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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 539448ISIN: INE646L01027INDUSTRY: Airlines

BSE   ` 3544.50   Open: 3559.35   Today's Range 3515.95
3573.70
-0.55 ( -0.02 %) Prev Close: 3545.05 52 Week Range 1812.10
3573.70
Year End :2023-03 

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

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

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

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

Secured - Working capital loans

As at March 31,2023

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

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

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

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

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

As at March 31,2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sensitivity analysis for key assumptions used:

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

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

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

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

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

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

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

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

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

Other financial assets and financial liabilities

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

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

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

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of NAV for mutual funds.

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

Valuation processes

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

b. Financial risk management

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

• Credit risk ;

• Liquidity risk ;

• Market Risk - Foreign currency ; and

• Market Risk - Interest rate

Risk management framework

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management policies and ensuring its effectiveness.

The Company's risk management policies are established to identify and analyse the risks faced by the Company to set appropriate risks, limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and the Company's activities.

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

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

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

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

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

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

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

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

(ii) Liquidity risk

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

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

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

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

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

- Maintaining diversified credit lines.

Sensitivity analysis

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

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

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

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

30. Capital management

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

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

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

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

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

(i) Income tax

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(v) Legal cases

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

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

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

Notes:

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

32. Commitments

Particulars

As at

March 31,2023

As at

March 31,2022

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

3,062,277.42

2,942,248.20

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

33. Employee benefits

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

Defined contribution plan

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

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

Defined benefit plan

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

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

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

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

Risk exposure:

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

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

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

34. Segment reporting

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

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

Revenue from air transportation services is directly attributed to domestic and international operations or are attributed on a reasonable basis. Other income is not allocated as the underlying assets / liabilities / services are used interchangeably.

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

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

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

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

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

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

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

(c) Ms. Rohini Bhatia, Non-Independent Non-Executive Director, resigned from the Board with effect from July 11,2022.

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

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

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

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

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

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

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

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

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

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