Annual Report cb smile - Jet Airways

Significant Accounting Policies and Notes forming part of Consolidated Accounts (contd.)
to certain terms and conditions of ‘Jet Privilege’, the passenger is eligible to redeem such miles lying to their
credit in the form of free tickets.
The cost of allowing free travel to members as contractually agreed under the Frequent Flyer Programme is
accounted considering the members’ accumulated mileage on an incremental cost basis. The movement in the
provision during the year is as under:
Amount (Rs. in lakhs)
Particulars 2009-10 2008-09
Opening Balance 3,344 2,949
Add: - Additional Provisions during the year 1,346 1,446
Less: - Amounts used during the year (1,053) (1,051)
Less: - Unused Amounts reversed during the year (416) -
Closing Balance 3,221 3,344
b) Redelivery of Aircraft :
The Company has in its fleet aircraft on operating lease. As contractually agreed under the lease agreements,
the aircraft have to be redelivered to the lessors at the end of the lease term in the stipulated technical
condition. Such redelivery conditions would entail costs for technical inspection, maintenance checks, repainting
costs prior to its redelivery and the cost of ferrying the aircraft to the location as stipulated under the lease
agreement.
The Company, therefore, provides for such redelivery expenses, as contractually agreed, in proportion to the
expired lease period.
Amount (Rs. in lakhs)
Particulars 2009-10 2008-09
Opening Balance 6,644 4,702
Add:- Additional Provisions during the year* 540 2,935
Less:- Amounts used / reversed during the year (907) (993)
Closing Balance 6,277 6,644
* Additions include adjustment of Rs. 57 lakhs (Previous year Rs. 1,253 lakhs) on account of exchange
fluctuation consequent to restatement of liabilities denominated in foreign currency.
The cash outflow out of the above provisions as per the current terms under the lease agreements are as under:
Year 2009-10 2008-09
Aircraft Amount Aircraft Amount
(Rs. in lakhs) (Rs. in lakhs)
2010-11 12 1,968 17 2,815
2011-12 4 561 2 224
2012-13 24 2,187 20 1,734
2013-14 2 220 5 295
2014-15 4 194 16 459
2015-16 16 876 1 34
2016-17 2 187 - -
2017-18 3 20 - -
2018-19 3 50 3 12
2019-20 2 14 - -
Total 6,277 5,573
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