Interglobe Aviation Ltd Auditors Report.

Independent Auditors

To the Members of InterGlobe Aviation Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of InterGlobe Aviation Limited ("the Company"), which comprise the Standalone Balance Sheet as at 31 March 2019, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (together referred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

S No. The key audit matter How the matter was addressed in our audit
1. Recognition of passenger revenue Audit procedures
The Company recognises passenger revenue on flown basis i.e. when the service is rendered. Moreover, fees charged for cancellation of flight tickets is recognised as revenue on rendering of the said service. Further, the Company recognises revenue from unexercised rights of customers which are non-refundable in nature, based on past trends in proportion to the pattern of rights exercised by the customer. In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:
• evaluated the design and implementation of internal controls and tested the operating effectiveness of the internal control over passenger revenue;
• performed substantive audit procedures over passenger revenue;
The determination of passenger revenue to be recognised for each flight requires complex IT systems and involves high volume of transactions. • with the assistance of our internal information technology specialists, tested the key IT system controls that impact the recognition of revenue from passenger;
We have identified revenue recognition as a key audit matter because passenger revenue is one of the key performance indicators of the Company, significance of passenger revenue to the financial statements, complexity of the underlying IT systems and the judgment required by management in determining the unexercised rights of passengers. • analysed the terms related to passenger tickets and, based on our understanding of these contracts, evaluated the judgments used in determining the timing of the recognition of revenue for unexercised rights of passengers;
• performed cut-off tests in order to verify whether the timing of passenger revenue recognition was accurate; and
• inspected underlying documentation for manual journal entries relating to passenger revenue which were material or met specified risked-based criteria.
Refer Note 2.b (xvi) to the standalone financial statements
2. Leases and incentives Audit procedures
The Company operates certain new and used aircraft under both finance and operating lease arrangements. The Company has entered into sale and leaseback transactions for new aircraft. In determining the appropriate lease classification, Ind AS 17 - "Leases" is applied by the Company and the substance of the transaction is considered rather than just the legal form. The Company receives certain non-refundable incentives in connection with the acquisition of new aircraft, which is recorded in the book of accounts basis the classification of leases and other factors as mentioned in Ind AS 17 "Leases" such as fair value of aircraft etc. In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:
• evaluated the design and implementation of internal controls and tested the operating effectiveness of the internal control over classification of leases and related incentives;
• reviewed the key terms of the leasing and aircraft acquisition contracts and evaluated managements judgments used in determining the classification of leases as per Ind AS 17 "Leases";
• on sample basis verified lease modification terms to assess if it will have a significant impact on the classification of leases.
The determination of the lease classification and recording of related incentives is considered as a complex accounting matter and involves significant management’s judgments. Accordingly, the classification of leases and accounting of incentives is regarded as a key audit matter. • obtained independent confirmations from airline and engine manufacturers with respect to incentives, which are received along with new aircraft; and
Refer Notes 2.b (x) and 2.b (xi) to the standalone financial statements • performed test of details to verify classification of leases and related incentives received during the current year ended 31 March 2019 and traced the same to bank statements, credit notes and other underlying contracts / documents.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the standalone financial statements and our auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(A) 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

(B) 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 as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 30 to the standalone 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 disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 08 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the Company has not paid/ provided for any remuneration to its directors during the current year in accordance with the provisions of Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W / W-100022
Jiten Chopra
Place: Gurugram Partner
Date: 27 May 2019 ICAI Membership No.: 092894

Annexure A referred to in our Independent Auditors Report to the members of InterGlobe Aviation Limited on the standalone financial statements for the year ended 31 March 2019

(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 have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. 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, goods and services tax, duty of customs, 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, sales tax, service tax and value added taxes.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, goods and services tax, duty of customs, cess and other statutory dues were in arrears as at 31 March 2019 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, goods and services 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 2019, other than those mentioned as follows:

Statement of Disputed Tax Dues

Name of the Statute Nature of the dues Amount (Rs. in million) Amount paid under protest (Rs. in million) Period to which the amount relates Forum where dispute is pending
Revision to the taxable income on account of :

High Court of Delhi and Commissioner of Income Tax (Appeals) [CIT(A)]

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
b) Disallowance of certain expenses / adjustments.
Revision to the taxable income on account of :

High Court of Delhi and Income Tax Appellate Tribunal (ITAT)

Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from manufacturers with the acquisition of aircraft and engine. - - AY 2008-09 2 AY 2009-10 3
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 1.30 AY 2010-11 4 ITAT and CIT(A)
b) Disallowance of certain expenses / adjustments.
Writ petition before High Court challenging the reopening of assessment 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. 3,921.14 - AY 2011-12 5 High Court of Delhi
b) Disallowance of certain expenses / adjustments.
Revision to taxable income on account of :
Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from the manufacturers with the acquisition of aircraft and engine. 5,822.44 100.00 AY 2012-13 6 AY 2013-14 7 AY 2014-15 7 ITAT
b) Disallowance of certain expenses / adjustments.
Revision to taxable income on account of :
Income-tax Act, 1961 a) Tax treatment of certain incentives received by the Company from the manufacturers with the acquisition of aircraft and engine. 2,158.60 250.00 AY 2015-16 8 ITAT
b) Disallowance of certain expenses / adjustments.
Income-tax Act, 1961 Tax deducted at source 1.02 - AY 2007-08 Assessing Officer (AO)
Income-tax Act, 1961 Tax deducted at source 142.48 7.84 AY 2010-11 ITAT and CIT(A)
Income-tax Act, 1961 Tax deducted at source 20.99 5.07 AY 2011-12 ITAT
Income-tax Act, 1961 Tax deducted at source 22.78 11.41 AY 2012-13 CIT(A)
Income-tax Act, 1961 Tax deducted at source 0.73 0.73 AY 2014-15 CIT(A)
Income-tax Act, 1961 Tax deducted at source 12.86 1.59 AY 2008-09, AY 2009-10, AY 2010-11, AY 2013-14, AY 2014-15, AY 2016-17 & AY 2017-18 ITAT, AO
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 ## Customs, Excise and 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 201011 ## CESTAT, Chandigarh
Finance Act, 1994 (Service tax) Penalty for late payment of Service tax on various expenses incurred on External Commercial Borrowing 358.56 89.64 FY 2012-13 to FY 2013-14 CESTAT, Chandigarh
Finance Act, 1994 (Service tax) Service tax on food and beverages sold in aircraft to the on-board passengers 344.93 14.29 FY 2013-14 to FY 2017-18 (till 30 June 2017) ## CESTAT, Chandigarh*
The Customs Act, 1962 Customs duty and penalty on import of aircraft engines 531.20 - FY 2011-12 and FY 201213 ## CESTAT, Bangalore
The Customs Act, 1962 Custom duty and penalty demanded on notional freight charges added to the value of Aviation turbine fuel 7.18 1.07 October 2011 to March 2015 ## Commissioner of Customs (Appeals), Mumbai ***
The Customs Act, 1962 Custom duty and penalty on notional freight charges added to the value of Aviation turbine fuel 1.42 - September 2011 to March 2015 ## Supreme Court **
The Customs Act, 1962 Refund of customs duty attributable to the notional freight charges added in the value of Aviation turbine fuel@ 0.12 0.12 April 2015 to May 2017 Commissioner of Customs (Appeals), New Delhi
Kerala Value Added Tax Act, 2003 Value Added Tax on sale of goods in International Flights 0.66 0.92 FY 2012-13 to FY 2013-14 Kerala Value Added Tax Appellate Tribunal, Ernakulam
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 (Credit of Rs. 0.47 million adjusted against demand and Rs. 0.48 million was deposited as part payment by the Company) 7.85 0.48 FY 2012-13 Joint Commissioner
Maharashtra Value Added Tax, 2002 Denial of Input Tax Credit 0.17 - FY 2012-13 Joint Commissioner
Maharashtra Value Added Tax, 2002 Tax on sale of goods in international flights in the state of Maharashtra and and Denial of Input Tax Credit (Credit of Rs. 0.60 million adjusted against demand and Rs. 0.26 million was deposited as part payment by the Company) 5.28 0.26 FY 2013-14 Joint Commissioner
Mumbai Municipal Corporations Act, 1888 Octroi on import/inward movement of aircraft engines and aircraft engine stand into the city of Mumbai for installation in aircraft @ 74.39 74.39 FY 2016-17 High court of Mumbai
Central Sales Tax Act, 1956 & APCST Rules. Central Sales Tax on sale of goods in international flights in the state of Andhra Pradesh. 0.35 0.04 FY 2012-13## Deputy Commissioner (Appeals)
Rajasthan- Value Added Tax, 2003 Demand raised by Assistant Commissioner of Commercial Taxes on account of mismatch in turnover and denial if Input Tax Credit. 4.83 - FY 2015-16 & FY 2016-17 Assistant Commissioner of Commercial Taxes, Jaipur
Customs Tariff Act, 1975 and The Integrated Goods And Services Tax, 2017 Integrated Goods and Services Tax on re-import of aircraft, aircraft engines and certain aircraft parts after repair@ 4,096.00 4,096.00 FY 2017-18 & FY 2018-19 CCSTAT, Delhi* and Commissioner of Customs (Appeals), New Delhi/ Bangalore/ Hyderabad

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

* Includes the cases wherein appeal filing is in process.

** Revenue authorities have filed the appeal before Supreme Court against the order passed by CESTAT, Delhi in favor of the Company.

@ As on 31 March 2019, net outstanding due is Nil.

*** The Commissioner of Customs (Appeals), Mumbai vide its Order No. MUM-CUSTM-PAX-APP-11/19-20 dated 25 April 2019 has set aside the demand.

1 ITAT has passed favorable 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 filed an appeal to High Court of Delhi dated 23 December 2016 for the proposed addition to 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. The High Court of Delhi vide order dated 7 July 2017 has admitted the departments appeal on taxability of certain incentives.

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 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. 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. The High Court of Delhi vide order dated 31 October 2017 has admitted the departments appeal on taxability of certain incentives.

During the current year, Income tax department has filed Special leave Petition before Honourable Supreme Court on the disallowance of certain expense which was not admitted by the High Court of Delhi. The Honourable Supreme Court dismissed the petition filed by Income tax department.

The Company has also filed a miscellaneous application before ITAT to adjudicate on disallowance of certain expenses amounting to Rs. 118.50 million.

3 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. 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. The High Court of Delhi vide order dated 31 October 2017 has admitted the departments appeal on taxability of certain incentives.

During the current year, Income tax department has filed Special leave Petition before Honourable Supreme Court on the disallowance of certain expense which was not admitted by the High Court of Delhi. The Honourable Supreme Court dismissed the petition filed by Income Tax Department.

The Company has also filed a Miscellaneous application before ITAT to adjudicate on disallowances of certain expenses amounting to Rs. 619.46 million.

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 AO. During the year ended 31 March 2016, CIT (A) has passed an order dated 20 January 2016 proposing additions to Rs. 726.60 million. The Company has filed an appeal to ITAT for proposed additions to taxable income.

Further, addition of Rs. 50.97 million was proposed by AO 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 AO has issued notice u/s 148 of the Income tax Act, 1961 for reopening of assessment, pertaining to AY 2011-12. The Company has filed a writ petition before High Court of Delhi challenging the re-opening of reassessment by AO. The High Court has directed to pass the assessment order stating such order shall not be given effect till further orders. The AO passed an assessment order proposing the additional taxable income amounting to Rs. 5,823.48 million vide order dated 29 December 2017 and accordingly, demand amounting to Rs. 3,921.14 million has arisen. The High Court of Delhi has granted stay vide order dated 18 April 2018 till disposal of writ petition by High Court of Delhi.

6 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 AO. CIT(A) has passed an order dated 22 March 2017 which further proposed additional taxable income amounting of Rs. 4,904.78 million. The assessing officer passed rectification order dated 03 October 2017 and accordingly, demand of Rs. 1,154.63 million has arisen. The Company has filed an appeal before ITAT for proposed additions to taxable income. During the current year, ITAT has referred the matter to Special Bench vide order dated 04 April 2018 for adjudication. The Company has also filed Miscellaneous application on certain grounds before ITAT on 27 July 2018.

Further, the Company has filed appeal for stay of demand before ITAT for the above mentioned demand.

7 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 orders dated 6 December 2016. The Company has filed appeals to CIT (A) and CIT (A) has passed orders dated 10 October 2017 giving partial relief to the tune of Rs. 3,500.35 million and Rs. 2,228.75 million respectively. The assessing officer passed appeal effect orders dated 12 February 2018 and accordingly, demand amounting to Rs. 3,381.40 million and Rs. 1,286.41 million respectively has arisen. The company has filed appeals before ITAT for proposed additions to taxable income.

Further, the Company has obtained stay of demand from ITAT for the above mentioned demands. The Company has paid Rs. 100 million under protest for AY 2013-14 pursuant to directions by ITAT.

8 The additional taxable income amounting to Rs. 11,512.08 million for AY 2015-16 was proposed vide assessment order dated 28 December 2017. The Company has filed an appeal before CIT(A) for proposed additions to taxable income and CIT(A) has passed a partly favourable order dated 20 September 2018 giving relief to the tune of Rs. 0.42 million and allowed tax credit of Rs. 641.70 million for statistical purposes. The AO has passed an appeal effect order dated 27 November 2018 and raised demand amounting to Rs. 2,063.07 million. Further, on 14 February 2019, the AO passed rectification order to the appeal effect order according to which demand was revised to Rs. 2,158.60 million. The company has filed an appeal before ITAT for proposed additions to taxable income.

The Company has obtained stay of demand from ITAT for the period of six months (180 days) from the date of order or passing of order, whichever is earlier. The Company has paid Rs. 250 million pursuant to the directions by ITAT and Principal Commissioner of Income Tax (PCIT) under protest.

(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 2019.

(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, the Company has utilised the money raised by way of Institutional Placement Programme ("IPP") in the previous year, for the purpose for which they were raised. The unutilised funds have been temporarily invested/ deposited in cash and cash equivalents including bank deposits and/or mutual funds. 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 Company has not paid/ provided for any managerial remuneration in accordance with the provisions of Section 197 read with Schedule V to the Companies Act, 2013. Accordingly, the provision of paragraph 3(xi) of the Order is not applicable to the Company.

(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 financial statements as required by the applicable accounting standards.

(xiv) 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 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.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W / W-100022
Jiten Chopra
Place: Gurugram Partner
Date: 27 May 2019 ICAI Membership No.: 092894

Annexure B to the Independent Auditors Report on the standalone financial statements of InterGlobe Aviation Limited for the year ended 31 March 2019

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

Opinion

We have audited the internal financial controls with reference to financial statements of InterGlobe Aviation Limited ("the Company") as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements 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 (the "Guidance Note").

Managements Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. 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 company’s 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 under the Companies Act, 2013 (hereinafter referred to as "the Act").

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. 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 with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, 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 auditor’s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company’s internal financial controls with reference to financial statements 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 company’s internal financial controls with reference to financial statements include 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 with reference to financial statements

Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W / W-100022
Jiten Chopra
Place: Gurugram Partner
Date: 27 May 2019 ICAI Membership No.: 092894