The Board of Directors hereby submits the report of the business and operations of yourCompany along with the audited financial statements for the financial year ended March31 2020. The consolidated performance of the Company and its subsidiaries has beenreferred to wherever required.
1. Financial Performance
The Company's performance during the year ended March 312020 compared to the previousfinancial year is summarised below:
(Amount in Rs million)
|Particulars || |
| ||March 31 2020 ||March 31 2019 ||March 31 2020 ||March 31 2019 |
|TOTAL REVENUE ||131359.87 ||91715.44 ||131347.53 ||91797.65 |
|Expenses || || || || |
|Operating Expenses ||87799.54 ||73000.54 ||87583.18 ||72948.77 |
|Cost of inventory consumed || ||- ||126.75 ||138.91 |
|Employee Benefit Expenses ||15257.76 ||10570.07 ||15292.55 ||10584.24 |
|Selling Expenses ||2269.59 ||2074.41 ||2260.99 ||2081.66 |
|Other Expenses ||13294.29 ||5586.40 ||13344.09 ||5421.59 |
|Earnings before interest tax depreciation and amortization ||12738.69 ||484.02 ||12739.97 ||622.48 |
|Depreciation and amortisation expense ||(17339.34) ||(2562.25) ||(17353.77) ||(2563.54) |
|Interest income on bank deposits ||703.12 ||864.90 ||703.42 ||864.90 |
|Finance Cost ||(5450.08) ||(1312.84) ||(5455.30) ||(1313.03) |
|Profit/ (Loss) before taxation and extraordinary items ||(9347.61) ||(2526.17) ||(9365.68) ||(2389.19) |
|Tax Expenses ||- ||- ||- ||0.26 |
|Extraordinary items ||- ||(634.66) ||- ||(634.66) |
|Profit/ (Loss) after taxation ||(9347.61) ||(3160.83) ||(9365.68) ||(3024.11) |
|Profit/ (Loss) brought Forward ||(19537.94) ||(16362.66) ||(19530.75) ||(16492.19) |
|Depreciation expense adjusted against reserves ||- ||- ||- ||- |
|Profit/ (Loss) for the year ||(9347.61) ||(3160.83) ||(9365.68) ||(3024.11) |
|Other comprehensive income ||(32.49) ||(14.45) ||(32.49) ||(14.45) |
|Amount transferred to Balance Sheet ||(28918.04) ||(19537.94) ||(28928.92) ||(19530.75) |
During the year under review the standalone income of the Company increased to Rs131359.87 million compared to Rs 91715.44 million in the previous year registeringgrowth of 43.23% and the consolidated income increased to Rs 131347.53 million comparedto Rs 91797.65 million in the previous year registering growth of 43.08%. Theprofitability of the Company is primarily impacted by adverse foreign exchange rates fuelprices pricing pressures and the early impact of Covid-19 apart from worldwide groundingof Boeing 737 Max aircraft. The Company has reported standalone loss of Rs 9347.61million (that also includes a non-cash loss of Rs 6970.19 million due to foreign exchangeloss on restatement of lease liability due to Indian Accounting Standards 116).
2. State of Affairs and Material Development
(a) The Company completed its fifteenth years of operation on May 23 2020 andregistered a growth of 43.23% in standalone income of the Company during the financialyear ended March 312020. In its fifteenth year of operations the Company consolidatedits operations on key routes and increased market presence through induction of additional39 aircraft to its fleet during financial year ended March 312020. The Company operated570 average daily passenger flights before Covid-19.
(b) SpiceXpress: The Company had announced the launch of its dedicated air cargoservices namely SpiceXpress' in September 2018 and inducted its first freighteraircraft at a grand ceremony held at the Indira Gandhi International Airport in New Delhi.The cargo services operates on both domestic and international routes and is powered byfully integrated transportation network including air cargo ground transportation andwarehousing facilities across the country. SpiceXpress operates on an incremental directoperating cost model thereby extending its operations through its common pool of resourceslike pilots engineers ground staff and airport infrastructure.
(c) New development: The Company has signed an agreement with GMR Hyderabad AviationSEZ Limited (GHASL) in March 2020 under which GHASL will be constructing a facility forthe Company to carry out the warehousing distribution and trading activity within thefree trade warehousing zone of multi-product SEZ popularly known as GMR Aerospace &Industrial Park. This facility will be 33000 sq. ft. initially with a potential toexpand to 100000 sq. ft. based on demand.
The Company has also signed a tripartite Memorandum of Understanding with GMR HyderabadInternational Airport Ltd. and Ras-Al-Khaimah International Airport UAE at the WingsIndia 2020 in Hyderabad. This association is in line with the Ministry of Civil Aviation'sKrishi Udaan scheme to give a boost to agro product exports and to aid farmers intransporting agricultural products. Under this collaboration a dedicated freight corridorwill be created to leverage the tremendous agro and farming sector potential fromcentrally located Telangana and the neighbouring regions. This will also give directmarketing access and open-up new opportunities for both export and import that wouldbenefit the farming community in India. Besides special arrangements are being made forhandling livestock both at exporting and destination airports.
(d) Boeing 737 Max aircraft grounding: Following the worldwide grounding during March2019 of Boeing 737 Max aircraft due to technical reasons the Company's fleet of thirteenBoeing 737 Max aircraft continues to be grounded. Despite its inability to undertakerevenue operations the Company continues to incur various costs with respect to theseaircraft. As a result of the above and the uncertainty in timing of return to operationsof these aircraft the Company has initiated the process of claims on the aircraftmanufacturer towards costs and losses which are currently under discussion. Consequentlyand without in any manner limiting or prejudicing the legal and commercial rights of theCompany towards its claims in this regard certain costs (including inter alia aircraftand supplemental lease rentals and certain other identified expenses relating to theBoeing 737 Max aircraft) aggregating to Rs 67l8.04 million have been recognised as otherincome during the year ended March 31 2020.
(e) Dispute with erstwhile promoters: The Company had in earlier financial yearsreceived amounts aggregating Rs 5790.9 million from its erstwhile promoters as advancemoney towards proposed allotment of certain securities (189091378 share warrants and3750000 non-convertible cumulative redeemable preference shares issuable based onapprovals to be obtained) to be adjusted at the time those securities were to be issued.Pursuant to the legal proceedings in this regard before the Hon'ble High Court of Delhi("Court") between the erstwhile promoters the present promoter and the Companythe Company was required to secure an amount of Rs 3290.89 million through a bankguarantee in favour of the Registrar General of the Court ("Registrar") and todeposit the balance amount of Rs 2500 million with the Registrar. The Company hascomplied with these requirements as at March 312018.
The parties to the aforementioned litigation concurrently initiated arbitrationproceedings before a three member arbitral tribunal (the "Tribunal") whichpronounced its award on July 20 2018 (the "Award"). In terms of the Award theCompany was required to (i) refund an amount of approximately Rs 3082.19 million to thecounterparty (ii) explore the possibility of allotting preference shares in respect ofapproximately Rs 2708.70 million failing which refund such amount to the counterpartyand (iii) pay interest calculated to be Rs 924.66 million (being interest on the amountstated under (i) above in terms of the Award). The amounts referred to under (i) and (ii)above aggregating Rs 5790.89 million continue to be carried as current liabilitieswithout prejudice to the rights of the Company under law. Further the Company wasentitled to receive from the counterparty under the said Award an amount of Rs 290.00million of past interest/servicing charges. During the quarter ended March 312019 theCourt has ordered release of Rs 2500.00 million out of the amount deposited by theCompany to the counterparty subject to certain conditions as enumerated by the Court inits order. Further pursuant to an order of the Court dated September 20 2019 theCompany has remitted a further Rs 580.00 million out of the guarantee placed with theCourt to the counterparty in October 2019. The Company its present promoter and thecounterparties have challenged various aspects of the Award including the above-mentionedinterest obligations and rights petitions for which have been admitted by the Court andthe matter is currently sub-judice.
Further the Court vide its order dated September 2 2020 in the said matter directedthe Company to deposit an amount of Rs 2429.37 million of interest component under theAward (including the amount of Rs 924.66 million provided for as indicated earlierwithout prejudice to the rights of the Company under law). The Company preferred a SpecialLeave Petition before the Hon'ble Supreme Court of India against the aforesaid Order andthe Hon'ble Supreme Court of India pursuant to its order dated November 6 2020 hasstayed the deposit of Rs 2429.37 million.
(f) Global health pandemic from Covid-19: The Covid-19 pandemic (declared as such bythe World Health Organisation on March 112020) has contributed to a significant declineand volatility and a significant decrease in economic activity in global and Indianmarkets. The Indian government announced a strict lockdown in India to contain the spreadof the virus till May 312020 which has been extended by certain states with varyinglevels of relaxations. This has led to significant disruptions and dislocations forindividuals and businesses and have had consequential impact of grounding the passengerairline operations. The Company has to operate under various regulatory restrictionswhich impacts its operations and may have varied financial implications. As per Governmentguidelines the Company suspended all passenger travel from March 25 2020 to May 242020. The Company has reassessed its operating environment based on the anticipated scaleof operations in the immediate future. The Company has considered potential impactsarising from the Covid-19 pandemic on the Company's business and where relevant haveaccounted for the same in the financial statements. However the full extent of impact ofthe Covid-19 pandemic on the Company's operations and financial metrics will depend onfuture developments across the geographies that the Company operates in and thegovernmental regulatory and the Company's responses thereto which are highly uncertainand incapable of estimation at this time. The impact of the Covid-19 pandemic on thefinancial position and its financial performance might be different from that estimated asat the date of this report.
We also draw your attention to Section 5 (Opportunities Risks Concerns and Threats)and 6 (Future Outlook) of the Management Discussion and Analysis for detailed discussionregarding Covid.
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.
3. Board of Directors
(a) In terms of the provision of Section 152(6) of the Companies Act 2013 Mr. AjaySingh is liable to retire by rotation at the forthcoming Annual General Meeting of theCompany and being eligible has offered himself for re-appointment.
(b) The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that they meet the criteria of independence aslaid down in Section 149(6) of the Companies Act 2013 read with the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
(c) Mr. Harsha Vardhana Singh (Independent Director) has resigned from the directorshipof the Company with effect from October 1 2019 as he wishes to concentrate more on hispersonal life and retire from active corporate engagements.
(d) The Nomination and Remuneration Committee conducted the Board evaluation for theyear. The evaluation of all the directors Committees Chairman of the Board and theBoard as a whole was conducted based on the criteria and framework adopted by the Board.
4. Share Capital
There is no change in authorised share capital of the Company during the financial year2019-20. However the paid-up share capital of the Company has increased from Rs5997183560 to Rs 6000762990 pursuant to allotment of 357943 equity shares of Rs 10each under SpiceJet Employee Stock Option Scheme - 2017.
The Board of Directors have not recommended any dividend for the financial year2019-20.
In terms of Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has adopted the Dividend Distribution Policyof the Company which is available on the website of the Company at www.spicejet.com inInvestor' section.
6. Transfer to Reserves
The Company has made no transfers to reserves during the financial year 2019-20.
7. Public Deposits
The Company has not accepted any fixed deposits including from the public and assuch no amount of principal or interest was outstanding as of the Balance Sheet date.Accordingly no disclosure or reporting is required in respect of details relating todeposits covered under Chapter V of the Companies Act 2013.
8. Extract of Annual Return
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format is annexed as "Annexure - A" to thisreport.
9. Particulars of Contracts or Arrangement made with Related Parties
The Board of Directors of the Company has formulated a policy on materiality of relatedparty transactions and also on dealing with related party transactions pursuant to theprovisions of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the same is available on the website of the Company atwww.spicejet.com in Investor' section.
All related party transactions that were entered into during the financial year underreview were on arm's length basis and were in the ordinary course of business. All relatedparty transactions have been placed before the Audit Committee and Board for theirapproval as per the provisions of the Companies Act 2013. No material related partytransactions (i.e. transactions exceeding the thresholds as defined under the CompaniesAct 2013) were entered during this financial year by the Company. Accordingly thedisclosure of related party transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AoC-2 is not applicable.
10. Particulars of Loans Guarantees or Investments under Section 186 of the CompaniesAct 2013
The Company has not granted any loan given guarantee or security or made investmentunder the provisions of Section 186 of the Companies Act 2013 during the financial yearunder review except as follows:
(a) As on March 312020 the Company has made an investment of Rs 0.10 million each inequity shares of its wholly owned subsidiaries namely SpiceJet Merchandise PrivateLimited SpiceJet Technic Private Limited Canvin Real Estate Private Limited; SpiceJetInteractive Private Limited; Spice Club Private Limited; Spice Shuttle Private Limited;SpiceXpress and Logistics Private Limited; and
(b) As on March 31 2020 the Company has an investment of Rs 0.50 million in classB-shares of Aeronautical Radio of Thailand Limited to become member airline for availingadvantageous rate on air navigation charges in Thailand.
As on March 312020 the Company has also provided loan of (a) Rs 257.01 million toSpiceJet Merchandise Private Limited (b) Rs 64.60 million to SpiceJet Technic PrivateLimited and (c) Rs 238.70 million to Canvin Real Estate Private Limited.
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
As on March 31 2020 following are the subsidiaries of the Company:
|S. No. ||Name ||Business Activity |
|1. ||SpiceJet Merchandise Private Limited ||Business of consumer merchandise and goods through various channels |
|2. ||SpiceJet Technic Private Limited ||Engineering related service including but not limited to maintenance repair and overhaul services of aircraft and its parts |
|3. ||Canvin Real Estate Private Limited ||Real estate |
|4. ||SpiceJet Interactive Private Limited ||Information and communication technology |
|5. ||Spice Club Private Limited ||Loyalty and rewards programme management |
|6. ||Spice Shuttle Private Limited ||Charter operation by aeroplanes and/or helicopters |
|7. ||SpiceXpress and Logistics Private Limited ||Cargo transportation and logistics |
In order to ensure governance of material subsidiary companies the Board of Directorsof the Company has adopted the policy and procedures for determining material'subsidiary companies in accordance with the provisions of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and the same is available on the websiteof the Company at www.spicejet.com in Investor' section.
During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 the Company has prepared theconsolidated financial statements of the Company which form part of this Annual Report.Further a statement containing the salient features of the financial statements of thesubsidiaries in the prescribed format AOC-1 is annexed as "Annexure - B" to theBoard's report. The statement also provides details of the performance and financialposition of each of the subsidiaries.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the website ofthe Company at www.spicejet.com in Investor' section.
12. Number of Meetings of the Board
During the financial year ended March 31 2020 four (4) board meeting were held thedetails of which are given in the Corporate Governance Report that forms part of thisreport. The intervening gap between any two meetings was within the period prescribedunder the Companies Act 2013.
13. Directors' Responsibility Statement
The financial statements are prepared in accordance with the Indian AccountingStandards (Ind AS). The Ind AS are prescribed under Section 133 of the Companies Act 2013read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015.
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for year ended March 312020 the Directors of yourCompany hereby state that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors have prepared the Annual Accounts of the Company on a goingconcern' basis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
14. Reporting of Frauds by Auditors
During the year under review neither the statutory auditors nor the secretarialauditor has reported to the audit committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in the Board's report.
15. Corporate Governance and Management Discussion and Analysis
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a detailed report on the Management Discussion and Analysis andCorporate Governance Report along with Practicing Company Secretary's Certificateregarding compliance of conditions of corporate governance forms an integral part of thisreport.
16. Particulars of Employees
The Company's goal is to stay invested in employee's growth provide them withdevelopment opportunities recognise their efforts and enable them to absorb our valuesystem. The Company focus on the workplace that promotes a transparent and participativeorganisation culture.
The Company has constituted an internal committee to consider and resolve all sexualharassment complaints reported by women and has also adopted a policy as per therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. During the financial year 2019-20 19 complaints were receivedunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 and as on March 312020 6 complaints were pending for its disposal.
The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company and other details in terms of Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report and annexed as "Annexure -C".
The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 forms part of this report. In terms of the provisionsof Section 136(1) of the Companies Act 2013 read with the rules made thereunder thisreport is being sent to all members of the Company excluding the said annexure. Any memberinterested in obtaining a copy of the annexure may write to the Company.
17. Employees Stock Option Scheme
The members of the Company in its 33rd Annual General Meeting held on November 27 2017has approved SpiceJet Employee Stock Option Scheme - 2017' for grant of ten millionstock options representing ten million equity shares of Rs 10 each. During the year underreview 1475000 grant has been made to eligible employees under this scheme.
There has been no material variation in the terms of the options granted under thisscheme and this scheme is in compliance with the SEBI (Share Based Employee Benefits)Regulations 2014. The details of this scheme including terms of reference and requirementspecified under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations2014 is available on the website of the Company at www.spicejet.com in Investor'section.
18. Corporate Social Responsibility
We believe that growth and development are effective only when they result in wideraccess to opportunities and benefit a broader section of society. With an objective ofsocioeconomic development in India the Board of Directors of the Company has adopted aCorporate Social Responsibility ("CSR") Policy which is available on the websiteof the Company at www.spicejet. com in Investor' section.
The Company has also constituted CSR Committee comprising of Mr. Ajay Aggarwal asChairperson and Mr. Ajay Singh and Mrs. Shiwani Singh as Member which inter-alia monitorsthe Company's CSR Policy and recommend the amount of CSR expenditure. During the yearunder review the CSR Committee met once on February 14 2020 with necessary quorum beingpresent at the meeting.
Working in close harmony and partnering with various organisations who have donephenomenal work in this field the Company has undertaken several initiatives in variousareas including education destitute care and rehabilitation healthcare and ruraldevelopment in line with the CSR Policy and are in accordance with Schedule VII of theCompanies Act 2013. As per Rule 8 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 annual report on CSR activities is annexed as "Annexure -D" and forms an integral part of this Report.
19. Conservation of Energy and Technology Absorption
Conservation of Energy: The management is highly conscious of the criticality of theconservation of energy at all operational levels particularly of aviation turbine fuelwhich is leading source of energy for aviation activity. Adequate measures are taken toreduce energy consumption whenever possible by using energy efficient equipment andtechnology infusion. These measures among other includes maintenance of engine andairframe flight planning training to operational staff regular analysis etc.
Technology absorption: The Company has used information technology comprehensively inits operations for more details please refer to Section 9 (Information Technology) ofManagement Discussion and Analysis.
20. Green Initiatives
The electronic copies of the Annual Report 2019-20 are sent to all members of theCompany whose email addresses are registered with the Company/Depository Participant(s).To support this green initiative and to receive all communications of the Company onemail members are requested to register their email addresses with M/s. KFin TechnologiesPrivate Limited (Registrar and Share Transfer Agent) if shares are held in physical modeor with their depository participants if the holding is in electronic mode.
21. Statutory Auditors
(a) The present Statutory Auditors of the Company M/s. S.R. Batliboi & AssociatesLLP Chartered Accountants (ICAI Firm Registration No: 101049W/E300004) will hold officeuntil the conclusion of this Annual General Meeting. The Board of Directors on therecommendations of the Audit Committee had recommended the appointment of M/s. WalkerChandlok & Co LLP Chartered Accountants (ICAI Firm Registration No.:001076N/N500013) as the Statutory Auditors of the Company for approval of the members ofthe Company. The proposed Statutory Auditors shall hold office for a period of fiveconsecutive years from the conclusion of this Annual General Meeting till the conclusionof forty first Annual General Meeting of the Company.
(b) In accordance with Section 134(3)(f) of the Companies Act 2013 information andexplanations to various comments made by the Statutory Auditors in their Report to themembers are mentioned in the Notes to the Accounts which form part of the financialstatements for the year ended March 312020.
22. Secretarial Auditors
(a) Pursuant to the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company appointed Mr. Mahesh Kumar Gupta Practicing Company Secretary toundertake the Secretarial Audit of the Company for financial year ended on March 312020.The Report of the Secretarial Auditor is annexed as "Annexure - E" to thisReport.
In accordance with Section 134(3)(f) of the Companies Act 2013 response (wherevernecessary) to the observations in the Secretarial Audit Report are as under:
Para 2 of the observation: The Company is still looking for a suitable candidature forwoman independent director and after finalization of such candidature the Company willfile necessary application for security clearance of such candidature as mandated by CivilAviation Requirements of Ministry of Civil Aviation.
Para 3 of the observation: In view of the uncertainties involved in the mattermanagement believes that the manner timing and other related aspects of adjustment ofthese amounts are currently not determinable. Based on their assessment and legal adviceobtained management is of the view that any possible consequential effects includingpenal consequences and any compounding thereof will not have a material impact on thefinancial statements.
(b) In terms of Regulation 24A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 read with SEBI Circulars bearing nos. CIR/CFD/CMD1/27/2019and CIR/CFD/CMD1/114/2019 dated February 8 2019 and October 18 2019 respectively theSecretarial Auditor has also issued a Secretarial Compliance Report for the year endedMarch 312020.
23. Secretarial Standards
The Company complies with all applicable mandatory secretarial standards issued by theInstitute of Company Secretaries of India.
24. Business Responsibility Report
Regulation 34 (2)(f) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 mandate the inclusion of Business Responsibility Report as part ofAnnual Report for top 500 listed entities based on market capitalisation. In compliancewith the said Regulation we have annexed the Business Responsibility Report for financialyear ended March 312020 as "Annexure - F".
25. Foreign Exchange Earnings & Outgo
The details of Foreign Exchange earnings and outgo for the financial year ended March312020 are set out below:
|Particulars ||Amount (Rs in millions) |
|Foreign Exchange Earnings ||10459 |
|Foreign Exchange Outgo ||51131 |
26. Internal Financial Controls and Risk Management Policy
Your Company has aligned its systems of internal financial control with the requirementof Companies Act 2013. This is intended to increase transparency and accountability in theorganisation process of designing and implementing a system of internal control. Theframework requires a company to identify and analyse risks and manage appropriateresponses. The company has successfully laid down the framework and ensured itseffectiveness.
Your Company also recognises that risk is an integral part of business and is committedto managing the risks in a proactive and efficient manner. The Company has established aframework to actively manage all the material risks faced by the Company in a mannerconsistent with the Company's strategy. This covers all business risks including strategicrisk operational risks including fraud and cyber risks foreign exchange risk fuel pricerisk and financial risks. The Company has laid down procedures to inform Board ofDirectors about risk assessment and minimisation procedures. These procedures areperiodically reviewed to ensure that executive management is controlling risks throughproperly defined framework. The system of risk assessment and follow-up procedure is inplace and considering its increased operations the Company continues to reassess its riskmanagement plan from time to time.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the Internal AuditorStatutory Auditors and Secretarial Auditor and external consultants including the auditof internal financial controls over financial reporting by the Statutory Auditors and thereviews performed by management and the relevant Board Committees including the AuditCommittee the Board is of the opinion that the Company's internal financial controls wereadequate and effective during the year ended March 312020.
The Company has a Risk Management Committee to identify elements of risk in differentareas of operations; the details of the Risk Management Committee are included in theCorporate Governance Report.
We thank our valued customers partners vendors investors and bankers for theircontinued confidence and support during the year and playing a significant role in thecontinued business excellence achieved by the Company. We place on record our appreciationof the contribution made by our employees at all fronts. Our consistent growth was madepossible by their hard work solidarity cooperation and support.
We thank governments of various countries where we have our operations. We thank theGovernment of India particularly the Ministry of Civil Aviation Ministry of CorporateAffairs Ministry of Finance Directorate General of Civil Aviation and other regulatoryauthorities for their cooperation support and guidance.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place: Gurugram ||Ajay Singh |
|Date : November 112020 ||Chairman & Managing Director |