Interglobe Aviation Ltd Auditors Report.

To The Members of InterGlobe Aviation Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of InterGlobe Aviation Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2017, and the Statement of Profit and Loss (including Other Comprehensive

Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

Managements Responsibility for the Standalone Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant Rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these standalone Ind

AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016

(‘the Order), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

a) We have sought and 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 it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss(including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued thereunder;

e) On the basis of written representations received from the directors as on 31 March 2017 taken on record by the

Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company the operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and

g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 31 to the standalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016.

Based on audit procedures performed and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note 40 to the standalone Ind AS financial statements.

Annexure A referred to in our Independent Auditors Report to the members of InterGlobe Aviation Limited on the standalone Ind AS financial statements for the year ended 31 March 2017

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years except for aircraft and spare engines, which are verified on an annual basis. In our opinion, this periodicity of physical verification by management is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were physically verified during the year. As informed to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the Company does not have any immovable properties.

Accordingly, paragraph 3(i)(c) of the Order is not applicable.

(ii) Inventories, except for goods-in-transit and stocks lying with third parties have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained. According to the information and explanations given to us, the procedures for physical verification of inventories followed by the management during the year are reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly adjusted in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the

Companies Act, 2013. Accordingly, the provisions of paragraph 3 (iii) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us, the Company has not given any loan, or provided any guarantee or security as specified under section 185 and 186 of the Companies Act, 2013. Moreover, in respect of the investments made by the Company, requirements of section 186 of the Companies Act, 2013 have been complied with.

(v) As per the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable.

(vi) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013, for any of the services rendered or goods sold by the Company. Accordingly, paragraph 3(vi) of the Order is not applicable.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, value added taxes, cess and other statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, value added taxes, cess and other statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, service tax, sales tax, value added tax and duty of customs which have not been deposited by the Company with the appropriate authorities on account of any dispute as at 31 March 2017, other than those mentioned as follows:

Statement of Disputed Tax Dues

Name of the Statute Nature of the dues Amount (Rs. in million) Period to which the amount relates Forum where dispute is pending
Revision to the taxable income on account of:
Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from manufacturers with the acquisition of aircraft and engine. - Assessment year (AY) 2007-08 1 High Court of Delhi, Commissioner of
AY 2008-09 2 Income Tax (Appeals)
AY 2009-10 3 [CIT(A)]
b) Disallowance of certain expenses / adjustments.
Revision to the taxable income on account of:
Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from manufacturers with the acquisition of aircraft and engine. 8.66 AY 2010-11 4 Income Tax Appellate Tribunal (ITAT) and CIT(A)
b) Disallowance of certain expenses / adjustments. (Rs.1.30 million deposited under dispute) Revision to the taxable income on account of:
Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from manufacturers with the acquisition of aircraft and engine. 2,465.83 AY 2012-13 5 ITAT
b) Disallowance of certain expenses / adjustments.
Revision to the taxable income on account of:
Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from manufacturers with the acquisition of aircraft and engine. 7,337.36 AY 2013-14 6 CIT(A)
b) Disallowance of certain expenses / adjustments. AY 2014-15 6
Income-tax Act, 1961 Tax deducted at source 1.02 AY 2007-08 Assessing officer (AO)
Income-tax Act, 1961 Tax deducted at source (Rs.7.84 million deposited under dispute) 142.48 AY 2010-11 ITAT, CIT(A)
Income-tax Act, 1961 Tax deducted at source (Rs.5.07 million deposited under dispute) 20.99 AY 2011-12 ITAT
Income-tax Act, 1961 Tax deducted at source (Rs.4.20 million deposited under dispute for AY 2013-14) 0.14 AY 2013-14 CIT(A), AO
Income-tax Act, 1961 Tax deducted at source (Rs.11.41 million deposited under dispute) 22.78 AY 2012-13 CIT(A)
Income-tax Act, 1961 Tax deducted at source 12.76 AY 2013-14, AY 2014-15 ITAT, AO
AY 2015-16 Customs, Excise and
Finance Act, 1994 (Service tax) Service tax and penalty on excess baggage charges, services received from overseas vendors and denial of CENVAT Credit 111.21 Financial year (FY) 2006- 07 to FY 2010-11 ## Service Tax Appellate Tribunal (CESTAT), Chandigarh
Finance Act, 1994 (Service tax) Service tax and penalty on services received from overseas vendors 2.96 FY 2005-06 to FY 2009-10 and FY 2010-11 ## CESTAT, Chandigarh
Finance Act, 1994 (Service tax) Penalty for late payment of Service tax on various expenses incurred on ECB (Rs. 89.64 million deposited under protest) 358.56 FY 2012-13 to FY 2013-14 CESTAT, Chandigarh
The Customs Act, 1962 Customs duty and penalty on import of aircraft engines 531.20 FY 2011-12 and FY 2012- 13 ## CESTAT, Bangalore
The Customs Act, 1962 Custom duty and penalty demanded on notional freight charges added to the value of Aviation turbine fuel left in the tank of an aircraft (Rs. 2.69 million has been deposited under protest) 6.78 August 2012 to May 2015 ## CESTAT, Chennai
The Customs Act, 1962 Custom duty and penalty demanded on notional freight charges added to the value of Aviation turbine fuel left in the tank of an aircraft 1.42 September 2011 to March 2015 ## CESTAT Delhi
Kerala Value Added Tax Act, 2003 Value Added Tax on sale of goods in International flights 0.66 FY 2012-13 to FY 2013-14 Kerala Value Added Tax Appellate
Central Sales Tax Act, 1956 & Central Sales Tax (Bombay) Rules, 1957 Central Sales Tax on sale of goods in international flights in the state of Maharashtra 7.85 FY 2012-13 Tribunal, Ernakulam Joint Commissioner **
Maharashtra Value Added Tax, 2002 Input Tax Credit denied 0.17 FY 2012-13 Joint Commissioner **

1 During the current year, ITAT has passed favourable order dated 18 July 2016 and the loss for the year has been assessed at Rs. 2,032.85 million vide appeal effect order dated 16 November 2016. Income tax department has filed an appeal to High Court of Delhi dated 23 December 2016 for the proposed addition to the taxable income amounting to Rs. 1,874.63 million for AY 2007-08, which will result in reduction of business loss and unabsorbed depreciation for AY 2007-08.

In relation to certain disallowance of expenses amounting to Rs. 22.39 million, appeal is pending before CIT(A) against order u/s 144/143(3)/263 of the Income Tax Act, 1961.

2 During the current year, ITAT has passed favorable order dated 18 November 2016 and the loss for the year has been assessed at

Rs. 3,171.43 million vide appeal effect order dated 6 March 2017. Subsequent to current year ended 31 March 2017, Income tax department has filed an appeal to High Court of Delhi dated 1 May 2017 for the proposed addition to taxable income amounting to Rs. 4,714.97 million for AY 2008-09.

3 During the current year, ITAT has passed favorable order dated 18 November 2016 and the loss for the year has been assessed at Rs. 2,121.80 million vide appeal effect order dated 21 February 2017. Subsequent to current year ended 31 March 2017, Income tax department has filed an appeal to High Court of Delhi dated 1 May 2017 for the proposed addition to taxable income amounting to Rs. 4,164.13 million for AY 2009-10.

Further, disallowance of Rs. 64.38 million was proposed vide re-assessment order dated 24 March 2015. The Company has filed an appeal before CIT(A). Out of this, relief amounting to Rs. 33.83 million has been given vide appeal effect order u/s 250/143(3) of the Income Tax Act 1961 dated 22 February 2016.

4 The additional taxable income amounting to Rs.3,569.11 million for AY 2010-11 was proposed vide order dated 15 March 2013 by assessing officer. During the previous year ended 31 March 2016, CIT(A) has passed an order dated 20 January 2016 proposing additions to the tune of Rs. 726.60 million. The Company has filed anappeal to ITAT for proposed additions to taxable income.

Further, addition of Rs. 50.97 million was proposed by assessing officer under section 147 of the Income tax Act, 1961 vide re-assessment order dated 27 January 2016 and accordingly, above mentioned demand has arisen. The Company has filed an appeal to CIT(A) against order under section 147 of the Income tax Act, 1961.

5 The additional taxable income amounting to Rs. 6,070.11 million for AY 2012-13 was proposed vide assessment order dated 25 March 2015 by assessing officer. During the current year, CIT(A) has passed an order dated 22 March 2017 which further proposed additional taxable income amounting of Rs. 4,904.78 million and accordingly, above mentioned demand has arisen. The Company is in the process of filing an appeal before ITAT.

6 The additional taxable income amounting to Rs.14,218.26 million and Rs.12,538.26 million for AY 2013-14 and AY 2014-15 respectively was proposed by assessing officer vide order dated 6 December 2016 and accordingly, above mentioned demand has arisen. The Company has filed an appeal to CIT(A) against the same. The company has obtained a stay of demand for AY 2013-14 and AY 2014-15 till 31 December 2017 or disposal of appeal whichever is earlier.

** The Company is in process of filling appeal to Joint Commissioner.

## The demand does not include interest component as it is not specified in order.

(viii) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not defaulted in repayment of loans or borrowings to banks or financial institutions. Further, no loans or borrowings were taken from government and there were no debentures issued during the year or outstanding as at 31 March 2017.

(ix) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, during the current and previous year, the Company has utilized all the money raised by way of initial public offer, for the purpose for which they were raised. There was a delay in utilization of Rs. 4,925.31 million due to obtaining requisite approvals. The same has been utilized during the current year. Moreover, the term loans taken by the Company have been applied for the purposes for which they were raised.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to information and explanations given to us and on the basis of our examination of the records of the Company, the managerial remuneration has been provided and paid by the Company in accordance with the provisions of section

197 read with Schedule V to the Companies Act, 2013.

(xii) According to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the standalone Ind AS financial statements as required by the accounting standards.

(xiv) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the current year. Accordingly, paragraph 3(xiv) of the Order is not applicable.

(xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure B to the Independent Auditors Report of even date on the standalone Ind AS financial statements of InterGlobe Aviation Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial reporting of InterGlobe Aviation Limited ("the Company") as of 31 March 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financialcontrols based on the internal control over financial reporting criteria considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance

Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence controls over financial about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining year ended on that an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone

Ind AS financial statements, whether due to fraud or error. bytheCompany We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial under the Companies control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For B S R & Co. LLP
Chartered Accountants
Firm registration number: 101248W / W-100022
Jiten Chopra
Place: Gurgaon Partner
Date: 09 May 2017 Membership number: 092894