Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting their Twenty Sixth Annual Report together with the Audited Financial Statements for the Financial Year ended 31st March, 2018.
1. Performance highlights
The financial and operating highlights for the year under review, compared with the previous Financial Year, are given below:
Financial highlights
(Rs. in Lakhs)
Particulars |
Standalone for year ended 31st March |
Consolidated for year ended 31st March |
||
2018 |
2017 |
2018 |
2017 |
|
GROSS REVENUE |
2,395,837 |
2,304,087 |
2,517,747 |
2,417,506 |
Profit before Interest, Depreciation, Exceptional Items & Tax |
69,581 |
300,431 |
74,514 |
297,550 |
Finance Costs |
84,286 |
85,109 |
84,894 |
85,868 |
Profit/(Loss) before Depreciation, Exceptional Items & Tax |
(14,705) |
215,322 |
(10,380) |
211,682 |
Depreciation |
62,057 |
67,090 |
62,114 |
67,155 |
Profit/(Loss) before Exceptional Items & Tax |
(76,762) |
148,232 |
(72,494) |
144,527 |
Exceptional Items (Net) |
- |
- |
- |
- |
Profit/(Loss) before Taxation & Adjustments |
(76,762) |
148,232 |
(72,494) |
144,527 |
(Excess)/Provision for Tax |
- |
(20) |
- |
(20) |
Share of Profit in Associate |
- |
- |
8,849 |
5,321 |
Profit/(Loss) after Taxation |
(76,762) |
148,252 |
(63,645) |
149,868 |
Other Comprehensive Income |
149 |
(5,181) |
248 |
(5,702) |
Loss brought forward |
(1,016,187) |
(1,155,763) |
(1,019,225) |
(1,159,897) |
Amount transferred to Debenture Redemption Reserve |
- |
(3,495) |
- |
(3,495) |
Impact of Depreciation as per the Companies Act, 2013 |
- |
- |
- |
- |
Amount transferred to Balance Sheet |
(1,092,800) |
(1,016,187) |
(1,082,623) |
(1,019,225) |
Note: 1 Lakh = 100,000
Operating highlights (Consolidated)
Operating Parameters |
Year ended 31st March |
|
2018 |
2017 |
|
Departures (Number) |
234,069 |
225,938 |
Available Seat Kilometers (ASKMs) (Million) |
58,228 |
53,476 |
Revenue Passenger Kilometers (RKMs) (Million) |
48,664 |
43,484 |
Passenger Load Factors (%) |
83.6 |
81.3 |
Revenue Passengers (Number) |
29,946,998 |
27,147,736 |
Fleet Size |
112 |
112 |
2. Dividend
In view of the losses, the Board of Directors have not recommended any dividend on the Equity Shares for the Financial Year ended 31st March, 2018 (Previous year: Nil per Equity Share).
3. Review of Operations
During the year, the Company reported consolidated loss after tax of Rs.63,645 Lakhs in fiscal 2018 and standalone loss after tax of Rs.76,762 Lakhs. Available Seat Kilometers (ASKMs) increased by 8.9% to 58,228 million compared with 53,476 million in FY17. As a result, passenger numbers also grew from 27.15 Million in FY17 to 29.95 million during FY18 resulting in increase in overall consolidated revenue from Rs.2,417,506 Lakhs in FY17 to Rs.2,517,747 Lakhs in FY18.
Overall cost during the year increased due to increase of close to 16% in Fuel Brent rate, alongwith increase in Maintenance and Landing and Navigation costs in the year. On a positive note, cost per ASKM excluding fuel continued to show improvement - witnessed by a reduction of 1.8% in non-fuel CASK over the last financial year.
Network and Connectivity
During the year, the Company welcomed its new Chief Executive Officer (CEO) - Mr. Vinay Dube, an accomplished aviation veteran with over three decades of industry experience. With Vinay at its helm, the Company continued to take steps to strengthen its connectivity in India by deepening its existing footprint as well as launching maiden flights connecting emerging cities such as Jaipur, Lucknow, Chandigarh, Dehradun, Udaipur and Indore with each other and with metros including Nagpur-New Delhi, Lucknow-Kolkata, Delhi-Indore and Kozhikode - Bengaluru as part of its strategy.
The Company continued to leverage its wide body fleet to enhance its guest experience at slot-constrained airports such as Delhi, Mumbai and Bengaluru. Earlier this year, it also announced plans to make Guwahati as its regional gateway together with a strengthened North Eastern presence, marked with the introduction of several direct as well as nonstop flights connecting Jorhat Guwahati, Aizwal, Silchar, Imphal with New Delhi and Mumbai, together with additional connectivity from/ to Pune, Patna, Raipur, Chandigarh, Amritsar, and Bengaluru.
On 29th October 2017, the Company launched its three international non-stop services between Chennai and Paris CDG (five days/week), Bengaluru - Amsterdam (daily) and Mumbai - London Heathrow (Third frequency). The new flights from Bengaluru and Chennai are especially significant as they will enable the Company to connect guests in Southern India with Europe and North America for the very first time with non-stop and one-stop flights in codeshare with KLM Royal Dutch Airlines and Delta Air Lines as well as with Air France and Delta Air Lines respectively. The Company also strengthened services from its third hub - Bengaluru with a second daily frequency to Singapore.
The Company also continued to enhance international cooperation by forging codeshare partnerships with leading airlines, including one with China Eastern Airlines for connectivity to Shanghai and Kunming in China. With this, the Companyâs total number of codeshare partners has grown to 21. The Company also announced a Memorandum of Understanding with Aeromexico to outline cooperation in the areas of enabling codeshare flights and frequent flyer programs during the year.
The Company also strengthened its ongoing codeshare relationships with Air France and KLM Royal Dutch Airlines to 35 additional points in Europe and 5 on Trans-Atlantic routes. Jet Airways also expanded its codeshare with Virgin Atlantic to 9 points in the US via London Heathrow and with Delta Air Lines, 30 additional domestic US codeshare destinations were added. These were aside from a far-reaching landmark âEnhanced Cooperation Agreementâ that was signed between the Company, Air France and KLM Royal Dutch Airlines. Under this first-of-its-kind partnership by an Indian carrier, the enhanced collaboration offers guests an unparalleled choice of 64 non-stop weekly flights between India and Europe.
Jet Airways Groupâs domestic passenger traffic for the year under review grew by 12.3% while international passenger traffic registered an increase of 5.7%. The Company ended FY18 with a system-wide seat factor of 83.6% (Domestic seat factor of 84.4% & International seat factor of 83.0%).
During the year, it also celebrated important milestones marking the completion of a decade of operations between the Gulf and India as well as between Bangladesh and India.
Jet Experience
In addition to growing connectivity, the Company undertook several industry-first initiatives to deliver exceptional value to guests. The Company introduced its acclaimed First Class between Delhi - Singapore and in an all-India first, redefined its classical in-flight duty free offering âJet Boutiqueâ by taking it online, introducing a unique, pre-order facility that helps guests save time at the airport. The Company also became the first Indian airline to embrace the Government of Indiaâs Unified Payment Interface (UPI), enabling guests to book and make payments using the latest payment initiative.
The Company also forged an industry-leading partnership with Airbnb - worldâs leading community-driven hospitality company, to offer its guests from India - especially millennials, well-differentiated and global hospitality choices in order to establish a deeper bond with the new-age Indian traveller, increasingly seeking unique and interesting experiences during travel. JetScreen - the airlineâs wireless streaming service, now covers 80% of its B737 fleet, providing guests with 330 hours of entertainment on their personal devices from amongst entertainment that ranges from Hollywood, Bollywood, Regional and international genres.
Jet airways started a unique business networking platform Jet Airways Global Linker that enables SMEs and startups enjoy the Big Business Advantage.
JetPrivilege
The loyalty and rewards programme - JetPrivilege continued to grow from strength to strength by adding new digital platforms as well as a record number of members that grew by almost 2 Mio to top 8 Mio for the financial year ended 2018. The programme introduced new benefits for our valued JetPrivilege members, welcoming 2 airline as well as 41 non-airline partners into the programme. On the digital end, more than 5 new partners were introduced on shop. jetprivilege.com, to reward members with JPMiles every time they shop online. JetPrivilege also won as many as 9 accolades in different categories at the âCustomer Loyalty Awards and Customer Experience Awardsâ 2018.
As part of guest empowerment, members are now able to select, compare and apply for any of the Jet Airways/ JetPrivilege co-brand credit cards at cards.jetprivilege.com. Recently, a new partnership category âFuelâ with Indian Oil, where our members can Earn & Redeem JPMiles on their fuel purchase, has been introduced.
Cargo
The Company signed a Memorandum of Understanding with Air France and KLM Royal Dutch Airlines on Strategic Cargo Co-operation. Key important actions implemented by Cargo, dynamic sales & marketing activities with continuous monitoring and improvement on the cargo mix, coupled with deployment of Airbus A330 aircrafts on domestic routes further enhanced capacity utilization. These have resulted in significant increase in revenue and tonnage carried in the year 2017-18 when compared to the previous year, 2016-17.
Cargo has also been awarded -
1) âCargo Airline of the year - Domesticâ for the period 2017 - 2018 received from Bangalore International Airport Limited.
2) âTop 5 Airlines by Absolute Cargo Growthâ for the period 2017 received from Changi Airport Group, Singapore. Marketing
For the second consecutive year, the Company sponsored one of Indiaâs leading sports events- the Tata Mumbai Marathon 2018 held on 21st January, 2018. The marathon saw the attendance of over 40,000 runners from across the country, including 162 members from our very own Jet Airways family. The Company was also the official Airline Partner of the Airtel Delhi Half Marathon 2017.
Fleet
As on 31st March, 2018, the Company had a fleet of 112 aircraft, comprising 10 Boeing 777-300 ER aircraft, 5 Airbus A330-200 aircraft, 4 Airbus A330-300 aircraft, 75 Next Generation Boeing 737-700/800/900/900ER aircraft, 15 modern ATR 72-500 Turboprop aircraft and 3 ATR 72-600 aircraft. The average fleet age as on 31st March, 2018 was 8.44 years. One A330-200 aircraft was sub-leased to Air Serbia as on 31st March, 2018
The Company flies to 45 domestic destinations (includes flights operated by Jet Lite (India) Limited, the Companyâs wholly owned subsidiary) and 20 International destinations.
4. Management Discussion and Analysis
As required by Regulation 34 of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 (the âListing Regulationsâ) entered into with the Stock Exchanges, a detailed review by the Management of the operations, performance and future outlook of the Company and its business, is presented in a separate section - Management Discussion and Analysis - forming part of this Annual Report.
5. Subsidiary / Associate Companies
a. Jet Lite (India) Limited
Jet Lite (India) Limited (âJet Liteâ) is a wholly owned subsidiary which was acquired by the Company on 20th April, 2007.
Jet Lite is a non-material, non-listed subsidiary company.
For the Financial Year ended 31st March, 2018, Jet Lite posted a total income of Rs.131,803 Lakhs (2016-17: Rs.123,331 Lakhs) and a Net Loss of Rs.32,101 Lakhs (2016-17: â (5,789) Lakhs). In view of the loss, the Board of Directors of Jet Lite has not recommended a dividend on the Equity Shares for the year ended 31st March, 2018 (Previous Year : Nil). The Company continues to support the operations of Jet Lite.
The highlights of the operating performance of Jet Lite for the Financial Year ended 31st March, 2018 are as follows:
Operating Parameters |
Year ended 31st March |
|
2018 |
2017 |
|
Departures (Number) Available Seat Kilometers (ASKMs) (Million) Revenue Passenger Kilometers (RKMs) (Million) Passenger Load Factors (%) Revenue Passengers (Number) |
22,105 2,650 2,260 85.3% 2,759,275 |
23,673 3025 2397 79.2% 2,751,994 |
As on 31st March, 2018, Jet Lite had an all-Boeing fleet of 8 aircraft, comprising 3 Boeing 737-700 and 5 Boeing 737-800 aircraft.
b. Airjet Ground Services Limited (âAGSLâ)
AGSL was incorporated as a wholly owned subsidiary of the Company on 10th March, 2017.
As at 31st March, 2018, AGSL has yet to commence operations. For the Financial Year ended 31st March, 2018, AGSL posted a total income of Rs. Nil and a Net Loss of â (1) Lakh.
c. Airjet Training Services Limited (âATSLâ)
ATSL was incorporated as a wholly owned subsidiary of the Company on 18th May, 2017.
As at 31st March, 2018, ATSL has yet to commence operations. For the Financial Period ended 31st March, 2018, ATSL posted a total income of Rs. Nil and a Net Loss of â (1) Lakh.
d. Airjet Engineering Services Limited (âAESLâ)
AESL was incorporated as a wholly owned subsidiary of the Company on 18th May, 2017.
As at 31st March, 2018, AESL has yet to commence operations. For the Financial Period ended 31st March, 2018, AESL posted a total income of Rs. Nil and a Net Loss of â (1) Lakh.
e. Airjet Security and Allied Services Limited (âASASLâ)
ASASL was incorporated as a wholly owned subsidiary of the Company on 19th May, 2017.
As at 31st March, 2018, ASASL has yet to commence operations. For the Financial Period ended 31st March, 2018, ASASL posted a total income of Rs. Nil and a Net Loss of â (1) Lakh.
f. Jet Privilege Private Limited (âJPPLâ)
Jet Privilege Private Limited (JPPL) was incorporated on 13th July, 2012. JPPL is an independent, loyalty and rewards Management Company. The Company holds 49.90% and Etihad Airways PJSC holds 50.10% in JPPL.
For the Financial Year ended 31st March, 2018, JPPL posted a total income of Rs.62,224 Lakhs (2016-17: Rs.53,752 Lakhs) and a Net Profit of Rs.17,735 Lakhs (2017-18: Rs.10,663 Lakhs).
The subsidiary/associate companies are managed by their respective Boards. The Company does not have any material unlisted subsidiary and hence is not required to nominate an independent director of the Company on the Board of the subsidiary companies.
6. Consolidated Financial Statements
In terms of Regulation 33 of the Listing Regulations and applicable provisions of the Companies Act, 2013 (the âActâ) read with the Rules framed thereunder, the Consolidated Financial Statements of the Company for the financial year 2017-18 have been prepared in compliance with applicable Accounting Standards and on the basis of Audited Financial Statements of the Company, its subsidiaries and associate company, as approved by their respective Board of Directors.
The Consolidated Financial Statements together with the Auditorsâ Report form part of this Annual Report.
Further, as required under Section 129(3) of the Act, read with Companies (Accounts) Rules 2014, a statement containing salient features of the Financial Statements of the Subsidiaries in prescribed Form AOC-1 is attached as Annexure A.
7. Conservation of energy, technology absorption and foreign exchange earnings and outgo
Particulars, as prescribed by Section 134(3)(m) of the Act, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, to the extent applicable to the Company, are given below:
Conservation of Energy
The principal requirement of energy for the Company is that of jet fuel for aviation activities. The Company persistently strives to optimize fuel consumption in every facet of flight operation. These measures pertain to fuel consumption on ground and during the flight. The pillars of Companyâs optimum energy strategy are:
(i) State of aircrafts:
State and configuration of aircrafts, which includes the airframe and the engines, impacts fuel consumption. Engine washing is done regularly to maintain engine efficiency and the airframe is maintained as per manufacturersâ recommendations to minimize aerodynamic drag.
(ii) Flight planning and processes:
Regular review of operating and flight planning processes is undertaken to optimize fuel consumption. Specific initiatives pertain to optimized routes, operating weight reduction and optimum fueling for the mission - without compromising the safety of operations. The Company utilizes latest models, techniques and systems which optimise fuel use. Deployment of the assets is done so as to optimize fuel efficiency for each flight.
(iii) Crew training and feedback:
Sensitization of Crew through regular training and feedback on fuel optimization potential is undertaken. Opportunities to reduce fuel consumption are brainstormed.
(iv) Post flight analysis:
Post flight analysis is undertaken to verify the impact of various policies and initiatives undertaken to reduce fuel consumption and serves as dynamic feedback in the fuel optimization endeavour. Senior Management periodically monitors the progress.
(v) Technology infusion:
Technology infusion is done in areas which are found to have high potential for reduction in fuel consumption. Such areas cover all the aspects of flight operations.
Technology absorption Training of Pilots
Simulator training for A330, B737 and B777 aircraft is conducted at the Training Centre at Bangalore under supervision of the Companyâs own trainers.
Technology and e-Commerce initiatives
The year gone by witnessed a host of consumer centric initiatives in the eCommerce space aimed to further enhance our guestsâ overall travel experience.
The Company launched JetUpgrade, a first-of-its-kind in Indian aviation where guests can submit a bid for an upgrade to First Class or Premiere or choose to upgrade instantly for a fixed amount.
To provide guests added convenience, the Company introduced JetBoutique online, a portal that enables guests preorder duty free products and have them delivered onboard their flight.
The Company made remarkable progress with a host of technological innovations. It partnered with Airbnb, enabling guests to book homestays and accommodation, directly on jetairways.com. Additionally, the integration with Uber allows guests to book their ride directly from the Jet Airways mobile app. With voice enabled services on the rise, the Company partnered with Amazon Alexa, enabling guests to check their flight status in real-time, simply by using a voice command. In an initiative to drive further choice and convenience, the Company included the widely adopted Google Tez as an additional mode of payment.
I n line with the philosophy of enhancing the overall guest experience, the Company introduced Net Promoter Score (NPS), a tool used to gauge the loyalty of the organisationâs customer relationships, based on their feedback.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under note no. 48 of the notes to accounts to the financial statements forming part of this Annual Report.
8. Environment, Health and Safety (EHS)
The Company values its employees and is committed to protecting their health, safety and well-being. It therefore continues to develop and improve its arrangement for managing environment, health and safety issues.
Our Audit Review Panel, chaired by the Chief Executive Officer/Accountable Manager is responsible for overseeing our EHS performance and reviewing our EHS Policy regularly. Panel members meet to monitor the Groupâs performance in EHS and compliance with EHS policy. It coordinates overall Group policy regarding EHS issues, by monitoring the effectiveness of the Safety Management System, identifying potential areas for improvement, and establishing and reviewing EHS objectives, targets and the overall progress
Key objectives are:
- To communicate appropriate, timely and practical workplace environment, health & safety information and advice.
- To improve compliance with EHS standards through inspection and investigation activities.
- To ensure that an effective and up-to-date health and safety at work regulatory frame work is maintained.
The Company management takes its responsibilities for managing its environment, health & safety systems, policies and practices very seriously by implementing various rules and regulations laid down in Factories Act 1948 and The Environment (Protection) Act, 1986.
Key areas of work includes:
- EHS Policy
- The lost time injury rate in year 2017 is the lowest among these years. We believe the safety culture has been enhanced by more intensive safety training and greater efforts in work planning. We will continually work on improving the health and safety performance as well as reducing the impact on the environment in our operation activities in order to safeguard the well-being of employees and nature environment.
- Tegular internal meetings with employees are held to ensure that we actively exchange views on EHS issues
- 0ur work to secure better regulations
1. All hazardous waste are disposed through approved vendors of PCB (Pollution Control Board).
2. Air monitoring is done in areas where chemicals & paints are used.
3. Waste water is treated through STP before they are discharged to storm water system.
- Trogress against our key performance targets
1. Medical check-up for employees dealing with chemicals.
2. EHS awareness program for employees.
3. EHS audit program.
4. Monitoring of Hazardous waste generation.
5. Re-cycling of paper waste generated in office.
6. Use of paper on both sides.
7. Energy and water conservation program.
8. No reportable accident in FY 2017-18.
9. Public Deposits
The Company has not accepted any deposits covered under Chapter V of the Act. Accordingly, no disclosure or reporting is required in respect of details relating to deposits covered under this Chapter.
10. Issue of Non-Convertible Debentures
The Companyâs Unsecured, Taxable, Redeemable, Listed and Rated Non-Convertible Debentures of a face value of Rs.1,000,000/- (Rupees Ten Lakh Only) (âNCDsâ) each aggregating to Rs.6,989,000,000/- (Rupees Six Hundred Ninety Eight Crore Ninety Lakhs Only) issued on a Private Placement basis to EA Partners I.B.V a Foreign Portfolio Investor are listed on the BSE Limited. The NCDs are rated BBB- by ICRA Limited. No interest remains unpaid in respect of the NCDs as at 31st March, 2018.
11. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the Securities and Exchange Board of India and have complied with all the mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.
Pursuant to Regulation 34(3) of the Listing Regulations, a separate Report on Corporate Governance, alongwith Auditorsâ Certificate regarding compliance of conditions of Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report.
The Chief Executive Officers declaration regarding compliance with the Code of Business Conduct and Ethics forms part of the Report on Corporate Governance.
12. Corporate Social Responsibility
As a good Corporate Citizen, your Company has since its inception in 1992, taken up several initiatives and activities, in its endeavour to contribute in a socially responsible manner to the communities it serves and to Indian society as a whole. Towards this end and as required under Section 135 of the Act, the Board of Directors of the Company has constituted a Corporate Social Responsibility Committee.
Your Company is committed to making a contribution to the society it serves in general, and in particular, towards the betterment, education and empowerment of the girl child. Since its early years, your Company has been running an inflight collection program called the âMagic Boxâ in association with a Non-Governmental Organization named Save the Children India (STCI). The funds raised through this unique initiative from our guests (flying on our domestic flights) are utilized by STCI for education and for providing healthcare for underprivileged children and education for children with special needs. The collections from the âMagic Boxâ are also used by STCI to fund vocational courses for women.
Furthermore, as an equal opportunities employer it has always been the airlineâs endeavor to hire and promote diversity within the organization and facilitate empowerment of women. In fact 33% of our work force comprises of women and we are very proud of this diversity. To celebrate and recognize womanhood, Jet Airways organizes a special inflight fund raising drive on the occasion of International Womenâs Day, each year, across its domestic destinations. The funds collected are donated to three chosen NGOs who work primarily for the up-liftment and empowerment of underprivileged women.
Jet Airways has, over the years, partnered with NGOs such as the Wishing Factory, Save the Children India, YouWeCan, Akanksha, Mijwan, and a host of others, to educate them with specially prepared presentations about the world of aviation, by regularly organise trips to our hangars and airport terminal buildings to showcase the behind the scenes workings of an airline to young children.
The Company also organizes its annual and unique âFlight of Fantasyâ event for underprivileged children, and those with special needs. This is your Companyâs flagship event done annually and offers over 100 underprivileged children from select NGOs not just the chance for a joy ride, but also give them the opportunity to realize their dream to fly in an aircraft.
Jet Airways has always been in the forefront in the wake of calamities, natural disasters and other such contingencies. The Company has responded and supported the various state Governments and the Government of Indiaâs call for rehabilitation of displaced persons, transporting emergency supplies of food, medicine, rehabilitation material, assisting & transporting doctors and stranded guests with rebated travel and carriage of free cargo for medical and relief supplies.
The airline annually organises the âJoy of Giving weekâ across its domestic network. This special week gives a chance to all our colleagues to donate for a chosen NGO in each metro city. We are proud to state that our colleagues donate very generously both in cash and in kind and have helped many NGOs with their care and generosity over the years.
Jet Airways takes its commitment to society and the upliftment of both women and children very seriously and we do our best with the resources in hand to put smiles on the faces of those less fortunate than us.
13. Employees
Your Directors particularly acknowledge the selfless untiring efforts, whole-hearted support and co-operation of the employees at all levels. Our industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 31st March, 2018, was 16,558 (as on 31st March, 2017: 16,015).
The information required pursuant to Section 197 of the Act read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered Office of the Company between 10 A.M. and 12 Noon on any working day of the Company up to the date of the ensuing Annual General Meeting.
14. Directorsâ Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:
- that in the preparation of the annual financial statements for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
- that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the loss of the Company for the year ended on that date;
- that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- that the annual financial statements have been prepared on a going concern basis;
- that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
- that Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were in place and were adequate and operating effectively.
15. Number of Meetings of Board
The annual calendar of Board Meetings is tentatively agreed upon at the beginning of each year. Additionally, Board Meetings are convened as and when necessary.
Four Board Meetings were held during the Financial Year 2017-18. The gap between any two Board Meetings did not exceed 120 days. The details of the attendance of Directors at the Board Meetings held during the Financial Year 201718 are provided in the Report on Corporate Governance which forms part of this Report.
16. Independent Directors
The definition of Independent Directors is derived from Regulation 16 of the Listing Regulations and Section 149(6) of the Act. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Section 149(6) of the Act and Listing Regulations as at 31st March, 2018:- Mr. Srinivasan Vishvanathan
- Ms. Rajshree Pathy
- Mr. Vikram Mehta
- Mr. Ranjan Mathai
17. Board Evaluation
Pursuant to the provisions of the Act and of the Listing Regulations, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees.
18. Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Details of the Remuneration Policy are provided in the Report on Corporate Governance and also posted on the website of the Company.
19. Particulars of loans, guarantees or investments under Section 186
Details of loans, guarantees and investments covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2018 are given at Note no. 53 the notes to accounts to the financial statements forming part of this Annual Report.
20. Auditors
Pursuant to the provisions of Section 139 of the Act, the Joint Statutory Auditors of the Company, M/s. B S R & Co. LLP and M/s. D T S & Associates were appointed by the Members of the Company for a period of five years (till the conclusion of the 28th Annual General Meeting to be held in 2020) and five years (till the conclusion of the 30th Annual General Meeting to be held in 2022) respectively.
The said appointment of the Joint Statutory Auditors was required to be ratified by the Members at each Annual General Meeting (AGM) in accordance with the provisions of Section 139 of the Act.
Vide notification dated 7th May, 2018 issued by the Ministry of Corporate Affairs, New Delhi the requirement of ratification by Member at each AGM has been done away with.
The resolution of approving the remuneration of M/s. B S R & Co. LLP and M/s. D T S. & Associates as the Joint Statutory Auditors, forms part of the Notice of the 26th Annual General Meeting and the Resolution is recommended for your approval.
The Company has obtained Statutory Auditors Certificate as per requirement of circulars issued by Reserve Bank of India from time to time in relation to downstream investments.
21. Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism and Whistle Blower Policy in place to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Report on Corporate Governance and also posted on the website of the Company.
22. Related Party Transactions
All related party transactions that were entered into during the Financial Year were on an armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC-2 of the rules prescribed under Chapter IX relating to Accounts of Companies under the Act, is appended as âAnnexure Bâ.
23. Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Taizoon M. Khumri, Practicing Company Secretary (COP No. 88) of T. M. Khumri and Co., Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as âAnnexure Câ.
There is no secretarial audit qualification for the year under review.
24. Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as âAnnexure Dâ.
25. Material changes and commitments affecting the financial position of the Company
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the report.
The Board of Directors of the Company at its Meeting held on 2nd September, 2015 approved the scheme of Merger of Jet Lite (India) Limited, the wholly owned subsidiary of the Company with the Company (the âSchemeâ) as per the provisions of Section 391 to 394 of the Companies Act, 1956, subject to receipt of requisite approvals. The Appointed Date as per the terms of the Scheme was 1st April, 2015. The Scheme was approved by the Members of the Company on 22nd April, 2016. The Honâble High Court of Judicature at Bombay approved the Scheme on 20th October, 2016.
As the Ministry of Civil Aviation did not approve the said Scheme, the same stands revoked, cancelled and has no effect as provided in para 18 of the Scheme. Jet Lite (India) Limited and the Company continue their respective operations as two separate legal entities with their respective Air Operator Certificate.
26. Risk management policy and internal adequacy
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Company has also voluntarily constituted a Risk Management Committee.
The Companyâs internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.
27. Policy on Prevention of Sexual Harassment at Workplace
The Company has in place a policy on Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. A committee has been set up to redress complaints received regarding sexual harassment. All women, permanent, temporary or contractual including service providers are covered under this policy. The details of complaints received during the Financial Year 2017-18 are provided in the Business Responsibility Report.
28. Dividend Distribution Policy
The Company has framed and adopted Dividend Distribution Policy in compliance with Regulation 43A of the Listing Regulations. The Policy sets out the parameters and circumstances that will be taken into account by the Board of Directors to determine the distribution of dividend to shareholders. The Dividend Distribution Policy is attached as Annexure E and is available on the website of the Company at www.jetairways.com.
29. The change in the nature of business, if any, pursuant to Section 134 of the Act, read with Rule 8(5) of the Companies (Accounts) Rules, 2014
There is no change in the nature of business of the Company.
30. The details of directors or key managerial personnel who were appointed or have resigned during the year
Sr. No. |
Name |
Designation |
Effective Date |
Cessation |
|||
1 |
Mr. Javed Akhtar |
Independent Director |
30th May, 2017 |
2 |
Mr. James Hogan |
Nominee Director |
12th September, 2017 |
3 |
Mr. James Rigney |
Nominee Director |
7th December, 2017 |
4 |
Mr. Dinesh Kumar Mittal |
Independent Director |
29th January, 2018 |
Appointment |
|||
1 |
Mr. Harsh Mohan |
Nominee Director |
12th September, 2017 |
2 |
Mr. Kevin Knight |
Nominee Director |
7th December, 2017 |
3 |
Mr. Vinay Dube |
Chief Executive Officer |
9th August, 2017 |
31. The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year:
- Airjet Engineering Services Limited was incorporated as a wholly owned subsidiary on 18th May, 2017.
- Airjet Training Services Limited was incorporated as a wholly owned subsidiary on 18th May, 2017.
- Airjet Security and Allied Services Limited was incorporated as a wholly owned subsidiary on 19th May, 2017.
32. Significant and material orders passed by the Regulators or courts
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.
The Ministry of Civil Aviation did not approve the Scheme of Merger of Jet Lite (India) Limited, the wholly-owned subsidiary of the Company with the Company. Accordingly, the said Scheme stands revoked, cancelled and has no effect as provided in Para 18 of the Scheme. Jet Lite (India) Limited and the Company continue their respective operations as two separate legal entities with their respective Air Operator Certificates.
33. The details in respect of adequacy of internal financial controls with reference to the Financial Statements.
Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Companyâs internal control system is commensurate with its size, scale and complexities of its operations.
34. Secretarial Standards
The Company has complied with the applicable Standards of SS-1 Secretarial Standards on Meetings of the Board of Directors and SS-2 Secretarial Standards on General Meetings.
35. Statutory Information
The Disclosure required under Section 197(12) of the Act read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is as follows:
Sr. No. |
Requirements |
Disclosure |
I |
The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year |
1:53 |
ii |
The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year |
No increase has been undertaken for Wholetime Director, Chief Executive Officer, Chief Financial Officer and Company Secretary. |
iii |
The percentage increase in the median remuneration of employees in the Financial Year |
Median increase over the last Financial Year: 2.1% |
iv |
The number of permanent employees on the rolls of Company |
16,558 as on 31st March, 2018 |
v |
Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; |
Employees 12.8% Managerial Personnel NIL |
vi |
Affirmation that the remuneration is as per the remuneration policy of the company |
Yes we confirm |
36. Acknowledgements
Your Directors place on record their appreciation of the Companyâs General Sales Agentsâ and other members of the travel trade for their efforts in furthering the interest of the Company.
Your Directors would like to thank the Government of India especially the Ministry of Civil Aviation, Ministry of Commerce and Industry and Ministry of Finance for having had the foresight to have introduced the historic liberalization measure permitting foreign airlines to invest in the equity of Scheduled and Non Scheduled passenger airlines in India.
Your Directors also take this opportunity to thank the Ministry of Civil Aviation, Government of India, the Directorate General of Civil Aviation, Airports Authority of India, Mumbai International Airport (Private) Limited, Delhi International Airport (Private) Limited, GMR Hyderabad International Airport Limited, Bangalore International Airport Limited, Cochin International Airport Limited and other airport companies for their support and co-operation. Your Directors are also grateful to the Reserve Bank of India, National Stock Exchange of India Limited, BSE Limited, US Exim Bank, Financial Institutions and Banks, The Boeing Company, Avion de Transport Regionale, Airbus Industrie, General Electric, CFM and Pratt and Whitney and the lessors of our aircraft and engines for their understanding and look forward to their continued support.
On behalf of the Board of Directors
Mumbai Naresh Goyal
23rd May, 2018 Chairman
Mar 31, 2017
Dear Members,
The Directors have pleasure in presenting their Twenty Fifth Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 2017.
1. Performance Highlights
The financial and operating highlights for the year under review, compared with the previous Financial Year, are given below:
Financial highlights
(Rs. in Lakhs)
Particulars |
Standalone for year ended |
Consolidated for year ended |
||
31st March |
31st March |
|||
2017 |
2016 |
2017 |
2016 |
|
GROSS REVENUE |
2,257,653 |
2,191,096 |
2,366,991 |
2,290,606 |
Profit before Interest, Depreciation, |
||||
Exceptional Items & Tax |
217,581 |
295,792 |
213,049 |
293,515 |
Finance Costs |
84,068 |
86,811 |
85,263 |
88,498 |
Profit/(Loss) before Depreciation, |
||||
Exceptional Items & Tax |
133,513 |
208,981 |
127,786 |
205,017 |
Depreciation |
88,701 |
99,509 |
88,766 |
99,624 |
Profit/(Loss) before Exceptional Items & Tax |
44,812 |
109,472 |
39,020 |
105,393 |
Exceptional Items (Net) |
(5,789) |
7,884 |
- |
14,802 |
Profit/(Loss) before Taxation & Adjustments |
39,023 |
117,356 |
39,020 |
120,195 |
(Excess)/Provision for Tax |
(20) |
- |
(20) |
1 |
Share of Profit in Associate |
- |
4,805 |
971 |
|
Profit/(Loss) after Taxation |
39,043 |
117,356 |
43,845 |
121,165 |
Loss brought forward |
(679,507) |
(795,116) |
(899,261) |
(1,018,679) |
Amount transferred to Debenture Redemption Reserve |
(3,495) |
(1,747) |
(3,495) |
(1,747) |
Impact of Depreciation as per New Companies Act, 2013 |
- |
- |
- |
- |
Amount transferred to Balance Sheet |
(643,959) |
(679,507) |
(858,911) |
(899,261) |
Note: 1 Lakh = 100,000
Operating highlights (Consolidated)
Operating Parameters |
Year ended 31st March |
|
2017 |
2016 |
|
Departures (Number) |
225,938 |
224,488 |
Available Seat Kilometers (ASKMs) (Million) |
53,476 |
50,114 |
Revenue Passenger Kilometers (RKMs) (Million) |
43,484 |
41,299 |
Passenger Load Factors (%) |
81.3% |
82.4% |
Revenue Passengers (Number) |
27,147,736 |
25,838,090 |
Fleet Size |
112 |
116 |
2. Dividend
In view of the accumulated losses, the Board of Directors have not recommended any dividend on the Equity Shares for the Financial Year ended 31st March, 2017 (Previous year: Nil per Equity Share).
3. Review of Operations
During the year, the Company reported consolidated Profit After Tax of Rs.43,845 Lakhs and standalone Profit After Tax of Rs.39,043 Lakhs. Overall revenue increased from Rs.2,290,606 Lakhs in Fiscal 2016 to Rs.2,366,991 Lakhs in Fiscal 2017.
Available Seat Kilometers (ASKMs) increased by 6.7% to 53,476 Million in Fiscal 2017 compared with 50,114 Million in Fiscal 2016, which lead to rise in passenger numbers from 25.84 Million in Fiscal 2016 to 27.15 Million in Fiscal 2017.
Cost per ASKMs, excluding fuel continues to show improvement, which is evident from the fact that the Company was able to reduce cost by 1.2% over last year, despite inflationary increase in costs, weakening Indian rupee, and more importantly considerable increase in payroll and landing & navigation costs during the year.
The Companyâs domestic passenger traffic for the year under review grew by 3.5% while international passenger traffic registered an increase of 9.1%. The Company ended the Financial year with a system-wide seat factor of 81.3%. The seat factor for Domestic and International operations was 81.4% and 81.3% respectively.
Civil Aviation Policy
The Government introduced the New National Civil Aviation Policy in June 2016 heralding a marked shift in the Civil Aviation scenario in the country.
The new policy outlines several concrete measures to support Indiaâs ambition to become the worldâs third largest aviation market by facilitating creation of a robust domestic infrastructure framework. These include promoting regional connectivity across the country, infrastructural development including secondary airports, reduction in air fares to make them affordable, protecting consumer rights via timely refunds, rationalizing excess baggage charges, etc.
The new policy also amended the erstwhile 5/20 rule boosting competition and accorded cargo an âinfrastructure statusâ in line with the Governmentâs âMake in Indiaâ plan to increase cargo volumes; as well as development and promotion of India as a major Maintenance, Repair & Overhaul (MRO) hub in Asia. The new policy also unbundled fares allowing carriers the opportunity to take innovative steps to boost revenue via ancillary streams.
Network and Connectivity
The past year was marked by notable achievements in both passenger and cargo sides of the business. The Company completed 12 successful months of operations from its new Gateway at Amsterdam. Amsterdam has witnessed strong growth within a year of its operation and the outlook is promising for both passenger and cargo. In view of higher levels of growth witnessed, the Company deployed its B777-300ER between India and Amsterdam, offering first class service as well as facilitating record cargo uplift.
During the year, the Company continued its efforts to augment connectivity in the domestic market by launching direct, non-stop flights between emerging cities and metros such as those between Mumbai-Bagdogra, Mumbai-Madurai and Mangalore-Delhi, as well as between emerging cities such as Jaipur and Chandigarh. These initiatives are expected to continue well into the next year, as the Company endeavors to increase its capacity in the highly competitive domestic market on commercially important routes. The Company deployed its wide body A330s on key domestic routes between metros (Delhi, Mumbai, Bengaluru, and Chennai which are slot constrained airports) this enabled it to increase traffic and enable our guests to experience international comfort on domestic routes. This initiative has drawn strong appreciation from our guests.
On the international side of the business, the Company, together with its strategic partner - Etihad Airways, continued to take steps to further strengthen connectivity between India and the Gulf and together with Etihad Airways, the Company accounted for the major share of international air traffic between India and the Gulf.
The Company also added frequencies between India and Nepal, providing guests with greater choice while doubling its capacity on the sector. New international flights from Bengaluru to Singapore and Colombo were also launched during the year, enhancing connectivity as well as capacity to ASEAN and SAARC regions, including deployment of B777 from Mumbai to Singapore.
The Company also expanded its connectivity to the Far East via codeshare agreements with Hong Kong Airlines, Fiji Airways and JetStar Asia, bringing new and unique destinations such as Okinawa in Japan, Darwin in Australia as well as Auckland in New Zealand into its network fold.
During the year, the Company also strengthened its ongoing relationship with code share partners Delta Air Lines, KLM Royal Dutch Airlines, Air France and Virgin Atlantic, expanding connectivity via its European gateways to cover 34 points in North America and 46 points in Europe.
Network enhancements and upgrades via introduction of new flights, addition of frequencies as well as wide body upgrades on key routes such as Amsterdam, Dammam, Doha, Dubai and Jeddah continued throughout the year, providing guests with a truly world-class travel experience. The Company also added flights from additional southern cities including Hyderabad, Mangaluru and Kozhikode to the Gulf, in line with growing demand.
Vision and Mission
With growing operations and improving financial health, the Companyâs management outlined its mission and strategic intent to revitalize the organisationâs vision in order to align it with the Companyâs current and future direction. In September 2016, the Company rolled out its new vision and mission as a follow up to its widely-acclaimed âGuest Firstâ philosophy. The new vision, mission and purpose have been conceived based on evolving market conditions and with an underlying fundamental focus to renew the airlines connect with its guests for sustaining its successful turnaround.
âTo be amongst the most innovative and admired brands, renowned for service excellenceâ is the new vision of the Company, with core drive being to âBring the spirit of Indian hospitality to the Worldâ. The Companyâs core values and mission have been created on the basis of its new vision statement.
Innovation and Technology
The Company continued to drive excellence in innovation by using technology to design and deploy valuable products such as JetAdvance, Priority Advantage, Seat Select, Global Pass as well as its cutting-edge Wi-Fi based inflight streaming services, which have been well received by the travelers.
The Company expanded the scope of its services towards its guests by offering to manage their entire itinerary from an end-to-end perspective via innovative last mile surface connectivity agreements with other brands such as Uber and Indo-Canadian Bus Services via coaches and cabs, helping amplify its value proposition to guests significantly.
Awards, Milestones and Recognitions
The Company also leveraged its gateways and deployment of long haul aircraft to stimulate its cargo business, winning numerous awards such as, âInternational Cargo Airline of the Yearâ at the 4th GMR-IGI Airport Awards 2016 and the âAir-Cargo Airline of the Yearâ at the âLogistics Asia Awardsâ.
Jet-Privilege, the well-recognized frequent flyer, rewards and loyalty management programme also continued to grow from strength to strength crossing the milestone of 6 Million plus members, making it one of the worldâ leading programmes in the aviation category. The reputed programme continued winning laurels including the coveted â210 Awardâ at the prestigious 2016 Freddie Awards as well as others at the 10th Customer Loyalty & Customer Experience Awards. During the year, the Company also launched Indiaâs first and biggest ever âBillion Miles Festivalâ, awarding JP Miles to guests booking flights on the airline until 31st March, 2017.
Fiscal 2017 was also eventful given that the International Air Transport Association (IATA) re-elected Mr. Naresh Goyal, Chairman of the Company, to its Board of Governors for a fifth successive tenure. In fact, Mr. Goyal is the only representative from India, the fastest growing aviation market in the world, on the IATA Board of Governors. Mr. Goyal was also honored as âThe Iconic Indianâ by BITB / ITB Berlin at an event held at New Delhi. The Company was the only Indian brand from the aviation category to be featured amongst the worldâs top 200 most influential brands in a survey by Richtopia.
Fleet
As on 31st March, 2017, the Company had a fleet of 104 aircraft, comprising 10 Boeing 777-300 ER aircraft, 5 Airbus A330-200 aircraft, 4 Airbus A330-300 aircraft, 67 Next Generation Boeing 737-700/800/900/900ER aircraft, 15 modern ATR 72-500 Turboprop aircraft and 3 ATR 72-600 aircraft. The average fleet age as on 31st March, 2017 was 7.43 years. One A330-200 aircraft was sub-leased to Air Serbia as on 31st March, 2017.
The Company flies to 45 domestic destinations (includes flights operated by Jet Lite (India) Limited, the Companyâs wholly owned subsidiary) and 20 International destinations.
4. Management Discussion and Analysis
As required by Regulation 34 of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 entered into with the Stock Exchanges, a detailed review by the Management of the operations, performance and future outlook of the Company and its business, is presented in a separate section -Management Discussion and Analysis - forming part of this Annual Report.
5. Subsidiary Companies Jet Lite (India) Limited
Jet Lite (India) Limited (âJet Liteâ) is a wholly owned subsidiary which was acquired by the Company on 20th April, 2007. Jet Lite is a non-material, non-listed subsidiary company.
For the Financial Year ended 31st March, 2017, Jet Lite posted a total income of Rs.123,331 Lakhs (2015-16: Rs.113,655 Lakhs) and a Net Loss of â (5,789) Lakhs (2015-16: â (2,072) Lakhs). In view of the loss, the Board of Directors of Jet Lite has not recommended a dividend on the Equity Shares for the year ended 31st March, 2017 (Previous Year : Nil). The Company continues to support the operations of Jet Lite.
The highlights of the operating performance of Jet Lite for the Financial Year ended 31st March, 2017 are as follows:
Operating Parameters |
Year ended 31st March |
|
2017 |
2016 |
|
Departures (Number) |
23,673 |
21,672 |
Available Seat Kilometers (ASKMs) (Million) |
3,025 |
2,680 |
Revenue Passenger Kilometers (RKMs) (Million) |
2,397 |
2,125 |
Passenger Load Factors (%) |
79.2% |
79.3% |
Revenue Passengers (Number) |
2,751,994 |
2,441,637 |
As on 31st March, 2017, Jet Lite had an all-Boeing fleet of 8 aircraft, comprising 3 Boeing 737-700 and 5 Boeing 737800 aircraft.
Jet Airways Training Academy Private Limited (JATAPL)
In view of the fact that JATAPL has not commenced operations since its incorporation in 2012, an application was made to the Registrar of Companies, Mumbai to strike off its name under the Fast Track Exit Scheme, 2011. The name of JATAPL has accordingly been struck off the Register of Companies with effect from 15th March, 2017.
Airjet Ground Services Limited (âAGSLâ)
Recent changes in the National Civil Aviation Policy dated 15th June, 2015, prohibit airlines from engaging any manpower on contract basis for performing ground handling services. However, airlines are permitted to carry out ground handling and ancillary services through their own employees or employees of their subsidiary (ies).
In view of the above, the Board of Directors of the Company, at its Meeting held on 13th January, 2017, approved the incorporation of a wholly owned subsidiary for the purpose of, inter-alia, carrying on ground handling and ancillary services.
Accordingly, AGSL was incorporated on 10th March, 2017. The main objects of AGSL are to carry on all or any of the business or activities of ground handling and allied services, in relation to the aviation sector, as may be permissible in law include ramp handling and traffic handling and such other related activities.
As at 31st March, 2017, AGSL has yet to commence operations. For the Financial Year ended 31st March, 2017, AGSL posted a total income of Rs.Nil and a Net Loss of â (3) Lakhs.
The Company will make available copies of the Annual Accounts of the subsidiary companies and the related detailed information, free of cost to Members, on request. The same are also available for inspection at the Registered Office between 10 A.M. and 12 noon on any working day of the Company till the date of the 25th Annual General Meeting to be held on 11th September, 2017.
The subsidiary companies are managed by their respective Boards. The Company does not have any material unlisted subsidiary and hence is not required to nominate an independent director of the Company on the Board of the subsidiary companies.
6. Consolidated Financial Statements
The Audited Consolidated Accounts and Cash Flow Statement, comprising of the Company and its subsidiaries form part of this Report. The Auditorsâ Report on the Consolidated Accounts is also attached. The same is unqualified. The Consolidated Accounts have been prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard and the provisions of the Listing Agreement(s) entered into with the Stock Exchanges.
Further, as required under Section 129(3) of the Companies Act 2013, read with Companies (Accounts) Rules 2014, a statement containing salient features of the Financial Statements of the Subsidiaries in prescribed Form AOC-1 is attached as âAnnexure Aâ.
7. Conservation of energy, technology absorption and foreign exchange earnings and outgo
Particulars, as prescribed by Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Account) Rules, 2014, in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, to the extent applicable to the Company, are given below:
Conservation of Energy
The principal requirement of energy for the Company is that of jet fuel for aviation activities. The Company persistently strives to optimize fuel consumption in every facet of flight operation. These measures pertain to fuel consumption on ground and during the flight. The focus is on making the flight processes more efficient to reduce fuel consumption and thus CO2 emissions. The pillars of Companyâs optimum energy strategy are:
(i) State of aircrafts:
State and configuration of aircrafts, which includes the airframe and the engines, impacts fuel consumption. Engine washing is done regularly to maintain engine efficiency and the airframe is maintained immaculately to minimize aerodynamic drag.
(ii) Flight planning and processes:
Regular review of operating and flight planning processes is undertaken to optimize fuel consumption. Specific initiatives pertain to optimized routes, operating weight reduction and optimum fueling for the mission - without compromising the safety of operations. The Company utilizes latest models, techniques and systems which optimise fuel use. Deployment of the assets is done so as to optimize fuel efficiency for each flight.
(iii) Crew training and feedback:
Sensitization of Crew through regular training and feedback on fuel optimization potential is undertaken. Opportunities to reduce fuel consumption are brainstormed.
(iv) Post flight analysis:
Post flight analysis is undertaken to verify the impact of various policies and initiatives undertaken to reduce fuel consumption and serves as dynamic feedback in the fuel optimization endeavour.
(v) Technology infusion:
Technology infusion is done in areas which are found to have high potential for reduction in fuel consumption. Such areas cover all the aspects of operations.
Technology absorption Training of Pilots
Simulator training for A330, B737 and B777 aircraft was conducted at the Training Centre at Bangalore under supervision of the Companyâs own trainers.
Technology and e-Commerce initiatives
The past year saw some remarkable breakthroughs in the eCommerce space with the introduction of various initiatives aimed to further enhance our guestsâ overall travel experience.
The Company launched JetScreen, a flrst-of-its-kind wireless streaming service in Indian aviation where guests can access a host of in-flight entertainment on their personal device, including smartphones, laptops and tablets.
To provide guests the added flexibility for planning their travel, the Company introduced eCoupons - an electronic version of our coupon booklets that allows guests to book flights at fixed (all-inclusive) fares to any destination within India. In an attempt to enhance the check-in process and reduce waiting time at the airport counters, the Company implemented printing of baggage tags at the check-in kiosks at Mumbai airport. Once tagged, guests can simply drop their bags at the self-bag drop counter and proceed to security check.
To further enhance and customise our guestsâ online user experience, the Company launched 9 new country specific websites taking the total tally to 72 websites in 10 local languages. In addition, the Company also launched lingual specific online booking engines for the French and Dutch markets. In line with the philosophy of enhancing its overall value proposition, the Company has introduced a host of smart, guest-centric initiatives in the form of both product and service experiences such as âSeat Selectâ, âFareLockâ, âJetAdvanceâ and âFare Choicesâ that make travel increasingly technology friendly and convenient.
In an initiative to drive further choice and convenience, the Company also integrated some of the latest payment options like EMI, UPI and payment wallets in the domestic and international markets.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the Notes to Accounts.
8. Environment, Health and Safety
Environment, health and safety (âEHSâ) is an umbrella term for the laws, rules, guidance and processes designed to help protect our employees, the public and the environment from harm. In our workplace, the responsibilities for designing and implementing this appropriate procedures is assigned to EHS Department which is responsible for environmental protection and occupational health & safety at the workplace. EHS management has two general objectives:
a. Prevention of incidents or accidents that might result from abnormal operating conditions; and
b. Reduction of adverse effects that result from normal operating conditions
Regulatory requirements play an important role and the EHS Manager and safety officers of all stations identify and understand relevant EHS regulations, the implications of which are communicated to executive management, so that it can implement suitable measures.
From environment, health & safety standpoint, it involves creating organized efforts and procedures for identifying workplace hazards and reducing accidents and exposure to harmful situations and substances. It also includes regular EHS awareness training of personnel in accident prevention, accident response, emergency preparedness and use of personal protective equipment (PPE).
From an environmental standpoint, we have created a systematic approach to complying with environmental rules and regulations, such as managing waste that are generated at our workplace all the way till handing over to Pollution Control Board authorized vendors to reduce the Companyâs carbon footprint.
Successful EHS programs also include measures to address ergonomics, air quality and workplace safety that could affect the health and well-being of employees and the overall community.
9. Fixed Deposits
The Company has not accepted any Fixed Deposits from the public during the Financial Year ended 31st March, 2017.
10. Non-Convertible Debentures
The Company had issued 6,989 Unsecured, Taxable, Redeemable, Listed and Rated Non-Convertible Debentures of a face value of Rs.1,000,000/- each (âNCDâ) in the previous financial year on a Private Placement basis to EA Partners I.B.V a Foreign Portfolio Investor. These NCDs are listed on the BSE Limited.
The NCDs are rated BBB- by ICRA. No interest remains unpaid in respect of the NCDs as at 31st March, 2017.
11. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the Securities and Exchange Board of India and have complied with all the mandatory requirements. The non-mandatory requirements have been complied with to the extent practical and applicable.
A separate section on Corporate Governance and a certificate from the Auditors confirming compliance with the Corporate Governance requirements forms part of this Annual Report.
The Acting Chief Executive Officerâs declaration regarding compliance with the Code of Business Conduct and Ethics forms part of the Report on Corporate Governance.
12. Corporate Social Responsibility
As a good Corporate Citizen, your Company has since its inception in 1992, taken up several initiatives and activities, in its endeavour to contribute in a socially responsible manner to the communities it serves and to Indian society as a whole. Towards this end and as required under Section 135 of the Companies Act, 2013, the Board of Directors of the Company has constituted a Corporate Social Responsibility Committee. As on 31st March, 2017, the Committee comprised of Ms. Rajshree Pathy, Mr. Javed Akhtar, Mr. Gaurang Shetty, Mr. Vikram Mehta and Mrs. Anita Goyal as its Members.
Your Company is committed to making a contribution to the society it serves in general, and in particular, towards the betterment, education and empowerment of the girl child. Since its early years, your Company has been running an inflight collection program called the âMagic Boxâ in association with a Non-Governmental Organization named Save the Children India (STCI). The funds raised through this unique initiative from our guests (flying on our domestic flights) are utilized by STCI for education and for providing healthcare for underprivileged children and education for children with special needs. The collections from the âMagic Boxâ are also used by STCI to fund vocational courses for women.
Furthermore, as an equal opportunities employer it has always been the airlineâs endeavor to hire and promote diversity within the organization and facilitate empowerment of women. To celebrate and recognize womanhood, Jet Airways organizes a special in-flight fund raising drive on the occasion of International Womenâs Day, each year, across its domestic destinations. The funds collected are donated to three chosen NGOâs who work primarily for the up-liftment and empowerment of underprivileged women.
Jet Airways has, over the years, partnered with NGOs such as the Wishing Factory, Save the Children India, YouWeCan, Akanksha, Maijwan, and a host of others, to educate them with specially prepared presentations about the world of aviation, by regularly organise trips to our hangars and airport terminal buildings to showcase the behind the scenes workings of an airline to young children.
On the occasion of Childrenâs Day on 14th November each year, the Company organizes its annual âFlight of Fantasyâ event for underprivileged children, and those with special needs. This is your Companyâs flagship event done yearly across centers and offers over 100 underprivileged children from select NGOs not just the chance for a joy ride, but also give them the opportunity to realize their dream to fly in an aircraft.
Jet Airways has always been in the forefront in the wake of calamities, natural disasters and other such contingencies. The Company has responded and supported the various state Governments and the Government of Indiaâs call for rehabilitation of displaced persons, transporting emergency supplies of food, medicine, rehabilitation material, assisting & transporting doctors and stranded guests with rebated travel and carriage of free cargo for medical and relief supplies.
The airline annually organises the âJoy of Giving weekâ across its domestic network. This special week gives a chance to all our colleagues to donate for a chosen NGO in each metro city. We are proud to state that our colleagues donate very generously both in cash and in kind and have helped many NGOâs with their care and generosity over the years.
Jet Airways takes its commitment to society and the upliftment of both women and children very seriously and we do our best with the resources in hand to put smiles on the faces of those less fortunate than us.
13. Employees
Your Directors acknowledge the selfless untiring efforts, whole-hearted support and co-operation of the employees at all levels. Our industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 31st March, 2017, was 16,015 (as on 31st March, 2016: 14,905).
The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered Office of the Company between 10 A.M. and 12 noon on any working day of the Company up to the date of the ensuing Annual General Meeting.
14. Directorsâ Responsibility Statement
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
- that in the preparation of the annual financial statements for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
- that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;
- that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- that the annual financial statements have been prepared on a going concern basis;
- that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
- that Company has devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were in place and were adequate and operating effectively.
15. Number of Meetings of Board
The annual calendar of Board Meetings is tentatively agreed upon at the beginning of each year. Additionally, Board Meetings are convened to transact special business, as and when necessary.
Six Board Meetings were held during the Financial Year 2016-17. The gap between any two Board Meetings did not exceed 120 days. The Board Meetings were held on the following dates:
26th May, 2016 |
12th August, 2016 |
11th November, 2016 |
27th December, 2016 |
13th January, 2017 |
3rd February, 2017 |
The details of the attendance of Directors at the Board Meetings held during the Financial Year 2016-17 are provided in the Report on Corporate Governance which forms part of this Report.
16. Directors
During the year, Mr. Aman Mehta (DIN: 00009364) and Mr. I M Kadri (DIN: 00081694) ceased to be Independent Directors with effect from 27th December, 2016. The Board places on record its appreciation for the services rendered by them during their tenure with the Company.
As per the provisions of the Companies Act 2013, Mrs. Anita Goyal (DIN:01992051), retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends her re-appointment as a Director.
Our definition of âIndependenceâ of Directors is derived from Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as at 31st March, 2017:-
- Mr. Dinesh Kumar Mittal
- Mr. Javed Akhtar
- Mr. Srinivasan Vishvanathan
- Ms. Rajshree Pathy
- Mr. Vikram Mehta
- Mr. Ranjan Mathai
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Details of the Remuneration Policy are provided in the Report on Corporate Governance.
17. Particulars of loans, guarantees or investments under Section 186
The Company has provided following loans and guarantees and made following investments pursuant to Section 186 of the Companies Act, 2013:
Name of the Entity |
Relation |
Amount (Rs. in Lakhs) |
Particulars of loans, guarantees and investments |
Purpose for which the loan, guarantee and investment are proposed to be utilized |
Jet Lite (India) Limited |
Wholly Owned Subsidiary |
16,441 |
Guarantee |
Provided to Banks/Financial Institutions and Lessor/Service Providers. |
Loans given and investment made are given under notes 14, 15 and 45 to standalone financials statements.
18. Auditors
The Joint Statutory Auditor, M/s. BSR & Co. LLP, Chartered Accountants, who were appointed by the Members at the 23rd Annual General Meeting held on 14th August, 2015, have confirmed their eligibility and willingness to continue in their office, if their appointment is ratified by the Members as required under Section 139 of the Companies Act, 2013.
Pursuant to the provisions of Section 139 (2) read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014, M/s Chaturvedi and Shah complete their term at the 25th Annual General Meeting and cannot be re-appointed without a mandatory cooling off period of five consecutive years. Accordingly, it is proposed to appoint M/s. D T S & Associates, a new audit firm in place of M/s Chaturvedi & Shah, Chartered Accountants, who complete their term at the 25th Annual General Meeting
The ratification of the appointment of M/s. BSR & Co. LLP and the appointment of M/s. D T S & Associates as the Joint Statutory Auditors, forms part of the Notice of the 25th Annual General Meeting and the Resolution is recommended for your approval.
The Statutory Auditors Report does not contain any qualifications, reservations or adverse remarks on the financial statements of the Company. Further, your Company also obtained Statutory Auditors Certificate as per requirement of circulars issued by Reserve Bank of India from time to time in relation to downstream investments.
19. Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism and Whistle Blower Policy in place to deal with instance of fraud and mismanagement, if any. The details of the Policy are explained in the Report on Corporate Governance and also posted on the website of the Company.
20. Related Party Transactions
All related party transactions that were entered into during the Financial Year were on an armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval, as may be required. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website. None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company.
The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC-2 of the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013, are appended as âAnnexure Bâ.
21. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Taizoon M. Khumri, Practising Company Secretary (COP No. 88) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as âAnnexure Câ
There is no secretarial audit qualification for the year under review.
22. Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as âAnnexure Dâ
23. Transfer to Reserves
During the Financial Year, the Company has transferred an amount of Rs.3,495 Lakhs to Debenture Redemption Reserve.
24. Material changes and commitments affecting the financial position of the Company
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
The Board of Directors of the Company at its Meeting held on 2nd September, 2015 approved the scheme of Merger of Jet Lite (India) Limited, the wholly owned subsidiary of the Company with the Company (the âSchemeâ) as per the provisions of Section 391 to 394 of the Companies Act, 1956, subject to receipt of requisite approvals. The Appointed Date as per the terms of the Scheme is 1st April, 2015. The Scheme was approved by the Members of the Company on 22nd April, 2016. The Honâble High Court of Judicature at Bombay approved the Scheme on 20thOctober, 2016.
The Company is now in the process of obtaining the approval of the Ministry of Civil Aviation to the Scheme.
25. Risk management policy and internal adequacy
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Company has also constituted a Risk Management Committee of the Board.
The Companyâs internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.
26. Policy on Prevention of Sexual Harassment at Workplace
The Company has in place policy on Prevention of Sexual Harassment at work place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules framed thereunder. A committee has been set up to redress complaints received regarding sexual harassment. All women, permanent, temporary or contractual including service providers are covered under the policy.
27. The change in the nature of business, if any, pursuant to Section 134 of the Companies Act, 2013, read with Rule 8(5) of the Companies (Accounts) Rules, 2014
- The details of directors or key managerial personnel who were appointed or have resigned during the year;
Sr. No. |
Name |
Designation |
Effective Date |
Cessation |
|||
1 |
Mr. Aman Mehta |
Independent Director |
27th December, 2016 |
2 |
Mr. I. M. Kadri |
Independent Director |
27th December, 2016 |
Appointment |
|||
3 |
Mr. Vikram Mehta |
Independent Director |
27th December, 2016 |
4 |
Ms. Rajshree Pathy |
Independent Director |
27th December, 2016 |
5 |
Mr. Ranjan Mathai |
Independent Director |
21st March, 2017 |
- The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year:
- The name of Jet Airways Training Academy Private Limited (âJATAPLâ), a wholly owned subsidiary of the Company was struck of the Register of Companies pursuant to an application made by JATAPL;
- Airjet Ground Services Limited was incorporated as a wholly owned subsidiary on 10th March, 2017.
28. Significant and material orders passed by the Regulators or courts
There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations, except for the order dated 20th October, 2016 of the Honâble High Court of Judicature at Bombay approving the Scheme of Merger of the Company. The Honâble High Court has vide its order dated 9th December, 2016 extended the due date for filing the certified copies of the order together with the authenticated scheme with the Registrar of Companies within a period upto 30 days from the date of receipt of the approval from the Ministry of Civil Aviation /Director General Civil Aviation of the Government of India respectively.
29. The details in respect of adequacy of internal financial controls with reference to the Financial Statements.
Your Company has an effective internal control and risk-mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The Companyâs internal control system is commensurate with its size, scale and complexities of its operations.
30. Statutory Information
The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is as follows:
Sr. No. |
Requirements |
Disclosure |
i |
The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year |
1:53 |
ii |
The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year |
No increase has been undertaken for Chief Executive Officer and Chief Financial Officer. Percentage increase in remuneration for Whole Time Director and Company Secretary was 71% and 74% respectively. |
iii |
The percentage increase in the median remuneration of employees in the Financial Year |
Median increase over the last Financial Year: 14% |
iv |
The number of permanent employees on the rolls of Company |
16,015 as on 31st March, 2017 |
v |
Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; |
Employees 28 % Managerial Personnel 24 % |
vi |
Affirmation that the remuneration is as per the remuneration policy of the company |
Yes we confirm |
31. Acknowledgements
Your Directors place on record their appreciation of the Companyâs General Sales Agentsâ and other members of the travel trade for their efforts in furthering the interest of the Company.
Your Directors would like to thank the Government of India especially the Ministry of Civil Aviation, Ministry of Commerce and Industry and Ministry of Finance for having had the foresight to have introduced the historic liberalization measure permitting foreign airlines to invest in the equity of Scheduled and Non Scheduled passenger airlines in India.
Your Directors also take this opportunity to thank the Ministry of Civil Aviation, Government of India, the Directorate General of Civil Aviation, Airports Authority of India, Mumbai International Airport (Private) Limited, Delhi International Airport (Private) Limited, GMR Hyderabad International Airport Limited, Bangalore International Airport Limited, Cochin International Airport Limited and other airport companies for their support and co-operation. Your Directors are also grateful to the Ministry of Finance, Reserve Bank of India, National Stock Exchange of India Limited, BSE Limited, US EXIM Bank, Financial Institutions and Banks, Boeing Company, Avion de Transport Regionale, Airbus Industrie, General Electric, CFM and Pratt and Whitney and the lessors of our aircraft and engines for their understanding and look forward to their continued support.
On behalf of the Board of Directors
Mumbai Naresh Goyal
30th May, 2017 Chairman
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their Twenty Third Annual
Report together with the Audited Statement of Accounts for the
Financial Year ended 31st March, 2015.
1. Performance highlights
The Financial and Operating highlights for the year under review,
compared with the previous Financial Year, are given below:
Financial highlights
(Rs in lakhs)
Particulars Standalone for year
ended 31st March
2015 2014
GROSS REVENUE 2,028,073 1,771,347
(Loss)/Profit before Interest, Depreciation,
Exceptional Items & Tax 59,135 (107,307)
Finance Costs 88,406 99,716
(Loss)/Profit before Depreciation, Exceptional
Items & Tax (29,271) (207,023)
Depreciation 76,250 87,575
Loss before Exceptional Items & Tax (105,521) (294,598)
Exceptional Items (Net) (75,850) (72,199)
Loss before Taxation & Adjustments (181,371) (366,797)
(Excess)/Provision for Tax - (12)
Share of Profit/(Loss) in Associate - -
Loss after Taxation (181,371) (366,785)
Impact of depreciation as per new Companies
Act 2013 (2,861) -
Loss brought forward (610,884) (244,099)
Amount transferred to Balance Sheet (795,116) (610,884)
Particular Consolidated for year
ended 31st March
2015 2014
GROSS REVENUE 2,166,165 1,944,530
(Loss)/Profit before Interest,
Depreciation,
Exceptional Items & Tax 33,765 (145,002)
Finance Costs 92,047 108,360
(Loss)/Profit before Depreciation, (58,282) (253,362)
Exceptional Items & Tax
Depreciation 76,531 87,778
Loss before Exceptional Items & Tax (134,813) (341,140)
Exceptional Items (Net) (75,322) (71,739)
Loss before Taxation & Adjustments (210,135) (412,879)
(Excess)/Provision for Tax 1 (12)
Share of Profit/fLoss) in Associate 395 (109)
Loss after Taxation (209,741) (412,976)
Impact of depreciation as per new Companies
Act' 2013 (3,235) -
Loss brought forward (805,703) (392,727)
Amount transferred to Balance Sheet (1,018,679) (805,703)
Operating highlights
Operating parameters Year ended 31st March
2015 2014
Departures (Number) 176,406 173,723
Available Seat Kilometers (ASKMs) (Million) 41,769 38,064
Revenue Passenger Kilometers (RPKMs) (Million) 34,423 29,747
Passenger Load Factor (%) 82.4 78.2
Revenue Passengers (Number) 19,475,480 17,218,833
Average Fleet Size 94 93
2. Dividend
The Board of Directors have not recommended any dividend on the Equity
Shares in view of the performance of the Company for the Financial Year
ended 31st March, 2015 (Previous year: Nil per Equity Share).
3. State of Company's Affairs / Review of Operations
The Company reported a consolidated negative Profit After Tax of Rs.
209,741 lakhs in Financial Year 2014-15, a reduction of 51% from
consolidated Loss After Tax in Financial Year 2013-14. Financial Year
2014-15 saw passenger growth of 9.6% and operating revenue growth of
10.1% as compared to Financial Year 2013-14. The reduction in losses
incurred by the Company was essentially due to:
a) Increase in operational revenue from Rs. 1,903,584 lakhs in Financial
Year 2013-14 to Rs. 2,096,560 lakhs - an increase of 10.1%, primarily on
account of improved load factors and yields
b) Reduction in Avaition Turbine Fuel (ATF) prices due to weakness in
global crude prices during Financial Year 2014-15
c) Measures taken by your company to control overheads
d) Surplus from Slump Sale of 'Jet Privilege' Frequent Flyer Program
aggregating Rs. 30,501 lakhs
The above improvements were partly offset by impairment of goodwill of
Rs. 117,239 lakhs in Financial Year 2014-15. The consolidated operating
loss excluding exceptional items (mainly impairment of goodwill and
surplus from sale of the Frequent Flyer Program) in Financial Year
2014-15 aggregates Rs. 134,813 lakhs, a reduction of 60% over operating
loss of Rs. 341,140 lakhs incurred in Financial Year 2013-14.
Your Company implemented a "single brand" and "full service" product in
December 2014 with an objective of delivering consistent, premium
service across its entire network. This was further supported by the
launch of "Guest First" program to enhance Ground and Inflight service,
increase guest engagement, and increase dedicated facilities at the
airports check-in counters and bag drop counters.
In addition to the above, your Company is continuously focusing on
improving and enhancing direct touch points with our guests. Some of
the steps taken by your company in this direction include:
a) Launch of "Global Linked' with specific focus on the Small and
Medium Enterprise (SME) segment
b) IVR Upgrade for pre recognition of frequent fliers
c) Enhancement of our online booking portal
d) Launch of Jet Instant to access information on fares and flight
status in real time through Twitter.
These measures adopted by your Company have started yielding positive
results, which is reflected in the improvement of load factors and
yields in Financial Year 2014-15 over Financial Year 2013-14.
On operational front, your Company has taken various initiatives to
improve efficiency and revenue earning potential. During Financial
Year 2014-15, the entire fleet of B737-800 aircraft were standardized
to 12(business)/ 156(economy) configuration. This has been a critical
factor to enable us provide a standardized product to our guests.
Further, utilization of our B737 fleet grew by 5.4% to an average 11.6
hours in Financial Year 2014-15 as compared to 11 hours in Financial
Year 2013-14.
In line with its turnaround strategy, your Company is continuously
looking at cost reduction initiatives, discontinuing loss making
routes, renegotiating major contracts including aircraft maintenance
costs and other efficiency enhancement measures. We are confident that
these measures will help us to bring down costs which are key to
overall turnaround of the Company.
Post its alliance with Etihad Airways, your Company has enhanced
international connectivity with addition of new destinations and
additional flights to various countries in the Gulf Region. The Company
operates more flights to the Gulf Region than any other Indian carrier.
Jet Airways and Etihad Airways together operate over 4,300
international flights a month connecting India to the world via the Abu
Dhabi gateway.
The domestic traffic in India increased by 15% for Financial Year 2015,
a significant improvement as compared to a 5% increase in the previous
year. The Company (along with its wholly owned subsidiary Jet Lite
(India) Limited), carried 194.75 lakhs revenue passengers on its
international and domestic services during the year under review, an
increase of 9.6% over Financial Year 2013-14.
Your Company's domestic passenger traffic for the year under review
grew by 9.3% as compared to a growth of 1% last year while
international passenger traffic registered an increase of 20.6%, as
compared to an increase of 6% last year. The Company ended the
Financial Year with a system-wide seat factor of 82.3%. The seat factor
was 78.4% on domestic and 84.3% on the international sectors.
Over the next few years, we expect the domestic aviation market to grow
at a healthy pace. While the Indian aviation market is still subject to
ongoing structural challenges and robust competition is placing
pressure on yields, we will continue to progress by focusing on
delivering an enhanced experience for our guests and improving
efficiency throughout the business.
Fleet
As on 31st March, 2015, the Company had a fleet of 107 aircraft,
comprising of 8 Airbus A330-200, 4 Airbus A330-300, 15 ATR 72-500, 3
ATR 72-600, 67 Next Generation Boeing 737-700/800/900/900ER and 10
Boeing 777-300ER. With an average fleet age of 5.6 years, the airline
has one of the youngest aircraft fleets in the world.
Of the 10 Boeing 777-300ER aircraft, 5 aircraft have been sub (dry)
leased to Etihad Airways PJSC. Additionally, 2 Airbus A330-200 aircraft
have been sub (dry) leased to Etihad Airways PJSC and 3 Airbus A330-200
aircraft have been sub (dry) leased to Turkish Airlines Inc.
4. Management Discussion and Analysis
As required by Clause 49 of the Listing Agreement entered into with the
Stock Exchanges, a detailed review by the Management of the operations,
performance and future outlook of the Company and its business, is
presented in a separate section - Management Discussion and Analysis -
forming part of this Annual Report.
5. Subsidiary Companies Jet Lite (India) Limited
Jet Lite (India) Limited ('Jet Lite') is a wholly owned subsidiary
which was acquired by the Company on 20th April, 2007.
Jet Lite is a non-material, non-listed subsidiary company as defined
under Clause 49 of the Listing Agreement(s) entered into with the Stock
Exchanges.
For the Financial Year ended 31st March, 2015, Jet Lite posted a total
income of Rs.143,320 lakhs (2013-14 : Rs. 176,364 lakhs) and a Net Loss of
Rs. (28,765) lakhs (2013-14: Rs. (42,931) lakhs). In view of the loss, the
Board of Directors of Jet Lite has not recommended a dividend on the
Equity Shares for the year ended 31st March, 2015 (Previous Year :
Nil). The Company continues to support the operations of Jet Lite.
The highlights of the operating performance of Jet Lite for the
Financial Year ended 31st March, 2015 are as follows:
Traffic parameters Year ended 31st March
2015 2014
Departures (Number) 26,302 31,986
Available Seat Kilometers (ASKMs) (Million) 3,027 3,937
Revenue Passenger Kilometers (RPKMs) (Million) 2,423 2,862
Passenger Load Factor (%) 80.1% 72.7%
Revenue Passengers (Numbers) 3,031,710 3,308,533
Fleet
As on 31st March, 2015, Jet Lite had an all-Boeing fleet of 9 aircraft,
comprising of 3 Boeing 737-700, 5 Boeing 737- 800 and 1 Boeing
737-900ER aircraft.
Jet Airways Training Academy Private Limited ('JATPL')
JATPL continues to be a subsidiary of the Company. For the Financial
Year ended 31st March, 2015, JATAPL posted a total income of Rs. NIL
(2013-14 : Rs. NIL) and a Net Loss of Rs.(1) lakhs (2013-14: Rs.(1) lakhs).
The Company will make available copies of the Annual Accounts of the
subsidiary companies and the related detailed information, free of cost
to Members, on request. The same are also available for inspection at
the Registered Office between 10 a.m. and 12 noon on any working day of
the Company till the date of the 23rd Annual General Meeting.
The subsidiary companies are managed by their respective Boards. The
Company does not have any material unlisted subsidiary and hence is not
required to nominate an independent director of the Company on the
Board of the subsidiary companies.
6. Consolidated Financial Statements
The audited Consolidated Accounts and Cash Flow Statement, comprising
of the Company and its subsidiaries form part of this Report. The
Auditors' Report on the Consolidated Accounts is also attached. The
same is unqualified. The Consolidated Accounts have been prepared in
accordance with the Accounting Standards prescribed by the Companies
Act, 2013 in this regard and the provisions of the Listing Agreement(s)
entered into with the Stock Exchanges.
7. Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars, as prescribed by Section 134(3)(m) of the Companies Act,
2013, read with Rule 8 (3) of the Companies (Account) Rules, 2014, in
respect of conservation of energy, technology absorption and foreign
exchange earnings and outgo, to the extent applicable to the Company,
are given below:
Conservation of Energy
The Company embraces new technology from aircraft and engine
manufacturers. Our achievements on fuel efficiency include our aircraft
fleet and engine modernization / renewal policy. Improved flight
planning through all flight stages, improvements in flight operation
procedures such as continuous descent operations, reduced engine
taxi-in procedure, participation in route planning/restructuring at
various levels and decrease in uplift of unnecessary surplus fuel
further contribute to fuel savings and emissions reductions. We utilize
latest flight techniques and flight planning systems that reduce fuel
use. Various teams within the Company work on implementing innovative
fuel optimization and monitoring initiatives. Other initiatives include
airframe and engine performance improvement packages, use of core
washing, reduction of unnecessary weight, adjustment of potable water
carried depending on aircraft and sector flown, usage of lightweight
crockery and cargo containers, reduction of operational items, as well
as employment of mobile ground power units and preconditioned air units
to reduce use of on-board auxiliary power units. These measures improve
our overall fuel efficiency and have enabled us to operate our aircraft
in a highly efficient manner.
The Company's impact on climate change is due mainly to CO2 emissions
generated by its aircraft engines. The Company has implemented its
action plan, the focus of which is renewal of its fleet. Fleet
modernization programme ensures our aircraft are as technologically
advanced and fuel efficient as possible. It is mobilizing all its
departments in its efforts to minimize its carbon footprint by pursuing
flight optimization, reducing the impact of ground operation etc. The
Company is committed to reduce CO2 emissions.
The Company is also sponsoring research dedicated towards understanding
the impact of aircraft engine emissions on the environment and the
various technological as well as market based measures to contain the
emissions. The Company is engaged in supporting high potential
resource conservation and renewable energy programmes.
Technology absorption
Technology and e-Commerce initiatives
Over the past year, the Company has introduced a set of technology
based initiatives with a clear focus on further enhancing its guests
overall travel experience. The introduction of an enhanced
self-check-in service has provided guests with seamless options to
check-in using our website, mobile app and kiosk. Integrating with
Google Now has enabled guests to receive convenient and relevant
updates about their flight and other related travel information.
The Company has also been the first in the country to successfully
complete a pilot test for the use of mobile barcoded boarding pass at
Bengaluru International Airport. Another first in Indian Aviation is
the launch of #JetInstant, a Twitter based integration that allows
guests to check for flight status and avail the lowest fare for a
particular route with just a single Tweet.
To increase its reach among developed and emerging markets, the Company
also introduced multi-lingual versions of its website in Arabic and
Vietnamese. Guests can now also pay for their tickets booked on
jetairways.com using Paytm and Mobikwik prepaid wallet based payment
options.
In the coming years, the Company aims to further enhance #JetInstant
with additional easy to access services. The launch of its refreshed,
state of the art, responsive website and booking experience will
further improve the guests overall online experience across devices.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the
Notes to Accounts.
8. Environment, Health and Safety (EHS)
The Company values its employees and is committed to protecting their
health, safety and well-being. It therefore continues to develop and
improve its arrangement for managing environment, health and safety
issues.
The managements vision is to see that the risks to employees' health
and safety arising from work activities are effectively controlled,
thereby contributing to the overall economic and social well-being of
the community.
The key objectives of our EHS policy are:
- To communicate appropriate, timely and practical workplace
environment, health & safety information and advice.
- To improve compliance with EHS standards through inspection and
investigation activities.
- To ensure that an effective and up-to-date health and safety
regulatory frame work is maintained.
The Company's Management takes its responsibilities for managing its
environment, health & safety systems, policies and practices very
seriously by implementing various rules and regulations laid down under
Factories Act, 1948 and the Environment (Protection) Act, 1986.
Examples of key areas of our work and include :
1 EHS Policy
2 Our work to secure better regulations
- All hazardous waste is disposed through approved vendors of the
Pollution Control Board.
- Air monitoring is done in areas where chemicals & paints are used.
- Waste water is treated through ETP before it is discharged to storm
water system.
3 Progress against our key performance targets
- Medical check-up for employees dealing with chemicals.
- EHS awareness program for employees.
- EHS audit program.
- Monitoring of Hazardous waste generation.
- Re-cycling of paper waste generated in office.
- Use of paper on both sides.
- Energy and water conservation program
- No reportable accident in Financial Year 2014-15.
9. Fixed Deposits
The Company has not accepted any Fixed Deposits from the public during
the Financial Year ended 31st March, 2015.
10. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the
Securities and Exchange Board of India and have complied with all the
mandatory requirements, except with regards to Clause 49(II)(A)(2) of
Listing Agreement which deals with number of Independent Directors in
case the non-executive chairman is a promoter which has been complied
by the Company with effect from 1st November, 2014. The non-mandatory
requirements have been complied with to the extent practical and
applicable.
A separate section on Corporate Governance and a certificate from the
Auditors confirming compliance with the Corporate Governance
requirements as stipulated in Clause 49 of the Listing Agreement(s)
entered into with the Stock Exchanges, form part of this Annual Report.
The Chief Executive Officer's declaration regarding compliance with the
Code of Business Conduct and Ethics forms part of the Report on
Corporate Governance.
The requisite Certificate from the Auditors of the Company on Corporate
Governance as stipulated under the aforesaid Clause 49 is attached to
this Report.
11. Corporate Social Responsibility
As required under Section 135 of the Companies Act, 2013, the Board of
Directors of the Company has constituted the Corporate Social
Responsibility Committee which consists of Mr. Dinesh Kumar Mittal, Mr.
Javed Akhtar and Mr. Gaurang Shetty as its Members
Since the Company does not have net profit for the last three Financial
Years, the Company is not mandatory required to contribute towards
Corporate Social Responsibility activities. However, the Company runs
an in-flight collection programme called 'Magic Box' in association
with the non-governmental organisation-(NGO) Save the Children India
(STCI). The funds raised through the Magic Box programme are utilised
for relief work involving natural calamities such as earthquakes as
well as education and healthcare for the underprivileged children and
women. It also contributes significantly in the fight against
trafficking of women and children.
In its constant endeavour to facilitate empowerment of women, the
Company organises an in-flight fund raising drive prior to the 8th
March each year. The funds collected are donated to select NGOs working
primarily for the upliftment and empowerment of underprivileged women.
On the occasion of Children's Day on 14th November each year, the
Company organises "Flights of Fantasy" for approximately 100
underprivileged children. Under this unique initiative, these children
are introduced to the world of aviation, which is both informative as
well as an educational experience for them.
12. Employees
Your Directors acknowledge the selfless untiring efforts, whole-hearted
support and co-operation of the employees at all levels. Our industrial
relations continue to be cordial.
The total number of permanent employees of the Company as on 31st
March, 2015, was 13,527 (as on 31st March, 2014: 13,256).
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, in respect of employees of the Company, will be provided
upon request. In terms of Section 136 of the Act, the Report and
Accounts are being sent to the Members and others entitled thereto,
excluding the information on employees' particulars which is available
for inspection by the Members at the Registered Office of the Company
between 10 a.m. and 12 noon on any working day of the Company up to the
date of the ensuing Annual General Meeting.
13. Directors' Responsibility Statement
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
- that in the preparation of the annual Financial Statements for the
year ended 31st March, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any
- that such accounting policies have been selected and applied
consistently and judgement and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2015 and of the loss of the
Company for the year ended on that date;
- that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- that the annual Financial Statements have been prepared on a going
concern basis;
- that proper internal financial controls are in place and that the
financial controls were adequate and were operating effectively;
- proper systems to ensure compliance with the provisions of all
applicable laws are in place and are adequate and operating
effectively.
14. Number of Meetings of Board
The annual calendar of Board Meetings is tentatively agreed upon at the
beginning of each year. Additionally, Board Meetings are convened to
transact special business, as and when necessary.
Six Board Meetings were held during the Financial Year 2014-15. The gap
between any two Board Meetings did not exceed 120 days. The Board
Meetings were held on the following dates :
27th May, 2014 11th August, 2014 7th November, 2014
11th December, 2014 6th February, 2015 17th March, 2015
The details of the attendance of Directors at the Board Meetings held
during the Financial Year 2014-15 are as follows :
Date of Board Mr. Naresh Mr. James Mr. James Mr. Aman
Meeting Goyal Hogan Rigney Mehta
27th May,2014 Yes Yes Yes Yes
11th August,2014 Yes Yes Yes Yes
7th November,2014 Yes Yes Yes Yes
11th December,2014 No No No No
6th February,2015 Yes Yes Yes Yes
17th March,2015 No No No No
Date of Board Mr. Dinesh Mr. I. M. Mr. Javed Mr.Gaurang
Meeting Kumar Kadri Akhtar Mittal
Shetty
27th May,2014 N.A. Yes Yes Yes
11th August,2014 N.A. Yes Yes Yes
7th November,2014 No Yes No Yes
11th December,2014 Yes Yes Yes Yes
6th February,2015 Yes Yes Yes Yes
17th March,2015 No Yes Yes Yes
The details of the attendance of Directors at the Annual General
Meeting held during the financial year 2014-15 is as follows :
Date ofGeneral Mr. Naresh Mr. James Mr. James Mr. Aman
Meeting Goyal Hogan Rigney Mehta
11th August, Yes Yes Yes Yes
2014
Date ofGeneral Mr. Dinesh Mr. I. M. Mr. Javed Mr.Gaurang
Meeting Kumar Mittal Kadri Akhtar Shetty
11th August,2014 N.A. Yes Yes Yes
15. Directors
Our definition of 'Independence' of Directors is derived from Clause 49
of the Listing Agreement with Stock Exchanges and Section 149(6) of the
Companies Act, 2013. Based on the confirmation / disclosures received
from the Directors and on evaluation of the relationships disclosed,
the following Non-Executive Directors are Independent in terms of
Clause 49 of the Listing Agreement and Section 149(6) of the Companies
Act, 2013 as at 31st March, 2015:-
- Mr. Aman Mehta
- Mr. Dinesh Kumar Mittal
- Mr. Javed Akhtar
- Mr. I. M. Kadri
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board of Directors has undertaken an
evaluation of its own performance, the performance of its Committees
and of all the individual Directors based on various parameters
relating to roles, responsibilities and obligations of the Board,
effective ness of its functioning, contribution of Directors at
meetings and the functioning of its Committees.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. Details of the Remuneration
Policy are provided in the Corporate Governance Report.
16. Particulars of loans, guarantees or investments under Section 186
The Company has provided following loans and guarantees and made
following investments pursuant to Section 186 of the Companies Act,
2013:
Name of the Entity Relation Amount Particulars of
(Rs in loans, guarantees
lakhs) and investments
Jet Lite (India) Subsidiary 24,215 Guarantee
Limited company
Name of the Entity Purpose for which the loan, guarantee and
investment are proposed to be utilised
Jet Lite (india) Limited Provided to Banks / Financial Institutions
and Lessors / Service Providers
Loans given and Investments made are given under notes 14 and 15 to the
Standalone Financial Statements.
17. Related Party Transactions
All related party transactions that were entered into during the
Financial Year were on an arm's length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
All Related Party Transactions have been placed before the Audit
Committee as also the Board for their approval.
The policy on Related Party Transactions as approved by the Board is
available on the Company's website.
None of the Directors has any pecuniary relationships or transactions
vis-a-vis the Company.
The particulars of contracts or arrangements with related parties
referred to in Section 188(1), as prescribed in Form AOC - 2 of the
rules prescribed under Chapter IX relating to Accounts of Companies
under the Companies Act, 2013, is appended as "Annexure A".
18. Auditors
The Statutory Auditors, Deloitte Haskins & Sells LLP, Chartered
Accountants, and Chaturvedi & Shah, Chartered Accountants, retire at
the forthcoming Annual General Meeting. M/s. Chaturvedi & Shah,
Chartered Accountants have confirmed their eligibility and willingness
to accept office, if re-appointed.
As per the provisions of Section 139 (2)(b)(ii) read with Rule 6 of the
Companies (Audit and Auditors) Rules, 2014, any audit firm which has
been functioning as the Statutory Auditor of a Company for ten years or
more cannot be re-appointed as the Statutory Auditor without a
mandatory cooling off period of five consecutive years.
In order to comply with the requirements of the Companies Act, 2013 and
to facilitate a smooth transition from the existing joint Statutory
Auditors to the new Statutory Auditors it is proposed to appoint a new
audit firm i.e M/s. BSR & Co. LLP, Chartered Accountants in place of
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, thereby
ensuring the Company is in compliance with Section Section 139
(2)(b)(ii) of the Companies Act, 2013, read with Rule 6 of the
Companies (Audit and Auditors) Rules, 2014.
The re-appointment of M/s. Chaturvedi & Shah, (Chartered Accountants)
and the appointment of M/s. BSR & Co. LLP as the Joint Statutory
Auditors for the Financial Year 2015-16, forms part of the Notice of
the said Annual General Meeting and the Resolution is recommended for
your approval.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. Vijay Sonone,
Practising Company Secretary (COP No. 7991) to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Auditor
is annexed herewith as "Annexure B".
Reply to the observations in the Secretarial Audit Report :
The necessary forms for appointment of Key Managerial Personnel have
been filed. The Company has also complied with the requirement of Woman
Director by appointing Mrs. Anita Goyal on 8th April, 2015.
19. Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism and Whistle Blower Policy in place to
deal with instance of fraud and mismanagement, if any. The details of
the Policy are explained in the Corporate Governance Report and also
posted on the website of the Company.
20. Transfer to Reserves
The Company has made no transfers to reserves during the Financial Year
2014-2015.
21. Extract of Annual Return
The details forming part of the extract of the Annual Return in Form
MGT 9 is annexed herewith as "Annexure C".
22. Material changes and commitments affecting the financial position
of the Company
There have been no material changes and commitments, if any, affecting
the financial position of the Company which have occurred between the
end of the Financial Year of the Company to which the Financial
Statements relate and the date of the report.
23. Risk management policy and adequacy of internal financial controls
The Company has in place a mechanism to identify, assess, monitor and
mitigate various risks to key business objectives. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis. These are discussed
at the meetings of the Audit Committee and the Board of Directors of
the Company.
The Company's internal control systems with reference to the Financial
Statements are adequate and commensurate with the nature of its
business and the size and complexity of its operations. These are
routinely tested by Statutory as well as Internal Auditors. Significant
audit observations, if any and follow up actions thereon are reported
to the Audit Committee.
24. Policy on Prevention of Sexual Harassment at Workplace
The Company has in place a Prevention of Sexual Harassment Policy in
line with the requirements of The Sexual Harassment of Women at the
workplace (Prevention, Prohibition & Redressal) Act, 2013, A committee
has been set up to redress complaints received regarding sexual
harassment. All employees (Permanent, contractual, temporary, trainees)
are covered under this policy.
25. General Information
- The details of directors or key managerial personnel who were
appointed or have resigned during the year;
Name Designation Date of Appointment
Mr Cramer Ball Chief Executive Officer 25th September, 2014
Mr Ravichandran Acting Chief Financial 24th February, 2015
Narayan Officer
Mr Dinesh Kumar Independent Director 1st November, 2014
Mittal
- During the Financial Year, no new Subsidiaries, joint ventures or
associate companies were aqiured by the Company;
- There were no significant and material orders passed by the
regulators or courts or tribunals impacting the going concern status
and Company's operations in future;
26. Information relating to Section 197(12) & Rule 5 of the Companies
(Appointment & Remuneration of Managerial Personnel) Rules, 2014
The ratio of the remuneration of each director to the median employee's
remuneration and other details in terms of sub-section 12 of Section
197 of the Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014:
The ratio of the remuneration of each director to the median
remuneration of the employees of the company for the Financial Year;
Director & Manager: 835,000 Employees: 1,365,033 Ratio: 1:1.63
(total wage cost / Average no of employees in the fiscal year)
The percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the Financial Year;
No increase has been undertaken for Chief Financial Officer, Chief
Executive Officer, Company Secretary or Manager.
The percentage increase in the median remuneration of employees in the
Financial Year; 4.65%
The number of permanent employees on the rolls of company;
13,527 as on 31st March, 2015
The explanation on the relationship between average increase in
remuneration and company performance;
- Arrears payments have been made to employees of the different
categories as per the pre-defined agreement.
- Cost of Living and /inflations.
- Industry Median Mark.
- Retention of superior performers based on performance appraisal.
Comparison of the remuneration of the Key Managerial Personnel against
the performance of the company;
We don't have a variable pay plan linking to the Company's performance
with Incentive earnings.
Variations in the market capitalisation of the company, price earnings
ratio as at the closing date of the current Financial Year and previous
Financial Year and percentage increase over decrease in the market
quotations of the shares of the company in comparison to the rate at
which the company came out with the last public offer in case of listed
companies, and in case of unlisted companies, the variations in the net
worth of the company as at the close of the current Financial Year and
previous Financial Year;
The Market Capitalisation as of 31st March, 2015 Rs. 55,446,882,642 as
compared to Rs. 28,223,269,806 as of 31st March, 2014. The EPS as of 31st
March, 2015 is Rs. (159.66) as compared to the EPS as of 31st March, 2014
of Rs. (381.30).
The Closing Price as of 31st March, 2015 was Rs. 488.10 as compared to
Closing Price of Rs. 248.45 as of 31st March, 2014.
Average percentile increase already made in the salaries of employees
other than the managerial personnel in the last Financial Year and its
comparison with the percentile increase in the managerial remuneration
and justification thereof and point out if there are any exceptional
circumstances for increase in the managerial remuneration;
Employees 14.16%
Managerial personnel 2.89%
Comparison of the each remuneration of the Key Managerial Personnel
against the performance of the company;
The Company doesn't have any variable payment structure. The Company
has been incurring consistent losses in the last few years.
The key parameters for any variable component of remuneration availed
by the directors;
Not Applicable. We don't have a variable pay plan
The ratio of the remuneration of the highest paid director to that of
the employees who are not directors but receive remuneration in excess
of the highest paid director during the year; and
1:1.75
(The ratio is derived by considering the average of total gross salary
of employees who are not directors but receive remuneration in excess
of the highest paid director during the year)
Affirmation that the remuneration is as per the remuneration policy of
the company.
Yes we confirm
27. Acknowledgements
Your Directors wish to place on record their appreciation for the
support extended by the Company's General Sales Agents' and other
members of the travel trade in furthering the interest of the Company.
Your Directors would like to thank the Government of India especially
the Ministry of Civil Aviation, Ministry of Commerce and Industry and
Ministry of Finance for having had the foresight to have introduced the
historic liberalization measure permitting foreign airlines to invest
in the equity of Scheduled and Non Scheduled passenger airlines in
India.
Your Directors also take this opportunity to thank the Ministry of
Civil Aviation, Government of India, the Directorate General of Civil
Aviation, Airports Authority of India, Mumbai International Airport
(Private) Limited, Delhi International Airport (Private) Limited, GMR
Hyderabad International Airport Limited, Bangalore International
Airport Limited, Cochin International Airport Limited and other airport
operators for their support and co-operation. Your Directors are also
grateful to the Ministry of Finance, Reserve Bank of India, National
Stock Exchange of India Limited, BSE Limited, US Exim Bank, Export
Credit Agencies, Financial Institutions and Banks, The Boeing Company,
Airbus Industrie, Avion de Transport Regionale, General Electric, CFM,
Pratt and Whitney, the other lessors of our aircraft and engines and
all other vedors and service providers for their understanding and look
forward to their continued support.
On behalf of the Board of Directors
Mumbai Naresh Goyal
29th May, 2015 Chairman
Mar 31, 2014
The Directors have pleasure in presenting their Twenty Second Annual
Report together with the audited Statement of Accounts for the
Financial Year ended 31st March, 2014.
1. Performance highlights
The financial and operating highlights for the year under review,
compared with the previous Financial Year, are given below:
Financial highlights
(Rs. in lakhs)
Particulars Standalone for year Consolidated for year
ended 31st March ended 31st March
2014 2013 2014 2013
GROSS REVENUE 1,771,347 1,740,317 1,944,530 1,940,920
(Loss) / Profit
before Interest,
Depreciation,
Exceptional
Items & Tax (107,307) 145,351 (145,002) 124,894
Finance Costs 99,716 111,898 108,360 119,429
(Loss) / Profit
before Deprecia
tion, Exceptional
Items & Tax (207,023) 33,453 (253,362) 5,465
Depreciation 87,575 92,657 87,778 92,935
Loss before
Exceptional
Items & Tax (294,598) (59,204) (341,140) (87,470)
Exceptional
Items (Net) (72,199) 10,654 (71,739) 9,612
Loss before
Taxation &
Adjustments (366,797) (48,550) (412,879) (77,858)
(Excess) /
Provision for
Tax (12) - (12) 122
Share of
(Loss) in
Associate - - (109) -
Loss after
Taxation (366,785) (48,550) (412,976) (77,980)
Loss brought
forward (244,099) (195,549) (392,727) (314,747)
Amount transfe
rred to Balance
Sheet (610,884) (244,099) (805,703) (392,727)
Note: 1 lakh = 100,000
Operating highlights
Operating parameters Year ended 31st March
2014 2013
Departures (Number 173,723 169,254
Available Seat
Kilometers (ASKMs) (Million) 38,064 37,428
Revenue Passenger
Kilometers (RPKMs) (Million) 29,747 29,502
Passenger Load Factor (%) 78.2 78.8
Revenue Passengers (Number) 17,218,833 16,854,438
Average fleet size 93.0 94.7
2. Dividend
The Board of Directors have not recommended any dividend on the Equity
Shares in view of the performance of the Company for the Financial Year
ended 31st March, 2014 (Previous year: Nil per Equity Share).
3. Review of Operations
The Company has reported a consolidated Loss After Tax of Rs. 412,976
lakhs in fiscal 2014, but achieved passenger growth of 2 % in the same
period. The losses incurred by the Company were essentially due to:
a) Depreciating rupee vis-Ã -vis the US dollar
b) Increase in crude oil prices
c) Instances of surplus aircraft which were on ground
d) Non-cash extraordinary write down of Rs. 93,601 lakhs
e) Impairment of goodwill of Rs. 70,000 lakhs
f) Frequent, aggressive price war strategy initiated by certain low
cost airlines players
The consolidated operating loss excluding non-cash extraordinary write
down, impairment of goodwill and cost of surplus aircraft on ground
aggregates Rs. 207,518 lakhs.
Your Company, on its part, has taken various initiatives to improve its
operating efficiency and revenue earning potential to bring down the
breakeven load factor. We are committed to take stringent measures to
ensure our success in this challenging and competitive aviation
industry. In order to secure long term future, we are taking measures
such as putting in place a new network and fleet plan, significant
product enhancement and major cost reduction programme. There can be
no short-term solutions and these changes will take time to implement.
Your Company is continuously looking at cost reduction initiatives,
discontinuing all loss making routes, renegotiating major contracts
including aircraft maintenance costs and other efficiency enhancement
measures which will help us to bring down costs which are key to
overall turnaround of the Company.
Additionally, we are focusing on exploring various avenues to enhance
ancillary revenues such as seat select, prepaid excess baggage, prepaid
meals, paid lounge access, unaccompanied minors to name a few, through
all its distribution channels.
After seeking your approval, your Company transferred its frequent
flyer programme to its subsidiary - Jet Privilege Private Limited.
Subsequently Jet Privilege Private Limited ceased to be a subsidiary of
the Company with effect from 24th March, 2014. This will enable us to
better manage our loyalty programme and help customers avail more
benefits out of it, including earn and burn on the Etihad Global
loyalty programme.
On 20th November 2013, Etihad infused equity of Rs. 2,058 crores (circa
US$ 380 Million) for the acquisition of 24% strategic stake in your
Company. The approval accorded by Govt. of India to a number of code
share segments between the Company and Etihad Airways PJSC allows a
greater access to a number of European and North-American destinations
currently not operated by the Company. This will offer Company''s
customers better international connectivity through either non-stop on
Jet''s services or through one stop combined with Etihad Airways''
partner Airlines'' network.
Whilst on one hand, your Company is upgrading and repositioning itself
based on its own operational strengths, on the other hand, it will
exploit and capitalize on synergies arising from its alliance with
Etihad as a strategic partner. Common areas of benefits include joint
sourcing of aircraft and equipment, sharing of best practices,
co-ordination of flights, leasing of spare aircraft, joint procurement
of fuel and other services etc. resulting in cost savings for both the
airlines. Through effective renegotiation of contracts, your Company
is targeting to achieve major cost savings in excess of USD 100
million.
The domestic traffic in India increased by 5% for Fiscal year 2014.
This was a significant improvement as compared to a 5% contraction in
the corresponding previous year. Over the next few years, we expect the
domestic aviation market to grow at around 2 to 2.5 times of GDP
growth. However, there will be short term challenges to grow profitably
because of the cost intensive aviation infrastructure in India and the
high regulatory operating costs.
The Company carried 172.18 lakhs revenue passengers on its
international and domestic services during the year under review. The
Company''s domestic passenger traffic for the year under review grew by
1% as compared to a reduction of 4% last year while international
passenger traffic registered an increase of 6%, as compared to an
increase of 0.3% last year.
The Company ended the financial year with a system-wide seat factor of
78.2%. The seat factor was 70.6% on domestic sectors and 82.2% on the
international sectors.
Details of routes introduced and discotinued during the Financial Year
ended 31st March, 2014 are as follows:
Routes Introduced Discontinued
Domestic Segment
Ahmedabad-Jaipur-
Ahmedabad 1st May, 2013
Goa-Chennai-Goa 1st May, 2013
Bengaluru-Vijayawada-
Bengaluru 25th July, 2013 27th February, 2014
Kochi-Tiruchirappalli
-Kochi 25th July, 2013 27th February, 2014
Bengaluru-Indore
-Bengaluru 27th October, 2013
Indore-Vadodara-Indore 15th January, 2014
Kochi-Hyderabad-Kochi 4th April, 2013
Bhopal-Hyderabad-Bhopal 30th April, 2013
Kolkata-Raipur-Kolkata 30th April, 2013
Indore-Lucknow-Indore 30th April, 2013
Indore-Raipur-Indore 30th April, 2013
Lucknow-Patna-Lucknow 30th April, 2013
Kolkata-Dimapur-Kolkata 31st May, 2013
Hyderabad-Vijayawada-Hyderabad 30th September, 2013
Mumbai-Bhubaneswar-Mumbai 25th October, 2013
Bengaluru-Bhubaneswar-Bengaluru 26th October, 2013
Kolkata-Bhubaneswar-Kolkata 26th October, 2013
Indore-Jaipur-Indore 14th January, 2014
Jammu-Srinagar-Jammu 14th January, 2014
Kolkata-Lucknow-Kolkata 28th February, 2014
Kolkata-Chennai-Kolkata 29th March, 2014
Hyderabad-Tirupati-Hyderabad 29th March, 2014
International Segment
Kochi-Abu Dhabhi-Kuwait
-Abu Dhabi-Kochi 16th May, 2013
Kochi-Dammam-Kochi 15th January, 2014
Chennai-Abu Dhabi-Dammam
-Abu Dhabi-Chennai 15th January, 2014
Hyderabad-Abu Dhabi
-Hyderabad 1st March, 2014
Bengaluru-Abu Dhabi
-Bengaluru 1st March, 2014
Chennai-Colombo-Chennai 3rd January, 2014
Kolkata-Bangkok-Kolkata 31st March, 2014
Fleet
As on 31st March, 2014, the Company had a fleet of 101 aircraft,
comprising 8 Airbus A330-200 aircraft, 4 Airbus A330-300 aircraft, 15
ATR 72-500 aircraft, 3 ATR 72-600 aircraft, 61 Next Generation Boeing
737-700/800/900/900ER aircraft and 10 Boeing 777-300ER aircraft. With
an average fleet age of 5.3 years, the airline has one of the youngest
aircraft fleets in the world.
Of the 10 Boeing 777-300ER aircraft, 3 aircraft have been sub leased
(on a wet lease/ACMI basis) to Turkish Airlines Inc. and 2 aircraft
have been sub (dry) leased to Etihad Airways PJSC. Additionally, 3
Airbus A330-200 aircraft have been sub (dry) leased to Etihad Airways
PJSC.
The Company flies to 56 domestic destinations (includes flights
operated by Jet Lite (India) Limited, the Company''s wholly owned
subsidiary) and 20 international destinations.
4. Management Discussion and Analysis
As required by Clause 49 of the Listing Agreement(s) entered into with
the Stock Exchanges, a detailed review by the Management of the
operations, performance and future outlook of the Company and its
business, is presented in a separate section - Management Discussion
and Analysis - forming part of this Annual Report.
5. Subsidiary Companies
Jet Lite (India) Limited (Jet Lite)
Jet Lite (India) Limited is a wholly owned subsidiary which was
acquired by the Company on 20th April, 2007.
Jet Lite is a non-material, non-listed subsidiary company as defined
under Clause 49 of the Listing Agreement(s) entered into with the Stock
Exchanges.
For the Financial Year ended 31st March, 2014, Jet Lite posted a total
income ofRs. 176,364 lakhs (2012-13 : Rs. 201,136 lakhs) and a Net Loss
of Rs. (42,931) lakhs (2012-13: Rs. (29,532) lakhs). On 24th March, 2014,
the 290,000,000 Compulsorily Fully Convertible Non-Cumulative Preference
Shares were converted into Equity shares as per the terms of their
issue. In view of the loss, the Board of Directors of Jet Lite has not
recommended a dividend; neither on the Equity Shares nor on the
Compulsorily Fully Convertible Non-Cumulative Preference Shares for the
year ended 31st March, 2014 (Previous Year : Nil). The Company
continues to support the operations of Jet Lite.
The highlights of the operating performance of Jet Lite for the
Financial Year ended 31st March, 2014 are as follows:
Traffic parameters Year ended 31st March
2014 2013
Departures (Number) 31,986 38,160
Available Seat Kilometers
(ASKMs) (Million) 3,937 4,566
Revenue Passenger Kilometers
(RPKMs) (Million) 2,862 3,416
Passenger Load Factor (%) 72.7 74.8
Revenue Passengers (Numbers) 3,308,533 3,871,414
As on date, Jet Lite had an all Boeing fleet of 12 aircraft, comprising
5 Boeing 737-700, 5 Boeing 737-800 and 2 Boeing 737-900 ER aircraft.
Jet Privilege Private Limited (JPPL)
For the Financial Year ended 31st March, 2014, JPPL posted a total
income ofRs. 574 lakhs (2012-13 : Rs. 159 lakhs) and a Net Loss of Rs.
(3,368) lakhs (2012-13: Net Profit of Rs. 103 lakhs).
With a view to unlock the value of the business of operating a frequent
flyer, loyalty and points-based reward scheme under the name Jet
Privilege Frequent Flyer Programme ("JPFFP") and subsequent to the
approval of the Members obtained by way of Postal Ballot, in March
2014, the Company transferred the JPFFP to JPPL on 21st April, 2014,
During the year, the Company and Etihad Airways PJSC agreed to promote
the business of JPPL and to invest in JPPL.
Accordingly, fresh shares were inter alia allotted to the Company and
Etihad Airways PJSC taking their holding to 49.% and 50.1% respectively
in JPPL.
JPPL thus ceased to be a subsidiary of the Company with effect from
24th March, 2014.
Jet Airways Training Academy Private Limited (JATPL)
JATPL continues to be a subsidiary of the Company. For the Financial
Year ended 31st March, 2014, JATAPL posted a total income ofRs. NIL lakhs
(2012-13 : Rs. NIL lakhs) and a Net Loss of Rs. (1) lakhs (2012-13: Rs. (1)
lakhs).
Pursuant to the provisions of Section 212(8) of the Companies Act,
1956, and Circular No. 2/2011 dated 8th February, 2011, issued by the
Ministry of Corporate Affairs, the Balance Sheet, Statement of Profit
and Loss and other documents of the subsidiary companies are not being
attached with this Report. However, a statement containing brief
financial details of the Company''s subsidiaries is included in the
Annual Report.
The Company will make available copies of the Annual Accounts of the
subsidiary companies and the related detailed information, free of cost
to Members, on request. The same are also available for inspection at
the Registered Office between 10 a.m. and 12 noon on any working day of
the Company till the date of the 22nd Annual General Meeting on 11th
August, 2014.
The subsidiary companies are managed by their respective Boards. The
Company does not have any material unlisted subsidiary and hence is not
required to nominate an independent director of the Company on the
Board of the subsidiary companies.
6. Consolidated Financial Statements
The audited Consolidated Financial Statements, comprising of the
Company and its subsidiaries form part of this Report. The Auditors''
Report on the Consolidated Accounts is also attached. The same is
unqualified. The Consolidated Accounts have been prepared in accordance
with the Accounting Standards prescribed by the Institute of Chartered
Accountants of India in this regard and the provisions of the Listing
Agreement(s) entered into with the Stock Exchanges
7. Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars, as prescribed by Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo, to the
extent applicable to the Company, are given below:
Conservation of Energy
The Company is committed to improving the fuel efficiency of its
aircraft operations. Key initiatives in our fuel efficiency improvement
program consist of efforts such as Integrated Emissions Management
System; renewal of our aircraft fleet to ensure that the aircraft in
operation are as technologically advanced and fuel-efficient as
possible; Flight operations procedures that reduces fuel burn; route
planning procedures to enable our planes fly the most fuel-efficient
routes possible; maintenance programs for both airframes and engines
that ensure operational efficiency and enhance fuel efficiency and use
of lightweight crockery, cargo containers, and other aircraft
modifications that minimize the weight of the aircraft.
Our culture of operating fuel efficiency has been embedded since our
inception and has been part of the airline''s standard operating
procedures. Improving fuel efficiency of our aircraft operations has
enabled us to offer competitive service to our customers. Improvement
in fuel efficiency has been a team effort. Various teams within the
Company work on implementing innovative initiatives for improving fuel
efficiency. Our efforts have allowed us to operate our aircraft in a
highly efficient manner, and to a certain extent, play a part in
buffering against adverse conditions such as rising fuel prices. Not
only does this save us money, it also helps us to reduce our
environmental impact. Energy conservation in our establishments is an
ongoing activity. We have ensured that the best practices are in place
for preventive maintenance of buildings and equipment. Integrated
approach to maintenance and management helps yield ongoing energy
savings.
Technology absorption
Training of Pilots
Simulator training for pilots operating Boeing 737, Boeing 777 and
Airbus 330 aircraft continued to be provided at the Company''s Simulator
Complex at Mumbai under the supervision of the Company''s own
instructors. The surplus capacities of the simulators were also used by
other airlines both domestic and international ailines thereby
generating valuable revenue.
Technology and e-Commerce initiatives
With a constant focus on using innovative technology towards creating
enhanced customer value, Jet Airways launched its state of the art
mobile app on Android, iOS and Blackberry. The mobile app provides
guests with the option to book tickets, manage their JetPrivilege
Account, check flight status, avail special offers and more. The
company also introduced the option of booking JetEscapes Holidays on
jetairways.com to provide leisure travelers a seamless experience to
book all inclusive holiday packages at their convenience.
In the coming year the organization will implement a highly enhanced
self check-in service across the web and mobile platform that will
allow guests to seamlessly check-in on the go. The airline also aims to
improve its online user
experience with a revamp of its current website and infrastructure
designed to provide a whole new experience using modern technology.
In June 2013, the Company migrated to Sabre SSCI departure control
system. This has many enhanced features compared to the earlier system.
We also upgraded the Sabre system to the version that is fully
compliant with IATA EMD guidelines. In February 2014 we migrated the
international operations to the new T2 terminal of Mumbai airport. The
entire migration activity went through smoothly without any issues. We
have embarked on a project to completely revamp the IT infrastructure
for the Company''s website and booking engine. This would result in far
better scalability, security and uptime.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the
Notes to Accounts.
8. Environment, Health and Safety (EHS)
The following steps have been taken by the Company towards improvement
of environment, health and safety:
1. Education and training employees to be constantly aware about EHS
elements.
2. Conduct of EHS campaign & competition, routine participative,
communicative and consultative exercises.
3. Monitor of EHS compliance by individual - EHS rules enforcement and
compliance, using various audits and reporting tools.
4. Explore technological and engineering interventions to eliminate,
reduce and mitigate any EHS related hazards, and endeavor to
demonstrate it objectively.
5. Reducing significant EHS risk where "significant" is understood to
loss of life, serious personal injury, major environmental impacts, and
major damage to assets.
6. Promoting continuous improvement in EHS performance and management
systems effectiveness, where "performance" is understood to mean actual
measured EHS outcomes/results, and "effectiveness" relates to the
ability of the local systems to help reduce business-operating costs or
otherwise improve the quality, speed and cost of EHS delivery.
9. Fixed Deposits
The Company has not accepted any Fixed Deposits from the public during
the Financial Year ended 31st March, 2014.
10. Corporate Governance
A separate section on Corporate Governance and a certificate from the
Auditors on the Corporate Governance requirements as stipulated in
Clause 49 of the Listing Agreement(s) entered into with the Stock
Exchanges, form part of this Annual Report.
The declaration by the Director and Manager regarding compliance with
the Code of Business Conduct and Ethics forms part of the Report on
Corporate Governance.
11. Corporate Social Responsibility
The Company runs an in-flight collection programme called ''Magic Box''
in association with the non-governmental organisation (NGO), Save the
Children India (STCI). The funds raised through the Magic Box programme
are utilised for relief work involving natural calamities such as
earthquakes as well as education and healthcare for the underprivileged
children and women. It also contributes significantly in the fight
against trafficking of women and children.
In its constant endeavour to facilitate empowerment of women, the
Company organises an an in-flight fund raising drive prior to the 8th
March each year. The funds collected are donated to select NGOs working
primarily for the upliftment and empowerment of underprivileged women.
On the occasion of Children''s Day on 14th November each year, the
Company organises "Flights of Fantasy" for approximately 100
underprivileged children. Under this unique initiative, these children
are introduced to the world of aviation, which is both informative as
well as an educational experience for them.
As required under Section 135 of the Companies Act, 2013, the Board of
Directors of the Company has constituted the Corporate Social
Responsibility Committee which consists of Mr. Gaurang Shetty, Mr.
Javed Akhtar and Mr. Naresh Goyal as its Members.
12. Employees
Your Directors particularly acknowledge the selfless untiring efforts,
whole-hearted support and co-operation of the employees at all levels.
Our industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 31st
March, 2014, was 13,256 (as on 31st March, 2013: 12,082).
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Annual Report. However, as
per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956,
this Report and Accounts are being sent to all the Members of the
Company, excluding the Statement of Particulars of Employees under
Section 217(2A) of the Companies Act, 1956. Members may inspect the
said Statement at the Registered Office of the Company between 10 a.m.
and 12 noon on any working day of the Company
13. Directors'' Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
- in the preparation of the Annual Accounts for the year ended 31st
March, 2014, the applicable accounting standards have been followed;
- appropriate accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2014 and of the loss of the
Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
14. Directors
Mr. Gaurang Shetty, Director retires by rotation at the forthcoming
Annual General Meeting and being eligible, has offered himself for
re-appointment.
The re-appointment of Mr. Gaurang Shetty form part of the Notice of the
forthcoming Annual General Meeting and the Resolution is recommended
for your approval.
Mr. James Hogan and Mr. James Rigney were appointed as Additional
Directors of the Company with effect from 20th November, 2013, and they
shall hold office up to the date of the ensuing Annual General Meeting.
The Company has received requisite notice in writing from a member
proposing appointment of Mr. James Hogan and Mr. James Rigney as
Directors of the Company.
The Company has received requisite notices in writing from Members
proposing the appointment of Mr. Aman Menta, Mr. Javed Akhtar and Mr. I
M Kadri as Independent Directors of the Company.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013, and under Clause 49 of the Listing Agreement
with the Stock Exchanges.
The profiles of these Directors, as required by Clause 49 of the
Listing Agreement(s) entered into with the Stock Exchanges, are given
along with the Notice of the Annual General Meeting.
15. Auditors
The Statutory Auditors, Deloitte Haskins & Sells LLP, Chartered
Accountants, and Chaturvedi & Shah, Chartered Accountants, retire at
the forthcoming Annual General Meeting and have confirmed their
eligibility and willingness to accept office, if re-appointed. Their
re-appointment as the Joint Statutory Auditors for the Financial Year
2014-15, forms part of the Notice of the said Annual General Meeting
and the Resolution is recommended for your approval.
16. Acknowledgements
Your Directors place on record their appreciation of the Company''s
General Sales Agents'' and other members of the travel trade for their
efforts in furthering the interest of the Company.
Your Directors would like to thank the Government of India especially
the Ministry of Civil Aviation, Ministry of Commerce and Industry and
Ministry of Finance for having had the foresight to have introduced the
historic liberalization measure permitting foreign airlines to invest
in the equity of Scheduled and Non Scheduled passenger airlines in
India.
Your Directors also take this opportunity to thank the Ministry of
Civil Aviation, Government of India, the Directorate General of Civil
Aviation, Airports Authority of India, Mumbai International Airport
(Private) Limited, Delhi International Airport (Private) Limited, GMR
Hyderabad International Airport Limited, Bangalore International
Airport Limited, Cochin International Airport Limited and other airport
companies for their support and co-operation. Your Directors are also
grateful to the Ministry of Finance, Reserve Bank of India, National
Stock Exchange of India Limited, BSE Limited, US Exim Bank, Financial
Institutions and Banks, Boeing Company, Avion de Transport Regionale,
Airbus Industrie, General Electric, CFM and Pratt and Whitney and the
lessors of our aircraft and engines for their understanding and look
forward to their continued support.
On behalf of the Board of
Directors
Mumbai Naresh Goyal
4th July, 2014 Chairman
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting their Twenty First Annual
Report together with the audited Statement of Accounts for the
financial year ended 31st March, 2013.
1. Performance highlights
The financial and operating highlights for the year under review,
compared with the previous financial year, are given below :
Financial highlights
(Rs. in lakhs)
Particulars Standalone for year Consolidated for year
ended 31st March ended 31st March
2013 2012 2013 2012
GROSS REVENUE 1,740,317 1,517,308 1,940,920 1,706,704
Profit before Interest,
Depreciation,
Exceptional Items & Tax 145,351 58,259 124,894 33,733
Finance Costs 111,898 97,123 119,429 100,579
(Loss) / Profit before
Depreciation,
Exceptional Items & Tax 33,453 (38,864) 5,465 (66,846)
Depreciation 92,657 93,988 92,935 94,462
(Loss) / Profit before
Exceptional Items & Tax (59,204) (132,852) (87,470) (161,308)
Exceptional Items 10,654 7,319 9,612 17,316
(Loss) / Profit before
Taxation & Adjustments (48,550) (125,533) (77,858) (143,992)
Provision for Tax - 1,440 122 1,384
Deferred Tax - (3,363) - (3,363)
(Loss) / Profit after
Taxation (48,550) (123,610) (77,980) (142,013)
Profit / (Loss)
brought forward (195,549) (71,939) (314,747) (172,734)
Amount available for
Appropriation (244,099) (195,549) (392,727) (314,747)
Transfer to Balance Sheet (244,099) (195,549) (392,727) (314,747)
Note : 1 lakh = 100,000
Operating highlights
Operating parameters Year ended 31st March
2013 2012
Departures (Number) 1,69,254 175,646
Available Seat Kilometers (ASKMs) (Million) 37,428 38,643
Revenue Passenger Kilometers (RPKMs) (Million) 29,502 30,643
Passenger Load Factor (%) 78.8 79.3
Revenue Passengers (Number) 16,854,438 17,305,290
Average fleet size 94.7 98.0
2. Dividend
The Board of Directors have not recommended any dividend on the Equity
Shares in view of the performance of the Company for the financial year
ended 31st March, 2013 (Previous Year : Nil per Equity Share).
3. Review of Operations
The year under review continued to be challenging one for your Company
due to sluggish economic scenario resulting into slump in demand by
around 5%.
In the 1st half of the financial year, domestic industry was going
through a turbulent time due to high costs and excess capacity
environment which was a spillover from the previous year. This caused
financial strain on airlines resulting in domestic capacity reducing in
the 2nd half of the year. Capacity induction in the 2nd half slowed
down, helping the airlines to maintain higher yields. However, airlines
were not able to pass on increase in costs fully to the passengers. All
these have resulted into industry posting losses once again in this
year.
According to CAPA''s latest estimate, losses for the domestic industry
as a whole for the year ended 31st March 2013, is estimated around US$
1.65 Billion dollars.
There were other major events which impacted the business which
included :
a) The weakening of the Indian Rupee vis-a-vis the United States Dollar
b) Increase in crude oil prices and resultant price of ATF, which forms
close to 40% of our operating costs
c) Significant increases in Landing & Navigation charges at key metros
d) Weak economy leading to the hardening of interest rates and also
made it difficult for airlines to raise short term / working capital
debt
During the year slowdown in demand has resulted in capacity reduction,
which has resulted in aircraft on ground. Few of them were redeployed
to profitable routes in international sectors.
The impact of aircraft on ground for the year was Rs. 1,889 Million
(US$ 34.8 Million).
Your Company, on its part, has taken various initiatives to improve its
operating efficiency and revenue earning potential to bring down the
breakeven load factor.
Initiatives such as discontinuing loss making routes, Sale / Sale and
lease back of aircraft / slots, renegotiation of major contracts
including aircraft maintenance, ground handling, selling and
distribution costs, etc. have been either implemented or in the process
of being implemented. We are confident that these measures will help us
to bring down the breakeven load factor. Your Company has started
focusing on increasing various avenues of ancillary revenues.
In order to help strengthen its balance sheet and strategize sustained
profitable growth, your Company will be inking a deal with Etihad
Airways PJSC which will bring immediate revenue growth and cost synergy
opportunities for both the airlines.
The domestic traffic growth in India reduced by 5% for Fiscal year 2013
and over the next few years; we expect the domestic aviation market to
grow at around 2 to 2.5 times of GDP growth. However, there will be
short term challenges to grow profitably because of high operating
costs which need to be passed on to the passenger.
For Jet Airways, the domestic passenger traffic for the year under
review went down by 4% as compared to the same period last year while
international passenger traffic registered an increase of 0.3%.
The Company ended the financial year with a system-wide seat factor of
72.6% on the domestic and 82.2% on the international sectors.
The Company carried 168.54 lakhs revenue passengers on its
international and domestic services during the year under review.
Routes
The details of the routes introduced and discontinued during the
financial year ended 31st March, 2013 are as follows :
Fleet
As on 31st March, 2013, the Company had a fleet of 95 aircraft,
comprising 10 Boeing 777-300 ER aircraft, 10 Airbus A330-200 aircraft,
3 Airbus A330-300 aircraft, 54 Next Generation Boeing
737-700/800/900/900ER aircraft, 17 modern ATR 72-500 Turboprop aircraft
and 1 ATR 72-600 aircraft. With an average fleet age of 5.40 years, the
airline has one of the youngest aircraft fleets in the world.
Of the 10 B777-300ER aircraft, 5 aircraft have been sub-leased to Thai
Airways International Public Company Limited ("Thai Airways"). The
lease in respect of these aircraft expires between May, 2013 and
November, 2013.
The Company flies to 55 domestic destinations (includes flights
operated by Jet Lite (India) Limited, the Company''s wholy owned
subsidiary) and 20 International destinations.
4. Management Discussion and Analysis
As required by Clause 49 of the Listing Agreement(s) entered into with
the Stock Exchanges, a detailed review by the Management of the
operations, performance and future outlook of the Company and its
business, is presented in a separate section - Management Discussion
and Analysis, forming part of this Annual Report.
5. Subsidiary Company
Jet Lite (India) Limited (''Jet Lite'') is a wholly owned subsidiary
which was acquired by the Company on 20th April, 2007.
Jet Lite is a non-material, non-listed subsidiary company as defined
under Clause 49 of the Listing Agreement(s) entered into with the Stock
Exchanges.
For the financial year ended 31st March, 2013, Jet Lite posted a total
income of Rs. 201,136 lakhs (2011-12 : Rs. 190,386 lakhs) and a Net
Loss of Rs. 29,532 lakhs (2011-12 : Rs. 18,403 lakhs). In view of the
loss, the Board of Directors of Jet Lite has not recommended a
dividend; neither on the Equity Shares nor on the Compulsorily Fully
Convertible Non-Cumulative Preference Shares for the year ended 31st
March, 2013 (Previous Year : Nil). The Company continues to support the
operations of Jet Lite.
The highlights of the operating performance of Jet Lite for the
financial year ended 31st March, 2013 are as follows :
Traffic parameters Year ended 31st March
2013 2012
Departures (Number) 38,160 41,992
Available Seat Kilometers (ASKMs) (Million) 4,566 5,829
Revenue Passenger Kilometers (RPKMs) (Million) 3,416 4,543
Passenger Load Factor (%) 74.8 77.9
Revenue Passengers (Numbers) 3,871,414 4,794,658
As on 31st Mach 2013, Jet Lite had an all Boeing fleet of 15 aircraft,
comprising 7 Boeing 737-700, 6 Boeing 737-800 and 2 Boeing 737-900 ER
aircraft.
New Subsidiaries :
The Company acquired 100% of the Share Capital of Jet Privilege Private
Limited on 5th December, 2012, a marketing services company engaged in
the business of managing reward points and loyalty programs for its
program partners with a view to transform the JetPrivilege programme
into a larger retail-based coalition loyalty program and through its
operations unlock greater commercial value.
Jet Airways Training Academy Private Limited was incorporated on 14th
December, 2012, as a 100% wholly owned subsidiary to function as an
academy to impart training to the crew of different airlines as well as
individuals who desire to pursue a career in aviation. It will also
provide training in other related fields like hospitality, travel and
tourism, etc.
Pursuant to Circular No. 2/2011 dated 8th February, 2011, issued by the
Ministry of Corporate Affairs read with the provisions of Section
212(8) of the Companies Act, 1956, the Balance Sheet, Statement of
Profit and Loss and other documents of the subsidiary companies are not
being attached with this Report. However, the financial information of
the subsidiary companies is disclosed in the Annual Report in
compliance with the said circular.
The Company will make available copies of the Annual Accounts of the
subsidiary companies and the related detailed information, free of cost
to Members, on request. The same are also available for inspection at
the Registered Office of the Company between 10 a.m. and 12 noon on any
working day of the Company.
The subsidiary companies are managed by their respective Boards which
have the rights and obligations to manage them in the best interest of
their stakeholders. The Company does not have any material unlisted
subsidiary and hence is not required to nominate an independent
director of the Company on the Board of the subsidiary companies.
6. Consolidated Financial Statements
The audited Consolidated Accounts and Cash Flow Statement, comprising
of the Company and its subsidiaries form part of this Report. The
Auditors'' Report on the Consolidated Accounts is also attached. The
same is unqualified. The Consolidated Accounts have been prepared in
accordance with the Accounting Standards prescribed by the Institute of
Chartered Accountants of India in this regard and the provisions of the
Listing Agreement(s) entered into with the Stock Exchanges.
7. Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars, as prescribed by Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo, to the
extent applicable to the Company, are given below :
Conservation of energy
Fuel is a major component in the cost of operations for an airline.
With the industry growing at a high rate year-on-year, there is an
increased need for improving the efficiency of operations through
commercial and fuel optimisation measures. The Company''s Integrated
Emission Management System (IEMS) uses advanced analytics to accurately
analyse and estimate aircraft fuel consumption and load, thus allowing
the airline to optimise the usage of aviation turbine fuel and improve
commercial loads. The system drills down into many sources of data and
can analyse at the aircraft level. The IEMS covers all flight
operations undertaken by the Company.
The Company''s fuel plan seeks to assess, formulate and promote fuel
optimisation initiatives. Our pilots apply, as often as possible, the
most fuel-efficient procedures, without compromising on flight safety.
These include continuous ascent and descent approach procedures,
optimum flight altitude levels and speed, continuous route optimisation
based on the latest weather data and taxiing with optimum use of
engines. We also continue to implement world-class fuel efficiency
improvement measures such as Required Navigation Performance (RNP)
implementation at select stations and use of lightweight crockery,
cargo containers and reduction of operator''s items.
Energy conservation is an ongoing activity and we have ensured that the
best practices are in place for preventive maintenance of buildings and
equipment. The integrated approach to maintenance and management helps
yield ongoing energy savings. We have implemented a number of
initiatives pertaining to maintenance and operation of buildings,
equipment upgradation, employee awareness campaigns and energy audits.
Technology absorption Training of Pilots
Simulator training for pilots operating Boeing 737, Boeing 777 and
Airbus 330 aircraft continued to be provided at the Company s Simulator
Complex at Mumbai under the supervision of the Company s own
instructors. The surplus capacities of the simulators were also used by
other airlines both domestic and international ailines thereby
generating valuable revenue.
Information Technology and e-Commerce initiatives
As the Company enters its third decade of operations, it has
strengthened its focus on creating differentiating products and
services to stay ahead in a competitive and challenging environment.
Jet Airways has strategically set up a joint Innovation Council in
partnership with International Business Machines Corporation (IBM), to
create smarter, faster and personalised self-service, digital and
social media solutions to enhance customer service and engagement.
The Company set a record milestone by becoming the first airline in
India to garner 1 Million fans on facebook. The Company also launched
India''s first native airline mobile application for Windows Phone and
applications for Android, iPhone and BlackBerry phones will soon
follow. In the coming year, the Company aims to use new technology to
increase its ancillary revenue and also leverage cloud computing which
entails several benefits like infrastructure flexibility, scalability,
cost control and improved performance and productivity.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the
Notes to Accounts.
8. Environment, Health and Safety (EHS)
Continuous improvement is the main focus throughout Jet Airways and is
integral to its EHS program. Good performance in the field of
environment, health and safety is a prerequisite for effective,
profitable operation.
Employee Safety : Safety Management System (SMS) has been implemented
in the organization this year after a thorough training to all
employees. Training on EHS is a continuous program and is a part of
induction training. An enhanced hazard identification process was a
main driver for the improved safety. There was no major / fatal
accident occurred during the financial year 2012-13.
Employee wellness : To improve employee health and wellness and
long-term employee health all engineering staff had undergone a medical
check-up, carried out by a group of doctors registered under the
Factories Act 1948.
Chemical Safety : Utmost care is taken to prevent any hazard from
chemicals. Material Safety Data Sheet (MSDS) is strictly followed at
all places where chemicals are used. Waste and hazardous chemicals are
recycled through pollution control vendors. Air samples are tested in
laboratories to check the impurity levels as assigned by Pollution
Control Board.
9. Fixed Deposits
The Company has not accepted any Fixed Deposits from the public during
the financial year ended 31st March, 2013.
10. Corporate Governance
We adhere to the principles of Corporate Governance as mandated by the
Securities and Exchange Board of India and have complied with all the
mandatory requirements. The non-mandatory requirements have been
complied with to the extent practical and applicable.
A separate section on Corporate Governance and a certificate from the
Auditors confirming compliance with the Corporate Governance
requirements as stipulated in Clause 49 of the Listing Agreement(s)
entered into with the Stock Exchanges, forms part of this Annual
Report.
The Acting Chief Executive Officer''s declaration regarding compliance
with the Code of Business Conduct and Ethics forms part of the Report
on Corporate Governance.
11. Corporate Social Responsibility
Since 1997, the Company has in place an in-flight fund collection
programme called ''Magic Box'' on all its domestic flights. The
collections help support children most ''at risk'' in our society as also
those with special needs.
Each year, the Company celebrates International Women''s Day (8th March)
to salute the independent woman and her continuous endeavour for an
equitable social milieu to live and work in. To commemorate this event,
an in-flight fund raising drive is organised, the proceeds of which are
donated to select NGOs working primarily for the upliftment and
empowerment of underprivileged women.
On the occasion of Children''s Day on 14th November every year, the
Company organises "Flights of Fantasy" for underprivileged children.
Under this unique initiative, children are introduced to the world of
aviation, which is both informative as well as an educational
experience for them.
As a responsible corporate citizen, the airline extends its support
during natural calamaties by making donations, operating additional
flights and carrying of relief material to help those affected.
12. Employees
Your Directors particularly acknowledge the selfless untiring efforts,
whole-hearted support and co-operation of the employees at all levels.
Our industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 31st
March, 2013, was 12,082 (as on 31st March, 2012 : 12,849).
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Annual Report. However, as
per the provisions of Section 219(1) (b)(iv) of the Companies Act,
1956, this Report and Accounts are being sent to all the Members of the
Company, excluding the Statement of Particulars of Employees under
Section 217(2A) of the Companies Act, 1956. Members may inspect the
said Statement at the Registered Office of the Company between 10 a.m.
and 12 noon on any working day of the Company
13. Directors'' Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that :
- in the preparation of the Annual Accounts for the year ended 31st
March, 2013, the applicable accounting standards have been followed;
- appropriate accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2013, and of the loss of
the Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
14. Directors
Due to sad demise of Mr. Yash Raj Chopra, he ceased to be a Director of
the Company with effect from 21st October, 2012. The Board of
Directors places on record its gratitude for Mr. Chopra''s loyal and
dedicated contribution to the Company.
Mr. Victoriano P. Dungca and Mr. Aman Mehta retire by rotation at the
forthcoming Annual General Meeting and being eligible, have offered
themselves for re-appointment.
The re-appointments of Mr. Dungca and Mr. Mehta form part of the Notice
of the forthcoming Annual General Meeting and the Resolutions are
recommended for your approval. The profiles of these Directors, as
required by Clause 49 of the Listing Agreement(s) entered into with the
Stock Exchanges, are given along with the said Notice.
15. Auditors
The Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants
and Chaturvedi & Shah, Chartered Accountants, retire at the forthcoming
Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed. Their re-appointment as
the Joint Statutory Auditors for the financial year 2013-14, forms part
of the Notice of the said Annual General Meeting and the Resolution is
recommended for your approval.
16. Transfer of amounts to Investor Education and Protection Fund
As required under Section 205C of the Companies Act, 1956, amounts that
have remained unpaid or unclaimed for a period of seven years have been
transferred by the Company to the Investor Education and Protection
Fund.
Pursuant to the provisions of Investor Education and Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company (as on the date of
last Annual General Meeting) on the website of the Company
(www.jetairways.com) and also on the Ministry of Corporate Affairs
website (www.iepf.gov.in).
17. Post Balance Sheet Event
Proposed Investment by Etihad Airways PJSC
The Government of India has now allowed the foreign airlines to invest
in the equity of Indian Airline Company''s by way of Foreign Direct
Investment (FDI) up to 49%.
In line with the Policy, Etihad Airways PJSC (Etihad) has proposed to
acquire a 24% stake in the Company. The members of the Company at the
Extraordinary General Meeting held on 24th May, 2013, had approved the
preferential allotment of 27,263,372 Equity Shares to Etihad. The
proposal to investment and other transaction related matters are
undergoing regulatory approval.
Minimum Public Shareholding (MPS) Norms
Your Company has met the Minimum Public Shareholding norms as per SEBI
requirements within the stipulated time. Tail Winds Limited, one of
the promoters, offered 4,317,697 equity shares to the Public
Shareholders vide an ''Offer for Sale'' (OFS) and Block Deal to divest
its shareholding to 75% from 79.99% to comply with the MPS Norms.
Further, there was an inter se transfer of 56,963,301 Equity Shares
amongst the promoters of the Company i.e. from Tail Winds Limited to
Mr. Naresh Goyal.
18. Acknowledgements
Your Directors place on record their appreciation of the Company''s
General Sales Agents'' and other members of the travel trade for their
efforts in furthering the interest of the Company.
Your Directors would like to thank the Government of India especially
the Ministry of Civil Aviation, Ministry of Commerce and Industry and
Ministry of Finance for having had the foresight to have introduced the
historic liberalization measure permitting foreign airlines to invest
in the equity of Scheduled and Non Scheduled passenger airlines in
India.
Your Directors also take this opportunity to thank the Ministry of
Civil Aviation, Government of India, the Directorate General of Civil
Aviation, Airports Authority of India, Mumbai International Airport
(Private) Limited, Delhi International Airport (Private) Limited, GMR
Hyderabad International Airport Limited, Bangalore International
Airport Limited, Cochin International Airport Limited and other airport
companies for their support and co-operation. Your Directors are also
grateful to the Ministry of Finance, Reserve Bank of India, National
Stock Exchange of India Limited, BSE Limited, US Exim Bank, Financial
Institutions and Banks, Boeing Company, Avion de Transport Regionale,
Airbus Industrie, General Electric, CFM and Pratt and Whitney and the
lessors of our aircraft and engines for their understanding and look
forward to their continued support.
On behalf of the Board of Directors
Mumbai Naresh Goyal
24th May, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting their Twentieth Annual
Report together with the audited Statement of Accounts for the
financial year ended 31st March, 2012.
1. Performance highlights
The financial and operating highlights for the year under review,
compared with the previous financial year, are given below:
Financial highlights (Rs. in lakhs)
Standalone for year Consolidated for year
Particulars ended 31st March ended 31st March
2012 2011 2012 2011
GROSS REVENUE 1,517,308 1,293,227 1,706,704 1,470,606
Profit before
Interest,
Depreciation,
Exceptional Items &
Tax 58,259 188,768 33,733 185,091
Finance Costs 97,123 111,971 100,579 118,415
(Loss) / Profit
before Depreciation,
Exceptional Items &
Tax (38,864) 76,797 (66,846) 66,676
Depreciation 93,988 91,062 94,462 91,857
(Loss) / Profit
before Exceptional
Items & Tax (132,852) (14,265) (161,308) (25,181)
Exceptional Items 7,319 18,919 17,316 20,328
(Loss) / Profit
before Taxation &
Adjustments (125,533) 4,654 (143,992) (4,853)
Provision for Tax 1,440 322 1,384 368
Deferred Tax (3,363) 3,363 (3,363) 3,363
(Loss) / Profit
after Taxation (123,610) 969 (142,013) (8,584)
Profit / (Loss)
brought forward (71,939) (72,908) (172,734) (164,150)
Amount available for Appropriation (195,549) (71,939) (314,747)
(172,734) APPROPRIATIONS
Transfer to Balance Sheet (195,549) (71,939) (314,747) (172,734) Note:
1 lakh = 100,000
Operating highlights
Operating parameters Year ended 31st March
2012 2011
Departures (Number) 175,646 146,876
Available Seat Kilometers (ASKMs) (Million) 38,643 34,323
Revenue Passenger Kilometers (RPKMs) (Million) 30,643 26,972
Passenger Load Factor (%) 79.3 78.6
Revenue Passengers (Number) 17,305,290 14,667,466
Average fleet size 98.0 90.0
2. Dividend
The Board of Directors has not recommended any dividend on the Equity
Shares in view of the performance of the Company for the financial year
ended 31st March, 2012 (Previous year: Nil per Equity Share).
3. Review of Operations
The year under review has been a challenging one for your Company not
only because of the events around the world over which the Company has
little control but also because of severe overcapacity in the domestic
market in India.
The domestic overcapacity led to fare wars in the domestic business
with nearly all airlines selling seats below cost. This led to severe
losses for the Industry as a whole. For the year ended 31st March 2012,
the domestic airline industry is estimated to have lost over Rs.12,000
crores.
There were other major events across the world which impacted the
business :
a) Slowdown in other economies which led to a drop in yields in
international markets
b) The weakening of the Indian Rupee vis-a-vis the United States Dollar
c) Increase in crude oil prices and resultant price of Aviation Turbine
Fuel, which forms close to 50% of our operating cost
d) General stress in the Indian economy which not only meant that
interest rates hardened but also made it difficult for airlines like
ourselves to raise short term/ working capital debt
Towards the second half of the financial year, things started giving
way and a major airline in India had to significantly reduce capacity
in the market. Also, airlines had no choice but to make fare increases
and there were two rounds of fare increases; one in November 2011 of
around 10% and another one in March 2012 of around 12%. This had very
little impact on the passenger traffic because of the capacity
reduction in the market, which also led to a steady increase in our
corporate and business class bookings.
The Company, on its part, has taken various initiatives to improve its
operating efficiency and revenue earning potential to bring down the
break even load factor.
Initiatives such as enhancing ancillary revenues, discontinuing loss
making routes, Sale/ Sale and lease back of aircraft, re-negotiation of
major contracts including, for aircraft maintenance, ground handling,
selling and distribution costs, etc., have been either implemented or
in the process of being implemented, which will bring down the break
even load factor.
The Company raised funds from the sale of development rights of its
lease hold property at Bandra-Kurla Complex, Mumbai and from the sale
and lease back of engines.
As part of its strategic re-branding exercise, your Company has
consolidated its low fare service products under the JetKonnect brand
to simplify the group's service proposition and enhance brand recall.
Thus, effective 25th March, 2012, the erstwhile JetLite and Jet Airways
Konnect services have started operating under the JetKonnect brand,
enabling guests to avail of a single superior in-flight product in the
full service (Jet Airways) and low-fare (JetKonnect) categories. For
the financial year ended 31st March, 2012, our capacity on JetKonnect
services formed 64% of our overall domestic capacity in terms of number
of seats. With its mixed fleet of Boeings and ATR aircraft and 400
daily flights connecting 56 destinations across India, JetKonnect
provides more flexibility and choice to its guests, making it India's
largest low fare brand.
For the financial year 2012, your Company has had the best On Time
Performance (OTP) and has reported an OTP of 91.1%, which was higher
than all other domestic carriers in India. Our vision and focus has
been to consistently be not only the biggest, but also the best in our
service to customers and in all our operational metrics vis-a-vis the
industry.
We are pleased to inform you that the benefits of these measures have
translated in the Company continuing to dominate the Indian domestic
skies with a market share of 26.1% during the year.
The Indian aviation market is one of the only markets in the world
which continues to grow at a healthy pace and it therefore presents an
enviable opportunity for companies like ours, to take advantage of the
strong franchise that we have created over the last few years.
The domestic traffic in India grew by 13% for fiscal year 2012 and over
the next few years, we expect the domestic aviation market to grow at
around 15% per annum and this has also been supported by various
studies and analysis carried out by independent agencies like IATA,
CAPA, etc. However, there will be short term challenges to grow
profitably because of high operating costs and overcapacity in both
domestic market as well as international traffic into and out of India.
During the year under review, domestic passenger traffic for the
Company, reported a 17.9% growth as compared to the same period last
year while international passenger traffic registered an increase of
18.1%.
The Company ended the financial year with a system-wide seat factor of
74.8% on the domestic and 81.6% on the international sectors.
The Company carried 173.05 lakhs revenue passengers on its
international and domestic services during the year under review, up
from 146.67 lakhs in the previous financial year.
The financial year 2012 was a year of consolidation and there were not
many new routes that the Company began operations on. The focus was
largely on building traffic flows between domestic and international as
well as international traffic flows over our key hubs at Mumbai and New
Delhi. The International business of the Company has now posted several
consecutive quarters of consistent growth in terms of seat factor of
above 80% and increase in the capacity in terms of ASKMs reflecting the
growing impact of our network synergies, major strategic international
code shares and customer centric product and service focus
The Company will take deliveries of 4 Airbus A330 - 300 aircraft this
financial, of which 2 will be replacements for lease expiries while the
other 2 will be deployed on long haul international routes. There are
various international route rights that your Company has applied for to
fly into European countries and the new aircraft capacity will be
deployed on some of these routes. Additionally, we will also free some
A330 aircraft capacity due to temporary suspension of our loss making
routes like Mumbai-Johannesburg in June 2012. These aircraft will be
redeployed on to other routes.
Routes
The details of the routes introduced and discontinued during the
financial year ended 31st March, 2012 are as follows:
Routes Introduced Discontinued
Domestic segment
Aizawl-Guwahati-Aizawl 1st May, 2011
Aurangabad-Hyderabad-Aurangabad 30th October, 2011
Bengaluru-Vijayawada-Bengaluru 30th October, 2011
Bengaluru-Vijayawada-Bengaluru 14th December,
2011
Delhi-Bagdogra-Guwahati-Delhi 30th June,
2011
Delhi-Guwahati-Agartala-Delhi 1st July, 2011
Delhi-Guwahati-Bagdogra-Delhi 30th June,
2011
Guwahati-Imphal-Guwahati 1st May, 2011
Guwahati-Jorhat-Guwahati 1st May, 2011
Guwahati-Silchar-Guwahati 1st May, 2011
Hyderabad-Bhubaneswar-Hyderabad 24th May, 2011
Hyderabad-Tirupati-Hyderabad 30th October,
2011
Indore-Jaipur-Indore 23rd September, 2011
Indore-Jodhpur-Indore 30th October, 2011
Indore-Jodhpur-Indore 14th December,
2011
Indore-Lucknow-Indore 15th October, 2011
Jaipur-Chandigarh-Jaipur 23rd September, 2011
Kolkatta-Aizawl-Kolkatta 1st May, 2011
Kolkatta-Dimapur-Kolkatta 16th November, 2011
Kolkatta-Nagpur-Kolkatta 30th October, 2011
Routes Introdued Discontinued
Domestic segment
Kolkatta-Silchar-Kolkatta 1st May, 2011
Leh-Chandigarh-Leh 30th October, 2011
Lucknow-Patna-Lucknow 15th October, 2011
Madurai-Bengaluru-Madurai 30th October, 2011
Madurai-Bengaluru-Madurai 14th December, 2011
Raipur-Bhubaneswar-Raipur 23rd May, 2011
Raipur-Indore-Raipur 23rd September,2011
International segment
Mumbai-Bangkok-Mumbai 14th December, 2011
Mumbai-Riyadh-Mumbai 14th December, 2011
Thiruvananthapuram-
Sharjah-
Thiruvananthapuram 30th October, 2011
Delhi-Dammam-Delhi 17th March, 2012
Fleet
As on date, the Company had a fleet of 102 aircraft, comprising 10
Boeing 777-300 ER aircraft, 12 Airbus A330-200 aircraft, 60 Next
Generation Boeing 737-700/800/900/900ER aircraft and 20 modern ATR
72-500 Turboprop aircraft. With an average fleet age of 6.04 years,
the airline has one of the youngest aircraft fleets in the world.
Of the 10 B777-300ER aircraft, 5 aircraft have been sub-leased to Thai
Airways Public Company Limited ("Thai Airways"). The lease in respect
of these aircraft expires between May, 2013 and November, 2013.
Flights to 76 destinations span the length and breadth of India and
beyond, including Abu Dhabi, Bahrain, Bangkok, Brussels, Colombo,
Dammam, Dhaka, Doha, Dubai, Hong Kong, Jeddah, Johannesburg, Kathmandu,
Kuala Lumpur, Kuwait, London (Heathrow), Milan, Muscat, New York (both
JFK and Newark), Riyadh, Sharjah, Singapore and Toronto.
4. Management Discussion and Analysis
As required by Clause 49 of the Listing Agreement(s) entered into with
the Stock Exchanges, a detailed review by the Management of the
operations, performance and future outlook of the Company and its
business, is presented in a separate section - Management Discussion
and Analysis - forming part of this Annual Report.
5. Subsidiary Company
Jet Lite (India) Limited ('Jet Lite') is a wholly owned subsidiary
which was acquired by the Company on 20th April, 2007.
Jet Lite is a non-material, non-listed subsidiary company as defined
under Clause 49 of the Listing Agreement(s) entered into with the Stock
Exchanges.
Jet Lite follows the low-cost, no-frills business model. Effective 25th
March, 2012, the service offered under the JetLite brand was
re-christened as JetKonnect.
For the financial year ended 31st March, 2012, Jet Lite posted a total
income of Rs. 190,386 lakhs (2010-11 : Rs. 178,615 lakhs) and a Net Loss of
Rs. 18,403 lakhs (2010-11: Net Loss of Rs. 10,747 lakhs). In view of the
loss, the Board of Directors of Jet Lite has not recommended a
dividend; neither on the Equity Shares nor on the Compulsorily Fully
Convertible Non-Cumulative Preference Shares for the financial year
ended 31st March, 2012 (Previous Year : Nil). The Company continues to
support the operations of Jet Lite.
The highlights of the operating performance ofJet Lite for the
financial year ended 31st March, 2012 are as follows:
Traffic Parameters Year ended 31st March
2012 2011
Departures (Number) 41,992 39,003
Available Seat Kilometers (ASKMs) (Million) 5,829 5,481
Revenue Passenger Kilometers (RPKMs) 4,543 4,340
(Million)
Passenger Load Factor (%) 77.9 79.2
Revenue Passengers (Number) 4,794,658 4,332,469
As on date, Jet Lite had an all Boeing fleet of 19 aircraft, comprising
9 Boeing 737-700, 8 Boeing 737-800 and 2 Boeing 737-900 ER aircraft.
The airline flies to 56 destinations across India and 1 international
destination - Nepal.
Pursuant to Circular No. 2/2011 dated 8th February, 2011, issued by the
Ministry of Corporate Affairs read with the provisions of Section
212(8) of the Companies Act, 1956, the Annual Report of Jet Lite, for
the financial year ended 31st March, 2012, is not annexed to this
Report. A summary of the financial performance of Jet Lite is given in
this Annual Report. The Company will make available copies of the
Annual Accounts of Jet Lite and the related detailed information, free
of cost to Members, on request. The same are also available for
inspection at the Registered Office between 10 a.m. and 12 noon on any
working day of the Company.
6. Consolidated Financial Statements
The audited Consolidated Accounts and Cash Flow Statement, comprising
Jet Airways (India) Limited and Jet Lite (India) Limited, appear in
this Report. The Auditors' Report on the Consolidated Accounts is also
attached. The same is unqualified. The Consolidated Accounts have been
prepared in accordance with the Accounting Standards prescribed by the
Institute of Chartered Accountants of India in this regard and the
provisions of the Listing Agreement(s) entered into with the Stock
Exchanges
7. Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars, as prescribed by Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo, to the
extent applicable to the Company, are given below:
Conservation of energy
The Company has embraced the best operational, technological and
maintenance practices and recommendations to reduce fuel burn. The
Company continues to modernize its fleet. The older aircraft are
regularly retired and replaced with the latest fuel efficient aircraft
thereby improving the overall fuel efficiency and mitigating unit
emissions. The Company continuously monitors the weight of various
catering, cabin and galley items. The weight reduction program
contributes to significant savings in fuel burn.
Through in-house subject matter expertise, the Company has developed
Integrated Emissions Management System (IEMS) for monitoring and
optimizing the use of Aviation Turbine Fuel.
The Company has commenced assessment of the carbon footprint of its
activities for both direct and indirect emissions. The carbon foot
printing is being done as per the internationally accepted Greenhouse
Gas Protocol Standard developed jointly by World Resources Institute
(WRI) and World Business Council for Sustainable Development (WBCSD).
The footprint mapping and reporting exercise is in line with the ISO
14064 guidelines.
Technology absorption Training of Pilots
Jet Airways Flight Operations Training School ('the School') is
approved by the Directorate General of Civil Aviation to function as
Type Rating Training Organization. It provides Pilots' Training, Cabin
Crew Training as well as Security Training all under one roof.
It has introduced e-learning for pilots and flight despatchers
resulting in cost saving and value addition. It has also conducted
special operational courses for Non-scheduled Airline Operators,
thereby generating revenue.
Information Technology and e-Commerce initiatives
The Company makes strategic use of the latest technology to interact
with passengers at a global level. Its significant presence on social
media platforms like Facebook, Twitter, LinkedIn, YouTube, Flickr and
Foursquare ensures increase in awareness and reach of the Company's
brand. The Company's growth on the social media networking platform has
been noteworthy registering an exponential increase in the number of
followers and fans on Twitter and Facebook.
In the coming year, the Company aims to introduce state-of-the-art
mobile applications for Android, iPhone, BlackBerry and Windows mobile
phones. These applications will provide passengers with a convenient
and seamless option to book tickets, check-in, access their
JetPrivilege account etc. using their mobile phones.
Additionally, the Company intends to commence the use of 2D Mobile
Bar-coded boarding passes for guests who have checked-in for their
flights, thus providing a paperless travel experience.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the
Notes to Accounts.
8. Environment, Health and Safety (EHS)
The Company consciously strives to keep up the good environment, health
and safety performance delivered in earlier years. There has been
tremendous progress in the areas of process safety and the Safety
Management System (SMS) implementation is well underway.
To ensure continued focus of EHS activities, various improvement plans
for better pollution control, provision of medical facilities,
conducting mock drills for increased safety awareness and preparedness
for any eventuality, were implemented during the year under review.
9. Fixed Deposits
The Company has not accepted any Fixed Deposits from the public during
the financial year ended 31st March, 2012.
10. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the
Securities and Exchange Board of India and have complied with all the
mandatory requirements. The non-mandatory requirements have been
complied with to the extent practical and applicable.
A separate section on Corporate Governance and a certificate from the
Auditors confirming compliance with the Corporate Governance
requirements as stipulated in Clause 49 of the Listing Agreement(s)
entered into with the Stock Exchanges, form part of this Annual Report.
The Chief Executive Officer's declaration regarding compliance with the
Code of Business Conduct and Ethics forms part of the Report on
Corporate Governance.
11. Corporate Social Responsibility
Since 1997, the Company has been running an in-flight collection
programme called 'Magic Box' on its domestic flights. The collections
help finance the numerous projects run by Save The Children India which
include pre-schools for the urban slum children and a special care
centre for the mentally challenged and hearing impaired.
As every year, on the occasion of Children's day, the Company organised
"Flights of Fantasy" for approximately 100 underprivileged children
giving them a chance to experience the world of aviation, which is both
an informative and educational experience.
To support Non Government Organisations working primarily for the
up-liftment and empowerment of underprivileged women, the Company
organized an in-flight fund raising drive on the occasion of
International Women's Day.
The Company celebrated the Joy Of Giving Week 2011 by inviting 180
underprivileged tribal children for an educational trip to its hangar.
12. Employees
Your Directors particularly acknowledge the selfless untiring efforts,
whole-hearted support and co-operation of the employees at all levels.
Our industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 31st
March, 2012, was 12,849 (as on 31st March, 2011: 12,811).
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Annual Report. However, as
per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956,
this Report and Accounts are being sent to all the Members of the
Company, excluding the Statement of Particulars of Employees under
Section 217(2A) of the Companies Act, 1956. Members may inspect the
said Statement at the Registered Office of the Company between 10 a.m.
and 12 noon on any working day of the Company.
13. Directors' Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
- in the preparation of the Annual Accounts, the applicable accounting
standards have been followed;
- appropriate accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2012 and of the loss of the
Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
14. Directors
Mr. Saroj K. Datta ceased to be a Director of the Company with effect
from 30th September, 2011, consequent to the completion of his tenure
as the Executive Director of the Company. Mr. Datta was the Executive
Director of the Company since March 1993. As such, he was instrumental
in spearheading the Company's emergence as one of the country's
foremost global service brands and a premier international airline to
emerge from India. The Board of Directors places on record its
gratitude to Mr. Datta for his loyal and dedicated contribution to the
Company.
The Board of Directors appointed Mr. Gaurang Shetty as an Additional
Director with effect from 24th May, 2012. As per the provisions of
Section 260 of the Companies Act, 1956, he holds office up to the date
of the forthcoming Annual General Meeting. The Company has received a
notice under Section 257 of the Companies Act, 1956, from a Member
proposing the appointment of Mr. Shetty as a Director of the Company.
Subject to the approval of the Members, the Board of Directors also
appointed Mr. Shetty as the Manager for a period of three years with
effect from 24th May, 2012.
Mr. Ali Ghandour and Mr. Yash Raj Chopra retire by rotation at the
forthcoming Annual General Meeting and being eligible, have offered
themselves for re-appointment.
The appointment of Mr. Shetty and the re-appointments of Mr. Ghandour
and Mr. Chopra form part of the Notice of the forthcoming Annual
General Meeting and the Resolutions are recommended for your approval.
The profiles of these Directors, as required by Clause 49 of the
Listing Agreement(s) entered into with the Stock Exchanges, are given
along with the said Notice.
15. Auditors
The Statutory Auditors, Deloitte Haskins & Sells, Chartered
Accountants, and Chaturvedi & Shah, Chartered Accountants, retire at
the forthcoming Annual General Meeting and have confirmed their
eligibility and willingness to accept office, if re-appointed. Their
re-appointment as the Joint Statutory Auditors for the financial year
2012-13, forms part of the Notice of the said Annual General Meeting
and the Resolution is recommended for your approval.
16. Acknowledgements
Your Directors place on record their appreciation of the Company's
General Sales Agents' and other members of the travel trade for their
efforts in furthering the interest of the Company.
Your Directors also take this opportunity to thank the Ministry of
Civil Aviation, Government of India, the Directorate General of Civil
Aviation, Airports Authority of India, Mumbai International Airport
(Private) Limited, Delhi International Airport (Private) Limited, GMR
Hyderabad International Airport Limited, Bangalore International
Airport Limited, Cochin International Airport Limited and other airport
companies for their support and co-operation. Your Directors are also
grateful to the Ministry of Finance, Reserve Bank of India, National
Stock Exchange of India Limited, BSE Limited, US Exim Bank, Financial
Institutions and Banks, Boeing Company, Avion de Transport Regionale,
Airbus Industrie, General Electric, CFM and Pratt and Whitney and the
lessors of our aircraft and engines for their understanding and look
forward to their continued support.
On behalf of the Board of Directors
Mumbai Naresh Goyal
24th May, 2012 Chairman
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting their Nineteenth Annual
Report together with the audited Statement of Accounts for the
financial year ended 31st March, 2011.
1. Performance highlights
The financial and operating highlights for the year under review,
compared with the previous financial year, are given below:
Financial highlights (Rs. in lakhs)
Standalone for year Consolidated for year
Particulars ended 31st March ended 31st March
2011 2010 2011 2010
GROSS REVENUE 1,295,104 1,062,292 1,472,698 1,062,292
Profit before
Interest,
Depreciation,
Exceptional Items
and Tax 181,519 141,69 7 177,362 141,697
Interest 102,836 99,301 108,584 99,301
(Loss) / Profit
before Depreciation,
Exceptional Items
and Tax 78,683 42,396 68,778 42,396
Depreciation 91,062 96,196 91,857 96,196
(Loss) / Profit
before Exceptional
Items and Tax (12,379) (53,800) (23,079) (53,800)
Exceptional Items 17,042 7,045 18,236 7,045
(Loss) / Profit before
Taxation and
Adjustments 4,663 (46,755) (4,843) (46,755)
Provision for Tax 331 9 378 9
Deferred Tax 3,363 - 3,363 -
(Loss) / Profit after
Taxation 969 (46,764) (8,584) (46,764)
Profit / (Loss)
brought forward (72,908) (26,144) (164,150) (26,144)
Amount available
for Appropriation (71,939) (72,908) (172,734) (72,908)
APPROPRIATIONS
Transfer to General
Reserve - -
Transfer to Balance
Sheet (71,939) (72,908) (172,734) (72,908)
Note: 1 lakh = 100,000 Operating highlights
Operating parameters Year ended 31st March
2011 2010
Departures (Number) 146,876 131,108
Available Seat Kilometers (ASKMs)
(Million) 34,323 29,242
Revenue Passenger Kilometers (RPKMs)
(Million) 26,972 22,640
Passenger Load Factor (%) 78.6 77.4
Revenue Passengers (Number) 14,667,466 12,039,475
Average fleet size 90.0 85.6
Average Head Count 11,927 11,328
2. Dividend
The Board of Directors has not recommended a dividend on the Equity
Shares in view of the performance of the Company for the financial year
ended 31st March, 2011 (Previous year: Nil per Equity Share).
3. Review of Operations
During the year under the review, the Company continued to have a tight
control on the costs which resulted in our unit costs (excluding
aviation turbine fuel) being lower as compared to the previous
financial year. While we may not be able to impact external factors,
our relentless focus remains on improving efficiencies and productivity
in our operations. Airlines across the world have been impacted by the
increase in the aviation turbine fuel prices and Jet Airways is no
exception. Though we would have liked to pass on more of the fuel price
increases to our customers, it was not possible to do so in the short
term.
Our focus has also been to improve our operational metrics including
the on-time performance of our flights. Our efforts in this regard have
ensured that we have been consistently bettering ourselves and have
been the industry leaders in terms of on-time performance. Also, our
International growth and seat factors continue to improve constantly
which is a testimony to the growing emergence of the airline, as the
preferred choice for guests to and from the Indian subcontinent. We
are pleased to inform you that the benefits of these measures have
translated in the Company consolidating its leadership position with a
market share of 26.1% during the year.
The Indian aviation market continued its growth during the year under
review at a steady pace. The growth of the Indian economy was a major
trigger and the aviation market has been growing at a healthy 2 times
multiple of the GDP growth. Over the next few years, we expect the
domestic aviation market to grow at around 15% per annum and this has
also been supported by various studies and analysis carried out by
independent agencies like IATA, CAPA, etc. However, we believe that
both the domestic and international markets will remain competitive
given that there is currently some over capacity in both markets.
Domestic passenger traffic for the year under review, reported a 4.2%
growth as compared to the same period last year while international
passenger traffic registered an increase of 20.1%. The Company ended
the financial year with revenues of Rs.1,062,292 lakhs, a decrease of
10% versus last year, with a system-wide seat factor of 71.6% on the
domestic and 80.4% on the international sectors.
The Company carried 146 lakhs revenue passengers on its international
and domestic services during the year under review, up from 120 lakhs
in the previous financial year.
We strengthened our presence in the low fare / low cost space and our
ÃJet Airways Konnect' and ÃJet Airways Konnect Select' products have
been widely accepted by our guests. For the financial year ended 31st
March, 2011, our capacity on Jet Airways Konnect services formed 59% of
our overall domestic capacity in terms of number of seats.
The Company also benefited from the strategic expansion of its domestic
and international service network. We now serve 23 international
destinations, which include the addition of a non-stop service between
Mumbai and Johannesburg and a Delhi Milan service. The international
business has now posted several consecutive quarters of consistent
growth in terms of seat factor of above 80% and increase in the
capacity in terms of Average Seat Kilometers reflecting the growing
impact of our network synergies, major strategic international code
shares and customer centric product and service focus.
Routes
The details of the routes introduced and discontinued during the
financial year ended 31st March, 2011 are as follows:
Fleet
The Company currently operates a fleet of 97 aircraft, which includes
10 Boeing 777-300 ER aircraft, 12 Airbus A330- 200 aircraft, 55 Next
Generation Boeing 737-700/800/900 aircraft and 20 modern ATR 72-500
Turboprop aircraft. With an average age of 5.15 years, the airline has
one of the youngest aircraft fleet in the world.
Of the 10 B777-300ER aircraft, 7 aircraft have been sub-leased as
follows:
- In 2009, 4 aircraft were sub-leased to Turkish Airlines Inc. ("TK")
for a period of 25 months. The lease in respect of these four aircraft
expires between the months of July and November 2011.
- In 2010, 3 aircraft were sub-leased to Thai Airways Public Company
Limited ("Thai Airways") for a period of 36 months. The lease in
respect of these three aircraft expires in May 2013.
In view of the planned level of operations and the fleet size, the
Company proposes to deploy 2 of the 4 aircraft being redelivered by TK
later this year, for its own operations. The remaining 2 aircraft being
redelivered by TK are being sub (dry) leased to Thai Airways for a
period of 2 years, with an option to extend the lease by a further
period of 1 year.
Flights to 75 destinations span the length and breadth of India and
beyond, including New York (both JFK and Newark), Toronto, Brussels,
London (Heathrow), Milan, Johannesburg, Hong Kong, Singapore, Kuala
Lumpur, Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain, Muscat,
Doha, Abu Dhabi, Dubai, Jeddah, Sharjah, Riyadh and Dammam.
Jet Airways Konnect service operates on key domestic routes and is
designed to meet the needs of the low-fare segment with value-for-money
fares. Jet Airways Konnect links seven major metros - Mumbai, Delhi,
Chennai, Bengaluru, Hyderabad, Ahmedabad and Kolkata à with several
destinations across India, operating over 170 flights daily. Jet
Airways Konnect Select is a premium economy product introduced on
certain Jet Airways Konnect flights.
4. Management Discussion and Analysis
As required by Clause 49 of the Listing Agreements entered into with
the Stock Exchanges, a detailed review by the Management of the
operations, performance and future outlook of the Company and its
business, is presented in a separate section - Management Discussion
and Analysis - forming part of this Annual Report.
5. Subsidiary Company
Jet Lite (India) Limited (ÃJet Lite') is a wholly owned subsidiary
which was acquired by the Company on 20th April, 2007.
Jet Lite is a non-material, non-listed subsidiary company as defined
under Clause 49 of the Listing Agreements entered into with the Stock
Exchanges.
Jet Lite follows the low-cost, no- frills business model. For the
financial year ended 31st March, 2011, Jet Lite posted a total income
of Rs.178,615 lakhs (2009-10: Rs.161,943 lakhs) and a Net Loss of
Rs.10,747 lakhs (2009-10: Profit of Rs.4,619 lakhs). In view of the
loss, the Board of Directors of Jet Lite has not recommended a
dividend; neither on the Equity Shares nor on the Compulsorily Fully
Convertible Non-Cumulative Preference Shares for the year ended 31st
March, 2011 (previous year : Nil). The Company continues to support the
operations of Jet Lite.
The highlights of the operating performance for the financial year
ended 31st March, 2011 are as follows:
Traffic Parameters Year ended 31st March
2011 2010
Departures (Number) 39,003 39,602
Available Seat Kilometers (ASKMs)
(Million) 5,481 5,156
Revenue Passenger Kilometers (RPKMs)
(Million) 4,340 3,866
Passenger Load Factor (%) 79.2 75
Revenue Passengers (Million) 4.33 3.61
As on 31st March, 2011, Jet Lite had a fleet of 19 aircraft, which
consists 18 Boeing 737 series and 1 Canadian Regional Jet (CRJ) 200
series. The airline flies to 27 domestic destinations and 1
international destination (Kathmandu), operating over 110 flights a
day, on an average.
Pursuant to Circular No. 2/2011 dated 8 February, 2011, issued by the
Ministry of Corporate Affairs read with the provisions of Section
212(8) of the Companies Act, 1956, the Annual Report of Jet Lite, for
the financial year ended 31s March, 2011, is not annexed to this
Report. A summary of the financial performance of Jet Lite is given in
this Annual Report. The Company will make available copies of the
Annual Accounts of Jet Lite and the related detailed information, free
of cost to Members, on request. The same are also available for
inspection at the Registered Office between 10 a.m. and 12 noon on any
working day of the Company.
6. Consolidated Financial Statements
The audited Consolidated Accounts and the Cash Flow Statement,
comprising Jet Airways (India) Limited and Jet Lite (India) Limited,
appear in this Report. The Auditors Report on the Consolidated Accounts
is also attached. The same is unqualified. The Consolidated Accounts
have been prepared in accordance with the Accounting Standards
prescribed by the Institute of Chartered Accountants of India in this
regard and the provisions of the Listing Agreements entered into with
the Stock Exchanges.
7. Conservation of energy, technology absorption and foreign exchange
earnings and outgo Particulars, as prescribed by Section 217(1)(e) of
the Companies Act, 1956, read with Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, in respect of
conservation of energy, technology absorption and foreign exchange
earnings and outgpo, to the extent applicable to the Company, are given
below:
Conservation of energy
The Company has embraced best industry practices and recommendations of
the aircraft manufacturers to reduce fuel burn. It is proposed to
continue with modifications to the aircraft for greater fuel
efficiency. Efforts are underway to optimise takeoff weights as well as
to improve process efficiencies.
Technology absorption
Training of Pilots
The Company provides ground training to its pilots, as well as to
pilots of other airlines at its Flight Operations Training School. The
Flight Operations Training School also designed and conducted courses
for pilots of aircraft belonging to leading corporates and to other
organisations.
Simulator training for pilots operating Boeing 737, Boeing 777 and
Airbus 330 aircraft continued to be provided at the Companys Simulator
Complex at Mumbai under the supervision of the Companys own
instructors. The Company also offered surplus simulator time to other
airlines.
T and e-Commerce initiatives
The Enterprise Resource Planning (ERP) system of the Company was
extended to the budgeting process besides accounting, purchase, human
resources and management information systems.
In addition to our successful media initiatives on social networking
sites of Facebook and Twitter, the Company has extended its engagement
with its guests by creating and managing accounts on LinkedIn, YouTube,
Flickr and Foursquare. The Company has 173,810 fans on Facebook and
7,598 followers on Twitter as on 31st March, 2011 and continues to
evolve this social media initiative across these platforms. This
initiative helps to increase the awareness of the Company on a global
level and effectively and speedily engage and collaborate with its
guests.
The Company plans to relaunch its mobile site using latest technology
to offer a booking engine as well as mobile check-in facility to
seamlessly book and pay for tickets and check-in using 2D Mobile
Barcoded Boarding Pass.
The Company continues to provide the highest quality of service through
its website www.jetairways.com which is a 360 degree platform that
allows guests to search, book and pay for various products and services
that the Company offers.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the
Notes to Accounts.
8. Environment, Health and Safety (EHS)
The Company is mindful of its responsibilities of protecting the
environment and therefore, ensures strict adherence to the permissible
emission / pollution limits laid down by the concerned authorities.
The Company accords due importance to the health of its employees,
particularly the operational staff. EHS Awareness training is imparted
to employees on a continuing basis.
9. Fixed Deposits
The Company has not accepted any Fixed Deposits from the public during
the year ended 31st March, 2011.
10. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the
Securities and Exchange Board of India and have complied with all the
mandatory requirements. The non-mandatory requirements have been
complied with to the extent practical and applicable.
A separate section on Corporate Governance and a certificate from the
Auditors confirming compliance with the Corporate Governance
requirements as stipulated in Clause 49 of the Listing Agreements
entered into with the Stock Exchanges, form part of this Annual Report.
This Certificate is being forwarded to the Stock Exchanges.
The Chief Executive Officer's declaration regarding compliance with the
Code of Business Conduct and Ethics forms part of the Corporate
Governance Report.
11. Corporate Social Responsibility
The Company in association with Save The Children India (STCI), has
been running an in-flight collection programme called ÃMagic Box' since
1997. This fund-raising programme for STCI is unique to the Company and
is implemented on all its flights in the domestic network, thereby
allowing its passengers to participate in this noble cause. The
significant projects run by STCI include pre-schools for the urban slum
children and a special care centre for the mentally retarded and
hearing impaired
As in previous years, the Company organized "Flights of Fantasy", where
children with special needs and underprivileged children are taken on
specially organized flights and introduced to the world of aviation.
Every year our employees participate in the Standard Chartered Mumbai
Marathon, which raises funds for changing the lives of the city's most
at-risk children. The number of employees participating has been
increasing each year.
In August 2010, the Company operated additional flights to Leh, in the
wake of the havoc and destruction caused by the flash floods in the
region.
In light of the political unrest in Libya in March 2011, the Company
operated some relief flights to aid in the urgent evacuation of Indian
citizens.
12. Employees
Your Directors gratefully acknowledge the exemplary contribution,
commitment, support and understanding of the employees at all levels.
Our industrial relations continue to be cordial.
The total number of permanent employees of the Company as on 31st
March, 2011, was 12,811 (as on 31st March, 2010: 11,328).
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Annual Report. However, as
per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956,
this Report and Accounts are being sent to all the Members of the
Company, excluding the Statement of Particulars of Employees under
Section 217(2A) of the Companies Act, 1956. Members may inspect the
said Statement at the Registered Office of the Company between 10 a.m.
and 12 noon on any working day of the Company.
13. Directors' Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
- in the preparation of the Annual Accounts, the applicable accounting
standards have been followed;
- appropriate accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2011 and of the profit of
the Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
14. Directors
Mr. I. M. Kadri and Mr. Javed Akhtar retire by rotation at the
forthcoming Nineteenth Annual General Meeting and being eligible, have
offered themselves for re-appointment.
The re-appointments of Mr. Kadri and Mr. Akhtar form part of the Notice
of the forthcoming Nineteenth Annual General Meeting to be held on 17th
August, 2011, and the Resolutions are recommended for your approval.
The profiles of Mr. Kadri and Mr. Akhtar, as required by Clause 49 of
the Listing Agreements entered into with the Stock Exchanges, are given
along with the said Notice.
15. Auditors
The Statutory Auditors, Deloitte Haskins & Sells, Chartered
Accountants, and Chaturvedi & Shah, Chartered Accountants, retire at
the forthcoming Nineteenth Annual General Meeting and have confirmed
their eligibility and willingness to accept office, if re-appointed.
Their re-appointment as the Joint Statutory Auditors for the financial
year 2011-2012, forms part of the said Notice of the said Annual
General Meeting and the Resolution is recommended for your approval.
16. Post Balance Sheet events
Status of litigation with Sahara India Commercial Corporation Limited
The Company had acquired 100% shares of Sahara Airlines Limited (SAL)
(now known as Jet Lite (India) Limited) in April, 2007. As per the
Share Purchase Agreement (SPA) of 2005 the purchase consideration was
Rs.200,000 lakhs. This was reduced to Rs.145,000 lakhs as per the
subsequent Consent Terms and the Arbitration Award (Consent Terms).
Since the Company had already paid Rs.90,000 lakhs, the balance
purchase consideration of Rs.550,000 lakhs was to be paid by the
Company to the Selling Shareholders (SICCL) in four equal interest free
installments by 30th March, 2011. As a result of certain disputes that
arose between the parties, both the parties had filed petitions in the
Hon'ble Bombay High Court for breach of the SPA and the Consent Terms.
The Hon'ble Bombay High Court passed an order on 4th May, 2011
whereunder SICCL's demand for restoration of original purchase
consideration to Rs.200,000 lakhs was denied and the purchase
consideration was confirmed at Rs.145,000 lakhs. However, the Hon'ble
Bombay High Court has ordered the Company to pay interest of 9% p.a. on
the sums payable to SICCL from the date of default. In view of this
Order, a sum of Rs.11,643 lakhs was payable as interest which has been
duly discharged by the Company. As a result of this discharge, the
undertaking given by the Company in April 2009 for not creating any
encumbrance or alienation of its moveable or immoveable assets and
properties in any manner other than in the normal course of the
business, stands released. Further, as regards the Company's execution
proceedings against SICCL to recover amounts aggregating Rs.82,102
lakhs in respect of SICCL's obligation to indemnify the Company for
income tax demands raised on Jet Lite (India) Limited for assessment
years prior to the effective date of SPA / Consent Terms, presently
stands resolved in light of Income Tax department squashing such demand
on Jet Lite (India) Limited.
Though the Company has complied with the Order of the Hon'ble Bombay
High Court by making payment of Rs.47,851 lakhs including interest of
Rs.11,643 lakhs, the Company, based on legal advice, has decided to
file an appeal with the Division Bench of Bombay High Court contesting
the levy of interest @ 9% and claiming that no interest is payable.
SICCL has in turn filed an appeal with the Division Bench of Hon'ble
Bombay High Court for restoration of the purchase consideration to
Rs.200,000 lakhs and for interest to be awarded at 18% p.a. insted of
9% awarded by the Hon'ble Bombay High Court.
Hence the interest payment of Rs.11,643 lakhs (Rs.11,305 lakhs up to
March 31, 2011) till 4 May 2011, effected by the Company on 5 May 2011
is not provided in the books of accounts as per its stand above and
will be subject to final determination by the Court.
17. Acknowledgements
Your Directors place on record their appreciation for the support
rendered by the Companys General Sales Agents, Travel Agents and other
members of the travel trade for their continued efforts in promoting
the Company.
Your Directors also take this opportunity to thank the Ministry of
Civil Aviation, Government of India, the Directorate General of Civil
Aviation, the Airports Authority of India, the Mumbai International
Airport (Private) Limited, Delhi International Airport (Private)
Limited, GMR Hyderabad International Airport Limited, Bangalore
International Airport Limited, Cochin International Airport Limited and
other airport companies for their support and co-operation. Your
Directors are also grateful to the Reserve Bank of India, the Ministry
of Finance, the Ministry of Civil Aviation, Government of India,
National Stock Exchange of India Limited, Bombay Stock Exchange
Limited, the US Exim Bank, Financial Institutions and Banks, the Boeing
Company, Avion de Transport Regionale, Airbus Industrie, General
Electric, CFM and Pratt and Whitney and the lessors of our aircraft and
engines for their support and look forward to their continued co-
operation.
On behalf of the Board of Directors
London Naresh Goyal
19th May, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting their Eighteenth Annual
Report together with the audited Statement of Accounts for the
financial year ended 31st March, 2010.
1. Performance highlights
The financial and operating highlights for the year under review,
compared with the previous financial year, are given below:
Financial highlights
Particulars Year ended Year ended
31st March, 31st March,
2010 2009
Rs. in lakhs Rs. in lakhs
GROSS REVENUE 1,062,292 1,178,688
Profit before Interest,
Depreciation, Exceptional Items & Tax 141,697 315
Interest 99,301 73,803
(Loss) / Profit before Depreciation,
Exceptional Items & Tax 42,396 (73,488)
Depreciation 96,196 89,981
(Loss) / Profit before Exceptional
Items & Tax (53,800) (163,469)
Exceptional Items 7,045 116,507
(Loss) / Profit before Taxation &
Adjustments (46,755) (46,962)
Provision for Tax 9 1,326
Deferred Tax - (8,054)
(Loss) / Profit after Taxation (46,764) (40,234)
Profit / (Loss) brought forward (26,144) 20,891
Adjustment on account of Change in Policy - (6,801)
Amount available for Appropriation (72,908) (26,144)
APPROPRIATIONS
Transfer to General Reserve - -
Transfer to Balance Sheet (72,908) (26,144)
Note: 1 lakh = 100,000
Operating highlights
Operating parameters Year ended Year ended
31st March, 31st March,
2010 2009
Departures (Number) 131,108 133,736
Available Seat Kilometers (ASKMs)
(Million) 29,242 31,652
Revenue Passenger Kilometers (RPKMs)
(Million) 22,640 21,444
Passenger Load Factor (%) 77.4 67.7
Revenue Passengers (Number) 12,039,475 11,080,035
Average fleet size 85.6 84.5
Average Head Count 11,328 13,843
2. Dividend
The Board of Directors has not recommended a dividend on the Equity
Shares in view of the performance of the Company for the financial year
ended 31st March, 2010 (Previous year: Nil per Equity Share).
3. Review of Operations
The Company was able to redesign its business model and emerge as a
leaner, more efficient and responsive organization. A series of
planned steps that were taken during the year ensured that the Company
remains competitive through stringent cost control, route
rationalization and fiscal prudence, whilist constantly introducing
strategic marketing and route initiatives without affecting the quality
of the product offered. We are pleased to inform you that the benefits
of these measures have translated in the Company consolidating its
leadership position with a market share of 25.2% during the year.
During the year under review, there was a progressive recovery in the
aviation industry, both in India and overseas though at a more rapid
rate than previously anticipated. This was primarily owing to the
faster growth of the Indian economy and the fact that major economies
came out of recessionary trends. The third and fourth quarters of the
financial year recorded encouraging passenger and cargo traffic growth.
However, both domestic and international markets remained competitive,
and there was significant over capacity in both markets.
Domestic passenger traffic for the year under review, reported a 4.2%
growth as compared to the same period last year while international
passenger traffic registered an increase of 20.1%. The Company ended
the financial year with revenues of Rs.1,062,292 lakhs a decrease of
10% versus last year, with a system-wide seat factor of 71.6% on the
domestic and 80.4% on the international sectors.
The Company carried 120 lakhs revenue passengers on its international
and domestic services during the year under review, up from 110 lakhs
in the previous financial year. But perhaps the most encouraging has
been the improvement in the EBITDAR margins from 3.5% to 19.2% mainly
due to improved yields, growth in traffic and cost efficiencies.
The introduction of Jet Airways Konnect and Jet Airways Konnect
Select were our answers to the market demand for quality, low-cost
travel during the global economic downturn, which has been well
appreciated by our guests. The Jet Konnect flights use Boeing 737 and
ATR aircraft and fly on both regional and trunk routes. As on 31s
March, 2010, approximately 65% of Jet Airways domestic flights were Jet
Airways Konnect flights.
Jet Airways Konnect Select is specifically targeted at the business
and leisure travelers who desire more flexibility, comfort and
benefits.
The Company also benefited from the strategic expansion of its domestic
and international service network. We now serve 23 international
destinations, which include the recent addition of a daily non-stop
service between Mumbai and Johannesburg, South Africa. Our airline has
also worked towards creating operational hubs in Mumbai and Delhi to
offer guests between third countries enhanced connectivity via these
gateways. As part of our International strategy, we have continued to
increase frequencies to international points from several gateways in
India thus enhancing our penetration of the market.
The details of the routes introduced and discontinued during the
financial year are as follows:
Routes Introduced Discontinued
Domestic segment
Chennai-Pune-Chennai 23rd April, 2009
Bengaluru-Coimbatore-Bengaluru 1st October, 2009
Delhi-Ahmedabad-Delhi 1st October, 2009
Delhi-Lucknow-Delhi 1st October, 2009
Delhi-Raipur-Delhi 7 November, 2009
Mumbai-Lucknow-Mumbai 1st October, 2009
Mumbai-Nagpur-Mumbai 16th December, 2009
Mumbai-Coimbatore-Mumbai 22nd December, 2009
Ahmedabad-Bengaluru-Ahmedabad 28th March, 2010
Delhi-Dehradun-Delhi 28th March, 2010
Chennai-Port Blair-Chennai 28th March, 2010
Jaipur-Udaipur-Jaipur 28 March, 2010
Mumbai-Indore-Mumbai 28th March, 2010
International
segment
Cochin-Kuwait-Cochin 21st January, 2010
Chennai-Dubai-Chennai 23rd April, 2009
Mumbai-Jeddah-Mumbai 14th July, 2009
Mumbai-Riyadh-Mumbai 6th August, 2009
Hyderabad-Dubai-Hyderabad 16th August, 2009
Cochin-Sharjah-Cochin 1stSeptember, 2009
Delhi-Hong Kong-Delhi 30th September, 2009
Mumbai-Kathmandu-Mumbai 2ndDecember, 2009
Mumbai-Dhaka-Mumbai 23rd December, 2009
Delhi-Doha-Delhi 21st January, 2010
Thiruvananthapuram-Dammam-
Thiruvananthapuram 28th March, 2010
The Company has leased four Boeing 777-300 ER aircraft to Turkish
Airlines Inc. on an operating lease basis between June and October 2009
for a period of twenty five months. In March 2010, the Company entered
into an agreement with Thai Airways International Public Company
Limited to lease out, on an operating lease basis, three Boeing 777-300
ER aircraft for a period of thirty six months.
As on date, seven out of ten Boeing 777-300 ER aircraft in the
Companys fleet have been leased out.
4. Managements Discussion and Analysis
As required by Clause 49 of the Listing Agreements entered into with
the Stock Exchanges (Listing Agreement), a detailed review by the
Management of the operations, performance and future outlook of the
Company and its business, is presented in a separate section -
Managements Discussion and Analysis - forming part of this Annual
Report.
5. Response to comments in the Annexure to the Auditors Report
Reference is drawn to Point No. 7 of the Annexure to the Auditors
Report relating to the scope of Internal Audit. The Companys response
to the same is as follows:
The Internal Audit department is being strengthened and its scope
extended to cover various new areas including those suggested by the
Statutory Auditors, more particularly the outsourced and overseas
payroll, besides procurement of fixed assets.
6. Subsidiary Company
Jet Lite (India) Limited (earlier known as Sahara Airlines Limited) has
been a wholly owned subsidiary of the Company since 20th April, 2007.
For the financial year ended 31st March, 2010, Jet Lite (India) Limited
has posted a total income of Rs.161,943 lakhs (2008-09 : Rs.166,561
lakhs) and a Net Profit / (Loss) of Rs.4,619 lakhs (2008-09: [Rs.63,043
lakhs]). In view of the inadequate profits, the Board of Directors of
Jet Lite (India) Limited has not recommended a dividend for the year
ended 31s March, 2010.
The improved performance of Jet Lite (India) Limited was achieved
through higher aircraft utilization, improved on-time performance and
the hard work and commitment of a dedicated team, all of which helped
Jet Lite (India) Limited emerge as a key contender in the low-fare
segment.
Positioned as an all-economy, no-frills airline, Jet Lite (India)
Limited operates a fleet of 25 aircraft, which consists 18 Boeing 737
series and 7 Canadian Regional Jets (CRJ) 200 series. The airline flies
to 28 domestic destinations and 2 international destinations (Kathmandu
and Colombo), operating over 110 flights a day, on an average.
A number of initiatives have been launched to improve the Jet Lite
Product.
These include:
- phasing out the CRJ 200 aircraft fleet and converting the fleet into
all Boeing 737 aircraft
- revamping cabin interiors and standardizing the seats and livery
- introducing new uniforms
These initiatives will continue to be implemented in the financial year
2010-11.
Network overlaps between the Company and Jet Lite (India) Limited were
minimized and a common reservation system was introduced. The
operations of Jet Lite (India) Limited continue to improve with support
from the Company. The highlights of the operating performance for the
year ended 31st March, 2010 are as follows:
Traffic Parameters Year ended Year ended
31st March, 2010 31st March, 2009
Departures (Number) 39,602 41,040
ASKMs (Million) 5,156 5,705
RPKMs (Million) 3,866 3,856
Passenger Load Factor (%) 75 67.6
Revenue Passengers (Million) 3.61 3.40
Jet Lite (India) Limited is a non-material, non-listed subsidiary
company as defined under Clause 49 of the Listing Agreement.
Pursuant to the provisions of Section 212(8) of the Companies Act,
1956, the Annual Report of Jet Lite (India) Limited for the year ended
31st March, 2010, is not annexed to this Report. A summary of the
financial performance of the subsidiary company is given in this Annual
Report. However, if any Member of the Company or the subsidiary company
so desires, the Company will make available copies of the Annual
Accounts of the subsidiary company and related detailed information
free of cost. The Annual Accounts of the subsidiary company are also
available for inspection by any investor at the Registered Office of
the Company and of the subsidiary company between 10 a.m. and 12 noon
on any working day of the Companys up to the date of the forthcoming
Eighteenth Annual General Meeting.
7. Consolidated Financial Statements
The audited Consolidated Accounts and the Cash Flow Statement,
comprising Jet Airways (India) Limited and Jet Lite (India) Limited,
appear in this Annual Report. The Auditors Report on the Consolidated
Accounts is also attached. The same is unqualified. The Consolidated
Accounts have been prepared in accordance with the Accounting Standards
prescribed by the Institute of Chartered Accountants of India in this
regard.
8. Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Particulars, as prescribed by Section 217(1)(e) of the Companies Act,
1956, read with Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, in respect of these items, to the
extent applicable to our Company, are given below:
Conservation of energy
The Company continues to follow best industry practices and
manufacturers recommendations to reduce and optimize fuel burn in all
its aircraft.
The Company also continues to pursue energy conservation in its ground
operations, in installations such as hangars and other areas of its
operations.
Technology absorption
Training of Pilots
Simulator training for pilots operating Boeing 737, Boeing 777 and
Airbus 330 aircraft continued to be carried out at the Companys
Simulator Complex at Mumbai under the supervision of the Companys own
instructors. The Company also offered surplus simulator time to other
airlines.
At the Companys Flight Operations Training School, the Company
provides ground training to its pilots, as well as to pilots of other
airlines and organizations.
The Training School designed and conducted courses for pilots of
business aircraft (belonging to leading corporates).
T and e-Commerce initiatives
The Company continued to upgrade its Enterprise Resource Planning (ERP)
system. The Companys ERP system was extended to the budgeting process,
during the year under review. The Companys ERP system now covers
nearly all finance funds accounting, purchase, human resources,
management information systems. Other operational systems are now
linked with the Companys ERP system.
The Company has launched social media initiative by creating and
managing its accounts on Facebook and Twitter. The Company plans to
extend this social media initiative across other platforms. This
initiative has been taken in order to connect with its guests, increase
the awareness of the Company on a global level, understand issues faced
by them, provide solutions and reach an increasingly large target.
The Company has launched a Wireless Application Protocol (WAP) site for
mobile users. The Company plans to offer a booking engine facility on
this site as well as a WAP check-in system for guests to seamlessly
book their tickets and check-in using a 2D Mobile Barcoded Boarding
Pass.
The Company gives the highest quality of service through its website
www.jetairways.com. This website is a 360 degree platform that allows
guests to inquire about, book and pay for various products and services
that the Company offers. The services include:
- Online Booking Engine - a guest can book, pay and print his web ticket
- Web Check-in - a guest can choose a preferred seat and print his
boarding pass online
- Check for Schedules and Flight status
- Log in to a Frequent Flyer account and use the account for transactions
of ancillary services like hotels and travel
Insurance, etc.
The Company uses Search Engine Optimization (SEO) and Search Engine
Marketing (SEM) techniques to increase visitors and booking on its
website www.jetairways.com.
Foreign Exchange earnings and outgo
The details of Foreign Exchange earnings and outgo are given under the
Notes to the Accounts.
9. Environment, Health and Safety
The Company is committed to the highest levels of safety, in the air
and in all of its critical areas of operation on the ground.
The Company has launched a programme to be compliant with the emission
norms of the European Union.
The Company continues to give the highest priority to employee health,
particularly operational staff.
1 0. Fixed Deposits
The Company has not accepted any Fixed Deposits from the Public.
11. Corporate Governance
We adhere to the principles of Corporate Governance mandated by the
Securities and Exchange Board of India and have complied with all the
prescribed requirements. As required by Clause 49 of the Listing
Agreement, a detailed report on Corporate Governance forms part of this
Annual Report. The Auditors Certificate on compliance with Corporate
Governance requirements by the Company is attached to the Corporate
Governance Report. This Certificate is being forwarded to the Stock
Exchanges.
The Chief Executive Officers declaration regarding compliance with the
Code of Business Conduct and Ethics forms part of the Corporate
Governance Report.
12. Corporate Social Responsibility
Since the year 1997, the Company has been running its in-flight
collection programme Magic Box in association with
Save The Children India (STCI). This fund-raising programme for STCI is
unique to the Company and is implemented on all
its flights in the domestic network, thereby allowing its passengers to
participate in this noble cause. Since its introduction
in January 1997, the charity collection contributes close to Rupees One
crore each year.
As in previous years, the Company organized Flights of Fantasy", where
underprivileged children and children with
special needs are taken on specially organized flights and introduced
to the world of aviation.
This year, as in past years, our employees participated in the Standard
Chartered Mumbai Marathon, that raises funds for
various causes. The number of employees participating has been
increasing each year.
13. Employees
Your Directors gratefully acknowledge the commitment, support and
understanding of all the employees at all levels
during the difficult times faced by the Company.
An industrial dispute with a section of the Pilots in September, 2009,
was amicably settled with the Consultative Group,
comprising Management and Pilots representatives, being set up to
redress all issues.
The total number of permanent employees of the Company as on 31s March,
2010, was 11,328 (as on 31st March,
2009: 13,078).
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies
(Particulars of Employees) Rules, 1975, as amended, forms part of this
Annual Report. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, this Report and
Accounts are being sent to all the Shareholders of the
Company, excluding the Statement of Particulars of Employees under
Section 217(2A) of the Companies Act, 1956.
Shareholders may inspect the said Statement at the Registered Office of
the Company between 10 a.m. and 12 noon on
any working day of the Company till the date of the forthcoming
Eighteenth Annual General Meeting.
14. Directors Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
. in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
. appropriate accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2010 and of the loss of the
Company for the year ended 31st March, 2010;
. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
. the Annual Accounts have been prepared on a going concern basis; and
. proper systems are in place to ensure compliance with the laws
applicable to the Company.
15. Directors
Due to personal reasons, Mr. Charles Adams resigned from the
Directorship of the Company with effect from 7th July, 2009. The Board
places on record its appreciation of the valuable contribution made by
Mr. Adams during his tenure of six years as a Non-executive Independent
Director of the Company.
With deep regret we inform you about the sad demise of Mr. Adams on 30
April, 2010, after battling liver and lung cancer for months. Mr. Adams
was a member of our Board from 20th September, 2003 till 7th July,
2009. Mr. Adams was 70 years of age and is survived by his wife,
daughter and son.
Due to personal reasons, Dr. Pierre Jeanniot resigned from the
Directorship of the Company with effect from 21st July, 2009.
The Board of Directors places on record its sincere appreciation of Dr.
Jeanniots invaluable guidance and support during
his tenure of nearly three years as a Non-executive Independent
Director of the Company.
Due to other work commitments, Mr. Shah Rukh Khan did not seek
re-appointment on retirement by rotation at the
Seventeenth Annual General Meeting held on 17th August, 2009. The Board
of Directors places on record its sincere
appreciation of Mr. Khans invaluable contribution and support during
his tenure of nearly three years as a Non-executive
Director of the Company.
Mr. Aman Mehta and Mr. Saroj K. Datta retire by rotation at the
forthcoming Eighteenth Annual General Meeting and
being eligible, have offered themselves for re-appointment.
The re-appointments of Mr. Aman Mehta and of Mr. Saroj K. Datta form
part of the Notice of the forthcoming
Eighteenth Annual General Meeting to be held on 26 August, 2010, and
the Resolutions are recommended for the
approval of Shareholders. Profiles of Mr. Aman Mehta and of Mr. Saroj
K. Datta, as required by Clause 49 of the Listing
Agreement, are given along with the said Notice.
16. Auditors
The Statutory Auditors, Deloitte Haskins & Sells, Chartered
Accountants, and Chaturvedi & Shah, Chartered Accountants, retire at
the forthcoming Eighteenth Annual General Meeting and have confirmed
their eligibility and willingness to accept office, if re-appointed.
Their re-appointment as the Joint Statutory Auditors for the financial
year 2010-2011, forms part of the Notice of the said Annual General
Meeting and the Resolution is recommended for your approval.
17. Post Balance Sheet events
. Operations to South Africa
The Company commenced daily non-stop flights from Mumbai to
Johannesburg aboard a state-of-the-art Airbus 330-200 aircraft from
14th April, 2010. The launch of this new international route marked the
beginning of Jet Airways international network expansion to Africa.
Johannesburg is the twenty-third destination in the airlines
international network.
. Volcanic ash
The drifting ash from a volcanic eruption in Iceland resulted in the
closure of several airports across Europe including London and
Brussels. As a result, the Companys operations were also affected.
. Jet Konnect Select
Buoyed by the improvement in the global economic environment and the
resultant upswing in air travel demand, particularly business travel,
the Company launched the all new Jet Konnect Select, a premium cabin
on several domestic routes of Jet Airways Konnect, the all-economy
service, effective 26th April, 2010. Jet Konnect Select is
specifically targeted at the business and leisure travelers who desire
more flexibility, comfort and benefits.
18. Acknowledgements
Your Directors place on record their appreciation for the support
rendered by the Companys General Sales Agents and their associates,
Travel Agents and other members of the travel trade for their continued
efforts in promoting the Company.
Your Directors also take this opportunity to thank the Ministry of
Civil Aviation, Government of India, the Directorate General of Civil
Aviation, the Airports Authority of India, the Mumbai International
Airport (Private) Limited, Delhi International Airport (Private)
Limited, GMR Hyderabad International Airport Limited, Bangalore
International Airport Limited, Cochin International Airport Limited and
other airport companies for their support and guidance. Your Directors
are also grateful to the Reserve Bank of India, the Ministry of
Finance, the Ministry of Corporate Affairs, Government of India,
National Stock Exchange of India Limited, Bombay Stock Exchange
Limited, the US Exim Bank, Financial Institutions and Banks, the Boeing
Company, Avion de Transport Regionale, Airbus Industrie, General
Electric, CFM and Pratt and Whitney and the lessors of our aircraft and
engines for their support and look forward to their continued
co-operation.
On behalf of the Board of Directors
London Naresh Goyal
20th May, 2010 Chairman
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