1. We have audited the attached Balance Sheet of Jet Airways (India)
Limited (the Company) as at 31st March, 2011, and the Profit and Loss
Account and the Cash Flow Statement of the company for the year ended
on that date both annexed thereto. These financial statements are the
responsibility of the Company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principle used and the significant estimates
made by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003 (CARO),
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we enclose in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further, to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(a) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act 1956;
(e) Without qualifying our opinion, we invite attention to the
following notes to Schedule S:
i) Note no. 2 (l) regarding the litigation with erstwhile shareholders
of Jet Lite (India) Limited. Subsequent to the Balance Sheet date, the
Honorable Bombay High Court has disposed off the Execution application
in terms of which the Company has paid Rs.11,643 lakh as interest - of
which, Rs.11,305 lakh pertain to the period up to 31st March, 2011. The
counterparty has contested this judgement while the company is
considering pursuing its plea against awarding of interest by the
executing court, based on legal advice. Pending final determination, no
provision has been made in the accounts for the interest of Rs.11,305
lakh.
ii) Note no. 5 regarding investments in and advances given to a
subsidiary aggregating to Rs.317,451 lakh. No provision for diminution
/ recoverability is considered necessary for reasons stated therein.
(f) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
ii) in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
5. On the basis of written representations received from Directors, as
on 31st March, 2011 taken on record by the Board of Directors, we
further report that none of the Directors is disqualified as on 31st
March, 2011 from being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956;
(Referred to in paragraph 3 of our report of even date)
1) In respect of its fixed assets;
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) As explained to us, the fixed assets have been physically verified
by the management during the year in a phased manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
verification.
c) In our opinion, the Company has not disposed off a substantial part
of the fixed assets during the year and the going concern status of the
Company is not affected.
2) In respect of its inventories;
a) The inventory has been physically verified during the year by the
management except inventory lying with third parties. In our opinion,
the frequency of verification is reasonable.
b) In our opinion and based on the information and explanations given
to us, the procedures of physical verification followed by the
management of stock lying with it were reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification. In respect of items lying with other entities we have
relied on the confirmations obtained by the management from such
entities.
3) In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given interest free loan to its wholly owned
subsidiary company. In respect of the said loan, the maximum amount
outstanding at any time during the year was Rs.172,796 lakh and the
year-end balance was Rs.152,951 lakh.
b) In our opinion and based on explanations received from the
management, the terms and conditions of the aforesaid loans are not
prima facie prejudicial to the interest of the Company.
c) The said interest free loan is repayable on demand. There is no
repayment schedule / overdue amount.
d) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4) In our opinion and according to the information and explanations
given to us, the internal control procedures for the purchase of
inventory, fixed assets and with regard to rendering of services are
commensurate with the size of the Company and the nature of its
business. Sale of goods is not a significant part of the Companys
activity. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal
controls.
5) In respect of contracts or arrangements referred to in section 301
of the Companies Act, 1956, to the best of our knowledge and belief and
according to the information and explanations given to us:
(a) The particulars of contracts or arrangements have been entered in
the register maintained under that section.
(b) Transactions exceeding Rupees five lakh in respect of any party
during the year made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time or within the limits
stipulated by the Central Government approval.
6) According to information and explanations given to us, the company
has not accepted deposits from the public. Therefore the provisions of
clause 4(vi) of the Companies (Auditors Report) Order, 2003 are not
applicable to the company.
7) The Company has an internal audit system comprising of its own
internal team and involvement of a reputed external firm of Chartered
accountants for specific areas on a rotational basis. In our opinion,
the Company has an adequate internal audit system commensurate with its
size and nature of its business.
8) Maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub section (1) of section 209 of the
Companies Act, 1956. Therefore the provisions of clause 4(viii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
9) In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues,
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues,
as applicable, have been generally regularly deposited with the
appropriate authorities. According to the information and explanations
given to us, no undisputed amounts payable in respect of the aforesaid
dues were outstanding as on 31st March, 2011 for a period more than six
months from the date they became payable.
b) According to the information and explanations given to us, there are
no dues of Sales Tax, Income Tax, Service Tax, Custom Duty, Wealth Tax
and Cess which have not been deposited on account of any dispute other
than the following:
Name of
statute Nature of the
dues Amount Period to which
the Forum where
(Rs. in lakh) amount relates dispute is
pending
IATT Rules,
1989 IATT Interest
and Penalty 321 2003-04 Commissioner of
Customs (Appeals)
New Delhi
B.M.C. Act,
1988 Octroi Dues 2,899 2000-01 Mumbai High Court
Finance Act,
1994 Service Tax 33 2004-05 to2005-06 Commissioner of
Central Excise
Appeals)
Finance Act,
1994 Service Tax 1,707 2001-02 to 2006-07 CESTAT
Finance Act, 1994 Service Tax 127,762 2001-02 to 2009-10 Commissioner
of Central
Excise
Income Tax
Act,1961 Income Tax 11,459 2003-2004 to
2008-2009 Commissioner of
Income Tax
(Appeals)
Income Tax
Act,1961 Income Tax 23,463 2006-07 to 2008-09 Commissioner
of Income Tax
10) The accumulated losses of the Company at the end of the financial
year are less than fifty per cent of its net worth. The Company has not
incurred cash loss during the current financial year and in the
immediately preceding financial year.
11) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in the repayment of dues to financial institutions and
banks.
12) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and any other
securities and hence question of maintenance of adequate records for
this purpose does not arise.
13) In our opinion and according to the information and explanation
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society. Therefore the provisions of clause 4(xiii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
14) The Company has not dealt (other than in Mutual Fund Units) or
traded in shares, securities, debentures or other investments during
the year. For dealings in units of Mutual Funds, the Company has
maintained proper records of transactions and contracts. All the
investments have been held by the Company in its own name.
15) The Company has given guarantees for loans taken by its wholly
owned subsidiary Company from banks / financial institution. Based on
the information and explanations given to us, we are of the opinion
that the terms and conditions thereof are not prima facie prejudicial
to the interest of the Company.
16) In our opinion, and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were raised.
17) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that
funds raised on short-term basis have, prima facie, not been used for
long-term investment during the year.
18) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the
Companies Act, 1956. Therefore, the provisions of clause 4(xviii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
19) During the period covered by our audit report, the Company has not
issued any debentures and no debentures were outstanding at the
beginning of the year. Therefore, the provisions of clause 4(xix) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
20) The Company has not raised any money by way of public issue during
the year.
21) According to the information and explanations given to us and on
the basis of the examination of the records, except for possible
fraudulent bookings of tickets through credit cards amounting Rs.41
lakh, which we are informed are being pursued, no fraud by the Company
and no material fraud on the Company was noticed or reported during the
year.
FOR DELOITTE HASKINS & SELLS FOR CHATURVEDI & SHAH
CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS
Registration No.117366W Registration No.101720W
R. D. KAMAT C.D.LALA
PARTNER PARTNER
M. No. 36822 M. No. 35671
Mumbai
19th May 2011
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