Jet Airways

1.  The Directors have pleasure in presenting their Sixteenth Annual
 Report together with the Audited Statement of Accounts for the
 Financial Year ended 31st March, 2008.
 
 HIGHLIGHTS
 
 2.  The Financial and Operational highlights for the year under review
 compared to the previous financial year are given below:
 
 Financial Highlights
 
 Particulars                               Year ended        Year ended
                                     31st March, 2008  31st March, 2007
                                            Rs.in lac         Rs.in las 
 
 GROSS REVENUE                                948,151           740,131
 
 Profit before Interest, 
 Depreciation and Tax                          85,796            70,561
 
 Interest and Finance Charges                  49,275            24,015
 
 Profit before Depreciation and Tax            36,521            46,546
 
 Depreciation / Amortisation                   77,780            41,410
 
 (Loss) / Profit before Taxation 
 and Adjustments                              (41,259)            5,136
 
 Provision for Tax                               1010               973
 
 Deferred Tax                                 (17,083)            1,369
 
 (Loss) / Profit after Taxation               (25,306)            2,794
 
 Profit brought forward                        46,197            49,743
 
 Profit available for Appropriation            20,891            52,537
 
 APPROPRIATIONS
 
 Transfer to General Reserve                        -               280
 
 Proposed Dividend                                  -             5,180
 
 Income Tax on Proposed Dividend                    -               880
 
 Transfer to Balance Sheet                     20,891            46,197 
 
 Note: 1 lac = 100,000
 
 Operational Highlights
 
 Operating Parameters                    Year ended        Year ended
                                   31st March, 2008  31st March, 2007
                                          Rs.in lac        Rs.in lasc 
 
 Number of Departures                       126,676           119,369
 
 Available Seat Kilometers 
 (ASKMs) Million                             24,447            17,698
 
 Revenue Passenger Kilometers 
 (RPKMs) Million                             16,914            12,307
 
 Passenger Load Factor %                       69.2%             69.5%
 
 Revenue Passenger (Numbers)             11,428,910        10,726,874
 
 Average fleet size during period              66.3              56.1 
 
 Average Head Count
 
 Gross                                       11,750             9,614
 
 Net                                         11,475             8,351
 
 DIVIDEND
 
 3.  The Board of Directors has not recommended any dividend on the
 Equity Shares of the Company in view of the performance during the
 Financial Year ended 31st March, 2008 (Previous year: Rs. 6 per Equity
 Share).
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 4.  The Management Discussion and Analysis Report for the year under
 review, as required by Clause 49 of the Listing Agreement with Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual Report.
 
 SUBSIDIARIES
 
 5.  During the year, Jet Lite (India) Limited (formerly known as Sahara
 Airlines Limited) became a wholly owned Subsidiary of your Company.
 
 6.  A statement pursuant to Section 212 of the Companies Act, 1956,
 relating to the said Subsidiary Company has been attached in the Annual
 Report.
 
 7.  Documents in respect of the said Subsidiary Company as set out in
 sub-section (1) of Section 212 of the Companies Act, 1956, has been
 attached in the Annual Report.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 8.  In accordance with the Accounting Standard AS-21, the audited
 Consolidated Financial Statements are provided in the Annual Report.
 These Consolidated Financial Statements have consolidated the financial
 results of the Subsidiary Company.
 
 REVIEW OF OPERATIONS
 
 9.  The growth in the Company’s revenue was primarily due to the
 increased level of its international operations. Revenues from
 international operations during the year were Rs. 304,756 lac (Previous
 Year Rs. 135,701 lac) i.e. a growth of 124.5%, and accounted for 34.5%
 of total revenues during the year compared to 19.23% in the previous
 year.
 
 10.  The Company commenced operations on the following routes during
 the year
 
 Internationl
 
 Routes                                              Commenced on
 
 Mumbai - Newark - Mumbai via 
 Brussels                                        5th August, 2007
 
 Delhi - Toronto - Delhi via Brussels 
 (Changed to Delhi-New York                   5th September, 2007
 (JFK) - Delhi - w.e.f.   
 28th October, 2007)
 
 Chennai - Toronto - Chennai via Brussels      28th October, 2007
 
 Delhi - Kathmandu - Delhi (2nd frequency)    10th November, 2007
 
 Delhi - Dhaka - Delhi                        16th December, 2007
 
 Kolkata - Dhaka - Kolkata                    16th December, 2007
 
 Delhi - Kuwait - Delhi                         5th January, 2008
 
 Kochi - Kuwait - Kochi                         5th January, 2008
 
 Kochi - Bahrain - Kochi                        5th January, 2008
 
 Mumbai - Bahrain - Mumbai                      5th January, 2008
 
 Kochi - Muscat - Kochi                        23rd January, 2008
 
 Kozhikode - Muscat - Kozhikode                23rd January, 2008
 
 Mumbai - Doha - Mumbai                        23rd January, 2008
 
 Kozhikode - Doha - Kozhikode                  23rd January, 2008
 
 Mumbai - Chandigarh - Mumbai                  17th October, 2007
 
 Kolkata - Ahmedabad - Kolkata 
 (Discontinued in June 2008)                  17th December, 2007
 
 Ahmedabad-Indore-Bhopal-
 Raipur-Hyderabad  and return                    30th March, 2008
 
 
 11.  The response to these new routes has been encouraging and
 passenger feedback with regard to the Company’s services and product
 offerings on these routes has been extremely positive. The Company
 competes with established, larger international carriers on nearly all
 the international routes it flies and has established significant
 market shares in most international route it operates.
 
 12.  The Company maintained its leadership in the domestic market
 through its superior network and high standards of service. The Company
 is synergizing its network and a number of areas of operations with
 those of its Subsidiary Company, Jet Lite (India) Limited, and this is
 expected to benefit both the Company and the Subsidiary Company.
 
 13.  There was significant over capacity in the domestic market. In the
 competitive environment that emerged the entry of several new operators
 in the domestic market during the last 2/3 years, many airlines
 resorted to low pricing, often below operating costs, in order to
 stimulate the market. As a result, yields of all domestic carriers
 declined during the year, despite increases, from time to time, of
 fares and of fuel surcharge. In this difficult environment, the
 Company’s performance in the domestic market must be viewed as
 satisfactory.
 
 14.  The cost of Aviation Turbine Fuel (ATF) increased continuously
 throughout the year due to the rising cost of crude oil. As on March
 2008, the cost of ATF in India was 37% higher than the cost a year ago.
 Additionally, because of the taxes and duties applicable, the ATF
 prices for domestic operations in India continue to be more than 60%
 higher than the international prices. The high cost of ATF has
 adversely impacted the performance of the Company during the year under
 review, as was the case with all the other Indian carriers and most
 airlines worldwide.
 
 15.  As on 31st March, 2008, the Company had 81 aircraft in its fleet
 compared to 62 as on 31st March, 2007. The Company added ten Boeing 777
 and six Airbus 330, three Boeing 737-700, seven Boeing 737-800 and two
 ATR - 72-500 aircraft to its fleet during the year. The Company also
 redelivered two Boeing 737-400, three Airbus 340 and three Boeing
 737-700 to the respective Lessors, at the end of respective lease
 periods. One ATR 72-500 aircraft was declared as a “Constructive Total
 Loss”.
 
 SALE AND LEASEBACK OF AIRCRAFT
 
 16.  During the year, the Company sold and leased back four Boeing
 737-700 aircraft. The Company’s profit attributable to this was Rs.
 31,484 lac.
 
 REVALUATION OF ASSETS
 
 17.  The Company revalued, as on 31st March, 2008, the Leasehold Land
 based on a valuation report obtained from a registered valuer and
 revalued Narrow Body Aircraft based on valuation reports prepared by
 International Aircraft Valuers. The resultant appreciation in respect
 of land is Rs. 148,119 lac and on account of Narrow Body Aircraft is
 Rs. 118,133 lac. An aggregate amount of Rs. 266,252 lac has been
 credited to Revaluation Reserve.
 
 INFORMATION UNDER CLAUSE 49 OF THE LISTING AGREEMENT: CHANGE IN
 ACCOUNTING POLICIES.
 
 18.  Exchange Gain (net) of Rs. 23,293 lac for the Year ended 31st
 March, 2008, has been included in Other Income in accordance with the
 revised Accounting Standard AS 11 “The Effects of Changes in Foreign
 Exchange Rates”. Such gain would have, prior to the onset of the
 Accounting Standard, been adjusted to the carrying amount of fixed
 assets.
 
 19.  The Company’s wide body aircraft are depreciated at the rates
 prescribed as per Schedule XIV of the Companies Act, 1956 on Straight
 Line method as against Written Down Value method followed for Narrow
 Body aircraft held by the Company. The Wide Body aircraft are different
 from the Narrow Body aircraft in terms of technology and other
 efficiency parameters based on long haul operations and are being used
 primarily on International routes as compared to Narrow Body aircraft
 which are mostly deployed on Domestic routes.
 
 RESPONSES TO COMMENTS IN THE ANNExURE TO THE AUDITORS‘ REPORT
 
 20.  Reference is drawn to point no. 4 and 7 of the Annexure to the
 Auditors‘ Report. The comments in italics read along with the
 respective further comments in the said Annexure to the Auditors‘
 Report are self-explanatory.
 
 DIRECTORS’ RESPONSIBILITY STATEMENT
 
 21.  As required under Section 217(2AA) of the Companies Act, 1956,
 your Directors confirm that:
 
 i. in the preparation of the Annual Accounts, the applicable accounting
 standards have been followed;
 
 ii. the Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the Financial Year and of the loss of the
 Company for that year;
 
 iii. the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the said Act for safeguarding the assets of the Company
 and for preventing and detecting fraud and other irregularities;
 
 iv.  the Directors have prepared the Annual Accounts on a going concern
 basis.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 
 22.  Particulars as prescribed pursuant to Section 217(1) (e) of the
 Companies Act, 1956 read with Companies (Disclosure of Particulars in
 the Report of Board of Directors) Rules, 1988 in respect of these items
 are given below:
 
 a.  Conservation of Energy:
 
 The Company has during the year under review continued to rigorously
 monitor fuel consumption of all aircraft on an on-going basis, and
 taken various measures to optimize consumption. The average age of the
 Company’s fleet as on 31st March, 2008 was 4.24 years, a factor that
 contributes to fuel efficiency. The Company also maintains
 fuel-efficient operations with regard to its ground equipment and
 vehicles.
 
 b.  Technology Absorption
 
 Training of Pilots:
 
 During the year under review, the Company installed and commissioned at
 its Simulator Centre in Mumbai two full flight simulators and related
 equipment to train Pilots on the Boeing 777 and Airbus 330 aircraft
 respectively.. The Company continued to give Pilots endorsement and
 refresher training for Boeing-737 aircraft at the Simulator Training
 Centre. The training was conducted by the Company’s own Instructors.
 The Company’s Pilots were given endorsement and refresher training for
 ATR aircraft at ATR’s simulator facility at Bangkok. This training was
 also conducted by the Company’s own instructors.
 
 IT initiatives:
 
 The Company continued to upgrade all applications in use, both in its
 operations and in Management Information Systems.
 
 DIRECTORS
 
 23.  Dr. Vijay L. Kelkar resigned from the Board pursuant to his
 appointment as Chairman of the Finance Commission. The Directors place
 on record his invaluable contribution and guidance to the Board and to
 the Management during his tenure as Director and as a member of the
 Audit Committee.
 
 24.  Mr. S. G. Pitroda, Mr. Javed Akhtar, Mr. Saroj K. Datta and Mr.
 Ali Ghandour retire by rotation at the ensuing Annual General Meeting
 and, being eligible, offer themselves for re-appointment.
 
 25.  The Directors recommend the re-appointment of Mr. Saroj K. Datta
 as Executive Director of the Company, subject to the approval of the
 Central Government, of the Terms and Conditions of his appointment.
 
 AUDITORS
 
 26.  The Statutory Auditors, Messieurs Deloitte Haskins & Sells,
 Chartered Accountants, and Messieurs Chaturvedi & Shah, Chartered
 Accountants, retire at the ensuing Annual General Meeting and have
 confirmed their eligibility and willingness to accept the office, if
 re-appointed. At the said Meeting, Members will be requested to appoint
 Statutory Auditors for the Financial Year 2008-09 and to fix their
 respective remuneration.
 
 PARTICULARS OF EMPLOYEES
 
 27.  Information as per Section 217(2A) of the Companies Act, 1956 read
 with the Companies (Particulars of Employees) Rules, 1975, as amended
 from time to time, forms part of this Report. However, as per the
 provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the
 Report and Accounts are being sent to all Members excluding the
 Statement containing the particulars of employees to be provided under
 Section 217 (2A) of the Act. A Member may inspect the particulars at
 the Registered Office of the Company between 11:00 A.M. to 1:00 P.M. on
 all working days till the date of the 16th Annual General Meeting.
 
 CORPORATE GOVERNANCE
 
 28.  Your Company has complied with the mandatory provisions of Clause
 49 of the Listing Agreement relating to Corporate Governance, as
 amended from time to time. A separate section on Corporate Governance
 forms part of the Annual Report and the Certificate from the Company’s
 Statutory Auditors on compliance with the provisions of Corporate
 Governance is annexed to the Corporate Governance Report.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 29.  In January 1997, the Company launched its in-flight collection
 programme the ‘Magic Box’ in association with the NGO “Save the
 Children India (STCI)‘‘. This fund-raising programme has been extended
 to all flights in the domestic network. The funds collected are
 utilized towards projects covering areas such as disaster relief,
 education and health care for the poor, and programmes to prevent the
 exploitation of women.
 
 30.  The Company organizes “Flights of Fantasy”, where underprivileged
 children and children with special needs are taken on specially
 organized flights and introduced to the world of aviation.  On the
 occasion of Children’s Day in November 2007, the Company operated
 Flights of Fantasy in partnership with Tata Consultancy Services in
 Hyderabad, for the Parents Association for Welfare of the Mentally
 Handicapped. In Mumbai, the Company in association with GE Volunteers
 operated a Flight of Fantasy for the children cared for by three NGOs
 viz. Magic Bus, Assema and VISA (Vision in Social Arena).
 
 31.  This year, as in past years, Jet Airways employees participated in
 the Standard Chartered Mumbai Marathon that raises funds for various
 NGOs. The number of employees participating has been increasing each
 year.
 
 POST BALANCE SHEET EVENTS
 
 Resolution by Postal Ballot
 
 32.  The Shareholders passed a Special Resolution by Postal Ballot
 authorizing the Board of Directors to issue Securities such as
 ADRs/GDRs/FCCBs etc. to eligible investors, QIBs/FIIs etc. up to US $
 400,000,000 (United States Dollars Four Hundred Millions).
 
 Fleet
 
 33.  The Company inducted one ATR 72-500 and one Airbus 330 in May 2008
 and one ATR 72-500 and one Airbus 330 aircraft in June 2008.
 
 34.  Depreciation on Narrow Body Aircraft was hitherto provided on
 Written Down Value Method.  Based on the usage of such Aircraft, the
 industry practice followed in domestic and international markets, the
 Company, in order to reflect a more appropriate preparation /
 presentation of fnancial statements, has with effect from 1st April,
 2008, changed the method of depreciation on such Aircraft to Straight
 Line Method and the surplus arising from retrospective computation
 aggregating Rs. 92,377 lac (excluding adjustment to revaluation
 reserve) will be accounted and disclosed under Exceptional Item.
 
 35.  The Company, based on legal advice has, with effect from 1st
 April, 2008, adjusted the foreign currency differences on amounts
 borrowed for acquisition of fixed assets acquired from outside India
 aggregating Rs. 62,429 to the carrying cost of the fixed assets, in
 compliance with Schedule VI of the Companies Act, 1956 which is in
 variance with the treatment prescribed in Accounting Standard (AS -11)
 on ‘Effects of Changes in Foreign Exchange Rates’ notified in the
 Companies (Accounting Standards) Rules.
 
 Network
 
 36.  The Company has introduced the following new routes and changes to
 exsiting routes after 1st April, 2008:
 
 International 
 
 Routes                                               Commenced on
 
 Mumbai - Hongkong - Mumbai                       14th April, 2008
 
 Kochi - Doha - Kochi                             18th April, 2008
 
 Mumbai - Muscat - Mumbai                         21st April, 2008
 
 Mumbai - Abu Dhabi - Mumbai                      23rd April, 2008
 
 Delhi - Abu Dhabi - Delhi                        23rd April, 2008
 
 Mumbai - Bangkok - Mumbai                           7th May, 2008
 
 Mumbai - San Francisco - Mumbai (via Shanghai)    14th June, 2008
 
 Delhi - Toronto - Delhi via Brussels             1st August, 2008
 (Operated as Delhi - New York 
 (JFK)-Delhi until 31st July, 2008)
 
 Chennai - New York (JFK) - Chennai via Brussels  1st August, 2008
 (Operated as Chennai - Toronto - 
 Chennai until 31st July, 2008)
 
 Mumbai - Dubai - Mumbai                         23rd August, 2008
 
 Delhi - Dubai - Delhi                           23rd August, 2008
 
 Domestic 
 
 Routes                                               Commenced on
 
 Chennai-Pune-Chennai                               15th May, 2008
 (This route is now 
 operated by Jet Lite)
 
 Hyderabad-Rajahmundry-Hyderabad                   15th June, 2008
 
 Hyderabad-Tirupathi-Hyderabad                     15th June, 2008
 
 ACKNOWLEDGEMENT
 
 37.  Your Directors place on record their appreciation for the
 contributions of the members of the Management Team and all employees
 for their continued hard work, dedication and commitment to maintaining
 the Company’s service standards, during the year under review.
 
 38.  Your Directors place on record their appreciation for the support
 rendered by the Company’s General Sales Agents and their associates,
 Travel Agents and other members of the travel trade for their continued
 efforts in promoting the Company.
 
 39.  Your Directors also take this opportunity to thank the Ministry of
 Civil Aviation, Government of India, the Director General of Civil
 Aviation (DGCA), the Airports Authority of India (AAI), the Mumbai
 International Airport (Private) Limited, Delhi International Airport
 (Private) Limited, Hyderabad International Airport (Private) Limited,
 Bangalore International Airport (Private) Limited and other airport
 companies for their support and guidance. Your Directors are also
 grateful to the Reserve Bank of India, the Ministry of Finance, the
 Ministry of Corporate Affairs, Government of India, National Stock
 Exchange of India Limited, Bombay Stock Exchange Limited, the US Exim
 Bank, Financial Institutions and Banks, the Boeing Company, Avion de
 Transport Regionale, Airbus Industrie, engine manufacturers and the
 lessors of our aircraft for their support, and look forward to their
 continued support.
 
                         For and on behalf of the Board of Directors
 
                                                        NARESH GOYAL
                                                            Chairman
 Date   : 1st September, 2008
 Place  : Mumbai