Jet Airways

1.  We have audited the attached Balance Sheet of Jet Airways (India)
 Limited ( the Company) as at March 31, 2009, and the Profit and Loss
 Account and Cash Flow Statement for the year ended on that date both
 annexed thereto. These financial statements are the responsibility of
 the Companys management. Our responsibility is to express an opinion
 on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with 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 misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by 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 (Auditors Report) Order, 2003, 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 above, we
 report that:
 
 (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, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the
 Companies Act 1956;
 
 (e) On the basis of written representations received from Directors,
 except for Mr. Shah Rukh Khan, as on 31st March, 2009 and taken on
 record by the Board of Directors, we report that none of the other
 Directors are disqualified as on 31st March, 2009 from being appointed
 as a director in terms of clause (g) of sub- section (1) of section 274
 of the Companies Act, 1956. In respect of Mr. Shah Rukh Khan, we are
 unable to comment on the status in the absence of such a
 representation;
 
 (f) Without qualifying our opinion, we invite attention to the
 following notes to Schedule S:
 
 i) note no. 9 (a) regarding investments in and advances to a subsidiary
 aggregating to Rs. 226,814 lac. No provision for
 diminution/recoverability is considered necessary for reasons stated
 therein.
 
 ii) note no. 9(b) regarding a claim against the Company. The matter
 being sub-judice, it is not possible to determine the impact of the
 outcome at this stage.
 
 iii) note no. 12 regarding remuneration paid to the Executive Director
 being subject to the approval of the Central Government.
 
 (h) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with notes
 thereto, gives the information required by the Companies Act, 1956, in
 the manner so required, and present a true and fair view in conformity
 with the accounting principles generally accepted in India; i) in so
 far as it relates to the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2009; ii) in so far as it relates to the
 Profit and Loss Account, of the loss for the year ended on that date;
 and iii) in so far as it relates to the Cash Flow Statement, of the
 cash flows for the year ended on that date.
 
 Annexure to auditor Report
 
 (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. In our opinion, the frequency of verification is
 reasonable.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management 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.
 
 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. 67,328 lac and the
 year-end balance was Rs. 62,314 lac.
 
 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 except in respect of timely reconciliation of debtors balance,
 which are being strengthened by the Company. There is no sale of goods.
 During the course of our audit, we have not observed any continuing
 failure to correct major weaknesses in 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 lac 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 which is being strengthened
 through inclusion of certain additional areas based on process risk
 assessment so as to be commensurate with the size and nature of
 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 (Auditors 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
 have been generally regularly deposited with the appropriate
 authorities. According to the information and explanation given to us,
 no undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at March 31, 2009 for a period of more than six months
 from the date they become 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,
 excise duty and cess which have not been deposited on account of any
 dispute other than the following:
 
 Name of statute          Nature of the dues          Amount
                                                     (Rs. in lac)
 
 IATT Rules, 1989        IATT Interest & Penalty         321
 IATT Rules, 1989        IATT Interest & Penalty          35
 B.M.C. Act, 1988          Octroi Dues                 2,899
 Central Excise and
 Custom Act              Service Tax                      33
 Central Excise and      Service Tax                      26
 Custom Act
 
 Period to which the     Forum where
 amount relates          dispute is pending
 
 2003-04                 Commissioner of
                         Customs (Appeals),
                         New Delhi
 
 2001-02                 Commissioner of
                         Customs (Appeals),
                         New Delhi
 
 2000-01                 Mumbai High Court
 2001-02 to              Commissioner of
 2004-05                 Central Excise
                         (Appeals)
 2001-02 To              CESTAT
 2004-05
 
 10) The Company has accumulated losses at the end of the financial
 year. The Company has incurred cash losses during the financial year
 covered by the audit and in the immediately preceding financial year,
 the Company had made cash profit.
 
 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. There were no debentures issued during the year or outstanding
 at the beginning of the year.
 
 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 explanations
 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 (Auditors Report) Order, 2003 are not applicable to the
 company.
 
 14) The Company has not dealt, other than in units, or traded in
 shares, securities, debentures or other investments during the year. In
 our opinion and according to information and explanations given to us
 the Company has dealt in units of Mutual Funds for which 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 subsidiary
 Company from bank and financial institution. According to 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 (Auditors 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 (Auditors 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 to
 approx. Rs. 61 lac, which we are informed are being pursued, no fraud
 on or by the Company was noticed or reported during the year
 
 
 FOR DELOITTE HASKINS & SELLS                     FOR CHATURVEDI & SHAH
 Chartered Accountants                            Chartered Accountants
 
 R. D. KAMAT                                                   C.D.LALA
 Partner                                                        Partner
 M. No. 36822                                              M. No. 35671
 
 Mumbai
 25th May 2009