations for FY 2021 forms a part of the Annual Report.
31. Report on Corporate Governance
In compliance with Regulation 34 read with Schedule V of the SEBI LODR Regulations, the Report on Corporate Governance of your Company, inter alia, covering composition, details of meetings of the Board and Committees, together with a certificate from the Secretarial Auditors regarding compliance of conditions of corporate governance, forms a part of the Annual Report.
A certificate from the Whole Time Director and CEO and the Chief Financial Officer of your Company in terms of Regulation 17 of the SEBI LODR Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, also forms a part of the Annual Report.
32. Business Responsibility Report
In compliance with Regulation 34 of the SEBI LODR Regulations read with SEBI Circular no. CIR/CFD/CMD/2015 dated November 04, 2015, the Business Responsibility Report of your Company for FY 2021 describing the various initiatives undertaken from an environment, social and governance perspective during FY 2021 forms a part of the Annual Report.
In compliance with Section 92(3) and Section 134(3)(a) of the Act and Rules made thereunder, a copy of the Company''s Annual Return as on March 31, 2021, is available on the Investor Relations Section of the website of your Company at https://www.goindigo.in/content/dam/goindigo/investor-relations/press-releases/2020-21/Annual-Return-MGT-7-FY-2020-21.pdf.
34. Significant material orders passed by the Regulators, Courts and Tribunals
There are no significant material orders passed by the regulators, courts or tribunals impacting the going concern status of your Company and its operations in future.
During FY 2021, your Company received multiple awards and recognition. Details in respect of such awards and recognition received by your Company are included in the Management Discussion and Analysis Report, which forms a part of this Annual Report.
36. Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Act, the Board, based on representations received from the Management and to the best of its knowledge, ability, and due inquiry, confirms that:
i. In the preparation of the annual accounts, applicable accounting standards have been followed and proper explanation for any material departures has been provided.
ii. Applicable accounting policies have been selected and applied consistently in order to form views/make judgments and estimates that are reasonable and prudent. This is intended to facilitate a true and fair view of the state of affairs of your Company at the end of the financial year including profit/loss of your Company for that period.
iii. Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions
of the Act is taken for safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities.
iv. Annual accounts have been prepared on a going concern basis.
v. IFCs to be followed by your Company have been laid down and such IFCs are adequate and operating effectively.
vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
The statement containing disclosure of remuneration under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014, as amended is given in Annexure - C forming a part of this Report. The information as per Rule 5(2) and Rule 5(3) of the abovementioned Rules pertaining to the names of top ten employees and other particulars of employees is provided in a separate annexure. However, as per the provisions of Section 136(1) of the Act and the Rules thereunder, the Annual Report and the financial statements, excluding the aforesaid annexure, are being sent to the Members, and other persons entitled thereto. Any Member interested in obtaining this, may write to the Company Secretary at the Registered Office of your Company in this regard.
None of the employees listed in the Annexure is related to any Director of your Company.
38. Transfer of unpaid / unclaimed dividend to Investor Education and Protection Fund
The provisions to transfer unpaid / unclaimed dividend to the Investor education and Protection Fund under Section 124(5) of the Act do not apply to your Company for FY 2021 since there is no unpaid / unclaimed dividend which is due for transfer to the said Fund during the current financial year.
The Auditors of your Company have not reported any instances of fraud committed in your Company by its officers or employees as specified under Section 143(12) of the Act.
40. Conservation of Energy, Technology Absorption
Your Company persistently strives to run its operations more efficiently to reduce its fuel consumption and resultant fuel emissions. This endeavour entails your Company''s continuous commitment towards conservation of energy and motivates it to embrace newer technological advances.
Your Company has incorporated policies, including flight and ground procedures, for conservation of fuel and has trained flight crew and aircraft maintenance engineers to ensure that fuel is conserved to the extent possible.
Your Company ensures that there is adequate fuel for its aircraft, after evaluating various traffic trends in the air and also on the ground, thus avoiding any additional/ unnecessary fuel upliftment. Your Company has installed a software for accurate flight planning. This software provides accurate maps and the most efficient flight path, restricting use of auxiliary power units, employing continuous descent approaches and economy cruise speeds. It also minimises aircraft weight by providing recommendations for removing unnecessary equipment and optimising engine settings for take-off and climb. Further, your Company has adopted innovative statistical data driven solutions for descent fuel optimisation. We are also working with Airbus on big data analytics using Airbus platforms like SKYWISE.
Your Company is engaged with stakeholders to collaborate on multiple air space optimisation initiatives like shortening of routes, promulgation of required navigation performance (RNP) approaches optimising flight routes through conditional route (CDR). Optimising flight routes: The Government of India has promoted flexible use of airspace and your Company has been using this opportunity to utilise every bit of optimum airspace to reduce fuel consumption and simultaneously reducing carbon emissions. Since August 2020, your Company has been able to reduce carbon emissions by 13,000 tonnes by utilising direct routes.
Your Company has sought to reduce the weight of its aircraft by selecting lighter seats and by choosing not to have inflight entertainment systems. Your Company has further reduced the aircraft weight by equipping the entire fleet with Electronic Flight Bags (EFB) and removing paper manuals weighing 25kg from each Airbus aircraft.
Your Company has also adopted fuel policies designed to reduce costs on the ground, including the use of the Eco-Power Engine Wash process for aircraft engines, the use of ground equipment in place of aircraft auxiliary power units (which consume more fuel), use of single engine for taxiing on ground and introduction of other engineering/operating protocols. These policies are all designed to optimise fuel consumption and reduce our carbon footprint and thereby finally reducing costs.
Your Company continues to explore the feasibility of using ground vehicles on cleaner alternative fuels like CNG/ electricity to reduce carbon emissions at airports.
Keeping with the commitment of replacing all A320 CEO aircraft expeditiously, your Company has re-delivered 42 A320 CEO aircraft from a total fleet of 123 CEO aircraft during FY 2021. Your Company has also inducted 43 NEO aircraft which are 15% more fuel efficient. During FY 2021, 120 A320 NEO aircraft have operated approximately 160,000 flights. During FY 2021, your Company has operated 26 ATR 72-600 turboprop aircraft on regional routes. These are more fuel efficient compared to jet aircraft.
Your Company is continuously working with government authorities in relation to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). In FY 2021, a successful external audit on fuel consumption on international operations was undertaken and was also reported to the DGCA.
41. Compliance with Secretarial Standards on Board and General Meetings
Pursuant to the provisions of Section 118 of the Act, your Company has complied with all the applicable provisions of the Secretarial Standard - 1 and Secretarial Standard - 2.
42. Foreign exchange earnings and outgo
The details of foreign exchange earnings and outgo for FY 2021, on an accrual basis, are set out below:
Foreign exchange earnings 16,817.64
Foreign exchange outgo* 110,541.80
*Foreign exchange outgo excludes foreign exchange gain/loss on reinstatement of assets and liabilities
The Board is grateful for the continuous patronage of our valued customers and remains committed to ensuring that your Company provides an on-time, courteous and hassle-free experience. The Board acknowledges and appreciates the commendable efforts of the employees of your Company who have worked together as a team during the very difficult year gone by.
Your Company also takes this opportunity to express its appreciation for the support and co-operation extended by the Central and State governments, regulatory authorities, investors, bankers and other stakeholders.
On behalf of the Board of InterGlobe Aviation Limited
Meleveetil Damodaran Ronojoy Dutta
Chairman Whole Time Director and Chief Executive Officer
DIN: 02106990 DIN: 08676730
Date: June 5, 2021 Place: Gurugram
Mar 31, 2018
Dear Shareholders,
The Board of Directors of the Company (the âBoardâ) have pleasure in presenting their fifteenth report on the business and operations of InterGlobe Aviation Limited (âthe Companyâ, âOur Companyâ or âweâ) for the financial year ended March 31, 2018.
1. Financial Results
The Companyâs financial performance, for the year ended March 31, 2018 is summarised below:
(Rupees in million, except earnings per share)
|
Particulars |
2017-18 |
2016-17 |
|
Revenue from operations |
230,208.87 |
185,805.00 |
|
Other Income |
9,468.56 |
7,890.70 |
|
Total Income |
239,677.43 |
193,695.70 |
|
Profit before tax |
31,266.77 |
21,443.40 |
|
Current Tax |
(6,689.82) |
(4,911.51) |
|
Deferred tax credit / (charge) |
(2,153.21) |
59.99 |
|
Profit after Tax (PAT) |
22,423.74 |
16,591.88 |
|
Other Comprehensive Income net of Tax |
2.51 |
(21.72) |
|
Total Comprehensive Income |
22,426.25 |
16,570.16 |
|
Warnings per equity shares of the face value of Rs. 10 each |
||
|
Basic (Rs.) |
60.03 |
45.94 |
|
Diluted (Rs.) |
59.90 |
45.85 |
2. Financial Performance
The total income increased from Rs. 193,695.70 million to Rs. 239,677.43 million thereby registering an increase of 23.74% over the previous financial year. The Profit after tax increased from Rs. 16,591.88 million to Rs. 22,423.74 million, a growth of 35.15 % over the previous financial year. For details, please refer to the standalone financial statements forming part of this Annual Report.
3. Operational Performance
As of March 31, 2018, the Company operated scheduled services to 50 destinations including 8 international destinations with a fleet of 159 aircraft consisting of 32 A320neo, 121 A320ceo and 6 ATR.
The Company continued to be the leading airline in terms of on-time performance with an average OTP of 83.1% at four key metros for the financial year ended March 31, 2018. During the year under review, the Company had a technical dispatch reliability of 99.85% and flight cancellation rate of 0.92%. The Company was awarded 20 routes covering 10 additional destinations in the Phase II of bidding under the Regional Connectivity Scheme.
For detailed analysis of operational performance, please refer to Management Discussion and Analysis Report forming part of this Annual Report.
4. Dividend
The Company has started purchasing some of the aircraft with its own free cash and will continue to do so in future. During the year under review, the Company had purchased 6 ATRs with its free cash. Based on Companyâs cash position, profitability for the year under review and use of cash to purchase aircraft, the Board has recommended a final dividend of Rs. 6 per equity share of the face value of Rs.10 each for the financial year ended March 31, 2018.
The Final Dividend, subject to the approval of the Members at the forthcoming Annual General Meeting, will be paid to the Members whose names appear in the Register of Members/Register of beneficial owner as on the record date fixed for this purpose. The total estimated amount of dividend payable, if approved by the shareholders, based on the current paid up share capital of the Company is Rs. 2,306.44 million (excluding corporate dividend tax).
5. Minimum Public Shareholding
During the year under review, the Company had achieved the minimum public shareholding in compliance with the requirements of Rule 19(2) and Rule 19(A) of the Securities Contracts (Regulations) Rules, 1957 read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the âListing Regulationsâ), within the stipulated period of three years from the date of listing of equity shares of the Company, as allowed under Rule 19(2)(b)(ii) of the Securities Contracts (Regulations) Rules, 1957.
In order to achieve the said minimum public shareholding, the Company successfully completed an Institutional Placement Programme (âIPPâ) under Chapter VIII-A of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, pursuant to which 33,578,421 equity shares having a face value of Rs. 10 each were allotted/ allocated, at an issue price of Rs. 1,130 per equity share, consisting of fresh issue of 22,385,614 equity shares and an offer for sale of 11,192,807 equity shares by the selling shareholders. Post IPP, the Promoters of the Company, through an âoffer for saleâ collectively sold 11,192,807 equity shares of the Company to the Public shareholders, representing 2.91% of the total paid up equity share capital of the Company. The said sale of the equity shares took place on a separate designated window of BSE Limited and the National Stock Exchange of India Limited and was undertaken in accordance with the comprehensive guidelines on offer for sale by promoters through the Stock Exchange Mechanism issued by the SEBI. As at March 31, 2018, the shareholding structure of the Company comprised of promotersâ shareholding of 74.93% and public shareholding of 25.07%.
6. Utilisation of IPP proceeds
The proceeds of fresh issue of equity shares from IPP amounted to Rs. 24,796.69 million (net of Companyâs share of fresh issue related expenses, which has been adjusted against Securities Premium Reserve). As per the terms set out in the prospectus on âUse of Proceedsâ, the Company was required to use the net proceeds of the fresh issue for one or more of the following: acquisition of aircraft, purchase of ground support equipment, repayment / prepayment of debt including finance leases for aircraft and general corporate purposes. As at March 31, 2018, 71% of IPP proceeds were unutilised and temporarily invested/ deposited in cash and cash equivalents including fixed deposits and/or debt mutual funds.
7. Composite scheme of arrangement amongst InterGlobe Enterprises Limited, Acquire Services Private Limited and Other Entities
During the year under review, pursuant to a composite scheme of arrangement (âSchemeâ) amongst InterGlobe Enterprises Limited (erstwhile Promoter of the Company) (âTransferor Company), InterGlobe Real Estate Ventures Private Limited (âResultant Real Estate Subsidiaryâ), InterGlobe Business Solutions Private Limited (â Resultant ITSS Subsidiaryâ), and Acquire Services Private Limited (âTransferee Companyâ) and their respective shareholders and creditors, which was approved by the Honâable Principal Bench of National Company Law Tribunal at New Delhi vide its order dated November 24, 2017, the Real Estate Undertaking and the ITSS Undertaking (as defined in the Scheme) of the Transferor Company stands demerged into the Resulting Real Estate Subsidiary and the Resultant ITSS Subsidiary, respectively and following which, the residual Transferor Company stands amalgamated with the Transferee Company with effect from November 29, 2017. Consequently, all the assets and liabilities of the residual Transferor Company, including its shareholding in the Company stands transferred to the Transferee Company.
With effect from the effective date i.e. November 29, 2017, 153,649,581 equity shares of the Company, held by the Transferor Company constituting 39.98% of paid up share capital of the Company were held by the Transferee Company, in addition to the Transferee Companyâs existing shareholding in the Company of 10,000 equity shares.
As a result of the restructuring, there was no takeover of the Company by another Company, no change in the control & management of the Company and no change in the promotersâ shareholding in the Company as both the Transferor Company and the Transferee Company forms part of Promoters of the Company
8. Employee stock option scheme
Pursuant to the approval of the shareholders at the Extraordinary General Meeting held on June 25, 2015, the Company had adopted InterGlobe Aviation Limited - Employee Stock Option Scheme, 2015 (âSchemeâ) which was amended by the members through special resolution passed through the Postal Ballot on September 07, 2016. The Scheme was framed with a view to reward the talented / key employees for their contributions in the successful operations of the Company and to provide an incentive to secure their continued contribution toward the future growth of the Company. The Company confirms that the Scheme complies with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014.
During the year under review, 552,861 stock options granted under the Scheme were exercised by the eligible employees to convert into equivalent number of equity shares of the Company. No employee has been issued stock options during the year, equal to or exceeding one percent of the issued capital of the Company at the time of grant.
Details of all the shares issued under Scheme and the disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 are uploaded on Investor Relations section of the website of the Company at www.goindigo.in
9. Increase in Share Capital
During the year under review, 22,385,614 equity shares were allotted by the Company under IPP. Further, the Company also allotted 552,861 equity shares to the employees upon exercise of options under the Scheme. Consequently, the issued, subscribed and paid up capital of the Company increased from 361,468,363 equity shares to 384,406,838 equity shares of Rs. 10 each aggregating to Rs. 3844.07 million as on March 31, 2018.
10. Subsidiary Company
The Company has one subsidiary namely âAgile Airport Services Private Limitedâ (âSubsidiaryâ). The Company has complied with the corporate governance requirements with respect to Subsidiary as specified in Regulation 24 and other provisions of the Listing Regulations and the Companies Act, 2013 (the âActâ).
In compliance with Section 129(3) of the Act, the Company has prepared the consolidated financial statements of the Company which forms part of this Annual Report. Further, a statement containing salient features of the financial statement of Subsidiary in the prescribed format AOC -1 is annexed to the consolidated financial statements.
Pursuant to the provisions of Section 136 of the Act, the standalone financial statements of the Company, the consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiary, are available at Investor Relations section of the website of the Company at www.goindigo.in
11. Related Party Transactions
All related party transactions are placed before the Audit Committee for review and approval. Prior omnibus approval was obtained from the Audit Committee for entering into transactions which were repetitive in nature. During the year under review, the details of related party transactions entered into by the Company, pursuant to omnibus approval were reviewed by the Audit Committee, on a quarterly basis. All the transactions entered into by the Company during the year under review, with the related parties were in the ordinary course of business and on armâs length basis.
During the year under review, the Company had not entered into any transaction with its related party (ies) which could be considered material, requiring approval of the Board / members, in accordance with the policy on materiality of related party transactions. The disclosure of related party transactions as required under Section 134(3)(h) of the Act, in form AOC -2 is not applicable. Further, the details of related party transactions is given at note 34 of the notes forming part to the standalone financial statements, attached to the Annual Report.
12. Directors and Key Managerial Personnel
Mr. Aditya Ghosh, President and Whole Time Director submitted his resignation on April 26, 2018. The Board accepted the resignation of Mr. Ghosh from the post of President of the Company effective July 31, 2018 and as Director of the Company with effect from April 26, 2018. The Board placed on record its appreciation for all the hard work and contributions and for the successes that the Company has enjoyed during his tenure.
Mr. Rahul Bhatia, Non-Executive Director of the Company was appointed as Interim Chief Executive Officer (Interim CEO) of the Company effective from April 27, 2018. He will continue to be a Director of the Company.
Mr. Rakesh Gangwal, Non-Executive Director, retires by rotation and being eligible, offered himself for reappointment at the ensuing Annual General Meeting of the Company.
Mr. Devadas Mallya Mangalore and Dr. Anupam Khanna, Independent Directors of the Company have given the certificate confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act read with Regulation 16(1)(b) of the Listing Regulations.
None of the Directors of the Company is disqualified to act as a Director under Section 164(2) of the Act.
13. Number of meetings of the Board
During the year under review, eight meetings of the Board were held. For details of meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.
14. Committees of the Board
As of March 31, 2018, the Board had following five committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Corporate Social Responsibility Committee
iv. Stakeholdersâ Relationship Committee
v. Risk Management Committee
The Board at its meeting held on June 21, 2017 combined the terms of reference of the Compensation Committee with the Nomination and Remuneration Committee. Thereafter, the Compensation Committee was dissolved.
The Board had constituted an Issue of Securities Committee on July 31, 2017 for issue of securities to achieve the minimum public shareholding through a public offer including an Institutional Placement Programme (IPP). The said Committee was dissolved on October 9, 2017, post the allotment.
The details of the composition, meetings and terms of references of the above stated committees are included in the Corporate Governance Report which forms part of this Report.
15. Board Evaluation
The Board had carried out an annual performance evaluation of its own performance, its committees and all the Directors, pursuant to the requirements of the Act and the Listing Regulations.The process of evaluation was undertaken through discussions amongst the Directors on the basis of criteria formulated by the Nomination and Remuneration Committee such as the composition of Committees, understanding of Companyâs principles and values, Board effectiveness in providing guidance to the management and processes followed at the meetings etc.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as constitution and composition of Committees, effectiveness of performance of the committees as outlined in their terms of reference.
The evaluation of the Independent Directors and other individual Directorsâ performance was made by the entire Board, on the basis of criteria such as attendance and active participation in the meetings, constructive engagement and contribution and inputs in meetings etc.
In a separate meeting of Independent Directors, the performance of Non-Independent Directors, the Chairman of the Board and the Board as a Whole was also evaluated by the Independent Directors and the recommendation of the Independent Directors, were presented to the Board.
16. Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee, framed a policy âInterGlobe Aviation Limited - Nomination and Remuneration Policyâ relating to Directorsâ appointment and their remuneration including the criteria for determining qualifications, positive attributes, independence of a Director and other matters as specified in Section 178(3) of the Act. The details of the policy are given at Investor Relations section of the website of our Company www.goindigo.in
17. Risk Management
The Company has developed & implemented an enterprise risk management framework through which it identifies monitors, mitigates & reports key risks that impacts its ability to meet the strategic objectives.
The Board has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has an additional oversight in the areas of financial risks and controls.
The Company has also in place a risk management policy to address risks such as foreign exchange risk, fuel price risk and interest rate risk, which was reviewed and approved by the Board.
18. Corporate Social Responsibility
In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board has constituted a Corporate Social Responsibility Committee. The details pertaining to the composition, meetings and terms of reference of the committee are included in the Report on Corporate Governance which forms part of this Report.
The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in flnnexure - A of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available at Investor Relations section of the website of the Company at www.goindigo.in
Our CSR programs have a periodicity of 3-5 years and for better monitoring of the programs and fund utilisation, we have broken up the total amounts into tranches spread across the project period, hence resulting in lesser utilisation of earmarked budget for the financial year 2017-18.
19. Statutory Auditors
B S R & Co., LLP, Chartered Accountants (Registration no. 101248W/W - 100022), were appointed as Statutory Auditors of the Company at the Annual General Meeting held on September 04, 2014 for a term of five consecutive years, pursuant to the requirements of Section 139 of the Act. The Statutory Auditors have submitted a certificate, as required under Section 139(1) of the Act confirming that they meet the criteria provided in Section 141 of the Act.
The Report given by the Statutory Auditors on the standalone financial statements of the Company and the consolidated financial statements of the Company for the financial year ended March 31, 2018 forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditors in their Report.
20. Secretarial Auditors
Sanjay Grover & Associates, a firm of practicing Company Secretaries, carried out the secretarial audit of compliance with the Act read with the rules made thereunder, the Listing Regulations & other applicable regulations as prescribed by Sâ¬BI, Foreign Exchange Management Act, 1999 and other laws specifically applicable to the Company. The secretarial audit report is attached to this Report as Annexure - B and does not contain any qualifications, reservations or adverse remarks or disclaimer which calls for any explanation from the Board.
21. Whistle Blower Policy / Vigil Mechanism
In compliance with the provisions of Section 177 of the Act read with Regulations 22 of the Listing Regulations, the Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs policies. The Audit Committee, on a quarterly basis, reviews the status of complaints, summary of findings and action taken in accordance with the policy. The policy is available at Investor Relations section of the website of the Company at www.goindigo.in
22. Internal Financial Control and their adequacy
The Company has an adequate Internal Financial Control (IFC) system which ensures that the transactions are authorised, recorded and reported correctly. The Companyâs IFC system has been designed to provide reasonable assurance regarding the following:
- Effectiveness and efficiency of Operations
- Adequacy of safeguards for assets
- Prevention and detection of frauds and errors
- Accuracy and completeness of the accounting standards (Ind AS)
- Timely preparation of financial statements
The Companyâs IFC system also comprises due compliances with Companyâs policies and Standard Operating Procedures (SOP) and is subject to periodic testing by the management of the Company.
23. Public deposits
The Company has not accepted any deposit during the year under review, under the provisions of the Act and the rules framed thereunder
24. Particulars of loans, investments, guarantees
The particulars of loans, guarantees and investments covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on March 31, 2018 are given at note no. 5 and 6 of the notes forming part of the standalone financial statements forming part of this Annual Report.
25. Management Discussion and Analysis Report
The Managementâs Discussion and Analysis Report on Companyâs operational performance, industry trends and other required details prepared in compliance of Regulation 34 of the Listing Regulations forms part of this Annual Report.
26. Corporate Governance Report
A separate report on Corporate Governance together with a certificate from the Secretarial Auditors of the Company regarding compliance of conditions of Corporate Governance in compliance of Regulation 34 of the Listing Regulations forms part of this Annual Report. Certificate of the Interim CEO and the CFO of the Company in terms of Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, also forms part of this Report.
27. Business Responsibility Report
A separate Business Responsibility Report dealing with the various initiatives taken by the Company on the environment, social and governance front in compliance of Regulation 34 of the Listing Regulations forms part of this Annual Report.
28. Extract of Annual Return
The extract of annual return in prescribed form MGT 9 as required under Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is given in Annexure - C, which forms part of this Report.
29. Significant material orders passed by the Regulators, Courts and Tribunals
There are no significant material orders passed by the Regulators, Courts or Tribunals impacting the going concern status of the Company and its operations in future.
30. Prevention and prohibition of sexual harassment of women at work place
The Company strongly believes in providing a healthy work environment that is free of any discrimination and harassment for each and every individual working for the Company through various interventions and practices. It is our continued endeavor to create an environment that enables employees to work without any fear of prejudices, gender bias and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder. During the year under review, the Company had conducted various workshops and interactive awareness programs for sensitizing the employees with the provisions of the aforesaid Act.
Pursuant to requirements of the aforesaid Act read with rules made thereunder, the Company has constituted an internal complaints committee to deal with the complaints received by the Company. During the year under review, 9 complaints were received by the Company and the same were investigated and resolved. Further, the Company has also submitted the annual return pertaining to FY 2017-18 to the local authority in compliance of the aforesaid Act.
31. Awards and recognitions
During the year under review, the Company won multiple awards and recognitions, both international and national. Some of the significant awards are as follows:
- Awarded the âBest Low Cost Airlineâ at the SKYTRAX World Airline Award 2017 for 8th consecutive year
- Awarded the âBest Low Cost Airline - Domesticâ and âBest International Low Cost Airline Out of / Into Indiaâ for FY 2017-18 by the Air Passengers Association of India (APAI)
- Awarded âSuperstar Airline of the Yearâ and âBest Airline of the Yearâ at the 6th Annual GMR - IGI Airport Awards, 2017
- Awarded âexcellence in Learning & Developmentâ by Society for Human Resource Management (SHRM) at SHRM India HR Excellence Awards
- Awarded 4th Most Punctual Airline Globally by OAG Punctuality League, 2018
- Awarded âBest Low Cost Airline in Asiaâ by Trip Advisor Travelersâ Choice Award 2018
- Awarded âOn-time Airline of the Year - Domesticâ, âPassenger Airline of the Year - International Low Costâ, âCustomer Choice Airline of the Year - Domesticâ, âPassenger Airline of the Year - Domestic Low Costâ, âTransformational Process Ideaâ and âAirline with best growing network - Domesticâ by Bangalore International Airport Limited (BIAL) Pinnacle Awards, 2018.
- Awarded âInternational Award for excellence in Air Cargo in the category Cargo Airline of the Year - Region - India by STAT Times.
32. Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Act, the Board, to the best of its knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. 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 of the Company for that period;
iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;
vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
33. Particulars of employees
The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure - D, attached to this Report. Further, the information required under Rule 5(2) & Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names of top ten employees and other particulars of employees is provided in a separate annexure. In terms of Section 136 of the Act, the report and the accounts are being sent to the members excluding the said annexure and the same is available for available for inspection at the Registered office of the Company during business hours.
34. Conservation of Energy, Technology Absorption
The Company persistently strives to run its operations more efficiently to reduce its fuel consumption and thus emissions. This endeavor entails the Companyâs continuous commitment towards conservation of energy and an ardent proclivity to engage in newer technological advances.
The Company provides an adequate fuel for sectors after evaluating various traffic trends thus avoiding any additional/ unnecessary fuel upliftment, installing software for accurate flight planning which provides accurate maps and most efficient flight path, increasing the accuracy of Flight plan by providing it again one hour prior to departure incorporating latest payload & weather information, restricting the use of auxiliary power units, employing continuous descent approaches and economy cruise speeds, minimising aircraft weight by removing unnecessary equipment and optimising engine settings for take-off and climb. Fuel consumption is directly proportional to the weight of an aircraft. The Company has sought to reduce the weight of the aircraft by selecting lighter seats and by choosing to not have in-flight entertainment system. Additionally, the Company has adopted conservation of fuel consumption policies which are inculcated in all pilots and engineering staff training procedures.
The Company has also adopted fuel policies designed to reduce costs on the ground including the use of the â¬co-Power â¬ngine Wash process for our engines, the use of ground equipment in place of aircraft auxiliary power units which consumes more fuel, use of single engine for taxing on ground and other engineering/operations protocols. These policies are all designed to optimise fuel consumption, reduce carbon footprint and thereby finally reducing costs.
Fill the A320 aircraft delivered to us since September 2008 use International Aero Engines SelectOne engines. These engines use various technological advancements to reduce aircraft fuel consumption compared to previous IA⬠engines. Our Companyâs fleet of aircraft includes A320neo aircraft which are up to 15% more fuel efficient than the current A320 without sharklet aircraft. In the last one year, 32 in service A320neo aircraft have operated 58,242 flights thereby reducing carbon emissions by 102.4T during the year under review.
35. Foreign exchange earnings and outgo
The details of foreign exchange earnings and outgo for the year ended March 31, 2018 are set out below:
36. Acknowledgements
The Board wish to thank all employees, bankers, vendors, government, regulatory authorities and other stakeholders for their continued support and cooperation.
We also take this opportunity to express our gratitude to investors for their continued faith in the Company.
On behalf of the Board of Directors of
InterGlobe Aviation Limited
Devadas Mallya Mangalore Rahul Bhatia
Chairman Nonexecutive Director and Interim Câ¬O
DIN: 01804955 DIN: 00090860
Date: July 05, 2018
Place: Gurgaon
Mar 31, 2017
Dear Shareholders,
The directors have pleasure in presenting their fourteenth report on the business and operations of InterGlobe Aviation Limited (the âCompanyâ, âIndiGoâ or âWeâ) for the financial year ended March 31, 2017.
Financial statements and results
1. Financial Performance
The Companyâs financial performance, for the year ended March 31, 2017 is summarised below:
(Rupees in millions) (except earnings per share)
|
Particulars |
2016-17 |
2015-16 |
|
Revenue from operations |
185,805.00 |
161,399.09 |
|
Other Income |
7,890.70 |
5,151.21 |
|
Total Income |
193,695.70 |
166,550.30 |
|
Profit before tax |
21,443.40 |
28,235.07 |
|
Current Tax |
(4,911.51) |
(7,303.93) |
|
Deferred tax (credit) / charge |
59.99 |
(1,069.53) |
|
Profit after Tax (PAT) |
16,591.88 |
19,861.61 |
|
Other Comprehensive Income net of Tax |
(21.72) |
(12.68) |
|
Total Comprehensive Income |
16,570.16 |
19,848.93 |
|
Earnings per equity shares of the face value of Rs. 10 each |
||
|
Basic (Rs.) |
45.94 |
58.06 |
|
Diluted (Rs.) |
45.85 |
56.39 |
2. Results of operations
The total income increased from Rs. 166,550.30 million to Rs. 193,695.70 million thereby registering an increase of 16.30% over the previous financial year. The Profit after tax decreased from Rs. 19,861.61 million to Rs. 16,591.88 million, a decline of 16.46% over the previous financial year. For details, please refer to the financial statements forming part of this Annual Report.
3. Dividend
Your Directors are pleased to recommend a final dividend of Rs. 34 per equity share of the face value of Rs.10 each for the financial year ended March 31, 2017.
The Final Dividend, subject to the approval of the Members at the forthcoming Annual General Meeting, will be paid to the Members whose names appear in the Register of Members/ Register of beneficial owner as on the record date fixed for this purpose. The total estimated amount of dividend payable, if approved by the shareholders, based on the current paid up share capital of the Company is Rs. 12,294.38 million (excluding corporate dividend tax).
4. Adoption of Indian Accounting Standards (Ind AS)
The Company has adopted Indian Accounting Standards (Ind AS) with effect from April 01, 2016, with transition date of April 01, 2015, pursuant to notification issued by Ministry of Corporate Affairs dated February 16, 2015, notifying the Companies (Indian Accounting Standard) Rules, 2015. Accordingly, the standalone financial statements of the Company and the consolidated financial statements of the Company with its subsidiary for the financial year ended March 31, 2017, have been prepared in accordance with Ind AS as prescribed under Section 133 of the Companies Act, 2013 (the âActâ), read with the relevant rules made thereunder and other accounting principles generally accepted in India.
Operational performance
During the year under review, the fleet size of the Company increased from 107 aircraft to 131 aircraft including 19 A320neos. As at the end of the year, the Company was operating in 44 destinations including 6 international destinations. The Company had a Technical Dispatch Reliability of 99.89%, on-time performance of 79.70% at four key metros and flight cancellation rate of 0.71%. A detailed analysis of operational performance is given in the Management Discussion and Analysis Report forming part of this Annual Report.
The Company has signed a term sheet with Avions de Transport Regional G.I.E. (ATR) for the purchase of 50 ATR 72-600 aircraft with the flexibility to reduce the number of aircraft deliveries based on certain conditions. This term sheet is subject to reaching a mutually satisfactory final purchase agreement. The Company plans to launch its turboprop operation at the end of calendar 2017 and expects to induct upto 20 ATR aircraft by December 2018.
Material changes
1. Incorporation of a wholly owned subsidiary
On February 14, 2017, Agile Airport Services Private Limited (âAgileâ) was incorporated as a wholly owned subsidiary of the Company for the purpose of carrying out the work of ground handling and other allied services at the airports, having paid up capital of Rs. 1,00,000 divided into 10,000 equity shares of Rs. 10 each. Agile is yet to commence its business operations.
In accordance with section 129(3) of the Act, the Company has, for the first time, prepared the consolidated financial statements of the Company with its subsidiary for the financial year ended March 31, 2017 which forms part of this Annual Report.
2. Increase in share capital
During the year under review, the Company issued 1,111,819 equity shares of the face value of Rs. 10 each to the employees upon exercise of stock options vested under InterGlobe Aviation Limited Tenured Employees Stock Option Scheme 2015 (Scheme-I). Consequently, the issued, subscribed and paid up capital of the Company increased from 360,356,544 equity shares to 361,468,363 equity shares of Rs. 10 each aggregating to Rs. 3614.68 million as on March 31, 2017.
Further, during the current financial year 2017-18 till the date of this report, the Company has issued 130,952 equity shares of the face value of Rs. 10 each to the employees upon exercise of stock options vested under InterGlobe Aviation Limited Employees Stock Option Scheme, 2015 (Scheme-II). Consequently, the issued, subscribed and paid up capital of the Company has increased to 361,599,315 equity shares of Rs. 10 each aggregating to Rs. 3615.99 million.
3. Utilisation of IPO proceeds
During the financial year 2015-16, the Company had completed its Initial Public Offer (âIPOâ), pursuant to which 39,464,562 equity shares of Rs. 10 each were allotted, at an issue price of Rs. 765, consisting of fresh issue of 16,640,544 equity shares and an offer for sale of22,824,108 equity shares by selling shareholders. Out of the fresh issue of 16,640,544 equity shares, 104,790 equity shares were issued to eligible employees at a discount of 10% to issue price and the remaining 16,535,754 equity shares were issued to public. The equity shares of the Company were listed on NSE and BSE on November 10, 2015.
As per the terms set out in the prospectus on âUtilisation of Net Proceedsâ, the Company was required to utilise IPO proceeds amounting to Rs. 12,091 million (net of fresh issue related expenses) (including service tax)) to retire certain outstanding financing lease liabilities and consequent acquisition of aircrafts, purchase of ground support equipment for our airline operations and general corporate purposes. During the year under review, the Company had utilised the entire IPO proceeds. Please refer note 39 to the notes to accounts to the financial statements as annexed to this Annual Report.
The Company had appointed HDFC Bank Limited as the Monitoring Agency of the IPO. In compliance of Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the âListing Regulationsâ), the Company had received Monitoring Report from HDFC Bank Limited confirming utilization of entire IPO proceeds as on March 31, 2017.
4. Employee stock option scheme
The Company had adopted two Employees Stock Option Schemes namely InterGlobe Aviation Limited Tenured Employees Stock Option Scheme 2016 (Scheme - I) and InterGlobe Aviation Limited Employee Stock Option Scheme 2015 (Scheme - II) pursuant to the approval of the shareholders of the Company at its extraordinary general meeting held on June 25, 2015. The Scheme - II was further amended by the shareholders through special resolution passed by postal ballot on September 07, 2016. The Schemes were framed to recognise the efforts made by employees towards the growth and success of the Company and to bring employees participation in the growth and prospects of the Company. The Compensation Committee of the Board of Directors (âBoardâ) administers and monitors the Scheme - I and Scheme - II.
During the year under review, all 1,111,819 stock options granted under the Scheme - I were vested and exercised by the employees to convert into equivalent number of equity shares of the Company. Further, during the current year 2017-18, till the date of this report, 130,952 vested stock options granted under Scheme-II were exercised by the eligible employees to convert into equivalent number of equity shares of the Company.
Details of the stock options granted under Scheme- I and Scheme- II and other disclosures in compliance with Section 62 of the Act read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Share Based Employee Benefits) Regulations, 2014 are uploaded on the website of the Company at https://www.goindigo.in/ content/indigo/airlines/en/information/investor-relations. html?linkNav=investor-relations footer. No employee has been issued stock options equal to or exceeding 1% of the share capital of the Company.
Disclosures
1. Public deposits
During the year under review, the Company has not accepted any deposits under Section 73 of the Act and as such, no amount on account of principal or interest on public deposits was outstanding as of March 31, 2017.
2. Particulars of loans, investments, guarantees
Details of loans, guarantees and investments covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on March 31, 2017 are given at note no. 5 and 6 of the notes to accounts to the financial statements forming part of this Annual Report.
3. Report on the performance and financial position of subsidiary
A report on the performance and financial position of the subsidiary as per Section 129(3) of the Act, in the prescribed format AOC - 1 is annexed to the consolidated financial statements and hence not repeated here for the sake of brevity. The Company has adopted a policy on material subsidiaries pursuant to Regulation 16(1)(c) of the Listing Regulations. The same is available on the website of the Company at https://www.goindigo.in/ content/indigo/airlines/en/information/investor-relations. html?linkNav=investor-relations footer
4. Related party transactions
All related party transactions are placed before the Audit Committee for review and approval. All the transactions entered into by the Company during the year 2016-17 were on an armâs length basis and in the ordinary course of business. During the year under review, the Company had not entered into any transaction with its related party which could be considered material, requiring approval of the Board/Shareholders, in accordance with the policy of the Company on materiality of related party transactions, Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act, in Form AOC -2 is not applicable.
The Policy on related party transactions as approved by the Board is available on the website of the Company at https:// www.goindigo.in/content/indigo/airlines/en/information/ investor-relations.html?linkNav=investor-relations footer. The details of related party transactions are given at note no. 35 of the notes to accounts to the financial statements forming part of this Annual Report.
5. Management discussion and analysis report
The Managementâs Discussion and Analysis Report on Companyâs operational performance, industry trends and other required details prepared in compliance of Regulation 34 of the Listing Regulations forms part of this Annual Report.
6. Business responsibility report
A Business responsibility Report as per Regulation 34 of the Listing Regulations dealing with the various initiatives taken by your Company on the environmental, social and governance front forms part of this Annual Report.
7. Corporate governance report
The Company has adopted good governance practices and lays strong emphasis on transparency, accountability and integrity. The Company has adopted the policies in line with governance requirements including Policy on Related Party Transactions, Policy on Material Subsidiaries, Policy for Materiality of Information and Events, Corporate Social Responsibility Policy and Whistle Blower Policy and Vigil Mechanism. These policies are available on the website of the Company at https://www.goindigo.in/ content/indigo/airlines/en/information/investor-relations. html?linkNav=investor-relations footer
In compliance with the provisions of Regulation 34(3) of the Listing Regulations, a separate report on Corporate Governance together with a Certificate from the Secretarial Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report.
8. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (âCODMâ) as required under Ind AS 108.
The CODM is considered to be Board who makes strategic decisions and is responsible for allocating resources and assessing performance of the operating segments. The principal activities of the Company comprises of Air Transportation operating in Domestic and International sectors. Accordingly, the Company has two reportable segments consisting of Domestic air transportation within India and International air transportation outside India.
9. Disclosure of Internal Financial Control and their adequacy The Company has an adequate Internal Financial Control (IFC) system which ensures that the transactions are authorised, recorded and reported correctly. The Companyâs IFC system has been designed to provide reasonable assurance regarding the following:
- Effectiveness and efficiency of Operations
- Adequacy of safeguards for assets
- Prevention and detection of frauds and errors
- Accuracy and completeness of the accounting standards (Ind AS)
- Timely preparation of financial statements
The Companyâs IFC system also comprises due compliances with Companyâs policies and Standard Operating Procedures (SOPâs) and is subject to periodic testing by the management of the Company.
10. Corporate social responsibility
At IndiGo, we bring to our Corporate Social Responsibility (âCSRâ) engagement, the same seriousness that we do to our core business. IndiGoReach, our CSR program is based on shared values, responsible business and exposure to voluntary social activities. We truly believe that itâs not just the funds, but true intentions and actions that go a long way. We focus on the identified areas that have long term and sustainable impact on the society by having a holistic approach towards all our Projects which help the beneficiaries in attaining sustainability in long run. IndiGoReach focuses on three of the most under-addressed areas in India marked by inequity and the potential to create the biggest catalytic impact in the shortest time the socio-economic status of women from backward sections; the educational and holistic development of children; the implementation of environment friendly practices; providing disaster relief in affected areas.
During the year under review, the Company was engaged in 33 CSR projects. An Annual Report on CSR activities undertaken during the year under review, in accordance with Section 135 of the Act read with the CSR rules made thereunder and the CSR Policy of the Company, is annexed to this Report as Annexure A. The policy is uploaded at the website of the Company at https://www.goindigo.in/ content/indigo/airlines/en/information/investor-relations. html?linkNav=investor-relations footer
Disclosures relating to Board and Committees
1. Board meetings
During the year under review, eight meetings of the Board of the Company were held. For details kindly refer to the âReport on Corporate Governanceâ forming part of this Annual Report.
2. Committees of the Board
A detailed note on the Board and its Committees is provided in the âReport on Corporate Governanceâ forming part of this Annual Report. As on March 31, 2017, the Board has the following standing Committees;
i. Audit Committee
ii. Nomination and Remuneration Committee*
iii. Corporate Social Responsibility Committee
iv. Stakeholdersâ Relationship Committee
v. Compensation Committee *
vi. Risk Management Committee
*The Board of Directors of the Company at its meeting held on June 21, 2017, combined the terms of reference of the Compensation Committee with the Nomination and Remuneration Committee. Thereafter, the Compensation Committee was dissolved.
For details of the terms of reference, meetings held during the year, membership and attendance of the members at the meetings of the above Committees of the Board, kindly refer to the âReport on Corporate Governanceâ forming part of this Annual Report.
3. Board evaluation
Pursuant to applicable provisions of the Act and the Listing Regulations, the Board has carried out the performance evaluation of all the Directors (including Independent Directors) on the basis of recommendation of Nomination and Remuneration Committee and the criteria formulated for the performance evaluation.
The evaluation of the Board of and the various committees was made on the basis of the following assessment criteria:
(i) Adequacy of the constitution and composition of the Board and its Committees
(ii) Understanding of the Companyâs principles, values, philosophy and mission statement
(iii) Matters addressed in the Board and Committee meetings
(iv) Effectiveness of the Board and its Committees in providing guidance to the management of the Company
(v) Processes followed at the meetings
(vi) Boardâs focus, regulatory compliances and Corporate Governance
The performance of the Committees was also evaluated by the members of the respective Committees on the basis of the Committee effectively performing the responsibility as outlined in its Charter/Terms of reference.
Similarly, the evaluation of the Independent Directors and other individual Directorsâ performance was made by the entire Board, on the basis of the following assessment criteria:
(i) Attendance and active participation in the Meetings
(ii) Contribution in Board and Committee Meetings
(iii) Execution and performance of specific duties, obligations, regulatory compliances and governance
The Board members had submitted their response for evaluating the entire Board and respective Committees of which they are members.
4. Meeting of Independent Directors
The Independent Directors of the Company had met separately on March 31, 2017 without the presence of Non-Independent Directors and the members of management.
However, the Company Secretary and Chief Compliance Officer of the Company was present in the meeting. The Independent Directors discussed, inter-alia, the performance of Non-Independent Directors and Board as a whole and the performance of Chairman of the Board and assessment of the quality, quantity and timeliness of the flow of information between the Company management and the Board that was necessary for effective performance of duties of the Board.
Auditors and their reports
1. Statutory Auditors and their Report
M/s B S R & Co. LLP, Chartered Accountants (Registration No. 101248W/ W-100022), were appointed as Statutory Auditors of the Company at the Annual General Meeting held on September 08, 2014 for a term of five consecutive years. As per the provisions of Section 139 of the Act, the appointment of Statutory Auditors is required to be ratified by the members at every Annual General Meeting of the Company. The Statutory Auditors have submitted a certificate, as required under Section 139(1) of the Act to the Company stating that they satisfy the criteria provided in section 141 of the Act.
The Reports given by the Statutory Auditors on the financial statements of the Company and the consolidated financial statements of the Company and its subsidiary for the financial year ended March 31, 2017, form part of this Annual Report. There has been no qualification, reservation or adverse remarks made by Statutory Auditors in their Reports. The Statutory Auditors have not reported any frauds to the Audit Committee under Section 143(12) of the Act.
2. Secretarial Auditors and their Report
Pursuant to Section 204 of the Act read with relevant rules, the Company had appointed Sanjay Grover & Associates, Practicing Company Secretaries as Secretarial Auditors of the Company for the financial year 2016-17.
The Secretarial Audit Report issued by the Secretarial Auditors in the prescribed form MR-3 is attached as Annexure - B to this Report. There have been no qualifications, reservations or adverse remarks made by the Secretarial Auditors in their Report which calls for any explanation from the Board.
Disclosures relating to the Directors, Key Managerial Personnel and Policies
1. Directors
Mr. Devadas Mallya Mangalore (DIN: 01804955) was reappointed as the Chairman and Independent Director and Dr. Anupam Khanna (DIN: 03421015) was reappointed as Independent Director for a period of five years effective from March 27, 2017 through special resolutions passed by the shareholders of the Company at the last Annual General Meeting held on September 21, 2016.
Mrs. Rohini Bhatia (DIN 01583219), retires by rotation and being eligible, has offered herself for re-appointment at the ensuing Annual General Meeting of the Company.
The Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act read with Regulation 16(1)(b) of the Listing Regulations. The details of familarisation programmes for Independent Directors for the financial year 2016-17 are uploaded on the website at https://www.goindigo.in/content/indigo/airlines/en/ information/investor-relations.html?linkNav=investor-relations footer
None of the Directors of the Company is disqualified to act as a Director under Section 164(2) of the Act.
2. Key Managerial Personnel
During the year under review, Mr. Rohit Philip joined the Company as the Chief Financial Officer effective July 18, 2016, succeeding Mr. Pankaj Madan who left the Company effective from July 17, 2016. Mr. Sanjay Gupta joined the Company as the Company Secretary and Chief Compliance Officer effective August 18, 2016, succeeding Mr. Suresh Kumar Bhutani who left the Company effective July 15, 2016. The Board took on record the resignation of Mr. Pankaj Madan and Mr. Suresh Kumar Bhutani and appreciated their sincere efforts and contributions towards the success of the Company.
3. Whistle Blower Policy / Vigil Mechanism
In compliance with the requirements of the provisions of Section 177 of the Act read with Regulation 22 of the Listing Regulations, the Board has established a vigil mechanism for directors, employees and other stakeholders to disclose instances of wrongdoing in the workplace and report instances of unethical behavior, actual or suspected fraud or violation of the Companyâs Policies. The Audit Committee periodically reviews the status of complaints received under this policy on a quarterly basis. The policy is available at the website of the Company at https://www. goindigo.in/content/indigo/airlines/en/information/investor-relations.html?linkNav=investor-relations footer. For details, kindly refer to the Report on Corporate Governance forming part of this Annual Report.
4. Remuneration Policy
The Board on the recommendation of the Nomination & Remuneration Committee, framed a policy âInterGlobe Aviation Limited - Nomination and Remuneration Policyâ relating to the remuneration of the Directors, Key Managerial Personnel and other employees. The policy is uploaded at the website of the Company at https://www. goindigo.in/content/indigo/airlines/en/information/investor-relations.html?linkNav=investor-relations footer.
5. Risk Management
The Companyâs risk management policies are established to identify and analyse the risks faced by the Company to set appropriate risks limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
The Board of the Company has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Risk Management Committee is responsible for reviewing the risk management policies and ensure its effectiveness.
6. Prevention and prohibition of sexual harassment of women at work place
At IndiGo, we are committed to provide a healthy work environment that is free of discrimination and unlawful harassment and that enables employees to work without fear of prejudice, gender bias and sexual harassment. Keeping with this commitment, IndiGo expressly and strictly prohibits any form of employee harassment based on race, color, religion, sex, national origin, age, disability, sexual orientation, or status in any group protected by state or local law. The Company has always endeavored for providing a better and safe environment free of sexual harassment at all its work places. In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, the Company continued conducting workshops and awareness programs for sensitising the employees with the provisions of the aforesaid Act.
As per the requirement of the aforesaid Act and Rules made thereunder, the Company has constituted an Internal Complaints Committee. During the year under review, 4 complaints were received by the Company and the same were investigated and resolved as per the provisions of the Act.
Awards and accolades
During the year under review, the Company won multiple awards and recognitions, both international and national. Some of the significant awards include:
- Awarded the âBest Low Cost Airline in India/ Central Asiaâ for the seventh successive year at the 2016 Skytrax World Airline Awards.
- Awarded âBest Low Cost Airline - Domesticâ for the year 2015-16 by the Air Passengers Association of India (APAI).
- Awarded âThe Emerging Company of the year 2016â for Corporate Excellence at the Economic Times Awards.
- Awarded âCompany of the Yearâ at Business Standard Award for Corporate Excellence 2016.
- Awarded one of the leading âOn-Time Performers in the Asia - Pacific regionâ by FlightStats. Inc in the 8th Annual Airline On-Time Performance Service Awards, January 2017.
- Received an Order of Merit for its outstanding financial performance and profitability in FY16 by Center for Asia Pacific Aviation India Private Limited (CAPA).
- Won âTripAdvisor Travelers Choice Awardâ (Airline).
- Awarded âAon Best Employers India - 2017â for two years in a row.
- Won âThe Better Holiday Awardsâ and âIndiaâs Favorite Budget Airline For Holidaysâ by Holiday IQ.
- Won âBest Operational Excellenceâ award in the category of large operators by Airbus for the second consecutive time globally, outperforming 46 international airlines of repute.
- Awarded âPassenger Airline of the Year - Domesticâ, âCustomer Choice Airline of the Year - Domesticâ and the âDomestic Airline of the Year for Cargoâ by Bangalore International Airport Limited (BIAL) Pinnacle Awards, May 2017
Other Disclosures
1. Extract of Annual Return
The extract of annual return in Form MGT -9 as required under Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure - C to this Report.
2. CEO and CFO Certificate
A Certificate of the President and Whole Time Director and Chief Financial Officer of the Company in terms of the Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee / Board, forms part of this Report.
3. General Disclosures
Pursuant to the Act and the Listing Regulations, the Board hereby confirms that during the year under review;
- The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.
- The Company has not issued shares (including sweat equity shares) to the employees of the Company under any scheme save and except Scheme - I as referred in this Report.
- There are no significant material orders passed by the Regulators or Courts and Tribunals impacting the going concern status of the Company and its operations in future.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) of the Act, the Board hereby confirms:
(a) That in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
(b) That they had 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 the affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) That they have prepared the annual accounts on a going concern basis;
(e) That they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and
(f) That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Particulars of employees
The Company had 14,604 permanent employees as on March 31, 2017. The disclosures pertaining to remuneration and other information as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and is appended as Annexure - D.
The information required pursuant to Section 197(12) of the Act read with Rule 5(2) and 5(3) of the aforesaid Rules forms part of this Report and will be furnished to the shareholders on request.
Conservation of energy, technology absorption,
At IndiGo, we are committed to running fuel and emission efficient operations. This endeavor entails the Companyâs continuous commitment towards conservation of energy and an ardent proclivity to engage in newer technological advances.
- The flight operating procedures of the Company are designed with focus on fuel efficiency and passenger safety. The average age of our aircraft was 5.17 years as of March 31, 2017 which is one of the youngest fleets of any Low Cost Carrier globally. A young fleet is more fuel efficient than an older fleet. The Company actively seeks to maintain a young fleet because it helps us to mitigate against technological obsolescence and achieve better reliability in terms of aircraft performance, lower maintenance costs, improved fuel-efficiency, higher flight dispatch reliability and higher passenger appeal.
- Fuel consumption is directly proportional to the weight of an aircraft. The Company has sought to reduce the weight of the aircraft by selecting lighter seats and by choosing to not have in-flight entertainment system.
- The Company has also adopted conservation of fuel consumption policies which are inculcated in all pilots and engineering staff training procedures.
- The Company provides an adequate fuel for sectors after evaluating various traffic trends thus avoiding any additional/unnecessary fuel upliftment, installing software for accurate flight planning which provides accurate maps and most efficient flight path, restricting the use of auxiliary power units, employing continuous descent approaches and economy cruise speeds, minimising aircraft weight by removing unnecessary equipment and optimising engine settings for take-off and climb.
- Additionally, the Company has also adopted fuel policies designed to reduce costs on the ground including the use of the Eco-Power Engine Wash process for our engines, the use of ground equipment in place of aircraft auxiliary power units which consumes more fuel, use of single engine for taxing on ground and other engineering/operations protocols. These policies are all designed to optimise fuel consumption, reduce carbon footprint and thereby finally reducing costs.
- The A320 aircraft delivered by Airbus to the Company since January 2013 have been equipped with âsharkletsâ and consume less fuel than aircraft without sharklets because of its improved aerodynamic efficiency. All the A320 aircraft delivered to us since September 2008 use International Aero Engines SelectOne engines. These engines use various technological advancements to reduce aircraft fuel consumption compared to previous IAE engines.
- The Company had ordered 430 Airbus A320neo aircraft, 22 of which have been delivered till June, 2017. These new generation A320neo aircraft which have introduced revolutionary engine enhancements, are up to 15% more fuel efficient than the current A320 aircraft (without sharklets). In the last one year, 19 in service A320neo aircraft have operated 20541 flights thereby reducing carbon emissions by 29.5T during the year.
Green initiative
Electronic copies of the Annual Report for the financial year 2016-17 will be sent to all the Members whose email addresses are registered with the Company / depository participant(s) and have not opted for receiving physical copies of the Annual Report. The Annual Report will be sent to other Members through permitted mode.
Appreciations and acknowledgements
We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their solidarity, cooperation and support.
We also take this opportunity to thank all Investors, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock exchanges for their continued support.
On behalf of the Board of Directors of
InterGlobe Aviation Limited
Devadas Mallya Mangalore Aditya Ghosh
Chairman President and Whole Time Director
(DIN 01804955) (DIN 01243445)
Date : June 21, 2017
Place : Gurgaon
Mar 31, 2016
Dear Shareholders,
The directors have pleasure in presenting their thirteenth report on
the business and operations of InterGlobe Aviation Limited (the
"Company") together with the audited financial statements for the
financial year ended March 31, 2016.
FINANCIAL STATEMENTS AND RESULTS
1. Financial Results
The Company''s financial performance for the year ended March 31, 2016
is summarized below:
(Rs. in million)
2015-16 2014-15
Revenue from operations 161,399.09 139,253.36
Other Income 4,613.93 3,945.83
Total 166,013.02 143,199.19
Profit before tax (charge) / benefit 28,289.50 18,465.23
Tax (charge) / benefit
Current Tax - Current period (7,303.93) -
Minimum Alternate Tax (''MAT'') - Current
period - (3,889.77)
Less: MAT credit entitlement - 2,014.85
Deferred tax credit/(charge) (1,088.37) (3,548.59)
Profit for the year after tax (PAT) 19,897.20 13,041.72
Add: Surplus in the statement of profit
and loss at the beginning of the year 380.72 250.07
Amount available for appropriation 20,277.92 13,291.79
Less: Appropriations
Interim dividend (10,029.10) (10,796.89)
Proposed equity dividend (5,405.35) -
Corporate dividend tax (3,142.15) (2,114.18)
Net surplus in the statement of profit
and loss carried forward 1,701.32 380.72
(In Rs.)
Earnings Per share 2015-16 2014-15
Basic 58.17 42.48
Diluted 56.49 37.94
2. Results of operations
- Total income during the year 2015-16 increased to Rs. 166,013.02
million as against Rs. 143,199.19 million during the year 2014-15, a
growth 15.9%.
- Profit after tax was Rs. 19,897.20 million during the year 2015-16 as
compared to Rs. 13,041.72 million during 2014-15, a growth of 52.6%.
- Basic earnings per share (par value of Rs. 10 per share) was Rs.
58.17 for the year 2015-16 as compared to Rs. 42.48 for the year
2014-15, a growth of 36.9%.
- Diluted earnings per share (par value of Rs. 10 per share) was Rs.
56.49 for the year 2015-16 as compared to Rs. 37.94 for the year
2014-15, a growth of 48.9%.
For details please refer to notes to accounts and management discussion
and analysis annexed to the annual report.
3. Appropriations
a. Dividend
Your Directors are pleased to recommend a final dividend of Rs. 15 per
equity share for the financial year ended March 31, 2016 (being 150 %
on the face value of Rs. 10 per share) which is subject to the approval
of the members at the ensuing Annual General Meeting of your Company.
The Interim Dividend of Rs. 32,668.08 per equity share of face value
of Rs. 1,000 per share for financial year 2015-16 aggregating to Rs.
10,029.10 million was paid on June 22, 2015.
b. Reserves
Your Directors have not proposed to transfer any amount to reserves for
the financial year 2015-16.
4. Changes in the capital structure
a. Scheme of Arrangement
A scheme of amalgamation between Caelum Investment LLC ("Transferor
Company") and InterGlobe Aviation Limited (the "Company" or "Transferee
Company") and their respective shareholders/members and creditors
("Scheme") was sanctioned by the Hon''ble High Court of Delhi vide its
order dated December 22, 2014 ("Order") under Sections 391 to 394 and
all other applicable provisions of the Companies Act, 1956 in Company
Petition No. 599/2014 connected with Company Application (M)
No.107/2014 and in respect of which the certified copy of the formal
Order was obtained on March 27, 2015 and was subsequently filed with
the Registrar of Companies on April 24, 2015. Further, in relation to
the Scheme, the Company has received a certificate of merger dated
April 24, 2015 from the Secretary of State, Division of Corporations,
State of Delaware, United States of America giving effect to the merger
of the Transferor Company with the Company. The applicable date and the
effective date of the scheme is April 24, 2015.
In accordance with the terms of the Scheme, the Company at its Board
meeting held on April 25, 2015, cancelled 147,000 Equity Shares of Rs.
1000 each held by Caelum Investment LLC and issued fresh Equity Shares
to the members of Caelum Investment LLC in the proportion of the voting
rights held by them in Caelum Investment LLC. For details please refer
to note 2.43 to the notes to accounts to financial statements annexed
to this report.
b. Conversion of convertible preference shares into equity shares
During the financial year, 36,716 fully paid up 0.00% convertible
preference shares of Rs. 1000 each have been converted into equity
shares of the Company ranking in all respects pari passu with the
existing fully paid-up equity shares of the Company in the ratio of
1:1, vide resolution passed by the Board at the Board Meeting of the
Company held on June 23, 2015.
c. Reclassification and sub-division of authorised share capital of
the Company
The Shareholders'' at the Extraordinary General Meeting (''EGM'') of the
Company held on June 25, 2015, approved the reclassification and
subdivision of the authorised Share Capital of the Company aggregating
to Rs. 2,200.00 million, comprising of 500,000 Equity Shares of Rs.
1,000 each aggregating to Rs. 500.00 million; 1,600,000 Redeemable
Preference Shares of Rs. 1,000 each aggregating Rs. 1,600.00 million
and 100,000 Convertible Preference Shares of Rs. 1,000 each aggregating
Rs. 100.00 million to 220,000,000 Equity Shares of Rs. 10 each
aggregating to Rs. 2.200.00 million.
Consequent to sub-division, the issued equity Share Capital was split
from Rs. 343,716,000 divided into 343,716 equity shares of Rs. 1000
each to Rs. 343.716.000 divided into 34,371,600 equity shares of Rs.
10 each.
d. Increase in the authorised share capital of the Company The
Shareholders'' at the EGM of the Company held on June 25, 2015, approved
increase in authorized share capital of the Company from Rs. 2,200.00
million comprising of 220,000,000 Equity Shares of Rs. 10 each to Rs.
7,500.00 million comprising of 750,000,000 Equity Shares of Rs. 10
each.
e. Bonus issue
During the year, the Shareholders'' at the EGM of the Company held on
June 25, 2015, approved capitalization of sum of Rs. 3,093.44 million,
out of the balance in the Company''s Capital Redemption Reserve /
General Reserve and issued and allotted 309,344,400 equity shares of
Rs. 10 each as bonus shares in the proportion of nine fully paid Equity
shares of Rs. 10 each for every one Equity share of Rs. 10 held as on
the record date i.e. June 25, 2015.
5. Adoption of new Articles of Association of the Company
The Shareholders'' at the EGM of the Company held on June 25, 2015 and
September 22, 2015, had altered and adopted new set of Articles of
Association comprising of Part I and Part II in accordance with the
provisions of the Companies Act, 2013 read with the rules issued
thereunder and in view of the conformity to the Shareholders Agreement
dated April 23, 2015 as amended and the proposed initial public offer
of equity shares of the Company. In accordance with the approval
granted by shareholders, Part II of the Articles of Association shall
terminate and shall be deemed to fall away without any further action
immediately on the commencement of listing and trading of the equity
shares of the Company on the BSE Limited or the National Stock Exchange
of India Limited in accordance with applicable laws.
Accordingly your directors further propose to alter the Articles of
Association of the Company by deleting Part
II thereof at the ensuing annual general meeting for the approval of
the shareholders.
6. Listing of Securities of the Company with National Stock Exchange
of India Limited and BSE Limited
During the financial year 2015-16, the Company had completed the
initial public offer (IPO), pursuant to which 39,464,562 equity shares
of Rs. 10 each were allotted, at an issue price of Rs. 765, consisting
of fresh issue of 16,640,544 equity shares and an offer for sale of
22,824,018 equity shares by selling shareholders. Out of the fresh
issue of 16,640,544 equity shares, 104,790 equity shares were issued to
eligible employees at a discount of 10% to issue price and the
remaining 16,535,754 equity shares were issued to public.
The equity shares of the Company were listed on National Stock Exchange
of India Limited (NSE) (symbol INDIGO) and BSE Limited (BSE) (scrip
code 539448) on November 10, 2015.
Expenses incurred by the Company aggregating to Rs. 1,286.27 million
(including Service Tax) in connection with the IPO have been partly
adjusted towards the securities premium account and partly recovered
from the selling shareholders. The IPO expenses amounting to Rs.
1,286.27 million, excluding certain expenses which are directly
attributable to the Company (such as legal counsel cost, auditor fee,
Listing fee and stamp duty expenses) amounting to Rs. 152.68 million,
have been allocated between the Company and each of the selling
shareholders in proportion to the equity shares allotted to the public
as fresh issue by the Company and under offer for sale by the existing
shareholders. For details please refer note 2.2 to the notes to
accounts to financial statements annexed to this report.
Your directors wish to apprise you that your Company had paid all
refund due to non allottees of the IPO of the Company and there is nil
balance of shares in the unclaimed shares escrow demat account opened
for the purpose.
1. Utilization of IPO proceeds
The Company had filed prospectus with Registrar of Companies (''RoC'') on
October 30, 2015. As per the terms set out in the prospectus on
"Utilization of Net Proceeds", the Company was required to utilize IPO
proceeds to retire certain outstanding finance lease liabilities and
consequent acquisition of aircraft by March 31, 2016. The Company has
retired finance lease liabilities for five aircraft out of the proposed
eight aircraft by March 31, 2016. Further during the month of April
2016, after obtaining the approvals from appropriate authorities, the
Company has retired the remaining three finance lease liabilities out
of the IPO proceeds. Please refer note 2.41 to the notes to accounts to
financial statements as annexed to this report.
The unutilized amount of the issue as at March 31, 2016 has temporarily
been deployed in fixed deposits with banks.
The Company had appointed HDFC Bank Limited as the Monitoring Agency of
the IPO. Your Company had received Monitoring Report from HDFC Bank
Limited as on March 31, 2016 under Regulation 32 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
8. Adoption and implementation of Employees stock option schemes
Your Company instituted two employee stock option schemes, namely the
InterGlobe Aviation Limited Tenured Employees Stock Option Scheme -
2015 ("ESOS 2015 - I") and InterGlobe Aviation Limited Employees Stock
Option Scheme - 2015 ("ESOS 2015 - II"), pursuant to resolutions of the
Board of Directors dated June 23, 2015 and resolutions of the
shareholders at the EGM dated June 25, 2015. The objective of the
schemes is to provide certain existing employees an opportunity for
investment in our equity shares. Both the schemes are in compliance
with Securities and Exchange Board of India (Share based Employee
Benefits) Regulations, 2014.
Both the employees stock option schemes are implemented to recognize
the efforts made by employees towards the growth and success of the
Company and to bring employees participation in the growth and
prospects of the Company. The Compensation Committee of the Company
administers and monitors both the schemes.
The details required to be provided under Section 62 of Companies Act,
2013 and Rule 12 of Companies (Share Capital and Debentures) Rules,
2014 and Securities and Exchange Board of India (Share Based Employee
Benefits) Regulations, 2014 read with Securities and Exchange Board of
India circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16, 2015 are
set out in the Annexure-A to this Report and also available on the
Company''s website www.goindigo.in.
On June 29, 2016, your Company has allotted 847,262 (Eight Lakhs Forty
Seven Thousand Two Hundred Sixty Two) equity shares of Rs. 10/- each
(Rupees Ten Only) to those grantees who had exercised their options
under the InterGlobe Aviation Limited - Tenured Employees Stock Option
Scheme 2015 "ESOS 2015-1" in accordance with the terms set out in the
scheme.
9. Management discussion and analysis report
The Management discussion and analysis report on Company''s operational
performance, industry trends and other material changes with respect to
the company prepared in compliance of Regulation 34 of Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 forms part of this annual report.
10. Public deposits
During the financial year under review, the Company has not accepted or
renewed any deposit falling within the purview of the provisions of
Sections 73 and 74 of the Companies Act, 2013 (the "Act") read with the
Companies (Acceptance of Deposits) Rules, 2014.
11. Disclosure under Section 129(3) of the Companies Act, 2013
The Company does not have any subsidiary company, associate and Joint
venture Company and hence no information as per the provisions of
Section 129(3) of the Companies Act, 2013 read with applicable rules is
furnished.
12. Business responsibility report
A Business responsibility report as per Regulation 34 of the Securities
and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 dealing with the various initiatives
taken by your Company on the environmental, social and governance front
forms an integral part of this report.
13. Corporate governance report
In compliance with the provisions of Regulation 34(3) of the Securities
and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a separate report on Corporate
Governance with a certificate from Sanjay Grover & Associates, Company
Secretary in practice regarding compliance of conditions of Corporate
Governance as stipulated under Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, is
an integral part of this report.
14. Indian Accounting standards (Ind AS)
Your Company has adopted Indian Accounting standards (Ind AS) with
effect from April 01, 2016 pursuant to the Ministry of Corporate
Affairs notification dated February 16, 2015 notifying the Companies
(Indian Accounting Standard) Rules, 2015. The quarterly unaudited
results for June 30, 2016 have been prepared as per the applicable Ind
AS to the Company.
15. Segment Reporting
Your Company operates in domestic and international sectors. Moreover,
the Company, considering its internal financial reporting, which is
based on geographic segments, has identified geographic segment as the
primary segment of your Company. The geographic segment consists of
Domestic air transportation within India and International air
transportation outside India.
The details regarding accounting treatment of segment reporting have
been disclosed in the note no. 2.38 to notes to accounts of financial
statements annexed to this report.
16. Disclosure of internal financial control and their adequacy
Your Company''s internal control procedures are adequate to ensure
compliance with various policies, practices and statutes in keeping
with the organization''s pace of growth and increasing complexity of
operations.
Your Company has in place system and process commensurate with its size
and nature of business and maintains a system of internal controls
designed to provide reasonable assurance regarding the following:
- Effectiveness and efficiency of operations
- Adequacy of safeguards for assets
- Prevention and detection of frauds and errors
- Accuracy and completeness of the accounting records
- Timely preparation of reliable financial information
Independent internal audit is carried out to ensure adequacy of
internal control system and adherence to policies and practices. The
scope of internal audit activity is guided by the internal annual audit
plan. The Audit Committee reviews reports submitted by the independent
internal auditor and monitors follow up and corrective action taken.
The details in respect of internal financial control and their adequacy
are included in the auditors'' report which forms an integral part of
this report.
17. Particulars of contracts or arrangements made with related parties
During the financial year 2015-16, your Company has entered into
various transactions with related parties as defined under the
Companies Act, 2013 read with applicable rules and the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, all of them are in the ordinary course
of business and at arm''s length basis.
During the year, the Company had not entered into any contract,
arrangement or transaction with related parties which could be
considered material in accordance with the policy of the Company on
materiality of related party transactions.
Information on transactions with related parties pursuant to Section
134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the
Companies (Accounts) Rules, 2014 are given in Form AOC - 2 as Annexure
- B which forms part of this report.
18. Particulars of Loans, Guarantees and Investments
Details of loans, guarantees and investments covered under Section 186
of the Companies Act, 2013 read with the Companies (Meetings of Board
and its Powers) Rules, 2014 as on March 31, 2016 are set out in the
financial statements forming part of this report.
19. Corporate Social Responsibility
IndiGoReach, our Corporate Social Responsibility program is based on
shared values, responsible business and exposure to voluntary social
activities. Any CSR project that we take up, we ensure that it is able
to make a social and an economic impact. It also has an effect on the
gender equality, caste and yield in the rural area where we intervene.
A holistic approach is what helps us attain sustainability in any
project. We truly believe that it''s not just the funds, but true
intentions and actions that go a long way.
Your Company focus on the identified areas that have long- term and
sustainable impact on the society. We have also chosen multi-year
projects whose implementation ranges from two to five years. We have
set milestones for each and every project and the payments to the
implementing team are made in tranches from time to time, as the CSR
activities of the Company are being planned out to ensure the optimal
utilization of funds.
A detailed report on CSR activities undertaken during the financial
year ended on March 31, 2016, in accordance with Section 135 of the
Companies Act, 2013 and Companies (Corporate Social Responsibility
Policy) Rules, 2014 as amended from time to time is annexed to this
report as Annexure C.
AUDITORS AND REPORTS
20. Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the rules framed thereunder, B S R & Co. LLP, Chartered
Accountants, (ICAI Firm Registration No. 101248W/ W-100022), were
appointed as statutory auditors of your Company at the annual general
meeting of the Company held on September 08, 2014 for a term of five
years subject to ratification of their appointment at every annual
general meeting by the shareholders of the company.
The Auditors have confirmed their eligibility and willingness to accept
office to conduct audit of financial statements for the financial year
ending March 31, 2017 at the ensuing annual general meeting. A
resolution to that effect forms part of notice of the annual general
meeting attached to this report.
The Report given by the Statutory Auditors of your Company on the
financial statements is annexed to this report. There are no
qualifications, reservations or adverse remarks made by the Statutory
Auditors in their Report for the financial year ended March 31, 2016.
The Statutory Auditors have not reported any incident of material fraud
to the Audit Committee of the Company during the year under review.
21. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Sanjay Grover &
Associates, Practicing Company Secretaries to undertake the Secretarial
Audit of the Company.
The Secretarial Audit Report in Form MR - 3 for the financial year
ended March 31, 2016 forms part of this report and has been attached as
Annexure - D. There are no qualifications, reservations or adverse
remarks made Secretarial Auditors in their Report for the financial
year ended March 31, 2016.
DISCLOSURES RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
22. Directors
The Board of your Company is constituted in terms of the provisions of
the Companies Act, 2013 and the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
The composition of the Board is detailed in the Corporate Governance
Report which forms an integral part to this report.
During the year under review, the following changes took place in the
office of directors of the Company.
On June 23, 2015 Mr. Kapil Bhatia resigned from the office of Chairman
and Director of your Company. Your directors place on record their
sincere appreciation for the advice and contributions made by Mr. Kapil
Bhatia towards the growth and success of the Company during his tenure
with the Company.
On June 23, 2015, the Board had approved the following:
- Appointment of Mr. Devadas Mallya Mangalore, Independent Director as
the Chairman of the Board;
- Change in the office of Mr. Rahul Bhatia from Managing Director to
Non-Executive Director of the Company liable to retire by rotation.
At the extra ordinary general meeting of your Company held on June 25,
2015, Mr. Rakesh Gangwal was appointed as a non - executive director of
the Company liable to retire by rotation.
At the previous annual general meeting of the Company held on September
29, 2015 Mr. Rahul Bhatia who was liable to retire by rotation was
reappointed as director of the Company.
Mr. Aditya Ghosh, Director of the Company is liable to retire by
rotation in accordance with the provisions of Section 152 of the
Companies Act, 2013 at the ensuing annual general meeting and being
eligible, has offered himself for reappointment as director of the
Company.
Mr. Devadas Mallya Mangalore and Dr. Anupam Khanna were appointed as
independent directors at the extraordinary general meeting of the
Company held on March 27, 2015 for period of 2 years i.e. March 27,
2015 to March 26, 2017. The board of directors at its meeting held on
August 01, 2016 had recommended the re-appointment of the independent
directors for a fresh term of 5 years from March 27, 2017 to March 26,
2022 subject to the approval of the shareholders at the ensuing annual
general meeting.
None of the directors of the Company are disqualified as per the
provisions of Section 164(2) of the Companies Act, 2013.
23. Key Managerial Personnel
During the financial year, on June 25, 2015, Mr. Suresh Kumar Bhutani,
Company Secretary of the Company was appointed as Compliance Officer of
the Company.
Subsequent to the close of the financial year, Mr. Pankaj Madan, Chief
Financial Officer submitted his resignation on May 17, 2016 and served
till July 17, 2016. The Board of Directors took on record the
resignation of Mr. Pankaj Madan, Chief Financial Officer (KMP) of the
Company and appreciated his sincere efforts and contributions towards
the success of the Company.
Further based on the recommendation of Nomination and Remuneration
Committee and approval of the Audit Committee, the board of directors
approved the appointment of Mr. Rohit Philip as the Chief Financial
Officer and Key Managerial Personnel of the Company for a period of
five (5) years effective July 18, 2016.
Mr. Suresh Kumar Bhutani had resigned from the post of Company
Secretary and Compliance Officer of the Company with effect from June
08, 2016 and served the Company till July 15, 2016. The board took on
record the same at their meeting held on August 01, 2016 and
appreciated his sincere efforts and contributions towards the success
of the Company.
24. Declaration by Independent Directors
Pursuant to the provisions of Section 149 of the Companies Act, 2013
Mr. Devadas Mallya Mangalore and Dr. Anupam Khanna were appointed as
independent directors at the extraordinary general meeting of the
Company held on March 27, 2015. The terms and conditions of appointment
of independent directors are as per Schedule IV of the Companies Act,
2013. They have submitted a declaration that each of them meets the
criteria of independence as provided in Section 149(6) of the Act and
there has been no change in the circumstances which may affect their
status as independent director during the year.
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
25. Board Meetings
During the year, the board of directors of your Company met ten times.
For details of the meetings of the board, please refer to the corporate
governance report, which forms an integral part of this report.
26. Committees of the Board
As per the provisions of the Companies Act, 2013 and the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the board of your Company has
constituted the following committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Corporate Social Responsibility Committee
iv. Stakeholders'' Relationship Committee
v. Compensation Committee
vi. IPO Committee#
vii. Risk Management Committee*
-The IPO Committee of the Company was constituted by the Board at its
meeting held on June 28, 2015 to approve and decide upon all activities
in connection with the Initial Public Offering of the Company. Since
the equity shares of the Company got listed with National Stock
Exchange of India Limited and BSE Limited on November 10, 2015 and the
scope and objective for which the IPO committee was constituted has
been achieved. Therefore IPO Committee was dissolved by the board at
its meeting held on January 21, 2016.
*According to Regulation 21 of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015 the Risk Management Committee is required to be constituted by the
top 100 listed companies determined on the basis of market
capitalisation, as at the end of the immediate previous financial year.
Since, your Company was one of among the top 100 listed companies as
per the list issued by the National Stock Exchange of India Limited
based on market capitalisation as on March 31, 2016, the Risk
Management Committee was constituted by board of directors of your
Company at their meeting held on April 29, 2016.
For details of membership and attendance of the meetings of the above
Committees of the board, please refer to the corporate governance
report which forms an integral part of this report.
27. Policies
An extract of the policies adopted by the board of directors is
included in Corporate Governance Report which forms part of this annual
report and also available on the website of your Company.
- Code of Conduct for Directors and Senior Management The Board of
Directors of the Company has in compliance of Regulation 17(5) of the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, laid down a code of conduct
for all Directors and Senior Management of the Company for governance
of good corporate practices.
- Vigil Mechanism for the Directors and Employees
In compliance with the requirements of the provisions of Section 177 of
the Companies Act, 2013 read with Regulation 22 of the Securities and
Exchange of Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board of Directors has established
a vigil mechanism for directors and employees of the Company to report
their genuine concerns or grievances. The vigil mechanism provides
adequate safeguards against victimization to any employees and / or
directors who use the mechanism to report their concerns or grievances.
The audit committee periodically reviews the functioning of this
mechanism. The employees/ directors of the Company have the right /
option to report their concern / grievance to the Chairman of the Audit
Committee.
- Related Party Transactions Policy
In compliance with the requirements of Regulation 23 of the Securities
and Exchange of Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board has approved a policy on
dealing with related party transactions. The policy has been placed on
the Company''s website at https://
www.goindigo.in/content/dam/goindigo/6e-website/
pdf/investor-relation/corporate-governance/policies/
IGAL-Policy-on-Related-Party-Transactions.pdf
- Corporate Social Responsibility Policy
A brief outline of the Corporate Social Responsibility (CSR) Policy of
the Company and the initiatives undertaken by the Company on CSR
activities during the year are set out in Annexure - C of this report
in the format prescribed as per the Companies (Corporate Social
Responsibility Policy) Rules, 2014.
- Nomination and Remuneration Policy
Nomination and Remuneration Committee of the Company has framed a
policy for selection and appointment of Directors including determining
qualifications of Director, Key Managerial Personnel and their
remuneration as part of its charter and other matters provided under
Section 178(3) of the Companies Act, 2013. The Nomination and
Remuneration Policy is available on the website of the Company https://
www.goindigo.in/content/dam/goindigo/6e-website/
pdf/investor_relation/corporategovernance/policies/ IGAL
Nomination%20Remuneration%20Policy.pdf
- Risk Management Policy
The Audit Committee of the Company has formed a risk management
committee to frame, implement and monitor the risk management plan for
the Company. The committee is responsible for reviewing the risk
management plan and ensuring its effectiveness. The audit committee has
additional oversight in the area of financial risks and controls. Major
risks identified by the businesses and functions are systematically
addressed through mitigating actions on a continuing basis.
- Annual Evaluation of Directors, Committee and Board and
Familiarization Program for Independent Directors and Board
The board of directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Companies Act, 2013 and Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations,
2015.
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc.
The performance of the committees was evaluated by the board after
seeking inputs from the committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the
performance of the individual directors on the basis of the criteria
such as the contribution of the individual director to the Board and
committee meetings like preparedness on the issues to be discussed,
meaningful and constructive contribution and inputs in meetings, etc.
In addition, the Chairman was also evaluated on the key aspects of his
role.
In a separate meeting of independent directors, performance of
non-independent directors and performance of the board as a whole was
evaluated.
28. Directors'' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Board of
Directors of the Company confirms that:
- in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
- the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of the affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
- 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;
- the directors have prepared the annual accounts on a going concern
basis; and
- the directors have laid down internal financial controls to be
followed by the Company and such internal financial controls are
adequate and operating effectively;
- 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.
29. Disclosure of orders passed by regulators or courts or tribunals
There are no significant material orders passed by the Regulators or
Courts or Tribunals impacting the going concern status of your Company
and its operations in future.
30. Extract of Annual Return
Pursuant to the provisions of Section 134(3)(a) of the Companies Act,
2013, extract of the annual return in Form MGT - 9 prepared in
compliance with the provisions of Section 92(3) of the Companies Act,
2013 for the financial year ended March 31, 2016 is attached as
Annexure - E and forms an integral part of this report.
OTHER DISCLOSURES
31. CEO and CFO Certification
A Certificate issued by Mr. Aditya Ghosh, President & Whole time
Director and Mr. Pankaj Madan, Chief Financial Officer of the Company
for the year under review, in terms of Regulation 17(8) of the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 was placed before the board
of directors in its meeting held on April 29, 2016, is annexed to this
report.
32. Prevention and prohibition of sexual harassment of women at work
place
At IndiGo, we are committed to provide a healthy work environment that
is free of discrimination and unlawful harassment and that enables
employees to work without fear of prejudice, gender bias and sexual
harassment. In keeping with this commitment, IndiGo expressly and
strictly prohibits any form of employee harassment based on race,
color, religion, sex, national origin, age, disability, sexual
orientation, or status in any group protected by state or local law.
The Company has always endeavored for providing a better and safe
environment free of sexual harassment at all its work places. In
compliance with the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 ("Act") and Rules
made thereunder, the Company continued conducting workshops and
awareness programs for sensitizing the employees with the provisions of
the Act.
During the year, your Company received 6 complaints under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. Only one was pending at the end of the financial
year 2015-16 as the issue was raised in mid of March, 2016 was closed
in the month of April, 2016.
33. Conservation of Energy and Technology Absorption
At IndiGo, we are committed to running a fuel and emission efficient
operation. This lowers cost of our operations and is environment
friendly. Our flight operating procedures are designed with focus on
fuel efficiency and passenger safety. The average age of our aircraft
was 4.6 years as of March 31, 2016 which is one of the youngest fleets
of any LCC globally. A young fleet is more fuel efficient than an older
fleet. We actively seek to maintain a young fleet because it helps us
to mitigate against technological obsolescence and achieve better
reliability in terms of aircraft performance, lower maintenance costs,
improved fuel-efficiency, higher flight dispatch reliability and higher
passenger appeal. The A320 aircraft delivered to us by Airbus since
January 2013 have been equipped with "sharklets" and consume less fuel
than aircraft without sharklets. All of the A320 aircraft delivered to
us since September 2008 use IAE SelectOne engines. These engines use
various technological advances to reduce aircraft fuel consumption
compared to previous IAE engines. Fuel consumption is directly
proportional to the weight of an aircraft. We have sought to reduce the
weight of our aircraft by selecting lighter seats and by choosing to
not have in-flight entertainment systems. Your Company had ordered 430
Airbus A320 neo aircraft, 3 of which have been were delivered till
March 31, 2016. As per Airbus these new generation A320 neo aircraft
are up to 15% more fuel efficient than the current A320 aircraft
without sharklets.
We have also adopted conservative fuel consumption policies which are
inculcated in all pilots and engineering staff training procedure,
enough fuel for sectors after evaluating various traffic trends thus
avoiding any additional/unnecessary fuel upliftment, installing
software for accurate flight planning which provides accurate maps and
most efficient flight path, restricting the use of auxiliary power
units, employing continuous descent approaches and economy cruise
speeds, minimizing aircraft weight by removing unnecessary equipment
and optimizing engine settings for take-off and climb. In addition, we
have adopted fuel policies designed to reduce costs on the ground
including the use of the EcoPower Engine Wash process for our engines,
the use of ground equipment in place of aircraft auxiliary power units
which consumes more fuel, use of single engine for taxing on ground and
other engineering/operations protocols,. These policies are all
designed to optimize fuel productivity reduce carbon footprint, finally
reducing costs.
34. Foreign Exchange Earnings and Outgo
The details of Foreign Exchange earnings and outgo are provided under
note 2.33 and note 2.34 to the notes to the financial statements
annexed to this report.
35. Particulars of employees
Your Directors acknowledge the untiring effort, support and co-
operation of the employees at all levels.
The information required under Section 197 of the Companies Act, 2013
read with rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are annexed to this report as
Annexure - F. The information pursuant to Section 197 of the Act read
with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is available on the Company''s
website www.goindigo.in.
Acknowledgement and Appreciation
Your Directors place on the record their appreciation for the
contribution made by all IndiGo employees at all levels with their hard
work, solidarity, co-operation and dedication during the year.
The Board sincerely conveys its gratitude to IndiGo bankers, business
associates, regulatory and government authorities for their continued
support. We are honoured to acknowledge their co-operation.
The Board also wishes to deeply thank the vendors for their assistance,
and is much obliged to consumers and shareholders for their trust and
confidence in the Company.
On behalf of the Board of Directors
M. D. Mallya Aditya Ghosh
(Chairman) (President and Whole Time Director)
(DIN 01804955) (DIN 01243445)
Gurgaon, August 01, 2016
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