Annual Report cb smile - Jet Airways

Significant Accounting Policies and Notes to Accounts (contd.)
d) Engine Repairs Cost :
The aircraft engines have to undergo shop visits for overhaul and maintenance at specified intervals as per the
Maintenance Program Document. The same was provided for on the basis of hours flown at a pre-determined
rate.
Amount (Rs. in lakhs)
Particulars 2009-10 2008-09
Opening Balance 333 657
Add/(Less) :- Adjustments during the year * (6) 164
Less: - Amounts used during the year 327 372
Less: - Unused Amounts reversed during the year - 116
Closing Balance - 333
* Adjustments during the year represents exchange fluctuation impact consequent to restatement of liabilities
denominated in foreign currency.
16) In the previous year, the Company adopted the option offered by the notification of the Companies (Accounting
Standards) Amendment Rules, 2006 which amended Accounting Standard - 11 “The Effects of Changes in Foreign
Exchange Rates”.
Pursuant to the aforesaid notification, exchange differences relating to long term monetary items have been
accounted for as described in Accounting policy L of Schedule S. Accordingly, cumulative foreign exchange loss (net)
of Rs. 94,895 lakhs (Previous year Rs. 215,556 lakhs) has been adjusted to the cost of the fixed assets/capital
work-in-progress being the exchange differences on long term monetary items relatable to the acquisition of fixed
assets. As a result of this the net loss before tax for the year is higher by Rs. 120,661 lakhs and Previous Year was
lower by Rs. 239,001 lakhs.
17) The Company 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 company 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 Company 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. 9,712
lakhs for the year ended 31st March, 2010 has been reflected as “Receivable from Lessors” and classified under
“Loans and Advances”.
18) Disclosures relating to amounts payable as at the year end together with interest paid / payable to Micro, Small
and Medium Enterprises have been made in the accounts, as required under the Micro, Small and Medium Enterprises
Development Act, 2006 to the extent of information available with the Company determined on the basis of
intimation received from suppliers regarding their status and the required disclosure are given below:
Amount (Rs. in lakhs)
Particulars 2009-10 2008-09
a Principal amount remaining unpaid as on 31 st March, 2010 30 113
b Interest due thereon as on 31st March, 2010 - -
c Interest paid by the Company in terms of Section 16 of Micro,
Small and Medium Enterprises Development Act, 2006, along
with the amount of the payment made to the supplier beyond
the appointed day during the year. - -
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