To The Members,
 
 The Directors present the 16th Annual Report along with the Audited
 Accounts of your Company for the year ended March 31, 2011.
 
 Operations
 
 Your Company''s operations during the year ended March 31, 2011 have
 resulted in:
 
                                                 (Rs. in million)
 
                                            Year ended    Year ended
 
                                                 March         March
 
                                              31, 2011      31, 2010
 
 Gross Income                                   64,956        52,710
 
 Earnings before financial                      11,243         4,036
 
 charges, lease rentals, depreciation & 
 amortization and taxes (EBITDAR) 
 Add/Less:
 
 Depreciation & Amortization                     2,410         2,173
 
 Lease Rentals                                   9,840        10,938
 
 Financial charges                              13,129        11,026
 
 Profit/ (Loss) before taxes                   (14,137)      (20,100)
 
 Provision for taxes (including                  4,934         7,707
 FBT)
 
 Net Profit / (Loss) from                       (9,203)      (12,393)
 
 ordinary activities after tax
 Foreign exchange translation                      158           502 
 difference
 
 Exceptional Item                                  912         3,577
 
 Net Profit / (Loss) after tax                 (10,274)      (16,472)
 
 Scheduled Airline Operations
 
 During the year under review, your Company had a domestic market share
 of 19.8% and carried more than 12 million passengers across both
 domestic and international sectors.  Fleet size of aircraft used in
 scheduled operations stood at 66 aircraft at year end, and an average
 schedule comprised of 366 domestic and 28 international flights daily
 over a route network (as on March 31, 2011) covering 59 domestic and 8
 international destinations.
 
 During the year under review, 14 of the Airbus A320 family aircraft in
 your Company''s fleet which use the V2500 engines manufactured by IAE
 International Aero Engines AG (IAE) had to be grounded due to
 technical problems relating to the engines. Your Company has made
 arrangements with IAE to perform maintenance and support work on its
 entire fleet of engines, including undertaking those measures
 identified by the United States Federal Aviation Administration and
 other support work to improve on- wing performance. By March 31, 2011,
 your Company had re-introduced ten aircraft back into service and the
 balance have also since been inducted into operations.
 
 The grounding of aircraft resulted in a 10% (1,222 million seat
 kilometres) drop in domestic capacity. Despite the drop in domestic
 capacity by 10%, your Company''s domestic passenger count increased by
 2.6% demonstrating sharply improved productivity.
 
 During the year under review, your Company undertook a further
 expansion in its international operations by introduction of a new
 wide-body route from Delhi to Hong Kong and narrow- body routes from
 Delhi to Kathmandu and from Delhi and Mumbai to Bangkok and Dubai.
 
 Your Company is the only Indian airline to be a member- elect of
 oneworld, which is the premier global airline alliance. It brings
 strong brand recognition comprising leading airlines such as American
 Airlines, British Airways, Cathay Pacific, Qantas and Finnair. oneworld
 serves airports in 150 countries through 9,000 daily flights with
 member airlines based in every continent.
 
 Kingfisher Airlines'' code share arrangements with British Airways has
 accelerated the growth trajectory of your Company into key
 international markets providing enhanced connectivity and traffic. Your
 Company has achieved market share leadership in most of the
 international sectors where operations have been launched, within a
 short span of 1 to 2 years of launch. This resulted in your Company''s
 combined domestic and international capacity increasing by 9.2% (1,365
 million seat kilometers), while the total passenger count has increased
 by 8.9%.
 
 Your Company has continued major initiatives during the year to reduce
 distribution costs, implement fuel management systems, improve aircraft
 utilization and re- negotiate general contracts in order to enforce
 revenue and cost competitiveness.
 
 To enhance consumer connect, your Company continued its focus on
 various marketing and commercial initiatives including tie-ups with
 corporate houses to get premium business. Campaigns to leverage and
 promote your Company''s network reach and product offerings were
 launched. During the year under review, your Company won the coveted
 award for the best frequent flyer program in category ''Best Promotion
 for Redemption'' and ''Best Loyalty Credit Card'' at Frequent Travellers
 Awards 2011.
 
 In view of operating losses incurred during the year, your Directors do
 not recommend payment of any dividend.
 
 Subsidiaries
 
 The statement of your Company''s interest in its only subsidiary, Vitae
 India Spirits Limited, as at March 31, 2011, prepared in accordance
 with the provisions of Section 212(3) of the Companies Act, 1956 is
 attached to the Balance Sheet.
 
 Outlook
 
 Your Company is one of India''s largest domestic carriers by passengers
 flown and cities served. Your Company has continued to enjoy market
 leadership with a wide network reach in India, a growing international
 presence, an awarded frequent flyer program and wide distribution.
 
 The country''s economy continues to be strong with GDP growth estimates
 being maintained in the range of 8 - 8.5%. Passenger traffic has been
 buoyant in the current year as recovery continues on the back of a
 strengthening macro-economic environment. Domestic seat capacity is
 expected to expand lower than growth in demand, enabling improved
 revenue performance for the industry. In fact your Company has achieved
 load factors in excess of 80% in the current year. To further improve
 consumer franchise, various marketing initiatives and enhanced customer
 loyalty programs have been undertaken.
 
 Your Company is optimistic of improved performance in the current year,
 primarily driven by improving domestic and international passenger
 revenue, the benefits of debt recast together with lowered interest
 burden, and various other initiatives taken by your Company to lower
 direct operating costs.
 
 Debt Recast Package
 
 During the year under review, your Company has implemented a Debt
 Recast Package with its consortium of bankers, salient features of
 which are:
 
 1) (a) (i) Rs.7,501 million of Loan from the bankers was converted into
 7.5% Compulsorily Convertible Preference Shares. The 7.5% Compulsorily
 Convertible Preference Shares were thereafter converted into equity
 shares in accordance with the pricing regulations of the Securities and
 Exchange Board of India (SEBI).
 
 (ii) Rs. 5,531 million of Loan from the bankers was converted into 8%
 Cumulative Redeemable Preference Shares redeemable at par after 12
 years.
 
 (iii) Repayment of the balance loans was rescheduled with a moratorium
 on repayment of principal of 2 years and step-up repayment over the
 subsequent 7 years.
 
 (iv) Interest for the period July 1, 2010 to March 31, 2011 on loans
 from the banks was converted into a funded interest term loan repayable
 in 9 years including 2 years moratorium.
 
 (v) Interest rate on loans reduced by over 300 bps.
 
 (vi) Additional fund based loan facilities of Rs.7,683.2 million and
 non-fund based facilities of Rs.4,444 million sanctioned by the banks.
 
 (vii) Part of the working capital limits of Rs.2,974 million converted
 into working capital term loans.
 
 (b) Loans from Promoters of Rs. 6,480 million were converted into 7.5%
 Compulsorily Convertible Preference Shares and thereafter into equity
 shares, pricing as per SEBI regulations. Also, the terms of 6%
 Redeemable Preference Shares of Rs. 970 million issued to the Promoters
 were varied so that they became 6% Compulsorily Convertible Preference
 Shares which thereafter were converted into equity shares, pricing as
 per SEBI regulations.
 
 Consequent to (a) and (b) above, your Company''s paid-up equity capital
 stood increased from Rs.  2,659,088,830 to Rs. 4,977,792,230 on March
 31, 2011.
 
 2) Loans / Inter corporate deposits from certain business associates
 aggregating to Rs.7,093 million were converted into 7,09,31,985 8%
 optionally convertible debentures of Rs.100/- each (OCDs) which are
 convertible into equity shares for a period of 18 months from their
 issue, after which they are redeemable. These OCDs are convertible into
 equity shares at the option of the holder, and at a conversion price to
 be determined as per applicable SEBI regulations with reference to the
 date of conversion. As a result, it is not presently possible to
 determine either the date of conversion of the OCDs, or the number of
 equity shares which may be issued and allotted if and when OCDs are
 converted.
 
 It is proposed that the terms of the OCDs be varied such that, in the
 event the Board decides to undertake the Rights Issue which is to occur
 prior to 18 months from the date of allotment of the OCDs, the OCDs
 shall become redeemable, in part or in full and in one or more
 tranches, at the option of the Board, and in such quantity as may be
 mutually agreed by the Board and the holders of the OCDs. The
 redemption proceeds of OCDs along with accrued interest are to be
 appropriated towards subscription to equity shares in the rights issue.
 In the event the rights issue has not opened for subscription or after
 opening for subscription has not successfully closed during the period
 of 18 months from the date of allotment of the OCDs, the OCDs shall be
 governed by their original terms of issue. Approval of the Members is
 being sought at the Annual General Meeting for such variation in the
 terms of the said OCDs.
 
 Capital
 
 During the year under review, your Company''s Authorised Share Capital
 was increased from Rs. 10,000,000,000/- comprising of 900,000,000
 Equity Shares of Rs. 10/- each and 10,000,000 Preference Shares of Rs.
 100/- each to Rs. 42,500,000,000/- comprising of 1,650,000,000 Equity
 Shares of Rs. 10/- each and 260,000,000 Preference Shares of Rs. 100/-
 each at the Annual General Meeting held on September 30, 2010.
 Subsequently, at the Extraordinary General Meeting held on December 20,
 2010, the Authorised Share Capital was re-classified into 1,650,000,000
 Equity Shares of Rs. 10/- each and 2,600,000,000 Preference Shares of
 Rs. 10/- each.
 
 Consequent upon the implementation of the Debt Recast Package, the
 Issued, Subscribed and Paid- up Share Capital of your Company has
 increased from Rs. 3,629,088,830/- divided into 265,908,883 Equity
 Shares of Rs. 10/- each and 9,700,000 6% Redeemable Non-Cumulative
 Preference Shares of Rs. 100/- each to Rs. 10,508,792,230/- divided
 into 497,779,223 Equity Shares of Rs. 10/- each and 553,100,000 8%
 Cumulative Redeemable Preference Shares of Rs. 10/- each.
 
 Depository System
 
 The trading in the equity shares of your Company is under compulsory
 dematerialization mode. As of date, equity shares representing 90.49%
 of the equity share capital are in dematerialized form. As the
 depository system offers numerous advantages, members are requested to
 take advantage of the same and avail of the facility of
 dematerialization of your Company''s shares.
 
 Auditors'' Report
 
 As regards observations in para 4 of Auditors'' Report, the Statutory
 Auditors have qualified their report by remarking that the receipt of
 subsidy from aircraft manufacturers should be recognized as income on
 an systematic basis over the period necessary to match them with
 related costs which they are intended to compensate though the
 accounting treatment does not appear to be covered by the Accounting
 Standard (AS)-19 (Accounting for Leases) issued by the Institute of
 Chartered Accountants of India. In the opinion of the Directors:
 
 (1) The lessor of the Aircraft is a person other than the Aircraft
 manufacturer and the lease contract is independent of the contract with
 Aircraft manufacturer.
 
 (2) The termination, if any, of the lease contract does not in any
 event breach the conditions for the grant of subsidy by the Aircraft
 manufacturer.
 
 (3) The subsidy value, referred to in Para 4 of the Audit Report have
 been received by the Company during the 15 months period ended June 30,
 2006.  As per Section 28 (iv) of the Income Tax Act, 1961, and
 precedents available under Income Tax laws, including pronouncements of
 the Apex Court, the revenue arising out of support packages will be
 treated as income for taxation purposes and therefore, it would not be
 prudent for the Company to treat the said revenues differently in the
 books of Accounts and for taxation purposes.
 
 (4) In the event of non compliance of the contract with the Aircraft
 manufacturer, the resultant possibility of recovery of subsidy granted
 by the Aircraft manufacturer has been disclosed as contingent liability
 and this accounting treatment adopted by the Company is also based on
 the well established principle of differentiation of revenue receipt
 and capital receipt.
 
 In view of the above, in the opinion of the Company, the accounting
 treatment of the support package, received from the Aircraft
 manufacturer, as Income in the year of accrual and receipt is in order.
 
 The fair market value of these Aircraft is not easily ascertainable due
 to the unique specifications of the Aircraft. Therefore, the management
 has obtained the valuation report for Aircraft of similarly type from a
 leasing company to ascertain the fair market value which is higher than
 the sale price of these Aircraft. This is also supported by the fact
 that the insurance value to be covered as per respective Lease
 Agreement is much more than the sale value of the Aircraft.
 
 As regards the observations in para 6 of the Auditors'' Report, the
 Company has adopted the Exposure draft on Accounting Standard - 10
 (Revised) ''Tangible Fixed Assets'' which allows such costs on major
 repairs and maintenance incurred to be amortized over the incremental
 life of the asset. The Company has extended the same treatment to costs
 incurred on major repairs and maintenance for engines pertaining to
 aircrafts acquired on Operating Lease.
 
 As regards the observations in para 13(a) of the Auditors'' Report, the
 Note number 16 to Notes to Accounts (Schedule 19) is self explanatory.
 
 As regards the observations in the Annexure to the Auditors'' Report,
 the Company has taken/ is taking necessary steps to ensure improvement
 in certain procedures and also compliance with relevant laws.
 
 Directors
 
 Mr. Ghyanendra Nath Bajpai and Mr. Subhash R. Gupte, Directors, retire
 by rotation and, being eligible, offer themselves for re-appointment.
 
 During the year under review, Dr. Naresh Trehan resigned from the Board
 of Directors of your Company effective August 11, 2010.
 
 Subsequent to the year under review, Diwan Arun Nanda has tendered his
 resignation from the Board of Directors of your Company. His
 resignation will be effective September 5, 2011.
 
 Auditors
 
 M/s. B. K. Ramadhyani & Co, your Company''s Auditors have confirmed that
 they are eligible for re-appointment at the ensuing Annual General
 Meeting and it is proposed to re-appoint them and to fix their
 remuneration.
 
 Listing of Shares of Your Company
 
 All the equity shares of your Company are listed on the Bombay Stock
 Exchange Limited and The National Stock Exchange of India Limited. The
 listing fee for the year 2011-12 has been paid to these Stock
 Exchanges.
 
 Corporate Governance
 
 A report on Corporate Governance is annexed separately as part of this
 Report along with a certificate of compliance from a Company Secretary
 in practice. Necessary requirements of obtaining certifications/
 declarations in terms of Clause 49 have been complied with.
 
 Management Discussion and Analysis
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, the Management Discussion and Analysis Report is annexed and
 forms an integral part of the Annual Report.
 
 Human Resources
 
 Employee relations remained cordial. The information as are required to
 be provided in terms of Section 217(2A) of the Companies Act, 1956 read
 with the amended Companies (Particulars of Employees) Rules, 1975, have
 been included as an annexure to this Report.
 
 Employee Stock Option Plan (ESOP)
 
 Disclosures as required by Clause 12 of the SEBI (Employee Stock Option
 Scheme and Employee Stock Purchase Scheme), Guidelines 1999 are annexed
 to this Report.
 
 Conservation of Energy, Research and Development, Technology
 Absorption, Foreign Exchange Earnings and Outgo
 
 The particulars as prescribed under section 217(1)(e) of the Companies
 Act, 1956 and the rules framed thereunder are not applicable to your
 Company.
 
 The relevant information relating to Foreign Exchange Earning and Outgo
 appears in the Notes Nos. 6 to 8 of Schedule 19 to the Financial
 Statements.
 
 Directors'' Responsibility Statement
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, in relation to
 the Financial Statements of your Company for the year ended March 31,
 2011, the Board of Directors reports that:
 
 - in the preparation of the Accounts for the year ended March 31, 2011,
 the applicable accounting standards have been followed along with
 proper explanation relating to material departures;
 
 - accounting policies have been selected and applied consistently and
 that the judgments and estimates made are reasonable and prudent so as
 to give a true and fair view of the state of affairs of your Company as
 at March 31, 2011 and of the Loss of your Company for the year ended
 March 31, 2011;
 
 - proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of your Company and
 for preventing and detecting fraud and other irregularities;
 
 - the accounts for the year ended March 31, 2011, have been prepared on
 a going concern basis.
 
 Thank You
 
 Your Directors place on record their sincere appreciation for the
 continued support from shareholders, customers, the Government of India
 especially the Ministry of Civil Aviation and the Directorate General
 of Civil Aviation, the various State Governments, Airports Authority of
 India, the Reserve Bank of India, lending banks and financial
 institutions, suppliers, other business associates and employees.
 
                          For and on Behalf of the Board of Directors
 
 Mumbai                                              Dr. Vijay Mallya
 
 August 25, 2011                         Chairman & Managing Director