KFA ANNUAL REPORT 1

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1 Kingfisher Airlines Limited Registered Office: UB Tower Level 12 UB City 24 Vittal Mallya Road Bangalore - 560 001 NOTICE NOTICE IS HEREBY GIVEN OF THE SEVENTEENTH ANNUAL GENERAL MEETING of the Company to be held at Good Shepherd Auditorium Opposite St. Joseph’s Pre-University College Residency Road Bangalore – 560 025 on Wednesday September 26 2012 at 2.30 p.m. for the following purposes: 1. To receive and consider the accounts for the year ended March 31 2012 and the reports of the Auditors and Directors thereon 2. To elect a Director in the place of Mr. A. K. Ravi Nedungadi who retires by rotation and being eligible offers himself for re-appointment 3. To appoint Auditors and fix their remuneration. The retiring Auditors M/s. B. K. Ramadhyani Co. are eligible for re-appointment 4. Appointment of Mr. Manmohan Singh Kapur as a Director: To consider and if thought fit to pass with or without modification the following Resolution as an Ordinary Resolution: “RESOLVED THAT Mr. Manmohan Singh Kapur who was appointed as an Additional Director and holds office upto the date of this Annual General Meeting be and is hereby appointed as a Director of the Company liable to retire by rotation.” By Order of the Board Place : Mumbai Bharath Raghavan Date : August 10 2012 Chief Legal Officer Company Secretary Notes : 1. Please refer to the explanatory statement given hereunder. 2. A SHAREHOLDER ENTITLED TO ATTEND THE MEETING AND VOTE THEREAT MAY APPOINT A PROXY TO ATTEND AND VOTE ON HIS BEHALF ONLY ON A POLL. SUCH A PROXY NEED NOT BE A MEMBER OF THE COMPANY. The proxy form duly completed must reach the Registered Office of the Company not later than forty-eight hours before the time appointed for the holding of the Meeting. 3. The Register of Members and Share Transfer Books will remain closed from Friday September 21 2012 to Wednesday September 26 2012 both days inclusive.

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2 NOTICE Contd. 4. Members are required to intimate immediately to the Company’s Registrars and Transfer Agents M/s Karvy Computershare Private Limited 17-24 Vittal Rao Nagar Madhapur Hyderabad – 500 081 Telephone No: 040-44655000 Fax No: 040-23420814 in case of shares held in physical form and to their respective Depository Participants in case of shares held in dematerialized/ electronic form:- a any change in their registered addresses along with PIN Code Number and b details about their email addresses if any so that all notices and other statutory documents which are required to be sent to the Members as per the provisions of the Companies Act 1956 can be sent to their email addresses as a measure of “Green Initiatives” introduced by the Ministry of Corporate Affairs MCA. 5. Members holding shares in the same name or same order of names under different ledger folios are requested to apply for consolidation of such folios to the Company’s Registrars and Transfer Agents at the address stated in Note No. 4 above. 6. Members may please address all their documents/correspondence relating to the equity shares of the Company directly to the Company’s Registrars and Transfer Agents at the address stated in Note No.4 above. 7. Nomination facility for shares is available for Members. The prescribed format in this regard can be obtained from Company’s Registrars and Transfer Agents at the address stated in Note No. 4 above. 8. The Company’s equity shares are under compulsory dematerialisation. Accordingly trading of these shares through the Stock Exchanges would be facilitated if the share certificates are dematerialised. Members holding shares in physical form are advised to consider opening of a Demat Account with an authorised Depository Participant and arrange for dematerializing their shareholdings in the Company. 9. All Unclaimed/Unpaid Dividend for the financial year 2003-04 required to be transferred to the Investor Education and Protection Fund Fund in terms of Section 205C of the Companies Act 1956 have been transferred to the Fund. 10. Members may kindly note that once the Unclaimed/Unpaid Dividend is transferred to the Fund no claim shall lie against the Fund or the Company in respect of the individual amounts which were unclaimed and unpaid for a period of seven years from the date that they first became due for payment and no payment shall be made in respect of any such claim. 11. Members attending the Annual General Meeting are requested to bring with them the following: a. Members holding shares in dematerialised form their DP Client ID Numbers. b. Members holding shares in physical form their Folio Numbers. c. Copy of the Annual Report and Notice as no copies thereof would be distributed at the Meeting. d. The Attendance Slip duly completed and signed in terms of specimen signature lodged with the Company. The Company would accept Attendance Slip from a Member actually attending the Meeting or from the person attending as a proxy under a valid proxy form registered with the Company not less than 48 hours prior to the Meeting. Attendance Slips of Members/valid proxies not personally present at the Meeting or relating to Proxies which are invalid will not be accepted from any other Member/person. The Meeting is for Members or their proxies only. Please avoid being accompanied by non-Members/children. 12. The Company has designated an exclusive email Id viz. investor.relationsflykingfisher.com to enable the investors to post their grievances and monitor its redressal. 13. Corporate members are required to send to the Company a certified copy of the Board Resolution pursuant to Section 187 of the Companies Act 1956 authorizing their representative to attend and vote at the Annual General Meeting. 14. The details required to be given in pursuance of Clause 49 of the Listing Agreement in case of directors being appointed/ re-appointed are given in the Corporate Governance Section of the Annual Report.

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3 NOTICE Contd. EXPLANATORY STATEMENT PURSUANT TO SECTION 1732 OF THE COMPANIES ACT 1956 Item No. 4 – Appointment of Mr. Manmohan Singh Kapur as a Director: Mr. Manmohan Singh Kapur was appointed as an Additional Director category Independent and Non-Executive of the Company with effect from April 24 2012 after receipt of necessary security clearance from the Ministry of Civil Aviation in respect of the appointment and holds office as Director upto the date of this Annual General Meeting. Mr. Manmohan Singh Kapur holds Degrees of B.Sc M.A from Punjab University. He is a career banker with more than 39 years experience mostly in the field of banking. He retired as Chairman Managing Director of Vijaya Bank. He was also the former Executive Director and Officiating Chairman Managing Director of Syndicate Bank Punjab Sind Bank. Prior to this he was Chief Vigilance Officer of Indian Overseas Bank as well as Union Bank of India. Notice under Section 257 of the Companies Act 1956 has been received from a Member signifying intention to propose the appointment of Mr. Manmohan Singh Kapur as a Director of the Company at this Annual General Meeting. Mr. Manmohan Singh Kapur does not hold any shares in the Company. Your Directors recommend the Ordinary Resolution for approval by the Members. None of the Directors other than Mr. Manmohan Singh Kapur is interested or concerned in the Resolution. By Order of the Board Place : Mumbai Bharath Raghavan Date : August 10 2012 Chief Legal Officer Company Secretary

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Board of Directors Dr. Vijay Mallya Ravi Nedungadi S. R. Gupte Bharath Raghavan Chief Legal Officer Company Secretary Report of the Directors 2 Corporate Governance Report 10 Management Discussion Analysis Report 20 Auditors’ Report 26 Balance Sheet 30 Statment of Profit and Loss 31 Notes to Financial Statements 32 Cash Flow Statement 66 Accounts of the Subsidiary 68 CONTENTS The Team Hitesh Patel Executive Vice President A. Raghunathan Chief Financial Officer Rajesh Verma Executive Vice President Manoj Chacko Executive Vice President Sanjay Aggarwal Chief Executive Officer M. S. Kapur

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1 BOARD OF DIRECTORS Dr. Vijay Mallya Chairman Managing Director Mr. Subhash R. Gupte Vice Chairman Mr. A. K. Ravi Nedungadi Mr. Manmohan Singh Kapur PRESIDENT CFO - THE UB GROUP Mr. A. K. Ravi Nedungadi CHIEF EXECUTIVE OFFICER Mr. Sanjay Aggarwal CHIEF FINANCIAL OFFICER Mr. A. Raghunathan CHIEF LEGAL OFFICER COMPANY SECRETARY Mr. Bharath Raghavan AUDITORS M/s. B. K. Ramadhyani Co. Chartered Accountants 4B 4 th Floor 68 Chitrapur Bhavan 8 th Main 15 th Cross Malleswaram Bangalore – 560 055 REGISTERED OFFICE UB Tower Level 12 UB City 24 Vittal Mallya Road Bangalore – 560 001

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2 Report of the Directors To The Members Your Directors present the 17th Annual Report along with the Audited Accounts of your Company for the year ended March 31 2012. Operations Your Company’s operations during the year ended March 31 2012 have resulted in: Rs. in million Year ended Year ended March 31 2012 March 31 2011 Gross Income 58239.08 64955.62 Earnings before financial charges lease rentals depreciation amortization and taxes EBITDAR 1222.08 11084.37 Less: Depreciation Amortization 3418.66 2410.38 Lease Rentals 8684.52 9839.96 Financial charges 12763.35 13129.40 Profit / Loss before taxes 23644.45 14295.36 Provision for taxes including FBT 11180.85 4933.85 Net Profit / Loss from ordinary activities after tax 12463.60 9361.51 Exceptional Item 10816.48 912.47 Net Profit / Loss after tax 23280.08 10273.98 Scheduled Airline Operations During the year under review your Company recorded a domestic market share of 15.6 and carried more than 10.5 million passengers across both domestic and international sectors. Fleet size of aircraft used in scheduled operations stood at 55 aircraft at year end. Despite significant downsizing measures in the second half of the year your Company operated over 110000 flights in the year and maintained connectivity to key destinations in the country through the year including under-serviced stations such as Dharamsala Shimla Kulu Hubli and Kandla. During the first half of the year your Company had been able to recover the Airbus A320 family aircraft in your Company’s fleet which were grounded in 2010-11 due to V2500 engine related issues. This reflected in strong operating performance for both the quarters of the first half of 2011-12. Your Company had also made public its intent to exit the low-cost model and to reconfigure aircraft along with a phased transition to the Full-Service model. Your Company has been able to partially progress on this plan. However given the pressure on the cost front due to unabated increase of fuel prices Rupee de-valuation rising interest rate and continued downward pressure on yields your Company decided to downsize operations starting November 2011. Despite the operational downsizing the cash losses continued leading to discontinuation of services from IATA’s Billing and Settlement Plan BSP. Despite the additional disadvantage created your Company designed alternate means to sell and distribute inventory. As a part of the overall downsizing of operations during the year under review your Company also temporarily shut down operations on its international network to contain operational losses. Your Company continues to maintain a “member-elect” status with the oneworld Alliance. The 15 to 18 month complex integration process was successfully near completion for the February 10 2012 integration date. However in light of priorities centered around your Company’s recapitalization efforts the oneworld management team agreed with your Company to defer the joining date - a move that would give your Company more time to address the challenges. They agreed to work with your Company during this phase with an aim of setting a new joining date. Your Company continued to focus on major cost control initiatives during the year to reduce distribution costs implement fuel optimization systems and processes improve aircraft utilization optimize headcount and re-negotiate general contracts in order to enforce cost competitiveness which is reflected in an improvement in the non-fuel EBITDA cost index. Your Company continued its focus on various marketing and commercial initiatives including tie-ups with corporate houses to get premium business and launch of the Business Mileage program targeted at Small Medium Enterprises SME. During the year under review your Company won the ‘Best Indian Airline’ Award from Business Traveller Magazine – London ‘Best Airline for Business Travel within India’ and ‘Best Airline for Leisure Travel within India’ from Conde NAST READER Travel Awards and Best Loyalty Innovation Award in the “Judge’s Choice” category at Loyalty Awards 2012 hosted by Flight Global. In view of operating losses incurred during the year your Directors do not recommend payment of any dividend.

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3 Report of the Directors Contd. Subsidiary The statement of your Company’s interest in its only subsidiary Vitae India Spirits Limited as at March 31 2012 prepared in accordance with the provisions of Section 2123 of the Companies Act 1956 is attached to the Balance Sheet. Outlook Your Company had successfully established itself as one of India’s largest domestic carriers by passengers flown and cities served over the last decade. Your Company has long enjoyed market leadership with a wide network reach in India an awarded frequent flyer program and wide distribution. Due to the current situation your Company is operating as a "holding pattern" with limited operation pending policy changes which are in the offing. The Indian airline industry is currently exposed to one of the toughest operating environments and is expected to struggle with profitability pressures with one of the highest prices for Jet Fuel across the world given tax structure recent depreciation of the rupee and the high cost of borrowing. The Government of India is in the process to usher in fiscal measures and reforms that will make the operating environment more conducive for profitable business viz. • Approved direct import of jet fuel by airlines. • Allowed External Commercial Borrowings ECB to the extent of USD 1 billion to be used as working capital. • Opened the international market to private carriers by taking away the right of first refusal from the national carrier. • In the process of modifying the Foreign Direct Investment FDI policy that will allow foreign airlines to invest in Indian carriers. Your Company will undertake a phased and pragmatic approach to re-induction of capacity as well as further market expansion. The focus will be on maximizing the nascent potential of the domestic Indian market and capitalizing on strategic international routes. Your Company will continue to closely monitor key market trends as well as macro-economic environment in the Country from a global perspective linked to the recovery plan. Optionally Convertible Debentures Loans / Inter Corporate Deposits from certain business associates aggregating to Rs.7093 million were converted into 70931985 8 Optionally Convertible Debentures of Rs.100/- each “OCDs” which were convertible into equity shares within a period of 18 months from their issue after which they were redeemable. During the year under review your Company on February 18 2012 allotted 79868051 Equity Shares of Rs. 10/- each of your Company pursuant to the conversion of 19975000 OCDs of Rs 100/- each. Subsequent upon the said allotment of equity shares as mentioned above United Breweries Holdings Limited UBHL along with its subsidiaries holds 47.89 of the paid-up share capital of your Company and therefore your Company ceases to be a subsidiary of UBHL. Subsequent to the year under review your Company further allotted to the then holders of the OCDs pursuant to the exercise of the conversion option by them: 1. 35642361 Equity Shares of Rs. 10/- each of your Company pursuant to the conversion of 8422290 OCDs of Rs 100/- each on April 10 2012. 2. 62160364 Equity Shares of Rs. 10/- each of your Company pursuant to the conversion of 14427421 OCDs of Rs 100/- each on April 24 2012. 3. 133272991 Equity Shares of Rs. 10/- each of your Company pursuant to the conversion of 28107274 OCDs of Rs 100/- each on June 23 2012. As on date all the OCDs have been converted into equity shares. Capital During the year under review your Company’s Authorised Share Capital remained unchanged at Rs. 42500000000/- comprising of 1650000000 Equity Shares of Rs. 10/- each and 2600000000 Preference Shares of Rs. 10/- each. During the year under review the Issued Subscribed and Paid-up Share Capital of your Company has increased from Rs. 10508792230/- divided into 497779223 Equity Shares of Rs. 10/- each and 553100000 8 Cumulative Redeemable Preference Shares of Rs. 10/- each to Rs. 11307472740/- divided into 577647274 Equity Shares of Rs. 10/- each and 553100000 8 Cumulative Redeemable Preference Shares of Rs. 10/- each. Subsequent to the year under review the Issued Subscribed and Paid-up Share Capital of your Company has increased to Rs. 13618229900/- divided into 808722990 Equity Shares of Rs. 10/- each and 553100000 8 Cumulative Redeemable Preference Shares of Rs. 10/- each.

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4 Report of the Directors Contd. Depository System The trading in the equity shares of your Company is under compulsory dematerialization mode. As of date equity shares representing 99.91 of the equity share capital are in dematerialized form. As the depository system offers numerous advantages members are requested to take advantage of the same and avail of the facility of dematerialization of your Company’s shares. Auditors’ Report As regards observations in para 4 of Auditors’ Report the Statutory Auditors have qualified their report with a remark that the receipt of subsidy from aircraft manufacturers should be recognized as income on an systematic basis over the period necessary to match them with related costs which they are intended to compensate though the accounting treatment does not appear to be covered by the Accounting Standard AS-19 Accounting for Leases issued by the Institute of Chartered Accountants of India. In the opinion of the Directors: 1 The lessor of the Aircraft is a person other than the Aircraft manufacturer and the lease contract is independent of the contract with Aircraft manufacturer. 2 The termination if any of the lease contract does not in any event breach the conditions for the grant of subsidy by the Aircraft manufacturer. 3 The subsidy value referred to in Para 4 of the Audit Report have been received by your Company during the 15 months period ended June 30 2006. As per Section 28 iv of the Income Tax Act 1961 and precedents available under Income Tax laws including pronouncements of the Apex Court the revenue arising out of support packages will be treated as income for taxation purposes and therefore it would not be prudent for your Company to treat the said revenues differently in the books of Accounts and for taxation purposes. 4 In the event of non compliance of the contract with the Aircraft manufacturer the resultant possibility of recovery of subsidy granted by the Aircraft manufacturer has been disclosed as contingent liability and this accounting treatment adopted by your Company is also based on the well established principle of differentiation of revenue receipt and capital receipt. In view of the above in the opinion of your Company the accounting treatment of the support package received from the Aircraft manufacturer as Income in the year of accrual and receipt is in order. The fair market value of these Aircraft is not easily ascertainable due to the unique specifications of the Aircraft. Therefore the management has obtained the valuation report for Aircraft of similar type from a leasing company to ascertain the fair market value which is higher than the sale price of these Aircraft. This is also supported by the fact that the insurance value to be covered as per respective Lease Agreements is much more than the sale value of the Aircraft. As regards the observations in para 5 of the Auditors’ Report your Company has adopted the Exposure draft on Accounting Standard – 10 Revised ‘Tangible Fixed Assets’ which allows such costs on major repairs and maintenance incurred to be amortized over the incremental life of the asset. Your Company has extended the same treatment to costs incurred on major repairs and maintenance for engines pertaining to aircrafts acquired on Operating Lease. As regards the observations in paras 8 9 10 of the Auditors’ Report the note numbers 36b 39 52 to Notes to Financial Statements are self explanatory. As regards the observations in the Annexure to the Auditors’ Report your Company has taken / is taking necessary steps to ensure improvement in certain procedures and also compliance with relevant laws. Directors Mr. A. K. Ravi Nedungadi Director retires by rotation and being eligible offers himself for re-appointment. During the year under review the following Directors resigned from the Board of Directors of your Company: 1. Diwan Arun Nanda - with effect from September 5 2011 2. Mr. Piyush Mankad - with effect from January 9 2012 3. Mr. Ghyanendra Nath Bajpai - with effect from January 9 2012 4. Mr. Vijay Amritraj - with effect from March 14 2012 5. Mr. Anil Kumar Ganguly - with effect from March 17 2012 Subsequent to the year under review Mr. Manmohan Singh Kapur was appointed as an Additional Director with effect from April 24 2012 and holds office up to the date of the ensuing Annual General Meeting of your Company. Notice

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5 Report of the Directors Contd. in writing has been received from a Member signifying intention to propose the appointment of Mr. Manmohan Singh Kapur as a Director of your Company at the ensuing Annual General Meeting. Auditors M/s. B. K. Ramadhyani Co. your Company’s Auditors have confirmed that they are eligible for re-appointment at the ensuing Annual General Meeting and it is proposed to re-appoint them and to fix their remuneration. Listing of Shares of Your Company All the equity shares of your Company are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The listing fee for the year 2012-13 has been paid to these Stock Exchanges. Corporate Governance A report on Corporate Governance is annexed separately as part of this Report along with a certificate of compliance from a Company Secretary in practice. Necessary requirements of obtaining certifications/ declarations in terms of Clause 49 have been complied with. Management Discussion and Analysis Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges the Management Discussion and Analysis Report is annexed and forms an integral part of the Annual Report. Human Resources Employee relations remained cordial. The information as are required to be provided in terms of Section 2172A of the Companies Act 1956 read with the amended Companies Particulars of Employees Rules 1975 have been included as an annexure to this Report. Employee Stock Option Plan ESOP Your Company had approved ESOP 2011 at the last Annual General Meeting of your Company held on September 28 2011. As on date your Company has not granted any option under ESOP 2011. Disclosures as required by Clause 12 of the SEBI Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines 1999 are annexed to this Report. Conservation of Energy Research and Development Technology Absorption Foreign Exchange Earnings and Outgo The particulars as prescribed under section 2171e of the Companies Act 1956 and the rules framed there under are not applicable to your Company. The relevant information relating to Foreign Exchange Earning and Outgo appears in the Note No. 31a to e to the Financial Statements. Directors’ Responsibility Statement Pursuant to Section 2172AA of the Companies Act 1956 in relation to the Financial Statements of your Company for the year ended March 31 2012 the Board of Directors reports that: • in the preparation of the Accounts for the year ended March 31 2012 the applicable accounting standards have been followed along with proper explanation relating to material departures • accounting policies have been selected and applied consistently and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31 2012 and of the Loss of your Company for the year ended March 31 2012 • proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities • the accounts for the year ended March 31 2012 have been prepared on a going concern basis. Thank You Your Directors place on record their sincere appreciation for the continued support from shareholders customers the Government of India especially the Ministry of Civil Aviation and the Directorate General of Civil Aviation the various State Governments Airports Authority of India the Reserve Bank of India lending banks and financial institutions suppliers other business associates and employees. For and on Behalf of the Board of Directors Mumbai Dr. Vijay Mallya August 10 2012 Chairman Managing Director

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6 ANNEXURE TO DIRECTORS REPORT STATEMENT OF PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217 2A OF THE COMPANIES ACT 1956 AND COMPANIES PARTICULARS OF EMPLOYEES RULES 1975 Employed throughout the year and in receipt of remuneration in aggregate of not less than Rs. 6000000 per annum SL. NO. NAME AGE DESIGNATION / NATURE OF DUTIES REMUNERATION Rs. QUALIFICATION EXPERI- ENCE IN YRS. DATE OF COM- MENCEMENT OF EMPLOYMENT PARTICULARS OF PREVIOUS EMPLOYMENT 1 AADITIYA J. GARG 28 CHECK PILOT 7357157 10+2 ATPL 5 10.04.2007 Air Deccan 2 ABHISHEK SAHAY 33 CAPTAIN 6140319 10+2 ATPL 11 18.05.2005 Air Deccan 3 AJEET OKA 56 CAPTAIN 6868342 10+2 ATPL 37 19.06.2004 Air Deccan 4 ALANGIAM PAULRAJ KALAICHELVAN 54 CAPTAIN 6885176 M. Sc. 29 27.06.2005 Air Deccan 5 ALI MUKARRAM SURURY 47 CAPTAIN 6577118 Diploma AME 26 12.05.2008 Indian Airlines 6 AMAR BHATIA 38 CHECK PILOT 6362618 B. Com. 17 07.01.2008 Air Sahara 7 AMARDEEP SINGH SARAI 36 CAPTAIN 6229832 B.A Arts 8 28.02.2007 Air Sahara 8 AMIT AGARWAL 42 SR. VICE PRESIDENT - CORPORATE DEVELOP- MENT PLANNING 7011360 M. Tech. 19 09.02.2010 Delta 9 AMIT KAPOOR 34 CAPTAIN 6033335 10+2 ATPL 12 14.02.2007 IAF 10 AMRITA G PEREIRA 32 CHECK PILOT 6081744 10+2 ATPL 11 16.09.2003 Air Deccan 11 ANNU PRAVIN GAIKWAD 30 CAPTAIN 6797837 10+2 ATPL 11 16.07.2007 Air Deccan 12 ASHISH RANJAN 51 CHECK PILOT 6433192 10+2 ATPL 32 01.05.2004 Air Deccan 13 ASHOK VARDHAN SINGH DEO 44 INSTRUCTOR 6719875 B. A. 23 29.04.2006 Alliance Air 14 ATUL A. KUCHERIA 37 CHECK PILOT 6856444 B. Sc. 16 15.12.2005 Jet Airways 15 AVNI DOGRA 44 CHECK PILOT 6417589 HSC / CPL 23 23.10.2007 Air Sahara 16 B. N. KISHORE 49 CAPTAIN 6848115 ATPL 28 22.12.2008 IAF 17 BABU Y S 53 INSTRUCTOR 6584864 10+2 ATPL 33 02.05.2004 Air Deccan 18 BANKIM CHANDRA MEHTA 44 CAPTAIN 6908241 B.A. 23 15.12.2004 IAF 19 BAVICCA BHARATHI 22 CAPTAIN 6600378 CPL 5 30.07.2007 Fresher 20 BED PRAKASH UPRETI 48 CAPTAIN 6952035 M. A. 27 01.04.2005 NECON AIR 21 BEER SINGH YADAV 48 CAPTAIN 6530158 ATPL 27 22.10.2008 Air Sahara 22 BHAG CHAND 49 CHECK PILOT 6360265 B.A. 27 21.01.2005 IAF 23 BHANUMOHAN KAILA 44 VICE PRESIDENT - AGENCY SALES WEST SOUTH INDIA 6427914 B.A. DHM PGDBM 23 01.12.2006 United Spirits Ltd. 24 BIJESH LOBHAN SEN 50 CAPTAIN 6252719 H.S.C. 29 09.05.2005 IAF 25 C. KIRTHAN KUMAR 36 CHECK PILOT 6216100 B. A. 14 19.01.2005 Blue Dart Aviation Ltd 26 CARLOSE DEVANAND 39 CAPTAIN 6713563 CPL 18 07.06.2006 CFI 27 CHIRAG THAKKAR 27 CHECK PILOT 7896325 10+2 ATPL 8 13.06.2005 Air Deccan 28 DHANANJAY VINAYAK WANNERE 47 CAPTAIN 6565725 10+2 ATPL 28 02.09.2009 IAF 29 DHIRAJ BALIRAM KANASE 42 CHECK PILOT 6514454 B. A. 21 04.08.2005 Indian Air Force 30 DILAWER SINGH BASRAON 44 CAPTAIN 6440334 H.S.C. 23 10.01.2005 Ranbaxy Lab. Ltd. 31 DIMITRIOS SIPSAS 60 CAPTAIN 7527082 ATPL 11 27.01.2010 OLYMPIC AVIATION 32 DINESH KANT SHARMA 50 EXAMINER 7442394 B. Sc. 26 03.01.2005 IAF 33 DUMISANI MOYO 51 CAPTAIN 7715853 ATPL 29 01.06.2007 Oman Air 34 DURLLAVA KUMAR MISHRA 58 CAPTAIN 6494685 H.S.C. 36 01.01.2005 Alliance Air 35 G. R. MOHAN 61 DGM - FLIGHT OPERATIONS BLR/HYD 7180875 M. Sc. MAeSL 39 03.01.2005 Blue Dart Aviation 36 G SUMI RAJAKUMAR 27 CAPTAIN 6926611 10 +2 CPL 7 04.08.2006 Air Deccan 37 GEORGIOS MAVROEIDIS 56 CAPTAIN 6464961 ATPL 12 01.09.2010 OLYMPIC AVIATION 38 HITESH PATEL 47 EXECUTIVE VICE PRESIDENT 32577406 MBA 28 18.01.2005 Jet Blue 39 INDIRA S. MITTRA 46 DGM - FLIGHT OPERATIONS MAA / CCU 7985555 ATPL 25 01.01.2009 Air Deccan 40 IOANNIS FRAGKOS 54 CAPTAIN 6729374 ATPL 16 01.09.2010 OLYMPIC AVIATION 41 IVAN JALALUDDIN 48 EXAMINER 7251424 HSC / ATPL 26 17.02.2008 Air India 42 JASBIR SINGH 56 CAPTAIN 6864327 MBA 27 17.09.2007 Reliance Group 43 KARL BAHADUR WYKES 43 INSTRUCTOR 7747063 H.S.C. 22 03.01.2005 Jet Airways 44 KARL J KATRAK 33 CHECK PILOT 6260389 10+2 ATPL 12 27.09.2003 Air Deccan 45 KOTHANDARAM KRISHNA REDDY 53 CAPTAIN 6480622 10+2 ATPL 33 03.08.2009 IAF 46 KRISHNAMURTHY SHANKAR 48 CHECK PILOT 7597760 H.S.C. 25 09.05.2005 IAF 47 KUMAR VEERAPPA HIREGOUDAR 47 CAPTAIN 6566110 10+2 ATPL 27 03.07.2009 IAF 48 MADHUKRISHNA R D 35 CAPTAIN 7218877 10+2 ATPL 14 21.04.2004 Air Deccan 49 MAHESH KUMAR SHARMA 43 CHECK PILOT 6792894 10+2 ATPL 21 09.06.2003 Air Deccan 50 MANOJ CHACKO 41 EVP - COMMERCIAL 8409360 MBA 19 21.12.2009 AMEX 51 MANOJ KUMAR AGARWAL 48 CAPTAIN 6460505 10+2 ATPL 29 14.05.2009 IAF 52 MANOJ VERMA 39 CHECK PILOT 6194725 Graduation 18 09.01.2008 Jet Lite I Ltd 53 MEETAK KUMAR BEHL 53 CAPTAIN 7033005 ATPL 32 01.08.2008 IAF 54 MOHNISH S. CHADDA 46 EXAMINER SECONDED FLIGHT OPERATIONS INSPECTOR DG 7836233 H.S.C. 24 07.11.2005 Air Lanka 55 MUKESH SINGH SHAKTAWAT 31 CAPTAIN 6095365 10+2 CPL 11 01.12.2005 Air Deccan 56 MURALI RAMACHANDRAN 42 SR. VICE PRESIDENT - GROUND SERVICES 6866326 IHM 21 01.11.2008 Jet Airways 57 N N KASHIB 50 CAPTAIN 7008386 10+2 ATPL 31 15.06.2005 Air Deccan 58 N S KADIAN 56 CHECK PILOT 6477709 10+2 ATPL 37 16.05.2006 Air Deccan 59 NATASHA GUPTA 24 CAPTAIN 6037806 P.U.C. 2 24.05.2007 Fresher 60 NAVEEN CHAWLA 41 VICE PRESIDENT - INTERNATIONAL SALES 6726981 MBA 21 19.04.2010 Qatar Airways 61 NAVEEN RAHI 47 CAPTAIN 6685798 10+2 ATPL 28 01.04.2009 IAF 62 NAVINDRA NATH VERMA 54 CAPTAIN 6905410 H.S.C. 34 27.06.2005 Air Deccan

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7 STATEMENT OF PARTICULARS OF EMPLOYEES Contd. SL. NO. NAME AGE DESIGNATION / NATURE OF DUTIES REMUNERATION Rs. QUALIFICATION EXPERI- ENCE IN YRS. DATE OF COM- MENCEMENT OF EMPLOYMENT PARTICULARS OF PREVIOUS EMPLOYMENT 63 NIELS PEDER TERNVING 63 CAPTAIN 8074425 ATPL 28 25.07.2008 Scandinavian 64 NIKET DEEP KALRA 43 CHECK PILOT 6664135 MBA 21 03.01.2005 IAF 65 NIRBHAY SINGH 32 CAPTAIN 6442718 10+2 ATPL 11 01.04.2003 Air Deccan 66 NITIN ANAND 40 HEAD - FLIGHT SAFETY 8193683 H.S.C. 19 23.11.2006 Air Deccan 67 P. ABHIJIT BHUSHAN 48 INSTRUCTOR 7541809 H.S.C. 27 03.01.2005 Jet Airways 68 PRADEEP KUMAR SHARAN 55 CAPTAIN 6738049 ATPL 33 01.08.2008 IAF 69 PRAFULL JAGDEV THAKUR 53 CHECK PILOT 6481446 B. Com. 26 27.03.2006 Alliance Air 70 PRAMOD SHARMA 50 EXAMINER 7111945 H.S.C. 27 07.03.2006 Indian Airlines 71 PRAVEEN SHARMA 51 CHECK PILOT 6701578 M. Sc. 30 01.10.2005 Tata Steel 72 PRAVIN VIJAY GAIKWAD 35 CAPTAIN 6709850 10+2 ATPL 14 16.07.2007 Air Deccan 73 PRITHVI MALHOTRA 34 CHECK PILOT 6804377 B. Sc. 12 09.11.2007 Air Sahara 74 PRITPAL SINGH ARORA 50 EXAMINER 7386727 B. Sc. 28 05.02.2008 Srilankan Airlines 75 PRIYA PAUL 39 CHECK PILOT 7286083 10+2 ATPL 18 24.09.2007 Fresher 76 PUNEET GROVER 43 CHECK PILOT 6242810 ATPL 22 14.07.2007 Air Sahara 77 RAJESH MALIK 43 EXAMINER 7104649 H.S.C. 21 24.06.2005 Singapore Airlines 78 RAJESH VERMA 53 EXECUTIVE VICE PRESIDENT 13135174 B. A. PGDBM 27 20.06.2006 Jet Airways 79 RAJIB BHATTACHARYYA 44 INSTRUCTOR 6384181 H.S.C. 23 28.04.2006 Alliance Air 80 RAJIV KOTHIYAL 53 EXAMINER 7444377 10+2 ATPL 28 01.01.2009 Air Deccan 81 RAJNISH VERMA 47 CAPTAIN 6031461 H.S.C. 25 01.09.2005 R.S.F.A. Govt. of Rajasthan 82 RAJU RAJBANSHI 49 CAPTAIN 6147010 ATPL 6 16.06.2005 ROYAL NEPAL AIRLINES 83 RAKESH KAPOOR 46 EXAMINER 6741360 10+2 ATPL 25 15.04.2008 IAF 84 RANBIR MOHAN 62 EXAMINER 7430567 10+2 ATPL 42 18.09.2009 Indian Airlines 85 RANJAN SAIKIA 42 CAPTAIN 6399574 10+2 ATPL 20 27.09.2007 Fresher 86 RAVI KUDARI 48 CAPTAIN 6957834 10+2 ATPL 29 01.07.2009 IAF 87 RAVI NATHAN 51 CAPTAIN 6874093 10+2 ATPL 32 08.06.2003 Air Deccan 88 REHAL H S 54 CHECK PILOT 6636752 10+2 ATPL 35 21.04.2004 Air Deccan 89 RICARDO JARAMILLO 41 CAPTAIN 7989674 ATPL 19 01.05.2007 Serca Aeropurto El Dorado Bogota 90 RISHI RAJ CHATTERJEE 38 EXAMINER 6838075 H.S.C. 16 02.11.2006 Air Deccan 91 RONALD NAGAR 62 SR. VP - OPERATIONS TRAINING 11937720 ISC 37 19.02.2008 Indian Airlines 92 SACHIN SURYAKANT PAWAR 36 CAPTAIN 6029953 H.S.C. 14 08.05.2006 Gold Star Aviation 93 SAMARJEET SINGH CHEEMA 35 DGM - FLIGHT OPERATIONS DEL 7471275 10+2 ATPL 14 30.05.2005 Air Deccan 94 SAMIR SHEOPORI 60 INSTRUCTOR 8154320 H.S.C. 30 03.01.2005 Alliance Air 95 SANDEEP DHAWAN 46 CAPTAIN 6840118 10+2 ATPL 26 07.04.2009 IAF 96 SANDEEP KAKKAR 45 INSTRUCTOR 6511039 B. A. 23 01.10.2006 Air Sahara 97 SANJAY AGGARWAL 43 CEO 33989112 MS 17 27.09.2010 Spice Jet 98 SANJAY N. MANDAVIA 39 CHECK PILOT 7248324 H.S.C. 17 03.01.2005 Jet Airways 99 SANJEEV KUMAR AHUJA 29 CAPTAIN 6085973 ATPL 6 09.10.2008 JetLite 100 SANJEEV MARWAH 44 AVP - FLIGHT OPERATIONS TRAINING 8974258 H.S.C. 22 07.03.2006 Indian Airlines 101 SATISH CHANDRA PANDEY 55 CAPTAIN 7319468 M. A. 34 06.04.2006 Jaypee Associates Ltd. 102 SERGIO CARRASCO 42 CAPTAIN 7314103 ATPL 21 21.02.2006 AIR ACES 103 SHAILENDU RANJAN 37 CAPTAIN 6047937 B. Sc. 16 01.09.2005 Academy Of Carver Avia- tion Pvt Ltd 104 SHITAL PATEL 37 CAPTAIN 6489191 ATPL 16 26.07.2008 Aer Arrann 105 SHYAM KALRA 46 CAPTAIN 6137793 ATPL 24 09.10.2008 JetLite 106 SIKANDAR SHARMA 33 MANAGER - FOQA A320 6979082 H.S.C. 11 15.01.2005 Jet Airways 107 SOURAV SINHA 45 SR. VP CHIEF INFORMATION OFFICER 8197220 M. Tech. 20 27.06.2008 Qatar Airways 108 SRINIVAS RAO 44 EXAMINER 8488411 B. Sc. 23 03.10.2006 Sri Lankan Airways 109 SUBRATA BOSE 53 CAPTAIN 6010734 M. Sc. 29 04.01.2007 IAF 110 SUMANT MISRA 45 GENERAL MANAGER - FLIGHT OPERATIONS 8001675 H.S.C. 24 15.06.2005 Singapore Airlines 111 SYRUS S. MAZDA 55 CAPTAIN 7089669 H.S.C. 31 01.09.2005 Blue Dart Aviation 112 TALMAT AMAR FERMAT 63 CAPTAIN 7279094 ATPL 41 02.05.2008 AIR ALGERIA 113 URMEZ PHIROZ MUGASETH 44 CAPTAIN 6128313 H.S.C. 22 16.08.2005 Air Sahara 114 V SATISH KUMAR 39 CAPTAIN 6987871 10+2 ATPL 18 17.02.2006 Air Deccan 115 VARINDAR NATH SHARMA 58 SENIOR EXECUTIVE PILOT 6069360 10+2 CHPL 38 21.09.2009 Global Vectra Helicorptor / IAF 116 VIJAY K. ARORA 58 EXECUTIVE DIRECTOR - GLOBAL SALES 8716803 B. A. 35 01.12.2006 United Spirits Ltd. 117 VIJAY KUMAR REDDY 55 CAPTAIN 6458553 H.S.C. 30 01.04.2005 Jet Airways 118 VIKRAM KAPOOR 43 INSTRUCTOR 6610794 B. Com. 22 03.10.2006 Sahara Airlines 119 VIMAL ROY 40 GENERAL MANAGER - FLIGHT OPERATIONS TRAINING 8298010 H.S.C. 18 03.01.2005 Jet Airways 120 VINOD ARORA 43 CHECK PILOT 6042999 Graduation 22 09.01.2008 Jet Lite I Ltd 121 VISHOK MANSINGH 47 AVP - ENGINEERING LOGISTICS SYSTEMS 7259055 B. E. 26 05.08.2008 Blue Dart Aviation Ltd 122 VISHWAS GANESH DATAR 55 CAPTAIN 6595980 ATPL 33 17.11.2008 IAF 123 XERXES HOMI BUHARIWALA 39 CAPTAIN 6131885 ATPL 17 13.10.2008 Jet Airways 124 YATEEN ANANT PANDIT 38 CAPTAIN 6051584 B. com. 17 11.06.2005 Buddha Air Pvt Ltd 125 ZORAN RAKIC 51 CAPTAIN 7753206 ATPL 29 01.06.2007 Jet Airways 126 ZUBIN K GEORGE 36 CAPTAIN 6133509 10+2 ATPL 15 21.01.2005 Air Deccan

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8 STATEMENT OF PARTICULARS OF EMPLOYEES Contd. Employed for part of the year and were in receipt of remuneration at the rate of not less than Rs. 500000 per month Notes : 1. Remuneration as shown above includes Salary House Rent Allowance Companys contribution to Provident Fund value of Residential Accommodation and monetary value of perquisites as per Income Tax Rules. 2. No Employee is on Contract Employment. Other Terms and Conditions are as per Service Rules of the Company from time to time. For and on Behalf of the Board of Directors Mumbai Dr. Vijay Mallya August 10 2012 Chairman Managing Director SL. NO. NAME AGE DESIGNATION / NATURE OF DUTIES REMUNERATION Rs. QUALIFICATION EXPERI- ENCE IN YRS. DATE OF COM- MENCEMENT OF EMPLOYMENT PARTICULARS OF PREVIOUS EMPLOYMENT 1 A.S. PEDNEKAR 51 CHECK PILOT 3981433 B. A. 30 09.05.2005 Air Deccan 2 ABHINAV DEV SHARMA 29 INSTRUCTOR 5165797 B. Sc. 6 06.08.2005 Jet Airways 3 AJAY KANNAN 30 CAPTAIN 2766009 CPL 8 01.11.2006 Air Deccan 4 AJAY KUKREJA 50 EXAMINER 5186803 10+2 ATPL 30 14.05.2004 Air Deccan 5 AKSHAY RENAVIKAR 44 INSTRUCTOR 6537139 H.S.C. 21 03.01.2005 Jet Airways 6 AMIT BAJAJ 45 EXAMINER 6241694 H.S.C. 22 01.02.2005 Air Sahara 7 ANGEL ARMANDO BARCEN 46 CAPTAIN 6113835 ATPL 24 31.03.2006 AIR ACES 8 ANIRVAN CHAKRAVARTY 33 CAPTAIN 4726600 B. Sc. 3 08.05.2006 Tatanagar Aviation P Ltd 9 ANSHU SAGAR KALRA 49 EXAMINER 5514630 B. Sc. 25 09.05.2005 IAF 10 ASHAN TISSA DILHAN D 43 CAPTAIN 721155 ATPL 18 01.01.2011 Srilankan Airlines 11 AZZEDDINE BENZIANI 60 CAPTAIN 6848278 ATPL 33 05.01.2011 Onur Air 12 BIKRANT DAS PRADHAN 37 CAPTAIN 5003117 ATPL 15 21.02.2008 BUDDHA AIR 13 BINISH THOMAS GEORGE 33 CAPTAIN 2574185 CPL 12 13.03.2006 CFI 14 C V S RAVI 54 EXAMINER 6715968 H.S.C. 29 21.01.2005 Air Sahara 15 CANO JORGE ISAAC GOM 57 CAPTAIN 5161917 ATPL 36 02.01.2006 AIR ACES 16 CHITSIME ARTHUR WALE 46 CAPTAIN 1215321 B. Sc.ChemistryATPL 25 23.04.2007 Precision 17 DINESH DHAWAN 55 CAPTAIN 4321348 ATPL 33 18.08.2008 IAF 18 DULEEPKUMAR DAVID JO 59 CAPTAIN 7608245 ATPL 35 18.04.2008 Sri Lankan Airways 19 ERWIN HAROLDO PEREZ 46 CAPTAIN 5793077 ATPL 24 24.05.2006 Air Aces 20 G SHIV KUMAR 49 EXAMINER 5609764 M. Sc. LLB 26 01.09.2005 IAF 21 GAURAV BEHAL 37 CHECK PILOT 4593794 10+2 ATPL 15 02.11.2004 Air Deccan 22 GAURAV SHEKHAR BANG 28 CAPTAIN 5113325 CPL 0 07.06.2006 1st Employment 23 GEOFFREY JESUDASON 65 Chief Examiner A320 2831085 H.S.C. 40 13.09.2004 Indian Airlines 24 HERMES DE AZEVEDO 55 CAPTAIN 4800155 ATP A320 33 12.09.2007 TAM BRAZIL 25 HIMANSHI SINGH 28 CAPTAIN 4600763 10+2 ATPL 8 28.01.2006 Air Deccan 26 HOLGER GALLO MANRIQU 51 CAPTAIN 5135706 ATPL 30 20.09.2005 AIR ACES 27 JOSE MARTIN UZCATEGU 62 CAPTAIN 5427560 ATPL 40 16.02.2007 SANTA BARBARA AIRLINES 28 JUGASHREE CHOWDHURY 52 CAPTAIN 5730174 M. Sc. 31 21.11.2006 IAF 29 KADATHANAD RAGHAVAN 48 CHECK PILOT 5245078 10+2 ATPL 29 15.01.2005 Air Deccan 30 KAMALRAJ SINGH 65 Captain 1297030 Graduate from IAF 43 10.03.2006 Air India 31 KOROSH IMANI TEHRANI 41 CAPTAIN 5436738 ATPL 20 01.08.2007 Air Deccan 32 LAWRENCE FREDRICK HICKS J R 32 CAPTAIN 6300396 ATPL 11 02.08.2010 Religare Airlines 33 LUIS CRISANTO GARME 51 CAPTAIN 4584925 ATPL 33 10.05.2010 LTA Linea Turistica Aerotuy 34 MAHESH KULKARNI 42 CHECK PILOT 6029517 10+2 ATPL 22 01.07.2005 Air Deccan 35 MAURO OLIVIER DE CAS 53 CAPTAIN 5798299 ATPL 32 14.06.2005 TOTAL AIRLINES 36 MEENA PANDEY 47 CAPTAIN 4048465 B. Sc 25 10.08.2005 NEPC Airlines Ltd 37 MUKUL GUPTA 45 CHECK PILOT 6030927 B.Com. 24 22.04.2006 Alliance Air 38 NARINDER SINGH 51 CHECK PILOT 3100272 M.Sc. 25 06.02.2006 Indian Navy 39 OMPRAKASH CHOUDHARY 40 CAPTAIN 4260784 B.A. 19 14.11.2007 Jet Lite I Ltd 40 PARAG GAONKAR 32 CHECK PILOT 4502346 ATPL 10 10.01.2008 Air Sahara 41 PATRICK RONALD TOBIN 48 CAPTAIN 3536219 10+2 ATPL 29 16.05.2005 Air Deccan 42 PAUL HENRY MOULINIER 47 CAPTAIN 2576188 ATPL 25 25.04.2007 SANTA BARBARA AIRLINES 43 PAYAL PASRICHA 38 CAPTAIN 3647994 B.Sc. 16 22.05.2006 Alliance Air 44 POPESCU SORIN COSTEL 55 CAPTAIN 1053507 ATPL 27 20.10.2009 Air Tarom 45 R. SATISH 35 CAPTAIN 5026311 CPL 13 19.04.2007 Fresher 46 RAJESH BHAT 47 EXAMINER 6494634 M. Sc. 25 01.10.2005 IAF 47 RAJIV BATTISH 52 CHECK PILOT 4571619 10+2 ATPL 33 01.05.2004 Air Deccan 48 RAJKUMAR 50 INSTRUCTOR 5165893 10+2 ATPL 30 03.04.2004 Air Deccan 49 RAMESH KUMAR DEWAN 65 CAPTAIN 1612464 10+2 ATPL 46 19.09.2005 Air Deccan 50 ROHIT SHARMA 27 CAPTAIN 5232182 CPL 6 24.07.2006 Fresher 51 SAMEER MEHRA 47 INSTRUCTOR 4777999 Graduate of National Defence Academy 26 04.08.2005 Indian Navy 52 SAMIR SHAH 54 EXAMINER 5473125 H.S.C. 33 03.01.2005 IAF 53 SANJEEV SHARMA 39 INSTRUCTOR 6036879 ATPL 17 01.10.2008 Indigo 54 SERGIO ESTUARDO VALD 50 CAPTAIN 5281922 ATPL 29 16.02.2007 TACA AIRLINES 55 SHAILENDRA 34 CAPTAIN 5201862 CPL 13 22.06.2006 Fresher 56 SHAILESH KUMAR GAUTA 30 CAPTAIN 4122426 10 +2 CPL 10 17.08.2006 Air Deccan 57 SHIVRAJ SINGH HADA 50 CHECK PILOT 4591751 10+2 ATPL 30 02.11.2004 Air Deccan 58 SIDDHARTHA KAUSHAL 37 INSTRUCTOR 5133130 H.S.C. 16 28.05.2006 Silk Air Pvt. Limited 59 SRINIVAS CHILLARA 48 CHECK PILOT 4144065 M.Phil M.Sc. 26 01.03.2007 Indian Air Force 60 STEVEN HADDAWAY 54 CAPTAIN 1906085 ATPL 33 01.06.2007 United Airlines 61 SUNDARESAN NAGARAJAN 54 HEAD - CORPORATE FINANCE 3461400 CA 30 01.11.2011 United Spirits Limited 62 SURINDER KUMAR BHAT 53 CHECK PILOT 4661198 M.Sc. 31 01.07.2005 Indian Air Force 63 SYED MOHAMMED NASR A 33 CAPTAIN 4872129 10 +2 CPL 11 06.05.2006 Air Deccan 64 TEJVIR SINGH TOMAR 54 CHECK PILOT 6183867 H.S.C. 28 06.08.2005 IAF 65 UDAY MANOHAR KOLHATKAR 53 CHECK PILOT 7093639 H.S.C. 28 03.01.2005 Air Deccan 66 VERNON SALDANHA 44 INSTRUCTOR 6557721 Diploma In Hotel Management 23 14.02.2008 Srilankan Airlines 67 VIJAY KUMAR AGARWAL 49 CHECK PILOT 3564804 ATPL 27 01.10.2008 Indigo 68 VIJAY SEKHAR PODA 57 CAPTAIN 5479497 ATPL 35 01.08.2008 IAF 69 VIKRAM SINGH BAL 39 CAPTAIN 4857594 10+2 Maths Physics Chemistry 17 01.09.2005 Patiala Aviation Club 70 VINAY YADAV 28 CAPTAIN 5304316 CPL 0 12.10.2006 1st Employment 71 VIVEK SONDHI 49 CAPTAIN 3200451 H.S.C. 27 09.05.2005 IAF 72 YVES JEAN DUMONT 38 CAPTAIN 5689860 ATPL 17 16.11.2007 DHL

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9 Report of the Directors Contd. STOCK OPTIONS GRANTED DURING THE YEAR UNDER THE ESOP 2005 2006 Disclosures as required by Clause 12 of the SEBI Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines 1999. Sl.No Particulars ESOP 2006 ESOP 2005 a Options granted Nil Nil b The Pricing formula Rs. 65/- Rs. 65/- c Options vested Nil Nil d Options exercised Nil Nil e The total number of shares arising as a result of exercise of options Nil Nil f Options lapsed Nil Nil g Variation of terms of options Nil Nil h Money realized by exercise of options Nil Nil i Total no. of options in force Nil Nil j Employee wise details of options granted: i Senior managerial personnel Nil Nil ii Any other employee who received a grant in any one year of option amounting to 5 or more of option granted during the year. Nil Nil iii Identified employees who were granted options during any one year equal to or exceeding 1 of the issued capital excluding outstanding warrants and conversions of the Company at the time of the grant Nil Nil k Diluted Earnings Per Share EPS pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard AS-20 N.A. N.A. l Method of accounting followed for value of charge on stock options as per the Guidance Note on Stock Based compensation by ICAI Intrinsic Value Intrinsic Value m Difference of amount of ESOP charge calculated as per the Intrinsic Value Method and the fair value of the options Black Scholes Method Rs. 7622330 n Proforma Earning Per Share if the Charge have been accounted in accordance with fair value method Black Scholes Method Rs. 46.90 o i weighted-averaged exercise prices Rs.65.00 Rs.65.00 and ii weighted-average fair values of options Rs. 137.93 Rs. 78.54 for options whose exercise price either equals or exceeds or is less than the market price of the stock p A description of the method and significant assumptions used during the year to estimate the fair values of options : i risk-free interest rate N.A. N.A. ii expected life years N.A. N.A. iii expected volatility N.A. N.A. iv expected dividends Nil Nil v the price underlying share in market at the time of option grant N.A. N.A.

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10 1. Company’s Philosophy on Corporate Governance Your Company is committed to excellence in corporate governance practices and recognizes that good corporate governance is a continuous exercise. Your Company aims at achieving transparency accountability equity and ethics in all facets of its operations and in all interaction with its stakeholders. Your Company believes that all its operations and actions must result in enhancement of overall shareholder value over a sustained period of time without compromising in any way compliance with laws and regulations. 2. Board of Directors During the financial year under review until September 5 2011 your Company’s Board of Directors comprised 8 Directors 1 Executive Director and 7 Non-Executive Directors. Consequent upon the resignation of Diwan Arun Nanda effective September 5 2011 Mr. Piyush Mankad and Mr. Ghyanendra Nath Bajpai effective January 9 2012 Mr. Vijay Amritraj effective March 14 2012 and Mr. Anil Kumar Ganguly effective March 17 2012 your Company’s Board of Directors comprised 3 Directors 1 Executive Director and 2 Non-Executive Directors. Subsequent to the year under review consequent upon the appointment of Mr. Manmohan Singh Kapur on April 24 2012 your Company’s Board of Directors comprise 4 Directors 1 Executive Director and 3 Non-Executive Directors. The constitution of the Board of Directors of your Company effective April 24 2012 is as follows: • Dr. Vijay Mallya – Chairman Managing Director • Mr. Subhash R. Gupte – Vice Chairman Non – Executive Director • Mr. A. K. Ravi Nedungadi – Non – Executive Director • Mr. Manmohan Singh Kapur – Non – Executive Independent Director During the year under review Five Board Meetings were held i.e. on May 23 2011 August 10 2011 August 25 2011 November 14 2011 and February 14 / 15 2012. Corporate Governance Attendance of each Director at the Board Meetings during the year under review and at the last Annual General Meeting and details of number of outside Directorships and Committee positions held by each of your Directors as on date are given below: Sl. No. Name of the Director Category of Directorship No. of Board Meetings attended Attendance at last AGM held on September 28 2011 No. of Other Companies in which Director No. of Committees other than your Company in which Chairman/ Member 1. Dr. Vijay Mallya Chairman Managing Director 5 Yes 19 Nil 2. Mr. Subhash R. Gupte Vice Chairman Non-Executive Non-Independent Director 5 Yes 9 4 Chairman of 2 3. Mr. A. K. Ravi Nedungadi Non-Executive Non-Independent Director 5 Yes 9 4 Chairman of 1 4. Diwan Arun Nanda Non-Executive Independent Director 1 3 No N.A. N.A. 5. Mr. Piyush Mankad Non-Executive Independent Director 2 2 No N.A. N.A. 6. Mr. Ghyanendra Nath Bajpai Non-Executive Independent Director 3 3 Yes N.A. N.A. 7. Mr. Vijay Amritraj Non-Executive Independent Director 4 1 Yes N.A. N.A 8. Mr. Anil Kumar Ganguly Non-Executive Independent Director 5 4 Yes N.A. N.A. 9. Mr. Manmohan Singh Kapur Non-Executive Independent Director 6 N.A. N.A. 11 7 Chairman of 3

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11 NOTE: The above details are in respect of their Directorship only in Indian Companies. a. Out of 19 other companies in which Dr. Vijay Mallya is a Director 6 are Private Limited companies and 2 are companies incorporated under Section 25 of the Companies Act 1956. b. Out of 9 other companies in which Mr. Subhash R. Gupte is a Director 2 are Private Limited companies and 2 are companies incorporated under Section 25 of the Companies Act 1956. c. Out of 9 other companies in which Mr. A. K. Ravi Nedungadi is a Director 3 are Private Limited companies and 1 is a company incorporated under Section 25 of the Companies Act 1956. d. Out of 11 other companies in which Mr. Manmohan Singh Kapur is a Director 2 are Private Limited companies. 1 Ceased to be Director w.e.f. September 5 2011. 2 Ceased to be Director w.e.f. January 9 2012. 3 Ceased to be Director w.e.f. January 9 2012. 4 Ceased to be Director w.e.f. March 14 2012. 5 Ceased to be Director w.e.f. March 17 2012. 6 Appointed as an Additional Director w.e.f. April 24 2012. Subsequent to the above resignations the composition of the Board fell below the minimum requirement specified in Clause 49 of the Listing Agreement wherein atleast half of the Board should comprise of Independent Directors. Your Company took proactive steps to achieve compliance with the listing requirements by obtaining the consent of Mr. Manmohan Singh Kapur Mr. Shrikant Ruparel and Mr. Lalit Bhasin to act as Independent Directors on the Board of your Company. Further Mr. Subramaniam Santhanakrishnan is proposed to be appointed as Nominee Director on the Board of your Company on behalf of the Consortium Banks. However in case of airline companies your Company is further required to comply with the Civil Aviation Requirement “CAR” prescribed by the Director General of Civil Aviation more specifically CAR Section 3 - Air Transport Series ‘C’ Part II dated March 1 1994 pursuant to which Directors shall be appointed only after their security clearance. Your Company has obtained security clearance in respect of Mr. Manmohan Singh Kapur and has appointed him as a Director Category – Independent / Non- Executive with effect from April 24 2012. Your Company has already applied for security clearances in respect of Mr. Shrikant Ruparel Mr. Lalit Bhasin and Mr. Subramaniam Santhanakrishnan and clearances are still awaited. Upon receipt of these security clearances your Company shall Corporate Governance Contd. forthwith induct these Independent Directors into the Board thereby ensuring due compliance with the requirements of the Listing Agreement. DISCLOSURE REGARDING APPOINTMENT AND RE-APPOINTMENT OF DIRECTORS Director retiring by rotation and seeking re-appointment A trained Chartered Accountant Mr. A. K. Ravi Nedungadi Mr. Nedungadi set early academic records by qualifying in the final of the Chartered Accountancy Exam at age 20. Early position at Macneill Magor Ltd. a diversified conglomerate and Pentagon Fasteners Ltd. Delhi set the stage for an outstanding track record with current employer. Mr. Nedungadi joined the UB Group in 1990 as the Corporate Treasurer. Within two years he was transferred to London as Group Finance Director of the Group’s international business managing the businesses of UB International which included the paint giant Berger Jenson and Nicholson spanning 27 countries. He was instrumental in listing the Berger group companies on London and Singapore bourses. Since his appointment as the President and Group CFO in 1998 the youngest to have been elevated to such a position in the Group Mr. Nedungadi led his way to sharpening the focus of the Group which had a conglomerate approach on areas of core competence and global reach. This saw the group focus on three verticals – Brewing Distilling Aviation each area presenting clear leadership within India and global significance too. He was also responsible for opening up the beverage alcohol sector to Global Best Practices and Transparency enabling the entry of institutional investors and rerating of the industry itself. Under his leadership the market capitalization of the 3 principal Group Companies has crossed US 7 billion which bears testimony to the successful accomplishment of business restructuring consolidation and enhanced shareholders value. As the principle leadership resources of UB Group Mr. Nedungadi was key to concluding the acquisition of Shaw Wallace Co. India Bouvet Ladubay France Whyte Mackay Scotland Air Deccan in India etc. each of which has contributed to the value creation for all stakeholders. Mr. Nedungadi is the recipient of many awards of excellence including the Udyog Rattan Award CNBC TV 18’s – CFO of the year – MA 2006 the CNBC Award for India’s best CFO in the FMCG Retail Sector 2007 the IMA Award for CFO of the year 2007 etc. Memberships in esteemed organizations like WHO’s Who of Professionals only reinforce the above testimonials. Further he is on the Board of Directors of several companies both in India and overseas.

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12 His interest in social work and the arts engage his free time. He is an active Rotarian and is a Trustee of Indian Foundation for Arts a leading Grant making Art Philanthropy. The details of his Directorships in other Indian Companies are as under: Other Directorships Position held Sanofi India Limited formerly Aventis Pharma Limited Director Bayer CropScience Limited Director Shaw Wallace Breweries Limited Director SWEW Benefit Company Section 25 Company Director United Breweries Limited Director Millenea Vision Advertising P Limited Director Beta Edutech Limited formerly Pie Education Limited Director Idea Streamz Consultants Private Limited Director He holds the following other Committee positions: Name of the Committee Position held Audit Committee Sanofi India Limited formerly Aventis Pharma Limited Member Bayer CropScience Limited Member Shareholders/Investors Grievance Committee Sanofi India Limited formerly Aventis Pharma Limited Member Bayer CropScience Limited Chairman Mr. A. K. Ravi Nedungadi does not hold any shares in your Company. New Director Mr. Manmohan Singh Kapur holds Degrees of B.Sc M.A from Punjab University. He is a career banker with more than 39 years experience mostly in the field of banking. He retired as Chairman Managing Director of Vijaya Bank. He was also the former Executive Director and Officiating Chairman Managing Director of Syndicate Bank Punjab Sind Bank. Prior to this he was Chief Vigilance Officer of Indian Overseas Bank as well as Union Bank of India. The details of his Directorships in other Indian Companies are as under: Other Directorships Position held United Breweries Holdings Limited Director Emco Energies Limited GMR Director Corporate Ispat Alloys Limited Director Shakti Bhog Foods Limited Director Other Directorships Position held Sri Adhikari Brothers Television Network Limited SAB Director Precision Pipes Profiles Co. Limited Director Broad Cast Initiatives Limited LIVE INDIA TV Director CHD Developers Limited Director GB Tools Forgings Limited Director ISID Private Limited Director The Lake Shore Palace Hotel Private Limited Director He holds the following other Committee positions: Name of the Committee Position held Audit Committee Corporate Ispat Alloys Limited Chairman Broad Cast Initiatives Limited LIVE INDIA TV Chairman Shakti Bhog Foods Limited Member Sri Adhikari Brothers Television Network Limited SAB Member Emco Energies Limited GMR Member GB Tools Forgings Limited Chairman Shareholders/Investors Grievance Committee Precision Pipes Profiles Co. Limited Member Mr. Manmohan Singh Kapur does not hold any shares in your Company. 3. AUDIT COMMITTEE The Audit Committee was constituted on December 21 2005 to meet the requirements under both the Listing Agreement and Section 292A of the Companies Act 1956. During the year under review meetings of the Committee were held on May 23 2011 August 10 2011 and November 14 2011. The details of attendance by members of the Committee are as below: Members Category No. of Meetings Attended Mr. Anil Kumar Ganguly Non-Executive/ Independent 3 Mr. A. K. Ravi Nedungadi Non-Executive/ Non-Independent 3 Diwan Arun Nanda Non-Executive/ Independent 2 Mr. Subhash R. Gupte Non-Executive/ Non-Independent 2 Mr. Ghyanendra Nath Bajpai Non-Executive/ Independent 3 Corporate Governance Contd.

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13 Ceased to be Director / Member of the Committee with effect from March 17 2012. Ceased to be Director / Member of the Committee with effect from September 5 2011. Ceased to be a Member of the Committee with effect from November 1 2011. Ceased to be Director / Member of the Committee with effect from January 9 2012. Consequent to the resignations of the Independent Directors viz. Diwan Arun Nanda Mr. Anil Kumar Ganguly and Mr. Ghyanendra Nath Bajpai from the Board who were also Members of the Audit Committee your Company was unable to meet the requirement of the Listing Agreement that atleast two third of the members of Audit Committee shall be Independent Directors as already set out hereinabove under item no. 2 Board of Directors your Company is in the process of inducting Independent Directors into the Board upon which the Audit Committee will be constituted to ensure compliance with the listing agreement. The current composition of the Committee is as given below : • Mr. A. K. Ravi Nedungadi • Mr. Manmohan Singh Kapur The terms of reference to the Audit Committee cover the areas mentioned under Clause 49 of the Listing Agreement and Section 292A of the Companies Act 1956 besides some other functions as are referred to it by the Board of Directors which are as follows : • Regular review of accounts accounting policies disclosures etc. • Review of the major accounting entries based on exercise of judgment by management and review of significant adjustments arising out of audit. • Qualifications in the draft audit report. • Establishing and reviewing the scope of the independent audit including the observations of the auditors and review of the quarterly half-yearly and annual financial statements before submission to the Board. • The Committee shall have post audit discussions with the independent auditors to ascertain any area of concern. • Establishing the scope and frequency of internal audit reviewing the findings of the internal auditors and ensuring the adequacy of internal control systems. • To look into reasons for substantial defaults in the payment to depositors debenture holders shareholders and creditors. • To look into the matters pertaining to the Directors’ Responsibility Statement with respect to compliance with Accounting Standards and Accounting Policies. • Compliance with Stock Exchange legal requirements concerning financial statements to the extent applicable. • The Committee shall look into any related party transactions i.e. transactions of the Company of a material nature with promoters or management their subsidiaries or relatives etc. that may have potential conflict with the interests of company at large. • Appointment and remuneration of statutory and internal auditors. • Such other matters as may from time to time be required by any statutory contractual or other regulatory requirements to be attended to by the Audit Committee. 4. SHARE ALLOTMENT TRANSFERS AND INVESTOR GRIEVANCE COMMITTEE The Share Allotment Transfers and Investor Grievance Committee was constituted on December 21 2005 to operate in terms of the provisions related thereto in the Listing Agreements with the Stock Exchanges and/or the provisions as prescribed or may be prescribed in this regard by the Companies Act 1956. During the year under review the said Committee comprised of the following Directors: • Mr. Anil Kumar Ganguly – Chairman • Mr. Subhash R. Gupte • Mr. A. K. Ravi Nedungadi Ceased to be Director/Member of the Committee with effect from March 17 2012. Mr. Bharath Raghavan Chief Legal Officer Company Secretary is the Compliance Officer of the Company. During the year under review no meetings of the Committee were held. The Company/ Company’s Registrars received 16 complaints during the financial year all of which were resolved to the satisfaction of shareholders/ investors. Corporate Governance Contd.

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14 There are no complaints or Transfer of Shares pending as on March 31 2012. 5. REMUNERATION COMPENSATION COMMITTEE The Remuneration Committee originally constituted on March 16 2005 was reconstituted as the Remuneration Compensation Committee on October 15 2008. The Committee is authorized inter alia to deal with matters relating to framing policies and compensation including salaries and salary adjustments incentives bonuses promotion benefits stock options and performance targets of top executives remuneration of Directors strategies for attracting and retaining employees employee development programmes and other key issues referred by the Board of Directors of your Company. During the year under review the Committee comprised of the following Directors: • Diwan Arun Nanda - Chairman • Mr. Anil Kumar Ganguly • Mr. A. K. Ravi Nedungadi Ceased to be Director/Member of the Committee with effect from September 5 2011. Ceased to be Director/Member of the Committee with effect from March 17 2012. Mr. Bharath Raghavan Chief Legal Officer Company Secretary is the Secretary to the Committee. During the year under review one meeting of the Committee was held on August 10 2011. a Sitting fees of Non-Executive Directors : Name of the Director Fees paid for attending Board/Committee Meetings Rs. Mr. Subhash R. Gupte 130000 Mr. A. K. Ravi Nedungadi 160000 Mr. Vijay Amritraj 20000 Mr. Piyush Mankad 40000 Mr. Anil Kumar Ganguly 130000 Diwan Arun Nanda 90000 Mr. Ghyanendra Nath Bajpai 90000 None of the Non-Executive Directors of your Company have any pecuniary relationship or transaction with your Company. b Shareholding of Non Executive Directors during the year under review: None of the Non-Executive Directors owned any shares on beneficial basis during the year under review. 6. GENERAL BODY MEETINGS The details in respect of the last three Annual General Meetings are furnished as under: Financial Year Date Time Venue 2008-2009 September 29 2009 02.45 p.m. Good Shepherd Auditorium Opp. St. Joseph’s Pre-University College Residency Road Bangalore – 560 025. 2009-2010 September 30 2010 12.45 p.m. Good Shepherd Auditorium Opp. St. Joseph’s Pre-University College Residency Road Bangalore – 560 025. 2010-2011 September 28 2011 11.30 a.m. Good Shepherd Auditorium Opp. St. Joseph’s Pre-University College Residency Road Bangalore – 560 025. All the resolutions set out in the Notices including Special Resolutions were passed by the Shareholders. Postal Ballot Your Company has not passed any resolution at the above Annual General Meetings which was required to be passed through Postal Ballot as per the provisions of the Companies Act 1956 “the Act” and the rules framed thereunder. Your Company has not conducted any Postal Ballot exercise for passing any resolution during the year under review. At this meeting also there is no special resolution requiring passing by way of Postal Ballot. No special resolution is proposed to be passed through Postal Ballot at present. 7. DISCLOSURES During the year under review there were no materially significant related party transactions with your Company’s promoters the Directors or the management Corporate Governance Contd.

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15 10. GENERAL SHAREHOLDERS’ INFORMATION a Annual General Meeting Date September 26 2012 Time 2.30 p.m. Venue Good Shepherd Auditorium Opp. St. Joseph’s Pre-University College Residency Road Bangalore - 560 025. b Financial Year April 1 2011 to March 31 2012 c Dates of Book Closure September 21 2012 to September 26 2012 both days inclusive. d Dividend Payment Date Your Company has not declared any dividend for the period April 1 2011 to March 31 2012. e Listing Fees The listing fees for the year 2012-13 have been paid to both the Stock Exchanges where your Company’s equity shares are listed. f Registered Office UB Tower Level 12 UB City 24 Vittal Mallya Road Bangalore 560 001. g Listing on Stock Exchanges in India Bombay Stock Exchange Limited P. J. Towers Dalal Street Mumbai - 400 001. National Stock Exchange of India Limited Exchange Plaza C/1 Block G Bandra-Kurla Complex Bandra E Mumbai - 400 051. h Stock Code BSE- 532747 NSE- SYMBOL - KFA i ISIN No. INE438H01019 j Financial Calendar for the period April 1 2012 to March 31 2013 is as given below: First Quarterly Results By August 14 2012 Second Quarterly Results By November 14 2012 Third Quarterly Results By February 14 2013 Audited Financial Results for the year 2012 - 13 By May 30 2013 k Market Price Data The shares of the Company are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The table below sets out the monthly high and low quotations of the shares traded during the year under review. Your Company’s Management cautions the readers that the share price performance shown in the table below should not be considered to be indicative of the share price in the future. their subsidiaries or relatives that may have potential conflict with the interests of your Company at large. Details of related party transactions form part of Notes to Accounts. Your Company has complied with all the statutory requirements comprised in the Listing Agreement/ Regulations / Guidelines / Rules of the Stock Exchanges / SEBI / other statutory authorities except for the following: a The National Stock Exchange of India Limited and The Bombay Stock Exchange Limited had issued letters dated May 17 2012 and May 24 2012 respectively regarding non compliance of Clause 49IA 49IIA IIB of the Listing Agreement pertaining to Composition of Board Qualified Independent Audit Committee and Meeting of the Audit Committee for the quarter ended March 31 2012. Your Company has replied to the said letters outlining the action taken/ proposed to be taken to ensure compliance with the relevant clauses of the Listing agreement. b The National Stock Exchange of India Limited had issued letters dated February 24 2012 and June 18 2012 alleging non-compliance with Clause 41 of the listing agreement in respect of Unaudited Financial Results for the quarter ended December 31 2011 and Audited Financial Results for the year ended March 31 2012 respectively. Your Company has replied to the said letters. There were no other instances of non-compliance by your Company nor have any penalties strictures have been imposed by stock exchanges or SEBI or any statutory authorities on any matter related to capital markets during the last three years. 8. MEANS OF COMMUNICATION The unaudited quarterly half-yearly results are sent to all the Stock Exchanges where the shares of your Company are listed. The results are normally published in Business Standard and Vijaya Karnataka. The results and presentation to analysts/ investors are displayed on your Company’s website www.flykingfisher.com. 9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion Analysis Report forms part of this Annual Report. Corporate Governance Contd.

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16 l Share Price of your Company ON BSE ON NSE Month High Rs. Low Rs. Close Rs. Volume Nos. High Rs. Low Rs. Close Rs. Volume Nos. April 2011 49.25 40.00 43.60 19065866 49.00 40.05 43.65 58450646 May 2011 45.40 39.40 42.50 12495618 45.50 39.30 42.55 40808225 June 2011 44.30 35.10 40.10 15202312 44.25 35.00 40.10 49020912 July 2011 41.30 34.15 34.60 8564937 41.35 34.20 34.60 30818472 August 2011 35.25 23.20 25.55 10707580 35.30 23.35 25.55 42981572 September 2011 28.40 18.85 20.00 14081790 28.35 18.85 20.05 51195500 October 2011 25.20 18.85 24.40 14995187 24.65 18.90 24.40 64797396 November 2011 27.75 17.55 24.15 61658803 27.70 17.70 24.10 223916240 December 2011 26.20 19.90 21.05 17479949 26.45 19.85 21.05 77603900 January 2012 27.70 18.00 24.70 24360682 27.70 18.15 24.65 91924535 February 2012 30.90 21.40 24.65 52929734 30.75 21.35 24.60 150171411 March 2012 25.30 16.15 16.55 70117912 25.40 16.20 16.50 195022661 The Company’s performance for the period from April 1 2011 to March 31 2012 vis-à-vis BSE Sensex NSE NIFTY. Your Company vis-à-vis BSE Corporate Governance Contd. Your Company vis-à-vis NSE

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17 m Registrar and Share Transfer Agents Karvy Computershare Pvt. Ltd. Plot No. 17-24 Vittal Rao Nagar Madhapur Hyderabad - 500 081 Tel. No. : 91 - 040 - 44655000 Fax No. : 91 - 040 - 23420814 Email : einward.riskarvy.com n Share Transfer System The power to consider and approve share transfers/ transmission/ transposition/ consolidation/ subdivision etc. has been delegated to a Committee of Directors as indicated under the heading “Share Allotment Transfers and Investor Grievance Committee”. The Committee meets when necessary. The requirements under the Listing Agreement/ Statutory regulations in this regard are being followed. o Distribution of Shareholding as on March 31 2012 Shareholding of nominal value Rs. Shareholders Share Amount Number to total In Rs. to total upto - 5000 115038 82.37 172717970 2.99 5001 - 10000 12615 9.03 108481470 1.88 10001 - 20000 5843 4.18 93402850 1.62 20001 - 30000 1894 1.36 49604990 0.86 30001 - 40000 894 0.64 32765080 0.57 40001 - 50000 964 0.69 46611510 0.81 50001 - 100000 1241 0.89 97565730 1.69 100001 and above 1170 0.84 5175323140 89.59 Total 139659 100.00 5776472740 100.00 p Shareholding Pattern as on March 31 2012 Sl. No. Name of Shareholder No. of shares of holding 1. Promoter and Promoter Group 289992626 50.20 2. Financial Institutions / Banks 106567038 18.45 3. Insurance Companies 1136595 0.20 4. Bodies Corporate 78031399 13.51 5. Individuals 79529277 13.77 6. Trusts 542059 0.09 7. Clearing Members 14724777 2.55 8. Foreign Institutional Investors 4095570 0.71 9. Non Resident Indians 2322033 0.40 10. Foreign Nationals 705900 0.12 Total 577647274 100.00 q Percentage of Shares held in Physical Electronic Form as on March 31 2012 Sl. No. Category Holders Total Shares To Equity 1. Physical 32 5368770 0.93 2. NSDL 93274 437900370 75.81 3. CDSL 46353 134378134 23.26 Total 139659 577647274 100.00 Your Company has not issued GDRs/ADRs/Warrants. During the year under review 19975000 8 Optionally Convertible Debentures of Rs.100/- each “OCDs” were converted into 79868051 equity shares of Rs. 10/- each at a conversion price determined as per applicable SEBI regulations with reference to the date of conversion out of the 70931985 OCDs. Subsequent to the year under review 50956985 OCDs were converted into 231075716 equity shares of Rs. 10/- each. r Dematerialisation of Shares 99.07 of the paid-up capital was held in dematerialized form as on March 31 2012 and 99.91 as on date. s Code of Conduct In compliance with Clause 49 of the Listing Agreement with the Stock Exchanges the Company has adopted a Code of Business Conduct and Ethics for its Board Members and Senior Management Personnel a copy of which is available at the Company’s website www.flykingfisher.com. All members of the Board and senior management personnel affirmed compliance with the Code for the year ended March 31 2012 and a declaration to this effect signed by the CEO forms part of this report. Pursuant to the requirements of SEBI Prohibition of Insider Trading Regulations 1992 the Company has adopted a “Code of Conduct for Prevention of Insider Trading”. This Code is applicable to all the Directors and designated employees of the Company. t Address for Correspondence Shareholder correspondence should be addressed to your Company’s Registrar and Share Transfer Agents: Corporate Governance Contd.

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18 Karvy Computershare Pvt. Ltd. Plot No. 17-24 Vittal Rao Nagar Madhapur Hyderabad - 500 081 Tel. No. : 91-040-44655000 Fax No. : 91-040-23420814 Email ID : einward.riskarvy.com Investors may also write to or contact Mr. Bharath Raghavan Chief Legal Officer Company Secretary at: Kingfisher Airlines Limited Kingfisher House Western Express Highway Vile Parle East Mumbai – 400 099. Tel No. : 91-022-26262392 Fax No. : 91-022-26262317 In compliance with the provisions of Clause 47f of the Listing Agreement with the Stock Exchanges an exclusive email Id viz investor.relationsflykingfisher.com has been designated for registering complaints by investors which has been displayed on the website of your Company www.flykingfisher.com. u Clause 5A of the Listing Agreement Pursuant to Clause 5A of the Listing Agreement the Company’s Registrars Transfer Agents have already sent three reminders to all the shareholders whose share certificates were returned undelivered and remained unclaimed. Necessary action is being taken to transfer the unclaimed shares in respect of the shareholders who have not yet responded to a folio in the name of “Unclaimed Suspense Account”. The voting rights on such shares shall remain frozen till rightful owners claim the shares. NON MANDATORY REQUIREMENTS a. Remuneration Committee Your Company has constituted a “Remuneration Compensation” Committee. b. Shareholders Rights Your Company’s half-yearly results are published in English and Kannada newspapers. Hence the same are not sent to the shareholders. c. Training of Board Members The Board of Directors comprises of well experienced and accomplished members and their formal training is considered not necessary. d. Whistle Blower Policy Your Company has a Whistle Blower Policy in place.

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19 CERTIFICATE ON CORPORATE GOVERNANCE The Members of Kingfisher Airlines Limited We have examined the compliance of conditions of Corporate Governance by Kingfisher Airlines Limited for the year ended March 31 2012 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement except to the extent as already mentioned in the Corporate Governance Report. We state that in respect of investor grievances received during the year ended March 31 2012 no grievances are pending against the Company as per records maintained by the Company. We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. Bangalore M. R. GOPINATH August 10 2012 Company Secretary in practice FCS 3812 CP 1030 CEO / CFO CERTIFICATE In terms of the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges the certificates from CEO / CFO have been obtained. On behalf of the Board of Directors Mumbai Dr. Vijay Mallya August 10 2012 Chairman Managing Director DECLARATION REGARDING AFFIRMATION OF CODE OF CONDUCT In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges the Board Members and Senior Management personnel of the Company have affirmed compliance with the Code of Business Conduct and Ethics of the Company for the financial year ended March 31 2012. Mumbai Sanjay Aggarwal August 10 2012 Chief Executive Officer

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20 1. Industry structure and development a. After a period of recovery for the global economy in 2011 recently signs of stress have appeared with the emergence of financial crises in Europe and sharp increases in prices of commodities. This has reduced the outlook for global economic growth to about 2 in 2012. When compared to the recent past Indias economic growth has slowed with the real Gross Domestic Product GDP growth for 2011-12 at 6.5 and a target of 6.5 also indicated for 2012-13. b. The global airline industry in 2011-12 recorded moderate growth and profitability of all major airlines across the world was significantly reduced due to sustained high level of fuel prices. c. The International Air Transport Association IATA that represents 240 airlines comprising about 84 of total air traffic has forecast global airline traffic growth at nearly 4 primarily driven by above average demand growth in Middle-East Latin America and Asia Pacific. Also domestic passenger traffic trends observed in 2012 vs. 2011 in India is a cause for concern. d. Jet fuel continues to remain a significant element of cost with IATA forecasts pegging this cost element at 36 of operating costs in 2012 up from 30 in 2011 with an average crude oil price Brent outlook of US 135 per barrel. 2. Industry Operating Environment a. As per IATA forecast for March 2012 the global airline industry is expected to post a net loss of US 5.3 billion in 2012 with an estimated average crude oil price of US 135 per barrel. This is in stark contrast to IATA’s original outlook for 2012 at the beginning of the year which had forecast a net profit for the industry at US 3 billion. b. The Indian airline industry which is exposed to one of the toughest operating environments globally is also expected to struggle with such profitability pressures more so with one of the highest prices for Jet Fuel across the world given the tax structure recent depreciation of the rupee and the high cost of borrowing. c. For the year under review the increase in passenger traffic was relatively lower than that achieved in previous years estimated at 13 compared to 20 in the previous year ended March 31 2011. However capacity in the industry grew by 17 for the same period and this consequently led to a marginal decrease in the industry load factor by approximately 1 percentage point compared to the previous year. d. Yields have been under pressure through large periods of the year. This was a result of irrational pricing policies adopted by some competitors and above average addition of capacity by low-cost carriers. Coupled with this situation the rise in fuel prices through the year has significantly constrained the profitability of the industry. 3. Internal control systems and their adequacy a. Your Company has a proper and adequate system of internal controls commensurate with its size and nature of operations to provide reasonable assurance that all assets are safeguarded transactions are authorized recorded and reported properly and applicable statutes codes of conduct and corporate policies are duly complied with. b. The Internal Audit department reviews the adequacy and efficacy of the key internal controls guided by the Audit Committee of the Board. c. One of the objectives of the Company’s Audit Committee is to review the reports submitted by the Internal Audit department and to monitor follow-up and corrective actions by Management. d. Your Company has a compliance procedure to ensure that all laws rules and regulations applicable to it are complied with. e. The Company Secretary is the designated Compliance Officer to ensure compliance with Securities and Exchange Board of India regulations and with the Listing Agreement with The National Stock Exchange of India Limited and Bombay Stock Exchange Limited. f. Your Company has a process of both external and internal safety audits for each area of operation. Your Company is in full compliance with all laws rules and regulations relating to airworthiness air safety and other statutory operational requirements. g. Your Company as part of its Risk Management strategy reviews on a continuous basis its Management Discussion and Analysis Report

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21 strategies processes procedures and guidelines to effectively identify and mitigate risks. Further the Management has developed a procedure to ensure adequate disclosures of key risks and mitigation initiatives to the Audit Committee of the Board. 4. Analysis of operational performance for the period ended March 31 2012 The current financial period is for the twelve month period from April 1 2011 to March 31 2012 FY12. Financial Results of Operations: FY12 FY11 Rs. million Rs. million difference Income Passenger 49102 56210 13 Cargo 4356 4519 4 Excess Baggage 327 306 7 Rebooking charges/ cancellation 1150 1299 11 Other Income 3305 2622 26 Total Income 58240 64956 10 Expenditure Employees costs 6695 6760 1 Aircraft/ engine lease rentals 8685 9840 12 Aircraft fuel expenses 29459 22740 30 Operating and other expenses 20863 24371 14 Depreciation/ Amortisation 3419 2410 42 Interest Finance charges 12763 13129 3 Exceptional Item 10816 913 1086 Total expenditure inc. exceptional item 92700 80163 16 Income Your Company’s total income stood at Rs. 58240 million during the twelve month period from April 1 2011 to March 31 2012. a. Income from services formed 94 of total income at Rs. 54935 million. Domestic revenues recorded for the period under review was Rs. 41126 million as against Rs. 47731 million in the previous year ended March 31 2011. Revenue generation has been significantly impacted in Q4 2011-12 due to operational downsizing and rationalization of capacity forced by tough operating environment. b. During the twelve month period ended March 31 2012 your Company’s International revenues stood at Rs. 13809 million as against Rs. 14602 million in the previous year ended March 31 2011. c. Other Operating Income stood at Nil during the twelve month period ended March 31 2012 as compared to Rs. 1263 million in the previous year ended March 31 2011 since the benefit of Duty Free Credit Entitlement Scheme was stopped for the aviation sector during the previous year ended March 31 2011. d. Other income stood at Rs. 3305 million during the twelve month period from April 1 2011 to March 31 2012 an increase of 26 when compared to the previous year ended March 31 2011. Other Income comprised mainly of liabilities no longer applicable and written back of Rs. 1487 million. Expenditure Total expenditure including exceptional items stood at Rs. 92700 million during the twelve month period from April 1 2011 to March 31 2012 an increase of 16 when compared to the previous year ended March 31 2011. a. Aircraft fuel expenses: Expenditure on fuel stood at Rs. 29459 million during the twelve month period from April 1 2011 to March 31 2012 accounting to 32 of the total costs. Prices have steadily risen through the year and ended 22 higher than prices at beginning of the year. Domestic ATF price movement in INR is given below: Your Company has attempted to contain overall fuel costs by a combination of route rationalization which saw cut on capacity on unprofitable routes and fuel consumption saving programs. Management Discussion and Analysis Report Contd.

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22 b. Aircraft Engine/Lease Rentals: Aircraft/engine lease rentals stood at Rs. 8685 million during the twelve month period from April 1 2011 to March 31 2012. Your Company operated 67 aircraft scheduled and non scheduled up to November 2011 13 of which were owned through finance leases and 54 are held under operating leases. Since November 2011 till the end of the financial year your Company returned 16 aircraft and the fleet as on March 31 2012 was 55 aircraft. c. Employee Remuneration and Benefits Personnel Costs: Employee remuneration and benefits stood at Rs. 6695 million during the twelve month period from April 1 2011 to March 31 2012. Your Company saw a reduction of 1 costs on employee remuneration. The number of employees of your Company for the period ended March 31 2012 was 5696 from 7317 employees in the previous year ended March 31 2011. d. Oth er Operating Expenses: Other operating expenses stood at Rs. 20863 million during the twelve month period from April 1 2011 to March 31 2012. The reduction in cost was mainly due to reduction in operations in the second half of the fiscal year. e. Interest and Finance Charges: Interest and Finance Charges amounted to Rs. 12763 million during the twelve month period from April 1 2011 to March 31 2012. Loan funds increased to Rs. 91336 million as against Rs. 70571 million. Your Company incurred interests of Rs. 12052 million on fixed and other loans as against Rs. 11189 million incurred in FY11. Bank charges and guarantee commission stood at Rs. 711 million for the year under review as compared to Rs. 1941 million in the previous year ended March 31 2011. f. Depreciation and Amortization: Depreciation charges were Rs. 3010 million during the year ended March 31 2012 as compared to Rs. 2030 million in the previous year ended March 31 2011. Amortization charges stood at Rs. 409 million during the year ended March 31 2012 versus Rs. 380 million for the year ended March 31 2011. 5. Material developments in Human Resources / Industrial Relations front including number of people employed a. The number of employees in the year under review was 5696. b. There were no material developments as regards human resources / industrial relations front during the period under review. 6. Your Company’s major initiatives undertaken in FY11 and planned initiatives for FY12 6.1 Initiatives undertaken in the year under review to enhance your Company’s cost competitiveness: • Focus on high aircraft utilization for all network scenarios. • Implementation of significant Fuel Optimization measures such as rigorous implementation of the Cost Index re-evaluation of flight dispatch plans to optimize sector fuel assumptions. • Re-negotiated select aircraft leases to reduce lease rentals. • Complete removal of expats from the A320 and ATR fleet and optimization of headcount of cockpit and cabin crew to fleet count. • Optimization of meals uplifted on board to control catering cost. • Re-negotiation of select agreements pertaining to Engineering Maintenance Ground Handling and with Distribution agencies. • Re-configuration of aircraft to add more seats per aircraft. 6.2 Initiatives undertaken in the year under review to enhance your Company’s revenue productivity: • Improvement in maximizing network traffic flows by introducing network pricing and advanced revenue management techniques. • Increased focus on higher customer retention by focusing on return traffic. • Improvement in cargo revenues through revenue management opportunities. • Continued focus on high yielding Corporate traffic. However from November 2011 revenue generation has been significantly impacted by the decision for operational downsizing continued adverse media publicity and subsequent distribution issues caused by suspension from the IATA Billing and Settlement Plan BSP. Management Discussion and Analysis Report Contd.

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23 6.3 Catering Airport and Cargo Services related initiatives undertaken in the year under review to enhance your Company’s revenue productivity and cut further costs: • Catering: o Your Company introduced measures to tightly control on-board meal wastage. o Re-designed cost effective menu options were introduced to suit the diverse tastes of the discerning Indian consumer. o Buy-on-Board concept of your Company is now limited to ATR flights. • Airport Cargo Services: Revenue / Cost Related Initiatives o Despite operational downsizing Cargo revenue achieved was at 98 of 2010-11 actuals. “Door-To-Door” cargo service in particular grew by 44.33. o Excess Baggage “Revenue per guest” increased by 25. o Re-negotiating ground handling cargo contracts and lounge rates downsizing resources taken from third party agents and airport premise space reduction has resulted in significant operational cost savings for the year under review. o Ground services personnel has been tightly monitored and sized to reduced scale of operations since November 2011. Operations Excellence o Promoted the active use of “Web Check-In” facility to reduce congestion and optimize staffing at airport counters. o Only Indian Carrier to promote use of Kiosk check-in facility at 4 Metros. Also liaised with airport authorities to introduce facility to print out tickets with a common kiosk outside airport. 6.4 Marketing and Commercial Initiatives undertaken during the year under review to enhance your Company’s consumer connect: • To aggressively drive choice for Kingfisher First your Company’s business class product to corporate flyers. • To win market share in key markets through innovative offers for consumers. • To leverage associations with Sahara Force India and Royal Challengers Bangalore Indian Premier League cricket team and offer unique experiences to our guests. • To further strengthen your Company’s relationship with travel agents. • Increase penetration in the corporate segment. • Increased rigor in driving sales from global markets. Marketing initiatives 2011-12 Domestic: • Your Company launched “Business Mileage” privilege program for the Small Medium Enterprise SME segment with the objective of driving loyalty amongst the SME segment. The program offers a host of benefits including a complementary Gold tier and upgrade vouchers. • During the year under review your Company developed and successfully executed consumer and trade promotions which contributed towards incremental revenue for FY 2011-12 as well as built consumer and guest engagement through interactive contests across the social media network. • Your Company leveraged association with Sahara Force India and created special promotions and packages for KFA guests during the lead-up to the Indian Grand Prix offering them an opportunity to witness the race live. International: • Your Company launched a thematic campaign “India is Kingfisher Country” in Dubai promoting Kingfisher Airlines as the preferred choice of Airline in India owing to its connectivity. 6.5 Marketing Initiatives and launches proposed to further improve consumer connect: • Thematic campaign to win back Consumer confidence. • Reinforce brand imagery through a new thematic campaign. • Continue to leverage properties such as Sahara Force India and Royal Challengers Bangalore to provide unique experiences to guests and trade. Management Discussion and Analysis Report Contd.

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24 • Drive seat factors through campaigns based on analytics. 6.6 Key Marketing Initiatives from King Club: King Club ensured a steady link to loyal customers was maintained by your Company under trying circumstances. Over the year King Club innovated on its program designs to better engage the base of its loyal customers. Between August – October 2011 King Club ran “Feel the Force” campaign an innovative Fantasy Formula1 contest leveraging the Sahara Force India association and targeted at the inaugural Indian Grand Prix. The campaign was chosen as the Best Loyalty Innovation within the Judge’s Choice category at the Loyalty Awards 2012 organized by Flight Global. King Club also maintained key co-brand relationships through the year under review with American Express ICICI and other key banks. From the overall oneworld perspective King Club also successfully entered and maintained bilateral frequent flyer partnerships with British Airways Finnair American Airlines Cathay Pacific Airways allowing King Club members to earn and redeem King Miles by flying on these airlines anywhere in the world. 7. Your Company and oneworld Alliance Your Company continues to maintain a “member- elect” status with the oneworld Alliance. The 15 to 18 month complex integration process was successfully near completion for the February 10 2012 integration date. However in light of priorities centered around your Company’s recapitalization efforts the oneworld management team agreed with your Company to defer the joining date - a move that would give your Company more time to address the challenges. They agreed to work with your Company during this phase with an aim of setting a new joining date. 8. Your Company’s Outlook a. Your Company which commenced scheduled airline operations in August 2003 endured significant operational challenges through the year – despite a series of steps to contain operational losses through capacity rationalization your Company managed to retain its position within the top half of the Indian airline industry. Due to the tough operating environment your Company is currently operating as a "holding pattern" with limited operation pending policy changes which are in the offing. This will have an impact on the market share till the anticipated changes are in effect. b. The Indian economy will be slower in 2012-13 with GDP growth estimated to be around 6.5 for 2012-13 and this will potentially reflect in lower growth for the aviation industry. c. Domestic capacity expansion will be in line with demand resulting in potential stagnation and/or muted growth of industry load factors in 2012-13. d. Yields are expected to remain stable given the fierce competition in the domestic industry. Your Company’s phased transition out of the low cost branding should help in capturing potential yield premium from the discerning Indian consumer who pegs price to the quality of service being offered. e. Fuel price has shown continued sustenance through 2011-12 industry experts believe jet fuel price will correspond to an average crude oil price of over US 120 per barrel. This will continue to constrain airline profitability. f. In 2012-13 your Company plans to focus on recapitalization phased recovery of grounded aircraft regaining premium market yields alongside driving a focused cost reduction plan to set in the foundation for a profitable airline of the future. g. Your Company will also continuously evaluate and potentially re-initiate limited international operations which were substantially curtailed by the end of 2011-12. 9. Opportunities and Threats Risks and Concerns a. Your Companys focus in 2012-13 will be to recover its position in the domestic market aided by anticipated policy changes. Your Company plans to undertake a phased and pragmatic approach to re-induction of capacity as well as further market Management Discussion and Analysis Report Contd.

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25 expansion. The focus will be on maximizing the nascent potential of the domestic Indian market and capitalizing on strategic international routes. b. Your Company will continue to closely monitor key market trends as well as macro-economic environment in the Country from a global perspective linked to the recovery plan. c. Your Company will proactively review and undertake measures to maximize profits and reduce losses including: • Planning for phased capacity re-induction. • Transitioning to a single brand offering. • Strengthening route structures and reconfiguring aircraft for productivity. • Reviving sales and distribution reach. • Improving aircraft utilization and scheduling efficiency. • Focusing on driving revenue premium through yield management. • Optimizing human resources utilization. • Comprehensively reviewing costs across all key functions. d. Your Company continues to actively manage fuel consumption in a bid to conserve this precious natural resource and contain the adverse impact of steep increases in jet fuel prices. e. Sales tax on jet fuel in India continues to be significantly higher compared to global markets. Sales Tax is currently a State subject and follows an Ad Valorem methodology. Your Company has made several representations to both the Central and State governments seeking reduction in Sales Tax rate on jet fuel as well as proposing a rationalization of the tax structure to a fixed rate that eliminates direct exposure to Sales Tax because of fluctuations in crude oil price. A change in the fuel tax regime on these lines would provide a significant upside to your Company’s operations as fuel now constitutes over 40-45 of the airline’s operating cost. f. Your Company will also explore the opportunity presented for direct import of jet fuel vide the recent permission granted by the Director General of Foreign Trade DGFT to reduce the incidence of fuel costs. g. The current FDI policy of the Government of India still does not allow foreign airlines to invest in domestic scheduled airlines. However a 49 investment is allowed to foreign institutional investors. The Government has been actively considering relaxing this to include foreign airlines based on several representations made by your Company and other domestic carriers. This change in policy could provide your Company with widened access to equity capital and potential to induct strategic partners. h. The Government of India has been making significant progress with respect to aviation infrastructure development in the Country and thereby addressing air traffic congestion at key airports. The results are already showing with the opening of the modern world-class Terminal-3 at Delhi Airport. Expediting these initiatives in other key metros such as Mumbai and Kolkata coupled with focus on some of the fast- growing Tier-2 and Tier-3 airports will benefit your Company by providing for more efficient facilities and better guest experience. 10. Awards Accolades During the year under review your Company has received the following awards and accolades: 1 ‘Best Indian Airline’ Award from Business Traveller Magazine – London. 2 ‘Flight Global Award for Best Loyalty Innovation’ from Flight Global. 3 ‘Best Airline for Business Travel within India’ and ‘Best Airline for Leisure Travel within India’ from Conde NAST READER Travel Awards. 4 ‘Best Loyalty Innovation’ Award in the “Judge’s Choice” category at Loyalty Awards 2012 hosted by Flight Global. Cautionary Statement Statements in the management discussion and analysis describing your Company’s objectives projections estimate expectations may be ‘forward-looking statement’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company’s operations include economic conditions in the domestic markets and overseas markets in which your Company operates changes in the Government Regulations tax laws and other statutes and incidental factors. Management Discussion and Analysis Report Contd.

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26 1. We have audited the attached Balance Sheet of Kingfisher Airlines Limited formerly known as Deccan Aviation Limited "the Company" as at March 31 2012 the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with 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 misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies Auditors Report Order 2003 issued by the Central Government of India in terms of sub-section 4A of section 227 of the Companies Act 1956 "the Act" as amended by the Companies Auditors Report Amendment Order 2004 herein after collectively referred to as the "Order" we enclose in the annexure a statement on matters specified in paragraphs 4 and 5 of the Order. 4. Other Income for the fifteen months ended June 30 2006 included a sum of Rs. 2672.20 Lacs towards certain subsidy provided to the Company by one of its suppliers in conjunction with lease of aircrafts on operating lease basis. The previous auditors had reported that they were of the opinion that such accounting treatment was not in accordance with Accounting Standard 19 on "Leases" and the subsidy should be recorded on a straight-line basis over the period of the lease. Their audit report on the financial statements for the fifteen months ended June 30 2006 was modified in this matter. We concur with the views of the said auditors in principle that such subsidy should be recognized on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs which they are intended to compensate although the matter does not appear to be covered explicitly by the said AS 19. 5. Attention is invited to note 48 of the Notes forming part of the Financial Statements Notes regarding method of accounting of costs incurred on major repairs and maintenance of engines of aircrafts taken on operating lease during the year aggregating to TO THE MEMBERS OF KINGFISHER AIRLINES LIMITED Rs. 28480.24 Lacs year ended March 31 2011 Rs. 12256.85 Lacs aggregate amount as at March 31 2012 Rs. 36978.84 Lacs which have been included under fixed assets and amortized over the estimated useful life of the repairs. In our opinion this accounting treatment is not in accordance with current accounting standards. 6. As reported in paragraph 6 of our report dated July 28 2009 the Company novated its rights in certain aircrafts purchase agreements during the year ended March 31 2009 in favor of certain lessors and took such aircrafts back on operating lease from the same persons. The Company incurred a loss of Rs. 8110.36 Lacs on such novation including interest on loans borrowed for making pre-delivery payments to aircraft manufacturers of Rs. 2706.77 Lacs after eliminating loss in respect of redelivered aircrafts. As already reported in the said report in the absence of an independent valuation report we had relied on the representations of the management that the novation was not established at fair value the fair value of the aircrafts is at least equal to or more than the cost of acquisition and the preconditions specified in AS 19 for deferring the said loss are satisfied. We do not express any independent opinion in the matter 7. Attention is invited to note 49 of the Notes regarding use fees/hourly and cyclic utilization charges payable by the Company in respect of certain assets taken on operating lease aggregating to Rs. 6033.53 Lacs year ended March 31 2011 Rs. 5576.45 Lacs aggregate amount till March 31 2012 Rs. 12418.61 Lacs as maintenance reserves in accordance with its understanding. Pending formalization of understanding with the relevant lessor we do not express any independent opinion in the matter. 8. Attention of the members is invited to note 52 of the Notes regarding write back of withholding tax earlier accrued and non provision for withholding tax for the year on amounts paid/provided as payable to certain non residents/interest thereon based on professional advice. This is subject to receipt of certain documentation from the relevant payees the Company complying with the requisite formalities under the relevant tax laws and validation of the position stated in the books of account. 9. Attention of the members is invited to note 36b of the Notes regarding write back/non provision for guarantee and security commission to guarantors which we understand was done at the behest of the consortium bankers aggregate amount Rs.13772.30 Lacs. We understand that consent of the concerned guarantors has not been received. We cannot express any opinion in the matter. Auditors Report

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27 10. Attention of the members is invited to note 39 of the Notes regarding recognition of deferred tax credit on account of unabsorbed losses and allowances during the year aggregating to Rs.111808.46 Lacs year ended March 31 2011 Rs. 49341.80 Lacs Total amount recognized up to March 31 2012 Rs. 404586.77 Lacs. This does not satisfy the virtual certainty test for recognition of deferred tax credit as laid down in Accounting Standard 22. 11. We further report that except for the effect if any of the matters stated in paragraphs 6 to 9 above paragraph 1b of the annexure to this report and notes 34a 44 46 and 53 of the Notes whose effect are not ascertainable had the observations made in paragraphs 4 5 and 10 above been considered the loss after tax for the year ended March 31 2012 would have been Rs. 344402.41 Lacs March 31 2011 - Rs. 155349.03 Lacs as against the reported loss of Rs. 232800.75 Lacs March 31 2011- Rs. 102739.80 Lacs earnings per share would have been Rs.68.92 March 31 2011 - Rs.59.90 as against the reported figure of Rs. 46.92 March 31 2011- Rs. 40.16 debit balance in statement of profit and loss as at March 31 2012 vide note 4 of the Notes would have been Rs.1192423.76 Lacs March 31 2011 - Rs. 848021.34 Lacs as against the reported figure of Rs.767648.18 Lacs March 31 2011 - Rs. 534847.43 Lacs Other current liabilities would have been Rs. 321876.74 Lacs March 31 2011 - Rs. 202878.92 Lacs as against the reported figure of Rs. 321864.34 Lacs March 31 2011 - Rs. 202600.40 Lacs fixed assets would have been Rs.124126.34 Lacs March 31 2011- Rs. 137071.61 Lacs as against the reported figure of Rs.144302.75 Lacs March 31 2011 - Rs. 157188.69 Lacs deferred tax asset net as at March 31 2012 would have been Nil March 31 2011 – Nil as against the reported figure of Rs. 404586.77 Lacs March 31 2011 – Rs.292778.31 Lacs. Data for the year ended March 31 2011 recast from that stated in our previous years report taking into account deferred tax credit to be derecognized. 12. Attention of the members is invited to note 45 of the Notes regarding the financial statements of the Company having been prepared on a going concern basis notwithstanding the fact that its net worth is completely eroded. The appropriateness of the said basis is interalia dependent on the Companys ability to infuse requisite funds for meeting its obligations rescheduling of debt and resuming normal operations. Further to our comments in the annexure referred to above we report that: 13. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. 14. In our opinion the Company has kept proper books of account as required by Law so far as appears from our examination of those books. Auditors Report Contd. 15. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account. 16 In our opinion subject to the effect of the matters stated in paragraphs 4 to 6 and 10 above the Balance Sheet Statement of Profit Loss and Cash Flow Statement dealt with by this report comply in all material respects with the mandatory Accounting Standards referred to in sub-section 3C of section 211 of the Act. 17. On the basis of written representations received from Directors as on March 31 2012 and taken on record by the Board of Directors we report that none of the Directors of the Company are disqualified as on that date from being appointed as a director under clause g of sub-section 1 of section 274 of the Act. 18. In our opinion and to the best of our knowledge and according to the information and explanations given to us the said accounts subject to note 43 of the Notes and read with other notes give the information required by the Act in the manner so required and subject to the effect of the matters stated in paragraphs 4 to 11 above foot note to note 38a regarding carve out of certain costs from their natural heads based on estimates made by management and presentation of the same as Restructuring/Idle costs and note 46 of the Notes regarding the basis of computation of unearned revenue including refunds due on account of cancelled tickets/flights as at March 31 2012 Data of number of unflown tickets and their aggregate average value based on which management has estimated the amount of unearned revenue not being drawn from accounting records have not been verified by us Effect thereof on revenue not ascertainable 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 March 31 2012 ii. In the case of Statement of Profit and Loss of the loss for the year ended on that date and iii. In the case of Cash Flow Statement of the cash flows for the year ended on that date. For B. K. RAMADHYANI CO. Chartered Accountants Firm registration number: 002878S Place : Mumbai Shyam Ramadhyani Date : May 30 2012 Partner Membership No. 019522 B. K. Ramadhyani Co. Chartered Accountants 4B Chitrapur Bhavan No. 68 8 th Main 15 th Cross Malleswaram Bangalore – 560 055

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28 Annexure to the Auditors Report AS REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF KINGFISHER AIRLINES LIMITED 1. a. The Company has maintained records showing full particulars including quantitative details and situation of fixed assets. However comprehensive description of assets and current location are to be incorporated in the asset records after completion of reconciliation referred to in paragraph 1b below. b. Fixed assets were physically verified by the management during the year 2010-11. Pending completion of reconciliation which is reportedly under progress discrepancies if any cannot be ascertained refer note 51 of the Notes. c. There was no substantial disposal of fixed assets during the year. 2. a. Management has conducted physical verification of inventory at reasonable intervals during the year. b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c. No material discrepancies were noticed on physical verification. 3. a. As informed the Company has not granted any loans secured or unsecured to companies firms or other parties covered in the register maintained under section 301 of the Act. b. As informed the Company has taken loans from three companies covered in the register maintained under section 301 of the Act. The total loan amount outstanding as at year end was Rs.15109.77 Lacs and the maximum amount outstanding at any time during the year were Rs.15363.91 Lacs. The rate of interest and terms and conditions on which the said loans are taken is not prima-facie prejudicial to the interests of the Company. No stipulations for repayment have been prescribed and as such no comments regarding regularity of payments are being made. 4. In our opinion and according to the information and explanation given to us and taking into consideration managements representation that a large number of items purchased are of a special nature for which alternative quotations cannot be obtained there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchases of inventory. Internal controls in respect of sale of services and purchase of fixed assets to be strengthened. Subject to our observations in paragraph 1b above and notes 46 of the Notes during the course of our audit no continuing failure to correct major weakness in internal controls has been noticed. 5. a. According to the information and explanations given to us we are of the opinion that transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956 have been so entered. b. Further contracts or arrangements referred to in section 301 of the Act and aggregating to Rs. 5.00 Lacs or more per party have been entered into at prices which are reasonable as compared to similar services rendered to / by other parties except in respect of advertisement sales promotional expenses of Rs. 394.98 Lacs and miscellaneous income of Rs. 707.76 Lacs where we are unable to make any comments on reasonability of rates since there were no similar transactions with third parties at the relevant time 6. The Company has not accepted any deposits from the public. 7. The Companys internal audit system needs to be strengthened to make the same commensurate with the size and nature of its business. 8. To the best of our knowledge and as explained the Central Government has not prescribed the maintenance of cost records under section 209 1 d of the Act for the products of the Company. 9. a. Undisputed statutory dues in respect of service tax withholding taxes and fringe benefit tax dues have not been regularly deposited with the appropriate authorities. Undisputed statutory dues in respect of provident fund employees state insurance investor education and protection fund wealth tax customs excise duty cess as applicable have generally been regularly deposited with the appropriate authorities barring few months. b. According to the information and explanations given to us:- i No amounts were outstanding as at year end on account of undisputed amounts payable in respect of investor education and protection fund sales tax customs duty excise duty and cess for a period of more than six months from the date they became payable. ii Undisputed amounts payable in respect of tax deducted at source of Rs. 53938.17 Lacs service tax of Rs. 1984.41 Lacs professional tax of Rs. 8.61 Lacs pertaining to regions for which registration is not obtained In all cases relating to the years 2007-08 to 2011-12 fringe benefit tax of Rs. 55.87 Lacs balance of tax for the financial year 2008-09 and gratuity to resigned employees of Rs. 25.39 Lacs relating the year 2011-2012 were outstanding for a period of more than six months from the date they became payable excluding applicable interest in all cases except in respect of fringe benefits tax to the extent identified pending review and reconciliation of the relevant accounts. The due dates for these amounts are as per respective statutes. The tax deducted at source liability indicated in this paragraph is without considering tax on certain

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29 payments to non-residents liability withdrawn/ not provided for based on professional advice as referred to in note 52 of the Notes and tax on guarantee and security commission payable to certain guarantors liability withdrawn at the behest of consortium bankers as referred to in note 36b of the Notes. c. According to the information and explanations given to us the following dues have not been deposited with the concerned authorities on account of dispute. Year Estimated amount Rs. in Lacs Pending before Tax deducted at source Liability arising out of rejection of approvals under section 1015A of the Income Tax Act 1961. 9730.67 Delhi High Court. In certain cases writs proposed by the Company are yet to be filed. Service Tax 2004-05 to 2007-08 475.02 Customs Excise and Service Tax Appellate Tribunal January 2005 to September 2007 18333.78 Customs Excise and Service Tax Appellate Tribunal. June 2008 to April 2010 687.82 Customs Excise and Service Tax Appellate Tribunal. 10. The Companys accumulated losses at the end of the financial year were more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and in the immediately preceding financial year. 11. Based on our audit procedures and as per the information and explanations given by the management the Company has defaulted in repayment of loans and interest to banks and financial institutions. Delays were noticed in payment of interest principal on several occasions during the year. Estimated unpaid overdues to banks and institutions as at March 31 2012 aggregated to Rs. 79774.60 Lacs including devolved guarantees/letters of credit unfunded as at March 31 2012. The over dues relate to the financial year 2011- 2012. Interest aggregating to Rs. 5107.10 Lacs for the calendar year 2011 were due to debenture holders as at March 31 2012 net of tax. 12. According to the information and explanations given to us and based on the documents and records produced to us the Company has not granted loans and advances on the basis of security by way of pledge of shares debentures and other securities. Accordingly the provisions of the clause 4xii of the Order are not applicable to the Company. 13. In our opinion the Company is not a chit fund or a nidhi mutual benefit fund / society. Accordingly the provisions of the clause 4xiii of the Order are not applicable to the Company. Annexure to the Auditors Report Contd. 14. In our opinion the Company is not dealing in or trading in shares securities debentures and other investments. Accordingly the provisions of clause 4xiv of the Order are not applicable to the Company. 15. According to the information and explanations given to us the Company has not given guarantees during the year for loans taken by others from banks or financial institutions. Accordingly the provisions of clause 4xv of the Order are not applicable to the Company. 16. Based on information and explanations given to us by the management term loans taken during the year have been applied for the purpose for which they were obtained wherever specified by the bank in the relevant sanction letters. 17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company we report that funds raised on short- term basis to an aggregate extent of Rs. 630444.28 Lacs have been used for long term investment as at March 31 2012. 18. Based on information and explanations given to us by the management the Company has made not any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. Accordingly the provisions of clause 4xvii of the Order are not applicable to the Company. 19. Debentures outstanding during the year ended March 31 2012 are unsecured. Accordingly the provisions of clause 4xix of the Order are not applicable to the Company. 20. The Company has not raised any money by public issue during the year. Accordingly the provisions of clause 4xx of the Order are not applicable to the Company. 21. As per the information and explanations furnished to us by the management no material frauds on or by the Company and causing material misstatements to financial statements have been noticed or reported during the course of our audit except for charge backs received by the Company from credit card service providers due to misutilisation of credit cards by third parties of Rs. 92.18 Lacs. For B. K. RAMADHYANI CO. Chartered Accountants Firm registration number: 002878S Place : Mumbai Shyam Ramadhyani Date : May 30 2012 Partner Membership No. 019522 B. K. Ramadhyani Co. Chartered Accountants 4B Chitrapur Bhavan No. 68 8 th Main 15 th Cross Malleswaram Bangalore – 560 055

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30 Balance Sheet as at March 31 2012 As per our report of even date For and on behalf of the Board of Directors For B. K. Ramadhyani Co. Dr. Vijay Mallya A. K. Ravi Nedungadi Chartered Accountants Chairman Managing Director Director Shyam Ramadhyani A. Raghunathan Bharath Raghavan Partner Chief Financial Officer Company Secretary Membership No. 019522 Place : Mumbai Place: Mumbai Date : May 30 2012 Date: May 30 2012 Particulars Note No. As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs I. EQUITY AND LIABILITIES 1 Shareholders’ Funds a Share Capital 3 113074.73 105087.92 b Reserves and Surplus 4 621314.83 400207.18 508240.10 295119.26 2 Non - current liabilities a Long term borrowings 5 569540.18 630583.89 b Other long term liabilities 7 1150.13 724.66 c Long term provisions 8 1958.57 2593.88 572648.88 633902.43 3 Current Liabilities a Short term borrowings 9 233459.66 60413.60 b Trade payables 10 281651.86 219906.36 c Other current liabilities 11 321864.34 202600.40 d Short term provisions 12 6618.22 3616.90 843594.08 486537.26 TOTAL 908002.86 825320.43 II. ASSETS 1 Non - current assets a Fixed Assets i Tangible assets 13 143155.26 155175.64 ii Intangible assets 13 1147.49 2013.05 144302.75 157188.69 b Non - current investments 14 2.56 5.00 c Deferred tax assets Net 6 404586.77 292778.31 d Long term loans and advances 15 192205.56 189810.56 e Other non-current assets 16 5021.69 10327.89 746119.33 650110.45 2 Current Assets a Inventories 17 20478.51 18764.55 b Trade receivables 18 18759.37 44052.70 c Cash and cash equivalents 19 18226.73 25236.25 d Short term loans and advances 20 103209.77 84900.40 e Other current assets 21 1209.15 2256.08 161883.53 175209.98 TOTAL 908002.86 825320.43 Accounting policies and other notes 1 2 22 30 31 33 - 58 The notes attached form an integral part of the Balance Sheet

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31 Statement of Profit and Loss for the year ended March 31 2012 Particulars Note No. Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs Income I a Revenue from Operations 23 549340.90 623337.90 I b Duty free credit entitlement - 12626.17 II Other income 24 33049.90 13592.16 III Total income I + II 582390.80 649556.23 IV Expenses Employee benefits expense 25 66950.65 67600.85 Aircraft / Engine Lease Rentals Foot note to 38a 86845.15 98399.56 Aircraft Fuel Expenses 294588.58 227402.58 Finance costs 26 127633.52 131294.00 Depreciation and amortization expense 27 34186.59 24103.76 Operating and Other Expenses 28 208630.80 243709.12 Redelivery and other costs arising on settlement of disputes 29 74344.72 9124.65 Restructuring/idle costs Foot note to 38a 33820.00 - Total Expenses 927000.01 801634.52 V Loss before tax III-IV 344609.21 152078.29 VI Tax expense: 1 Deferred tax 111808.46 49341.80 2 Fringe benefit tax - 3.31 111808.46 49338.49 VII Loss for the period from continuing operations V-VI 232800.75 102739.80 VIII Earning per equity share: 32 46.92 40.16 Accounting policies and other notes 1 2 22 30 31 33 - 58 The notes attached form an integral part of the Statement of Profit and Loss As per our report of even date For and on behalf of the Board of Directors For B. K. Ramadhyani Co. Dr. Vijay Mallya A. K. Ravi Nedungadi Chartered Accountants Chairman Managing Director Director Shyam Ramadhyani A. Raghunathan Bharath Raghavan Partner Chief Financial Officer Company Secretary Membership No. 019522 Place : Mumbai Place: Mumbai Date : May 30 2012 Date: May 30 2012

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32 1 Corporate Information a Background Kingfisher Airlines Limited formerly known as Deccan Aviation Limited “the Company” is engaged in rendering scheduled and unscheduled aircraft passenger and cargo services including charter services. The Company was incorporated on June 15 1995 as a private limited company and converted itself into a public limited company on January 31 2005. Consequently the Company changed its name from Deccan Aviation Private Limited to Deccan Aviation Limited. On June 12 2006 the Company’s shares were listed on the Bombay Stock Exchange Limited and the National Stock Exchange Limited pursuant to the Company’s initial public offer of shares. The scheduled airline business of Kingfisher Training and Aviation Services Limited “KTASL” previously known as Kingfisher Airlines Limited demerged on a going concern basis with the Company with effect from April 1 2008 as the demerger appointed date vide scheme of arrangement approved by the honourable High Court of Karnataka vide its order dated June 16 2008 under sections 391 to 394 of the Companies Act 1956 ‘Scheme”. The helicopter charter division of the Company was also hived off pursuant to the Scheme. The Company changed its name from Deccan Aviation Limited to Kingfisher Airlines Limited with effect from September 5 2008. b Demerger of the commercial airline division of KTASL i Order of the Karnataka high court in form 42 of the Companies Court Rules 1949 in respect of the Scheme is yet to be passed. ii Documentation in respect of transfer of certain assets and liabilities taken over pursuant to Scheme to the name of the Company are pending. The Company is in the process of transfer of charges created by KTASL to its name in respect of securities granted for loans so taken over by the Company in consultation with the Registrar of Companies. 2 Statement of significant accounting policies a Basis of preparation The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles “GAAP” under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Companies Accounting Standards Rules 2006 the provisions of the Companies Act 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Further the financial statements are presented in the general format specified in schedule VI to the Companies Act 1956 ‘the Act’. b Use of estimates In preparation of the financial statements in conformity with generally accepted accounting principles estimates and assumptions where necessary have been made based on management’s best knowledge and experience. Accordingly actual results may differ from such estimates. c Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and revenue can be reliably measured. Revenue from charter services is recognized based on services provided and billed as per the terms of the contracts with the customers provided that the collection is reasonably certain. Revenue from sale of tickets of the airline and cargo operations is recognized in the period in which the service is provided i.e. on flown / carried basis. Such revenue is net of statutory fees to be collected from customers as per government regulations. Unearned revenue represents consideration on sale of passenger tickets and cargo against which the Company has to provide services in future periods and is included under Advances received / Forward sales. The same is released to the Statement of Profit and Loss as the services are rendered. Fees for passenger initiated changes and cancellations of tickets are recognized as revenue in the period in which such changes / cancellations are effected. Interest income is recognized on a time proportionate method when the right to receive income is established and that collection is reasonably certain. Income from sale of advertisement space is recognized on accrual basis over the period the advertisements are displayed. The Company enters into barter arrangements with other parties for providing services in exchange for the Company’s advertising in the other party’s media or in exchange for other services or goods. Such transactions are recorded at the fair value of the services / goods received from the other party or at the fair value of the services provided by the Company if it is not feasible to determine the fair value of the services / goods received. d Fixed assets and Intangible assets Fixed assets and intangible assets are stated at cost of acquisition less accumulated depreciation / amortization and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and also includes cost of modification and improvements to leased assets. Notes to Financial Statements

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33 Borrowing costs relating to acquisition of fixed assets are also included to the extent they relate to the period till such assets are ready to be put to use. Cost of fixed assets not ready for intended use as of the balance sheet date are disclosed under capital work-in- progress. Advance paid towards acquisition of fixed assets are included in long term loans and advances. e Depreciation Depreciation on fixed assets except non-compete fees trademarks design – aircraft interiors software leasehold improvements is provided on a straight line basis at the rates prescribed under schedule XIV to the Companies Act 1956 which are estimated to be the useful life of fixed assets by the management. Additions are depreciated on a pro-rata basis from the date of installation till the date the assets are sold or disposed. 1 Non Compete fees are amortized over the period of agreement i.e. five years. 2 Trademarks are amortized over the period of four years. 3 Design – Aircraft Interiors are amortized over the period of seven years. 4 Software is depreciated over a period of 1 - 4 years based on estimated useful life as ascertained by the management. 5 Leasehold improvements on operating leases are depreciated over the shorter of the period of the lease and their estimated useful lives. 6 Cost of major maintenance and overhaul of the engines are amortized over the period of estimated useful life of the repairs 3 years. 7 Movable cabins and mobile phones are depreciated over the period of five and two years respectively on a straightline method. f Borrowing Costs Borrowing costs attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of the assets. Other borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs include amortization of ancillary costs incurred in connection with the arrangement of borrowings. The unamortized portion of ancillary costs incurred in connection with the arrangement of borrowings is included under ‘Loans and Advances’. g Leases – Where the Company is a lessee Finance leases which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees legal charges and other initial direct costs are capitalized. If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term. Leases where the lessors effectively retain substantially all the risks and benefits of ownership over the leased term are classified as operating leases. Operating lease payments including expenses incurred for bringing the leased asset to its working condition for intended use are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. Profit or loss on sale and leaseback arrangements resulting in operating leases are recognized immediately in case the transaction is established at a fair value else the excess over the fair value is deferred and amortised over the period for which the asset is expected to be used. If the sale price is below the fair value and the loss is compensated by future lease payments at below market price the same is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the fair value at the time of sale and lease back transaction is less than the carrying amount of the asset a loss equal to the amount of difference between the carrying amount and fair value is recognised immediately. In case of sale and leaseback arrangement resulting in a finance lease any excess or deficiency of sales proceeds over the carrying value is deferred and amortised over the lease term in proportion to the depreciation of the leased asset. h Impairment of assets The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. Notes to Financial Statements Contd.

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34 i Maintenance costs In respect of aircraft aircraft engines and helicopters the Company has entered into maintenance arrangements. Payments made to lessors for major maintenance expenditure as per the related maintenance agreements comprising fixed period-based amounts and variable activity-based amounts are initially considered as maintenance deposits and expensed as and when maintenance expenditure is incurred/termination of agreements. j Inventory Inventories are valued at lower of cost or net realizable value. Cost of engineering inventories is determined on first in first out basis except at one of the divisions where the weighted average basis was followed till December 31 2008. In respect of reusable items such as rotables special tools etc provision for amortization / obsolescence is made based on the estimated useful life of the aircraft as derived from schedule XIV to the Companies Act 1956. In-flight inventory is valued on weighted average basis while inventory of fuel is valued on the basis of last fuel uplifted rates in respective aircrafts. k Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. l Employee Benefits i Defined Contribution Plan The Company contributes on a defined contribution basis to employees’ provident fund and pension scheme towards post employment benefits all of which are administered by the respective government authorities. The Company also contributes to social security schemes in respect of its employees at certain overseas offices. It has no further obligation beyond making its contribution which is expected in the year in which it pertains. ii Defined Benefit Plan The Company has a defined benefit plan namely gratuity for all its employees. The liability for the defined benefit plan of gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year-end which is calculated using Projected Unit Credit Method. Actuarial gains and losses are adjusted in the Statement of Profit and Loss. iii Other long-term employee benefits The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year-end and charged to the Statement of Profit and Loss. Actuarial gains and losses are adjusted in the Statement of Profit and Loss. m Income taxes Tax expense comprises current deferred and fringe benefit taxes. Current income tax and fringe benefit tax are measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income-tax Act 1961. Deferred income taxes reflects the impact of current period timing differences between taxable and accounting income for the period and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized. n Foreign currency transactions i Initial recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting and foreign currencies at the date of the transaction. ii Conversion Foreign currency monetary items are reported at rate prevailing on the balance sheet date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. Notes to Financial Statements Contd.

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35 iii Exchange differences Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements are recognized as income or as expenses in the period in which they arise except that the Company had availed the option provided by notification No. G.S.R. 225E dated March 31 2009 issued by the Ministry of Corporate Affairs read with accounting standard 11 in respect of foreign exchange differences in respect of long term monetary assets and liabilities. The Company has not availed the option of the relevant notification after March 31 2010. iv Forward exchange contracts The Company uses forward exchange contracts to hedge its exposure to movements in foreign exchange rates. The Company does not use the forward exchange contracts for trading or speculation purposes. In respect of foreign currency monetary assets or liabilities in respect of which forward exchange contract is taken the premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the period. Pursuant to The Institute of Chartered Accountants of India’s announcement ‘Accounting for Derivatives’ the Company marks-to-market all such outstanding derivative contracts at the end of the period and the resulting mark-to-market losses if any are recognized in the Statement of Profit and Loss. o Earnings per share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders after deducting preference dividends and relevant taxes by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue bonus element in a rights issue to existing shareholders 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 shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. p Provisions A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. q Stock option compensation expense The Company accounts for stock option compensation expense based on the intrinsic value of the options granted which is the difference between the fair value of the share underlying the option and the exercise price of the option determined at the grant date. Compensation expense is amortized over the period of vesting on a straight-line basis. The accounting value of the options net of deferred compensation expense is reflected as Employee stock option outstanding. r Initial costs on leased aircrafts Expenses directly attributable and incurred in relation to aircrafts acquired on operating lease arrangement are deferred and amortized over the period of lease of aircrafts. Such expenses interalia include initial borrowing costs incurred on pre delivery payments for aircrafts till the Company novates / assigns the right to acquire the aircrafts in favor of the lessors. s Incentives from aircraft manufacturers Incentives from aircraft manufacturers are credited to statement of Profit and Loss in the year when such incentives are made available to the Company as per the terms of aircraft purchase agreements. This includes incentives granted for the purpose of meeting certain revenue expenses. t Commission Commission to travel agents is recognized when the corresponding revenues are recognized as income on flown / carried basis. Notes to Financial Statements Contd.

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36 3 Share Capital As at March 31 2012 As at March 31 2011 Number Rs. In Lacs Number Rs. In Lacs Authorized: Preference Shares of Rs. 10/- each 2600000000 260000.00 2600000000 260000.00 Equity shares of Rs. 10/- each 1650000000 165000.00 1650000000 165000.00 4250000000 425000.00 4250000000 425000.00 Issued subscribed and fully paid up: 6 Redeemable Preference shares of Rs. 100 /- each At the beginning of the reporting period - - 9700000 9700.00 Amended during the reporting period to result in 6 CCPS - - 9700000 9700.00 At the close of the reporting period - - - - 8 Cumulative Redeemable Preference shares of Rs. 10 /- each At the beginning of the reporting period 553100000 55310.00 - - Issued during the reporting period - - 553100000 55310.00 At the close of the reporting period 553100000 55310.00 553100000 55310.00 7.5 Compulsorily Convertible Preference shares CCPS of Rs. 10 /- each Issued during the reporting period - - 139810000 139810.00 Converted into equity shares - - 139810000 139810.00 At the close of the reporting period - - - - 6 Compulsorily Convertible Preference shares of Rs. 10 /- each Issued during the reporting period - - 97000000 9700.00 Converted into equity shares - - 97000000 9700.00 At the close of the reporting period - - - - Equity shares of Rs. 10/- each At the beginning of the reporting period 497779223 49777.92 265908883 26590.89 Issued during the reporting period 79868051 7986.81 231870340 23187.03 At the close of the reporting period 577647274 57764.73 497779223 49777.92 113074.73 105087.92 Notes to Financial Statements Contd.

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37 As at March 31 2012 As at March 31 2011 Number Rs. In Lacs Number Rs. In Lacs Other Information: 1 Preference shares: a. 8 cumulative redeemable preference shares of Rs 10/- each were issued in conversion of loans and interest due to banks in terms of the MDRA. The preference shareholders do not have voting rights. The preference shares carry a 8 cummulative dividend rate. They are redeemable at par not later than 12 years from the date of the allotment. b. 9700000 6 redeemable preference shares of Rs.100/- each were allotted during the year 2008- 09 pursuant to a contract without consideration being received in cash pursuant to the Scheme of Arrangement under sections 391 to 394 of the Companies Act 1956 approved by the honourable High Court of Karnataka dated June 16 2008 which resulted in demerger of the scheduled airline business of Kingfisher Training and Aviation Services Limited. c. 7.5 CCPS of Rs.10/- each were issued in conversion of loans and interest due to banks and certain promoter companies in terms of the Master Debt Recast Agreement dated December 21 2010 MDRA 2 Equity shares: a. The Company has only one class of equity shares having a par value of Rs 10/- each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the equity shares held by the shareholder. b. Equity shares include shares allotted pursuant to a contract without consideration being received in cash. 130033350 130033350 Equity shares were allotted during the year 2008 - 2009 pursuant to the Scheme of Arrangement under sections 391 to 394 of the Companies Act 1956 approved by the honourable High Court of Karnataka dated June 16 2008 which resulted in demerger of the scheduled airline business of Kingfisher Training and Aviation Services Limited. c. Shares allotted by way of bonus shares 27284390 27284390 Equity shares of Rs. 10/- each were allotted as fully paid up bonus shares by capitalisation of securities premium and balance in Profit Loss Account. d. Shares held by the holding company/ultimate holding company/subsidiaries or associates of the holding company/ultimate holding company in aggregate. Nil 276640305 Notes to Financial Statements Contd.

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38 As at March 31 2012 As at March 31 2011 Number Rs. In Lacs Number Rs. In Lacs 3 Securities convertible into equity Details of securities 50956985 as at March 31 2011 70931985 8 Optionally Convertible Debentures of Rs.100/- each OCDs Earliest date of conversion: The OCD shall be optionally converted into Equity shares of the Company of the face value of Rs. 10/- each at the option of the holder at such time as may be determined by the Board which shall not be later than 18 months from the date of allotment of the OCD. 4 Particulars of equity share holders holding more than 5 of the total number of equity share capital: Equity Share Capital Sr. No. Name of the holder As at March 31 2012 As at March 31 2011 No. of Shares held to total paid up capital No. of Shares held to total paid up capital a. United Breweries Holdings Limited 197833555 34.25 199598555 40.10 b. Kingfisher Finvest India Limited 63478570 10.99 63478570 12.75 c. State Bank of India Below 5 28264578 5.68 d. ICICI Bank Limited Below 5 26364764 5.30 5 Particulars of preference share holders holding more than 5 of the total number of preference share capital. 8 Cumulative Redeemable Preference Shares of Rs. 10/- each CRPS Sr. No. Name of the holder As at March 31 2012 As at March 31 2011 No. of CRPS held to total paid up capital No. of CRPS held to total paid up capital a. State Bank of India 182250000 32.95 182250000 32.95 b. IDBI Bank Limited 112500000 20.34 112500000 20.34 c. Bank of India 56250000 10.17 56250000 10.17 d. UCO Bank 45000000 8.14 45000000 8.14 e. Punjab National Bank 36740000 6.64 36740000 6.64 f. United Bank of India 30000000 5.42 30000000 5.42 g. Bank of Baroda 29960000 5.42 29960000 5.42 Notes to Financial Statements Contd.

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39 4 Reserves and Surplus Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Securities Premium As at Beginning of the year 134345.16 8022.19 Additions during the year 11988.19 126322.97 As at the end of the year 146333.35 134345.16 Share option outstanding account As at Beginning of the year 295.09 748.17 Transferred to Statement of Profit Loss 295.09 453.08 As at the end of the year - 295.09 Surplus i.e. balance in Statement of Profit Loss As at Beginning of the year 534847.43 432107.63 Loss for the year 232800.75 102739.80 As at the end of the year 767648.18 534847.43 TOTAL 621314.83 400207.18 5 Long term Borrowings Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 1 Secured Loans: a. Term Loans - from Banks 414616.59 419849.69 Less: Current maturities of long term debt 23259.77 391356.82 - 419849.69 - from Others 4202.08 5170.48 Less: Current maturities of long term debt 1200.00 3002.08 2497.99 2672.49 Finance lease obligations Refer Note 37b 63534.31 61040.75 Less: Current maturities of finance lease obligations 13778.15 49756.16 9126.57 51914.18 444115.06 474436.35 2 Unsecured Loans: a. Bonds Debentures 50956.99 70931.99 Less: Current maturities of long term debt 28107.27 22849.72 - 70931.99 b. Term Loans - from Banks 49892.93 49905.96 Less: Current maturities of long term debt 2557.80 47335.13 - 49905.96 - from Others 55240.27 35309.58 125425.12 156147.53 3 Total long term borrowings 1+2 569540.18 630583.89 Notes to Financial Statements Contd.

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40 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs Additional Information: a Details of security for secured loans from Banks i Assignment of right under purchase agreement entered with aircraft manufacturer for purchase of the aircrafts 16569.74 16927.26 ii Hypothecation of certain aircrafts 586.92 6363.04 iii Secured by hypothecation of all movables assets of the Company both fixed and current other than fixed assets acquired on hire purchase/lease basis and aircrafts but including Helicopters all trade marks and Goodwill of the Company all credit card receivables IATA collections and other receivables of the Company and mortgage of Kingfisher House. The loans have been classified as secured on the basis of their market value as estimated by the management. No current valuation reports have been obtained. 397459.93 396559.39 The Company has also furnished non disposal undertakings in respect of aircrafts taken on finance lease/hire purchase aircraft. The securties referred to above shall rank pari passu interest amongst the lenders Total 414616.59 419849.69 b Details of security for secured loans from others i Hypothecation of Aircraft and assignment of documents of title to such assets 4202.08 5161.80 ii Hypothecation of ground handling equipments - 8.68 Total 4202.08 5170.48 c Details of security for assets taken on finance lease i Secured by the hypothecation of the respective assets 63534.31 61040.75 63534.31 61040.75 d Loans guaranteed by directors and others Secured Term Loans - from Banks 414616.59 419849.69 e Loans guaranteed by directors and others Unsecured Term Loans - from Banks 49306.01 43542.92 - from Others 500.00 10000.00 Notes to Financial Statements Contd.

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41 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs f Loans guaranteed by others i Secured term loans - from Banks 586.92 6363.04 - from Others 58832.80 57350.08 ii Unsecured term loans - from Others - 2500.00 g Rate of interest on debentures Optionally Convertible Debentures of Rs 100/- 8.00 8.00 h Particulars of redemption or conversion of bonds and debentures Particulars Date of redemption/ conversion Date of redemption/ conversion Optionally Convertible Debentures of Rs 100/- Optionally convertible into equity shares of the Company of the face value of Rs. 10/- each at the option of the holder at such time as may be determined by the Board which shall be not later than 18 months from the date of allotment. Within expiry of 18 months of allotment. Within expiry of 18 months of allotment. i Terms of repayment of term loans and others i Secured Loans: Term loan from Banks Represents the working capital term rupee term funded interest term and additional rupee loans funding granted by the banks as per the MDRA entered by the Company with the constortuim of banks led by SBI and repayable w.e.f October 2012 after a moratorium period of two years as per the laid down repayment schedule. Interest payable at certain mark up above the Base rate and to be reset every 2 years. In case of PDP loans interest payable at certain mark up above the Base rate and to be reset every 2 years and repayable over a period of six years with effect from September 2010. Assets taken on Finance Leases Loans taken for aircrafts purchased on finance leases are repayable over a period ranging between 9-12 years as per the relevant agreements entered into with the lessors and carries fixed interest rate ranging between 5.37 to 7.61 in some cases and variable interest rate LIBOR+margins for the others. Notes to Financial Statements Contd.

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42 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs Other term loans from others Loans taken against hypothecation of the corresponding assets taken on hire purchase repayable over a period of 7.5 years carrying an interest rate of 15.25 ii Unsecured Loans: Term loan from Banks Represents working capital term rupee term funded interest term and additional rupee loans funding granted by certain banks as per the MDRA entered by the Company with the constortuim of banks led by SBI and repayable w.e.f October 2012 after a moratorium period of two years as per the laid down repayment schedule. Interest payable at certain mark up above the Base rate and to be reset every 2 years. Term loan from Others Loan represents working capital funding by Corporate entities and group companies carrying interest rate ranging between 7 to 15 and repayable over a period of 2 to 3 years based on individual agreements entered with the parties. In certain cases there are no stipulation fixed for repayment. j Period and amount of continuing default as on the balance sheet date in respect of loans and interest Amount Period Amount Period Interest on Optionally Convertible Debentures 5107.10 Calendar year 2011 - - Interest on term loans from banks 31114.64 September 2011 to March 2012 2044.93 December 2010 to March 2011 Overdue installments of finance lease obligations 5238.78 2011-12 499.13 2010-11 Notes to Financial Statements Contd.

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43 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 6 Deferred Tax Refer note 39 i Deferred tax liability: a On account of depreciation on fixed assets 21213.66 31829.22 b On account of timing differences in recognition of expenditure 2021.60 4082.87 23235.26 35912.09 ii Deferred tax asset: a On account of timing differences in recognition of expenditure 843.13 936.99 b On account disallowance under section 40 ia 79171.30 66115.48 c On account of Unabsorbed losses and depreciation under the Income Tax Act 1961 347807.59 261637.93 427822.02 328690.40 Net Deferred tax asset 404586.77 292778.31 7 Other Long term liabilities Gain on sale and lease back transaction 532.56 573.98 Less: Income for the year 41.42 41.42 491.14 532.56 Less: Current Maturities 41.42 41.42 449.72 491.14 Employee Security deposits 700.41 233.52 1150.13 724.66 8 Long term Provisions Refer notes 40b and 42 Provisions for employee benefits i Gratuity 1246.12 1387.20 ii Compensated Absences 712.45 1206.68 1958.57 2593.88 Notes to Financial Statements Contd.

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44 9 Short term Borrowings Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs 1 Secured Loans: - from banks 91463.27 28256.44 - from others 1298.00 1298.00 92761.27 29554.44 2 Unsecured Loans: - from banks 769.62 5754.44 - from others 139928.77 25104.72 140698.39 30859.16 Total 233459.66 60413.60 Additional Information: a Details of security for secured loans i Secured by hypothecation of all movables assets of the Company both fixed and current other than fixed assets acquired on hire purchase/lease basis and aircrafts but including Helicopters all trade marks and Goodwill of the Company all credit card receivables IATA collections and other receivables of the Company and mortgage of Kingfisher House. The loans have been classified as secured on the basis of their market value as estimated by the management. No current valuation reports have been obtained. 90463.27 28256.44 The Company has also furnished non disposal undertakings in respect of aircrafts taken on finance lease/ hire purchase aircraft. The securties referred to above shall rank pari passu interest amongst the lenders ii Charge on current assets of the Company both present and future pari pasu with other borrowings from consortium banks. 1000.00 - iii Second priority on mortgage of aircraft 1298.00 1298.00 b Loans guaranteed by directors and others Loans repayable to banks 90463.27 28256.44 Loans repayable to others 500.00 10000.00 Notes to Financial Statements Contd.

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45 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs c Loans guaranteed by others Loans repayable to banks 1000.00 - Loans repayable to others 10000.00 - d Terms of repayment of term loans and others i Secured Loans from Banks Cash credit facilities from banks repayable on demand devolved letters of credit/guarantees and short term loan facility repayable in 6 months from the date of availment which carry an interest rate of certain mark up above the base rate at monthly rests. ii Secured Loans from others Second priority on mortgage of aircraft repayable on demand and carries an interest rate of 13. iii Unsecured Loans from Banks Carries an interest rate of 11 and repayable on demand. iv Unsecured Loans from others Loan represents working capital funding by Corporate entities and group companies carrying interest rate ranging between 11 to 18 and repayable over a period of 2 to 3 years based on individual agreements entered with the parties. e Period and amount of default as on the balance sheet date in respect of loans and interest Amount Period Amount Period Interest on loans and devolved letter of credits and bank guarantees 48659.96 September 2011 to March 2012 3771.21 December 2010 to March 2011 Notes to Financial Statements Contd.

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46 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 10 Trade Payables Refer Note 43 281651.86 219906.36 281651.86 219906.36 11 Other current liabilities: a Current maturities of long term debt 55124.84 2497.99 b Current maturities of finance lease obligations 13778.15 9126.57 c Interest accrued but not due on borrowings 27594.03 11901.57 d Interest accrued and due on borrowings 41453.60 3085.48 e Advances from customers / Forward Sales Refer note 46 36152.15 61354.40 f Employee Security deposits 1858.07 1977.91 g Unclaimed dividends - 2.76 h Overdrawn bank balances book overdraft 1191.62 3.35 i Current maturities of Gain on sale and lease back transaction 41.42 41.42 j Accrued expenses and other liabilities 144670.46 112608.95 321864.34 202600.40 12 Short term provisions: a Provision for employee benefits Refer notes 40b and 42a - Gratuity 79.97 88.95 - Compensated Absences 560.12 205.10 b Provision for Wealth Tax 1.40 6.40 c Fringe Benefit Tax 55.87 450.70 d Frequent Flyer Scheme Refer note 40a 3447.52 2165.75 e Provision for Contingencies Refer note 51 700.00 700.00 f Provision for Redelivery Cost 1773.34 - 6618.22 3616.90 Note: Provision for redelivery costs on returned/repossessed aircrafts has been done provisionally pending receipt of claims if any. Notes to Financial Statements Contd.

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47 13 Fixed Assets: Rs. in Lacs Particulars GROSS BLOCK AT COST DEPRECIATION NET BLOCK As at April 1 2011 Additions for the year Deductions during the year As at March 31 2012 As at April 1 2011 For the year Deductions As at March 31 2012 As at March 31 2012 As at March 31 2011 Tangible Assets Owned assets Land Buildings Refer note 1 below 3010.87 - - 3010.87 120.48 49.08 - 169.56 2841.31 2890.39 Building on Rented Land 903.89 - - 903.89 78.76 14.73 - 93.49 810.40 825.13 Ground Support and Other Equipment 13117.37 238.68 504.01 12852.04 2959.82 602.08 162.21 3399.69 9452.35 10157.55 Computers 5555.33 107.69 73.48 5589.54 3311.96 814.72 71.03 4055.65 1533.89 2243.37 Office equipment 1724.13 127.65 219.42 1632.36 384.99 89.79 78.32 396.46 1235.90 1339.14 Furniture Fixtures 4749.19 215.75 330.22 4634.72 1413.78 337.94 172.52 1579.20 3055.52 3335.41 Vehicles 3029.83 255.47 8.89 3276.41 1052.93 296.23 7.14 1342.02 1934.39 1976.90 Aircraft Helicopter 23155.78 - - 23155.78 3356.31 1296.72 - 4653.03 18502.75 19799.47 Improvements to leasehold Buildings 3574.55 69.51 534.95 3109.11 2020.51 749.99 365.04 2405.46 703.65 1554.04 Improvements to leasehold Aircrafts 41698.02 28480.24 29519.83 40658.43 18943.91 18154.95 17911.54 19187.32 21471.11 22754.11 Refer note 2 below Assets taken on finance lease Aircraft Helicopter Refer note 53 119395.32 - - 119395.32 31095.19 6686.14 - 37781.33 81613.99 88300.13 219914.28 29494.99 31190.80 218218.47 64738.64 29092.37 18767.80 75063.21 143155.26 155175.64 Intangible assets Computer Software 2165.18 141.74 - 2306.92 1344.42 372.09 - 1716.51 590.41 820.76 Trademarks Refer note 3 below 100.00 - - 100.00 100.00 - - 100.00 - - Design - Aircraft Interiors 246.46 - - 246.46 152.53 35.21 - 187.74 58.72 93.93 Non Compete Fees 3000.00 - - 3000.00 1901.64 600.00 - 2501.64 498.36 1098.36 5511.64 141.74 - 5653.38 3498.59 1007.30 - 4505.89 1147.49 2013.05 TOTAL 225425.92 29636.73 31190.80 223871.85 68237.23 30099.67 18767.80 79569.10 144302.75 157188.69 Previous Year 204813.71 22094.47 1482.26 225425.92 49362.29 20302.45 1427.51 68237.23 Note : 1 Land and Buildings were purchased for a consolidated amount. Value of Land and Buildings have not been segregated. Depreciation has been provided on the entire amount. 2 Additions to leasehold improvements - aircrafts includes Rs. 28480.24 Lacs March 31 2011 - Rs. 12256.85 Lacs representing cost of major engine repairs to aircrafts taken on operating lease Refer note 48. 3 Certain Trademarks are pending registration. Notes to Financial Statements Contd.

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48 14 Non Current Investments: Details of Investments/Name of the Company No of Shares Face Value Rs. As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Investments in Equity Instruments: Subsidiary: Trade Fully paid up Equity shares in Vitae India Spirits Limited fully paid up 50000 10.00 5.00 5.00 Less: Provision for diminution in value of investments 2.44 - Total 2.56 5.00 Aggregate value of unquoted investments: Cost 5.00 5.00 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 15 Long term loans and advances: Unsecured and considered good i Capital advances Refer note 34 77024.60 67334.63 ii Deposits with lessor towards Aircrafts 29689.63 12137.79 iii Aircraft major maintenance reserve 73178.68 96617.37 iv Security deposits 8314.86 7076.76 v Prepaid Expenses 3997.79 6644.01 192205.56 189810.56 16 Other non current assets i Initial Cost on Leased Aircrafts Per last Balance sheet 599.65 860.26 Less: Amortised/writen off during the year 536.43 260.61 63.22 599.65 Less: Current maturities 63.22 536.43 - 63.22 ii Loss on novation / assignment of rights interest on loans taken for financing pre delivery payments 11984.32 13703.97 Less: Amortised/written off during the year 5816.70 1719.65 6167.62 11984.32 Less: Current maturities 1145.93 1719.65 5021.69 10264.67 5021.69 10327.89 Notes to Financial Statements Contd.

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49 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs 17 Inventories: i Rotables Tools and Engineering Consumables 18957.52 16573.68 Less: Provision for Obsolescence 643.71 543.71 18313.81 16029.97 ii Inflight Stores and Consumables 2102.41 2585.65 iii Fuel 62.29 148.93 20478.51 18764.55 18 Trade receivables: i Trade receivables exceeding six months 2360.71 2249.03 ii Others 17578.00 41883.67 19938.71 44132.70 Less: Allowance for doubtful debts 1179.34 80.00 18759.37 44052.70 Additional information: 1 Breakup of above: i Secured considered good - - ii Unsecured considered good 18759.37 44052.70 iii Doubtful 1179.34 80.00 Total 19938.71 44132.70 Less: Allowance for doubtful debts 1179.34 80.00 18759.37 44052.70 19 Cash and cash equivalents: i Balances with banks - in margin money security for borrowings guarantees and other commitments 13318.93 16418.00 - in Current Accounts 4863.88 8698.06 ii Cash on hand 43.92 120.19 18226.73 25236.25 Additional information: In respect of following amounts there are repatriation restrictions: Includes Cash of Rs.2.87 Lacs March 31 2011 - Rs. 2.87 Lacs on which restriction is placed by the High Court Of Karnataka. Notes to Financial Statements Contd.

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50 Particulars As at March 31 2012 As at March 31 2011 Rs. In Lacs Rs. In Lacs 20 Short term loans and advances: i Loans and advances to related parties - 76.69 ii Balances with Government and statutory authorities Refer note 54 21094.95 26942.06 iii Prepaid Expenses 8933.99 17834.83 iv Aircraft major maintenance reserve 39596.25 16913.84 v Interest accrued on term deposits 295.89 223.93 vi Deposits with Lessors towards Aircrafts 685.17 301.02 vii Rental Security Deposits 478.43 1383.42 viii Others 32652.30 21751.82 103736.98 85427.61 Less: Allowance for doubtful advances 527.21 527.21 103209.77 84900.40 Additional information: 1 Breakup of above: i Secured considered good - - ii Unsecured considered good 103209.77 84900.40 iii Doubtful 527.21 527.21 Total 103736.98 85427.61 Less: Allowance for doubtful advances 527.21 527.21 103209.77 84900.40 21 Other Current Assets Current maturities of Initial Cost on Leased Aircrafts 63.22 536.43 Current maturities of Loss on novation / assignment of rights interest on loans taken for financing pre delivery payments 1145.93 1719.65 1209.15 2256.08 Notes to Financial Statements Contd.

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51 Particulars As at March 31 2012 As at March 31 2011 Remarks Rs. In Lacs Rs. In Lacs 22 Contingent liabilities and Commitments: to the extent not provided for a Contingent Liabilities: i Claims against the Company not acknowledged as debts 22514.09 21923.74 Pertains to litigations filed against the Company which are pending with various authorities / arbitration including National Consumer Disputes Redressal Commission Consumers’ Disputes Forums Courts Civil Court and invoices / claims of suppliers and service providers not accepted by the Company. ii Guarantees/ Letters of credit given by banks on behalf of the Company 65952.82 128636.99 Pertains to guarantees and letters of credit given / issued by banks to Airport Authorities lessors suppliers of spares stores components and others. iii Demands raised by Income Tax authorities under appeal 1393.42 1399.71 An aggregate sum of Rs. 270.95 lacs paid has been included under ‘Loans and Advances’. iv Demands and show cause notices raised by service tax authorities 36905.61 23392.50 The Company has preferred /furnished appeals/objections /is in the process of replying. Amount indicated does not include any demands that may be raised for other years based on the stand taken by tax authorities in orders passed/show cause notices issued. v Show cause notices raised by entry tax authorities - 14.37 The Company has furnished objections. vi Lease rentals payable in respect of assets taken on operating lease in the event of the Company not meeting certain contractual obligations 27765.96 16521.15 The Company has taken certain assets from a lessor on operating lease. The lessor has undertaken to waive the lease rentals in the event the Company meets certain contractual obligations. The Company has requested for extention of time to meet certain obligations. The Company is confident that its request for extention of time will be accepted and that it will meet the obligations within the extended time. vii Redelivery and other costs in respect of assets taken on operating lease at the end of the lease period Not ascertainable Not ascertainable In respect of operating leases the Company is required to return the aircrafts as per prescribed terms. However the lease periods are extendable for a longer period and considering on going maintenance of aircrafts a reliable estimate cannot be made of the redelivery costs. Notes to Financial Statements Contd.

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52 Particulars As at March 31 2012 As at March 31 2011 Remarks Rs. In Lacs Rs. In Lacs viii Amounts payable if any for breach of contractual obligations Not ascertainable Not ascertainable In particular a Financial claims if any in respect of certain lease agreements terminated have not been received. Liability in this respect if any is not ascertainable. b Certain creditors have claimed interest for late payment of dues. The Company is negotiating with these parties to waive such interest. The Company is confident that its request will be accepted and accordingly no proivsion is made for the same. ix Liability for deduction of tax at source on lease payments in respect of aircrafts and engines where agreements were entered into with lessors on or before March 31 2007 excluding interest 35401.55 21178.55 a The Company has filed applications under section 1015A of the Income Tax Act 1961 with the Central Board of Direct Taxes CBDT seeking exemption from deduction of tax which are pending. These are being followed up by the Company. b In respect of agreements involving tax of Rs.9730.67 Lacs up to March 31 2011 applications made by the Company have been rejected. In respect of certain agreements the Company has filed writs before the Delhi High Court. In respect of others the Company will do so shortly. Recast The Company has entered into agreements for purchase of aircrafts / engines under which the Company has commitments to purchase aircrafts / engines over a period stipulated in the agreements. Such agreements involve complex pricing arrangements wherein the Company receives discounts / credits on such purchases which are based on the commitments to purchase which the Company is confident to fulfil currently. Accordingly amount of contingent liability if any as at the balance sheet date is not ascertainable. In addition to the above there are certain arbitration proceedings with customers / suppliers / contractors in respect of which claims are currently not ascertainable. The management believes based on internal assessment and / or legal advice that the probability of an ultimate adverse decision and outflow of resources of the Company is not probable and accordingly no provision for the same is considered necessary. b Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances 2550709.70 2227287.48 Pertains to acquisition of aircrafts other capital assets in future. c Arrears of fixed cumulative dividends on preference shares including tax thereon 9448.50 4305.89 Notes to Financial Statements Contd.

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53 Particulars Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 23 Revenue from operations: i Passenger 491018.54 562098.26 ii Cargo 43554.97 45194.52 iii Excess Baggage 3271.12 3052.79 iv Rebooking Charges / Cancellation 11496.27 12992.33 549340.90 623337.90 Net of credit card chargeback amount of Rs.92.18 lakhs previous year Rs.107.76 lakhs 24 Other Income: i Interest on deposits with banks 1361.15 873.42 ii Income on sale and lease back transaction 41.42 41.42 iii Provision no longer required withdrawn 14866.68 7298.59 iv Other non operating income 5882.15 5378.73 v Exchange Gain net 10898.50 - 33049.90 13592.16 25 Employee Benefit Expenses: Refer foot note to note 38a i Salaries and wages 64786.28 65059.86 ii Contribution to provident and other funds Refer note 42b 881.74 893.97 iii Gratuity Refer note 42a 154.36 489.19 iv Leave encashment / Compensated absences Refer note 40b 65.89 277.69 v Expenses on the employee stock option scheme 295.09 453.08 vi Staff welfare expenses 1357.47 1333.22 66950.65 67600.85 26 Finance Costs: i Interest expense 120520.57 111892.92 ii Bank charges and guarantee commission 7107.96 19151.08 iii Others 4.99 250.00 127633.52 131294.00 27 Depreciation and amortization: i Depreciation 30099.67 20302.45 ii Initial Costs amortised on Leased Aircrafts 1980.26 1980.26 iii Amortisation of slot charges 2106.66 1821.05 34186.59 24103.76 Notes to Financial Statements Contd.

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54 Particulars Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 28 Operating and other expenses: Refer foot note to note 38a i Landing Parking Housing and Navigation Charges 40060.59 43336.91 ii Ground Handling 23170.89 22353.61 iii Aircraft Maintenance: - Maintenance and Component Support Services 15235.20 28562.91 - Stores and Spares Consumed 5963.32 5668.88 - Others 4048.33 3065.88 25246.85 37297.67 iv Inflight and Other Amenities 17868.67 21960.76 v Rent 5973.08 4854.44 vi Repairs to buildings 35.33 67.70 vii Repairs others 1573.14 2183.17 viii Insurance: - Aircraft 6285.19 7276.45 - Others 82.68 371.95 6367.87 7648.40 ix Rates and Taxes 351.29 691.63 x Rates and Taxes - Service Tax 885.68 3803.05 xi Selling and Distribution 24599.43 27846.86 xii Commission to selling agents 17041.74 19497.40 xiii Discounts other than trade discounts 1594.52 4025.46 xiv Advertising and Sales Promotion 17386.28 14537.25 xv Payment to the auditors - as auditor 60.00 60.00 - for other services 55.00 56.25 - for reimbursement of expenses 2.12 3.21 117.12 119.46 xvi Communication 2688.37 2592.66 xvii Electricity 760.75 664.78 xviii Printing and Stationery 441.44 509.34 xix Legal and professional charges 4965.12 9335.15 xx Travelling Conveyance Boarding expenses 5840.21 6558.53 xxi Directors sitting fees 6.60 9.30 xxii Hire Charges 3620.94 4338.09 xxiii Training 1397.75 1815.20 xxiv Recruitment 153.83 149.75 xxv Loss on sale of Fixed Assets net 1239.20 54.75 xxvi Provision for Contingencies - 700.00 xxvii Bad Debts written off 919.84 1136.02 xxviii Allowance for Doubtful Debts/ Advances 1464.00 607.21 xxix Provision for Dimunition in value of investments 2.44 - xxx Software Expenses 1092.82 1048.96 xxxi Miscellaneous expenses 1765.01 2382.89 xxxii Foreign Exchange loss net - 1582.72 208630.80 243709.12 Includes Rs 100 lacs on account of provision for obsolescence Notes to Financial Statements Contd.

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55 Particulars Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs 29 Details of redelivery/other costs: Costs incurred on account of premature termination of lease/ purchase contracts 74344.72 3965.52 Amount paid/ provided as payable to a service provider on settlement of disputes - 5159.13 74344.72 9124.65 30 Prior period items: to the extent identified i Income 45.55 - ii Expenses - Maintenance and component support service 736.39 500.60 - Landing parking housing and navigation charges 46.15 570.60 - Others 517.17 1844.04 1299.71 2915.24 31 Additional Information: a Value of Imports calculated on CIF basis: i Stores Spares and Components 10076.62 7088.72 ii Capital goods 0.73 7336.71 b Expenditure in foreign currency: i Salaries 5172.91 9039.73 ii Traveling Conveyance 1895.36 1977.47 iii Professional Consultancy expenses 1453.57 2520.88 iv Training expenses 869.58 986.81 v Aircraft and other maintenance expenses 61426.27 34025.74 vi Lease rentals 105845.44 98399.56 vii Ticket distribution and reservation system 26157.10 27113.68 viii Interest 3209.87 3080.62 ix Fuel Purchase 47870.24 39841.23 x Airport Charges 13309.68 13192.60 xi Ground Handling 6704.22 6024.96 xii Redelivery costs 59187.19 2061.63 xiii Slot charges 2106.66 1821.05 xiv Others 7532.98 9905.43 c Value of Components and Spare parts consumed Particulars Amount Rs. In Lacs to total Amount Rs. In Lacs to total i Value of imported raw materials spare parts and components consumed 4651.39 78.00 1463.38 26.00 ii Value of indigenous raw materials spare parts and components consumed 1311.93 22.00 4205.50 74.00 5963.32 100.00 5668.88 100.00 d Details of non-resident shareholdings i Number of non-resident share holders as at the end of the year 1461 1073 ii Number of shares held by non-resident shareholders as at the end of the year 7123503 44286393 iii Amount remitted during the year in foreign currency on account of dividends Nil Nil e Earnings in foreign exchange: As certified by management i Passenger / cargo revenue Rs. In Lacs 136323.39 83248.76 Notes to Financial Statements Contd.

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56 33 a Buildings constructed at a cost of Rs. 88.74 Lacs are on land rented from the State Government for which lease has been transferred to Deccan Charters Limited DCL. Such rental agreement is renewable on an annual basis. The Company has in turn entered into a rental arrangement with DCL. b Buildings constructed at a cost of Rs. 865.86 Lacs are on land belonging to the Airport Authority of India. Such rental agreements are renewable on a periodical basis. 34 a Capital advances includes capitalised interest on borrowings for purchase of fixed assets. The movement in the account is given below: Particulars 2011-2012 2010-2011 Opening balance 16568.66 12328.29 Add: Interest capitalised during the year 2265.59 4682.14 Less: Deletions on account of delivery and cancellation of orders of aircrafts - 441.77 Closing balance 18834.25 16568.66 An aircraft wise schedule of interest capitalized is under preparation and review. The Company is in the process of renegotiating the delivery terms of aircrafts with the relevant manufacturers. Any amounts to be decapitalized consequent to temporary suspension of work will be accounted after such renegotiation. b Capital advances includes Rs. 2402.51 lacs paid for purchase of a flight simulator. The Company is to pay the balance consideration and take delivery of the asset. The Company is exploring various options to fund the balance consideration payable. Management is confident that it will be in a position to fund the balance consideration take delivery of the flight simulator. Accordingly the said amount is considered good of recovery. 35 Employee Stock Option Plan ESOP On March 16 2005 the shareholders of the Company approved an employee stock option plan ESOP 2005. Further on December 21 2005 the Board of Directors approved the ESOP 2006 scheme which will govern issuance of options on or after January 1 2006. Options issued under ESOP 2005 would continue to be governed under ESOP 2005. The shareholders have approved the issuance of 8181779 options in aggregate subject to a maximum of 10 of the aggregate number of issued and outstanding equity shares calculated on an as converted basis under both the options put together. 32 Earnings per share: Particulars Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Loss for the year after tax expense 232800.75 102739.80 Preference dividend payable including dividend tax 5142.61 4305.89 237943.36 107045.69 Weighted average number of equity shares 507162628 266544144 Earning per share Basic and Diluted In Rs. 46.92 40.16 The options vested in certain debenture holders to convert their outstanding to equity on weighted average number of shares for diluted EPS is not considered since their effect is anti-dilutive. Notes to Financial Statements Contd.

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57 Notes to Financial Statements Contd. During the year ended March 31 2012 no options under ESOP 2006 scheme have been issued. Details of number and weighted-average exercise prices of options are given below: Particulars 2011-2012 2010-2011 Number of options Weighted average exercise price per share Number of options Weighted average exercise price per share In Rupees In Rupees Outstanding at the beginning of the year 470600 65 822310 65 Forfeited during the year 470600 65 351710 65 Outstanding at the end of the year Nil 65 470600 65 Exercisable at the end of the year Nil 65 426380 65 The Company has determined intrinsic values based on the fair value of the shares on the date of grant as follows: Month year of grant Intrinsic value determined In Rupees Jun-05 62.97 Dec-05 62.97 Apr-07 49.9 Sep-07 83.8 Feb-08 91.95 The Company has written back deferred compensation expense of Rs. 295.08 Lacs Previous year - Rs. 453.08 Lacs during the year on account of forfeiture of options issued. The following table illustrates the effect on net loss per share if the Company had applied the fair value method under Black-Scholes model to measure stock-based compensation. Particulars 2011-2012 2010-2011 Net loss after tax as reported Rs. in Lacs 232800.75 102739.80 Add: Compensation expense as recognized Rs. in Lacs 295.09 453.08 Add: Arrears of fixed cumulative preference dividends including tax thereon Rs. in Lacs 5142.61 4305.89 Total 238238.45 107498.77 Less: Compensation expense under the fair value method Black Scholes Method Rs. in Lacs 371.31 662.17 Net Loss after tax proforma used for computation of loss per share after extra ordinary items Rs. in Lacs 237867.14 106836.60 Loss per share as reported basic and diluted Rs. 10 par value in Rupees 46.92 40.16 Loss per share pro forma basic and diluted Rs. 10 par value in Rupees 46.90 40.08 The Company has not issued any options during the year. Accordingly the assumptions used in determination of the fair value of the Company’s stock options for pro forma net loss per share disclosures using the Black-Scholes option-pricing model have not been furnished. The Board of Directors of the Company are yet to formulate the stock option plan to the employees of the commercial airline division of KTASL taken over by the Company pursuant to clause 11.1 of the Scheme.

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58 36 a Related Party Disclosures Parties identified by the Management and relied upon by the auditors: Names of related parties Holding company - till February 17 2012 Associate - from February 18 2012 United Breweries Holdings Limited Fellow subsidiaries - till February 17 2012 Enterprises over which KMP has significant influence - From February 18 2012 Kingfisher Finvest India Limited KFIL formerly known as Kingfisher Radio Limited and subsequently renamed as Kingfisher Finvest India Limited UB Infrastructure Projects Limited UBIPL Kingfisher Training and Aviation Services Limited KTASL Bangalore Beverages Limited UBSN Limited Subsidiary of the Company Vitae India Spirits Limited Key Management Personnel KMPs Dr. Vijay Mallya Mr. Sanjay Aggarwal from September 27 2010 Rs. in Lacs Transactions during the year Holding Company/ Associate Fellow subsidiaries/ Enterprises over which KMP has significant influence Subsidiary KMPs Remuneration to Mr. Sanjay Aggarwal Mar-12 401.02 Mar-11 212.22 Guarantee and security commission expense Mar-12 Nil Nil Nil Mar-11 5800.95 40.33 5086.90 Write back of guarantee and security commission income Refer note 36b Mar-12 1256.28 18.44 1403.79 Mar-11 Nil Nil Nil License fees expense Mar-12 568.26 Mar-11 617.68 Interest expense Mar-12 447.33 284.62 Nil 5618.80 Mar-11 6324.80 1512.91 133.79 Nil Reimbursement of expenses Mar-12 0.07 Mar-11 0.14 Purchase of goods/Services Mar-12 Nil Mar-11 0.64 Loans borrowed Mar-12 7809.77 5762.12 88264.97 Mar-11 57511.59 5000.00 Nil Loans repaid Mar-12 Nil 4700.00 Nil Mar-11 25500.00 24500.00 Nil Purchase of fixed assets Mar-12 197.87 Mar-11 Nil Notes to Financial Statements Contd.

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59 Transactions during the year Holding Company/ Associate Fellow subsidiaries/ Enterprises over which KMP has significant influence Subsidiary KMPs Outstanding payable net of receivables Mar-12 19897.48 4030.28 454.39 Nil 19.28 93322.78 Mar-11 12303.56 2712.01 470.99 0.62 Nil Nil Outstanding receivables net of payable Mar-12 Nil Mar-11 76.69 Loans due by the Company converted into 7.5 CCPS Mar-12 Nil Nil Mar-11 63300.00 1500.00 Conversion of 6 redeemable non- cumulative preference shares of Rs. 100 each to 6 CCPS of Rs. 10 each Mar-12 Nil Mar-11 9700.00 Equity shares allotted by the Company pursuant to conversion of CCPS face value Mar-12 Nil Nil Mar-11 11321.34 232.63 Guarantees given on behalf of the Company for loans taken other liabilities Mar-12 892586.12 590414.00 Mar-11 886355.00 617563.12 Investments held by the Company in Vitae India Spirits Limited Mar-12 5.00 Mar-11 5.00 UBIPL KFIL KTASL UBSN Limited Bangalore Beverages Limited conversion of interest other dues payable as loan of Rs. 9239.00 Lacs and Rs. 2370.00 Lacs respectively. Dr. Vijay Mallya Excludes amortization of amounts paid in prior years of Rs. 221.69 Lacs Entitled to free use of Company car telephone. Excludes accrued leave encashment and gratuity since the same have been recognized for the Company as a whole and cannot be determined at an employee level. NA: Not applicable In addition the Company has derived revenue from certain related parties from sale of tickets / cargo space in the normal course of business. These have not been quantified shown separately. b Rs. 2678.50 lacs representing commission for the period from January 1 2011 to March 31 2011 earlier accrued as payable in the books of account to the guarantors for issuing guarantees at the request of the Company to its bankers / others has been withdrawn pursuant to directives of the consortium bankers pursuant to the Reserve Bank of Indias Guidelines. Further for the same reason no provision has been made in the books of account for commission payable in respect of guarantees issued by the guarantors to the Companys bankers / others for the year estimated at Rs.11093.80 lacs. The Company has communicated the matter to the concerned guarantors and their response is awaited. Notes to Financial Statements Contd.

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60 37 Leases and Hire Purchase The Company has entered into operating and finance lease agreements. Disclosures required under AS 19 on “Leases” is as given below: a Operating leases Operating lease arrangements comprise of leases of aircraft helicopters spare engines and office premises. The salient features of such lease agreements are as follows: 1 Lease periods range up to twelve years and are in certain cases non-cancellable. 2 Lease rentals are usually fixed over the term of the lease while some arrangements are subject to adjustments linked to the Libor rates movements. 3 The Company also has agreements for maintenance and lease of stores and spares for such aircrafts for which fixed and variable rentals are paid. Variable rentals are paid on a pre determined rate payable on the basis of actual flying hours / cycles. Such variable rentals are subject to annual escalations as stipulated in the agreements. However the Company is eligible to claim reimbursement of maintenance costs to the extent eligible under the agreements. 4 The Company does not have an option to buy the aircraft or helicopters and spare engines or to renew the leases. 5 In case of default by the Company in addition to repossession of the aircraft penalties are stipulated in the agreements. 6 The Company is required to deposit a commitment fee and a security deposit with the lessor or provide a letter of credit for such amounts. 7 Office premises are subject to further renewal after the expiry of original non cancellable period as per the original agreement. Particulars 2011-2012 2010-2011 Lease contributions for the year excluding maintenance reserves 107718.49 98399.56 Minimum lease payments contributions - Not later than one year 71544.49 93616.34 - Later than one year but not later than five years 199740.93 264319.46 - Later than five years 48116.96 103822.35 In addition to the above the Company has entered into agreements to lease aircrafts / engines in respect of which the aircrafts / engines are pending delivery / the lease was yet to commence as at March 31 2012. The above table of minimum lease payments does not include amounts that may become payable in respect of leases yet to commence as at March 31 2012. b Finance leases Rs. in Lacs Particulars 2011-2012 2010-2011 Total minimum lease payments at the balance sheet date in case of balance fixed non cancellable lease term 77865.59 76630.00 Less: Amount representing finance charges 14331.28 15589.25 Present value of minimum lease payments 63534.31 61040.75 Lease payments for the year 7741.56 9985.54 Minimum Lease Payments: Not later than one year Present value as at March 31 2012 Rs.13778.15 Lacs As at March 31 2011 Rs.9126.57 Lacs 18610.99 13133.68 Later than one year but not later than five years Present value as at March 31 2012 Rs.37113.70 Lacs As at March 31 2011 Rs.37687.80 Lacs 45479.91 47258.46 Later than five years Present value as at March 31 2012 Rs.12642.46 Lacs As at March 31 2011 Rs. 14226.38 Lacs 13774.69 16237.86 Salient features of Finance Lease Agreement Aircraft: 1 Monthly aircraft lease rentals are paid in the form of fixed rentals. 2 The Company is responsible for keeping the aircraft airworthy in all respects and in good condition and insuring the same throughout the lease period. 3 The Company has an option to purchase the aircraft either during the term of the lease on payment of the outstanding principal amount or at the end of the lease term on payment of a nominal option price. 4 In the event of default the Lessee is responsible for payment of all costs of the Owner including financing costs and other associated costs. Further a right of repossession is available to the Owner / Lessor. Notes to Financial Statements Contd.

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61 In addition the Company has entered into cancellable leasing arrangements for office and residential premises which are renewable at mutual consent. Lease rentals of Rs.4100.03 lacs Previous year - Rs.4854.44 Lacs have been included under the head “Operating and Other Expenses - Rent” in the Statement of Profit and Loss. 38 Segment disclosures a Geographical segments Considering the internal reporting framework the Company has considered geographical segments as the primary segments. Such segments consist of domestic air transportation within India and international air transportation outside India. Rs. in Lacs Particulars Domestic Sectors International sectors Total Revenue 2011-12 411255.78 138085.11 549340.89 2010-11 477314.68 146023.22 623337.90 Segment results - gain / loss before tax and interest 2011-12 8343.94 33001.78 41345.72 2010-11 77600.05 7810.91 69789.14 Less: Interest and finance charges 2011-12 127633.52 2010-11 131294.00 Rs. in Lacs Particulars Domestic Sectors International sectors Total Depreciation and other amortizations 2011-12 34186.59 2010-11 24103.76 Other unallocable expenditure 2011-12 66328.56 2010-11 81980.63 Restructuring/idle costs 2011-12 33820.00 2010-11 - Redelivery and other cost and Foreign exchange translation differences 2011-12 63446.22 2010-11 10707.37 Add: Unallocable income 2011-12 22151.40 2010-11 26218.33 Total loss before tax expense 2011-12 344609.21 2010-11 152078.29 Foot Note: Represents fixed cost associated with curtailment of operations during the year relating to aircrafts on ground. The details of such costs shown separately from their natural head is disclosed as under: Natural head of account Total Expense Rs. In lacs Amount shown under restructuring/ idle costs Rs. In lacs Net amount shown under natural heads Rs. In lacs Employee costs 67351.38 400.73 66950.65 Aircraft lease rentals 105845.44 19000.29 86845.15 Other operating expenses 223049.78 14418.98 208630.80 Total 396246.60 33820.00 362426.60 Notes to Financial Statements Contd.

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62 The value of assets and liabilities capital expenditure incurred during the year and depreciation on fixed assets segment wise cannot be segregated and identified to any reportable segment. Note: All data in note 38a is as certified by management since part of the data is drawn from non-financial records. b Business segments The Company operates in a single business segment i.e. of providing scheduled and unscheduled air transportation services. Accordingly no separate segment disclosures for business segments are required to be given. 39 Deferred tax asset on unabsorbed depreciation and business losses has been recognized on the basis of business plan prepared by the management which takes into account certain future receivables arising out of contractual obligations. The management is of the opinion that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which the deferred tax asset can be realized. 40 Provisions In accordance with Accounting Standard – 29 ‘Provisions Contingent Liabilities and Contingent Assets’ following is the movement in provision towards cost for frequent flyer program. a Frequent Flyer Program: The Company has a Frequent Flyer Program King Club wherein passengers who fly frequently are entitled to accumulate miles to their credit. Passengers are eligible to redeem such miles in the form of tickets either on the Company or its partners’ airlines. The cost of allowing free travel to members is accounted considering the members’ accumulated mileage on an incremental basis. However in the light of inadequate historical data the Company has not factored costs that would be incurred by it while estimating provisions required in case eligible passengers redeem such miles for services/tickets of partners. The movement in the provision towards cost for frequent flyer program during the year is as under: Particulars As at March 31 2012 As at March 31 2011 Opening Balance 2165.75 1730.34 Add: Provision during the year 1967.34 1445.24 Less: Amounts utilized during the year 685.57 1009.83 Closing Balance 3447.52 2165.75 The outflow with regard to above would depend upon utilization of accumulated mileage by the members and hence the Company is not able to reasonably ascertain the timing of outflow. b Leave encashment / compensated absences The movement in the provision towards cost of leave encashment/compensated absences during the year is as under: Particulars As at March 31 2012 As at March 31 2011 Opening Balance 1411.78 1239.62 Add: Provision during the year 65.89 277.68 Less: Amounts utilized during the year 205.11 105.52 Closing Balance 1272.57 1411.78 41 There were no forward or derivative contracts outstanding as at March 31 2012 and March 31 2011. Foreign currency exposures as at March 31 2012 and March 31 2011 that had not been hedged by any derivative instrument or otherwise are estimated as follows: Particulars As at March 31 2012 As at March 31 2011 Capital Advances 57764.84 50301.17 Prepaid Maintenance Reserve 112774.93 113531.21 Other Assets Receivables 55820.82 39990.49 Finance Lease for aircrafts and other term loan from financial institution 63534.31 61040.75 Other Liabilities Payables 123227.89 54018.29 Recast Notes to Financial Statements Contd.

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63 42 Employee Benefits: a Contribution to defined benefit plans-gratuity plan unfunded as certified by the management Particulars 2011-2012 2010-2011 I Change in benefit obligation: Defined benefit obligation DBO at the beginning of the year 1476.15 1056.35 Service Cost 375.78 337.09 Interest Cost 121.78 108.70 Past service cost- vested benefit - 8.50 Actuarial loss / gain 343.20 34.90 Benefits paid 304.42 69.39 Defined benefit obligation at the end of the year 1326.09 1476.15 II Components of cost for the year: Service cost 375.78 337.09 Interest on defined benefit obligation 121.78 108.70 Past service cost- vested benefit - 8.50 Net actuarial gain recognized in the year 343.20 34.90 Net gratuity recognized in the Statement of Profit and Loss 154.36 489.19 III Actuarial assumptions: Discount rate p.a 8.50 8.00 Salary Escalation Rate p.a 5.00 5.00 Retirement Age 58 years 58 years Mortality Rates of LIC 1994-1996 mortality table Rates of LIC 1994-1996 mortality table Withdrawal rate 2.00 2.00 b Contribution to defined contribution plans Contribution to provident fund Rs.673.66 Lacs Previous year – Rs. 641.76 Lacs. Contribution to social security schemes Rs.214.71 Lacs Previous year - Rs. 200.01 Lacs. Recast 43 The Company is not aware of the registration status of its suppliers registration under the MSME Act 2006 “Micro Small and Medium Enterprises Development Act 2006”. Accordingly information relating to outstanding balances due have not been disclosed as it is not determinable. Similarly interest payable if any has not been computed and provided for. 44 Accounts of certain creditors debtors IATA loans advances advances on capital account bank accounts passenger service fees and charges payable to airport operators service tax payable including under reverse mechanism input service tax credit recognized are subject to review / reconciliation / confirmation. Adjustments if any will be made on completion of such review / reconciliation / receipt of confirmations/identification of doubtful and bad debts/advances. 45 The Company has incurred substantial losses and its net worth has been eroded. The Company has initiated several cost savings schemes/ route rationalization programs and has prematurely terminated certain contracts etc. The Company has also drawn up plans for capital raising and will request banks at an appropriate time for debt restructuring. These plans are material to it continuing as a going concern. Since the Company is confident of raising capital and rescheduling its debt and in the light of continued group support the financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are required to the carrying value of assets and liabilities. 46 The Company’s centralized ticket reservation system CRS does not support capture of unearned revenue. Accordingly such unearned revenue has been estimated by management by multiplying the estimated aggregate number of unflown tickets as on the reporting date by an overall average estimated ticket value. Management is taking continuing steps to streamline the process of determination of unearned revenue. Notes to Financial Statements Contd.

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64 47 The Company’s Cargo Revenue Management CRM system is yet to stabilize. Mistakes noticed in revenue recognized sundry debtors and other relevant accounts have been corrected to the extent identified. The Company is of the view that any unadjusted differences will not be material. Management is taking steps to further streamline the processes and stabilize the system. 48 Accounting of costs on major repairs and maintenance of its engines: During the current and immediately preceeding previous two years the Company has adopted the exposure draft on Accounting Standard - 10 Revised ‘Tangible Fixed Assets’ which allows costs on major repairs and maintenance incurred to be amortized over the incremental life of the asset. The Company has extended the same treatment to costs and maintenance on engines pertaining to aircrafts acquired on operating lease. Such expenditure has been included in ‘Lease hold improvements- Aircrafts’ vide schedule of fixed assets. This accounting policy has been confirmed by an independent expert and in the opinion of the management has resulted in a fair depiction of the working results and the state of affairs of the Company. But for such accounting practice the loss before after tax for the year would have been higher by Rs. 59.33 Lacs and Rs. 40.08 Lacs respectively. 49 Use fees payable by the Company in respect of certain assets taken on operating lease aggregating to Rs. 6033.53 Lacs previous year Rs 5576.45 lacs have in accordance with the Company’s understanding been treated as maintenance reserves. In terms of the Company’s accounting policy these fees are initially included under Loans and Advances and are expensed out to the Statement of Profit and Loss at the time of incurrence of major expenditure /termination of agreements. The Company is taking steps to formalize this understanding with the relevant lessor. 50 The Company has not prepared consolidated financial statements CFS as required by the AS 21 since the transactions of subsidiary during the year/its assets and liabilities were not material. 51 Fixed assets were physically verified by the management during the previous year. Pending completion of reconciliation discrepancies if any have not been finalized and adjusted. As a matter of abundant caution provision of Rs. 500 lacs has been made for the possible effect of any discrepancies. 52 Rs. 10858 lacs representing withholding tax earlier accrued as payable in the books of account on amounts paid/ provided as payable to certain non residents/interest thereon has been withdrawn based on professional advice. Consequently no provision is considered necessary for withholding tax for the year 2011-12 on amounts paid/ provided as payable to certain non residents/interest thereon. The Company is in the process of completing a part of the pending documentation and complying with the requisite formalities under the Income Tax Act 1961. 53 In respect of certain aircrafts taken on finance lease book value as at March 31 2012 Rs.24626.96 lacs finance lease obligation outstanding as at March 31 2012 Rs.21706.41 lacs the concerned lessors have terminated the relevant lease agreements in the light of events of default by the Company and the aircrafts stand deregistered from its name in April 2012. The Company is in the process of negotiation with the concerned lessors to purchase the aircrafts. Pending finalization no adjustments have been made in the financial statements. 54 Claims for duty free credits amount recognized as at March 31 2012 and included under ‘Other current assets’ Rs.12740.56 lacs are yet to be lodged with the relevant authorities. The Company will take necessary action in the matter. 55 Segregation between current and non current liabilities /assets as at end of current and previous reporting periods have been done on an estimated basis in certain cases due to non availability of precise data. 56 The Company has terminated certain agreements entered into with parties as a cost rationalisation measure. The Company is in discussion with the relevant parties to finalise the amount of compensation and other costs if any payable by it. The same will be accounted on final determination of the matter. In the opinion of the management this amount is not likely to be material. 57 Loans and advances include Rs 2064.14 lacs Previous year 1489.87 lacs representing sums recovered by certain creditors on account of Company’s delay in payment of tax deducted at source. The Company is in discussion with the relevant parties to resolve the matter. In the opinion of the management no adjustment are required to the financial statements on this account. 58 Previous year’s figures have been regrouped / reclassified wherever necessary to conform to the current year’s presentation. Notes to Financial Statements Contd.

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65 Statement pursuant to Section 212 of the Companies Act 1956 related to the Subsidiary Company Particulars Vitae India Spirits Limited 1. Financial year of the Subsidiary ended on March 31 2012 2. Shares of the Subsidiary held by the Company on the above date: a Number face value 50000 Equity Shares of Rs.10/- each b Extent of holding 100 3. Net aggregate amount of profits/losses of the Subsidiary so far as they concern members of Kingfisher Airlines Limited: a For the financial year of the Subsidiary i Dealt within the accounts of the Company for the year ended March 31 2012 Rs. Lacs NIL ii Not Dealt with the accounts of the Company for the year ended March 31 2012 Rs. Lacs 2.44 b For the previous financial year of the subsidiary since it became a subsidiary i Dealt within the accounts of the Company for the previous financial year ended March 31 2011 Rs. Lacs NIL ii Not Dealt with the accounts of the Company for the previous financial year ended March 31 2011 Rs. Lacs 2.43 For and on behalf of the Board of Directors Dr. Vijay Mallya A. K. Ravi Nedungadi Chairman Managing Director Director Place : Mumbai A. Raghunathan Bharath Raghavan Date : May 30 2012 Chief Financial Officer Company Secretary

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66 Particulars Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs Cash flows from operating activities Loss before taxation 344609.21 152078.29 Adjustments for: Depreciation / Amortisation on fixed assets 30099.67 20302.45 Amortisation of slot charges 2106.66 1821.05 Initial Costs amortised on Leased Aircrafts 1980.26 1980.26 Initial Costs amortised on Leased Aircrafts - Redelivery Costs 4372.87 - Provision for Gratuity 150.06 419.80 Provision for Leave Encashment / Compensated Absences 139.22 172.16 Provision for Frequent Flyer Scheme 1281.77 435.41 Provision for Redelivery Costs 1773.34 - Employee Compensation Income / Expense 295.09 453.08 Baddebts written off 919.84 1136.02 Provision for Doubtful Debts/ Advances 1464.00 607.21 Provision for Contingencies - 700.00 Provision for Obsolescence 100.00 - Provision for Dimunition in Value of Investments 2.44 - Loss on sale of assets 1239.20 54.75 Loss on redelivery of aircrafts 11179.16 - Foreign exchange loss/gain 7791.38 2798.26 Income on sale and lease back transaction 41.42 41.42 Interest received 1361.15 873.42 Interest expenses 120520.57 111892.92 167261.46 140952.37 177347.75 11125.92 Increase/ decrease in trade and other receivables 22909.49 13020.20 Increase/ decrease in inventories 1813.96 2276.82 Increase/ decrease in trade advances 4290.27 32518.84 Increase/ decrease in trade payables 63807.19 60185.97 89192.98 12370.11 88154.76 1244.19 Income taxes paid 399.83 1021.63 Net cash from operating activities 88554.59 222.56 Cash flows from investing activities Movement in fixed assets including changes in Capital work- in -progress and capital advances 32014.19 8631.40 Sale of fixed assets 4.64 - Slot charges incurred during the year 2106.66 1827.67 Repayment of Finance Lease obligation during the year prin- cipal portion 5930.16 11496.91 Interest received 1289.19 888.33 Net cash from/used in investing activities 38757.16 3804.85 Cash Flow Statement For The Year Ended March 31 2012

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67 Particulars Year Ended March 31 2012 Year Ended March 31 2011 Rs. In Lacs Rs. In Lacs Rs. In Lacs Rs. In Lacs Cash flows from financing activities Proceeds from Loans from Banks and Others 204580.50 233467.78 Repayment of Loans to Banks and Others 17818.28 141153.17 Interest paid 66459.98 84142.77 Net cash from financing activities 120302.23 8171.84 Net increase/decrease in cash and cash equivalents 7009.52 4589.55 Cash and cash equivalents at beginning of reporting period 25236.25 20646.70 Cash and cash equivalents at end of reporting period 18226.73 25236.25 Note: The above cash flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard - 3. Cash Flow Statement For The Year Ended March 31 2012 Contd. As per our report of even date For and on behalf of the Board of Directors For B. K. Ramadhyani Co. Dr. Vijay Mallya A. K. Ravi Nedungadi Chartered Accountants Chairman Managing Director Director Shyam Ramadhyani A. Raghunathan Bharath Raghavan Partner Chief Financial Officer Company Secretary Membership No. 019522 Place : Mumbai Place: Mumbai Date : May 30 2012 Date: May 30 2012

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68 VITAE INDIA SPIRITS LIMITED Directors Report To The Members Your Directors present the 4th Annual Report along with the Audited Accounts of your Company for the financial year ended March 31 2012. Operations Your Company has not carried on any business during the year under review. For the financial year ended March 31 2012 your Company has incurred a loss of Rs. 454/- comprising of bank charges. Share Capital The Authorised Issued Subscribed and Paid up Equity Share Capital of your Company remains unchanged at Rs. 500000/- divided into 50000 equity shares of Rs. 10/- each. Your Company continues to remain a wholly owned subsidiary of Kingfisher Airlines Limited. Directors Mr. Bharath Raghavan Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment. Auditors M/s Vishnu Ram Co. your Company’s Auditors have confirmed that they are eligible for re-appointment at the ensuing Annual General Meeting and it is proposed to re-appoint them and to fix their remuneration. Conservation of Energy Research and Development Technology Absorption Foreign Exchange Earnings and Outgo The particulars as prescribed under section 2171e of the Companies Act 1956 and the rules framed there under are not applicable to your Company. Foreign Exchange Earnings and Outgo There is no earning or outgoing of Foreign Exchange during the year under review. Directors’ Responsibility Statement In terms of the provisions of Section 2172AA of the Companies Act 1956 the Directors of your Company hereby confirm that: • in the preparation of the Accounts for the year ended March 31 2012 the applicable accounting standards have been followed along with proper explanation relating to material departures • accounting policies have been selected and applied consistently and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at March 31 2012 and of the loss of your Company for the year ended March 31 2012 • proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities • the accounts for the year ended March 31 2012 have been prepared on a going concern basis. Particulars of Employees’ Remuneration Your Company has no employees on its payroll and accordingly the provisions of Section 2172A of the Companies Act 1956 read with the Companies Particulars of Employees Rules 1975 are not applicable. For and on Behalf of the Board of Directors Bangalore A. Raghunathan T. R. Venkatadri May 10 2012 Director Director

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69 To The Members of VITAE INDIA SPIRITS LIMITED 1. We have audited the attached Balance Sheet of VITAE INDIA SPIRITS LIMITED as at 31st March 2012 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date 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 misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. Further to our comments in the annexure referred to above we report that: i We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit ii 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 iii The Balance Sheet the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account Auditors’ Report iv In our opinion the Balance Sheet Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section 3C of section 211 of the Companies Act 1956 v On the basis of written representations received from the Directors and taken on record by the Board of Directors we report that none of the Directors are disqualified as on 31st March 2012 from being appointed as a Director in terms of clause g of sub-section 1 of section 274 of the Companies Act 1956 vi In our opinion and to the best of our information and according to the explanations given to us the said accounts together with the notes thereon give the information required by the Companies Act 1956 1 of 1956 in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India a in the case of the Balance Sheet of the state of affairs of the Company as at 31-03-2012 b in the case of the Profit and Loss account of the loss for the year ended on that date and c in the case of the Cash Flow Statement of the cash flows for the year ended on that date. For Vishnu Ram Co. Chartered Accountants S. Vishnumurthy Proprietor Bangalore Membership No. 22715 May 10 2012 Firm Registration No. 004742S

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70 Re: VITAE INDIA SPIRITS LIMITED Referred to in paragraph 3 of our report of even date a There were no fixed assets. Therefore the provisions of clause 4ia to 4ic of the Companies Auditor’s Report Order 2003 are not applicable to the Company. b There were no stocks of goods. Therefore the provisions of clause 4iia to 4iic of the Companies Auditor’s Report Order 2003 are not applicable to the Company. c The Company has not granted any loans to companies firms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Therefore the provisions of clause 4iiia to 4iiid of the Companies Auditor’s Report Order 2003 are not applicable to the Company. d The Company has not taken any loans from companies firms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Therefore the provisions of clause 4iiie to 4iiig of the Companies Auditor’s Report Order 2003 are not applicable to the Company. e In our opinion and according to the information and explanations given to us there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory fixed assets and with regard to the sale of goods and services. During the course of audit we have not observed any continuing failure to correct major weaknesses in internal controls. f According to the information and explanations given to us there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act 1956. Therefore the provisions of clause 4va of the Companies Auditor’s Report Order 2003 are not applicable to the Company. g In our opinion and according to the information and explanation given to us there have not been any transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956. Therefore the provisions of clause 4vb of the Companies Auditor’s Report Order 2003 are not applicable to the Company. h The Company has not accepted any deposits from the public in contravention of the provisions of sections 58A 58AA and any other relevant provisions of the Act and the Companies Acceptance of deposits Rules 1975. Therefore the provisions of clause 4vi of the Companies Auditor’s Report Order 2003 are not applicable to the Company. i The paid up capital of the Company does not exceed Rs. 50 lakhs. There has not been any turnover during the year. Therefore the provisions with regard to internal audit of clause 4vii of the Companies Auditor’s Report Order 2003 are not applicable to the Company. j Provisions with regard to maintenance of cost records under section 2091d of the Companies Act 1956 are not applicable to this Company. k The Company is regular in depositing with appropriate authorities undisputed statutory dues including income tax and other material statutory dues applicable to it. Further since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act 1956 we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. l According to the information and explanations given to us no undisputed amounts payable in respect of income tax wealth Annexure to the Auditors’ Report tax service tax sales tax customs duty and excise duty were in arrears as at 31-3-2012 for a period of more than six months from the date they became payable. m According to the information and explanations given to us there are no dues of sales tax income tax customs duty wealth tax service tax and excise duty which have not been deposited on account of any dispute. n The Company has been registered for a period of less than five years. Therefore the provisions of clause 4x of the Companies Auditor’s Report Order 2003 are not applicable to the Company. o The Company has not taken any loans from banks or financial institutions nor issued any debentures. Therefore the provisions of clause 4xi of the Companies Auditor’s Report Order 2003 are not applicable to the Company. p The Company has not granted any loans on the basis of security by way of pledge of shares debentures and other securities. Therefore the provisions of clause 4xii of the Companies Auditor’s Order 2003 are not applicable to the Company. q The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4xiii of the Companies Auditor’s Report Order 2003 are not applicable to the Company. r The Company is not dealing in or trading in shares securities debentures and other investments. Therefore the provisions of clause 4xiv of the Companies Auditor’s Report Order 2003 are not applicable to the Company. s The Company has not given any guarantees for loans taken by others from banks or financial institutions. Therefore the provisions of clause 4xv of the Companies Auditor’s Report Order 2003 are not applicable to the Company. t The Company has not raised any term loans during the year. Therefore the provisions of clause 4xvi of the Companies Auditor’s Report Order 2003 are not applicable to the Company. u According to the information and explanations given to us and on an overall examination of the balance sheet of the Company we report that no funds raised on short term basis have been used for long term investment. v According to the information and explanations given to us the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. Therefore the provisions of clause 4xviii of the Companies Auditor’s Report Order 2003 are not applicable to the Company. w According to the information and explanations given to us the Company has not issued any debentures during the year. Therefore the provisions of clause 4xix of the Companies Auditor’s Report Order 2003 are not applicable to the Company. x During the year the Company has not raised any money by public issue. Therefore the provisions of clause 4xx of the Companies Auditor’s Report Order 2003 are not applicable to the Company. y According to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the course of our audit For Vishnu Ram Co. Chartered Accountants S. Vishnumurthy Bangalore Proprietor May 10 2012 Membership No. 22715 Firm Registration No. 004742S

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71 Balance Sheet as at March 31 2012 For and on behalf of the Board of Directors of Per our report of even date Vitae India Spirits Limited For Vishnu Ram Co. Chartered Accountants Bangalore A. Raghunathan T. R. Venkatadri S. Vishnumurthy May 10 2012 Director Director Proprietor Membership No. 22715 Firm Registration No. 004742S Note No As at 31-03-2012 Rupees As at 31-03-2011 Rupees I. Equity and liabilities 1. Shareholders’ funds a. Share capital 2.1 500000 500000 b. Reserves and surplus 2.2 243838 243384 2. Current liabilties a. Other current liabilties 2.3 58987 86562 315150 343178 II. Assets a. Current assets a. Cash and cash equivalents 2.4 315150 343178 315150 343178 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO FINANCIAL STATEMENTS 1 2

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72 Note No For the year ended 31-03-2012 Rupees For the year ended 31-03-2011 Rupees I. Revenue - - II. Expenses a. Other expenses 2.5 454 38833 454 38833 III. Loss before taxation 454 38833 a. Tax expense: i. Current tax - - ii. Deferred tax charge / credit - - IV. Loss for the year 454 38833 V. Earning per share i. Basic Face value of Rs.10 each 0.01 0.78 ii. Diluted Face value of Rs.10 each 0.01 0.78 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO FINANCIAL STATEMENTS 1 2 Statement of Profit and Loss for the year ended March 31 2012 For and on behalf of the Board of Directors of Per our report of even date Vitae India Spirits Limited For Vishnu Ram Co. Chartered Accountants Bangalore A. Raghunathan T. R. Venkatadri S. Vishnumurthy May 10 2012 Director Director Proprietor Membership No. 22715 Firm Registration No. 004742S

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73 Notes to the financial statements for the year ended March 31 2012 1. Significant Accounting Policies i. Basis for preparation of financial statements: The financial Statements are prepared under the historical cost convention having due regard to the fundamental accounting assumptions of going concern consistency accrual and in compliance with the mandatory accounting standards as specified in the Companies Accounting Standards Rules 2006. ii. Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions actual results could differ from these estimates. iii. Tax expense: Tax expense comprises of current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes are recognised for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in income using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. iv. Revenue recognition: All revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization. v. Provision and contingencies: A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. vi. Earning per Share: The basic earning / loss per share are computed by dividing the net profit / loss attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the period. vii. Related party transaction: Transactions between the related parties are disclosed as per Accounting Standard 18 - Related Party Disclosure specified by the Companies Accounting Standards Rules 2006. Accordingly disclosures regarding names of the transacting related party description of the relationship between the parties nature of transactions and the amount outstanding as at end of the accounting year are made. As at 31-03-2012 Rupees As at 31-03-2011 Rupees 2.1 Share Capital Authorised 50000 equity shares of Rs.10 each 500000 500000 500000 500000 Issued subscribed and paid-up 50000 equity shares of Rs.10 each 500000 500000 500000 500000 Reconciliation of equity shares outstanding Particualrs As at March 31 2012 As at March 31 2011 Number of shares Amount Number of shares Amount As at the beginning of the year 50000 500000 50000 500000 Issued during the year Outstanding at the end of the year 50000 500000 50000 500000

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74 Notes to the financial statements for the year ended March 31 2012 Terms/rights attached to the equity shares The Company has only one class of shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends if any in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company the holders of equity shares will be entitled to receive assets remaining after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. Shares held by holding Company Out of equity shares issued by the Company shares held by its holding Company is as follows: Particulars As at March 31 2012 As at March 31 2011 Number of shares Number of shares Holding Company - Kingfisher Airlines Limited 50000 50000 Details of shareholders holding more than 5 shares in the Company As at March 31 2012 As at March 31 2011 Number of shares holding Number of shares holding Equity shares of Rs. 10 each fully paid 50000 100 50000 100 Kingfisher Airlines Limited 2.2 Reserves and Surplus Debit balance in profit and loss account As per last balance sheet 243384 38833 Add: loss for the year 454 204551 243838 243384 2.3 Other current liabilities Vishnu Ram Co. 46920 74495 G. Krishna 6067 6067 Kingfisher Airlines Limited 6000 6000 58987 86562 2.4 Cash and cash equivalents Cash in hand 600 600 In current accounts 314550 342578 315150 343178 2.5 Other expenses Bank charges 454 228 Professional Charges - 38605 454 38833 2.6 In the opinion of the Board of Directors the current assets loan and advances have a value on realization in the ordinary course of business at least equal to the amounts at which they are stated. 2.7 Retirement benefits: Since there are no employees on the rolls of the Company no provision for gratuity or leave salary is made in the financial statements. 2.8 Figures in the Balance Sheet Profit and Loss account and schedules have been rounded off to the nearest rupee. 2.9 Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil.

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75 Notes to the financial statements for the year ended March 31 2012 2.10 Based on the available information with the management there are no outstanding dues to small scale industrial undertakings and to micro small and medium enterprises as defined under The Micro Small and Medium Enterprises Development Act 2006. 2.11 Related Party Disclosures: i List of related parties: Sl. No. Name of the related party Nature of relationship 1. United Breweries Holdings Limited Ultimate Holding Company 2. Kingfisher Airlines Limited Holding Company 3. Kingfisher Finvest India Limited Fellow Subsidiary 4. Kingfisher Training and Aviation Services Limited Fellow Subsidiary 5. Bangalore Beverages Limited Fellow Subsidiary 6. UB Electronic Instruments Limited Fellow Subsidiary 7. UB Infrastructure Projects Limited Fellow Subsidiary 8. UB International Trading Limited Fellow Subsidiary 9. City Properties Maintenance Company Bangalore Limited Fellow Subsidiary 10. Kingfisher Aviation Training Limited Fellow Subsidiary 11. Rigby International Corp. Fellow Subsidiary 12. United Breweries of America Inc. Delware Fellow Subsidiary 13. Inversiones Mirabel S A Fellow Subsidiary 14. Mendocino Brewing Company Inc. USA Fellow Subsidiary 15. Rubic Technologies Inc. Fellow Subsidiary 16. Releta Breweing Company LLC Fellow Subsidiary 17. UBSN Limited Fellow Subsidiary 18. United Breweries International U.K. Limited Fellow Subsidiary 19. UB Overseas Limited Fellow Subsidiary 20. UBHL BVI Fellow Subsidiary ii Related Party Transactions: Sl. No. Nature of Transactions: Holding Company 1 Kingfisher Airlines Limited 2011-12 2010-11 Share capital Rs. 500000 Rs. 500000 Advance received towards expenses Rs. 6000 Rs. 6000 2.12 The Company has adopted Accounting Standard - 20 on “Earning Per Share” specified in the Companies Accounting Standards Rules 2006 for calculation of EPS and the disclosures in this regard are as given below: Particulars Year ended 31.03.2012 Year ended 31.03.2011 Rupees Rupees Net loss after tax 454 38833 Weighted average number of equity shares of Rs. 10/- each outstanding during the year No. of shares 50000 50000 Basic / diluted earnings per share Rs not annualised 0.01 0.78 2.13 Segment information is not furnished since there is no reportable segment. For and on behalf of the Board of Directors of Per our report of even date Vitae India Spirits Limited For Vishnu Ram Co. Chartered Accountants Bangalore A. Raghunathan T. R. Venkatadri S. Vishnumurthy May 10 2012 Director Director Proprietor Membership No. 22715 Firm Registration No. 004742S

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76 Year ended 31-03-2012 Rupees Year ended 31-03-2011 Rupees I. Cash Flow from operating activities Loss before tax 454 38833 Operating loss before working capital changes 454 38833 Adjustment for : Increase/decrease in current liabilites 27575 38605 Net cash used in operating activities 28029 228 II. Cash flows from investing activities - - III. Cash flow from financing activities - - Net decrease in cash cash equivalents 28029 228 Cash and cash equivalents at the beginning of the year 343178 343406 Cash and cash equivalents at the end of the period 315150 343178 Cash and cash equivalents comprises of: Cash on hand 600 600 Balance at Bank 314550 342578 315150 343178 STATEMENT OF CASH FLOW FOR THE YEAR ENDED MARCH 31 2012 For and on behalf of the Board of Directors of Per our report of even date Vitae India Spirits Limited For Vishnu Ram Co. Chartered Accountants Bangalore A. Raghunathan T. R. Venkatadri S. Vishnumurthy May 10 2012 Director Director Proprietor Membership No. 22715 Firm Registration No. 004742S

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AFFIX RS. 1/- REVENUE STAMP Kingfisher Airlines Limited Regd. Office: UB Tower Level 12 UB City 24 Vittal Mallya Road Bangalore - 560 001 ATTENDANCE SLIP I hereby record my presence at the SEVENTEENTH ANNUAL GENERAL MEETING of the Company being held on Wednesday September 26 2012 at 2.30 p.m. at Good Shepherd Auditorium Opp. St. Josephs Pre-University College Residency Road Bangalore 560 025. SIGNATURE OF THE ATTENDING MEMBER/PROXY Folio No. : DP Client ID No. : No. of Shares : NOTE: 1. The Meeting is for Members of the Company only. Members are requested not to bring non-members or children. 2. The Company will accept only the Attendance slip of a person personally attending the Meeting as a Member or a valid Proxy duly registered in time with the Company. The Company will not accept Attendance Slip from any other person even if signed by a Member. 3. Member/Proxy holder attending the Meeting should bring his/her copy of the Annual Report for reference at the Meeting. 4. To facilitate Members registration of attendance will commence at 1.45 p.m. on September 26 2012. Kingfisher Airlines Limited Regd. Office: UB Tower Level 12 UB City 24 Vittal Mallya Road Bangalore - 560 001 PROXY FORM I/We________________________________________________of_______________________________________________being a Member / Members of KINGFISHER AIRLINES LIMITED do hereby appoint _______________________________________ of ____________________________ _______________________or failing him/her _______________________________________ of______________________________________________ as my /our proxy to vote for me/ us and on my/our behalf at the Seventeenth Annual General Meeting of the Company to be held on Wednesday September 26 2012 at 2.30 p.m. and at any adjournment or adjournments thereof. Signed this ____________________day of September 2012. Signature across the stamp _________________________________________________ Name ______________________________________________________________________ Registered Folio No. _________________________________________________________ DP Client ID No. ___________________________________________________________ NOTE : The Proxy Form duly completed must reach the Registered Office of the Company not later than 48 hours before the time for holding the Meeting. A Member entitled to attend and vote at the Meeting is entitled to appoint a Proxy to attend and vote instead of himself and the Proxy need not be a Member. Members are advised that no gifts will be distributed at the Annual General Meeting

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Board of Directors Dr. Vijay Mallya Ravi Nedungadi S. R. Gupte Bharath Raghavan Chief Legal Officer Company Secretary Report of the Directors 2 Corporate Governance Report 10 Management Discussion Analysis Report 20 Auditors’ Report 26 Balance Sheet 30 Statment of Profit and Loss 31 Notes to Financial Statements 32 Cash Flow Statement 66 Accounts of the Subsidiary 68 CONTENTS The Team Hitesh Patel Executive Vice President A. Raghunathan Chief Financial Officer Rajesh Verma Executive Vice President Manoj Chacko Executive Vice President Sanjay Aggarwal Chief Executive Officer M. S. Kapur

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