INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF JET AIRWAYS TRAINING ACADEMY PRIVATE LIMITED Report on the Standalone Financial Statements We have audited the accompanying financial statements of JET AIRWAYS TRAINING ACADEMY PRIVATE LIMITED ("the Company"), which comprise the Balance Sheet as at 31 st, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management's Responsibility for the Standalone Financial Statements The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 st March, 2015, and its loss and its cash flows for the year ended on that date. Emphasis of Matter We draw attention to Note 14 in the financial statements which indicate that the Company s net worth is further eroded due to losses incurred during the year. Going concern assumption for the company is dependent upon the financial support from its parent company. Our Opinion is not qualified in respect of the above matter. 1
Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor s Report) Order, 2015 ( the Order ) issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. 2. As required by Section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. (b) (c) (d) (e) (f) (g) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The matters described in under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company. On the basis of the written representations received from the directors as on 31 st taken on record by the Board of Directors, none of the directors is disqualified as on 31 st from being appointed as a director in terms of Section 164 (2) of the Act. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. There were no pending litigations which would impact the financial position of the Company; ii. iii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. For CHATURVEDI & SHAH Chartered Accountants Firm Registration No.: 101720W Place: Mumbai Parag D. Mehta Partner Membership No.: 113904 Date: 28 th May, 2015 2
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT (Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report of even date) 1) The Company does not hold any fixed assets. Thus paragraph 3(i) of the order is not applicable. 2) The Company does not hold any inventories. Thus paragraph 3(ii) of the order is not applicable. 3) According to the information and explanations given to us the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013. Therefore, the paragraph 3(iii) (a) and (b) of the Order are not applicable. to the company. 4) During the year, the Company has neither purchased any inventory nor any fixed assets nor sold any goods and services. Accordingly paragraph 3(iv) of this Order does not apply in respect of the adequacy of internal control system for purchase of inventory, fixed assets and sale of goods or services. 5) According to information and explanations given to us, the Company has not accepted any deposit during the year. 6) According to information and explanations given to us, maintenance of cost records has not been prescribed for the Company by the Central Government under clause sub section (1) of section 148 of the Companies Act, 2013. 7) According to the information and explanations given to us, in respect of statutory dues: a) Undisputed statutory dues, including provident fund, employees state insurance, income tax, sales-tax, value added tax, wealth tax, service tax, duty of customs, duty of excise, cess and any other material statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities. There were no undisputed amounts payable in respect of provident fund, employee state insurance, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues in arrears as at 31 st for a period of more than six months from the date they became payable. b) According to the information and explanations given to us, there are no material dues of sales tax, wealth tax, duty of customs, duty of excise, value added tax, and cess which have not been deposited with the appropriate authorities on account of any dispute. c) According to the information and explanations given to us there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under. 8) The Company has been registered for a period less than five years and hence paragraph 3(viii) of the order does not apply to incurrence of cash losses in the current financial year or immediately preceding financial year. 9) The Company has not borrowed money from any financial institution or bank or by issue of debentures and hence defaulting in repayment of its dues does not arise. Therefore, paragraph 3(x) of this order does not apply to the company. 10) In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. 11) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained. 3
12) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit. For CHATURVEDI & SHAH Chartered Accountants Firm Registration No.: 101720W Place: Mumbai Parag D. Mehta Partner Membership No.: 113904 Date: 28 th May, 2015 4
Balance Sheet as at 31 st Note No. EQUITY AND LIABILITIES Shareholders' Funds Share Capital 2 100,000 100,000 Reserves and Surplus 3 (306,411) (206,837) (206,411) (106,837) Non-Current Liabilities Long-term borrowings 4 500,000 - Current Liabilities Trade Payables 5 56,180 135,179 Other Current Liabilities 6 23,151-579,331 135,179 ASSETS TOTAL 372,920 28,342 Current Assets Cash and Cash equivalents 7 372,920 28,342 TOTAL 372,920 28,342 The accompanying notes are an integral part of 1 the Financial Statements As per our attached report of even date For CHATURVEDI & SHAH On behalf of Board of Directors Chartered Accountants Parag D. Mehta Partner Gaurang Shetty Director Belson Coutinho Director Date: 28 th May, 2015 Place: Mumbai 1
Statement of Profit and Loss for the Year ended 31 st Note No. Ended 31 st Ended 31 st Income - - Total Revenue - - Expenses Finance cost 8 23,151 169 Other Expenses 9 76,423 92,988 Total expenses 99,574 93,157 Loss before Tax (99,574) (93,157) Tax Expense - Current Tax - - Loss for the period (99,574) (93,157) Earnings per Equity Share: (Face value ` 10 Per Share) Basic and Diluted (in ` ) 10 (9.96) (9.32) The accompanying notes are an integral part of 1 the Financial Statements As per our attached report of even date For CHATURVEDI & SHAH On behalf of Board of Directors Chartered Accountants Parag D. Mehta Partner Gaurang Shetty Director Belson Coutinho Director Date: 28 th May, 2015 Place: Mumbai 2
Cash Flow Statement for the Year ended 31 st Note No. Ended 31 st March,2015 Ended 31 st March,2014 Cash Flow from Operating Activities : Net loss Before Tax (99,574) (93,157) Adjustment for: Finance Cost 23,151 - Operating (Loss) before Working Capital Changes (76,423) (93,157) Changes in Trade Payables and Other Current Liabilities 78,999 21,499 Net cash from / (used in) operating activities (155,422) (71,658) Cash Flow from Investing Activities - - Net Cash Flow from / (used in) Investing Activities - - Cash Flow from Financing Activities Proceeds from Long Term Loan 500,000 - Net Cash from Financing Activities 500,000 - Net Increase in Cash & Cash Equivalents 344,578 (71,658) Cash and Cash Equivalents as at the Beginning of the period 28,342 100,000 Cash and Cash Equivalents as at End of the period 372,920 28,342 As per our attached report of even date For CHATURVEDI & SHAH Chartered Accountants On behalf of Board of Directors Parag D. Mehta Gaurrang Shetty Belson Coutinho Partner Director Director Date: 28 th May, 2015 Place: Mumbai 3
Notes to the Financial Statements for the Year ended 31st 1. Significant Accounting Policies A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS : The financial statements are prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 2013 and the applicable accounting standards. B. USE OF ESTIMATES : The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized. C. REVENUE RECOGNITION : Revenue is recognized on accrual basis. D. TAXES : Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing differences between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable / virtual certainty, as the case may be, that the asset will be realized in future. E. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS : Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. F. BORROWING COSTS : Borrowing costs attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred G. PRELIMINARY EXPENSES: Preliminary expenses are written off in the period in which it incurred. 4
2. Share Capital Authorised 50,000 Equity Shares of ` 10/- each (Previous Year 50,000 Equity Shares of ` 10/- each) Issued, subscribed and Fully Paid up: 10,000 Equity Shares: Face value of ` 10/- each (Previous Year 10,000 Equity Shares of ` 10/- each) a. Reconciliation of Number of Shares March, 2015 March, 2014 500,000 500,000 500,000 500,000 100,000 100,000 TOTAL 100,000 100,000 As at 31st Number Number of shares of shares Issued, Subscribed and Fully Paid up: Equity Shares: Face value of ` 10/- each Outstanding as at the beginning of the year 10,000 100,000 10,000 100,000 Add : Issued during the year - - - - Outstanding as at the end of the year 10,000 100,000 10,000 100,000 b. Shareholders holding more than 5% of share capital and shares held by Holding Company / Ultimate Holding Company Name of the Shareholder Equity Shares Jet Airways (India) Limited (Holding Company) and its nominee Number of shares Percentage of holding Number of shares Percentage of holding 10,000 100.00% 10,000 100.00% Terms and Rights attached to Equity Shares The Company has equity shares having a par value of ` 10/-. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends if any, in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amount. 3. Reserves and Surplus Deficit in Statement of Profit and Loss Balance as per Last Balance Sheet (206,837) (113,680) Loss for the year (99,574) (93,157) Deficit at the end of the year (306,411) (206,837) 5
4. Long Term Borrowings Loans from Related Parties 500,000-500,000 - Salient Terms Loan of ` 500,000 (Previous Year ` Nil) is an interest rate bearing loan taken from the Holding Company to support its operations and is repayable in March, 2020. Interest is charge by holding company @10% p.a. 5. Trade Payables Trade payables Total outstanding dues to Micro, Small and Medium Enterprises - - Others for Goods and Services 56,180 135,179 TOTAL 56,180 135,179 Under the Micro, Small and Medium Enterprise Development Act, 2006, which came into force from October 2, 2006, certain disclosures are required to be made relating to micro and small enterprise. The Company has taken necessary steps to seek relevant information from its suppliers about the coverage under the Act. According to information available with the management, no amounts are outstanding pertaining to covered creditors for a period more than 45 days. 6. Other Current Liabilities Interest accrued but not due 23,151 - TOTAL 23,151-7. Cash and Cash Equivalents Balances with Banks In Current Accounts 372,920 28,342 TOTAL 372,920 28,342 6
8. Finance Cost ended 31st ended 31st Interest Expenses 23,151 169 TOTAL 23,151 169 9. Other Expenses ended 31st ended 31st Auditors Remuneration- Audit Fee 56,180 56,180 Professional Fees 6,067 33,708 Filing Fees 14,176 3,100 10. Earnings Per Share (EPS) TOTAL 76,423 92,988 The earnings per equity share, computed as per the requirements of Accounting Standard 20 Earnings Per Share issued by the Institute of Chartered Accountants of India, is as under: ended 31st ended 31st Loss after tax (99,574) (93,157) Amount available for Equity Share holders A (99,574) (93,157) Weighted Average No. of Equity Shares outstanding during the period B 10,000 10,000 Nominal Value of Equity Shares (`) 10 10 Basic and Diluted EPS (`) (A/B) (9.96) (9.32) 11. Related Party Transactions As per Accounting Standard - 18 on Related Party Disclosures issued by the Institute of Chartered Accountants of India, the disclosure of transactions with the related party as defined in the Accounting Standard are given below: i. List of Related Parties with whom transactions have taken place and Relationships Sr. No. Name of the related party Nature of relationship 1.. Jet Airways (India) Limited Holding Company ii. List of Related Parties with whom no transactions have taken place and Relationships Sr. No. Name of the related party Nature of relationship 1.. Naresh Goyal Controlling Shareholders of Holding Company 2. Tail Winds Limited (Upto 30 th May, 2013) Ultimate Holding Company 3. Jet Lite India Limited Fellow Subsidiary 4. Fellow subsidiary upto 23 rd Jet Privilege Private Limited Effective 24th, enterprise over which Holding Company having significant Influence 5. Etihad Airways PJSC (w.e.f.20 th November, 2013) Enterprise which exercises Significant Influence 7
iii. Transactions during the year ended 31 st and balances with related parties Holding company Jet Airways (India) Limited 2014-15 2013-14 Transactions during the year : - Loan Received 500,000 - - Interest Expense 23,151 Closing Balance - Interest accrued but not due 23,151 - Loan 500,000-12. Segment Reporting: The Company operates in single business segment of providing training and educational services in various fields. It also operates in a single geographical segment viz. India since all its customers and assets are located in India. 13. As a matter of prudence, deferred tax asset on account of preliminary expenses has not been recognized. 14. The Company to get financial support from the holding company and has also been assured of such assistance in future. In view of the fact that the holding company has also incurred losses and its net-worth is fully eroded as at the end of the year, the going concern assumption for the Company is dependent on the ability of the holding company to raise adequate funds. As the management of the holding company is hopeful of being able to raise necessary funds, the Company has prepared its accounts on going concern basis despite of erosion in its net-worth due to losses suffered. 15. Previous Years Figures Previous year s figures have been regrouped / reclassified wherever necessary to correspond with the current year s classification / presentation. As per our attached report of even date For CHATURVEDI & SHAH On behalf of Board of Directors Chartered Accountants Parag D. Mehta Gaurang Shetty Belson Coutinho Partner Director Director Date : 28 th May, 2015 Place: Mumbai 8