Your Directors have pleasure in presenting their Twenty Sixth Annual Report togetherwith the Audited Financial Statements for the Financial Year ended 31st March2018.
1. Performance highlights
The financial and operating highlights for the year under review compared with theprevious Financial Year are given below:
| || || || ||(Rs.in Lakhs) |
|Particulars || |
Standalone for year ended 31st March
Consolidated for year ended 31st March
| ||2018 ||2017 ||2018 ||2017 |
|Gross revenue ||2395837 ||2304087 ||2517747 ||2417506 |
|Profit before Interest Depreciation || || || || |
|Exceptional Items & Tax ||69581 ||300431 ||74514 ||297550 |
|Finance Costs ||84286 ||85109 ||84894 ||85868 |
|Profit/(Loss) before Depreciation || || || || |
|Exceptional Items & Tax ||(14705) ||215322 ||(10380) ||211682 |
|Depreciation ||62057 ||67090 ||62114 ||67155 |
|Profit/(Loss) before Exceptional Items & Tax ||(76762) ||148232 ||(72494) ||144527 |
|Exceptional Items (Net) ||- ||- ||- ||- |
|Profit/(Loss) before Taxation & Adjustments ||(76762) ||148232 ||(72494) ||144527 |
|(Excess)/Provision for Tax ||- ||(20) ||- ||(20) |
|Share of Profit in Associate ||- ||- ||8849 ||5321 |
|Profit/(Loss) after Taxation ||(76762) ||148252 ||(63645) ||149868 |
|Other Comprehensive Income ||149 ||(5181) ||248 ||(5702) |
|Loss brought forward ||(1016187) ||(1155763) ||(1019225) ||(1159897) |
|Amount transferred to debenture ||- ||(3495) ||- ||(3495) |
|Redemption reserve || || || || |
|Impact of depreciation as per the Companies act 2013 ||- ||- ||- ||- |
|Amount transferred to Balance sheet ||(1092800) ||(1016187) ||(1082623) ||(1019225) |
Note: 1 Lakh = 100000
Operating highlights (Consolidated)
|Operating Parameters ||Year ended 31st March |
| ||2018 ||2017 |
|Departures (Number) ||234069 ||225938 |
|Available Seat Kilometers (askms) (Million) ||58228 ||53476 |
|Revenue Passenger Kilometers (rkms) (Million) ||48664 ||43484 |
|Passenger Load Factors (%) ||83.6 ||81.3 |
|Revenue Passengers (Number) ||29946998 ||27147736 |
|Fleet Size ||112 ||112 |
In view of the losses the Board of Directors have not recommended any dividend on theEquity Shares for the Financial Year ended 31st March 2018 (Previous year: Nilper Equity Share).
3. Review of operations
During the year the Company reported consolidated loss after tax of Rs.63645 Lakhs infiscal 2018 and standalone loss after tax of Rs.76762 Lakhs. Available Seat Kilometers(askms) increased by 8.9% to 58228 million compared with 53476 million in FY17. As aresult passenger numbers also grew from 27.15 Million in FY17 to 29.95 million duringFY18 resulting in increase in overall consolidated revenue from Rs.2417506 Lakhs in FY17to Rs.2517747 Lakhs in FY18.
Overall cost during the year increased due to increase of close to 16% in Fuel Brentrate alongwith increase in Maintenance and Landing and Navigation costs in the year. On apositive note cost per ASKM excluding fuel continued to show improvement witnessed by areduction 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. VinayDube 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 connectivityin India by deepening its existing footprint as well as launching maiden flightsconnecting emerging cities such as Jaipur Lucknow Chandigarh Dehradun Udaipur andIndore with each other and with metros including Nagpur-New Delhi Lucknow-KolkataDelhi-Indore and Kozhikode - Bengaluru as part of its strategy.
The Company continued to leverage its wide body fleet to enhance its guest experienceat slot-constrained airports such as Delhi Mumbai and Bengaluru. Earlier this year italso announced plans to make Guwahati as its regional gateway together with a strengthenedNorth Eastern presence marked with the introduction of several direct as well as non-stopflights connecting Jorhat Guwahati Aizwal Silchar Imphal with New Delhi and Mumbaitogether with additional connectivity from/ to Pune Patna Raipur Chandigarh Amritsarand Bengaluru.
On 29th October 2017 the Company launched its three international non-stopservices between Chennai and Paris CDG (five days/week) Bengaluru Amsterdam (daily) andMumbai London Heathrow (Third frequency). The new flights from Bengaluru and Chennai areespecially significant as they India with Europe and North America for the very first timewith 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 Linesrespectively. The Company also strengthened services from its third hub Bengaluruwith a second daily frequency to Singapore.
The Company also continued to enhance international cooperation by forging codesharepartnerships with leading airlines including one with China Eastern Airlines forconnectivity to Shanghai and Kunming in China. With this the Company's total number ofcodeshare partners has grown to 21. The Company also announced a Memorandum ofUnderstanding with Aeromexico to outline cooperation in the areas of enabling codeshareflights and frequent flyer programs during the year.
The Company also strengthened its ongoing codeshare relationships with Air France andKLM 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 viaLondon Heathrow and with Delta Air Lines 30 additional domestic US codeshare destinationswere added. These were aside from a far-reaching landmark "Enhanced CooperationAgreement" that was signed between the Company Air France and KLM Royal DutchAirlines. Under this first-of-its-kind partnership by an Indian carrier the enhancedcollaboration offers guests an unparalleled choice of 64 non-stop weekly flights betweenIndia and Europe.
Jet Airways Group's domestic passenger traffic for the year under review grew by 12.3%while international passenger traffic registered an increase of 5.7%. The Company endedFY18 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 adecade of operations between the Gulf and India as well as between Bangladesh and India.
In addition to growing connectivity the Company undertook several industry-firstinitiatives to deliver exceptional value to guests. The Company introduced its acclaimedFirst Class between Delhi Singapore and in an all-India first redefined its classicalin-flight duty free offering Jet Boutique' by taking it online introducing aunique pre-order facility that helps guests save time at the airport. The Company alsobecame the first Indian airline to embrace the Government of India's Unified PaymentInterface (UPI) enabling guests to book and make payments using the latest paymentinitiative.
The Company also forged an industry-leading partnership with Airbnb - world's leadingcommunity-driven hospitality company to offer its guests from India - especiallymillennials well-differentiated and global hospitality choices in order to establish adeeper bond with the new-age Indian traveller increasingly seeking unique and interestingexperiences during travel. Jetscreen the airline's wireless streaming service now covers80% of its B737 fleet with 330+ hours of entertainment on their personal devices fromamongst entertainment that ranges from Hollywood Bollywood Regional and internationalgenres. Jet airways started a unique business networking platform Jet Airways GlobalLinker that enables smes and startups enjoy the Big Business Advantage.
The loyalty and rewards programme - jetprivilege continued to grow from strength tostrength by adding new digital platforms as well as a record number of members that grewby almost 2 Mio to top 8 Mio for the financial year ended 2018. The programme introducednew benefits for our valued jetprivilege members welcoming 2 airline as well as 41non-airline partners into the programme. On the digital end more than 5 new partners wereintroduced on shop. Jetprivilege.com to reward members with jpmiles every time they shoponline. Jetprivilege also won as many as 9 accolades in different categories at the"Customer Loyalty Awards and Customer Experience Awards" 2018.
As part of guest empowerment members are now able to select compare and apply for anyof the Jet Airways/jetprivilege co-brand credit cards at cards.jetprivilege.com. Recentlya new partnership category Fuel' with Indian Oil where our members can Earn &Redeem jpmiles on their fuel purchase has been introduced.
The Company signed a Memorandum of Understanding with Air France and KLM Royal DutchAirlines on Strategic Cargo Co-operation. Key important actions implemented by Cargodynamic sales & marketing activities with continuous monitoring and improvement on thecargo mix coupled with deployment of Airbus A330 aircrafts on domestic routes furtherenhanced capacity utilization. These have resulted in significant year 2017-18 whencompared to the previous year 2016-17.
Cargo has also been awarded
1) "Cargo Airline of the year Domestic" for the period 2017 2018 received from Bangalore International Airport Limited.
2) "Top 5 Airlines by Absolute Cargo Growth" for the period 2017 receivedfrom Changi Airport Group Singapore.
For the second consecutive year the Company sponsored one of India's leading sportsevents- the Tata Mumbai Marathon 2018 held on 21st January 2018. The marathonsaw the attendance of over 40000 runners from across the country including 162 membersfrom our very own Jet Airways family. The Company wasalsotheofficialairline Partner of theAirtel Delhi Half Marathon 2017.
As on 31st March 2018 the Company had a fleet of 112 aircraft comprising10 Boeing 777-300 ER aircraft 5 Airbus A330-200 aircraft 4 Airbus A330-300 aircraft 75Next Generation Boeing 737-700/800/900/900ER aircraft 15 modern ATR 72-500 Turbopropaircraft and 3 ATR 72-600 aircraft. The average fleet age as on 31st March2018 was 8.44 years. One A330-200 aircraft was sub-leased to Air Serbia as on 31stMarch 2018
The Company flies to 45 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 Regulation 34 of the Securities and Exchange Board of India (ListingObligations And Disclosure Requirements) Regulations 2015 (the "ListingRegulations") entered into with the Stock Exchanges a detailed review by theManagement of the operations performance and future outlook of the Company and itsbusiness 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 (Jet Lite') is a wholly owned subsidiary which wasacquired 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 totalincome of Rs.131803 Lakhs (2016-17: Rs.123331 Lakhs) and a Net Loss of Rs.32101Lakhs (2016-17: Rs.(5789) Lakhs). In view of the loss the Board of Directors of Jet Litehas not recommended a dividend on the Equity Shares for the year ended 31stMarch 2018 (Previous Year : Nil). The Company continues to support the operations of JetLite.
The highlights of the operating performance of Jet Lite for the Financial Year ended 31stMarch 2018 are as follows:
|Operating Parameters ||Year ended 31st March |
| ||2018 ||2017 |
|Departures (Number) ||22105 ||23673 |
|Available Seat Kilometers (ASKMs) (Million) ||2650 ||3025 |
|Revenue Passenger Kilometers (RKMs) (Million) ||2260 ||2397 |
|Passenger Load Factors (%) ||85.3% ||79.2% |
|Revenue Passengers (Number) ||2759275 ||2751994 |
As on 31st March 2018 Jet Lite had an all-Boeing fleet of 8 aircraftcomprising 3 Boeing 737-700 and 5 Boeing 737-800 aircraft.
b. Airjet Ground Services Limited (AGSL')
AGSL was incorporated as a wholly owned subsidiary of the Company on 10thMarch 2017.
As at 31st March 2018 AGSL has yet to commence operations. For theFinancial Year ended 31st March 2018 AGSL posted a total income of Rs.Nil anda Net Loss of Rs.(1) Lakh.
c. Airjet Training Services Limited (ATSL')
ATSL was incorporated as a wholly owned subsidiary of the Company on 18thMay 2017.
As at 31st March 2018 ATSL has yet to commence operations. For theFinancial Period ended 31st March 2018 ATSL posted a total income of Rs.Niland a Net Loss of Rs.(1) Lakh.
d. Airjet Engineering Services Limited (AESL')
AESL was incorporated as a wholly owned subsidiary of the Company on 18thMay 2017.
As at 31st March 2018 AESL has yet to commence operations. For theFinancial Period ended 31st March 2018 AESL posted a total income of Rs.Niland a Net Loss of Rs.(1) Lakh.
e. Airjet Security and Allied Services Limited (ASASL')
ASASL was incorporated as a wholly owned subsidiary of the Company on 19thMay 2017.
As at 31st March 2018 ASASL has yet to commence operations. For theFinancial Period ended 31st March 2018 ASASL posted a total income of Rs.Niland a Net Loss of Rs.(1) Lakh.
f. Jet Privilege Private Limited (JPPL')
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 31stMarch 2018 JPPL posted a total income of Rs.62224 Lakhs (2016-17: Rs.53752 Lakhs) anda Net Profit ofRs.17735 Lakhs (2017-18: Rs.10663 Lakhs).
The subsidiary/associate companies are managed by their respective Boards. The Companydoes not have any material unlisted subsidiary and hence is not required to nominate anindependent 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 theCompanies Act 2013 (the "Act") read with the Rules framed thereunder theConsolidated Financial Statements of the Company for the financial year 2017-18 have beenprepared in compliance with applicable Accounting Standards and on the basis of AuditedFinancial Statements of the Company its subsidiaries and associate company as approvedby their respective Board of Directors.
The Consolidated Financial Statements together with the Auditors' Report form part ofthis 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 theSubsidiaries in prescribed Form AOC-1 is attached as
7. Conservation of energy technology absorption and foreign exchange earningsand outgo
Particulars as prescribed by Section 134(3)(m) of the Act read with Rule 8 (3) of theCompanies (Accounts) Rules 2014 in respect of conservation of energy technologyabsorption and foreign exchange earnings and outgo to the extent applicable to theCompany are given below:
Conservation of energy
The principal requirement of energy for the Company is that of jet fuel for aviationactivities. The Company persistently strives to optimize fuel consumption in every facetof flight operation. These measures pertain to fuel consumption on ground and during theflight. The pillars of Company's optimum energy strategy are:
(I) STATE OF AIRCRAFTS:
State and configuration of aircrafts which includes the airframe and the enginesimpacts fuel consumption. Engine washing is done regularly to maintain engine efficiencyand the airframe is maintained as per manufacturers' recommendations to minimizeaerodynamic drag.
(II) FLIGHT PLANNING AND PROCESSES:
Regular review of operating and flight planning processes is undertaken to optimizefuel consumption. Specific initiatives pertain to optimized routes operating weightreduction and optimum fueling for the mission without compromising the safety ofoperations. The Company utilizes latest models techniques and systems which optimise fueluse. 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 optimizationpotential 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 andinitiatives undertaken to reduce fuel consumption and serves as dynamic feedback in thefuel optimization endeavour. Senior Management periodically monitors the progress.
(v) Technology infusion:
Technology infusion is done in areas which are found to have high potential forreduction 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 Centreat Bangalore under supervision of the Company's own trainers.
Technology and e-Commerce initiatives
The year gone by witnessed a host of consumer centric initiatives in the eCommercespace aimed to further enhance our guests' overall travel experience.
The Company launched JetUpgrade a first-of-its-kind in Indian to First Class orPremiere or choose to upgrade instantly for a fixed amount.
To provide guests added convenience the Company introduced JetBoutique online aportal that enables guests pre-order duty free products and have them delivered onboardtheir flight.
The Company made remarkable progress with a host of technological innovations. Itpartnered with Airbnb enabling guests to book homestays and accommodation directly onjetairways.com. Additionally the integration with Uber allows guests to book their ridedirectly from the Jet Airways mobile app. With voice enabled services on the rise theCompany partnered with Amazon Alexa enabling guests to check their flight status inreal-time simply by using a voice command. In an initiative to drive further choice andconvenience the Company included the widely adopted Google
Tez as an additional mode of payment.
In line with the philosophy of enhancing the overall guest experience the Companyintroduced Net Promoter Score (NPS) a tool used to gauge the loyalty of theorganisation's 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 thenotes 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 safetyand well-being. It therefore continues to develop and improve its arrangement for managingenvironment health and safety issues.
Our Audit Review Panel chaired by the Chief Executive Officer/Accountable Manager isresponsible for overseeing our
EHS performance and reviewing our EHS Policy regularly. Panel members meet to monitorthe Group's performance in EHS and compliance with EHS policy. It coordinates overallGroup policy regarding EHS issues by monitoring the effectiveness of the SafetyManagement System identifying potential areas for improvement and establishing andreviewing EHS objectives targets and the overall progress
Key objectives are:
?To communicate appropriate timely and practical workplace environmenthealth & safety information and advice. ?
?To improve compliance with EHS standards through inspection andinvestigation activities. ?
?To ensure that an effective and up-to-date health and safety at workregulatory frame work is maintained. ? The Company management takes itsresponsibilities for managing its environment health & safety systems policies andpractices very seriously by implementing various rules and regulations laid down inFactories 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. Webelieve the safety culture has been ?enhanced by more intensive safety training andgreater efforts in work planning. We will continually work on improving the health andsafety performance as well as reducing the impact on the environment in our operationactivities in order to safeguard the well-being of employees and nature environment.
?Regular internal meetings with employees are held to ensure that weactively exchange views on EHS issues ?
?Our work to secure better regulations
1. All hazardous waste are disposed through approved vendors of PCB (Pollution ControlBoard).
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.
?Progress 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 todeposits covered under this Chapter.
10. Issue of Non-Convertible debentures
The Company's Unsecured Taxable Redeemable Listed and Rated Non-ConvertibleDebentures of a face value of Rs.1000000/- (Rupees Ten Lakh Only) (NCDs')each aggregating to Rs.6989000000/- (Rupees Six Hundred Ninety Eight Crore Ninety LakhsOnly) issued on a Private Placement basis to EA Partners I.B.V a Foreign PortfolioInvestor are listed on the BSE Limited. The NCDs are rated BBB- by ICRA Limited. Nointerest 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 andExchange Board of India and have complied with all the mandatory requirements. Thenon-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 CorporateGovernance alongwith Auditors' Certificate regarding compliance of conditions ofCorporate Governance as stipulated under the ListingRegulations forms an integral part ofthis Report.
The Chief Executive Officer's declaration regarding compliance with the Code ofBusiness 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 upseveral initiatives and activities in its endeavour to contribute in a sociallyresponsible manner to the communities it serves and to Indian society as a whole. Towardsthis end and as required under Section 135 of the Act the Board of Directors of theCompany has constituted a Corporate Social Responsibility Committee.
Your Company is committed to making a contribution to the society it serves in generaland in particular towards the betterment education and empowerment of the girl child.Since its early years your Company has been running an in- flight collection programcalled the Magic Box' in association with a Non-Governmental Organization named Savethe Children India (STCI). The funds raised through this unique initiative from our guests(flying on our domestic flights) utilized by STCI for education and for providinghealthcare for underprivileged children and education for children with special needs. Thecollections from the "Magic Box" are also used by STCI to fund vocationalcourses for women. Furthermore as an equal opportunities employer it has always been theairline's endeavor to hire and promote diversity within the organization and facilitateempowerment of women. In fact 33% of our work force comprises of women and we are veryproud of this diversity. To celebrate and recognize womanhood Jet Airways organizes aspecial in-flight fund raising drive on the occasion of International Women's Day eachyear across its domestic destinations.
The funds collected are donated to three chosen NGOs who work primarily for theup-liftment and empowerment of underprivileged women.
Jet Airways has over the years partnered with NGOs such as the Wishing Factory Savethe Children India YouWeCanAkanksha Mijwan and a host of others to educate them withspecially prepared presentations about the world of aviation by regularly organise tripsto our hangars and airport terminal buildings to showcase the behind the scenes workingsof an airline to young children.
The Company also organizes its annual and unique "Flight of Fantasy" eventfor underprivileged children and those with special needs. This is your Company'sflagship event done annually and offers over 100 underprivileged children from select NGOsnot just the chance for a joy ride but also give them the opportunity to realize theirdream to fly in an aircraft.
Jet Airways has always been in the forefront in the wake of calamities naturaldisasters and other such contingencies. The Company has responded and supported thevarious state Governments and the Government of India's call for rehabilitation ofdisplaced persons transporting emergency supplies of food medicine rehabilitationmaterial assisting & transporting doctors and stranded guests with rebated travel andcarriage of free cargo for medical and relief supplies. The airline annually organises theJoy of Giving week' across its domestic network. This special week gives a chance toall our colleagues to donate for a chosen NGO in each metro city. We are proud to statethat our colleagues donate very generously both in cash and in kind and have helped manyNGOs with their care and generosity over the years. Jet Airways takes its commitment tosociety and the upliftment of both women and children very seriously and we do our bestwith the resources in hand to put smiles on the faces of those less fortunate than us.
Your Directors particularly acknowledge the selfless untiring efforts whole-heartedsupport and co-operation of the employees at all levels. Our industrial relations continueto be cordial.
The total number of permanent employees of the Company as on 31st March2018 was 16558 (as on 31st March 2017: 16015).
The information required pursuant to Section 197 of the Act read with Rule 5 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report and Accounts are being sent to the Members and others entitled theretoexcluding the information on employees' particulars which is available for inspection bythe Members at the
Registered Office of the Company between 10 A.M. and 12 Noon on any working day of theCompany up to the date of the ensuing Annual General Meeting.
14. Directors' responsibility statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Act: ? that in the preparation of the annual financialstatements for the year ended 31st March 2018 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; ? that such accounting policies have been selected and appliedconsistently and judgement and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at 31stMarch 2018 and of the loss of the Company for the year ended on that date; ? thatproper and sufficientcare has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
? that the annual financial statements have been prepared ? that properinternal financial controls were in place and that the financial controls were adequateand were operating effectively; ? that Directors have devised proper systems toensure compliance with the provisions of all applicable laws and such systems were inplace 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 ofeach year. Additionally Board Meetings are convened as and when necessary.
Four Board Meetings were held during the Financial Year 2017-18. The gap between anytwo Board Meetings did not exceed 120 days. The details of the attendance of Directors atthe Board Meetings held during the Financial Year 2017-
18 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 ListingRegulations and Section 149(6) of the Act. Based on the confirmation / disclosuresreceived from disclosed the following Non-Executive Directors are Independent in terms ofSection 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 ofDirectors has undertaken an evaluation of its own performance the performance of itsCommittees and of all the individual Directors based on various parameters relating toroles responsibilities and obligations of the Board effectiveness of its functioningcontribution of Directors at meetings and the functioning of its Committees.
18. Remuneration Policy
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. Details of the Remuneration Policy are provided in the Report on CorporateGovernance 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 readwith the Companies (Meetings of Board and its Powers) Rules 2014 as on 31stMarch 2018 are given at Note no. 53 the notes to accounts to the financial statementsforming part of this Annual Report.
Pursuant to the provisions of Section 139 of the Act the Joint Statutory Auditors ofthe Company M/s. B S R & Co. LLP and M/s. D T S & Associates were appointed bythe Members of the Company for a period of five years (till the conclusion of the 28thAnnual General Meeting to be held in 2020) and five years (till the conclusion of the 30thAnnual General Meeting to be held in 2022) respectively.
The said appointment of the Joint Statutory Auditors was required to be ratified by theMembers at each Annual General Meeting (AGM) in accordance with the provisions of Section139 of the Act.
Vide notification dated 7th May 2018 issued by the Ministry of CorporateAffairs New Delhi the requirement of ratification by Member at each AGM has been doneaway with.
The resolution of approving the remuneration of M/s. B S R & Co. LLP and M/s. D TS. & Associates as the Joint Statutory Auditors forms part of the Notice of the 26thAnnual General Meeting and the Resolution is recommended for your approval.
The Company has obtained Statutory Auditors Certificate as per requirement of circularsissued 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 withinstances of fraud and mismanagement if any. The details of the Policy are explained inthe 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 onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant with Promoters Directors Key Managerial Personnel or other designatedpersons 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 beforethe Board for approval. The policy on Related Party Transactions as approved by the Boardis uploaded on the Company's website. None of the Directors has any pecuniaryrelationships or transactions vis--vis the Company.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC-2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Act is appended as
23. Secretarial audit
Pursuant to the provisions of section 204 of the act and the companies (appointment andremuneration of managerial Personnel) rules 2014 the company had appointed mr. Taizoonm. Khumri practicing company secretary (cop no. 88) of t. M. Khumri and co. companysecretaries to undertake the secretarial audit of the company. The report of thesecretarial auditor is annexed herewith as "annexure c".
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 annexedherewith as "Annexure D".
25. Material changes and commitments affecting the financial position of the Company
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the Financial Year of theCompany 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 September2015 approved the scheme of Merger of Jet Lite (India) Limited the wholly ownedsubsidiary of the Company with the Company (the Scheme') as per the provisions ofSection 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. TheScheme was approved by the Members of the Company on 22nd April 2016. TheHon'ble High Court of Judicature at Bombay approved the Scheme on 20th October2016. As the Ministry of Civil Aviation did not approve the said Scheme the same standsrevoked 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 legalentities 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 variousrisks to key business objectives.
Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis. These are discussed at the meetings ofthe Audit Committee and the Board of Directors of the Company. The Company has alsovoluntarily constituted a Risk Management Committee.
The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested and certified byStatutory as well as Internal Auditors. Significant observations and follow up actionsthereon 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 therequirements of The Sexual
Harassment of Women at the workplace (Prevention Prohibition & Redressal) Act2013. A committee has been set up to redress complaints received regarding sexualharassment. All women permanent temporary or contractual including service providers arecovered under this policy. The details of complaints received during the Financial Year2017-18 are provided in the Business Responsibility Report.
28. Dividend distribution Policy
The Company has framed and adopted Dividend Distribution Policy in compliance withRegulation 43A of the Listing Regulations. The Policy sets out the parameters andcircumstances that will be taken into account by the Board of Directors to determine thedistribution of dividend to shareholders. The Dividend Distribution Policy is attached as AnnexureE 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 actread 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 haveresigned during the year
|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 jointventures or associate companies during the year:
? Airjet Engineering Services Limited was incorporated as a wholly ownedsubsidiary on 18th May 2017. ? Airjet Training Services Limited wasincorporated as a wholly owned subsidiary on 18th May 2017. ? AirjetSecurity and Allied Services Limited was incorporated as a wholly owned subsidiary on 19thMay 2017.
32. Significant and material orders passed by the Regulators or courts
There are no significant and material orders passed by the status of the Company andits 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 thesaid Scheme stands revoked cancelled and has no effect as provided in Para 18 of theScheme. Jet Lite (India) Limited and the Company continue their respective operations astwo separate legalentitieswiththeirrespectiveAirOperatorCertificates.
33. The details in respect of adequacy of internal financial controls with reference tothe Financial statements.
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations.
34. SECRETARIAL STANDARDS
The Company has complied with the applicable Standards of SS-1 Secretarial Standards onMeetings 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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is asfollows:
|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 FinancialOfficer Chief Executive Officer Company Secretaryor Wholetime Director Chief Executive Officer Manager if any in the Financial Year ||No increase has been undertaken for 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 ||16558 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 ||Yes we confirm that the remuneration is as per the |
| ||policy of the company || |
Your Directors place on record their appreciation of the Company's General SalesAgents' and other members of the travel trade for their efforts in furthering the interestof the Company.
Your Directors would like to thank the Government of India especially the Ministry ofCivil Aviation Ministry of Commerce and Industry and Ministry of Finance for having hadthe foresight to have introduced the historic liberalization measure permitting foreignairlines to invest in the equity of Scheduled and Non Scheduled passenger airlines inIndia.
Your Directors also take this opportunity to thank the Ministry of Civil AviationGovernment of India the Directorate
General of Civil Aviation Airports Authority of India Mumbai International Airport(Private) Limited Delhi International Airport (Private) Limited GMR HyderabadInternational Airport Limited Bangalore International Airport Limited Cochin
International Airport Limited and other airport companies for their support andco-operation. Your Directors are also grateful to the Reserve Bank of India NationalStock Exchange of India Limited BSE Limited US Exim Bank Financial Institutions andBanks The Boeing Company Avion de Transport Regionale Airbus Industrie GeneralElectric CFM and
Pratt and Whitney and the lessors of our aircraft and engines for their understandingand look forward to their continued support.
| ||On behalf of the Board of Directors |
|Mumbai ||Naresh Goyal |
|23rd May 2018 ||Chairman |
Annexure A form aoC-I
Oviso to sub-section (3) of section 129 of the Companies Act 2013 read with rule 5 ofCompanies (Accounts) Rules 2014) pr (Pursuanttofirst
Statement containing salient features of the financial statement of subsidiaries orassociate companies or joint ventures Part "A": Subsidiaries
| || || || || || ||(Rs.in Lakhs) |
|Sr. No ||Name of subsidiary company ||Wholly owned subsidiaries |
| || ||Jet Lite (India) Limited 31st March 2018 ||Airjet Ground services Limited 31st March 2018 ||Airjet Engineering services Limited 31st March 2018 ||Airjet Training services Limited 31st March 2018 ||Airjet Security and allied services Limited 31st March 2018 |
|1. ||Date since when Subsidiary was acquired ||20th April 2007 ||10th March 2017 ||18th May 2017 ||18th May 2017 ||19th May 2017 |
|2. ||Paid up Share Capital ||79612 ||50 ||1 ||1 ||1 |
|3. ||Reserves ||(252675) ||(4) ||(1) ||(1) ||(1) |
|4. ||Total Asset ||32655 ||47 ||1 ||1 ||1 |
|5. ||Total Liabilities ||32655 ||47 ||1 ||1 ||1 |
|6. ||Investment included in Total Assets ||110 ||- ||- ||- ||- |
|7. ||Turnover ||131121 ||- ||- ||- ||- |
|8. ||Profit / (Loss) before Tax ||(32101) ||(1) ||(1) ||(1) ||(1) |
|9. ||Provision for tax ||- ||- ||- ||- ||- |
|10. ||Profit / (Loss) after tax ||(32101) ||(1) ||(1) ||(1) ||(1) |
|11. ||Proposed Dividend ||Nil ||NIL ||Nil ||Nil ||Nil |
|12. ||% of shareholding ||100% ||100% ||100% ||100% ||100% |
Notes: The following information shall be furnished at the end of the statement:
1. Names of subsidiaries which are yet to commence operations:
Airjet Ground Services Limited Airjet Engineering Services Limited Airjet TrainingServices Limited Airjet Security and Allied Services Limited
2. Names of subsidiaries which have been liquidated or sold during the year: Na
| ||On behalf of the Board of Directors |
|Mumbai ||Naresh Goyal |
|23rd May 2018 ||Chairman |
Part "B": Associates and Joint Ventures statement pursuant to section 129 (3)of the Companies act 2013 related to associate Companies and
|Name of Associates/Joint Ventures ||Jet Privilege Private limited |
|1. Latest audited Balance sheet date ||31st March 2018 |
|2. Date since when Associate / Joint Ventures was acquired ||24th March 2014 |
|3. Shares of Associate/Joint Ventures held by the company on the year end ||Equity share |
|No. ||54772 |
|Amount of Investment in Associates/Joint Venture ||Rs.69522 Lakhs |
|Extend of Holding % ||49.90% |
|4. Description of how there is significant influence ||Shareholding |
|5. Reason why the associate/joint venture is not consolidated ||Consolidated by Equity method of accounting |
|6. Networth attributable to shareholding as per latest audited ||Rs.95893 Lakhs |
|Balance sheet || |
|7. Profit / Loss for the year || |
|i. Considered in Consolidation ||Rs.8849 Lakhs |
|ii. Not Considered in Consolidation ||Rs.8886 Lakhs |
1. Names of associates or joint ventures which are yet to commence operations: Nil
2. Names of associates or joint ventures which have been liquidated or sold during theyear: Nil
| ||On behalf of the Board of Directors |
|Mumbai ||Naresh Goyal |
|23rd May 2018 ||Chairman |
Form No. Aoc-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of Section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto
1. DETAILS OF CONTRACTS OR ARRANGEMENTS OR TRANSACTIONS NOT AT ARM'S LENGTH BASIS A)Name(s) of the related party and nature of relationship: NA b) Nature of contracts/arrangements/transactions: NA c) Duration of the contracts / arrangements/transactions:NA d) Salient terms of the contracts or arrangements or transactions including the valueif any: NA e) Justification for entering into such contracts or arrangements ortransactions: NA f) date(s) of approval by the Board: NA g) Amount paid as advances ifany: NA h) Date on which the special resolution was passed in general meeting as requiredunder first proviso to Section 188: NA
2. DETAILS OF MATERIAL CONTRACTS OR ARRANGEMENT OR TRANSACTIONS AT ARM'S LENGTH BASIS A)Name(s) of the related party and nature of relationship: NA b) Nature of contracts/arrangements/transactions: NA c) Duration of the contracts / arrangements/transactions:NA d) Salient terms of the contracts or arrangements or transactions including the valueif any: NA e) Date(s) of approval by the Board if any: NA f) Amount paid as advances ifany: NA
| ||On behalf of the Board of Directors |
|Mumbai ||Naresh Goyal |
|23rd May 2018 ||Chairman |
Annexure E dividend distribution Policy
The Securities Exchange Board of India (SEBI) has inserted a new Regulation 43A afterRegulation 43 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 which requires top fivehundred listed companies (based on market capitalization of every financial year) toformulate a Dividend Distribution Policy which shall be disclosed in its Annual Reportand on its website.
SCOPE AND OBJECT OF THE POLICY
This Dividend Distribution Policy ("Policy") sets forth the broad principlesthat would guide the Board of Directors ("Board") of Jet Airways (India) Limited("Company") in matters concerning declaration and distribution of dividend. Theobjective of this Policy is to establish the parameters to be considered by the Board ofthe Company before declaring or recommending dividend. The Policy reflectsthe intent ofthe Company to reward its shareholders by sharing a portion of its profits after retainingsufficient funds for growth of the Company thus maximizing shareholders' value.
The intent of the Policy is to broadly specify the external and internal factorsincluding financial parameters that shall be considered while declaring dividend and thecircumstances under which the shareholders of the Company may or may not expect dividendand how the retained earnings shall be utilized etc.
The Policy shall not apply to: ? ?Determination and declaration ofdividend on preference shares as and when issued by the Company as the same will be asper the terms of issue approved by the shareholders.
? ?Issue of Bonus Shares by the Company.
? ?Buyback of Securities.
? ?The Policy is not an alternative to the decision of the Board forrecommending dividend which is made every year after taking into consideration all therelevant circumstances enumerated hereunder or other factors as may be decided as relevantby the Board.
PARAMETERS TO BE CONSIDERED BEFORE RECOMMENDING DIVIDEND
The Board of the Company shall consider the following financial / internal parameterswhile declaring or recommending dividend to shareholders: a. Company's earnings; b.General financial condition; c. Short term and long term capital requirements; d.Acquisitions including any strategic acquisitions; e. Investments in subsidiaries orassociate; f. Investments in other business; g. Results of operations; h. Cash positions;i. Contractual obligations; j. Overall financial position; and k. Restrictive covenantsunder financing arrangements with lenders.
The Board of the Company shall consider the following external parameters whiledeclaring or recommending dividend to shareholders: a. Macro-economic environment:Significant changes in macro-in which the Company is engaged in the geographies in whichthe Company operates. b. Regulatory changes: Introduction of new regulatory requirementsor material changes in existing taxation or regulatory requirements which significantlyaffect the businesses in which the Company is engaged. c. Technological changes whichnecessitate significant new investments in any of the businesses in which the Company isengaged.
UTILISATION OF RETAINED EARNINGS
The Company shall endeavor to utilise the retained earnings in a manner which shall bebeneficial to the interests of the Company and also its shareholders. The Company mayutilize the retained earnings for making investments for future growth and expansionplans for the purpose of generating higher returns for the shareholders or for any otherspecific purpose as approved by the Board of the Company.
PARAMETERS THAT SHALL BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARES
The Company has issued only one class of shares viz. equity shares. Parameters fordividend payments in respect of any other class of shares will be as per the respectiveterms of issue and in accordance with the applicable regulations and will be determinedif and when the Company decides to issue other classes of shares.
COMPANY'S APPROACH TO DIVIDEND PAYOUT
The Board in general after considering all the internal and external factors willrecommend the payment offinaldividend at the end of the fiscal year which shall be subjectto the approval of the shareholders of the Company. The Company expects to only declareone final dividend each year.
However the Board may at its sole discretion declare an interim dividend during thefinancial year.
1. In case of any doubt or ambiguity arising out of interpretation of the Policy or anydifficulty arising out of the implementation of the Policy the Board of the Company isempowered to issue necessary clarifications and the decision of the Board shall be finaland binding.
2. The Board may from time to time make amendments to this Policy to the extentrequired due to change in applicable laws and regulations or as deemed fit on a review.