1.  Background
 
 Kingfisher Airlines Limited (formerly known as Deccan Aviation Limited)
 (the Company) is engaged in rendering scheduled and unscheduled
 aircraft passenger and cargo services, including charter services. The
 Company was incorporated on June 15, 1995 as a private limited company
 and converted itself into a public limited company on January 31, 2005.
 Consequently, the Company changed its name from Deccan Aviation Private
 Limited to Deccan Aviation Limited. On June 12, 2006, the Company''s
 shares were listed on the Bombay Stock Exchange Limited and the
 National Stock Exchange Limited, pursuant to the Company''s initial
 public offer of shares. The scheduled airline business of Kingfisher
 Training and Aviation Services Limited (KTASL) (previously known as
 Kingfisher Airlines Limited) demerged on a going concern basis with the
 Company, with effect from April 1, 2008 as the demerger appointed date,
 vide scheme of arrangement approved by the honourable High Court of
 Karnataka vide its order dated June 16, 2008 under sections 391 to 394
 of the Companies Act, 1956 (''Scheme). The helicopter charter division
 of the Company was also hived off pursuant to the Scheme. The Company
 changed its name from Deccan Aviation Limited to Kingfisher Airlines
 Limited, with effect from September 5, 2008.
 
 2.  Demerger of the commercial airline division of KTASL
 
 a) Order of the Karnataka High Court in form 42 of the Companies
 (Court) Rules, 1949 in respect of the Scheme is yet to be passed.
 
 b) Documentation in respect of transfer of certain assets and
 liabilities taken over pursuant to Scheme, to the name of the Company
 are pending. The Company is in the process of transfer of charges
 created by KTASL to its name in respect of securities granted for loans
 so taken over by the Company, in consultation with the Registrar of
 Companies.
 
 2.  Commitments and contingent liabilities not provided for:
 
                                                       (Rs. in Lacs)
 
                             As at       As at
 Particulars                                       Remarks
 
                    March 31, 2011 March 31, 2010
 
 a.  Estimated 
 amount of contracts  2,227,287.48   2,267,640.57  Pertains to 
                                                   acquisition of 
                                                   aircrafts &
 remaining to be 
 executed on capital                               other capital assets
                                                   in future.
 account and not 
 provided for (net of
 advances) & as 
 certified by 
 management
 
 b.  Guarantees / 
 letters of credit 
 given                  128,636.99      71,331.52  Pertains to 
                                                   guarantees and
                                                   letters of
 by banks on behalf 
 of the Company                                    credit given / 
                                                   issued by banks to
                                                   Airport Authorities,
                                                   lessors, suppliers of
                                                   spares, stores &
                                                   components and others.
 
 c.  Claims against 
 the Company not         21,923.74      26,418.00* Pertains to 
                                                   litigations filed 
                                                   against
 acknowledged as debts 
 (including                                        the Company which are
                                                   pending
 civil and customer 
 suits) in the normal                              with various 
                                                   authorities / 
                                                   arbitration,
 course of business 
 (to the extent                                    including National
                                                   Consumer Disputes
 ascertainable)                                    Redressal Commission,
                                                   Consumers''
                                                   Disputes Forums, 
                                                   Courts, Civil Court
                                                   and invoices / claims
                                                   of suppliers and
                                                   service providers not
                                                   accepted by the 
                                                   Company. The Company
                                                   has a claim against 
                                                   one of the parties to
                                                   an extent of Rs. Nil
                                                  (as at March 31, 2010
                                                   Rs. 10,100.00 Lacs).
 
 d.  Demands raised by 
 Income Tax                1,399.71     1,336.84   An aggregate sum of
                                                   Rs. 1,060.17 lacs
 authorities under 
 appeal                                            paid has been included
                                                   under ''Loans and 
                                                   Advances''.
 
 e.  Demands and show 
 cause notices raised     23,392.50     6,928.51*  The Company has
                                                   preferred/furnished
 by service tax 
 authorities                                       appeals/ objections
                                                   /is in the process
                                                   of replying. Amount
                                                   indicated does not
                                                   include any demands 
                                                   that may be raised
                                                   for other years, based
                                                   on the stand taken by
                                                   tax authorities in 
                                                   orders passed/show 
                                                   cause notices issued.
 
 f.  Show cause notices 
 raised by entry tax         14.37           Nil   The Company has
                                                   furnished objections.
 authorities
 
 g.  Lease rentals 
 payable in respect of   13,216.86           Nil   The Company has
                                                   taken certain assets
 assets taken on 
 operating lease in the                            from a lessor on
                                                   operating lease. The
 event of the Company 
 not meeting                                       lessor has undertaken
                                                   to waive the
 certain contractual 
 obligations                                       lease rentals in the
                                                   event the Company
                                                   meets certain 
                                                   contractual 
                                                   obligations.
 
                                                   The Company is
                                                   confident of meeting
                                                   these obligations
 
 h.  Redelivery and other 
 costs in respect of               Not        Not  In respect of
                                                   operating leases, the
 assets taken on operating 
 lease at the                 ascertai
                                -nable   ascertai
                                           -nable  Company is required 
                                                   to return the
 end of the lease period                           aircrafts as per
                                                   prescribed terms.
                                                   However, the lease
                                                   periods are
                                                   extendable for a 
                                                   longer period and
                                                   considering on going
                                                   maintenance of
                                                   aircrafts, a reliable
                                                   estimate cannot be
                                                   made of the
                                                   redelivery costs.
 
 i.  Amounts payable, if 
 any for breach of                Not         Not
 contractual obligations     ascertai
                               -nable    ascertai
                                           -nable
 
 j.  Liability for 
 deduction of tax at 
 source                     17,993.99    8,644.15  a) The Company has 
                                                   filed applications
 on lease payments in 
 respect of aircrafts                              under section 10(15A)
                                                   of the Income
 and engines, where 
 agreements were                                   Tax Act, 1961 with
                                                   the Central Board
 entered into with 
 lessors on or before                              of Direct Taxes (CBDT)
                                                   seeking
 March 31, 2007 
 (excluding interest)                              exemption from 
                                                   deduction of tax,
                                                   which are pending. 
                                                   These are being
                                                   followed up by the
                                                   Company.
 
                                                   b) In respect of
                                                   agreements involving
                                                   tax of Rs.6,019.06 
                                                   Lacs up to March
                                                   31, 2011, applications
                                                   made by the Company 
                                                   have been rejected.
                                                   In respect of certain
                                                   agreements, the 
                                                   Company has filed 
                                                   writs before the 
                                                   Delhi High Court. In 
                                                   respect of others, 
                                                   the Company will do so
                                                   shortly.
 
 k.  True up charges payable 
 to a service                   Nil     2,608.87   Based on legal advice
                                                   the Company
 provider (difference between                      has disputed the 
                                                   amount of the said
 guaranteed volume of 
 business and                                      charges payable as 
                                                   computed by the
 actual)                                           service provider and
                                                   has sought refund
                                                   of amounts paid, 
                                                   wherever applicable.
                                                   The Company has also
                                                   contended that the 
                                                   relief agreement
                                                   executed is not 
                                                   binding. Amount paid
                                                   so far has been 
                                                   included in loans and
                                                   advnces.  Such claim
                                                   of the Company has 
                                                   been disputed by the
                                                   concerned service 
                                                   provider. The Company
                                                   is in the process of
                                                   examining options 
                                                   open to it in the
                                                   matter.
 
 l.  Lease rentals claimed 
 by a vendor in                  Nil    4,596.57   Certain aircraft
                                                   engines supplied by
 respect of spare engines 
 supplied not                                      a vendor failed
                                                   prematurely and the
 acknowledged as debt                              Company has incurred 
                                                   substantial amounts
                                                   on repair and 
                                                   overhaul of the 
                                                   same. Pending repair
                                                   and overhaul of the
                                                   said engines, the
                                                   Company has taken 
                                                   certain spare engines
                                                   on lease from the 
                                                   said vendor. The
                                                   Company has preferred
                                                   claims against the
                                                   said vendor and has
                                                   requested the party
                                                   to conclude
                                                   arrangements to 
                                                   settle matter at 
                                                   zero cost to it. The
                                                   party has submitted,
                                                   without prejudice, a 
                                                   term sheet for 
                                                   settlement of the 
                                                   matter, which
                                                   envisages waiver of
                                                   the lease rentals 
                                                   payable.
 
 m.  Arrears of fixed 
 cumulative preference     4,305.89          Nil   Arrears of fixed
                                                   cumulative 
 dividends (including 
 tax thereon)                                      preference dividends
                                                   on CCPS (till date of
                                                   conversion) and 
                                                   cumulative redeemable
                                                   preference shares and
                                                   tax thereon.
 
 The Company has entered into agreements for purchase of aircrafts /
 engines under which the Company has commitments to purchase aircrafts /
 engines over a period stipulated in the agreements. Such agreements
 involve complex pricing arrangements wherein the Company receives
 discounts / credits on such purchases, which are based on the
 commitments to purchase, which the Company is confident to fulfill
 currently. Accordingly, amount of contingent liability, if any, as at
 the balance sheet date is not ascertainable.
 
 In addition to the above, there are certain arbitration proceedings
 with customers / suppliers / contractors, in respect of which claims
 are currently not ascertainable.
 
 The management believes, based on internal assessment and / or legal
 advice, that the probability of an ultimate adverse decision and
 outflow of resources of the Company is not probable and accordingly, no
 provision for the same is considered necessary.
 
 3. a) Buildings constructed at a cost of Rs. 88.74 Lacs are on land
 rented from the State Government, for which lease has been transferred
 to Deccan Charters Limited (DCL). Such rental agreement is renewable on
 an annual basis. The Company has in turn entered into a rental
 arrangement with DCL.
 
 b) Buildings constructed at a cost of Rs. 865.86 Lacs are on land
 belonging to the Airport Authority of India. Such rental agreements are
 renewable on a periodical basis.
 
 b) Capital work in progress includes Rs. 2,098.25 lacs paid for
 purchase of a flight simulator. The Company is to pay the balance
 consideration and take delivery of the asset. The Company is exploring
 various options to fund the balance consideration payable. Management
 is confident that it will be in a position to fund the balance
 consideration & take delivery of the flight simulator. Accordingly, the
 said amount is considered good of recovery.
 
 4.  Employee Stock Option Plan [ESOP]
 
 On March 16, 2005, the shareholders of the Company approved an employee
 stock option plan [ESOP 2005]. Further on December 21, 2005, the Board
 of Directors approved the ESOP 2006 scheme, which will govern issuance
 of options on or after January 1, 2006. Options issued under ESOP 2005
 would continue to be governed under ESOP 2005. The shareholders have
 approved the issuance of 8,181,779 options in aggregate subject to a
 maximum of 10% of the aggregate number of issued and outstanding equity
 shares (calculated on an as converted basis), under both the options
 put together.
 
 The Company has not issued any options during the year. Accordingly,
 the assumptions used in determination of the fair value of the
 Company''s stock options for pro forma net loss per share disclosures
 using the Black-Scholes option-pricing model have not been furnished.
 
 The Board of Directors of the Company are yet to formulate the stock
 option plan to the employees of the commercial airline division of
 KTASL taken over by the Company, pursuant to clause 11.1 of the Scheme.
 
 5.  Related Party Disclosures (Parties identified by the Management
 and relied upon by the auditors): Names of related parties
 
 Holding Company United Breweries (Holdings) Limited
 
 Fellow Subsidiaries Kingfisher Finvest India Limited (KFIL)
 
 (formerly known as Kingfisher Radio Limited and subsequently renamed as
 
 Kingfisher Finvest India Limited)
 
 UB Infrastructure Projects Limited (UBIPL)
 
 Kingfisher Training and Aviation Services Limited (KTASL)
 
 UBSN Limited Subsidiary of the Company Vitae India Spirits Limited
 
 Key Management Personnel (KMPs) Dr. Vijay Mallya
 
 Mr. Sanjay Aggarwal (from September 27, 2010)
 
 6.  Leases and Hire Purchase
 
 a) The Company has entered into operating and finance lease agreements.
 Disclosures required under AS 19 on Leases is as given below:
 
 Operating leases
 
 Operating lease arrangements comprise of leases of aircraft,
 helicopters and spare engines. The salient features of such lease
 agreements are as follows:
 
 - Lease periods range up to twelve years and are usually
 non-cancelable.
 
 - Lease rentals are usually fixed over the term of the lease while some
 arrangements are subject to adjustments linked to the Libor rates
 movements.
 
 - The Company also has agreements for maintenance and lease of stores
 and spares for such aircrafts for which fixed and variable rentals are
 paid. Variable rentals are paid on a pre determined rate payable on the
 basis of actual flying hours / cycles. Such variable rentals are
 subject to annual escalations as stipulated in the agreements.
 However, the Company is eligible to claim reimbursement of maintenance
 costs to the extent eligible under the agreements.
 
 - The Company does not have an option to buy the aircraft or
 helicopters and spare engines or to renew the leases.
 
 - In case of default by the Company, in addition to repossession of the
 aircraft, penalties are stipulated in the agreements.
 
 - The Company is required to deposit a commitment fee and a security
 deposit with the lessor or provide a letter of credit for such amounts.
 
 In addition to the above, the Company has entered into agreements to
 lease aircrafts / engines in respect of which the aircrafts / engines
 are pending delivery / the lease was yet to commence as at March 31,
 2011. The above table of minimum lease payments does not include
 amounts that may become payable in respect of leases yet to commence as
 at March 31, 2011.
 
 Salient features of Finance Lease Agreement (Aircraft):
 
 - Monthly aircraft lease rentals are paid in the form of fixed rentals.
 
 - The Company is responsible for keeping the aircraft airworthy in all
 respects and in good condition and insuring the same throughout the
 lease period.
 
 - The Company has an option to purchase the aircraft either during the
 term of the lease on payment of the outstanding principal amount or at
 the end of the lease term on payment of a nominal option price.
 
 - In the event of default, the Lessee is responsible for payment of all
 costs of the Owner including financing costs, and other associated
 costs. Further, a right of repossession is available to the Owner /
 Lessor.
 
 b) In addition, the Company has entered into cancelable leasing
 arrangements for office and residential premises which are renewable at
 mutual consent. Lease rentals of Rs. 4,854.44 lacs (Previous year - Rs.
 5,477.55 Lacs) have been included under the head Operating and Other
 Expenses - Rent under Schedule 16 in the Profit and Loss Account.
 
 7.  Segment disclosures
 
 a) Geographical segments – Considering the internal reporting
 framework, the Company has considered geographical segments as the
 primary segments. Such segments consist of domestic air transportation
 within India and international air transportation outside India.
 
 b) Business segments
 
 The Company operates in a single business segment, i.e. of providing
 scheduled and unscheduled air transportation services. Accordingly, no
 separate segment disclosures for business segments are required to be
 given.
 
 8.  Provisions
 
 In accordance with Accounting Standard - 29 ''Provisions, Contingent
 Liabilities and Contingent Assets'', following is the movement in
 provision towards cost for frequent flyer program.
 
 The outflow with regard to above would depend upon utilization of
 accumulated mileage by the members and hence, the Company is not able
 to reasonably ascertain the timing of outflow.
 
 9. The Company is not aware of the registration status of its
 suppliers regarding registration under the MSME Act, 2006 (Micro Small
 and Medium Enterprises Development Act 2006). Accordingly, information
 relating to outstanding balance or interest due have not been disclosed
 as it is not determinable.
 
 10.  Accounts of certain creditors, debtors, loans & advances, advances
 on capital account, bank accounts, passenger service fees and charges
 payable to airport operators, service tax payable (including under
 reverse mechanism) , input service tax credit recognized are subject to
 review / reconciliation / confirmation. Adjustments, if any will be
 made on completion of such review / reconciliation / receipt of
 confirmations.
 
 11.  The Company has incurred substantial losses and its net worth has
 been eroded. However, having regard to improved passenger and cargo
 load in recent months, improvement in economic sentiment and business
 prospects, cost savings schemes being implemented, premature
 termination of certain lease / purchase contracts, recently launched
 international routes, route rationalization programs, the master debt
 recast agreement signed with banks in December 2010, augmentation of
 capital by conversion of a part of loans from banks and group
 companies, capital raising plans etc, the financial statements have
 been prepared on the basis that the Company is a going concern and that
 no adjustments are required to the carrying value of assets and
 liabilities.
 
 12.  The Company''s centralized ticket reservation system (CRS) does not
 support captured of unearned revenue. Accordingly, such unearned
 revenue has been estimated by management by multiplying the estimated
 aggregate number of unflown tickets as on the reporting date by the
 average estimated tickets value prevailing in each of the months to
 which such unflown ticket relate to. Management is taking continuing
 steps to streamline the process of determination of unearned revenue.
 
 13.  The Company''s Cargo Revenue Management (CRM) system is yet to
 stabilized. Mistakes noticed in revenue recognized, sundry Debtors and
 other relevant accounts have been corrected to the extent identified.
 The Company''s of the view that unadjusted differencies will not be
 material. Management is taking steps to further steemline the process
 in stabilized system.
 
 14.  Accounting of costs on major repairs and maintenance of its
 engines: During the current and immediate previous year, the Company
 has adopted the exposure draft on Accounting Standard - 10 (Revised)
 ''Tangible Fixed Assets'' which allows 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 and
 maintenance on engines pertaining to aircrafts acquired on operating
 lease. Such expenditure has been included in ''Lease hold improvements-
 Aircrafts'' vide schedule of fixed assets. This accounting policy has
 been confirmed by an independent expert and in the opinion of the
 management, has resulted in a fair depiction of the working results and
 the state of affairs of the company. But for such accounting practice,
 the loss before & after tax for the year would have been higher by Rs.
 3,726.83 Lacs and Rs. 2,517.66 Lacs respectively.
 
 15.  Use fees payable by the Company in respect of certain assets taken
 on operating lease aggregating to Rs. 5,576.45 lacs have, in accordance
 with the Company''s understanding, been treated as maintenance reserves.
 In terms of the Company''s accounting policy, these fees are initially
 included under Loans and Advances and are expensed out to the Profit
 and Loss Account at the time of incurrence of major expenditure
 /termination of agreements. The Company is taking steps to formalize
 this understanding with the relevant lessor.
 
 16.  The Company has not prepared consolidated financial statements
 (CFS) as required by the AS 21, since the transactions of subsidiary
 during the year/its assets and liabilities were not material.
 
 17.  Fixed assets have been physically verified by the management
 during the year. Pending completion of reconciliation, discrepancies,
 if any, have not been finalized and adjusted. As a matter of abundant
 caution, provision of Rs. 500 lakhs has been made for the possible
 effect of any discrepancies.
 
 18.  Previous year''s figures have been regrouped / reclassified
 wherever necessary to conform to the current year''s presentation.