SpiceJet

The Directors hereby present the Twenty Fourth Annual Report and the
 Audited Accounts for the year ended March 31,2008.
 
 1.  Financial Results
 
 Particulars                           March 31,2008     March 31,2007
 
 Gross Income                              14,385.79          7,482.80
 
 Operating Expenses                        12,420.17          6,478.02
 
 Employee Remuneration of benefits          1,431.92            860.87
 
 Selling Expenses                             914.09            279.61
 
 Administrative Expenses                      703.81            427.17
 
 Finance Charges                              137.23             42.48
 
 Depreciation and Amortisation                 78.18             58.47
 
 Profit/ (Loss) before taxation            (1,299.61)          (663.82)
 
 Fringe Benefit Tax                            24.24              9.94
 
 Prior Period Adjustments                      11.22             33.67
 
 Profit/(Loss) After taxation              (1,335.07)          (707.43)
 
 Explanations to various comments made by the Auditors in their Report
 to the shareholders are mentioned in the Notes to the Accounts, which
 forms part of the Balance Sheet for the year ended March 31,2008.
 
 2.  Business
 
 The Company completed its third year of operations on May 23, 2008.
 During its third year of operations, the Company grew its fleet size to
 nineteen aircraft covering 18 destinations and operating 113 flights
 daily. During the year ended March 2008, the number of passengers flown
 has also increased by 48% to 4.5 million as compared to previous year.
 The average load factor of 73% was recorded by the airline during the
 year under review with a market share of over 9%.
 
 During the year under review, the company improved its average deployed
 fleet to 14.13 aircraft versus 7.68 aircraft for comparable previous
 year.
 
 Your company also focussed on processes to generate ancillary revenues
 which in turn reduced cost of operations. The company has managed to
 improve the Net Revenue per passenger to Rs.2,650 from Rs.2,320 in
 comparable previous year.
 
 3.  Change of Financial Year
 
 The Company had changed its financial year in the previous financial
 year from June-May to April-March.  Accordingly, the previous financial
 results reflect the performance of the Company for ten months only and
 may not be comparable with full year results for the year ended March,
 2008.
 
 4.  Fleet Rationalisation
 
 During the year under review the Company inducted eight new aircraft to
 its fleet taking the total fleet strength to nineteen aircraft. Out of
 eight new aircraft inducted, two were Boeing 737-900, which is the
 largest capacity domestic aircraft having a seating capacity of 212
 passengers.
 
 During December 2007, the Company also completed the funding for
 additional ten aircraft with Babcock and Brown Aircraft Management LLC.
 The aircraft are scheduled to be delivered during the year 2010 through
 2012. Further in view of mounting oil prices and decline in domestic
 air traffic the Company has pre maturely terminated four operating
 leases and also cancelled delivery of four new aircraft post closure of
 the current financial year.
 
 5.  Share Capital
 
 Shareholders approved increase in authorised share capital of your
 company by Rs. 650 million in the extra- ordinary general meeting held
 on September 12,2008.
 
 In terms of the authority given by the shareholders at the
 extra-ordinary general meeting held on June 10,2005 and pursuant to the
 Offering Circular dated December 7, 2005, the Company amended covenants
 of US million Zero Coupon Secured Convertible Bonds Due 2010 (the
 FCCB) as a part of overall financing arrangement wherein the entire
 cash collateral of US million and interest accrued has been released
 back to the Company after deduction of US{FILE_CONTENT}.9 million as contractual
 obligation and administration expenses.
 
 The amendments to FCCB covenants, inter-alia, include (a) release of
 entire cash collateral, (b) resetting FCCB Conversion Price to Rs.25
 per equity share and (c) providing customary rights as are generally
 available in such type of investment.
 
 Post closure of the financial year in March 2008, the paid-up share
 capital of the Company was increased by 368,960 equity a share
 consequent upon conversion of FCCBs aggregating to US$ 200,000 at FCCB
 Conversion Price of Rs.25 per equity share.
 
 6.  Dividend
 
 In view of losses during the year under review, your Directors do not
 recommend any dividend.
 
 7.  Directors
 
 Mr. Ajay Singh and Mr. Mukkaram Jan retire by rotation in the
 forthcoming Annual General Meeting and, being eligible, offer
 themselves for re-appointment.
 
 Mr. Siddhanta Sharma, Executive Chairman has ceased to be a director on
 the Board of the Company with effect from July 31,2008.
 
 Mr. Osman Qureshi and Mr. Khaled Mohammed Ali Alkamda have also ceased
 to be directors on the Board of the Company with effect from August
 29,2008.
 
 With regard to comment of the Auditors in para 6 (d) of their report
 dated June 30, 2008 for the year ended March 31, 2008, we submit that
 nomination of Mr. Osman Qureshi and Mr. Khaled Mohammed Ali Alkamda was
 withdrawn by Istithmar PJSC prior to March 31,2008 subject to
 appointment of Mr. Tom Ronell as its new nominee after obtaining
 necessary security clearance. As these directors were not to be
 re-appointed, declaration under Section 274(1 )(g) of the Companies
 Act, 1956 were not received from them.
 
 Post security clearance, Mr. Tom Ronell was appointed as the additional
 director on the Board of the Company on August 29, 2008 and shall hold
 office upto the date of ensuing annual general meeting. The Company has
 received notice under section 257 of the Companies Act, 1956 proposing
 his candidature as such.
 
 The Board has also invited Mr. Wilbur L. Ross, Jr. and Mr. Ranjeet
 Nabha nominees of W. L. Ross & Co LLC, to join your Companys board on
 receipt of security clearance from Ministry of Civil Aviation (MCA),
 Government of India in terms of provisions of Civil Aviation Rules. The
 appropriate applications have been filed with the MCA in this regard
 and the clearance is awaited.
 
 8.  Personnel
 
 Information as required under the provisions of Section 217 (2A) of the
 Companies Act, 1956, read with Companies (Particulars of Employees)
 Rules, 1975 as amended, forms part of this report. However, as per
 provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the
 Report and Accounts are being sent to all the shareholders excluding
 the statement of particulars under Section 217 (2A). The Statement is
 open for inspection at the registered office of the Company during
 working hours and a copy of the same may be obtained by writing to the
 Company at its registered office.
 
 9.  Directors Responsibility Statement
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
 based on the representations received from the operating management,
 confirm:
 
 i. that in the preparation of the accounts for the year ended March
 31,2008, except otherwise disclosed, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures;
 
 ii. that except otherwise disclosed in the Notes to the Accounts, they
 have selected such accounting policies and applied them consistently
 and made judgments 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 review period and of the profit or loss of the Company for
 that period;
 
 iii. that, except otherwise disclosed in the Notes to the Accounts,
 they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv.  that they have prepared the accounts for the year ended March
 31,2008 on a going concern basis.
 
 10.  Employee Stock Option Scheme
 
 The applicable disclosure as required under Clause 12 of SEBI
 (Employees Stock Option Scheme a Employee Stock Purchase Scheme)
 Guidelines 1999 as on March 31,2008 is as under:
 
 S. 
 No.  Description                Remark
 
 a)   Options granted            5,200,000
 
 b)   Pricing formula            Intrinsic value method for 
                                 valuation has been used for determining
                                 the fair value option granted under the
                                 Scheme. The value per option
                                 as per this method is Rs. 27.85.
 
 c)   Options vested             Nil
 
 d)   Options exercised          Nil
 
 e)   Total number of shares     Nil
      arising as a result of
      exercise of options
 
 f)  Options lapsed             389,000
 
 g)   Variations of terms of     Nil
      options
 
 h)   Money realised by          Nil
      exercise of options
 
 i)   Total number of options    4,811,000
      in force
 
 j)   Employee wise details of
      options granted to:
 
 i.   senior management
      personel
 
 SN  Name                      Designation       Options
                                                 Granted
 
 1   Samyukth Sridharan                CCO       100,000
 
 2   O P Ahuja                         AVP-       50,000
                              Coordination
 
 3   Virender Pal                      CTO        50,000
 
 4   Surajit Banerjee                VP-HR        50,000
 
 5   Partha Sarthi Basu                CFO        50,000
 
 6   Kamal Hingorani          VP-Marketing        50,000
     & Planning
 
 7   J S Dhillon                EVP-Flight        50,000
     Ops
 
 ii. any other employee        None
     who receives a grant
     in any one year of
     option amounting to
     5% more of option
     granted during that
     year
 
 iii. identified employees     None
      who were granted
      option, during any one
      year, equal to or
      exceeding 1 % of the
      issued capital
     (excluding
      outstanding warrants
      and conversions) of
      the Company at the
      time of grant
 
 k) Diluted earnings per       (Rs.5.55)
    share pursuant to issue
    of shares on exercise of
    options calculated in
    accordance with
    Accounting Standard
   (AS) 20 earning Per
    Share
 
 I) Method of calculation of
    employee compensation
    cost
 
 The employee compensation cost would be calculated based on instrinsic
 value of the options offered. The value of an option using this method
 is Rs. 27.85. However, the fair value per option (as per Black Scholes
 Model) is Rs.32.50.  the difference in the value of an option using
 both methods is Rs.4.65.
 
 m) Exercise price an fair value of option
 
 The exercise price of all the options granted under the above mentioned
 Scheme is Rs. 30.  Also, the fair value of the options, as calculated
 using the Black Scholes option Valuation Model is Rs.32.50 only.
 
 n) Option valuation methodology
 
 Black Scholes Option Valuation Model has been used to estimated the
 fair value of the options granted under the above mentioned Scheme
 
 i. Risk-free interest rate    9 year zero coupon treasury rate
 
 ii. Expected life             2.5 years from the date of vesting 
                               based on various schemes launched by
                               various organizations in the country.
 
 iii. Expected volatility
 
 Volatility is calculated on the movement of companys share price on
 BSE in the past one year which comes out be 55%. The same volatility is
 applicable to the Black Scholes Model.
 
 iv. Expected dividend          Nil
 
 v. Price of underlying         Rs.57.85
 share at the time of
 option grant
 
 11.  Conservation of Energy & Technology Absorption
 
 Particulars as required under section 217(1) (e) of the Companies Act,
 1956, relating to conservation of energy and technology absorption are
 not applicable for the year under review, and hence not furnished.
 
 12.  Foreign Exchange Earnings & Outgo
 
 The Company had foreign exchange earnings of Rs.1,746.86 million while
 the outgoings were Rs.4,257.51 million during the year under review.
 
 13.  Deposits/Borrowings
 
 The Company has not accepted any deposit under provisions of Section
 58A of the Companies Act, 1956 during the year under review.
 
 14.  Auditors
 
 M/s Walker Chandiok & Co., auditors of the Company will retire at the
 forth coming Annual General Meeting.  The Company has received letter
 from them to the effect that their appointment, if made, would be
 within the prescribed limits under Section 224 (1-B) of the Companies
 Act, 1956. On recommendation of the Audit Committee, the Board in its
 meeting held on June 30, 2008 proposed their name for re-appointment.
 You are requested to consider their appointment.
 
 15.  Corporate Governance
 
 Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock
 Exchange Ltd., Management Discussion and Analysis, Corporate Governance
 Report and Auditors Certificate regarding Compliance with the Code of
 Corporate Governance are made part of the Annual Report.
 
 16.  Information as required under the listing agreement
 
 Shares of the company are presently listed at Bombay Stock Exchange
 Limited, P. J. Towers, Dalai Street, Mumbai and the company has paid
 listing fee upto March 31,2009 in respect of above stock exchange.
 
 17.  Acknowledgement
 
 The Directors thank all government, regulatory bodies and shareholders
 for their consistent support in the smooth airline operations of the
 Company. We also place on record our appreciation to the contribution
 made by companys staff at all levels, without whom the Company would
 not have attained such great heights in such a short period of its
 operations.
 
                                     For and on behalf of the Board
 
                                     Sd/-                      Sd/-
 
                               Ajay Singh             Kishore Gupta
                                 Director                  Director
 
 Place: Gurgaon, Haryana
 Date : October 14, 2008