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Notes to Accounts of InterGlobe Aviation Ltd.

Mar 31, 2023

*Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 143 months.

#The above mentioned loan is repayable in ten equal installments of USD 5.5 million between the period July 2023 - June 2024.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (''BFE'') installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilising the pre-delivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

There are no defaults as on reporting date in repayment of principal and interest.

Secured - Working capital loans

As at March 31,2023

Working capital loans are repayable in 6 to 10 days from the reporting date. These loans are drawn under banking facilities that are revolving in nature i.e., can be redrawn upon repayment.

Rate of interest on working capital loans is 8.20% per annum.

Working capital loans are secured through first pari passu charge by way of hypothecation on current assets (excluding cash and cash equivalents, bank balances and investments of the Company) and credit / debit card receivables of the Company (present and future) along with deposits with bank under lien.

There are no defaults as on reporting date in repayment of principal and interest.

The Company has been sanctioned working capital limits from banks during the year which in certain cases include security of current assets of the Company. As per the respective loan agreements, details / statement pertaining to such current assets may have to be provided on occurrence of certain events, however there are no such trigger event during the year ended March 31, 2023. Accordingly, the Company was not required to file any quarterly returns/statements in relation to such security with the respective banks.

As at March 31,2022

Working capital loans are repayable in 4 to 19 days from the reporting date. These loans are drawn under banking facilities that are revolving in nature i.e., can be redrawn upon repayment.

Rate of interest on working capital loans ranges from 2.50% to 6.90% per annum.

Foreign currency loan is secured through first pari passu charge or subservient charge on current assets (excluding cash and cash equivalents, bank balances and investments of the Company) and deposits with banks under lien. A portion of Foreign currency loan is also secured through first pari passu charge on credit / debit card receivables of the Company (present and future).

Indian Rupee loan is secured through first pari passu charge by way of hypothecation on current assets (excluding cash and cash equivalents, bank balances and investments of the Company). A portion of Indian Rupee Loan is also secured by first pari passu charge on credit / debit card receivables of the company (present and future) and deposits with bank under lien.

There are no defaults as on reporting date in repayment of principal and interest.

The Company''s leased assets primarily consist of leases for aircraft and engines, equipment, leasehold land and buildings.

Interest expense on lease liabilities for the year is amounting to Rs. 26,376.26 (previous year Rs.19,627.85) (including interest amounting to Rs. 36.61 (previous year Rs. 109.45) capitalised under capital work-in-progress). Refer to Note 26.

Certain lease liabilities amounting to Rs. 10,542.23 (previous year Rs. 13,155.50) are secured against the respective aircraft. Remaining lease liabilities are secured to the extent of letter of credits issued / deposits given to lessors.

The Company has recognised an expense of Rs. 3,258.40 (previous year Rs. 3,116.84) on account of short term leases which represents leased aircraft and engines. The portfolio of other short-term leases to which the Company is committed at the end of the reporting period is not materially different from the portfolio of other short term leases for which expense has been recognised during the year.

The Company has several lease contracts that include extension and termination options. The management has included termination options in determination of lease term for contracts having such option. Extension options have not been included in determination of lease term since the management is reasonably certain not to exercise these options. Potential cash flows in relation to such extension options cannot be ascertained since the cash outflow for the extended period will depend on the negotiations with the lessors in the event of exercising the extension options.

Under certain lease arrangements of aircraft and engines, the Company incurs variable payments towards maintenance of the aircraft which are disclosed under "Supplementary rentals and aircraft repair and maintenance (net)".

The Company has entered into sale and leaseback arrangements, for certain aircraft and engines owned and controlled by the Company, to increase its liquidity. The Company has recorded proceeds of Rs. 6,740.71 (previous year Rs. 6,006.43) (net) from the sale and leaseback arrangements as disclosed in the Standalone Cash Flow Statement. The profit on sale and leaseback arrangements is Rs. Nil (previous year Rs. 750.96) disclosed in Note 23.

Future cash outflows for leases not yet commenced amounts to Rs. 39,629.08 (previous year Rs. 64,435.43).

The maturity analysis of lease liabilities are disclosed in Note 29. Further, information about the Company''s exposure to market risks is disclosed in Note 29.

^Includes lease liabilities with related parties amounting to Rs. 4,737.58 (previous year Rs. 5,093.61). Refer to Note 35.

a. Provision for redelivery obligation: The Company has in its fleet, aircraft on lease. As contractually agreed under certain lease contracts, the aircraft have to be redelivered to the lessors at the end of the lease term under stipulated contractual return conditions. The redelivery obligations are determined by management based on historical trends and data, and are capitalised at the present value of expected outflow, where effect of the time value of money is material.

b. Provision for overhaul expenses for certain aircraft held under lease are recorded at discounted value, where effect of the time value of money is material.

c. Provision for engine maintenance which represents additional accrual, beyond supplementary rentals, for the estimated future costs of engine maintenance checks. These accruals are based on past trends for costs incurred on such events, future expected utilisation of engine, condition of the engine and expected maintenance interval and are recorded over the period of the next expected maintenance visit.

The measurement of the provision for redelivery and overhaul cost includes assumptions primarily relating to expected costs and discount rates commensurate with the expected obligation maturity schedules. An estimate is therefore made to ensure that the provision corresponds to the present value of the expected costs to be borne by the Company. Judgement is exercised by management given the long-term nature of assumptions that go into the determination of the provision. The assumption made in relation to the current year are consistent with those in the previous year.

Expected timing of resulting outflow of economic benefit is financial year 2023-24 to 2032-33 (previous year 2022-23 to 2031-32) and the Company calculates the provision using Discounted Cash Flow (DCF) method.

Sensitivity analysis for key assumptions used:

If expected cost differ by 10% from management''s estimate, while holding all other assumptions constant, the provision for maintenance, redelivery and overhaul cost may increase / decrease by Rs. 984.94 (previous year by Rs. 802.38).

If expected discount rate differ by 1%, while holding all other assumptions constant, the provision for maintenance, redelivery and overhaul cost may increase by Rs 87.77 (previous year Rs. 28.39) or decrease by Rs. 93.17 (previous year by Rs. 38.86).

The Company foresees future taxable profits in the subsequent years against which deferred tax asset as at March 31, 2023 will be utilised.

The Company has unabsorbed depreciation and carry forward losses which arose in India of Rs. 162,216.15 (previous year Rs. 88,774.97) that are available for offsetting against future taxable profits of the Company. Carry forward losses are available for a period of eight years immediately succeeding the year in which the loss is incurred. Unabsorbed depreciation can be carried forward indefinitely.

The temporary differences associated with investment in subsidiary for which a deferred tax liability has not been recognised amounts to Rs. 142.51 (previous year Rs. 118.87). The Company has determined that undistributed profits of its subsidiary will not be distributed in the foreseeable future.

â¢ The fair values for security deposits forming part of other financial assets were calculated based on discounted cash flows using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

** Non-current investments excludes investment in subsidiary which is carried at cost.

***The fair values of supplementary rentals and aircraft maintenance are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

There has been no transfers between Level 1, Level 2 and Level 3 for the year ended March 31, 2023 and March 31, 2022.

Other financial assets and financial liabilities

The carrying amounts of trade receivables, trade payables, short-term borrowings (including interest accrued but not due), current financial assets (excluding security deposits), cash and cash equivalents, bank balances other than cash and cash equivalents and unclaimed dividend approximates the fair values, due to their short-term nature.

Long term borrowings have been contracted at floating rate of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value as on the reporting date.

Non-current financial assets (excluding security deposits) represents bank deposits (due for maturity after twelve months from the reporting date) and interest accrued but not due on financial instruments, the carrying value of which approximates the fair values as on the reporting date.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of NAV for mutual funds.

- the fair value of the remaining financial instruments is determined using discounted cash flow method.

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Senior Management. Discussions on valuation and results are held between the Senior Management and valuation team at least once every quarter in line with the Company''s quarterly reporting periods.

b. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk ;

â¢ Market Risk - Foreign currency ; and

â¢ Market Risk - Interest rate

Risk management framework

The Board of Directors 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 policies and ensuring its effectiveness.

The Company''s 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 Company''s activities.

The Risk Management Committee oversees how management monitors compliance with Company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by the Company.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invests in deposits with financial institutions with high credit ratings assigned by credit rating agencies. Investments primarily include investment in debt based mutual fund units with low risk. Other financial assets majorly includes security deposits which primarily represents deposits given as pre delivery payments to aircraft manufacturers. Such deposits will be returned to the Company on deliveries of the aircraft by the aircraft manufacturers as per the contract. The credit risk associated with such security deposits is relatively low.

Trade receivables are generally unsecured and are derived from revenue earned (including applicable taxes and airport levies) from customers primarily located in India and certain parts of Middle East and South Asia. Trade receivables also includes credit / debit card receivables of the Company which are realisable within a period of 1 to 7 working days.

The Company monitors the economic environment in which it operates to manage its credit risk. The Company manages its credit risk through various measures including establishing credit limits and continuously monitoring credit worthiness of customers to whom it extends credit in the normal course of business.

The Company sells majority of its air transportation services against advances made by agents / customers and through online channels.

The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Company''s historical experience for customers. Based on the business environment in which the Company operates, management considers that the trade receivables (other than receivables from government departments) are in default (credit impaired) if the payments are more than 90 days past due, however, the Company based upon past trends determine an impairment allowance for loss on receivables outstanding for more than 180 days past due.

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers. Trade receivables as at year end primarily includes Rs. 4,091.76 (previous year Rs. 2,199.81) relating to revenue generated from passenger services and Rs. 1,191.32 (previous year Rs. 1,209.00) relating to revenue generated from cargo services.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Company''s approach to manage liquidity is to have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company believes that its liquidity position, comprising of total cash, bank deposits and investments (including amounts under lien) of Rs. 233,513.31 as at March 31, 2023 (previous year Rs.181,499.35), anticipated future internally generated funds from operations, and its fully available, revolving undrawn fund and non fund based credit facilities will enable it to meet its future known obligations in the ordinary course of business. As of March 31,2023, the Company had received revolving fund based credit line sanctions amounting to Rs. 58,805.30 (previous year Rs. 52,593.24), of which the Company has drawn Rs. 18,000.00 (previous year Rs. 34,805.65) and has undrawn revolving fund based credit facilities of Rs. 40,805.30 (previous year Rs. 17,787.59). Additionally, the Company also has undrawn non fund based credit facilities amounting to Rs. 77,016.20 (previous year Rs. 92,668.15). The Company does not believe a significant liquidity risk with regard to its lease liabilities as the assets are sufficient to meet the obligations related to lease liabilities as and when they fall due. In addition to this, the Company has unencumbered assets as well as access to adequate financing arrangements. Hence, in case a liquidity need were to arise, the Company believes it has sufficient means to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Company''s liquidity management process as monitored by management, includes the following:

- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Company''s liquidity position on the basis of expected cash flows.

- Maintaining diversified credit lines.

Sensitivity analysis

A reasonably possible strengthening / (weakening) of the Indian Rupee against below currencies as at March 31, 2023 and March 31, 2022 would have affected the measurement of financial instruments denominated in foreign currency and affected Standalone Statement of Profit and Loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

USD: United States Dollar, GBP: Great British Pound, AED: Arab Emirates Dirhams, NPR: Nepalese Rupees, OMR: Omani Rials, THB: Thai Baht, CHF: Swiss Franc, SGD: Singapore Dollar, EUR: Euro, QAR: Qatari Riyal, BDT: Bangladeshi Taka, LKR: Sri Lankan Rupee, HKD: Hong Kong Dollars, KWD: Kuwaiti Dinar, MYR: Malaysian Ringgit, SAR: Saudi Riyal, TRY: Turkish Lira, CNY: Chinese Yuan, MVR: Maldivian Rufiyaa, AUD: Australian Dollar, BHD: Bahraini Dinar, CAD: Canadian Dollar, IDR: Indonesian Rupiah, DKK: Danish Krone.

Amounts which are less than ten thousand are appearing as ''0.00''.

* The sensitivity analysis to foreign currency risk includes an exposure to foreign exchange fluctuations on long term foreign currency loans that have been capitalised in the cost of the related right of use assets. 1% depreciation / appreciation in Indian Rupees against USD, affects the adjustment to right of use assets by Rs. 105.42 (previous year Rs. 131.56). It is expected to impact the Standalone Statement of Profit and Loss over the remaining life of the right of use assets as an adjustment to depreciation charge.

30. Capital management

The primary objective of the management of the Company''s capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows.

The Board of directors regularly review the Company''s capital structure in light of the economic conditions, business strategies and future commitments.

Management monitors the return on equity and debt equity ratio which has been disclosed in Note 43.

31. Contingent liabilities (to the extent not provided for)

The Company is a party to various taxation disputes and legal claims, which are not acknowledged as debts. Significant management judgement is required to ascertain that it is not probable that an outflow of resources embodying economic benefits will be required to settle the taxation disputes and legal claims.

(i) Income tax

The income tax authority has assessed the return of income of the Company up to Assessment Year ("AY") 2021-22 and has revised the taxable income for certain years on account of disallowance of certain expenses and in respect of the tax treatment of certain incentives received from the manufacturer in respect of acquisition of aircraft and engines. The Company has not yet received assessment orders for subsequent years.

The Company has received favourable order against such disallowances/additions from the Special Bench of Income Tax Appellate Tribunal ("ITAT") for AY 2012-13 and Divisional Bench of ITAT for certain years till AY 2015-16. However, the tax authority''s appeal against the order of the Divisional Bench of ITAT for AY 2007-08, AY 2008-09 and AY 2009-10 and Special Bench of ITAT for AY 2012-13 is pending before the Hon''ble High Court.

The Company believes, based on legal advice from counsels, that the view taken by ITAT Special Bench and Divisional Bench is sustainable in higher courts and accordingly, no provision is required to be recorded in the books of account.

The tax exposure (excluding interest and penalty) for matters disallowed by income tax authorities up to AY 2021-22 i.e. the last year assessed, amounts to Rs. 19,244.53 (previous year Rs. 14,029.94) in case the incentives are held to be taxable. The above amount is net of Rs. 5,331.67 (previous year Rs. 5,331.67), which represents minimum alternate tax recoverable written off in the earlier years.

(ii) The Company is in legal proceedings for various disputed legal matters related to Customs, Octroi, Service Tax, Integrated Goods and Services Tax (''IGST'') and Value Added Tax (''VAT''). The amounts involved in these proceedings, not acknowledged as debt, are:

(1) Service Tax- Rs. 55.07 (previous year Rs. 144.71),

(2) Value Added Tax - Rs. 30.92 (previous year Rs. 30.92),

(3) Octroi - Rs. 74.39 (previous year Rs. 74.39) and

(4) IGST on re-imports* - Rs. 12,638.46 (previous year Rs. 10,616.39).

The Company believes, based on advice from counsels/experts, that the views taken by authorities are not sustainable and accordingly, no provision is required to be recorded in the books of account.

*During the current year, the Company has paid Integrated Goods and Services Tax ("IGST") amounting to Rs. 2,022.07 (previous year Rs. 2,077.28) under protest, on re-import of repaired aircraft, aircraft engines and other certain aircraft parts, to Custom authorities and therefore as at March 31, 2023, cumulative amount paid under protest is Rs. 12,638.46 (previous year Rs. 10,616.39), against which appeals have been filed or to be filed before the Appellate authorities. In past, the Company had received favourable orders on this matter from the Customs Excise and Service Tax Appellate Tribunal ("Câ¬STAT"), New Delhi. However, the Customs authorities filed an appeal before the Hon''ble Supreme Court of India against the above-mentioned Câ¬STAT orders. The matter is yet to be decided by the Supreme Court and no stay on Câ¬STAT orders has been granted by the Supreme Court till date. Further, the Customs authorities vide Customs amendment notification dated July 19, 2021 ("Amendment Notification") has amended earlier Customs exemption Notification to reiterate their position that IGST is applicable on re-import of goods after repair. Based on the advice received from the legal counsels, we continue to believe that, IGST is still not payable on such re-import of repaired aircraft, aircraft engines and other certain aircraft parts even after the above-mentioned Amendment Notification. During the current year, the Company has filed a Writ Petition before the Hon''ble High Court of Delhi challenging the constitutional validity of Amendment Notification. The matter is pending for disposal before the Hon''ble High Court of Delhi. Accordingly, the above amounts paid under protest till March 31, 2023 have been shown as recoverable.

(iii) The Competition Commission of India ("CCI") passed an order dated November 17, 2015 against, inter alia, the Company, imposing a penalty of Rs. 637.40 on the Company on account of cartelization for determination of fuel surcharge included in the component of Cargo services. The Company filed an appeal against this order before the Competition Appellate Tribunal and it referred the matter back to the CCI for fresh adjudication. CCI passed a final order dated March 07, 2018 reducing the penalty amount on the Company to Rs. 94.50. The Company has filed an appeal before the National Company Law Appellate Tribunal ("NCLAT") against the order imposing penalty which is currently pending. The penalty imposed by CCI on the Company was stayed by NCLAT upon deposit of 10% of the penalty amount.

The Company based on legal advice from the external counsel, believes that the views taken by authorities are challengeable and accordingly, no provision is required to be recorded in the books of account at this stage.

(iv) In February 2019, Hon''ble Supreme Court of India in its judgement clarified the applicability of allowances that should be considered to measure obligations under Employees Provident Fund Act, 1952. There are interpretative challenges on the application of judgement retrospectively and as such the Company does not consider that there is any probable obligations for past periods. Accordingly, based on evaluation the Company has made a provision for provident fund contribution on prospective basis.

(v) Legal cases

As per the notification dated January 1, 2016, The Payment of Bonus (Amendment) Act, 2015 is applicable retrospectively w.e.f April 1, 2014. In view of the partial stay granted by Karnataka and Kerala High Court, the impact of this amendment for the period April 1,2014 till March 31,2015 amounting to Rs. 19.47 has not been acknowledged as debt.

(vi) Other legal proceedings for which the Company is contingently liable

The Company is party to various legal proceedings in the normal course of business and does not expect the outcome of these proceedings to have any adverse effect on the standalone financial statements and hence, no provision has been set-up against the same.

Notes:

Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements or decisions pending with various forums or authorities. Accordingly, the above mentioned contingent liabilities are disclosed at undiscounted amount.

32. Commitments

Particulars

As at

March 31,2023

As at

March 31,2022

Estimated amount of contracts remaining to be executed on capital account and other commitments, and not provided for in the books of account [net of advances Rs. 1,480.22 (previous year Rs. 322.07)]

3,062,277.42

2,942,248.20

As on the reporting date, the Company expects that the estimated realisable value of these assets will exceed the commitment value net of discounts, benefits and incentives which will accrue to the Company consequential to acquiring these assets.

33. Employee benefits

The Company contributes to the following post-employment benefit plans.

Defined contribution plan

The Company pays provident fund contributions to the appropriate government authorities at rate specified as per regulations.

An amount of Rs. 1,097.95 (previous year Rs. 917.54) has been recognised as an expense in respect of the Company''s contribution to Provident Fund and the same has been deposited with the relevant authorities. It has been shown under employee costs in the Standalone Statement of Profit and Loss.

Defined benefit plan

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days of total basic salary last drawn for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. Gratuity is payable to all eligible employees of the Company on retirement, separation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972.

The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits:

The sensitivity analysis is based on a change in above assumption while holding all other assumptions constant. The changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting year) has been applied, as has been applied when calculating the provision for defined benefit plan recognised in the Standalone Balance Sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in an increase in plan liabilities.

34. Segment reporting

Based on the "management approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker (''CODM'') evaluates the Company''s performance at an overall company level as one segment i.e. ''air transportation services'' based on the nature of operations, the risks and rewards and the nature of the regulatory environment across the Company''s network and the interchangeability of use of assets across the network routes of the Company.

Segment wise information for the year ended March 31,2023 and March 31,2022 are as follows:

Non-current assets, other than financial instruments, deferred tax assets (net) and income tax assets (net), primarily comprises of right of use assets, property, plant and equipment and other non-current assets which cannot be bifurcated between domestic and international locations, as such assets are used interchangeably. Accordingly, the same has not been bifurcated between domestic and international locations.

No single external customer amounts to 10% or more of the Company''s revenue. Accordingly, information about major customer is not provided.

The Committee, upon a review of the remuneration structure for employees and with the desire to review and make a more market relevant compensation structure of the senior management, recommended to the Board to not proceed further with the grant of outstanding 78,158 stock options earlier approved by the Committee on February 4, 2022. The same has been approved by Board at its meeting held on February 2, 2023.

The risk-free interest rates are determined based on current yield to maturity of Government Bonds with 5-10 years residual maturity. Expected volatility calculation is based on historical daily closing stock prices of competitors / Company using standard deviation of daily change in stock price. The minimum life of stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which the options cannot be exercised. The expected life has been considered based on average sum of maximum life and minimum life and may not necessarily be indicative of exercise patterns that may occur. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date basis past trends. For the measurement of grant date fair value certain market conditions were considered in the method of valuation.

39. During the year ended March 31,2023, following changes in the Management took place:

(a) Mr. Meleveetil Damodaran stepped down from the Board as the Chairman and Independent Non-Executive Director on May 3, 2022, on attaining the age of 75 years. The Board later on appointed him as Non Independent Director w.e.f. July 16, 2022, which was approved by the shareholders on August 26, 2022.

(b) Dr. Venkataramani Sumantran, Independent Non-Executive Director, was appointed as the Chairman of the Board effective May 4, 2022.

(d) Mr. Vikram Singh Mehta and Air Chief Marshal (Retd.) Birender Singh Dhanoa were appointed as an Independent Non-Executive Directors on the Board with effect from May 27, 2022 and the shareholders approved their appointment at their meeting held on August 26, 2022.

(e) Mr. Ronojoy Dutta stepped down as the Whole Time Director and Chief Executive Officer of the Company with effect from September 30, 2022. The Shareholders of the Company had approved, through Postal Ballot on September 29, 2022, payment of remuneration including full and final settlement and ex-gratia to Mr. Ronojoy Dutta, for the period from April 1, 2022 to September 30, 2022.

(f) Mr. Petrus Johannes Theodorus Elbers has joined as the Chief Executive Officer of the Company effective September 6, 2022.

40 .The Company has established a comprehensive system of maintenance of information and documents that are required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its international transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

41 . No funds have been advanced or loaned or invested by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

* Excluding lease liabilities of Rs. 426,018.76 as at March 31,2023 and Rs. 329,811.01 as at March 31,2022, the Debt-Equity ratio would have been (0.36) for March 31,2023 and (0.65) for March 31, 2022.

** Inventories pertaining to stores, spares and loose tools have not been considered for the computation of the ratio as these are in the nature of consumables used for aircraft maintenance.

*** Excluding lease liabilities of Rs. 426,018.76 as at March 31, 2023 and Rs. 329,811.01 as at March 31,2022, the ROCâ¬ would have been 22.84% for March 31,2023 and 261.04% for March 31,2022.

The calculation for above ratios (including restatement of prior year ratios, wherever necessary) is in accordance with formula prescribed by Guidance note on Schedule III issued by the Institute of Chartered Accountants of India.

The accompanying notes form an integral part of the standalone financial statements As per our report of even date attached

Mar 31, 2022

17.a Borrowings (Contd..)

There are no defaults as on reporting date in repayment of principal and interest.

The Company has been sanctioned working capital limits from banks during the year which in certain cases include security of current assets of the Company. As per the respective loan agreements, details / statement pertaining to such current assets may have to be provided on occurrence of certain events, however there are no such trigger event during the year ended 31 March 2022. Accordingly, the Company was not required to file any quarterly returns/statements in relation to such security with the respective banks.

As at 31 March 2021

Working capital loans are repayable in 6 to 180 days from the reporting date. These loans are drawn under banking facilities that are revolving in nature i.e., can be redrawn upon repayment. These facilities had an availability period till September 2021 which can be extended mutually by banks and the Company.

Rate of interest on working capital loans ranges from 3.20% to 7.00% per annum.

Foreign currency loan is secured through deposits with banks under lien and subservient charge on current assets excluding cash and cash equivalents and investments of the Company.

Indian Rupee loan is secured through deposits with banks under lien and exclusive charge on credit / debit card receivables of the company (present and future) and first pari passu charge by way of hypothecation on unencumbered current assets.

There are no defaults as on reporting date in repayment of principal and interest.

The Company has been sanctioned working capital limits from banks during the year which in certain cases include security of current assets of the Company. As per the respective loan agreements, details / statement pertaining to such current assets may have to be provided on occurrence of certain events, however there are no such trigger event during the year ended 31 March 2021. Accordingly, the Company was not required to file any quarterly returns/statements in relation to such security with the respective banks.

The Company''s leased assets primarily consist of leases for aircraft and engines, equipment, leasehold land and buildings.

Interest expense on lease liabilities for the year is amounting to Rs. 19,627.85 (previous year Rs.16,435.04) (including interest amounting to Rs. 109.45 (previous year Rs. 238.17) capitalised under capital work-in-progress). Refer to Note 26.

Certain lease liabilities amounting to Rs. 13,155.50 (previous year Rs. 16,153.80) are secured against the respective aircraft. Remaining lease liabilities are secured to the extent of letter of credits issued / deposits given to lessors.

The Company has recognised an expense of Rs. 3,116.84 (previous year Rs. 2,804.57) on account of short term leases which represents leased aircraft and engines having a remaining lease term of less than 12 months as on transition date and other short term leases. The portfolio of other short-term leases to which the Company is committed at the end of the reporting period is not materially different from the portfolio of other short term leases for which expense has been recognised during the year.

The Company has entered into sale and leaseback arrangements, for certain aircraft and engines owned and controlled by the Company, to increase its liquidity. The Company has recorded proceeds of Rs. 6,006.43 (previous year Rs. 18,833.68) (net) from the sale and leaseback arrangements as disclosed in the Standalone Cash Flow Statement. The profit (net of loss) on sale and leaseback arrangements is Rs.750.96 (previous year Rs. 12.81) disclosed in Note 23.

Future cash outflows for leases not yet commenced amounts to Rs. 64,435.43 (previous year Rs. 62,343.06).

The maturity analysis of lease liabilities are disclosed in Note 29. Further, information about the Company''s exposure to market risks is disclosed in Note 29.

*Includes lease liabilities with related parties amounting to Rs. 5,093.61 (previous year Rs. 5,429.29). Refer to Note 35.

b. Provision for overhaul expenses for certain aircraft held under lease are recorded at discounted value, where effect of the time value of money is material.

Sensitivity analysis for key assumptions used:

If expected discount rate differ by 1%, while holding all other assumptions constant, the provision for maintenance, redelivery and overhaul cost may increase by Rs 28.39 (previous year Rs. 22.29) or decrease by Rs. 38.86 (previous year by Rs. 20.02).

The Company foresees future taxable profits in the subsequent years against which deferred tax asset as at 31 March 2022 will be utilised.

The Company has unabsorbed depreciation and carry forward losses which arose in India of Rs. 88,774.97 (previous year Rs. 15,080.01) that are available for offsetting against future taxable profits of the Company. Carry forward losses are available for a period of eight years immediately succeeding the year in which the loss is incurred. Unabsorbed depreciation can be carried forward indefinitely.

The temporary differences associated with investment in subsidiary for which a deferred tax liability has not been recognised amounts to Rs. 118.87 (previous year Rs. 100.55). The Company has determined that undistributed profits of its subsidiary will not be distributed in the foreseeable future.

# Borrowings have been contracted at floating rate of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.

* The carrying amounts of trade receivables, trade payables, borrowings, cash and cash equivalents, bank balances other than cash and cash equivalents, fixed rate non-convertible debentures, unclaimed dividend and other current financial assets (excluding security deposits), approximates the fair values, due to their short-term nature. Other non-current financial assets (excluding security deposits) represents bank deposits (due for maturity after twelve months from the reporting date) and interest accrued but not due on financial instruments, the carrying value of which approximates the fair values as on the reporting date. The fair values for security deposits forming part of other financial assets were calculated based on discounted cash flows using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

** Non-current investments excludes investment in subsidiary which is carried at cost.

There has been no transfers between Level 1, Level 2 and Level 3 for the year ended 31 March 2022 and 31 March 2021.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of NAV for mutual funds.

- the fair value of the remaining financial instruments is determined using discounted cash flow method.

29. Fair value measurement and financial instruments (Contd..)

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Senior Management. Discussions on valuation and results are held between the Senior Management and valuation team atleast once every quarter in line with the Company''s quarterly reporting periods.

b. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk;

â¢ Liquidity risk;

â¢ Market Risk - Foreign currency; and

â¢ Market Risk - Interest rate

Risk management framework

The Company''s 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 Company''s activities.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invests in deposits with financial institutions with high credit ratings assigned by credit rating agencies. Investments primarily include investment in debt based mutual fund units with low risk. Further, investments in fixed rate non-convertible debentures are secured by way of first pari passu charge over moveable financial assets identified by the issuer and simple mortgage over the immoveable assets of the issuer. Other financial assets majorly includes security deposits which primarily represents deposits given as pre delivery payments to aircraft manufacturers. Such deposits will be returned to the Company on deliveries of the aircraft by the aircraft manufacturers as per the contract. The credit risk associated with such security deposits is relatively low.

Trade receivables are generally unsecured and are derived from revenue earned from customers primarily located in India and certain parts of Middle East and South Asia. Trade receivables also includes credit / debit card receivables of the Company which are realisable within a of period 1 to 7 working days.

The Company sells majority of its air transportation services against advances made by agents / customers and through online channels.

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers. Trade receivables as at year end primarily includes Rs. 2,199.81 (previous year Rs. 1,160.40) relating to revenue generated from passenger services and Rs. 1,209.00 (previous year Rs. 1,110.52) relating to revenue generated from cargo services.

* The Company believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour.

# The Company based upon past trends determine an impairment allowance for loss on receivables outstanding for more than 180 days past due. Receivables more than 180 days past due primarily comprises receivables from government departments, which are fully realisable based on historical payment behaviour and hence, no loss allowance has been recognised, and from agents for which the impairment allowance has already been recognised on specific credit risk factor.

The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2022 and 31 March 2021 is insignificant and hence the same has not been recognised. The reversal for lifetime expected credit loss on customer balances for the current year is Rs. Nil (previous year Rs. Nil.)

(ii) Liquidity risk

The Company believes that its liquidity position, comprising of total cash, bank deposits and investments (including amounts under lien) of Rs. 181,499.35 as at 31 March 2022 (previous year Rs.185,184.30), anticipated future internally generated funds from operations, and its fully available, revolving undrawn fund and non fund based credit facilities will enable it to meet its future known obligations in the ordinary course of business. As of 31 March 2022, the Company had received revolving fund based credit line sanctions amounting to Rs. 52,593.24 (previous year Rs. 28,742.04), of which the Company has drawn Rs. 34,805.65 (previous year Rs. 21,239.95) and has undrawn revolving fund based credit facilities of Rs. 17,787.59 (previous year Rs. 7,502.09). Additionally, the Company also has undrawn non fund based credit facilities amounting to Rs. 92,668.15 (previous year Rs. 104,769.75). The Company does not believe a significant liquidity risk with regard to its lease liabilities as the assets are sufficient to meet the obligations related to lease liabilities as and when they fall due. In addition to this, the Company has unencumbered assets as well as access to adequate financing arrangements. Hence, in case a liquidity need were to arise, the Company believes it has sufficient means to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Company''s liquidity management process as monitored by management, includes the following:

- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Company''s liquidity position on the basis of expected cash flows.

- Maintaining diversified credit lines.

(iii) Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

A. Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates primarily relates to certain bank deposits, foreign currency term loan and certain lease liabilities carrying floating rate of interest.

USD: United States Dollar, GBP: Great British Pound, Aâ¬D: Arab Emirates Dirhams, NPR: Nepalese Rupees, OMR: Omani Rials, THB: Thai Baht, CHF: Swiss Franc, SGD: Singapore Dollar, â¬UR: â¬uro, QAR: Qatari Riyal, BDT: Bangladeshi Taka, LKR: Sri Lankan Rupee, HKD: Hong Kong Dollars, KWD: Kuwaiti Dinar, MYR: Malaysian Ringgit, SAR: Saudi Riyal, TRY: Turkish Lira, CNY: Chinese Yuan, MVR: Maldivian Rufiyaa, AUD: Australian Dollar, BHD: Bahraini Dinar.

Amounts which are less than ten thousand are appearing as ''0.00''.

* The sensitivity analysis to foreign currency risk includes an exposure to foreign exchange fluctuations on long term foreign currency loans that have been capitalised in the cost of the related right of use assets. 1% depreciation / appreciation in Indian Rupees against USD, affects the adjustment to right of use assets by Rs. 131.56 (previous year Rs. 161.54). It is expected to impact the Standalone Statement of Profit and Loss over the remaining life of the right of use assets as an adjustment to depreciation charge.

30. Capital management

The Board of directors regularly review the Company''s capital structure in light of the economic conditions, business strategies and future commitments. Management monitors the return on equity and debt equity ratio which has been disclosed in Note 49.

31. Contingent liabilities (to the extent not provided for)

(i) Income tax

The income tax authority has assessed the return of income of the Company up to Assessment Year ("AY") 2019-20 and has revised the taxable income for certain years on account of disallowance of certain expenses and in respect of the tax treatment of certain incentives received from the manufacturer with the acquisition of aircraft and engines. The Company has not yet received assessment orders for subsequent years.

The Company has received favourable order against such disallowances from the Special Bench of Income Tax Appellate Tribunal ("ITAT") for AY 2012-13 and Divisional Bench of ITAT for certain years till AY 2015-16. However, the tax authority''s appeal against the order of the Divisional Bench of ITAT for AY 2007-08, AY 2008-09 and AY 2009-10 is pending before the Hon''ble High Court.

During the current year, the tax authorities have accepted the Company''s application to conclude the matters for AY 2008-09 and AY 2009-10 under Direct Tax Vivad se Vishwas scheme ("DTVSVS") and passed the final administrative order.

The tax exposure (excluding interest and penalty) for matters disallowed by income tax authorities up to AY 2019-20 i.e. the last year assessed, amounts to Rs. 4,907.19 (previous year Rs. 4,907.19) in case the incentives are held to be taxable on an amortized basis over the initial lease period. However, the exposure could increase to Rs. 14,029.94 (previous year Rs. 14,029.94) in case the incentives are held to be taxable on a receipt basis. The above amounts are net of Rs. 5,331.67 (previous year Rs. 5,331.67), which represents minimum alternate tax recoverable written off in the earlier years.

(1) Service Tax- Rs. 144.71 (previous year Rs. 144.71),

(2) Value Added Tax - Rs. 30.92 (previous year Rs. 28.46),

(3) Octroi - Rs. 74.39 (previous year Rs. 74.39) and

(4) IGST on re-imports* - Rs. 10,616.39 (previous year Rs. 8,539.11).

The Company believes, based on advice from counsels/experts, that the views taken by authorities are not sustainable and accordingly, no provision is required to be recorded in the books of account.

*During the current year, the Company has paid Integrated Goods and Services Tax ("IGST") amounting to Rs. 2,077.28 (previous year Rs. 2,583.75) under protest, on re-import of repaired aircraft, aircraft engines and other certain aircraft parts, to custom authorities and therefore as at 31 March 2022, cumulative amount paid under protest is Rs. 10,616.39 (previous year Rs. 8,539.11), against which appeals have been filed before the Appellate authorities. During the previous year, the Company has also received favourable orders from the Customs Excise and Service Tax Appellate Tribunal ("Câ¬STAT"), New Delhi. The customs authorities had filed an appeal before the Hon''ble Supreme Court of India against the Câ¬STAT order. The matter is yet to be decided by the Supreme Court and no stay on Câ¬STAT order has been granted by the Supreme Court till date. Further, the customs authorities vide customs amendment notification dated 19 July 2021 has amended earlier customs exemption notification to reiterate their position that IGST is applicable on re-import of goods after repair. The Company, based on the legal advice from counsels, continues to believe that no IGST is payable on such re-import of repaired aircraft, aircraft engines and other certain aircraft parts. Accordingly, the above amounts paid under protest till 31 March 2022 have been shown as recoverable.

to Rs. 94.50. The Company has filed an appeal before the National Company Law Appellate Tribunal ("NCLRT") against the order imposing penalty which is currently pending. The penalty imposed by CCI on the Company was stayed by NCLAT upon deposit of 10% of the penalty amount.

The Company based on legal advice from counsel, believes that the views taken by authorities are not sustainable and accordingly, no provision is required to be recorded in the books of account.

(v) Legal cases

As per the notification dated 1 January 2016, The Payment of Bonus (Amendment) Act, 2015 is applicable retrospectively w.e.f 1 April 2014. In view of the partial stay granted by Karnataka and Kerala High Court, the impact of this amendment for the period 1 April 2014 till 31 March 2015 amounting to Rs. 19.47 has not been acknowledged as debt.

(vi) Other legal proceedings for which the Company is contingently liable

Notes:

32. Commitments
Particulars	As at	As at
	31 March 2022	31 March 2021
Estimated amount of contracts remaining to be executed on capital account and other commitments, and not provided for in the books of account [net of advances Rs. 322.07 (previous year Rs. 449.03)]	2,942,248.20	2,925,642.05

As on the reporting date, the Company expects that the estimated realizable value of these assets will exceed the commitment value net of discounts, benefits and incentives which will accrue to the Company consequential to buying these assets.

33. Employee benefits

The Company contributes to the following post-employment benefit plans.

Defined contribution plan

The Company pays provident fund contributions to the appropriate government authorities at rate specified as per regulations.

An amount of Rs. 917.54 (previous year Rs. 825.4) has been recognised as an expense in respect of the Company''s contribution to Provident Fund and the same has been deposited with the relevant authorities. It has been shown under Employee costs in the Standalone Statement of Profit and Loss.

Defined benefit plan

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days of total basic salary last drawn for each completed year of service. Gratuity is payable to all eligible employees of the Company on retirement, separation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1972.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in an increase in plan liabilities.

34. Segment reporting

Standalone Financial Statements

Corporate overview

Statutory ^^Financial stot^ntsf

Notes forming part of the Standalone Financial Statements

for the year ended 31 March 2022

(Rupees in millions, except for share data and if otherwise stated)

35. Related party disclosures (Contd..)

Dr. Venkataramani Sumantran - Independent Director (with effect from 28 May 2020)

Mr. Gregg Albert Saretsky - Non-Independent Non-Executive Director (with effect from 01 October 2020)

Mr. Sanjay Gupta - Company Secretary and Chief Compliance Officer

Mr. Sidhant Gupta - Son of Mr. Sanjay Gupta (with effect from 24 February 2022)

(iv) Other related parties - entities which are joint ventures or subsidiaries or where control/ significant influence exists of parties as given in (a) or (b)(i), (b)(ii) and (b)(iii) above

InterGlobe Air Transport Limited InterGlobe Hotels Private Limited CAE Simulation Training Private Limited

The Chinkerpoo Family Trust (Trustee: Ms. Shobha Gangwal & J.P.Morgan Trust Company of Delaware)

Caddie Hotels Private Limited InterGlobe Real estate Ventures Private Limited InterGlobe Business Solutions Private Limited InterGlobe Air Transport Limited W.L.L.

InterGlobe Education Services Limited Shardul Amarchand Mangaldas & Co.

InterGlobe Technology Quotient Private Limited

c. Transactions with related parties during the current / previous year:

S.	Particulars	For the year ended	For the year ended
No.		31 March 2022	31 March 2021
(i)	Commission
	InterGlobe Air Transport Limited	0.09	0.01
	InterGlobe Air Transport Limited W.L.L.*	96.64	46.48
(ii)	*The Company has received or due to receive remittances of Rs. 5,429.55 (previous year Rs. 2,174.60) for the sale of passenger tickets through the agent for which the above commission was paid or payable. Crew accommodation and transportation
	InterGlobe Hotels Private Limited	32.79	10.60
	Caddie Hotels Private Limited	18.18	13.18
(iii)	Training CAE Simulation Training Private Limited	155.46	211.01
(iv)	Repairs and maintenance
	InterGlobe Real Estate Ventures Private Limited	16.44	15.86
(v)	Miscellaneous income
	CAE Simulation Training Private Limited		0.15
	InterGlobe Education Services Limited	4.26	1.80
	Agile Airport Services Private Limited	16.26	13.55
(vi)	Reimbursement for expenses received
	Agile Airport Services Private Limited	1.23	0.94
	InterGlobe Enterprises Private Limited	288.90	-
	Mr. Rakesh Gangwal	0.26	-
(vii)	Reimbursement for expenses paid InterGlobe Air Transport Limited W.L.L.	11.62	10.89
(viii)	Miscellaneous expenses
	InterGlobe Air Transport Limited	-	0.01
	InterGlobe Real Estate Ventures Private Limited	9.98	10.59

187

Annual Report 2021-22

During the previous year, an unrelated party has assigned its right to receive Rs. 48.83 (towards commission as an agent) to InterGlobe Technology Quotient Private Limited. Accordingly, the Company has discharged its obligation towards unrelated party by making payment of Rs. 48.83 to InterGlobe Technology Quotient Private Limited.

e. Terms and Conditions

All transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and within the ordinary course of business. Outstanding balances at the year end are unsecured and settlement occurs in cash. Transactions relating to dividend, subscriptions for new equity shares are on the same terms and conditions that are offered to other shareholders.

* During the year ended 31 March 2022, the Board of Directors had accepted resignation of Mr. Jiten Chopra from the post of Chief Financial Officer of the Company effective 28 March 2022. During the year ended 31 March 2021, the Board of Directors had accepted resignation of Mr. Aditya Pande from the post of Chief Financial Officer of the Company effective 21 February 2021.

# During the year ended 31 March 2021, the Company has granted 185,000 stock options to its Whole Time Director and Chief Executive Officer which was approved by the shareholders through postal ballot on 10 April 2021.

The risk-free interest rates are determined based on current yield to maturity of Government Bonds with 5-10 years residual maturity. Expected volatility calculation is based on historical daily closing stock prices of competitors / Company using standard deviation of daily change in stock price. The minimum life of stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which the options cannot be exercised. The expected life has been considered based on average sum of maximum life and minimum life and may not necessarily be indicative of exercise patterns that may occur. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date basis past trend of three years. For the measurement of grant date fair value certain market conditions were considered in the method of valuation.

39. During the year ended 31 March 2022, following changes in the Management took place:

(a) Mr. Gaurav Manoher Negi was appointed as the Chief Financial Officer ("CFO") of the Company effective 29 March 2022, in place of Mr. Jiten Chopra, erstwhile CFO, who resigned on 28 March 2022, effective immediately.

(b) Dr. Anupam Khanna completed his second term as an Independent Nonexecutive Director of the Company on 26 March 2022.

(c) Mr. Rakesh Gangwal, Nonexecutive Director, resigned from the Board of Directors of the Company effective 18 February 2022.

(d) Mr. Rahul Bhatia, Nonexecutive Director, was appointed as the Managing Director of the Company effective 4 February 2022.

40. Post closure of year ended 31 March 2022, following changes in the Management took place:

(a) Mr. Ronojoy Dutta has decided to resign as the Whole Time Director and Chief Executive Officer of the Company with effect from 30 September 2022.

40. Post closure of year ended 31 March 2022, following changes in the Management took place (Contd..)

(b) The Board of Directors has approved the appointment of Mr. Pieter Elbers as the Chief Executive Officer and as a Whole Time Director of the Company, subject to necessary regulatory and Shareholders'' approvals. His appointment as the Chief Executive Officer is expected to be effective from 01 October 2022.

(c) Mr. Meleveetil Damodaran has stepped down from the Board as the Chairman and Independent Non-Executive Director on 3 May 2022, on attaining the age of 75 years.

(d) Dr. Venkataramani Sumantran, Independent Non-Executive Director, was appointed as the Chairman of the Board effective 4 May 2022.

(e) The Board approved the appointment of Mr. Vikram Singh Mehta and Air Chief Marshal (Retd.) Birender Singh Dhanoa as Additional Directors (Independent Non-Executive Directors), not liable to retire by rotation, subject to security clearance from the Ministry of Civil Aviation ("MOCA") and further subject to approval of the Shareholders of the Company. The appointments of Mr. Mehta and ACM Dhanoa (Retd.) will be effective from the date of receipt of security clearance from the MOCA.

41. During the year ended 31 March 2022, the members of the Company through postal ballot on 18 March 2022, approved the following resolutions:

(a) Appointment of Mr. Rahul Bhatia as the Managing Director of the Company effective 4 February 2022.

(b) Availing of advisory services from Mr. Gregg Albert Saretsky, Non-Executive Director of the Company, in the capacity of Special Advisor and payment of remuneration to him for the said services.

42. The managerial remuneration paid by the Company to its Whole Time Director and Chief Executive Officer in accordance with the limits prescribed under Section 197 read with Schedule V to the Companies Act, 2013, was approved by the shareholders at the Annual General Meeting held on 4 September 2020. Further, the revision in remuneration and minimum remuneration for the year ended 31 March 2021 on account of grant of the stock options in previous year, which amounted to a stock compensation charge of Rs. 19.22 in previous year and Rs. 104.71 in current year, was approved by the shareholders through postal ballot on 10 April 2021. The approval of shareholders covers the remuneration paid for the year ended 31 March 2022 as well.

43 . The Company has established a comprehensive system of maintenance of information and documents that are required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its international transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

44. InterGlobe Enterprises Private Limited and Mr Rahul Bhatia (the "IGE Group"), as claimants, submitted a Request for Arbitration dated 1 October 2019 to London Court of International Arbitration under the Shareholders Agreement dated 23 April 2015 (as amended on 17 September 2015) (the "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 the Company. The IGE Group and the RG Group are promoters of the Company. The Company was named as a respondent as it is a party to the Shareholders Agreement. The Company was named as a proper party to the arbitration. However, 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 23 September 2021 (the "Award"). As per the directions in the award the Company has received reimbursement of costs, from the IGE Group in relation to the Arbitration.

45. During the current year the shareholders of the Company, at their extraordinary general meeting held on 30 December 2021, on the joint requisition of the IGE Group and the RG Group, have approved the special resolution for amending the Articles of Association of the Company by removing the Transfer Restriction Articles therefrom.

46. During the year ended 31 March 2022, the ongoing Covid 19 pandemic continued to adversely impact the Company''s operation and the demand for air travel declined during the months of May-June 21 and in January 22, due to second and third wave of Covid 19. While we did see some recovery of passenger traffic in the rest of the months, December 21 and the second half of the fourth quarter witnessed strong recovery. The Company expects recovery of passenger traffic to continue.

We remain focused to keep improving on our cost leadership and strengthening our balance sheet. The Company continues to have sufficient liquidity as of 31 March 2022, to meet our financial obligations. While preparing our financial statements we have assessed the recoverability of the carrying value of the assets, by performing sensitivity analysis and we expect the carrying amount of these assets will be recovered. We constantly monitor any material changes to the future economic conditions which potentially may impact our assessment and financial position.

47 . No funds have been advanced or loaned or invested by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

* Excluding lease liabilities of Rs. 329,811.01 as at 31 March 2022 and Rs. 273,540.31 as at 31 March 2021, the Debt-â¬quity ratio would have been (0.65) for 31 March 2022 and 35.34 for 31 March 2021.

** Inventories pertaining to stores, spares and loose tools have not been considered for the computation of the ratio as these are in the nature of consumables used for aircraft maintenance.

*** Excluding lease liabilities of Rs. 329,811.01 as at 31 March 2022 and Rs. 273,540.31 as at 31 March 2021, the ROCâ¬ would have been 261.04% for 31 March 2022 and (283.88%) for 31 March 2021.

50. Previous year figures have been re-grouped / re-classified wherever necessary, to conform to current year''s classification in order to comply with the requirements of the amended Schedule III to the Companies Act, 2013 effective 1 April 2021.

Mar 31, 2021

Terms / rights attached to the equity shares

The Company has one class of equity share having a par value of Rs. 10 per share. Each holder of the equity share is entitled to one vote per share and is entitled to dividend declared, if any. The paid up equity shares of the Company rank pari-pasu in all respects, including dividend. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The interim dividend is declared by the Board of Directors. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

Other Notes

During the year ended 31 March 2018, the Company had completed the Institutional Placement Programme ("IPP") under Chapter VIII-A of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended. As per the Prospectus, the IPP proceeds can be utilised 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 31 March 2020, 100% of the IPP proceeds were utilised by the Company towards the purposes mentioned in the prospectus.

* The fully paid up convertible preference shares of Rs. 1,000 each were issued at a premium ranging from Rs. 5,650 to Rs. 6,642 per share with 0.00% coupon rate and were convertible into equity shares of the Company in the ratio of 1:1 not earlier than (a) the initial public offer of the Company; or (b) a strategic sale of the Company. In the event of liquidation of the Company before conversion of convertible preference shares, the preference shareholders had priority over the equity shares in the repayment of the capital. The holder of preference shares were entitled to one vote per share at any meeting of the Company on any resolutions of the Company directly affecting their rights.

During the year ended 31 March 2016, 36,716 fully paid up 0.00% convertible preference shares were converted into equity shares of the Company in the prescribed ratio of 1:1, vide resolution passed by the Board at its meeting held on 23 June 2015.

*On 27 May 2019, the Board of Directors has recommended a final dividend of Rs. 5 per share (face value of Rs. 10 per share) for the financial year ended 31 March 2019 and the same was approved by the shareholders at their Annual General Meeting held on 27 August 2019.

Retained earnings are the accumulated profits/ (losses) earned by the Company till date, adjusted with impact of changes in accounting pronouncements and amount transferred from other comprehensive income, less transfer to general reserves, dividend (including applicable taxes) and other distributions made to the shareholders.

#The terms of above mentioned loan has been amended during the current year and accordingly it is repayable in ten equal installments of USD 5.5 million between the period July 2023 - June 2024.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (''BFE'') installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilising the predelivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

* Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 143 months.

# The terms of above mentioned loan is repayable in twenty unequal installments ranging between USD 4.5 million to USD 5.5 million between the period September 2020 - June 2024.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (''BFE'') installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilising the predelivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

There are no defaults as on reporting date in repayment of principal and interest.

16. Financial liabilities (contd...)

Current Borrowings

Secured - Working capital loans

As at 31 March 2021

Working capital loans are repayable in 6 to 180 days from the reporting date. These loans are drawn under banking facilities that are revolving in nature i.e., can be redrawn upon repayment. These facilities have an availability period till September 2021 which can be extended mutually by banks and the Company.

Rate of interest on working capital loans ranges from 3.20% to 7% per annum.

Foreign currency loan is secured through deposits with banks under lien and subservient charge on current assets excluding cash and cash equivalents and investments of the Company.

Indian Rupee loan is secured through deposits with banks under lien and exclusive charge on credit/debit card receivables of the company (present and future) and first pari passu charge by way of hypothecation on unencumbered current assets.

There are no defaults as on reporting date in repayment of principal and interest.

The Company''s leased assets primarily consist of leases for aircraft and engines, equipment, leasehold land and buildings.

Interest expense on lease liabilities for the year is amounting to Rs. 16,435.04 (previous year Rs. 13,906.20) (including interest amounting to Rs. 238.17 (previous year Rs. 261.70) capitalized under capital work-in-progress). Refer to Note 25.

Certain lease liabilities amounting to Rs. 16,153.80 (previous year Rs. 17,486.65) are secured against the respective aircraft. Remaining lease liabilities are secured to the extent of letter of credits issued / deposits given to lessors.

The Company has recognized an expense of Rs. 2,804.57 (previous year Rs. 4,966.57) on account of short term leases which represents leased aircraft and engines having a remaining lease term of less than 12 months as on transition date and other short term leases. The portfolio of other short-term leases to which the Company is committed at the end of the reporting period is not materially different from the portfolio of other short term leases for which expense has been recognized during the year.

Under certain lease arrangements of aircraft, the Company incurs variable payments towards maintenance of the aircraft which are disclosed under "Supplementary rentals and aircraft repair and maintenance(net)"

During the current year the Company has entered into sale and leaseback arrangements, for certain aircraft and engines owned and controlled by the Company, to increase its liquidity. The Company has recorded proceeds of Rs. 18,833.68 (net) from the sale and leaseback arrangements as disclosed in the Standalone Cash Flow Statement. The profit (net of loss) on sale and leaseback agreements is Rs.12.81 disclosed in Note 22.

Future cash outflows for leases not yet commenced amounts to Rs. 62,343.06 (previous year Rs. 73,848.41).

The maturity analysis of lease liabilities are disclosed in Note 28. Further, information about the Company''s exposure to market risks is disclosed in Note 28.

^Includes lease liabilities with related parties amounting to Rs. 5,429.29 (previous year Rs. 6,080.73). Refer to Note 34.

16. Financial liabilities (contd...)

The impact of transition to Ind AS 116 on retained earnings (cumulative effect of applying the standard) as on 1 April 2019 is Rs. 6,180.47 (net of deferred tax amounting to Rs. 3,319.76). It represents:

1. Recognition of lease liabilities of Rs. 146,320.72, being the present value of the remaining lease payments.

2. Recognition of right of use assets of Rs. 93,942.04 (including deferred rentals amounting to Rs. 3,500.81). The deferred incentive as at transition date amounting to Rs. 48,724.34 has been netted off from right of use assets.

b. Provision for overhaul expenses for certain aircraft held under lease are recorded at discounted value, where effect of the time value of money is material.

c. Provision for engine maintenance which represents additional accrual, beyond supplementary rentals, for the estimated future costs of engine maintenance checks. These accruals are based on past trends for costs incurred on such events, future expected utilization of engine, condition of the engine and expected maintenance interval and are recorded over the period of the next expected maintenance visit.

Expected timing of resulting outflow of economic benefit is financial year 2021-22 to 2030-31 (previous year 2020-21 to 202728) and the Company calculates the provision using Discounted Cash Flow (DCF) method.

Sensitivity analysis for key assumptions used:

If expected cost differ by 10% from management''s estimate, while holding all other assumptions constant, the provision for maintenance, redelivery and overhaul cost may increase/ decrease by Rs. 1,371.22 (previous year by Rs. 1,575.19).

If expected discount rate differ by 1%, while holding all other assumptions constant, the provision for maintenance, redelivery and overhaul cost may increase by Rs. 22.29 (previous year Rs. 19.81) or decrease by Rs. 20.02 (previous year by Rs. 18.72).

Contract balances

Contract assets represents trade receivables which are generally unsecured and are derived from revenue earned from customers, primarily located in India and certain parts of Middle East and South Asia. Trade receivables also includes receivables from credit card companies which are realisable within a period 1 to 7 working days.

# Borrowings (including current maturities) have been contracted at floating rates of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.

** Non-current investments excludes investment in subsidiary which is carried at cost.

28. Fair value measurement and financial instruments (contd...)

The fair values for loans were calculated based on discounted cash flows using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The fair values of supplementary rentals and aircraft maintenance are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

There has been no transfers between Level 1, Level 2 and Level 3 for the year ended 31 March 2021 and 31 March 2020. Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of NAV for mutual funds.

- the fair value of the remaining financial instruments is determined using discounted cash flow method.

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Senior Management. Discussions on valuation and results are held between the Senior Management and valuation team atleast once every quarter in line with the Company''s quarterly reporting periods.

b. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

â¢ Credit risk ;

â¢ Liquidity risk ;

â¢ Market Risk - Foreign currency ; and

â¢ Market Risk - Interest rate

Risk management framework

(i) Credit risk

28. Fair value measurement and financial instruments (contd...)

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invests in deposits with financial institutions with high credit ratings assigned by credit rating agencies. Investments primarily include investment in debt based mutual fund units with low risk. Further, investments in fixed rate non-convertible debentures are secured by way of first pari passu charge over moveable financial assets identified by the issuer and simple mortgage over the immoveable assets of the issuer. The loans primarily represents security deposits given as pre delivery payments to aircraft manufacturer. Such deposit will be returned to the Company on deliveries of the aircraft by the aircraft manufacturer as per the contract. The credit risk associated with such security deposits is relatively low.

Trade receivables are generally unsecured and are derived from revenue earned from customers primarily located in India and certain parts of Middle East and South Asia. Trade receivables also includes receivables from credit card companies which are realisable within a period 1 to 7 working days.

The Company sells majority of its air transportation services against advances made by agents/ customers and through online channels.

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers. Trade receivables as at year end primarily includes Rs. 1,160.40 (previous year Rs. 879.82) relating to revenue generated from passenger services and Rs. 1,110.52 (previous year Rs. 1,792.57) relating to revenue generated from cargo services.

* The Company believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour.

The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2021 and 31 March 2020 is insignificant and hence the same has not been recognised. The reversal for lifetime expected credit loss on customer balances for the current year is Rs. Nil (previous year Rs. Nil.)

The Company believes that its liquidity position, comprising of total cash, bank deposits and investments (including amounts under lien) of Rs. 185,184.30 as at 31 March 2021 (previous year Rs. 203,339.16), anticipated future internally generated funds from operations, and its fully available, revolving undrawn fund and non fund based credit facilities will enable it to meet its future known obligations in the ordinary course of business. As of 31 March 2021, the Company had received revolving fund based credit line sanctions amounting to Rs. 28,742.04 (previous year Rs. Nil.), of which the Company has drawn Rs. 21,239.95 (previous year Rs. Nil.) and has undrawn revolving fund based credit facilities of Rs. 7,502.09 (previous year Rs. Nil.). Additionally, the Company also has undrawn non fund based credit facilities amounting to Rs. 104,769.75 (previous year Rs. 77,033.25). The Company does not believes a significant liquidity risk with regard to its lease liabilities as the assets are sufficient to meet the obligations related to lease liabilities as and when they fall due. In addition to this, the Company has unencumbered assets (including owned aircraft and engines) as well as access to adequate financing arrangements. Hence, in case a liquidity need were to arise, the Company believes it has sufficient means to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Company''s liquidity management process as monitored by management, includes the following:

- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Company''s liquidity position on the basis of expected cash flows.

- Maintaining diversified credit lines.

A. Interest rate risk

Exposure to interest rate risk

The Company''s interest rate risk arises from certain bank deposits, foreign currency term loan and certain lease liabilities carrying floating rate of interest. These deposits and obligations expose the Company to cash flow interest rate risk. The exposure of the Company to interest rate changes as reported to the management at the end of the reporting period are as follows:

Sensitivity analysis

A reasonably possible strengthening/ (weakening) of the Indian Rupee against below currencies as at 31 March 2021 and 31 March 2020 would have affected the measurement of financial instruments denominated in foreign currency and affected Standalone Statement of Profit and Loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

USD: United States Dollar, GBP: Great British Pound, RED: Arab Emirates Dirhams, NPR: Nepalese Rupees, OMR: Omani Rials, THB: Thai Baht, CHF: Swiss Franc, SGD: Singapore Dollar, EUR: Euro, QAR: Qatari Riyal, BDT: Bangladeshi Taka, LKR: Sri Lankan Rupee, HKD: Hong Kong Dollars, KWD: Kuwaiti Dinar, MYR: Malaysian Ringgit, SAR: Saudi Riyal, TRY: Turkish Lira, CNY: Chinese Yuan, MVR: Maldivian Rufiyaa, PLN: Polish Zloty, VND: Vietnamese Dong.

Amounts which are less than ten thousand are appearing as ''0.00''.

* The sensitivity analysis to foreign currency risk includes an exposure to foreign exchange fluctuations on long term foreign currency loans that have been capitalised in the cost of the related right of use assets. 1% depreciation / appreciation in Indian Rupees against USD, affects the adjustment to right of use assets by Rs. 161.54 (previous year Rs. 174.87). It is expected to impact the Standalone Statement of Profit and Loss over the remaining life of the right of use assets as an adjustment to depreciation charge.

The Board of directors regularly review the Company''s capital structure in light of the economic conditions, business strategies and future commitments.

For the purpose of the Company''s capital management, capital includes issued share capital, securities premium and all other equity reserves and debt includes term loan and working capital loans.

30. Contingent liabilities (to the extent not provided for)

(i) Income tax

The income tax authority has assessed and revised the taxable income of the Company up to Assessment Year ("AY") 2018-19 on account of disallowance of certain expenses and in respect of the tax treatment of certain incentives received from the manufacturer with the acquisition of aircraft and engines. The Company has not yet received assessment orders for subsequent years.

The Company has received favourable orders from the final fact-finding authority, the Income Tax Appellate Tribunal ("ITAT") for AY 2007-08, 2008-09 and 2009-10 against certain such disallowances and/or adjustments made by the tax authority. However, the tax authority''s appeal against the order of the ITAT is pending before the Hon''ble High Court and for AY 2012-13, the matter has been referred to Special Bench of ITAT. However, the Company believes, based on legal advice from counsels, that the view taken by ITAT is sustainable in higher courts and accordingly, no provision is required to be recorded in the books of account.

During the current year, under Direct Tax Vivad se Vishwas scheme ("DTVSVS"), the Company has accepted the order passed by tax authorities to conclude the matters for AY 2008-09 and 2009-10. However, the final administrative order is awaited from tax authorities for AY 2008-09 and 2009-10.

The tax exposure (excluding interest and penalty) for various matters arising up to AY 2018-19 i.e. the last year assessed, amounts to Rs. 4,907.19 (previous year Rs. 5,753.87) in case the incentives are held to be taxable on an amortized basis over the initial lease period. The above amounts are net of Rs. 5,331.67 (previous year Rs. 4,887.28), which represents minimum alternate tax recoverable written off in the earlier years. However, the exposure could increase to Rs. 14,029.94 (previous year Rs. 13,478.55) in case the incentives are held to be taxable on a receipt basis.

(1) Service Tax- Rs. 144.71 (previous year Rs. 151.11),

(2) Value Added Tax - Rs. 28.46 (previous year Rs. 16.51),

(3) Octroi - Rs. 74.39 (previous year Rs. 74.39) and

(4) IGST on re-imports* - Rs. 8,539.11 (previous year Rs. 5,955.36).

The Company believes, based on advice from counsels/experts, that the views taken by authorities are not sustainable and accordingly, no provision is required to be recorded in the books of account.

*During the year, the Company has paid Integrated Goods and Services Tax ("IGST") amounting to Rs. 2,583.75 (previous year Rs 1,820.00) under protest, on re-import of repaired aircraft, aircraft engines and other certain aircraft parts, to custom authorities and therefore as at 31 March 2021, cumulative amount paid under protest is Rs. 8,539.11 (previous year Rs. 5,955.36). In this regard, the Company has also filed the appeals before the Appellate authorities. The Company, based on legal advice from counsels, believes that no IGST is payable on such re-import of repaired aircraft, aircraft engines and other certain aircraft parts and accordingly, such amounts have been shown as recoverable. During the current year, the Company has received favourable order from the Customs Excise and Service Tax Appellate Tribunal ("CESTAT"), New Delhi.

(iii) The Competition Commission of India ("CCI") passed an order dated 17 November, 2015 against, inter alia, the Company, imposing a penalty of Rs. 637.40 on the Company on account of cartelization for determination of fuel surcharge included in the component of Cargo services. The Company filed an appeal against this order before the Competition Appellate Tribunal and it referred the matter back to the CCI for fresh adjudication. CCI passed a final order dated 07 March 2018 reducing the penalty amount on the Company to Rs. 94.50. The Company has filed an appeal before the National Company Law Appellate Tribunal ("NCLAT") against the order imposing penalty which is currently pending. The penalty imposed by CCI on the Company was stayed by NCLAT upon deposit of 10% of the penalty amount.

The Company based on legal advice from counsel, believes that the views taken by authorities are not sustainable and accordingly, no provision is required to be recorded in the books of account.

(v) Legal cases

(vi) During the current year, the Company has renegotiated its existing agreements with an Original Equipment Manufacturer ("OEM") for spare engines support and provision of maintenance services which settles claims pursuant to these agreements that the Company and OEM had raised against each other. The net financial impact arising from this settlement has been recorded in the Standalone Financial Statements.

(vii) Other legal proceedings for which the Company is contingently liable

Notes:

32. Employee benefits

The Company contributes to the following post-employment benefit plans.

Defined contribution plan

The Company pays provident fund contributions to the appropriate government authorities at rate specified as per regulations.

An amount of Rs. 825.40 (previous year Rs. 909.84) has been recognised as an expense in respect of the Company''s contribution to Provident Fund and the same has been deposited with the relevant authorities. It has been shown under Employee costs in the Standalone Statement of Profit and Loss.

Defined benefit plan

The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits, bifurcated under passenger services (including corporate employees) and cargo services:

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in an increase in plan liabilities.

(iv) Defined benefit liability and employer contribution

The expected maturity analysis of undiscounted defined benefit liability is as follows:

The sensitivity analysis are based on a change in above assumption while holding all other assumptions constant. The changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting year) has been applied, as has been applied when calculating the provision for defined benefit plan recognised in the Standalone Balance Sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in an increase in plan liabilities.

33. Segment reporting

Revenue rrom air transportation services is directly attributed to domestic and international operations or are attributed on a reasonable basis. Other income is not allocated as the underlying assets/ liabilities/services are used interchangeably. Non-current assets, other than financial instruments, deferred tax assets (net) and income tax assets (net), primarily comprises of right of use assets, property, plant and equipment and other non-current assets which cannot be bifurcated between domestic and international locations, as such assets are used interchangeably. Accordingly, the same has not been bifurcated between domestic and international locations.

No single external customer amounts to 10% or more of the Company''s revenue. Accordingly, information about major customer is not provided.

34. Related party disclosures

a. List of related parties and nature of relationship where control exists:

(i) Subsidiaries

Agile Airport Services Private Limited (wholly owned subsidiary)

b. List of related parties and nature of relationship with whom transactions have taken place during the current/ previous year

(i) Entity/ person with direct or indirect significant influence over the Company InterGlobe Enterprises Private Limited

Ms. Shobha Gangwal - Wife of Mr. Rakesh Gangwal

(ii) Subsidiaries

Agile Airport Services Private Limited (wholly owned subsidiary)

34. Related party disclosures (contd...)

(iii) Key managerial personnel of the Company and their close family members Mr. Rahul Bhatia - Director

Ms. Rohini Bhatia - Director

Mr. Rakesh Gangwal - Director

Dr. Anupam Khanna - Independent Director

Ms. Pallavi Shardul Shroff- Independent Woman Director (with effect from 19 September 2019)

Mr. Anil Parashar - Non-executive director Ms. Ritu Parashar - Wife of Mr. Anil Parashar

Mr. Meleveetil Damodaran - Independent Director and Chairman of the Board

Mr. Ronojoy Dutta - Whole Time Director & Chief Executive Officer (Chief Executive Officer till 26 January 2020)

Dr. Asha Mukherjee - Sister of Mr. Rakesh Gangwal

Mr. Kapil Bhatia - Father of Mr. Rahul Bhatia

Mr. Alok Mehta - Brother of Ms. Rohini Bhatia

Mr. Rohit Philip - Chief Financial Officer (till 15 September 2019)

Mr. Aditya Pande - Chief Financial Officer (with effect from 16 September 2019 till 21 February 2021)

Mr. Jiten Chopra - Chief Financial Officer (with effect from 22 February 2021 )

Dr. Venkataramani Sumantran - Independent Director (with effect from 28 May 2020)

Mr. Gregg Albert Saretsky - (Non-Independent Non-Executive Director) Additional Director (with effect from 01 October 2020)

Mr. Sanjay Gupta - Company Secretary and Chief Compliance Officer

(iv) Other related parties - Entities which are joint ventures or subsidiaries or where control/ significant influence exists of parties as given in (a) or (b)(i), (b)(ii) and (b)(iii) above

InterGlobe Air Transport Limited

InterGlobe Hotels Private Limited

CAE Simulation Training Private Limited

The Chinkerpoo Family Trust (Trustee: Ms. Shobha Gangwal & J.P.Morgan Trust Company of Delaware)

Caddie Hotels Private Limited InterGlobe Real Estate Ventures Private Limited InterGlobe Business Solutions Private Limited InterGlobe Air Transport Limited W.L.L.

InterGlobe Education Services Limited

Shardul Amarchand Mangaldas & Co. (with effect from 19 September 2019)

InterGlobe Technology Quotient Private Limited

e. Terms and Conditions

fill transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and within the ordinary course of business. Outstanding balances at the year end are unsecured and settlement occurs in cash. Transactions relating to dividend, subscriptions for new equity shares are on the same terms and conditions that are offered to other shareholders.

37. Share-based payment arrangements

a. Description of share-based payment arrangements

InterGlobe Aviation Limited Employees Stock Option Scheme - 2015 (ESOS 2015 - II)

On 23 June 2015, the Board of Directors approved the InterGlobe Aviation Limited Employees Stock Option Scheme - 2015 (the "ESOS 2015 - II"), which was subsequently approved in the Extraordinary General Meeting held on 25 June 2015. ESOS 2015 - II, comprises 3,107,674 options, which are granted to eligible employees of the Company determined by Compensation Committee, which are convertible into equivalent number of equity shares of Rs. 10 each as per the terms of the scheme. Upon vesting, the employees can acquire one common equity share of the Company for every option. The options were granted on the dates as mentioned in table below.

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* During the year ended 31 March 2021, the Board of Directors had accepted resignation of Mr. Aditya Pande from the post of Chief Financial Officer of the Company effective 21 February 2021. During the year ended 31 March 2020, the Board of Directors had accepted resignation of Mr. Rohit Philip from the post of Chief Financial Officer of the Company effective 15 September 2019.

The risk-free interest rates are determined based on current yield to maturity of Government Bonds with 10 years residual maturity. Expected volatility calculation is based on historical daily closing stock prices of competitors / Company using standard deviation of daily change in stock price. The minimum life of stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which the options cannot be exercised. The expected life has been considered based on average sum of maximum life and minimum life and may not necessarily indicative of exercise patterns that may occur. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date basis past trends. For the measurement of grant date fair value certain market conditions were considered in the method of valuation.

38. (a) Mr. Gregg Albert Saretsky has been appointed as an (Non-Independent Nonexecutive Director) Additional Director

with effect from 01 October 2020, subject to the approval of shareholders at the forthcoming Annual General Meeting of the Company.

(b) Mr. Aditya Pande, erstwhile Chief Financial Officer resigned with effect from 21 February 2021.

(d) Dr. Venkataramani Sumantran has been appointed as an Independent Director with effect from 28 May 2020.

39. The Company has established a comprehensive system of maintenance of information and documents that are required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its international transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

40 . The Company had filed an application for settlement before the Securities and Exchange Board of India ("Sâ¬BI") under the Sâ¬BI (Settlement Proceedings) Regulations, 2018 in relation to a show cause notice dated 10 November 2020 (the "Show Cause Notice") issued by the Sâ¬BI pursuant to the complaints filed by one of the promoters. The SGBI has accepted the Company''s application for settlement of the adjudication proceeding pursuant to the Show Cause Notice and issued

the Settlement Order. Accordingly, the Company, while neither admitting or denying the alleged violations, has paid an amount of Rs. 21.03 after which the adjudication proceedings have now concluded.

41 . InterGlobe Enterprises Private Limited and Mr. Rahul Bhatia, as claimants (the "IGE Group"), submitted a Request for Arbitration dated 1 October 2019 to the London Court of International Arbitration under the shareholders agreement dated 23 April 2015 (as amended on 17 September 2015) (the "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 the Company. The IGE Group and the RG Group are promoters of the Company. The Company has been named as a respondent as it is a party to the Shareholders Agreement. The Company has been named as a proper party to the arbitration and no monetary claim, including any compensation, has been sought against the Company by the IGE Group or the RG Group and accordingly the Company believes that the claims filed in the arbitration do not impact the Financial Statements of the Company. The pleadings of the IGE Group, the RG Group and the Company in the arbitration have now been completed.

42. During the year ended 31 March 21, the Company''s operations were severely affected due the ongoing Covid-19 Pandemic. We have been ramping up our operations in a phased manner, in accordance with Government directions, post the lockdown imposed by the Central Government in May 2020. Our international operations remained significantly curtailed. We were also witnessing a steady recovery in demand. However, starting March 2021, the second wave of Covid-19 has hit the country leading to a significant drop in demand which has impacted our revenue and profitability for the period.

While there is uncertainty in the revenue environment in the near term which is expected to normalise in the long-run, IndiGo''s balance sheet continues to remain strong with sufficient liquidity as of 31 March 2021. We continue to remain focused to reduce our unit costs. Stringent controls have been put in place on all discretionary spends and capital expenditures are being approved on a case-to-case basis. We are closely monitoring the current environment and will continue to take necessary actions that strengthen our cash position.

Health and safety of our passengers and employees has always been of paramount importance for us. This has become even more relevant during the current pandemic. To ensure the well-being of our passengers, we have introduced several measures including contactless boarding, strict enforcement of social distancing norms, regular sanitisation of our aircraft and provision of PPE kit, masks and face shields. To ensure our employees are protected, all employees are being vaccinated and support is being provided to tide over through this crisis.

The Company has assessed the recoverability of the carrying amount of assets while preparing the Company''s Financial Statements for the year ended 31 March 2021. We have performed sensitivity analysis on the assumptions used and based on current estimates, expect the carrying amount of these assets will be recovered. We have a strong cash position as of 31 March 2021 and hold our current investments in highly liquid funds and bank fixed deposits. We have met and expect to meet all our ongoing cash obligations pertaining to our lease rentals, debt repayments and any other financial obligations. Through this period of uncertainty, we will continue to monitor, any material changes to future economic conditions impacting our financial position.

43 . The managerial remuneration paid by the Company to its Whole Time Director and Chief Executive Officer in accordance with the limits prescribed under Section 197 read with Schedule V of the Companies Act, 2013, was approved by the shareholders at the Annual General Meeting held on 4 September 2020. Further, the revision in remuneration and minimum remuneration for the year ended 31 March 2021 on account of grant of the stock options, which amounts to a stock compensation charge of Rs. 19.22, was approved by the shareholders through postal ballot on 10 April 2021.

Notes forming part of the standalone financial statements

for the year ended 31 March 2021

(Rupees in millions, except for share data and if otherwise stated)

Standalone Finandal Statements

Overview

Reports

Financials

Details of bank deposits, current investments, cash and cash equivalents and bank balances other than cash and cash equivalent:

As at 31 March 2021

Particulars	Non lien	Under lien	Total
Bank deposits (due for maturity after twelve months from the reporting date) (Refer to Note 8)	13.84	0.10	13.94
Current investments (Refer to Note 6)	55,935.41	16,964.35	72,899.76
Cash and cash equivalents (Refer to note 12)	5,081.82	0.98	5,082.80
Bank balance other than cash & cash equivalents (Refer to Note 13)	9,465.64	97,722.16	107,187.80
Total	70,496.71	114,687.59	185,184.30

As at 31 March 2020

Anil Parashar

Director

DIN: 00055377

Sanjay Gupta Company Secretary and Chief Compliance Officer

As per our report of even date attached For S.R. Batliboi & Co LLP Chartered Accountants

ICAI Firm Registration No.: 301003E/E300005

per Sanjay Vij Partner

Membership No. 95169

Place: Gurgaon Date: 5 June 2021

For and on behalf of the Board of Directors of InterGlobe Aviation Limited

Ronojoy Dutta Whole Time Director and Chief Executive Officer DIN: 08676730

Jiten Chopra Chief Financial Officer

Place: Gurgaon Date: 5 June 2021

Particulars	Non lien	Under lien	Total
Bank deposits (due for maturity after twelve months from the reporting date) (Refer to Note 8)	2.11	51.32	53.43
Current investments (Refer to Note 6)	76,818.53	18,173.14	94,991.67
Cash and cash equivalents (Refer to note 12)	6,760.34	0 08	6,760.42
Bank balance other than cash & cash equivalents(Refer to Note 13)	5,269.75	96,263.89	101,533.64
Total	88,850.73	114,488.43	203,339.16

169

Annual Report 2020-21

IndiGo Fâ

Consolidoted Finonciol Stotements

InterGlobe Aviotion Limited ...................................................................................................................

Independent Auditor''s Report

To the Members of InterGlobe Aviation Limited

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the accompanying consolidated financial statements of InterGlobe Aviation Limited (hereinafter referred to as "the Holding Company") and its subsidiary (the Holding Company and its subsidiary together referred to as "the Group") comprising of the consolidated Balance sheet as at March 31 2021, the consolidated Statement of Profit and Loss, including other comprehensive income, the consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, as at March 31, 2021, their consolidated loss including other comprehensive loss, their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditorâs Responsibilities for the Audit of the Consolidated Financial Statementsâ section of our report. We are independent of the Group in accordance with the ''Code of Ethicsâ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Emphasis of Matter

We draw attention to Note 42 to the consolidated financial statements, which describes the possible effects of uncertainties relating to COVID-19 pandemic on the Group operations and results as assessed by the management. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the financial year ended March 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

Mar 31, 2018

1. Company Information / Overview

InterGlobe Aviation Limited (the âCompanyâ) is a public limited company domiciled in India. The Company was incorporated on 13 January 2004 as a private limited company in India. Subsequently, the Company changed its legal status from a private company to a public company on 11 August 2006. The Companyâs registered office is at Central Wing, Ground Floor, Thapar House, 124 Janpath, New Delhi - 110 001. The shares were listed on National Stock Exchange of India Limited (NSâ¬) and BSâ¬ Limited (BSâ¬) on 10 November 2015. The Company is in the low cost carrier (LCC) segment of the airline industry in India. The principal activities of the Company comprise of air transportation which includes passenger and cargo services and providing related allied services including in-flight catering services.

2.a Basis of preparation

(i) Statement of compliance

The standalone financial statements comply with Indian Accounting Standards (âInd ASâ) as prescribed under section 133 of the Companies Act, 2013 (the âActâ), read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, relevant provisions of the Act and other accounting principles generally accepted in India. The Company had adopted Ind AS with effect from 1 April 2016, with transition date of 1 April 2015, pursuant to notification issued by Ministry of Corporate Affairs dated 16 February 2015, notifying the Companies (Indian Accounting Standard) Rules, 2015.

The standalone financial statements were authorised for issue by the Board of Directors of the Company on 2 May 2018.

(ii) Basis of measurement

The standalone financial statements have been prepared on the historical cost basis except certain financial assets and liabilities that are measured at fair value or amortised cost.

(iii) Critical accounting estimates and judgements

In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Information about significant areas of estimation/uncertainty and judgements in applying accounting policies that have the most significant effect on the standalone financial statements are as follows:

Note 2.(b) (xiv) and 32 - measurement of defined benefit obligations: key actuarial assumptions.

Note 2.(b) (x) and (xi) - judgement required to ascertain lease classification and fair value of aircraft.

Note 2.(b) (viii) and (ix) - measurement of useful life and residual values of property, plant and equipment and useful life of intangile assets.

Note 2.(b) (viii) and (ix) - Determination of major engine and airframe overhauls and other heavy maintenance as separate components for owned aircraft and aircraft taken on finance lease (âLeased Aircraftâ), and their associated costs.

Note 2.(b) (xx) and 16. - estimation of provision of redelivery and overhaul cost.

Note 2.(b) (xv) and 30. - judgement is required to ascertain whether it is probable or not that an outflow of resources embodying economic benefits will be required to settle all disputes including taxation and legal claim.

Note 37 - judgement required to determine grant date fair value technique.

Note 2.(b) (iii), (v) and 28 - fair value measurement of financial instruments.

Note 2.(b) (xxii) - judgement required to determine probability of recognition of deferred tax assets and Minimum Alternative Tax (âMATâ) credit entitlement.

There are no assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year.

* On 14 February 2017, a wholly owned subsidiary, Agile Airport Services Private Limited (âAgileâ) was incorporated, having registered office in New Delhi, India, for the purpose of carrying out the work of ground handling and other allied services at the airports. The Company had invested in 10,000 shares (fully paid-up of Rs. 10 each) in Agile on 30 March 2017. 100 of such shares are held by a nominee of the Company. On 11 September 2017, the Company has further invested in Agile by subscribing on right basis, 100,000 equity shares of Rs. 10 each (fully paid-up) in cash at par to existing equity shareholders.

** The transfer of the investment is restricted to airline members flying in Thailand.

Information about the Companyâs exposure to credit and market risks, and fair value measurement, is included in Note 28.

Trade receivables includes receivables from related parties amounting Rs. 85.48 (previous year Rs. Nil). Refer to Note 34.

The carrying amount of trade receivables approximates their fair value, is included in Note 28.

The Companyâs exposure to credit and currency risks, and impairment allowances related to trade receivables is disclosed in Note 28.

d. Terms / rights attached to the equity shares

The Company has only one class of equity share having a par value of Rs. 10 per share. â¬ach holder of the equity share is entitled to one vote per share and is entitled to dividend, declared if any. The paid up equity shares of the Company rank pari-pasu in all respects, including dividend. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The interim dividend is declared by the Board of Directors. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

* During the current year ended 31 March 2018, pursuant to the Composite Scheme of Arrangement, InterGlobe Enterprises Limited was amalgamated with Acquire Services Private Limited with effect from 29 November 2017. Consequently, 153,649,581 equity shares of the Company held by InterGlobe Enterprises Limited were transferred to Acquire Services Private Limited. Subsequently, the name of Acquire Services Private Limited has been changed to InterGlobe Enterprises Private Limited on 18 December 2017.

h. Shares reserved for issuance under Stock Option Plans of the Company

For details of shares reserved for issue under the employee stock option scheme (ESOS) of the Company. (Refer to Note 37)

i. Other Notes

(i) During the current year ended 31 March 2018, the Company has completed the Institutional Placement Programme (âIPPâ) under Chapter VIII-A of the Securities and Exchange Board of India (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 certain selling shareholders.

(ii) The proceeds of fresh issue of equity shares from IPP amounts to Rs. 24,796.69 (net of Companyâs share of fresh issue related expenses, which has been adjusted against Securities Premium Reserve). As per the Prospectus, the IPP proceeds can be utilised 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 31 March 2018, 71% of IPP proceeds are unutilised and have been temporarily invested/ deposited in cash and cash equivalents including fixed deposits and/or debt mutual funds.

* The fully paid up convertible preference shares of Rs. 1,000 each were issued at a premium ranging from Rs. 5,650 to Rs. 6,642 per share with 0.00% coupon rate and are convertible into equity shares of the Company in the ratio of 1:1 not earlier than (a) the initial public offer of the Company; or (b) a strategic sale of the Company. In the event of liquidation of the Company before conversion of convertible preference shares, the preference shareholders had priority over the equity shares in the repayment of the capital. The holder of preference shares were entitled to one vote per share at any meeting of the Company on any resolutions of the Company directly affecting their rights.

* â¬xpenses incurred by the Company during the current year ended 31 March 2018, aggregating to Rs. 801.74 (including Goods and Services Tax (âGSTâ)) in connection with the IPP have been partly adjusted towards the securities premium reserve and partly recovered from the selling shareholders. The IPP expenses amounting to Rs. 801.74 (including GST), excluding certain expenses which are directly attributable to the Company amounting to Rs. 95.53 (including GST), have been allocated between the Company and each of the selling shareholders in proportion to the equity shares allotted under the IPP by the Company and offer for sale by the existing selling shareholders.

* On 29 April 2016, the Board of Directors had recommended a final dividend of Rs. 15 per share (face value of Rs. 10 per share) for the financial year ended 31 March 2016 and the same was approved by the shareholders at the Annual General Meeting held on 21 September 2016.

**On 9 May 2017, the Board of Directors has recommended a final dividend of Rs. 34 per share (face value of Rs. 10 per share) for the financial year ended 31 March 2017 and the same was approved by the shareholders at the Annual General Meeting held on 28 August 2017.

***On 2 May 2018, the Board of Directors has recommended a final dividend of Rs. 6 per share (face value of Rs. 10 per share) for the financial year ended 31 March 2018, subject to approval of the shareholders in the upcoming Annual General Meeting.

Current maturities of foreign currency term loan and finance lease obligations amounting to Rs. Nil and Rs. 2,113.51 (previous year Rs. Nil and Rs. 2,004.66), respectively have been disclosed under âOther financial liabilitiesâ (Refer to Note 15.b).

Information about the Companyâs exposure to interest rate, foreign currency and liquidity risks is included in Note 28.

* Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 137 months.

# The above mentioned loan is repayable in twenty unequal instalments ranging between USD 4 million to USD 6 million between the period September 2022 - December 2023.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (âBFEâ) installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilising the predelivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

There are no defaults as on reporting date in repayment of principal and interest.

* Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 137 months.

# The above mentioned loan is repayable in twenty unequal instalments ranging between USD 4 million to USD 6 million between the period September 2022 - December 2023.

There are no defaults as on reporting date in repayment of principal and interest.

Secured - Other loans Finance lease obligations

Certain aircraft have been obtained on finance lease, the obligation of which will be contractually settled in USD. The legal title to these items vests with the lessors. The lease term for aircraft is 12 years (previous year 12 years) and year of maturity ranges between March 2025 to September 2026 (previous year March 2025 to September 2026) with quarterly payments beginning from the quarter subsequent to the commencement of the lease. The total future minimum lease payments as at the reporting date, element of interest included in such payments and present value of these minimum lease payments are as follows:

The rate of interest for aircraft acquired on finance lease is inclusive of transaction costs and margin over 3 months USD LIBOR (previous year margin over 3 months USD LIBOR). Interest is paid with margin over 3 months USD LIBOR, margin is less than 250 basis points (previous year margin is less than 250 basis points).

Finance lease obligation amounting to Rs. 19,445.12 (previous year Rs. 21,357.74) are secured against the respective aircraft. There are no defaults as on reporting date in repayment of principal lease and interest payments.

The future minimum lease payments and their present value as at 31 March 2018 is as follows:

Aircraft maintenance costs also includes provision for overhaul expenses for certain aircraft held under operating leases. These are recorded at discounted value, where effect of the time value of money is material.

The Company has in its fleet aircraft on operating lease. As contractually agreed under the lease contracts, the aircraft have to be redelivered to the lessors at the end of the lease term under stipulated contractual return conditions. At inception of the lease, the redelivery obligations are determined by management based on historical trends and data, and are capitalised at the present value of expected outflow, where effect of the time value of money is material.

Expected timing of resulting outflow of economic benefit is financial year 2019-2024 (previous year 2018-2023) and the Company calculates the provision using Discounted Cash Flow (DCF) method.

Sensitivity analysis for key assumptions used:

If expected cost differ by 10% from managementâs estimate, while holding all other assumptions constant, the provision for redelivery and overhaul cost may increase/ decrease by Rs. 136.69 (previous year by Rs. 63.31).

If expected discount rate differ by 1%, while holding all other assumptions constant, the provision for redelivery and overhaul cost may increase/ decrease by Rs. 14.88 (previous year by Rs. 3.75).

The Company has recognised MAT credit entitlement in the current and previous years. The utilisation of MAT credit entitlement (unused tax credits) is depended on future taxable profits. The MAT credit entitlement is recognised only to the extent that it is probable that future taxable profits will be available against which such MAT credit entitlement can be utilised. However, if there is a change in future taxable profits, which will also make the Company to foresee recognition of such unrecognised MAT credit entitlement amounting to Rs. 1,017.21, the same may be recognised.

* Schedule III to the Companies Act, 2013 requires disclosure of exchange differences arising from foreign currency term loan to the extent that they are regarded as an adjustment to interest cost. The amount of Rs. 26.41 (previous year Rs. Nil) representing this adjustment has been disclosed in the above note. The remaining exchange loss of Rs. 516.17 (previous year Rs. Nil) has been disclosed under âOther expensesâ.

Operating leases for aircraft and engines

The Company has taken aircraft on operating lease from lessors. Under the aircraft operating lease arrangement, the Company accrue monthly rental in the form of base and supplementary rentals. Base rental payments are either based on floating interest rates or on fixed rentals. Supplementary rentals are based on aircraft utilisation and are calculated with reference to the number of hours or cycles operated during each month. Both base and supplementary rentals have been charged to Standalone Statement of Profit and Loss. The Lease has varying terms, escalation clauses and renewal rights. On renewal the terms of leases are renegotiated.

Aircraft and engine rentals, recognised in Standalone Statement of Profit and Loss amounting to Rs. 36,101.99 (previous year Rs. 31,253.73) are also net of cash and non-cash incentives and certain other credits exclusive of claims, amounting to Rs. 6,442.62 (previous year Rs. 5,332.06).

Operating leases for assets other than aircraft and engines

The Company has taken its office premises, various commercial premises and residential premises for its employees under cancellable operating lease arrangements.

The lease payments charged during the year to the Standalone Statement of Profit and Loss amounting to Rs. 1,009.64 (previous year Rs. 897.02.). The lease has varying terms, escalation clauses and renewal rights. On renewal the terms of leases are renegotiated.

3. Fair value measurement and financial instruments

a. Financial instruments - by category and fair values hierarchy

The following table shows the carrying amounts and fair value of financial assets and financial liabilities, including their levels in the fair value hierarchy.

# The Companyâs borrowings have been contracted at floating rates of interest, which resets at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.

* The carrying amounts of trade receivables, trade payables, cash and cash equivalents, bank balances other than cash and cash equivalents, aircraft maintenance-current, unclaimed dividend and other current financial assets, approximates the fair values, due to their short-term nature. The other non-current financial assets represents bank deposits (due for maturity after twelve months from the reporting date) and interest accrued but not due on bank deposits, the carrying value of which approximates the fair values as on the reporting date.

** Non-current investments excludes investment in subsidiary which is carried at cost.

The fair values of supplementary rentals, aircraft maintenance-non-current and other liabilities are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

There has been no transfers between Level 1, Level 2 and Level 3 for the year ended 31 March 2018 and 31 March 2017.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of NAV for unquoted mutual funds.

- the fair value of the remaining financial instruments is determined using discounted cash flow method.

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Senior Management. Discussions on valuation and results are held between the Senior Management and valuation team atleast once every quarter in line with the Companyâs quarterly reporting periods.

b. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ;

- Market Risk - Foreign currency ; and

- Market Risk - Interest rate

Risk management framework

The Board of Directors 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 policies and ensuring its effectiveness.

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 Risk management committee oversees how management monitors compliance with Companyâs risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by the Company.

(i) Credit risk

The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the Standalone Balance Sheet

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. The loans primarily represents security deposits given to aircraft manufacturer. Such deposit will be returned to the Company on deliveries of the aircraft by the aircraft manufacturer. The credit risk associated with such security deposits is relatively low.

Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India and certain parts of Middle East and South Asia. Trade receivables also includes receivables from credit card companies which are realisable within a period 2 to 21 working days. The Company monitors the economic environment in which it operates. The Company manages its credit risk through establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.

The Company sells majority of its air transportation services against advances made by agents (customers) and through online channels.

The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Companyâs historical experience for customers. Based on the business environment in which the Company operates, management considers that the trade receivables (other than receivables from government departments) are in default (credit impaired) if the payments are more than 90 days past due however the Company based upon past trends determine an impairment allowance for loss on receivables outstanding for more than 180 days past due.

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers. Trade receivables as at year end primarily includes Rs. 1,256.16 (previous year Rs. 730.62) relating to revenue generated from passenger services and Rs. 1,078.44 (previous year Rs. 920.36) relating to revenue generated from cargo services.

# The Company believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour.

# The Company based upon past trends determine an impairment allowance for loss on receivables outstanding for more than 180 days past due.

# Receivables more than 180 days past due primarily comprises receivables from government departments, which are fully realisable on historical payment behaviour and hence no loss allowance has been recognised, and from agents for which the impairment allowance has already been recognised on specific credit risk factor.

The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2018 and 31 March 2017 is insignificant and hence the same has not been recognised. The reversal for lifetime expected credit loss on customer balances for the current year is Rs. Nil (previous year Rs. Nil).

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Companyâs approach to manage liquidity is to have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Companyâs reputation.

The Company believes that its liquidity position, comprising of total cash (including bank deposits under lien and excluding interest accrued but not due) and short-term investments, of Rs. 137,082.56 as at 31 March 2018 (previous year Rs. 93,431.85), anticipated future internally generated funds from operations, and its fully available, revolving undrawn credit facility of Rs. 37,426.22 (previous year Rs. 46,271.25) will enable it to meet its future known obligations in the ordinary course of business. However, if a liquidity needs were to arise, the Company believes it has access to financing arrangements, value of unencumbered assets, which should enable it to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Companyâs liquidity management process as monitored by management, includes the following:

- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Companyâs liquidity position on the basis of expected cash flows.

- Maintaining diversified credit lines.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The contractual cash flow amounts are gross and undiscounted, and includes interest accrued but not due on borrowings.

* Against payments for supplementary rentals amounting to Rs. 41,531.90 (previous year Rs. 31,682.76), the Company has issued letter of credit/ standby letter of credit which are backed by deposits with banks.

(iii) Market risk

A. Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs borrowings with floating interest rates.

Exposure to interest rate risk

The Companyâs interest rate risk arises majorly from the foreign currency term loan and finance lease obligations carrying floating rate of interest. These obligations expose the Company to cash flow interest rate risk. The exposure of the Companyâs borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:

Interest rate sensitivity analysis

A reasonably possible change of 0.50 % in interest rates at the reporting date would have affected the profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

B. Currency risk

Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Companyâs operating, investing and financing activities.

Exposure to foreign currency risk

The summary of quantitative data about the Companyâs exposure to currency risk, as expressed in Indian Rupees, as at 31 March 2018 and 31 March 2017 are as below:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies as at 31 March 2018 and 31 March 2017 would have affected the measurement of financial instruments denominated in foreign currency and affected Standalone Statement of Profit and Loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

USD: United States Dollar, GBP: Great British Pound, AED: Arab Emirates Dirham, NPR: Nepalese Rupee, OMR: Omani Rial, THB: Thai Baht, CHF: Swiss Franc, SGD: Singapore Dollar, EUR: Euro, QAR: Qatari Riyal, BDT: Bangladeshi Taka, LKR: Sri Lankan Rupee.

*The sensitivity analysis to foreign currency risk excludes an exposure to foreign exchange fluctuations on long term foreign currency loans that have been capitalised in the cost of the related property plant and equipment. For the year ended 31 March 2018 and 31 March 2017, 1% depreciation / appreciation in Indian Rupees against USD, affects the adjustment to leased asset (aircraft taken on finance lease) by Rs. 194.45 (previous year: Rs. 213.58). It is expected to impact the Standalone Statement of Profit and Loss over the remaining life of the property, plant and equipment as an adjustment to depreciation charge.

4. Capital Management

The primary objective of the management of the Companyâs capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows. Management also monitors the return on equity.

The Board of directors regularly review the Companyâs capital structure in light of the economic conditions, business strategies and future commitments.

For the purpose of the Companyâs capital management, capital includes issued share capital, securities premium reserves and all other equity reserves. Debt includes, foreign currency term loan and finance lease obligations.

During the current year ended 31 March 2018, the Company has raised equity share capital primarily through IPP. Refer to Note 13.i.(i).

5. Contingent liabilities (to the extent not provided for)

(i) Income tax

The income tax authority has assessed and revised the taxable income for various assessment years on account of disallowance of certain expenses, provisions, depreciation and/or adjustments, and in respect of the tax treatment of certain incentives received from the manufacturer with the acquisition of aircraft and engines. The Company has received favourable order from the final fact finding authority, Income Tax Appellate Tribunal (âITATâ) for Assessment Year 200708 against certain such disallowance and/or adjustments made by tax authority. However, the tax authority has filed an appeal before the Honâble High Court against the order of the ITAT. The Company believes, based on legal advice from counsels, that the view taken by the ITAT is sustainable in higher court and accordingly no provision is required to be recorded in the books of account.

The tax exposure (excluding interest and penalty) estimated by the Company pertaining to these matters for various assessment years, which are under dispute, amounts to Rs. 6,346.42 (previous year Rs. 4,177.82) as at 31 March 2018. This exposure is net of Rs. 1,017.21 (previous year Rs. 1,017.21), which represents minimum alternate tax recoverable written off in the earlier years.

(ii) The Company is in legal proceedings for various disputed legal matters related to Customs, Octroi, Service Tax, Integrated Goods and Services Tax (âIGSTâ) and Value Added Tax (âVATâ). The amounts involved in these proceedings, not acknowledged as debt, are:

(1) Service Tax- Rs. 145.68 (previous year Rs. 145.68),

(2) Value Added Tax - Rs. 13.13 (previous year Rs. 7.85),

(3) Octroi - Rs. 74.39 (previous year Rs. 74.45) and

(4) IGST on re-imports* - Rs. 1,829.50 (previous year Rs. Nil).

The Company believes, based on advice from counsels/experts, that the views taken by authorities are not sustainable and accordingly no provision is required to be recorded in the books of account.

*During the year ended 31 March 2018, the Company has paid Integrated Goods and Services Tax (âIGSTâ) amounting to Rs. 1,829.50 under protest, on re-import of repaired aircraft, aircraft engines and other certain aircraft parts, to custom authorities. The Company, based on legal advice from counsels, believes that no IGST is payable on such re-import of repaired aircraft and aircraft engines and accordingly, such amount has been shown as recoverable.

(ii) The Competition Commission of India (âCCIâ) passed an order dated 17 November, 2015 against, inter alia, the Company, imposing a penalty of Rs. 637.40 million on the Company on account of cartelization for determination of fuel surcharge included a component of Cargo services. The Company has filed an appeal against this order with Competition Appellate Tribunal and it has referred the matter back to the CCI for fresh adjudication. CCI passed a final order dated 07 March 2018 reducing the penalty amount to Rs. 94.50 million. The Company is in process of filing an appeal against the order passed by CCI before National Company Law Appellate Tribunal.

The Company based on legal advice from counsel, believes that the views taken by authorities are not sustainable and accordingly no provision is required to be recorded in the books of account.

(iv) Legal cases

(v) Other legal proceedings for which the Company is contingently liable

Notes:

6. Employee benefits

The Company contributes to the following post-employment benefit plans.

Defined contribution plan

The Company pays provident fund contributions to the appropriate government authorities at rate specified as per regulations.

An amount of Rs. 439.33 (previous year Rs. 362.55) has been recognised as an expense in respect of the Companyâs contribution to Provident Fund deposited with the relevant authorities and has been shown under Employee benefits expense in the Standalone Statement of Profit and Loss.

Defined benefit plan

The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits:

a. Passenger services

(i) Changes in present value of defined benefit obligation:

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in an increase in plan liabilities.

(iv) Defined benefit liability and employer contribution

The expected maturity analysis of undiscounted defined benefit liability is as follows:

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increase in life expectancy will result in an increase in plan liabilities.

(iv) Defined benefit liability and employer contribution

The expected maturity analysis of undiscounted defined benefit liability is as follows:

7. Segment reporting

Based on the âmanagement approachâ as defined in Ind AS 108 - Operating Segments, with effect from 1 April 2017, the Chief Operating Decision Maker (âCODMâ) has realigned the evaluation of the Companyâs performance at an overall company level as one segment i.e. âair transportation servicesâ. Till the previous year, CODM evaluated the Company performance based on geographical segments. However, after considering the nature of operations, the risks and rewards and the nature of the regulatory environment across the Companyâs network and the interchangeability of use of assets across the network routes of the Company, the CODM has started evaluating the Companyâs performance based on air transportation services.

Revenue from air transportation services is directly attributed to domestic and international operations or are attributed on a reasonable basis. Other income is not allocated as the underlying assets/ liabilities/services are used interchangeably. Non-current assets other than financial instruments and income tax assets (net) primarily comprises of aircraft, spare engines, leasehold improvements-aircraft and rotables and non-aircraft equipment, which cannot be bifurcated between domestic and international locations, as such assets are used interchangeably. Accordingly, the same has not been bifurcated between domestic and international locations.

No single external customer amounts to 10% or more of the Companyâs revenue. Accordingly, information about major customer is not provided.

8. Related party disclosures

a. List of related parties and nature of relationship where control exists:

(i) Subsidiaries

Agile Airport Services Private Limited (Incorporated on 14 February 2017)

b. List of related parties and nature of relationship with whom transactions have taken place during the current/ previous year

(i) Entity/ person with direct or indirect significant influence over the Company InterGlobe Enterprises Limited (till 28 November 2017)

InterGlobe Enterprises Private Limited - Formerly known as Acquire Services Private Limited (with effect from 29 November 2017) (Refer to Note 13(g))

Ms. Shobha Gangwal - Wife of Mr. Rakesh Gangwal

(ii) Subsidiaries

Agile Airport Services Private Limited (Incorporated on 14 February 2017)

(iii) Key managerial personnel of the Company and their close family members

Mr. Aditya Ghosh - President and Whole Time Director (Resigned as Whole Time Director with effect from 26 April 2018) (Refer to Note 39)

Mr. Rahul Bhatia - Director (Appointed as Interim Chief Executive Officer with effect from 27 April 2018) (Refer to Note 39) Ms. Rohini Bhatia - Director Mr. Rakesh Gangwal - Director

Mr. Devadas Mallya Mangalore - Independent Director Dr. Anupam Khanna - Independent Director Dr. Asha Mukherjee - Sister of Mr. Rakesh Gangwal Mr. Kapil Bhatia - Father of Mr. Rahul Bhatia Mr. Alok Mehta - Brother of Ms. Rohini Bhatia

Mr. Rohit Philip - Chief Financial Officer (with effect from 18 July 2016)

Mr. Pankaj Madan - Chief Financial Officer (till 17 July 2016)

Mr. Sanjay Gupta - Company Secretary and Chief Compliance Officer (with effect from 18 August 2016)

Mr. Suresh Kumar Bhutani - Company Secretary (till 15 July 2016)

(iv) Other related parties - Entities which are joint ventures or subsidiaries or where control/ significant influence exists of parties as given in (a) or (b)(i), (b)(ii) and (b)(iii) above

InterGlobe Air Transport Limited InterGlobe Foundation InterGlobe Technologies Private Limited InterGlobe Hotels Private Limited CAE Simulation Training Private Limited

The Chinkerpoo Family Trust (Trustee: Ms. Shobha Gangwal & J.P.Morgan Trust Company of Delaware)

Caddie Hotels Private Limited

IGâ¬ (Mauritius) Private Limited

Pegasus Buildtech Private Limited

Pegasus Utility Maintenance & Services Private Limited

InterGlobe Real Estate Ventures Private Limited

InterGlobe Business Solutions Private Limited

InterGlobe Air Transport Limited W.L.L.

e. Terms and Conditions

All transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions and within the ordinary course of business. Outstanding balances at the year end are unsecured and settlement occurs in cash. Transactions relating to dividend, subscriptions for new equity shares are on the same terms and conditions that are offered to other shareholders.

* Includes 826,038 (previous year 706,140) of stock options granted to employees under the employee stock option schemes are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive.

Nil (previous year 307,411) of the stock options granted to employees under the existing employee share option schemes have not been included in the calculation of diluted earnings per share because they are anti-dilutive for the current and previous year presented.

9. Corporate social responsibility

Under Section 135 of the Companies Act, 2013, the Company is required to spend, in every financial year, atleast 2% of the average net profits of the Company made during the three immediately preceding financial years on Corporate Social Responsibility (CSR), pursuant to its policy in this regard.

10. Share-based payment arrangements a. Description of share-based payment arrangements

(i) InterGlobe Aviation Limited Tenured Employees Stock Option Scheme - 2015 (ESOS 2015 - I)

On 23 June 2015, the Board of Directors approved the InterGlobe Aviation Limited Tenured Employees Stock Option Scheme - 2015 (the âESOS 2015 - Iâ), which was subsequently approved in the Extraordinary General Meeting held on 25 June 2015. ESOS 2015 - I comprises 1,111,819 options, granted to eligible employees determined by Compensation Committee, which are convertible into equivalent number of equity shares of Rs. 10 each as per the terms of the scheme. Upon vesting, the employees can acquire one common equity share of the Company for every option granted. The options were granted on 25 June 2015.

Vesting of the Options granted under the ESOS 2015 - I shall be one year from the Grant Date or completion of the listing of the shares of the Company on a recognized stock exchange in India in an initial public offering, whichever is later. In case the listing is not completed within two years from the date of Grant, the Options shall automatically lapse on the expiry of such two year period.

During the previous year ended 31 March 2017, all the options granted under ESOS 2015 - I were exercised and consequently, equity share capital has been increased by Rs. 11.11.

(ii) InterGlobe Aviation Limited Employees Stock Option Scheme - 2015 (ESOS 2015 - II)

On 23 June 2015, the Board of Directors approved the InterGlobe Aviation Limited Employees Stock Option Scheme -2015 (the âESOS 2015 - IIâ), which was subsequently approved in the Extraordinary General Meeting held on 25 June 2015. ESOS 2015 - II, comprises 3,107,674 options, which are granted to eligible employees of the Company determined by Compensation Committee, which are convertible into equivalent number of equity shares of Rs. 10 each as per the terms of the scheme. Upon vesting, the employees can acquire one common equity share of the Company for every option. The options were granted on the dates as mentioned in table below.

The risk-free interest rates are determined based on current yield to maturity of Government Bonds with 10 years residual maturity. Expected volatility calculation is based on historical daily closing stock prices of competitors / Company using standard deviation of daily change in stock price. The minimum life of stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which the options cannot be exercised. The expected life has been considered based on average sum of maximum life and minimum life and may not necessarily indicative of exercise patterns that may occur. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date. For the measurement of grant date fair value certain market conditions were considered in the method of valuation.

11. Disclosure on specified bank notes

During the previous year ended 31 March 2017, the Company had Specified Bank Notes (SBN) or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 30 March 2017 on the details of SBN held and transacted during the period from 8 November 2016 to 30 December 2016, the details of SBNs and other denomination notes as per the notification is given below:

* For the purposes of this disclosure, the term âSpecified Bank Notesâ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8 November 2016.

** excluding foreign currency notes.

12. Subsequent to the year ended 31 March 2018, the Board has appointed Mr. Rahul Bhatia as the Interim Chief Executive Officer of the Company. Mr. Rahul Bhatia will continue as Director of the Company. Further, the Board has accepted resignation of Mr. Aditya Ghosh, President and Whole Time Director of the Company, from the post of President of the Company effective 31 July 2018 and as a Director of the Company with effect from 26 April 2018. Currently, the Company is in the process of estimating its impact which will be recognised in the subsequent period.

13 . The public shareholding as at 31 March 2018 is 25.07% of the total paid up equity share capital of the Company. The Company has complied with the minimum public shareholding requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulations) Rules, 1957 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 Securities Contracts (Regulations) Rules, 1957.

14 . The Company has established a comprehensive system of maintenance of information and documents that are required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its international transactions with the associated enterprises are at armâs length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

15. Previous yearâs figures have been regrouped / reclassed, where necessary, to confirm to current yearâs classification. This does not impact recognition and measurement principles followed for preparation of standalone financial statements.

Mar 31, 2017

1. Company Information / Overview

InterGlobe Aviation Limited (the âCompanyâ) is a public limited company domiciled in India. The Company was incorporated on 13 January 2004 as a private limited company in India. Subsequently, the Company changed its legal status from a private company to a public company on 11 August 2006. The Companyâs registered office is at Central Wing, Ground Floor, Thapar House, 124 Janpath, New Delhi - 110 001. The shares were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on 10 November 2015. The Company is in the low cost carrier (LCC) segment of the airline industry in India. The principal activities of the Company comprise of air transportation which includes passenger and cargo services and providing related allied services including in-flight catering services.

2.a Basis of preparation

(i) Statement of compliance

The Company has adopted Indian Accounting Standards (Ind AS) with effect from 1 April 2016, with transition date of 1 April 2015, pursuant to notification issued by Ministry of Corporate Affairs dated 16 February 2015, notifying the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the financial statements comply with Ind AS as prescribed under section 133 of the Companies Act, 2013 (the âActâ), read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, relevant provisions of the Act and other accounting principles generally accepted in India.

The financial statements upto and for the year ended 31 March 2016 were prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended), as notified under section 133 of the Act (âPrevious Indian GAAPâ) and other relevant provision of the Act.

The financial statements for the year ended 31 March 2017 are the first financial statements of the Company prepared under Ind AS. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is included in Note 28.

The financial statements were authorised for issue by the Board of Directors of the Company on 9 May 2017.

(ii) Basis of measurement

The financial statements have been prepared on the historical cost basis except certain financial assets and liabilities that are measured at fair value or amortised cost.

(iii) Critical accounting estimates and judgements

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Information about significant areas of estimation/uncertainty and judgements in applying accounting policies that have the most significant effect on the financial statements are as follows:

Note 2.(b) (xiv) and 33 - measurement of defined benefit obligations: key actuarial assumptions.

Note 2.(b) (x) and (xi) - judgement required to ascertain lease classification and fair value of aircraft.

Note 2.(b) (viii) - measurement of useful life and residual values of property, plant and equipment.

Note 2.(b) (xx) and 16 - estimation of costs of redelivery and overhaul.

Note 2.(b) (xv) and 31 - judgement is required to ascertain whether it is probable or not that an outflow of resources embodying economic benefits will be required to settle the taxation disputes and legal claim.

Note 38 - judgement required to determine grant date fair value technique.

Note 2.(b) (iii) (v) and 29 - fair value measurement of financial instruments.

Note 2.(b) (xxii) - judgement required to determine probability of recognition of deferred tax assets and MAT credit entitlement.

There are no assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year.

3. Property, plont ond equipment

* As per Ind AS 101, a first-time adopter of Ind AS may continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the year ending immediately before the beginning of the first Ind AS financial reporting year as per the Previous Indian GAAP (i.e. year ended 31 March 2016 or before). The Company has opted for the optional exemption and accordingly, the Company had adjusted foreign currency gain amounting to Rs. 369.17 (31 March 2016: foreign currency loss amounting to Rs. 2,311.29) during the year ended 31 March 2017, arising on re-statement of long-term foreign currency monetary loans used for acquisition of a depreciable capital asset. Refer to Note 28.

**The Company has utilized its Initial Public Offer proceeds towards retirement of certain outstanding finance lease liabilities in foreign currency and consequent acquisition of aircraft. The adjustment in the Gross value of owned aircraft of Rs. 5,718.07 (31 March 2016: Rs. 8,671.11) represents the cost of the acquired finance leased aircraft as reduced by the outstanding deferred incentives amounting to Rs. 894.75 (31 March 2016: Rs. 243.76) in respect of these aircraft, as on the date of the acquisition. The adjustment in the Accumulated Depreciation of owned aircraft of Rs. 524.29 (31 March 2016: Rs. 2,107.26) represents the accumulated depreciation of the acquired finance leased aircraft as increased by the outstanding provision for supplemental rentals amounting to Rs. Nil (31 March 2016: Rs. 987.01) in respect of these aircraft, as on the date of the acquisition.

Consequently, the adjustment in the Gross value of finance leased aircraft of Rs. 6,612.82 (31 March 2016: Rs. 8,914.87) represents the cost of the transferred finance leased aircraft to owned aircraft, as on the date of the acquisition. Moreover, the adjustment in the Accumulated Depreciation of finance leased aircraft of Rs. 524.29 (31 March 2016: Rs. 1,120.25) represents the accumulated depreciation of the transferred finance leased aircraft to owned aircraft as on the date of the acquisition.

*** The Company, in accordance with Ind AS 16 - Property, Plant and Equipment, has identified certain spare parts and stand-by equipment, and reclassified/ capitalised them as rotables and non-aircraft equipment under property, plant and equipment. The same were classified as inventories under Previous Indian GAAP. These rotables and non-aircraft equipment have been depreciated over the remaining useful lives of the asset.

# During the current year ended 31 March 2017, the Company has sold and leased back on operating lease, certain owned aircraft. Net gain amounting to Rs. 26.02 on account of such sale and lease back transaction has been recognised in the Statement of Profit and Loss under other income as the transaction has been established at fair value (Refer to Note 21).

For terms of assets acquired under finance lease, Refer to Note 15(a).

There are no quoted investments during the current and previous years.

** The transfer of the investment is restricted to airline members flying in Thailand.

Information about the Companyâs exposure to credit and market risks, and fair value measurement, is included in Note 29.

a. Terms / rights attached to each classes of shares

(i) Equity shares

The Company has only one class of equity share. The par value of the share issued initially till 24 June 2015 was Rs. 1,000 per share. With the approval of the members at the Extraordinary General Meeting (âEGMâ) of the Company held on 25 June 2015 the par value of the share was changed to Rs. 10 per share (Refer to Note 13 j.). Each holder of the equity share is entitled to one vote per share and is entitled to dividend, declared if any. The paid up equity shares of the Company rank pari-pasu in all respects, including dividend. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The interim dividend is declared by the Board of Directors. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii)Convertible preference shares

The fully paid up convertible preference shares of Rs.1,000 each were issued at a premium ranging from Rs. 5,650 to Rs. 6,642 per share with 0.00% coupon rate and are convertible into equity shares of the Company in the ratio of 1:1 not earlier than (a) the initial public offer of the Company; or (b) a strategic sale of the Company. In the event of liquidation of the Company before conversion of preference shares, the preference shareholders had priority over the equity shares in the repayment of the capital. The holder of preference shares were entitled to one vote per share at any meeting of the Company on any resolutions of the Company directly affecting their rights.

During the previous year ended 31 March 2016, 36,716 fully paid up 0.00% convertible preference shares were converted into equity shares of the Company in the prescribed ratio of 1:1, vide resolution passed by the Board at its meeting held on 23 June 2015.

a. Shares reserved for issuance under Stock Option Plans of the Company

For details of shares reserved for issue under the employee stock option scheme (ESOS) of the Company. (Refer to Note 13 j.(iv), (v) and Note 38)

b. Other Notes

(i) The Shareholdersâ at the Extraordinary General Meeting (âEGMâ) of the Company held on 25 June 2015, approved the reclassification and sub-division of the authorized share capital of the Company aggregating to Rs. 2,200.00, comprising of 500,000 equity shares of Rs. 1,000 each aggregating to Rs. 500.00; 1,600,000 0.00% non-cumulative redeemable preference shares of Rs. 1,000 each aggregating Rs. 1,600.00 and 100,000 0.00% convertible preference shares of Rs. 1,000 each aggregating Rs. 100.00 to 220,000,000 equity shares of Rs. 10 each aggregating to Rs. 2,200.00.

(ii) The Shareholdersâ at the EGM of the Company held on 25 June 2015, approved increase in authorized share capital of the Company from Rs. 2,200.00 comprising of220,000,000 equity shares of Rs. 10 each to Rs. 7,500.00 comprising of 750,000,000 equity shares of Rs. 10 each.

(iii) The Shareholdersâ at the EGM of the Company held on 25 June 2015, approved capitalization of sum of Rs. 3,093.44, out of the balance in the Companyâs 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 9 fully paid equity shares of Rs. 10 each for every equity share of Rs. 10 held as on the record date which is 25 June 2015.

(iv) The Shareholdersâ at the EGM of the Company held on 25 June 2015, approved adoption and implementation of âInterGlobe Aviation Limited-Tenured Employee Stock Option Scheme 2015 (ESOS 2015-I)â comprising 1,111,819 stock options, convertible into equivalent number of equity shares of Rs. 10 each as per the terms of the ESOS 2015-I. All options under ESOS 2015-I have been granted on 25 June 2015. During the year ended 31 March 2017, 1,111,819 options vested on 25 June 2016 and were subsequently exercised by the employees. Further, 1,111,819 equity shares of Rs. 10 each were allotted to the employees on exercise of option. Refer to Note 38.

(v) Further, the Shareholdersâ at the EGM of the Company held on 25 June 2015, approved adoption and implementation of âInterGlobe Aviation Limited- Employee Stock Option Scheme 2015 (ESOS 2015-II)â comprising 3,107,674 stock options, convertible into equivalent number of equity shares of Rs. 10 each as per the terms of the ESOS 2015-II scheme. Out of the above, 2,267,143 stock options were granted on 30 October 2015 and 353,299 stock options were granted on 16 September 2016. Refer to Note 38.

(vi) During the previous year ended 31 March 2016, 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 fresh issue of 16,640,544 equity shares, 104,790 equity shares were issued to eligible employees at a discount of 10% of 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) via Symbol INDIGO and BSE Limited (BSE) via Scrip Code 539448 on 10 November 2015.

* Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 137 months.

# The above mentioned loan is repayable in twenty unequal instalments ranging between USD 4 million to USD 6 million between the period September 2022 - December 2023.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (âBFEâ) installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilizing the pre-delivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

* Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 137 months.

# The above mentioned loan is repayable in twenty unequal instalments ranging between USD 4 million to USD 6 million between the period September 2022 - December 2023.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (âBFEâ) installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilizing the pre-delivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

* Markup is 275 basis points over 6 month USD LIBOR. The period of maturity from the date of origination is 137 months.

# The above mentioned loan is repayable in twenty unequal instalments ranging between USD 4 million to USD 6 million between the period September 2022 - December 2023.

Foreign currency term loan is secured by way of assignment of rights, title, benefits and interests of the Company in respect to Buyer-furnished equipment (âBFEâ) installed or to be installed in the aircraft under BFE Security and Assignment Agreement. Moreover, the lender has a contractual right to buy certain aircraft to be delivered to the Company partially by utilizing the pre-delivery payments under the agreement signed by Airbus S.A.S, lender and the Company.

There are no defaults as on reporting date in repayment of principal and interest.

Secured - Other loans Finance lease obligations

Certain aircraft have been obtained on finance lease, the obligation of which will be contractually settled in USD. The legal title to these items vests with the lessors. The lease term for aircraft is 12 years (31 March 16: 12 years; 1 April 2015: ranges between 10 - 12 years) and year of maturity ranges between March 2025 to September 2026 (31 March 16: January 2025 to September 2026; 1 April 2015: August 2019 to September 2026) with monthly/ quarterly payments beginning from the month/ quarter subsequent to the commencement of the lease. The total future minimum lease payments as at the reporting date, element of interest included in such payments and present value of these minimum lease payments are as follows:

The rate of interest for aircraft acquired on finance lease is inclusive of transaction costs and margin over 3/6 months USD LIBOR.

Interest is paid with margin over 3 months USD LIBOR, margin is less than 250 basis points (31 March 16 : Margin over 3 months USD LIBOR, margin is less than 450 basis points; 1 April 2015: Margin over 3/6 months USD LIBOR, margin is less than 450 basis points).

Finance lease obligation amounting to Rs. 21,357.74 (31 March 2016: Rs. 28,410.83, 1 April 2015: Rs. 36,514.87) are secured against the respective aircraft.

There are no defaults as on reporting date in repayment of principal lease and interest payments.

* 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 in its meeting held on 23 June 2015. Refer to Note 13 for terms / rights attached to preference shares. Refer to Note 14.a.

4 Provisions

Provision for redelivery and overhaul cost

The schedule of provision as required to be disclosed in compliance with Ind AS 37 on âProvisions, Contingent Liabilities and Contingent Assetsâ is as under:

The Company has in its fleet aircraft on operating lease. As contractually agreed under the lease contracts, the aircraft have to be redelivered to the lessors at the end of the lease term under stipulated contractual return conditions. The redelivery costs are estimated by management based on historical trends and data, and are recorded in the financial statements in proportion to the expired lease period. These are recorded at the discounted value, where effect of the time value of money is material.

Sensitivity analysis for key assumptions used:

If expected discount rate differ by 1%, while holding all other assumptions constant, the provision for redelivery and overhaul cost may increase/ decrease by Rs. 3.75 (31 March 2016: Rs. 3.98).

As at 1 April 2015, the Company has recognised net deferred tax asset. The utilisation of the deferred tax asset is dependent on future taxable profits and reversal of existing taxable temporary differences. The deferred tax asset recognised on 1 April 2015 was partially utilised subsequently and as on 31 March 2016, the Company had recognised a net deferred tax liability. Further, the Company has recognised MAT credit entitlement in the current and previous years. The utilisation of MAT credit entitlement (unused tax credits) is depending on future taxable profits. The MAT credit entitlement is recognised only to the extent that it is probable that future taxable profits will be available against which such MAT credit entitlement can be utilised. However, if there is a change in future taxable profits, which will also make the Company to foresee recognition of such unrecognised MAT credit entitlement amounting to Rs. 1,017.21, the same may be recognised.

5 Other expenses

Operating leases for aircraft and engines

The Company has taken aircraft on dry operating lease from lessors. Under the aircraft operating lease arrangement, the Company accrue monthly rental in the form of base and supplementary rentals. Base rental payments are either based on floating interest rates or on fixed rentals. Supplementary rentals are based on aircraft utilisation and are calculated with reference to the number of hours or cycles operated during each month. Both base and supplementary rentals have been charged to Statement of Profit and Loss. The Lease has varying terms, escalation clauses and renewal rights. On renewal the terms of leases are renegotiated.

Total future minimum lease payments due under non-cancellable operating leases (except supplementary rental which are based on aircraft utilization and calculated on number of hours or cycles operated) are as follows:

Aircraft and engine rentals, recognised in Statement of Profit and Loss amounting to Rs. 31,253.73 (31 March 2016: Rs. 25,067.64) are also net of cash and non-cash incentives and certain other credits, exclusive of claims, amounting to Rs. 5,332.06 (31 March 2016: Rs. 3,565.96).

Operating leases for assets other than aircraft and engines

The Company has taken its office premises, various commercial premises and residential premises for its employees under cancellable operating lease arrangements.

The lease payments charged during the year to the Statement of Profit and Loss amounting to Rs. 897.02 (31 March 2016: Rs. 778.98). The lease has varying terms, escalation clauses and renewal rights. On renewal the terms of leases are renegotiated.

6 Transition to Ind AS:

These are the Companyâs first financial statements prepared in accordance with Ind AS.

The Company has adopted Indian Accounting Standards (Ind AS) as notified under section 133 of the Companies Act, 2013, read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, with effect from 1 April 2016, with transition date of 1 April 2015, pursuant to notification issued by Ministry of Corporate Affairs dated 16 February 2015. Accordingly, the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and the opening Ind AS balance sheet as at 1 April 2015 have been prepared in accordance with Ind AS.

In preparing opening Ind AS balance sheet, the Company have adjusted amounts reported previously in the financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended), as notified under section 133 of the Act (âPrevious Indian GAAPâ) and other relevant provisions for the Act. An explanation of how the transition from Previous Indian GAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes.

a. Exemptions and exception availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous Indian GAAP to Ind AS.

(i) Ind AS optional exemptions

1 Deemed Cost

As per Ind AS 101, an entity may elect to use carrying values of all property, plant and equipment and other intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Previous Indian GAAP and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure property, plant and equipment and other intangible assets at their Previous Indian GAAP carrying values. Refer to Note 3 and 4.

2 Exchange differences arising from translation of long-term foreign currency monetary items

As per Ind AS 101, a first-time adopter of Ind AS may continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the year ending immediately before the beginning of the first Ind AS financial reporting year as per the Previous Indian GAAP (i.e. year ended 31 March 2016 or before). The Company has opted for the optional exemption and accordingly, the Company has adjusted foreign currency loss amounting to Rs. 2,311.29 during the year ended 31 March 2016, arising on re-statement of long-term foreign currency monetary liabilities used for acquisition of a depreciable capital asset. Refer to Note 3.

3 Determining whether an arrangement contains a lease

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 for determining whether a contract or an arrangement existing at the date of transition contains a lease. If the entity elects the optional exemption, then it assesses whether the lease contracts / arrangements existing at the date of transition contain lease are based on the facts and circumstances existing at that date except where the effect is expected not to be material. The Company has elected to apply this exemption on the basis of facts and circumstances existing as at the transition date.

(ii) Ind AS mandatory exceptions

1 Estimates

Under Ind AS 101, an entityâs estimates in accordance with Ind AS at âthe date of transition to Ind ASâ (i.e. 1 April 2015) or âthe end of the comparative period presented in the entityâs first Ind AS financial statementsâ (i.e. 31 March 2016), as the case may be, should be consistent with estimates made for the same date in accordance with the Previous Indian GAAP.

The Companyâs Ind AS estimates as at the transition date are consistent with the estimates made as at the same date made under Previous Indian GAAP. Key estimates considered in preparation of the financial statements that were not required under the Previous Indian GAAP are listed below:

- Fair valuation of financial instruments carried at FVTPL.

- Determination of the discounted value for financial instruments carried at amortised cost.

- Discount rate for determining value of provision for redelivery and overhaul cost.

2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exists at the date of transition to Ind AS.

b. Reconciliations between Previous Indian GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for previous periods. The following tables and notes represents the reoconciliations from Previous Indian GAAP to Ind AS.

(iv) There are certain reconciliation items between Cash Flow Statement prepared under Previous Indian GAAP and those prepared under Ind AS.

Net cash generated from operating activities amounting to Rs. 166.49 has increased on account of reclassification of certain rotables and non-aircraft equipments from inventory to Property, plant and equipment, Accordingly, cash used in investing activities has increased by Rs. 166.49. Refer to Note c. (viii) below.

c. Notes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and profit and loss for the year ended 31 March 2016

(i) Employee benefits : Remeasurement of post employement benefit plans

Under Ind AS, remeasurements i.e. actuarial gains and losses on the net defined benefit liability are recognised in Other Comprehensive Income instead of Statement of Profit and Loss. Under Previous Indian GAAP these were forming part of the Statement of Profit and Loss for the year. As a result of this change, the employee benefit expense to the extent of actuarial loss amounting to Rs. 19.39 (net of taxes Rs. 12.68) for the year ended 31 March 2016 has been reduced and the same has been reclassified to Other Comprehensive Income. There is no impact on the other equity as at 31 March 2016.

(ii) Provisions : Proposed dividend

Under the Previous Indian GAAP, dividend proposed by the Board of Directors after the reporting period but before the approval of the financial statements were considered as adjusting events. Accordingly, the provision for proposed dividend was recognised as liability. Under Ind AS such dividends are recognised when the same is approved by the shareholders in the annual general meeting. Accordingly, the total liability recorded for proposed dividend and corporate dividend tax of Rs. 6,505.77 as at 31 March 2016 (Rs. 1,200.43 as at 1 April 2015) included in the provisions has been reversed with corresponding adjustment to reserves and surplus. Consequently, the other equity increased by Rs. 6,505.77 as at 31 March 2016 (Rs. 1,200.43 as at 1 April 2015).

(iii) Financial assets (Loans): Security deposits

Under Previous Indian GAAP, interest free security deposits (that are refundable in cash on completion of the term as per the contract) are recorded at their transaction value. Under Ind AS, such financial assets are required to be recognised initially at their fair value and subsequently at amortised cost. Difference between the fair value and transaction value of the security deposit has been recognised as deferred rent. Consequent to this change the amount of security deposit as on 31 March 2016 has decreased by Rs. 3,922.35 (1 April 2015 : Rs. 2,944.50) with a creation of deferred rent (included in other non-current and current assets) of Rs. 3,212.89 (1 April 2015 : Rs. 2,429.06). The other equity decreased by Rs. 515.44 as at 1 April 2015. The unwinding of security deposit happens by recognition of a notional interest income in Statement of Profit and Loss at effective interest rate. The deferred rent gets amortised on a straight line basis over the term of the security deposits. The profit and other equity for the year ended 31 March 2016 decreased by Rs. 194.02 due to amortisation of deferred rent by Rs. 447.01 (included in aircraft and engine rentals), decrease in foreign exchange gain by Rs. 189.69 due to restatement of security deposit as at reporting date (included in other expense) and increase in notional interest income of Rs. 442.68 recognised on security deposits (included in other income).

(iv) Financial liabilities (Other financial liabilities) : Supplementary rentals

Under Previous Indian GAAP, interest free long term liabilities were recognised at transaction value. Under Ind AS, such financial liabilities are required to be recognised initially at their fair value and subsequently at amortised cost. Consequent to this change, the supplemental rentals have decreased by Rs. 3,090.46 (1 April 2015 : Rs. 2,885.07). The other equity increased by Rs. 2,885.07 as at 1 April 2015. The profit and other equity for the year ended 31 March 2016 has increased by Rs. 205.39 due to gain on discounting of supplementary rentals by Rs.1,500.90 (included in Aircraft and engine rentals), decrease in forex loss on restatement of supplemental rentals as at reporting date by Rs.182.06 (included in other expense) and unwinding of discounted liabilities for supplementary rental by Rs. 1,477.57 (included in finance cost).

(v) Fair valuation of investments

Under Previous Indian GAAP, investments in equity instruments and mutual funds were classified as long-term investments and current investments, respectively, based on intended holding period and realisability. The long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. The current investments were carried at lower of cost or fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments amounting to Rs. 25.51 have been recognised in other equity as at the date of transition (i.e. 1 April 2015). The profit and other equity for the year ended 31 March 2016 has increased by Rs. 94.60 due to the fair value changes.

(vi) Provisions - Provision for redelivery and overhaul cost

Under the Previous Indian GAAP, discounting of provisions was not allowed. Under Ind AS, the provisions are measured at discounted amounts, if the effect of the time value of money is material.

Accordingly, provision for redelivery and overhaul cost has been discounted to their present values. Consequent to this change, the provision for redelivery and overhaul cost has decreased by Rs. 43.14 (1 April 2015 Rs. 42.38). The other equity increased by Rs. 42.38 as at 1 April 2015. The profit and other equity for the year ended 31 March 2016 increased by Rs. 0.76 due to gain on discounting of provision of Rs. 20.43 (included in other expense) which is partially set off by unwinding of discounted provision of Rs. 19.67 (incuded in finance cost).

(vii) Convertible preference share - other equity

The Company had issued convertible preference shares. Under Previous Indian GAAP, the preference shares were classified as equity. Under Ind AS, convertible preference shares (compound financial instruments) are separated into liability and equity components based on the terms of the contract. Interest on liability component is recognised using the effective interest method. On the transition date (i.e. 1 April 2015), the equity component of compound financial instruments has been reclassed, as a seperate head under other equity, from reserves and surplus amounting to Rs. 22.07 (net of tax of Rs. 10.03) (31 March 2016 : Rs. 22.07 [net of tax of Rs. 10.03]). Further, the liability component of compound financial instruments has been reclassed, as a seperate item under the head borrowings, from reserves and surplus amounting to Rs 23.65 (including the interest accretion portion). During the year ended 31 March 2016, interest amounting to Rs. 13.07 (included in finance cost) till the date of conversion i.e. 23 June 2015 has been charged to Statement of Profit and Loss. The liability component of compound financial instruments amounting to Rs. 36.72 as at date of conversion has been reclassed to the equity component of financial instruments.

(viii) Property, plant and equipment

Under Ind AS, Property, plant and equipment (âPPEâ) including rotables, consumables and non-aircraft equipment that meet the criteria of PPE are capitalised as part of cost of PPE. The Company, in accordance with Ind AS 16 - Property, Plant and Equipment, has identified certain spare parts and stand-by equipment as they meet the definition of PPE, which were earlier classified as inventories in the Previous Indian GAAP, have been reclassified/ capitalised as rotables and non-aircraft equipment amounting to Rs. 361.79 (1 April 2015) and Rs. 504.38 (31 March 2016) under PPE and depreciated over its remaining useful life.

(ix) Finance lease obligation - Financial Liability - Borrowings

Under Ind AS, upfront borrowing cost on finance lease obligations is considered as finance cost and included in the finance lease obligations through amortisation method using effective interest rate.

Under Previous Indian GAAP, transaction costs incurred in connection with finance lease liability was amortised on a straight line basis over the period of lease and charged to Statement of Profit and Loss. Under Ind AS, transaction costs are deducted from the carrying amount of financial lease liability on initial recognition and these costs are charged to Statement of Profit and Loss using the effective interest method. As at 1 April 2015 the borrowing (finance lease liability) has decreassed by Rs. 44.89, other financial liability (current portion of finance lease liability and interest accrued but not due on borrowings) has increased by Rs. 320.62. As at 31 March 2016 the borrowing (finance lease liability) has increassed by Rs. 121.70, other financial liability (current portion of finance lease liability and interest accrued but not due on borrowings) has increased by Rs. 336.34. During the year ended 31 March 2016, there is an increase in finance lease charges by Rs. 182.32 (Finance cost) due to increase in interest cost based on the effective interest rate method. Consequent to above change, as on the date of the transition (i.e 1 April 2015) the financial lease liability (including current portion of finance lease liability) and the other equity has decreased by Rs. 275.73 (31 March 2016 : Rs.458.04).

The finance lease liability is restated at each reporting date and the exchange gain / loss is capitalised. Further, due to the above effect of transition to Ind AS in the finacial lease liability, the value of PPE has increased by Rs. 14.81 for the year ended 31 March 2016 on account of capitalisation of foreign exchange losses on restatement of finance lease liability.

(x) Deferred tax assets / liabilities (net)

Previous Indian GAAP requires accounting for deferred tax, using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

In addition, the various transitional adjustments lead to temporary differences. On the date of transition (i.e 1 April 2015), the net impact on deferred tax liabilities is of Rs. 256.71 (31 March 2016: Rs. 282.28). The profit and other equity for the year ended 31 March 2016 have decreased by Rs. 18.44 due to differences in temporary differences.

(xi) Other Comprehensive Income

Under Previous Indian GAAP, there was no requirement to disclose any item of profit or loss in Other Comprehensive income. However, Ind AS requires certain items of profit or loss to be reclassified to other comprehensive income. Consequent to this, the Company has reclassified remeasurement of defined benefit plans from Statememt of Profit and Loss to other comprehensive income.

(xii) Retained earnings

Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustements.

7 Fair value measurement and financial instruments

a. Financial instruments - by category and fair values hierarchy

The following table shows the carrying amounts and fair value of financial assets and financial liabilties, including their levels in the fair value hierarchy.

* The carrying amounts of trade receivables, trade payables, cash and cash equivalents, bank balances other than cash and cash equivalents, maintenance advance and other current financial assets, approximates the fair values, due to their short-term nature. The other non-current financial assets represents bank deposits (due for maturity after twelve months from the reporting date) and interest accrued but not due on bank deposits, the carrying value of which approximates the fair values as on the reporting date.

The fair values of supplementary rentals are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

There has been no transfers between Level 1, Level 2 and Level 3 for the years ended 31 March 2017 and 31 March 2016.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of NAV for unqouted mutual funds.

- the fair value of the remaining financial instruments is determined using discounted cash flow method.

Valuation processes

The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. This team reports directly to the Senior Management. Discussions on valuation and results are held between the Senior Management and valuation team atleast once every quarter in line with the Companyâs quarterly reporting periods.

b. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ;

- Market Risk - Foreign currency ; and

- Market Risk - Interest rate

Risk management framework

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units. The loans primarily represents security deposits given to aircraft manufacturer. Such deposit will be returned to the Company on deliveries of the aircraft by the aircraft manufacturer. The credit risk associated with such deposits is relatively low.

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India and certain parts of Middle East and South Asia. Trade receivables also includes receivables from credit card companies which are realisable within a period 2 to 21 working days. The Company does monitor the economic environment in which it operates. The Company manages its credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.

The Company sells majority of its passenger services against deposits made by agents (customers) and through online channels.

On adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Companyâs historical experience for customers. Based on the business environment in which the Company operates, management considers that the trade receivables (other than receivables from government departments) are in default (credit impaired) if the payments are more than 90 days past due however the Company based upon past trends determine an impairment allowance for loss on receivables outstanding for more than 180 days past due.

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers. Trade receivables as at year end primarily includes Rs. 730.62 (31 March 2016: Rs. 1,037.25 1 April 2015: Rs. 600.98) relating to revenue generated from passenger services and Rs. 920.36 (31 March 2016: Rs. 598.23, 1 April 2015: Rs. 514.63) relating to revenue generated from cargo services.

# The Company believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour.

# The Company based upon past trends determine an impairment allowance for loss on receivables outstanding for more than 180 days past due.

# Receivables more than 180 days past due primarily comprises receivables from government departments, which are fully realisable on historical payment behaviour and hence no loss allowance has been recognised and from agents for which the impairment allowance has already been recognised on specific credit risk factor.

The allowance for lifetime expected credit loss on customer balances for the year ended 31 March 2017 and 31 March 2016 is insignificant and hence the same has not been recognised. The reversal for lifetime expected credit loss on customer balances for the year ended 31 March 2017 is Rs. Nil (31 March 2016: Rs. Nil.)

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Companyâs approach to manage liquidity is to have sufficient liquidity to meet itâs liabilties when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Companyâs reputation.

The Company believes that its liquidity position, including total cash (including bank deposits under lien and excluding interest accrued but not due) and short-term investments of Rs. 93,431.85 as at 31 March 2017 (31 March 2016: Rs. 60,587.94, 1 April 2015: Rs. 40,305.38) anticipated future internally generated funds from operations, and its fully available, revolving undrawn credit facility of Rs. 46,271.25 (31 March 2016: Rs. 34,013.80, 1 April 2015 Rs. 25,261.58) will enable it to meet its future known obligations in the ordinary course of business. However, if a liquidity needs were to arise, the Company believes it has access to financing arrangements, value of unencumbered assets, which should enable it to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Companyâs liquidity management process as monitored by management, includes the following:

- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Companyâs liquidity position on the basis of expected cash flows.

- Maintaining diversified credit lines.

(iii) Market risk

A. Interest rate risk

Exposure to interest rate risk

The Companyâs interest rate risk arises majorly from the foreign currency term loan and finance lease obligations carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Companyâs borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:

Interest rate sensitivity analysis

A reasonably possible change of 0.50 % in interest rates at the reporting date would have affected the proft or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

B. Currency risk

Exposure to foreign currency risk

The summary of quantitative data about the Companyâs exposure to currency risk, as expressed in Indian Rupees, as at 31 March 2017, 31 March 2016 and 1 April 2015 are as below:

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies at 31 March 2017 and 31 March 2016 would have affected the measurement of financial instruments denominated in foreign currency and affected Statement of Profit and Loss by the amounts shown below. This analysis is peformed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

*The sensitivity analysis to foreign currency risk excludes an exposure to foreign exchange fluctuations on long term foreign currency loans that have been capitalised in the cost of the related property plant and equipment. For the year ended 31 March 2017 and 31 March 2016, 1% depreciation / appreciation in Indian Rupees against USD, affects the adjustment to leased asset (aircraft taken on finance lease) by Rs. 213.58 (31 March 2016: Rs. 284.11). It is expected to impact the Statement of Profit and Loss over the remaining life of the property, plant and equipment as an adjustment to depreciation charge.

8 Capital Management

The Board of directors regularly review the Companyâs capital structure in light of the economic conditions, business strategies and future commitments.

For the purpose of the Companyâs capital management, capital includes issued share capital, convertible preference share capital, securites premium and all other equity reserves. Debt includes, foreign currency term loan and finance lease obligations.

During the financial year ended 31 March 2017, no significant changes were made in the objectives, policies or processes relating to the management of the Companyâs capital structure.

9 Contingent liabilities (to the extent not provided for)

The Company is a party to various taxation disputes and legal claims, which are not acknowledged as debts as detailed below. Significant management judgement is required to ascertain that it is not probable that an outflow of resources embodying economic benefits will be required to settle the taxation disputes and legal claims.

(i) Income tax

The income tax authority has assessed and revised the taxable income on account of disallowance of certain expenses, provisions, depreciation and/or adjustments, and in respect of the tax treatment of certain incentives received from the manufacturer with the acquisition of aircraft and engines. The Company has received favourable order from the final fact finding authority, Income Tax Appellate Tribunal (âITATâ) for three years i.e. Assessment Year (âAYâ) 2007-08, AY 2008-09 and AY 2009-10 against such disallowance and/or adjustments made by tax authorities. However, the tax authorities have filed an appeal before the High Court against the order of the ITAT. The Company believes, based on advice from counsels/experts, that the views taken by the ITAT are sustainable in higher courts and accordingly no provision is required to be recorded in the books of account. The tax exposure estimated by the Company pertaining to these cases amounts to Rs. 4,177.82 as at 31 March 2017 (31 March 2016: Rs. 972.71, 1 April 2015: Rs. 972.71). This exposure (excluding interest and penalty) is net of Rs. 1,017.21, (31 March 2016 : Rs. 1,602.03, 1 April 2015 : Rs. 1,602.03) which represents minimum alternate tax recoverable written off in the earlier years.

(ii) The Company is in legal proceedings for various disputed legal matters related to Customs, Octroi, Service Tax and Value Added Tax (VAT). The amounts involved in these proceedings, not acknowledged as debt, are:

(1) Customs- Rs. Nil (31 March 2016: Rs. Nil, 1 April 2015: Rs. 24.05),

(2) Service Tax- Rs. 145.68 (31 March 2016: Rs. 145.68, 1 April 2015: Rs. 56.04),

(3) Value Added Tax - Rs. 7.85 (31 March 2016: Rs. Nil, 1 April 2015: Rs. 10.28) and

(4) Octroi - Rs. 74.45 (31 March 2016: Rs. Nil, 1 April 2015: Rs. Nil).

The Company believes, based on advice from counsels/experts, that the views taken by authorities are not sustainable and accordingly no provision is required to be recorded in the books of account.

(iii) Other legal cases

1) Claims by supplier amounting to Rs. Nil (31 March 2016: Rs. 244.09, 1 April 2015: Rs. 179.32) on account of certain disputed matters.

2) As per the notification dated 1 January 2016, The Payment of Bonus (Amendment) Act, 2015 is applicable retrospectively w.e.f 1 April 2014. While the Company has considered the impact of this amendment for the current and previous financial year, in view of the partial stay granted by Karnataka and Kerala High Court, the impact of this amendment for the period 1 April 2014 till 31 March 2015 amounting to Rs. 19.47 has not been acknowledged as debt.

3) Ministry of Civil Aviation, Government of India, vide their Order No. AV 13011/3/2016 dated 9 November 2016 stated that Regional Connectivity Fund Levy will be imposed on scheduled flights being operated within India to fund the Regional Connectivity Fund (RCF). Pursuant to the above order, Airport Authority of India has raised invoice amounting to Rs. 646.71 on the Company for the period ended as on 31 March 2017. Federation of Indian Airlines has filed a writ petition before High Court of Delhi to challenge these RCF Levy. The matter is currently pending with the High Court of Delhi. Moreover, the Company, based on advice received from experts, believes that the levy to fund the RCF is not tenable and accordingly no provision is required to be recorded in the books of account.

(iv) Other legal proceedings for which the Company is contingently liable

The Company is party to various legal proceedings in the normal course of business and does not expect the outcome of these proceedings to have any adverse effect on the financial statements and hence no provision has been set-up against the same.

Notes:

Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements / decisions pending with various forums/ authorities.

Accordingly, the above mentioned contingent liabilities are disclosed at undiscounted amount.

10 Employee benefits

The Company contributes to the following post-employment benefit plans in India.

Defined contribution plan

The Company pays provident fund contributions to the appropriate government authorties at rate specified as per regulations.

An amount of Rs. 362.55 (31 March 2016: Rs. 299.64) has been recognised as an expense in respect of the Companyâs contribution to Provident Fund deposited with the relevant authorities and has been shown under Employee benefits expense in the Statement of Profit and Loss.

Defined benefit plan

The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits:

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in plan liabilities.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Risk exposure:

The defined benefit plan is exposed to a number of risks, the most significant of which are detailed below:

Change in discount rates: A decrease in discount yield will increase plan liabilities.

Mortality table: The gratuity plan obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in plan liabilities.

11 Segment reporting

A. Basis for Segment reporting

Factors used to identify the entityâs reportable segments, including the basis of organisation

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM is considered to be the Board of Directors who makes strategic decisions and is responsible for allocating resources and assessing performance of the operating segments.

The principal activities of the Company comprises Air Transportation, in respect of which it operates in Domestic and International sectors. Accordingly, the Company has two reportable segments as follows:

- Domestic (air transportation within India)

- International (air transportation outside India)

Segment revenue and expenses:

Segment revenue and expenses represents revenue and expenses that are either directly attributed to individual segments or are attributed to individual segments on a reasonable basis. The remainder of the revenue and expenses are categorized as unallocated which mainly comprises finance costs and other operating expenses and certain other income since the underlying assets/liabilities/services are used interchangeably. The Company believes that it is not practical to provide segment disclosures relating to these unallocated revenue and expenses, and accordingly these are separately disclosed as âunallocatedâ.

Segment assets and liabilities:

Segment assets includes all operating assets used by a segment which are directly attributed to individual segments or are attributed to individual segments on a reasonable basis. Segment liabilities include all operating liabilities which are directly attributed to individual segments or are attributed to individual segments on a reasonable basis. The remainder of assets and liabilities are categorized as unallocated, since the Company believes that it is not practical to allocate the same over reportable segments on a reasonable basis.

12 Related party disclosures

a. List of related parties and nature of relationship where control exists:

(i) Parent and Ultimate Controlling Party

InterGlobe Enterprises Limited (Parent till 9 November 2015)

Mr. Rahul Bhatia (Ultimate Controlling Party till 9 November 2015)

(ii) Subsidiaries

Agile Airport Services Private Limited (Incorporated on 14 February 2017)

b. List of related parties and nature of relationship with whom transactions have taken place during the current/ previous year

(i) Parent and Ultimate Controlling Party

InterGlobe Enterprises Limited (Parent till 9 November 2015)

Mr. Rahul Bhatia (Ultimate Controlling Party till 9 November 2015)

(ii) Entity/ person with direct or indirect significant influence over the Company InterGlobe Enterprises Limited (with effect from 10 November 2015)

Ms. Shobha Gangwal - Wife of Mr. Rakesh Gangwal (Related party with effect from 25 April 2015)

(iii) Subsidiaries

Agile Airport Services Private Limited (Incorporated on 14 February 2017)

(iv) Key managerial personnel of the Company or its parent and their close family members Mr. Aditya Ghosh - President and Whole Time Director

Mr. Kapil Bhatia - Father of Mr. Rahul Bhatia (Director till 23 June 2015)

Mr. Rahul Bhatia - Director (Managing Director till 23 June 2015)

Mar 31, 2016

1. Employee benefits

Defined contribution plan

An amount of Rs. 306.71 (previous year Rs. 251.93) has been recognised as an expense in respect of the Company''s contribution to Provident Fund and Employee State Insurance Fund deposited with the relevant authorities and has been shown under personnel expenses in the Statement of Profit and Loss.

Defined benefit plan

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to 15 days of total basic salary last drawn for each completed year of service. Gratuity is payable to all eligible employees of the Company on retirement, separation, death or permanent disablement, in terms of the provisions of the Payment of Gratuity Act.

2. Segment Reporting

a) Primary Segment: Geographical Segment

The 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.

The geographic segment consists of :

i) Domestic (air transportation within India)

ii) International (air transportation outside India)

Accounting policies: Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

Segment revenue and expenses:

Segment revenue and expenses represents revenue and expenses that are either directly attributed to individual segments or are attributed to individual segments on a reasonable basis. The remainder of the revenue and expenses are categorized as unallocated which mainly comprises finance costs and other operating expenses and certain other incomes since the underlying assets/liabilities/services are used interchangeably. The Company believes that it is not practical to provide segment disclosures relating to these unallocated revenue and expenses, and accordingly these are separately disclosed as "unallocated".

Segment assets and liabilities:

Segment assets includes all operating assets used by a segment and consists primarily of fixed assets, inventories, trade receivables, loans and advances etc which are directly attributed to individual segments or are attributed to individual segments on a reasonable basis. Segment liabilities include all operating liabilities and consist primarily of forward sales, advance from customers etc which are directly attributed to individual segments or are attributed to individual segments on a reasonable basis. The remainder of assets and liabilities are categorized as unallocated, since the Company believes that it is not practical to allocate the same over reportable segments on a reasonable basis.

3. Employee share-based payment plans

Description of share-based payment arrangements

As at 31 March 2016, the Company has following share-based payment arrangements for employees:

(i) InterGlobe Aviation Limited Tenured Employees Stock Option Scheme - 2015 (ESOS 2015 - I)

On 23 June 2015, the Board of Directors approved the InterGlobe Aviation Limited Tenured Employees Stock Option Scheme (the "ESOS 2015 - I"), which was subsequently approved in the Extraordinary General Meeting held on 25 June 2015. The InterGlobe Aviation Limited Tenured Employees Stock Option Scheme - 2015, comprises 1,111,819 options which are convertible into equivalent number of equity shares of Rs. 10 each as per the terms of the scheme. Upon vesting, the employees can acquire one common equity share of the Company for every option granted. The options were granted on 25 June 2015.

4. Under Section 135 of the Companies Act, 2013, the Company is required to spend, in every financial year, atleast 2% of the average net profits of the Company made during the three immediately preceding financial years on Corporate Social Responsibility (CSR), pursuant to its policy in this regard. The Act requires such companies to constitute a Corporate Social Responsibility Committee which shall formulate and recommend to the Board a Corporate Social Responsibility Policy which shall indicate the CSR activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013.

5. Scheme of arrangement

Amalgamation of the Company with Caelum Investment, LLC

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 High Court of Delhi vide its order dated 22 December 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 27 March 2015 and was subsequently filed with the Registrar of Companies on 24 April 2015. Further, in relation to the Scheme, the Company has received a certificate of merger dated 24 April 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. Accordingly, in terms of the Scheme, the Scheme came into effect from 24 April 2015 ("Effective Date"). The applicable date and the effective date of the scheme is 24 April 2015.

Transferor Company was an investment Company.

In relation to the Scheme, the Foreign Investment Promotion Board vide its letter (No. 69(2014)/90(2014) dated 10 September 2014 had granted its approval to the Company to issue and allot upto 147,000 equity shares having face value of Rs. 1.000 each constituting 47.88% of the issued, paid-up equity share capital to the members of the Transferor Company in the proportion of the voting units held by such members in the Transferor Company pursuant to the Scheme. Further, the Competition Commission of India vide its order dated 30 July 2014 stated that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, approved the same under Section 31(1) of the Competition Act, 2002.

As on the Effective Date, the only assets of the Transferor Company represents 147,000 equity shares having face value of Rs. 1.000 ("Equity Shares") in the Transferee Company.

In accordance with the terms of the Scheme, the Company at its board meeting held on 25 April 2015, cancelled the equity shares held by the Transferor Company in the Company and issued and allotted 147,000 fresh fully paid-up equity shares of Rs. 1,000 each to the members of Transferor Company in the manner mentioned below, constituting 47.88% of the post issue paid-up equity share capital of the Company on the date of issue of the aforesaid 147,000 equity shares. In terms of the Scheme, the 147,000 fresh equity shares were issued to the members of the Transferor Company in the proportion to the voting units held by the members of the Transferor Company in the Transferor Company and whose names appear in the books and records of the Transferor Company as on 23 April 2015 i.e. the ''Record Date'', as defined in the Scheme:

The amalgamation is in the nature of a merger and has been accounted for under the "Pooling of Interest Method" as per Accounting Standard 14 (AS-14), by recording the following:

- As per the scheme, 147,000 equity shares of Rs. 1,000 each held by the Transferor Company in the Transferee Company were extinguished and proportionate number of fresh fully paid-up equity shares of Rs. 1,000 each of the Transferee Company were issued to the members of the Transferor Company on 25 April 2015.

- There is no material adjustment required to be made for difference in the accounting policies between the Transferee Company and the Transferor Company.

6. The Company had placed a firm order for 180 A320Neo aircraft with Airbus in June 2011. Pursuant to this firm order, the Company was to receive delivery of the first aircraft out of the fleet of 180 A320Neo aircraft during the quarter ended 31 December 2015. However, on 17 December 2015, the Company has received a notification from Airbus that the delivery of the first A320Neo aircraft is delayed due to industrial reasons. Subsequently, in the quarter ended 31 March 2016, the Company has received delivery of three A320Neo Aircraft out of the order of 180 A320Neo Aircraft.

7. The Company has established a comprehensive system of maintenance of information and documents that are required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. Previous year''s figures have been regrouped / reclassed, where necessary, to conform to current year''s classification.

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