Annual Report 2007-08 - Kingfisher Airlines

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Schedules forming part of accounts for the nine months ended March 31, 2008 (Contd.)(o) Earnings per shareBasic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders(after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstandingduring the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitledto participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number ofequity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existingshareholders; share split; and reverse share split (consolidation of shares).For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholdersand the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potentialequity shares.(p) ProvisionsA provision is recognised when an enterprise has a present obligation as a result of past event; and it is probable that anoutflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisionsare not discounted to their present value and are determined based on best estimate required to settle the obligation at thebalance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.(q) Preliminary expensesPreliminary expenses are written off over a period of ten years on a straight- line basis.(r)Deferred revenue expensesShare/debenture issue expenses, training expenses and pre-operative expenses are amortised over a period of three years ona straight- line basis following the year of incurring the expenses.(s)Stock option compensation expenseThe Company accounts for stock option compensation expense based on the intrinsic value of the options granted which isthe difference between the fair value of the share underlying the option and the exercise price of the option determined atthe grant date. Compensation expense is amortised over the period of vesting on a straight-line basis. The accounting valueof the options net of deferred compensation expense is reflected as Employee stock option outstanding.3. Slump Sale of the Non-Scheduled Air transport Services ( Passenger) (Charter Service Operations) to Deccan ChartersLimited (DCL)The Honorable High Court of Karnataka vide their order dated June 16, 2008 interalia approved the transfer of the charter servicesoperations to DCL pursuant to a composite scheme of arrangement between Kingfisher Airlines Limited (Currently known asKingfisher Training and Aviation Services Limited), DCL, the Company and their respective shareholders and creditors (“Scheme”).In terms of the Scheme, the appointed date is January 1, 2008 and the effective date being the later of the date on which certifiedcopies of the order of the High Court of Karnataka sanctioning the Scheme are filed with Registrar of Companies and DCL obtaininga non-scheduled operators permit in terms of the extant civil aviation rules. Since both the formalities have been completed beforethe date these financial statements (“FS”) have been approved by the Board of Directors of the Company, necessary effect hasbeen given in the FS for the same. The profit earned by the Company by virtue of the slump sale of Rs.244,598,527 has beenshown separately in the Profit and Loss Account.4. Share CapitalDuring the year, the Company has allotted 328,385 equity shares under the Employee Stock Option Plan at Rs. 10/- each at apremium of Rs. 55 per share.44
Schedules forming part of accounts for the nine months ended March 31, 2008 (Contd.)5. The Company raised an aggregate amount of Rs.36,328 lakhs through a public issue of shares during the period ended June 30,2006. The proceeds of the issue has been utilized as follows:Rs. in lakhsParticulars March 31, 2008 June 30, 2007Balance as per last Balance Sheet 16,712 21,833Less: Share issue expenses Nil 1,167Sub total (A) 16,712 20,666Utilization of proceedsRepayment of debts 1,345 200Capital Expenditure 500 645Setting up of infrastructure at airports 259 566General Corporate Expenses 13,143 236Marketing development initiatives Nil 2,307Total Out Flow (B) 15,247 3,954Unutilized balance (A – B) 1,465 16,712The Board of Directors of the Company at its meeting held on March 18, 2008 approved the transfer of Rs. 13,143 lakhs to thehead ‘General Corporate Purpose’ from savings in other heads, based on legal opinion.6. Commitments and contingent liabilities not provided for:ParticularsAs at March 31,2008 (Rs)As at June 30,2007 (Rs)RemarksEstimated amount of contracts 67,709,799,738 74,740,367,367remaining to be executed on capitalaccount and not provided for (net ofadvances)Guarantees given by Banks 2,946,740,641 2,469,332,785 Pertains to guarantees given by banks toAirport Authorities, lessors and others.Letters of credit outstanding Nil 46,628,930 Pertains to letters of credit issued by banks tosuppliers of spares, stores and components.Claims against the Company notacknowledged as debts (includingcivil and customer suits) in the normalcourse of businessRedelivery and other costs in respect ofassets taken on operating lease at theend of the lease periodAmounts payable, if any for breach ofcontractual obligations174,971,134 112,977,316 Pertains to litigations filed against theCompany which are pending with variousauthorities.Not ascertainableNot ascertainableNot ascertainable In respect of the operating lease agreements,the Company is required to return theAircrafts as per prescribed terms. However,considering on-going maintenance ofaircrafts, a reliable estimate cannot be madeof redelivery costs.Not ascertainableThe Company has entered into agreements for purchase of aircrafts/engines under which the Company has commitments topurchase aircrafts/engines over a period stipulated in the agreements. Such agreements involve complex pricing arrangementswherein the Company receives discounts/credits on such purchases, which are based on the commitments to purchase, whichthe Company is confident to fulfill currently. Accordingly, the amount of contingent liability, if any, as at the balance sheet date iscurrently not ascertainable.45
Page 3 and 4: Report of the Directors (Contd.)You
Page 5 and 6: Report of the Directors (Contd.)Tax
Page 7 and 8: Report of the Directors (Contd.)Sto
Page 9 and 10: Corporate Governance (Contd.)Sl.No.
Page 11 and 12: Corporate Governance (Contd.)Name o
Page 13 and 14: Corporate Governance (Contd.)Member
Page 15 and 16: Corporate Governance (Contd.)d) Emp
Page 17 and 18: Corporate Governance (Contd.)Your C
Page 19 and 20: Corporate Governance (Contd.)q) Per
Page 21 and 22: Management Discussion and Analysis
Page 27 and 28: AUDITORS’ REPORT (Contd.)Further
Page 29 and 30: AnneXure to the AUDITORS’ REPORT
Page 31 and 32: Profit and Loss account for the nin
Page 33 and 34: Schedules to the Balance Sheet as a
Page 39 and 40: Schedules to Profit and Loss accoun
Page 41 and 42: Schedules forming part of accounts
Page 43: Schedules forming part of accounts
Page 58 and 59: Cash Flow Statement for nine months
Page 60 and 61: BALANCE SHEET ABSTRACTStatement Pur
Page 62 and 63: 62NOTES
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Annual Report 2007-08 - Kingfisher Airlines

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