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The Members of JET AIRWAYS (INDIA) LIMITED
1. We have audited the attached Balance Sheet of Jet Airways (India) Limited ("the Company") as at 31st March , 2012, and the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principle used and the significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. Without qualifying our opinion, we invite attention to the following notes:
i) Note no. 32 (b) (viii) regarding the continuing litigation with erstwhile shareholders of Jet Lite (India) Limited. During the year, the Honorable High Court of Bombay had disposed off the Execution application in terms of which the Company paid Rs. 11,643 lakhs as interest @ 9% p.a. The counterparty contested this judgment and sought increased compensation and interest @18% p.a. instead of 9% p.a. while the Company challenged the levy of interest in toto. Consequent to the dismissal of this matter by the Honorable High Court of Bombay, both the parties filed a Special Leave Petition which is pending before the Honorable Supreme Court of India. The management has, based on legal advice and pending final determination, not recognized the amount paid as aforesaid as interest in the accounts.
ii) Note no. 35 regarding investments in and advances given to its subsidiary aggregating to Rs. 292,739 lakhs (Previous year Rs. 317,451 lakhs). The accumulated losses have fully eroded the net worth of the subsidiary and its negative net worth as at the year-end is Rs 141,826 lakhs (Previous year Rs. 123,533 lakhs). An external valuation report obtained by the management covers the carrying value of such investment / advance and accordingly no provision for diminution/recoverability is considered necessary by the management. In view of the prevailing situation in the aviation sector, the valuation as aforesaid is dependent on the achievement of the projections as regards operating performance by the subsidiary.
iii) Note no. 1 A (c) regarding preparation of financial statements of the Company on going concern basis for the reasons stated therein. The appropriateness of assumption of going concern is critically dependent upon the Company's ability to raise requisite finance / generate cash flows in the near future to meet its obligations.
4. As required by the Companies (Auditor's Report) Order, 2003 (CARO), issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.
5. Further, to our comments in paragraphs 3 (i) to (iii) above and the Annexure referred to in paragraph 4 above, we report that:
(a) We have 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 appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act 1956;
(e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;
i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2012;
ii) In the case of the Statement of Profit and Loss, of the loss of the company for the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
6. On the basis of written representations received from Directors, as on 31 st March, 2012 taken on record by the Board of Directors, we further report that none of the Directors is disqualified as on 31 st March, 2012 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.
FOR DELOITTE HASKINS & SELLS
R. D. KAMAT
M. No. 36822
FOR CHATURVEDI & SHAH
Registration No. 101720W
RAJESH D. CHATURVEDI
M. No. 45882
Date: 24th May 2012
ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF JET AIRWAYS (INDIA) LIMITED
(Referred to in paragraph 4 of our report of even date)
1) In respect of its fixed assets;
a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification.
c) In our opinion, the company has not disposed off a substantial part of the fixed assets during the year and the going concern status of the Company is not affected.
2) In respect of its inventories;
a) The inventory has been physically verified during the year by the management except inventory lying with third parties. In our opinion, the frequency of verification is reasonable.
b) In our opinion and based on the information and explanations given to us, the procedures of physical verification followed by the management of stock lying with it were reasonable and adequate in relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification. In respect of items lying with other entities we have relied on the confirmations obtained by the management from such entities.
3) In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties cove