Annual Report cb smile - Jet Airways

Significant Accounting Policies and Notes forming part of Consolidated Accounts (contd.)
17. The Group has entered into a “Power by the Hour” (PBTH) Engine Maintenance agreement with a Service provider
for its Next Generation Boeing 737 Aircraft fleet. Till the previous year, with respect to all Aircraft on operating
lease, the Group was charging variable rent payable to various Lessors to the profit and loss account as per the
agreement entered into with them.
Consequent to the new arrangement entered into with the Engine Maintenance Service provider, which includes the
cost of future engine shop visits, the Group has expensed out the monthly cost of PBTH at the rate specified in
the contract to the profit and loss account and treated the variable rental payable to the Lessors as receivables to
be set off against the future claims payable on engine shop visits. Accordingly, the variable rent of Rs. 15,326 lakhs
for the year ended 31 st March, 2010 has been reflected as “Receivable from Lessors” and classified under “Loans
and Advances”.
18. The Subsidiary Company is carrying provisions of Rs. 5,231 lakhs to meet the repair expenses to make two CRJ’-
200s grounded aircrafts airworthy, which, is stipulated by the terms of the lease agreement with the lessors of lease
aircrafts. The Company does not expect such expenditure on delivery of these Aircraft to be in excess of this
provision.
19. The Subsidiary Company pursuant to the clarification by CBEC Vide Circular No. File No. 137/72/2008-CX.4 dated
21-11-2008, that the accumulated CENVAT credit upto 31 st March, 2008 can be utilized by the Company for
payment of future output service tax without any restriction of time line and the coverage of service tax being
enhanced to cover all sectors in Domestic and International travel by the Finance Act 2010, the Company has
recognized CENVAT credit available for utilization as on 1 st April, 2008 amounting to Rs. 11,214 lakhs and has
disclosed the same as an exceptional item.
20. Aircraft Lease Rentals are stated net of sub-lease rentals Nil (Previous Year Rs. 194 lakhs).
21. Pending resolution of representation made by the Board of Airline Representative in India “BAR (I)” to the statutory
authorities regarding non levy of Fringe Benefit Tax on free / concessional tickets issued by the airline companies,
no provision for the same has been made upto 31.03.2009 in the books of Subsidiary Company amounting to
Rs.808 lakhs (Previous Year Rs. 808 lakhs).
22. In case of Subsidiary Company, balances of Sundry Debtors and Creditors are subject to confirmations and
reconciliations and adjustments, if any. The management doesn’t expect any material adjustment on receipt of
confirmations / reconciliation of such balances.
23. Comparative financial information (i.e. amounts and other disclosures for the previous year presented above as
corresponding figures), is included as an integral part of the current year’s financial statements, and is to be read
in relation to the amounts and other disclosures relating to the current year. Figures of the previous year have been
regrouped / reclassified wherever necessary to correspond to figures of the current year.
Signatures to Schedules ‘A’ to ‘S’
As per our attached report of even date On behalf of the Board of Directors
For DELOITTE HASKINS & SELLS For CHATURVEDI & SHAH Saroj K. Datta Executive Director
Chartered Accountants Chartered Accountants Durban
R. D. Kamat C.D. Lala Aman Mehta
Partner Partner I.M. Kadri
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Yash Raj Chopra
Victoriano P. Dungca
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Directors
Monica Chopra Company Secretary &
Sr. General Manager - Legal
Mumbai Mumbai
20 th May, 2010 20 th May, 2010