spicejet ltd Directors report

Dear Members,

It is our immense pleasure to present the 39^th Annual Report along with the audited financial statements of your Company for the financial year ended March 31, 2023. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. Financial Performance

The financial performance of the Company for the financial year 2022-23, on a standalone and consolidated basis, is summarised below:

(Amount in Rupees million)

Particulars	Standalone		Consolidated
	March 31, 2023	March 31, 2022	March 31, 2023	March 31, 2022
TOTAL INCOME	98,597.50	75,445.60	98,418.89	75,717.15
Expenses
Operating Expenses	74,057.59	57,943.65	73,537.91	57,671.36
Cost of inventory consumed	902.92	608.92	924.55	1,008.30
Employee Benefit Expenses	8,438.71	7,087.49	8,800.07	7,349.93
Selling Expenses	2,278.11	1,220.49	2,279.84	1,219.46
Other Expenses	13,251.53	7,982.82	13,252.79	7961.51
Earnings before interest, tax, depreciation and amortization	(331.36)	602.23	(376.27)	506.59
Depreciation and amortisation expense	(10,193.64)	(12,897.32)	(10,227.41)	(12,933.36)
Finance Income	551.36	640.81	551.81	588.27
Finance Cost	(5,056.51)	(4,825.79)	(5,077.60)	(4,829.61)
Profit/ (Loss) before taxation and extraordinary items	(15,030.15)	(16,480.07)	(15,129.47)	(16,668.11)
Tax Expenses	-	-	-	-
Exceptional items	-	(774.58)	-	(774.58)
Profit/ (Loss) after taxation	(15,030.15)	(17,254.65)	(15,129.47)	(17,442.69)
Profit/ (Loss) brought Forward	(48,902.29)	(31,724.67)	(49,420.55)	(32,051.82)
Depreciation expense adjusted against reserves	-	-	-	-
Profit/ (Loss) for the year	(15,030.15)	(17,254.65)	(15,129.47)	(17,442.69)
Other comprehensive income	(1.10)	35.63	(0.48)	32.56
Transferred from general reserve	-	-	-	-
Other	25,599.01	41.40	25.61	41.40
Amount transferred to other equity	(38,334.53)	(48,902.29)	(64,524.89)	(49,420.55)

Notes: The above figures are extracted from the audited standalone and consolidated financial statements of the Company. The amount shown in bracket () in the above table are negative in value.

The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2023, have been prepared in accordance with the Indian Accounting Standards as notified by the Ministry of Corporate Affairs and as amended from time to time. On a standalone basis, the Company achieved total income of Rs.98,597.50 million during the current financial year as against Rs.75,445.60 million in the previous financial year and reported standalone loss of Rs.15,030.15 million during the current financial year as against loss of Rs.17,254.65 million in the previous financial year.

2. State of Affairs and Material Development

(i) The Company is engaged in business of schedule airline services and has completed its eighteenth years of operation on May 23, 2023 making flying more affordable for the common man and connecting the unconnected parts of the country. The Company reported highest load factor of 88% for domestic scheduled flights with an increase in load factor by 7.24% compared to last year. The Company also operated 1,568 charter flights carrying over 2,48,568 passengers. (ii) Saleofcargobusinessundertaking:Intermsofearlier special resolution(s) passed by the members, the Company, on March 31, 2023, inter-alia, entered into a Business Transfer Agreement with its subsidiary company namely SpiceXpress and Logistics Private Limited ("SpiceXpress") for transfer of its cargo business undertaking as a going concern, on slump sale basis. Accordingly, SpiceXpress is now carrying cargo business effective April 1, 2023.

The transfer of cargo business undertaking to SpiceXpress will provide greater and differentiated focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth. The transfer, with separate and enhanced management focus, will provide greater opportunity and flexibility in pursuing long-term growth plans and strategies. It will also assist the management in evaluating the business performance as an independent entity while leveraging and unlocking significant value for the Company and its shareholders.

(iii) Dispute with erstwhile promoters: The Company had, in earlier financial years, received amounts aggregating to Rs.5,790.9 million from its erstwhile promoters as advance money towards proposed allotment of certain securities (189,091,378 share warrants and 3,750,000 non-convertible cumulative redeemable preference shares, issuable based on approvals to be obtained), to be adjusted at the time those securities were to be issued. Pursuant to the legal proceedings in this regard before the Honble High Court of Delhi (the "Court") between the erstwhile promoters, the present promoter and the Company, the Company was required to secure an amount of Rs.3,290.89 million through a bank guarantee in favour of the Registrar General of the Court ("Registrar") and to deposit the balance amount of Rs.2,500 million with the Registrar. The Company has complied with these requirements in September 2017.

The parties to the aforementioned litigation concurrently initiated arbitration proceedings before a three-member arbitral tribunal (the "Tribunal"), which pronounced its award on July 20, 2018 (the "Award"). In terms of the Award, the Company was required to (a) refund an amount of approximately Rs.3,082.19 million to the counterparty, (b) explore the possibility of allotting non-convertible cumulative redeemable preference shares in respect of approximately Rs.2,708.70 million, failing which, refund such amount to the counterparty, and (c) pay interest calculated to be Rs.924.66 million (being interest on the amount stated under (a) above, in terms of the Award). The amounts referred to under (a) and (b) above, aggregating Rs.5,790.89 million, continue to be carried as current liabilities without prejudice to the rights of the Company under law. Further, the Company was entitled to receive from the counterparty, under the said Award, an amount of Rs.290.00 million as counter-claim. Consequent to the Award, and without prejudice to the rights and remedies it may have in the matter, the Company accounted for Rs.634.66 million as an exceptional item (net) during the year ended March 31, 2019, being the net effect of amount referred to under (c) and counter-claim receivable of Rs.290.00 million, above. The Company, its present promoter and the counterparties had challenged before the Court various aspects of the Award, including the above-mentioned interest obligations and rights ("Section 34 Petitions"). The Court vide its judgements dated July 31, 2023 has dismissed Section 34 Petitions filed by the Company, its present promoter and the counterparties and thereafter the Company preferred an appeal before the division bench of the Court under Section 37 of the Arbitration and Conciliation Act, 1996 which is pending adjudication. In the execution petitions filed by the counterparties ("Execution Petitions"), the Court vide its order dated April 2, 2019 released Rs.2,500 million, out of the amount deposited by the Company, to the counterparty, subject to certain conditions as enumerated by the Court in its order. Further, pursuant to an order of the Court dated September 20, 2019, the Company has remitted an additional Rs.582.19 million out of the guarantee placed with the Court, to the counterparty, in October 2019. All such payments made have been included under other non-current assets. The Court vide its order dated September 2, 2020 in the said matter, directed the Company to deposit an amount of Rs.2,429.37 million of interest component under the Award (including the amount of Rs.924.66 million provided for as indicated earlier, without prejudice to the rights of the Company under law). The Company preferred a Special Leave Petition before the Honble Supreme Court of India ("Supreme Court") against the aforesaid Order and the Supreme Court pursuant to its order dated February 13, 2023 has modified the said order dated September 2, 2020 passed by the Court and directed to release the bank guarantee placed with the Court (aggregating to Rs.2,707.81 million) to the counterparty towards quantum of principal sum due under the Award and pay an amount of Rs.750.00 million to the counterparty within period of three months towards liability on account of interest. The said amount of bank guarantee has been released to the counterparties during the quarter ended March 31, 2023 and accordingly entire principal of Rs. 5,790.9 million has been paid. However, the Company was unable to pay Rs. 750.00 million to the counterparty within the prescribed timeline and filed an application with Supreme Court for extension of time which was dismissed. Thereafter, the Company has further paid Rs.1,000.00 million to the counterparties, in terms of the Court order dated August 24, 2023 in the Execution Petitions, to show its bona fide without prejudice to its rights in the pending litigation. (iv) Preferential issue: The Board of Directors of the Company, at its meeting held on December 12, 2023, has approved the issue of up to 31,83,00,000 (Thirty One Crore Eighty Three Lakh only) equity shares of the face value of Rs.10 (Rupees Ten) each and up to 13,00,00,000 (Thirteen Crore only) warrants, having option to apply for and be allotted equivalent number of equity shares of the face value of Rs.10 (Rupees Ten) each , on a preferential basis, subject to approval of members. The aggregate issue size for equity shares and warrants, having option to apply for and be allotted equivalent number of equity shares is Rs.22,41,50,00,000 (Rupees Twenty Two Hundred Forty One Crore Fifty Lakh only). This fund raise will strengthen financial position of the Company.

(v) Qualified Institutions Placement: The Company has passed an enabling resolution to raise funds for an amount not exceeding Rs.25.00 billion by way of qualified institutions placement. The detailed terms and conditions for the offer (including number of equity shares to be issued, identification of investors, price, quantum and timing of the issue) of fund raising through qualified institution placement will be determined by the Board in consultation with the lead managers, advisors, placement agents and such other agency or agencies as may be required to be consulted by the Company, considering the prevailing market conditions and in accordance with the applicable provisions of the law and other relevant factors.

(vi) During the financial year 2022-23, there was no change in the nature of Companys business. (vii) There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

3. Board of Directors and Key Managerial Personnel

(i) As on March 31, 2023, the Board comprised five meambers with an Executive Chairman & Managing Director, besides three Independent Directors and one Non-Executive Non-Independent Director, of which one is a women director. During the financial year 2022-23, the composition of the Board was not as per the requirement of Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as the Company has not been able to appoint one independent woman director and the total number of directors are less than six. The Company is looking for a suitable candidature for woman independent director and after finalisation of such candidature, the Company will file necessary application for security clearance of such candidature as mandated by Civil Aviation Requirements of Ministry of Civil Aviation, Government of India. (ii) The Board of Directors in its meeting held on February 24, 2023 on the recommendation of the Nomination and Remuneration Committee has approved the re-appointment of Mr. Ajay Singh (DIN: 01360684) as Managing Director of the Company for a period of three (3) years with effect from May 21, 2023 which was subsequently approved by the members through postal ballot on August 31, 2023.

(iii) Mr. Ajay Aggarwal (DIN: 00001122) was appointed as an Independent Director of the Company for a period of five years effective from February 11, 2019, and he holds office as an Independent Director of the Company upto February 10, 2024. The Board of Directors of the Company in its meeting held on December 4, 2023 on the recommendation of the Nomination and Remuneration Committee and after taking into consideration the performance evaluation, background, experience and contribution made by Mr. Aggarwal during his tenure as an Independent Director of the Company, decided to re-appoint Mr. Aggarwal as an Independent Director of the Company, for a second term of five consecutive years, effective from February 11, 2024 to February 10, 2029, subject to requisite approval of members. (iv) Mr. Manoj Kumar (DIN: 00072634) was appointed as an Independent Director of the Company for a period of five years effective from May 28, 2019, and he holds office as an Independent Director of the Company upto May 27, 2024. The Board of Directors of the Company in its meeting held on December 4, 2023 on the recommendation of the Nomination and Remuneration Committee and after taking into consideration the performance evaluation, background, experience and contribution made by Mr. Kumar during his tenure as an Independent Director of the Company, decided to re-appoint Mr. Kumar as an Independent Director of the Company, for a second term of five consecutive years, effective from May 28, 2024 to May 27, 2029, subject to requisite approval of members.

(v) Mr. Ashish Kumar was appointed as Chief Financial Officer of the Company with effect from September 9, 2022 consequent upon resignation of Mr. Sanjeev Taneja from the post of Chief Financial Officer of the Company effective August 31, 2022. (vi) The remuneration paid to the Directors, Key Managerial Personnel and Senior Management is in accordance with the Nomination and Remuneration Policy of the Company formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

4. Disclosure on Companys Policy on Directors Appointment and Remuneration

The Nomination and Remuneration Policy of the Company was adopted by the Board based on the recommendation of the Nomination and Remuneration Committee. The Policy sets out criteria to pay equitable remuneration to the Directors, Key Managerial Personnel and other employees of the Company and to harmonise the aspirations of human resources with the goals of the Company. The Nomination and Remuneration Policy is available on the website of the Company at www.spicejet.com under the ‘Investors section.

While formulating the Policy, the Board has ensured that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully, relationship of remuneration to performance is clear and meets appropriate performance benchmarks, and the remuneration of the directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

The Policy assist the Company to fulfill its responsibility towards attracting, retaining and motivating the Directors, Key Managerial Personnel, senior management personnel and other employees through competitive and reasonable remuneration in line with the corporate and individual performance.

5. Board Evaluation

The Nomination and Remuneration Committee conducted the Board evaluation for the year. The evaluation of all the directors, committees, chairman of the Board, and the Board as a whole was conducted based on the criteria and framework adopted by the Board. Further, details on the same are given in the Corporate Governance Report which forms part of this report.

6. Declaration by Independent Directors

The independent directors on the Board of the Company have submitted a declaration to the Board under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All independent directors of the Company have afirmed compliance with the Schedule IV of the Companies Act, 2013 and the Companys Code of Conduct for Board Members and Senior Management.

All the Independent Directors of the Company have complied with the requirement of inclusion of their names in the data bank of Independent Directors maintained by Indian Institute of Corporate Affairs and they meet the requirements of proficiency self-assessment test. In the opinion of Board of Directors of the Company, independent directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. The Company has an optimum mix of expertise (including financial expertise), leadership and professionalism.

7. Share Capital

During the financial year 2022-23, the paid-up share capital of the Company has increased from Rs.6,017.97 million to Rs.6,018.46 million pursuant to allotment of 49,050 equity shares of Rs.10 each under SpiceJet Employee Stock Option Scheme - 2017.

There is no change in authorised share capital of the Company during the financial year 2022-23.

8. Dividend

The Board of Directors have not recommended any dividend for the financial year 2022-23. In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Company has adopted the Dividend Distribution Policy of the Company which is available on the website of the Company at www.spicejet.com under the ‘Investors section.

9. Transfer to Reserves

The Company has made no transfers to reserves during the financial year 2022-23.

10. Public Deposits

The Company has not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date. Accordingly, no disclosure or reporting is required in respect of details relating to deposits covered under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

11. Annual Return

In accordance with the Companies Act, 2013, the annual returns of the Company in the prescribed format are available on the website of the Company at www.spicejet. com under the ‘Investors section. Annual return of the Company for the financial year 2022-23, as required under Section 92 (3) of the Companies Act, 2013, shall also be placed on website of the Company.

12. Number of Meetings of the Board

During the financial year 2022-23, three (3) board meetings were held, the details of which are given in the Corporate Governance Report that forms part of this report. The Company was unable to hold minimum number of meetings of the Board due to a ransomware attack in May 2022 which affected IT system(s) of the Company and resulted in delay in completion of audit process and conducting the meeting of the Board within the prescribed timeline.

13. Directors Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for year ended March 31, 2023, the Directors of the Company state that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii) the Directors 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 the financial year and of the profit and loss of the Company for that period; (iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the Directors have prepared the Annual Accounts of the Company on a ‘going concern basis; (v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

The Company has not granted any loan, given guarantee or security or made investment under the provisions of Section 186 of the Companies Act, 2013 during the financial year under review except (i) loans to its subsidiary companies as stated below (ii) investment in subsidiary companies as stated in Annexure – A to this report and (iii) investment of Rs.0.25 million in class B-shares of Aeronautical Radio of Thailand Limited to become member airline for availing advantageous rate on air navigation charges in Thailand. Details of loan given to subsidiaries as on March 31, 2023 is as below:

S. No.	Name of the Company	(Amount in Rs. million)
1.	SpiceJet Merchandise Private Limited	106.78
2.	SpiceJet Technic Private Limited	10.28
3.	Canvin Real Estate Private Limited	238.90
4.	SpiceXpress and Logistics Private Limited	1.00
5.	Spice Ground Handling Services Private Limited	0.20
6.	Spice Club Private Limited	0.20
7.	SpiceJet Interactive Private Limited	0.20

15. Particulars of Contracts or Arrangement made with Related Parties

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the policy on materiality of related party transactions and also on dealing with related party transactions formulated by the Board of Directors of the Company pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. The said policy is also available on the website of the Company at www.spicejet.com under the ‘Investors section.

The Company in terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 regularly submits disclosures of related party transactions on a consolidated basis, in the format specified to the stock exchange. The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is attached as Annexure – B and forms an integral part of this report.

16. Subsidiaries

As on March 31, 2023, following are the subsidiaries of the Company:

s.No.	Name	Business Activity
1.	SpiceJet Merchandise Private Limited	Business of consumer merchandise and goods through various channels
2.	SpiceJet Technic Private Limited	Engineering related service including but not limited to maintenance, repair and overhaul services of aircraft and its parts
3.	Canvin Real Estate Private Limited	Real estate business
4.	SpiceJet Interactive Private Limited	Information and communication technology
5.	Spice Club Private Limited	Loyalty and rewards programme management
6.	Spice Shuttle Private Limited	Charter operation by aeroplanes and/or helicopters
7.	SpiceXpress and Logistics Private Limited	Cargo transportation and logistics
8.	Spice Ground Handling Services Private Limited	Ground handling services
9.	SpiceTech System Private Limited	IT Services

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared the consolidated financial statements of the Company, which form part of this Annual Report. Further, a statement containing the salient features of the financial statements of the subsidiaries in the prescribed format AOC-1 is appended as Annexure – A to this report. The statement also provides details of the performance and financial position of each of the subsidiaries.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on the website of the Company at www.spicejet.com under the ‘Investors section. In order to ensure governance of material subsidiary companies, the Board of Directors of the Company has adopted the policy and procedures for determining ‘material subsidiary companies in accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and the same is available on the website of the Company at www.spicejet.com under the ‘Investors section.

17. Corporate Governance and Management Discussion and Analysis

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed report on the Management Discussion and Analysis and Corporate Governance Report along with Practicing Company Secretarys Certificate regarding compliance of conditions of corporate governance forms an integral part of this report.

18. Particulars of Employees

The Companys goal is to stay invested in employees growth, provide them with development opportunities, recognise their efforts and enable them to absorb our value system. The Company focus on the workplace that promotes a transparent and participative organisation culture.

The Company has constituted an internal committee to consider and resolve all sexual harassment complaints reported by women and has also adopted a policy as per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has complied with the provisions of said Act. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the financial year 2022-23, seventeen complaints were received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and as on March 31, 2023, one of the complaint was pending for its disposal. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report and annexed as Annexure – C. The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of the provisions of Section 136(1) of the Companies Act, 2013 read with the rules made thereunder, this report is being sent to all members of the Company excluding the said annexure. Any member interested in obtaining a copy of the annexure may write to the Company.

19. Employees Stock Option Scheme

The members of the Company in its meeting held on November 27, 2017 authorized the Board to introduce, offer, issue and provide stock options to eligible employees of the Company and its subsidiaries under ‘SpiceJet Employee Stock Option Scheme - 2017. The maximum number of shares under this scheme shall not exceed 10,000,000 equity shares. During the year under review 49,050 grant was made under this scheme. There has been no material variation in the terms of the options granted under this scheme and this scheme is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (erstwhile the SEBI (Share Based Employee Benefits) Regulations, 2014. The details of this scheme including terms of reference, and requirement specified under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at www.spicejet. com under the ‘Investors section.

20. Corporate Social Responsibility

We believe that growth and development are effective only when they result in wider access to opportunities and benefit a broader section of society. With an objective of socio-economic development in India, the Board has adopted a Corporate Social Responsibility ("CSR") Policy which is available on the website of the Company at www.spicejet.com under the ‘Investors section. The Company has also constituted CSR Committee comprising of Mr. Ajay Aggarwal as Chairperson and Mr. Ajay Singh and Mrs. Shiwani Singh as Member which inter-alia monitors the Companys CSR Policy and recommend the amount of CSR expenditure. During the year under review, the CSR Committee met once on February 14, 2023 with necessary quorum being present at the meeting. As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, annual report on CSR activities is attached as Annexure – D and forms an integral part of this Report.

21. Conservation of Energy and Technology Absorption

Conservation of Energy: The management is highly sensitive of the criticality of the conservation of energy at all operational levels particularly of aviation turbine fuel which is leading source of energy for aviation activity. Adequate measures are taken to reduce energy consumption whenever possible by using energy efficient equipment and technology infusion. These measures among other includes maintenance of engine and airframe, flight planning, training to operational staff, regular analysis etc.

Technology absorption: The Company has used information technology comprehensively in its operations, for more details please refer to Section 9 (Information Technology) of Management Discussion and Analysis.

22. Statutory Auditors

The present Statutory Auditors of the Company, M/s. Walker Chandiok & Co LLP, Chartered Accountants, (ICAI Firm Registration No.: 001076N/N500013), was appointed by members of the Company at its 36^th Annual General Meeting held on December 24, 2020 to hold office till the conclusion of 41st Annual General Meeting of the Company.

In accordance with Section 134(3)(f) of the Companies Act, 2013, information and explanations to various comments made by the Statutory Auditors in their Report to the members are mentioned in the Notes to the Accounts, which form part of the financial statements for the year ended March 31, 2023.

23. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company appointed Mr. Mahesh Kumar Gupta, Practicing Company Secretary (ICSI Membership No.: FCS 2870) to undertake the Secretarial Audit of the Company for financial year ended on March 31, 2023. The Report of the Secretarial Auditor is annexed as Annexure – E to this report. In accordance with Section 134(3)(f) of the Companies Act, 2013, response (wherever necessary) to the observations in the Secretarial Audit Report are as under: (i) Composition of Board of Directors: The airline industry has been affected by unprecedented Covid-19 pandemic and is taking longer time to recoup. This has not only affected the Companys operations but also deteriorated its financial positions which is creating serious apprehension in the mind of prospective candidate for independent director. The duty and responsibilities of director prescribed under the applicable laws vis-?-vis present financial conditions of the Company is not encouraging prospective candidate for appointment in the Company as independent director. Notwithstanding the above, the Company is still looking for a suitable candidature for independent woman director and after finalisation of such candidature, the Company will file necessary application for security clearance of such candidature as mandated by Civil Aviation Requirements of Ministry of Civil Aviation (ii) Number of Board Meetings and Audit Committee Meetings: During May 2022, a ransomware attack affected IT system(s) of the Company and access to data and computer systems were blocked. This has resulted in delay in completion of audit process and conducting the Board Meeting and Audit Committee Meeting within the prescribed timeline. (iii) Delay in submission of financial results to stock exchange: The delay in submission of financial results of the Company to stock exchange for financial year ended March 31, 2022 and quarter ended June 30, 2022 – The delay was due to ransomware attack on IT system of the Company.

The delay in submission of financial results of the Company to stock exchange for quarter ended December 31, 2022 – The delay was due to non-availability of requisite quorum for the Audit Committee Meeting scheduled on February 14, 2023 (within statutory time limit) to consider and recommend the financial results for quarter ended December 31, 2022 to the Board for their consideration.

(iv) Structural Digital Database: The Company has procured necessary software to maintain the prescribed database in January 2023. However, during the review period, no UPSI entry has been maintained by the Company.

(v) Dispute with erstwhile promoter: In view of the uncertainties involved in the matter, management believes that the manner, timing and other related aspects of adjustment of amounts, are currently not determinable. Based on their assessment and legal advice obtained, management is of the view that any possible consequential effects, including penal consequences and any compounding thereof, will not have a material impact on the financial statements.

In terms of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended read with SEBI Circulars bearing nos. CIR/CFD/CMD1/27/2019 and CIR/CFD/CMD1/114/2019 dated February 8, 2019 and October 18, 2019 respectively along with Circular issued by stock exchange i.e. BSE Limited dated March 16, 2023, the Secretarial Auditor has also issued a Secretarial Compliance Report on May 30, 2023 for the year ended March 31, 2023.

24. Reporting of frauds by auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in this report.

25. Cost records and cost audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 are not applicable for the business activities carried out by the Company.

26. Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016

Details of applications made or pending during financial year ended March 31, 2023 under the Insolvency and Bankruptcy Code, 2016 against the Company are as follows:

S. No.	Name of Applicant	Amount (Rs. In millions)	Date of filing	Present status
1.	Acres Buildwell Private Limited	_32.49	August 29, 2022	Parties settled the matter
2.	Willis Lease Finance Corporation	901.83	February 23, 2023	Dismissed as withdrawn

27. Secretarial Standards

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

28. Business Responsibility and Sustainability Report

A detailed Business Responsibility and Sustainability Report in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached herewith as Annexure - F to this report.

29. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

30. Foreign Exchange Earnings and Outgo

The details of Foreign Exchange earnings and outgo for the financial year ended March 31, 2023 are set out below:

Particulars Amount (Rs. in millions)

Foreign Exchange Earnings 10,906 Foreign Exchange Outgo 24,590

31. Internal Controls and Risk Management

The Company believes that strong internal control systems that are commensurate with the scale, scope and complexity of its operations are correlated to the principle of governance and therefore the Company remains committed to ensuring a mature and effective internal control environment that, inter alia, provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records and Management Information Systems, timely preparation of reliable financial information, adherence with relevant statutes and compliance with related party transactions. The Company has aligned its systems of internal financial control with the requirement of Companies Act, 2013. This is intended to increase transparency and accountability in the organisation process of designing and implementing a system of internal control. The framework requires a company to identify and analyse risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness. The Company also recognises that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. The Company has established a framework to actively manage all the material risks faced by the Company, in a manner consistent with the companys strategy. This covers all business risks including strategic risk, operational risks including fraud and cyber risks, foreign exchange risk, fuel price risk and financial risks. The Company has laid down procedures to inform Board of Directors about risk assessment and minimisation procedures. These procedures are periodically reviewed to ensure that executive management is controlling risks through properly defined framework. The system of risk assessment and follow-up procedure is in place and considering its increased operations the Company continues to reassess its risk management plan.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the Internal Auditor, Statutory Auditors and Secretarial Auditor and external consultants, including the audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the year ended March 31, 2023.

The Companys risk management process is designed to identify and mitigate risks that have the potential ability to materially impact our business objectives. The Company adopts mitigation measures to reduce the adverse effects of risks. The Company has a risk management policy which acts as a guiding document for the purpose of identifying and mitigating risk. Pursuant to Section 134(3) (n) of the Companies Act, 2013 and Regulation 17(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated and adopted a Risk Management Policy. The primary objectives of the policy include identification and categorisation of potential risks, their assessment and mitigation and to monitor these risks. The Company has also constituted a Risk Management Committee which oversee the processes of identification, evaluation and mitigation of risks. The Committee inter alia periodically reviews the organisational risks that are spread across operational, financial, technological and environmental spheres and provide guidance to the management team.

32. Acknowledgement

We thank our valued customers, partners, vendors, investors and bankers for their continued confidence and support during the year and playing a significant role in the continued business excellence achieved by the Company. We place on record our appreciation of the contribution made by our employees at all fronts. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the Government of India particularly the Ministry of Civil Aviation, Ministry of Corporate Affairs, Ministry of Finance, Directorate General of Civil Aviation and other regulatory authorities for their cooperation, support and guidance.

For and on behalf of the Board

	Sd/-
Place : Gurugram	Ajay Singh
Date : December 12, 2023	Chairman & Managing Director