1 476 1 16-Annual-Report-201718 PDF

AIESL
AIR INDIA ENGINEERING

SERVICES LIMITED
AIESL
CONTENTS
Page No.
1. Board of Directors 1
2. Chairman’s Message 2
3. Directors’ Report 6
4. Management Discussion & Analysis Report 26
5. Comments of the Comptroller & Auditor General of India 45
6. Independent Auditors’ Report 49
7. Balance Sheet as at 31 March 2018 57
8. Statement of Prot & Loss for the year ended 31 March 2018 58
9. Statement of Change in Equity for the year ended 31 March 2018 59
10. Cash Flow Statement for the year ended 31 March 2018 60
11. Notes forming part of the Financial Statements for the year ended 31 March 2018 61
AIESL
BOARD OF DIRECTORS (as on 26 DECEMBER 2018)
Shri Pradeep Singh Kharola Chairman
Shri Vinod Hejmadi Director
Smt. Gargi Kaul Director
Shri Satyendra Kumar Mishra Director
Chief Executive Officer
Shri H.R. Jagannath
Chief Financial Officer
Shri Kapil Aseri
Company Secretary
Shri Gagan Batra
Auditors
M/s. D.B Ketkar & Co.
Chartered Accountants
Registered Office
Airlines House
113 Gurudwara Rakabganj Road
New Delhi 110 001
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AIESL
CHAIRMAN'S SPEECH
Dear Shareholders,
It gives me great pleasure to present the fourteenth Annual Report of the Company for the year 2017-18.
Air India Engineering Services Ltd. is a leading MRO service provider in the country providing both Line
Maintenance and Major Maintenance for various type of aircraft in AI's eet/Air India Express/Alliance Air/Third
party Airlines as well as Defense forces.
The MRO industry is a Capital Intensive industry with high competitive environment and low returns and there is
a long payback / cost absorption period in view of the xed overheads on infrastructure facilities and high wage
costs due to licensed manpower. However, with the expected growth in third party business and the incentives
expected from GOI for the MRO industry, it is anticipated that AIESL will be operationally protable in next few
years.
PERFORMANCE OF THE COMPANY
The nancial performance of your company during FY 2017-18 was as under:
l The operating revenue has increased from Rs. 740.45 crores in previous year to Rs. 783.26 crores in
current year and the total revenue increased from Rs. 740.48 crores to Rs. 794.43 during the period i.e. an
increase of Approx Rs. 54 crores (7.3%).
l As against this, the total expenditure of the company increased from Rs. 1251.36 crores to Rs. 1290.09
crores in the same period which an increase of approx Rs. 39 crores (3.1%).
l The loss of the company during FY 2017-18 was reduced to Rs. 495.66 crores as compared to Rs. 510.88
crores in FY 2016-17 which resulted decrease in loss by approx Rs.15.22 crores (2.98%).
Further, your company had in past technical handling agreement with 8 International Airlines and 2 Domestic
Airlines for Line Maintenance work. During the year 2017-2018, AIESL signed SGHAs (Standard Ground
Handling Agreements) with new International Airlines namely- Druk Air, Unitop Airlines, Air Asia Berhad, Thai
Smile, VietJet and Cebu Pacic for diversion.
Your company had approval from 5 foreign Civil Aviation authorities and in 2017-2018; we submitted our
application to 4 more foreign Civil Aviation authorities, viz. CAA Thailand, CAA Malaysia, CAA Vietnam and
CAA Srilankan. At present, AIESL has 6 foreign CAA approvals namely Qatar, Kuwait, GACA(UAE & Saudia),
CAA Singapore, CAASL, CAA Nepal and 2 approvals are under progress viz. CAA Thailand and CAA
Malaysia.
Your company carried out base maintenance work for Domestic operators namely –Jet Airways, Go Air, TATA
SIA Airlines, Air Asia India and Spicejet in 2017-2018. In addition, AIESL has also carried out major
maintenance work for ARC, Indian Navy, Indian Air Force, Indian Coast Guard, HAL, BSF Airwing and Pawan
Hans. In 2017-2018, AIESL undertook maintenance of private parties aircraft like – Reliance RCDL, Jindal
Steel, Taj Air Charters, Bluedart, GMR Hyderabad, Nepal Airlines Corporation and Air Mauritius.
In Dec 2017, changes in CAR 147 Basic was made by DGCA and approximately 24-25 institutes approached
AIESL for Agreement to provide practical training to their students. In 2017-2018, we have signed up with 12
Institutes for imparting training to their students. And, similar numbers of Institute are interested in signing up
with AIESL in 2018-2019.
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AIESL
STRENGTHS AND CHALLENGES
The company is well known in Indian as well as in South Asian Region for providing one stop solution to its
clients for their MRO related work requirements that too at competitive prices and world class standards of
commitments. The technically skilled manpower is the main strength of the company. However, the company
would need to upgrade the skills and constantly engage more young and energetic manpower to keep pace
with the time and changes in technologies as well as to stand with the increasing competition in the industry.
MRO SCENARIO- WORLD
Maintenance, repair and overhaul (MRO) in the aeronautical industry is a complex process that has strict and
precise requirements dened by airworthiness authorities to guarantee the safety of passengers and aircrew.
Billions of dollars are spent by airlines every year to comply with such requirements, which represent a relevant
portion of their total operational costs. The importance of MRO can be judged by the fact that it typically
constitutes 12-15 per cent of an airline's operating cost.
The MRO sector describes different types of aircraft repair as:-
(1) Aircraft Structural Repairs,
(2) Engine/ APU's Overhauls/ Repairs
(3) Component repairs,
The supply chain in the aeronautical industry is very complex. Each component has to be manufactured by an
approved organization (OEM) and the product is certied after vigorous testing of all conditions of ight. Due to
the high level of requirements, there are limited number of companies authorized to provide parts and services
in the aeronautical industry.
Aviation Sector, to which MRO services are provided, can be broadly categorized into three (3) groups:-
Commercial Aviation Industry -The commercial aviation industry is composed of airline companies that offer
passenger and cargo transportation services. Approximately 230 major airlines operate throughout the world
and are registered with the International Air Transport Association (IATA). Boeing explains that the industry
continuously adapts to various market forces. Key market forces that impact the airline industry are fuel prices,
economic growth and development, environmental regulations, infrastructure, market liberalization, airplane
capabilities, other modes of transport, business models, and emerging markets.
Business Aviation Industry -Worldwide demand for business jets is highly correlated with wealth creation,
which, in turn, is largely driven by economic growth. Since the introduction of the business jet, in 1965, the
business aircraft market has been highly cyclical. The crisis in the nancial markets at the end of 2008
precipitated a sharp downturn in business aviation and new business aircraft orders.
Military Aviation Industry: Political decisions determine when and how the military, as a whole, will be employed
and this employment has a direct impact on the MRO industry.
MRO providers are expanding their geographical reach and capabilities in a bid to become regional and global
full service providers. The number of MRO businesses in emerging countries is increasing due to low labor
costs and joint ventures between suppliers and aircraft manufacturers.
In the Fully Integrated MRO model, all MRO activities are provided internally; in addition, the capabilities are
extended to support other airlines. While many airlines have treated MRO as an expense, other airlines have
successfully transformed their MRO into a prot generation units.
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AIESL
MRO SCENARIO - INDIA
The Ministry of Civil Aviation (MoCA), Government of India released the National Civil Aviation Policy 2016
(NCAP 2016). As per the new Civil Aviation Policy, the MRO business of Indian Carriers is around Rs. 5000
crores and approx 90 % of this is currently spent outside India. The government is keen to develop India as an
MRO hub in Asia, attracting business from foreign Airlines.
FUTURE PLANS
The company is planning to establish its footprints overseas also. In a rst step towards that AIESL has
established its rst overseas branch at Sharjah, UAE. Based on the experience and backed by cost benet
analysis, the opportunity to expand to other international stations is also being explored.
I am condent in the years to come with the increase in business and recovery of xed capital and manpower
costs the Company will be able to steer its way to protability.
CORPORATE GOVERNANCE
AIESL was in compliance with the guidelines on Corporate Governance issued by Department of Public
Enterprises (DPE), wherever applicable during the year. The evaluation of various parameters viz. Financial
as well Technical was also done in terms of targets set in the Memorandum of Understanding entered into by
the company. The evaluation reports as well as return on Corporate Governance were led with the authorities
concerned.
ACKNOWLEDGEMENT
I take this opportunity to thank Air India Limited, Airline Allied Services Ltd., Air India Express Limited, Ministry
of Civil Aviation and vendors for their unstinted support. I also acknowledge the support extended by all other
authorities including Banks and regulatory agencies. I would like to thank my colleagues on the Board for their
valuable guidance.
I would like to thank all employees of the company for their support in making this Company protable in the
future.
On behalf of the Board, I seek your continued support, as always.
Sd/-
(Pradeep Singh Kharola)
Chairman
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AIESL
Vision
To provide best in class and timely quality services to the customers by maintaining highest standards of
regulatory and safety compliance.
Mission
Customer
l Maintaining all aircraft of the captive work load of the eet of Air India in a continuous state of airworthiness
by the system of preventive and corrective maintenance to secure a high level of safety.
l Provide a “One Stop” solution to the customer.
l Faster Turn Around Time.
l To capture maximum Third Party work from in and around India.
Process
l To get DGCA approval under CAR 147.
l To obtain FAA and EASA approval for all its establishment and facilities.
l Aggressive Marketing policy for more and more third party work.
l It needs to Department centric so, every Departmental Heads need to be responsible for the deliverables
so as to fulll the overall vision.
l Continuous monitoring of Quality through quality audit etc.
l Constant endeavor to upgrade the services, delivering highest customer satisfaction in terms of Quality,
Service and Cost effective and ensuring long term strategic relationship.
l All-out effort to be the world class MRO without compromising the quality standard.
l Updating and enhancing the capability through training of the personnel and equipment of latest
technology.
l Multiskilling of the personnel through cross training to enhance the productivity.
l Optimising operational cost.
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AIESL
DIRECTORS’ REPORT
To,
The Members,
Air India Engineering Services Ltd.
The Directors have pleasure in presenting their fourteenth Annual Report on the business and operations of the
Company and the accounts for the Financial Year ended March 31, 2018.
1.1. Financial summary and highlights
The Company's nancial performance is given hereunder:

(Rs. in crore)
Particulars Financial Year Financial Year

ended 31.03.2018 ended 31.03.2017*
Total Revenue 794.43 740.48
Total Expenses 1290.08 1251.36
Prot (Loss) before tax (495.66) (510.88)
Less Provision of Tax NIL NIL
Prot after tax (495.66) (510.88)
Other Comprehensive Income 51.22 (07.01)
Total Comprehensive Income (444.44) (517.89)
Balance of prot brought forward from previous year (1500.43) (982.54)
Balance carried to Balance Sheet (1944.87) (1500.43)
*Transition to Ind AS: The Company has adopted all the Ind AS and adoption was carried out in
accordance with Ind AS 101 First Time Adoption Indian Accounting Standard. The transition was carried
out from Indian GAAP as prescribed under section 133 of the Companies Act, 2013, read with Rule 7 of
the Companies (Account) Rules, 2014 which was the previous GAAP.
In preparing opening Ind AS balance sheet as on 1st April 2016 and in presenting the comparative
information for the year ended 31st March 2017, the Company has adjusted amounts reported previously
in the nancial statements prepared in accordance with the Indian GAAP.
1.2. Details of revision of Financial Statements or Board's Report
The Company has not revised its Financial Statements or Board's Report in respect of any of the three
preceding nancial years as mentioned in Section 131 (1) of the Companies Act, 2013.
1.3. Dividend
The directors are not recommending any dividend as the company has not earned any prots.
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AIESL
1.4. Transfer of unclaimed dividend to Investor Education and Protection Fund
Since there was no unpaid / unclaimed dividend for the past years, the provision of section 125 of
Companies Act 2013 did not apply
1.5. Amount which the Board proposes to carry to reserves
The Board of the company has decided/proposed to carry NIL amounts to its reserves.
1.6. Major events during the year 2017-18
1.6.1Fleet details handled by AIESL during 2017-18 on average basis:-
Type of Aircraft Average No. of Aircraft
A319 22
A320 24.5
A321 20
B787 25.37
B777 15.43
B747 5.0
ATR 13.5
B737 23
1.6.2Utilization/ TDR (Technical Dispatch Regularity) achieved:
AIESL maintained the Technical Dispatch Regularity (TDR) and Utilisation compared to Global Aviation
Standard. The eet wise TDR and Utilisation were as under:
Fleet Type Daily Utilization (Hrs) TDR(%)
A319 11.39 99.27
A320 12.11 98.99
A321 13.37 99.20
B787 14.29 97.67
B777 13.78 97.49
B747 7.49 97.30
ATR 8.86 99.41
B737 14.40 98.76
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AIESL
1.6.3The operations of your Company have been divided into various regions/ prot centers. Their
performances during the year and future plans were as given below:
I. NAGPUR MRO:
A. Regulatory approvals and work done in MRO, Nagpur can be summarised as under :
Ø Got DGCA approval on 20th May 2015 for C-2 Check (2250 days inspection) on B 777
series aircraft tted with GE 90 -100/115 engines.
Ø Subsequently, 'D' Check (3000 days inspection) approval for B 777 was granted to the
company on 19.02.2016.
Ø Addition of capability to carry out maintenance upto 4A Check including out of Phase
Task, Modication, Structural Inspection & Repair on A319/A320/321 series aircraft tted
with CFM56-5B/V2500-A1 series engines was granted to the company on 26.10.2016.
Ø MRO Nagpur has obtained, on 09.05.2017, approval for working on B737–700/800/ 900
aircraft tted with CFM56 series Engines. However, the limitation were (i) tasks upto
48000FH/56000 FC/ 20Years of 737-700/800/900 tted with CFM56-7 Engines and (ii)
the Maintenance Planning Document tasks.
Ø Approval has been obtained for GE-90 Engine Testing and GenX Engine for Quick Turn
(QT) repair.
B. Overview Of Checks Completed is as below :
Aircraft B-777 – 200LR / 300ER :
'D' Check - 12
'C' Check - 10 ( 11th in progress)
'Phase' check - 18(19th in progress)
1500 days Check - 01
Transit' check - 01
A 320 family - 3A Check VT-EXC completed
C. Engine Change and Test Flight :
(First time in MRO) Both engines of aircraft (VT ALQ) were changed and successful TEST
FLIGHT was carried out on 17.08.2018.
D. Back Shops – Approvals for B777
Ø C6 – Equipment: Maintenance of slide- raft assembly upto Level – 3 and Life Vest upto
Level – 2. Till date 7 Slide Rafts and 500+ Life Vests certied.
Ø C15 – Oxygen: Maintenance of portable Oxygen bottles upto Level – 2 and Main Oxygen
Cylinder Assembly upto Level – 3. Till date 100+ Oxygen Bottles certied.
In Addition we are repairing different type of cabin fairing.
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AIESL
GenX Engine for QT under repair in progress expected to completed on 22/11/2018
E. Maintenance of Third Party Aircraft - commenced from 10.08.2017.
Spice Jet:
'C1' check of 01 B-737(VT SZM) aircraft of Spice jet was successfully done.
Engine change and other associated work carried out on Spice jet B 737-Q400 (VT SUM)
aircraft successfully done.
Indigo :
Hangar space, manpower, tools & equipment, as required, provided to indigo airlines (VT-IYA,
ATR 72-600) to carry out emergency structural repairs of replacing carbon bre wing.
F. Future operations plan includes :
1 Maintenance of A319/A320 series of Aircraft for Full MPD Tasks.
2 The approvals have been sought and are in process for CMRS, Machine Shop, Welding
Section & Heat Treatment.
3 Also the approval has been sought and is in process for GE GEnx Engine Testing.
4 Construction in progress for Overhaul Workshop of GE GEnx and GE 90 Engine.
II. HYDERABAD BASE (Southern Region):
The performance of Hyderabad base during the year was as under:
A. Signicant Achievements during FY 2017-18:
1) Technical Certication provided to Client Airlines and revenue earned :
Ø Engineering Certication of client airlines aircraft (A320 family) of M/s Silk Air, M/s Qatar
Airways, M/s Kuwait Airways, M/s Etihad Airways, M/s Air Vistara, M/s Nepal Airways and
A330 aircraft of M/s Qatar Airways & M/s Kuwait Airways were provided at various
Stations in Southern Region as per details given under :
Client APRIL 2017 to MARCH 2018 (No. of Flights)

Airlines
MAA HYD BLR CCJ CJB COK TRV VTZ Total
Silk Air 179 174 199 – 97 258 249 151 1307
Etihad Airways 1096 945 973 – – – 697 – 3711
Qatar Airways 365 213 – 365 – – 365 – 1308
Kuwait Airways 257 – 249 – – – 303 – 809
Air Vistara 1 1073 – – – 734 – – 1808
Nepal Airlines – – 65 – – – – – 65
Air Asia 1 – – – – – – 713 714
Sri Lankan Airlines – – – – – – 14 139 153
TOTAL 1899 2405 1486 365 97 992 1628 1003 9875
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AIESL
Note : @ INR 68 per USD is considered for revenue calculations.
Ø At the above stations, Engineering Certication has been provided for 9875 Flights during the
period, earning revenue of approximately Rs.1429.77 Lacs.
Ø By way of providing Engineering Hangar facilities for aircraft of outside parties at Chennai,
revenue of Rs.266.92 Lacs was earned.
Ø The revenue of approx. Rs.29.22 Lacs was earned through aircraft component servicing of
outside parties at Hyderabad.
2) Major Check activity at MRO Complex: At MRO, RGIA, Shamshabad “37” A-Checks on A-320
family aircraft, “2” 4A Checks & ”1” C-Check on ATR-72 aircraft were carried out.
3) Engineering Training School, CTE, Hyderabad: The revenue of approx. Rs. 9.26 Lacs was
earned by providing training facilities to outside agencies at ETS, Hyderabad.
4) AME Trainees/Inplant Trainees/Project Work: The revenue of Rs.38.66 Lacs was earned by
intake of AME trainees/On Job Trainees (6 months & 1 month On Job Training).
B) FUTURE PLANS / NEW CAPABILITY ADDITION :
1) ATR-72 Project: Hyderabad Base got approved to carry out Maintenance upto and including
“1” “C” Check of ATR-72 from Director (Air Worthiness), DGCA. Presently Company is in the
process to take Base Maintenance Approval to cover Aircraft Maintenance Planning (AMP) full
scope for ATR-72 at Hyderabad.
2) Mandatory Structural OJT (On Job Training): Company signed MOE (Maintenance
Organisation Expositon) with FlyTech Aviation and Telangana Aviation Academy for Structural
OJT as per DGCA, for training school approval. Similar agreement is under process with Rajiv
Gandhi Aviation Academy, Hyderabad.
3) Aircraft Familiarization OJT (On Job Training): Permission has been sought from DGCA for
OJT training in VT-ESI at Begumpet. Proposal is being sent to AME training schools for
providing periodic Aircraft familiarization on the unused Commercial Aircraft positioned at
Begumpet, for Revenue generation.
III. KOLKATA BASE (Eastern Region):
The performance of Eastern Region during the period was as under:
1) Effective cleaning and servicing of Heat Exchangers have signicantly improved reliability of
Air-condition & Pressurization system on aircraft.
2) Identication of root cause of failures of Pressure Regulating Valve and efforts to minimize
removals leading to more reliable hot air circuit of air conditioning system of aircraft; less faults
related to hot air system.
3) We are in the process of adopting APU 131-9A (A319 a/c) on the Test Cell designed for
GTCP36-300A (A320 Classic a/c) at APU centre. This will save a lot of out go for the company if
nal commissioning is successful. Progressively, we are preparing to place our proposal
before DGCA for approval of Testing capability on APU 3131-9A.
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4) Procurement of mod kits for 22 A319 aircraft and 4 A320F (Enhanced) aircraft (Total Qty. 26
modkits) from M/s UTC Aerospace Systems for compliance of Airbus SB A320-27-1223 and
Goodrich VSB RA31075-27-22; successfully negotiated with the supplier of mod kits i.e M/s
UTC Aerospace Systems and this would reduce the price of the mod kits substantially.
IV. MUMBAI BASE (Western Region):

The performance of Western Region (WR) during the period was as under:
1) Third Party Certications:
Sr.No. Period Nos. of Flights Handled
1. April 2016 to March 2017 6595
2. April 2017 to March 2018 3786
2) Earnings from Outside Party:
Sr.No. Period Earnings in Rs. Lacs
1. April 2016 to March 2017 647.09
2. April 2017 to March 2018 998.62
3) Outside Party Work done:
a) Jet Airways Major checks:
Ø C-checks of Jet Airways Aircrafts VT-JWR, VT-JWT, VT-JWU, VT-JWQ are carried
out during period 26/04/2017 to 30/12/2017.
Ø L/G replacement of Jet Airways Aircraft VT-JWW carried out during period
30/11/2017 to 12/12/2017.
Ø Small package check of Jet Airways Aircraft VT-JWQ carried out during period
03/08/2017 to 04/08/2017.
b) Alliance Air (AASL)
Ø Line Maintenance checks at outstations
Ø SSFDR data processing/TP gauge calibration and certication in Avionics shop
4) Training imparted in WR:
a) Classroom Trainings
Sr.No. Financial Year Designation No. of Total courses Total no. of

Trained
Candidates
1. 2016-2017 EXECUTIVE/ 38 183

(April 2016 ENGINEERS
to March 2017)
SERVICE 23 170
ENGINEERS
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Sr.No. Financial Year Designation No. of Total courses Total no. of

Trained
Candidates
2. 2017-2018 EXECUTIVE/ 48 304

(April 2017 to ENGINEERS
March 2018)
SERVICE 24 233
ENGINEERS
b) Training imparted to GO AIR staff for PBE (Protective Breathing Equipment) /AOA sensor
maintenance in Avionics shops.
5) Others:
a) Permaswaging equipment which was not working for last 10 years, made serviceable and
functional in Acc. /Overhaul shop in October, 2017.
b) Capability enhancement in Instrument Shop can be listed as under:
Ø Total Pressure probe – Level.1
Ø SSFDR from Level-1 to Level-2
Ø Protective Breathing Equipment (PBE) from Level-1 to Level-2
V. DELHI BASE (Northern Region):
Major events at Northern Region during the Financial Year 2017-18 were as under:
a) July'2017:
Ø In July 2017, rst 'C' Check on Airbus A320 aircraft of M/s Air Asia was carried out and
accomplished in 6 days of time.
Ø All three Landing Gears of an aircraft of M/s GO AIR were replaced within stipulated TAT.
Ø At ATEC, Snag rectication of ATEC 6000 station was done in-house, thus enabling
production of 6 ECUs which resulted in saving of roughly USD 90,000.
b) Nov'2017:
Ø In-house push-back of aircrafts, which was previously outsourced to AISATS, was carried
out, resulting in saving of around Rs.18 Lakhs / month.
Ø Continuous reduction in overtime during last 6 months due to better control over
processes.
c) Jan'2018:
Ø Indigenous engine replacement of Airbus Neo Aircraft A320-251N was carried out at
A320 Major Maintenance.
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d) Mar'2018:
Ø Landing gear change of Indigo A320 Aircraft was carried out at A320 Major Maintenance.
Ø Initiative was taken towards replacement of existing Hangar lighting with L.E.D., in order
to achieve power saving which results into power saving of approx. Rs.6.5 Lakhs per
annum.
VI. JEOC (Jet Engine Overhaul Complex):
The details on No. of engines produced in JEOC from April 2017 to March 2018 & April 2018 to July
2018 is as follows:
Month / Year JT8D V2500 CFM Total
Apr – 17 to Mar-18 02 03 26 31
Apr – 18 to July – 18 01 00 6 07
Total 03 03 32 38
Ø Efforts are being made to enhance the capability of BSI (Borescope Inspection) on CFM LEAP
Engine (NEO) and V2500 A5 is underway to generate additional revenues.
Ø Further discussions are on with CFMI to make JEOC a CFM branded shop, and storing CFM
engines of other operators in JEOC. This would result in generating additional revenues.
1.6.2 IMPLEMENTATION OF OFFICIAL LANGUAGE
As AIESL does not have a dened structure for Implementation of Ofcial Language Policy of its own, the
same is done in AIESL in consultation with the Rajbhasha Section of Air India.
1.6.3 INDUSTRIAL RELATIONS
Industrial Relations were largely peaceful with no loss of man hours during the year.
No. of employees under different categories were as under:
Executives: 480 (411 Permanent + 30 Contractual + 39 Retired)
Staff: 5170 (3488 Permanent+ 1046 Contractual+ 636 Retired)
Total: 5650
Technical out of the above: 4866 (3530 Permanent+1336 Contract)
Employees on deputation from Air India: 639.
1.6.4 IMPLEMENTATION OF RESERVATION POLICY
Reservation of posts for SC/ST/OBC and Ex-servicemen is implemented as per the Government
Directives on the subject.
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1.6.5COMPLIANCE WITH RTI ACT, 2005
Nodal Ofcers/CPIO/Appellate Authorities have been appointed in all the four Regions and at Corporate
Ofce, as per the provisions of the Act.
The details of RTI applications are as under:-
No. of RTI Applications received : 159.

No. of RTI Applications disposed of : 141
No. of RTI Applications pending : 18
1.6.6DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION,

PROHIBITION & REDRESSAL) ACT, 2013
The company is in compliance of provisions of the Act. The details of complaints received & disposed off
during the year were as under:-
Number of complaints received: 01

No. of complaints disposed of: 01
No. of cases pending: Nil
No. of workshops or awareness programmes carried out: 01
Remedial Measures by the Company: Counselling by the Committee
2. GENERAL INFORMATION
Air India Limited, the parent company, on 7th August, 2010 approved the hiving off of Air India Engineering
Services Limited (AIESL) as wholly owned subsidiary of Air India and a separate Prot Centre to cater the
service towards Maintenance, Repair and Overhaul (MRO) activities of the captive load of Air India and it's
other subsidiaries besides the workload from 3rd Party Customer of domestic and international market.
Accordingly Cabinet Approval was obtained on 6th September, 2012 for operationalization of AIESL. After
complying with the requirements of the various Statutory and Regulatory Authorities, nal approval was
obtained from DGCA to operate as an independent MRO under CAR 145, on January, 2015.
3. CAPITAL STRUCTURE
The authorised Share Capital of the company during the year was Rs. 1000 crores divided in to 100 crore
equity shares of Rs. 10 each.
The Paid-Up Share Capital of the company during the year was Rs. 166,61,65,000 divided in to
166,61,65,00 equity shares of Rs. 10 each.
4. MANAGEMENT
4.1 Directors and Key Managerial Personnel
The following changes have occurred in the constitution of directors of the company during the
FY 2017-18.
S.No Name Designation Date of appointment Date of cessation
1. Shri Ashwani Lohani Chairman - 23.08.2017
2. Shri Rajiv Bansal Chairman 23.08.2017 12.12.2017
3. Shri Pradeep Singh Kharola Chairman 12.12.2017
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4.2 Number of Meetings of the Board of Directors
During the Financial Year 2017-18, the Company held four meetings of the Board of Directors as per
Section 173 of Companies Act, 2013 which is summarized below.
S No. Date of Meeting Board Strength No. of Directors

Present
1 25.04.2017 4 4
2 22.08.2017 4 4
3 27.11.2017 4 4
4 17.01.2018 4 3
5 07.03.2018 4 3
6 14.03.2018 4 4
4.3 Composition of Committees and details of changes, if any
AUDIT COMMITTEE :
The constitution of Audit Committee as required under the Companies Act, 2013 was approved by the
Board of Directors in its 42nd Meeting held on 31st March 2016 & subsequently in 50th Board Meeting held
on 17th January 2018.
The constitution of committee as on 31st March 2018 was as under:-

1) Govt. Nominee ( Ms Gargi Kaul ) Chairperson
2) Govt. Nominee ( Shri S K Mishra ) Member
3) Nominee of Holding Co. ( Sh Vinod Hejmadi ) Member
4) CMD, Air India ( Shri Pradeep Singh Kharola ) Permanent Invitee
NOMINATION, REMUNERATION AND STAKEHOLDERS RELATIONSHIP COMMITTEE :
Constitution of Nomination and Remuneration Committee was to be taken up after the appointment of
Independent Directors by Holding company/ Administrative Ministry. As there was no Independent
Director on the Board of AIESL, the matter was taken up with the Administrative Ministry by Holding
company i.e. Air India Limited.
The appointment of Independent Directors was subsequently exempted for the Subsidiary Companies by
the government.
4.4 Company's Policy on Director's appointment and remuneration
APPOINTMENT POLICY :
AIESL is a wholly owned Subsidiary of Air India Limited. As per the provisions of 97 Article of the Articles
of Association of the Company, the number of Directors of the Company shall not be less than three and
not more than fteen all of whom shall be appointed by Air India Limited, who will prescribe the period for
15
AIESL
which they will hold ofce as director and may remove them and appoint others in their places and ll in
any vacancy that may occur.
The Administrative Ministry has been requested by Air India to consider appointment of Independent
Directors on Board.
REMUNERATION POLICY :
Section 197 in respect of remuneration to directors of the Company is not applicable to AIESL being a
Government Company Vide Notication No. G.S.R.463(E) Dated 5th June, 2015.
4.5 Board Evaluation
It is not applicable to AIESL being a Government Company Vide Notication No.G.S.R.463(E)dated 5th
June, 2015.
4.6 Remuneration received by Managing / Whole time Director from holding or subsidiary company
There was no Managing / Whole time director on the Board of the company during FY 2017-18.
4.7 Directors' Responsibility Statement’
The Board of Directors of the Company conrm that:-
(a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed
along with proper explanation relating to material departures;
(b) The Directors have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the company at the end of the nancial year and of the prot and loss of the
company for that period;
(c) The Directors have taken proper and sufcient care for the maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) The Directors have prepared the Annual Accounts on a going concern basis;
(e) Company being unlisted sub clause (e) of section 134(3) is not applicable.
(f) The Directors have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
4.8 Internal financial controls
Adequate internal nancial controls are in place for ensuring the orderly and efcient conduct of its
business, including adherence to the Company's policies; the safeguarding of its assets; the prevention
and detection of frauds and errors; the accuracy and completeness of the accounting records; and the
timely preparation of reliable nancial information, which is commensurate with the operations of the
Company.
16
AIESL
Further, the company is in the process of strengthening the internal control process so as to ensure the
coverage of all the areas as envisaged and ensure effective internal controls at stations, regional ofces,
user departments.
M/s Sanjay Gupta & Associates were appointed as Internal Auditors for the nancial year 2017-18. The
Internal Auditor has carried out an extensive audit, including internal nancial controls.
Statutory Auditors are also required to issue the Independent Auditor's Report on the Internal Financial
Controls of the Company under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act 2013.
4.9 Disclosure regarding frauds
There were no frauds reported by the Auditor to the Audit Committee or to the Board.
5. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Company does not have any Subsidiary, Joint venture or Associate Company.
6. DETAILS OF DEPOSITS
The Company has not accepted any public deposit during the year ended 31st March, 2018 as covered
under the provisions of Section 76 of the Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014.
7. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Particulars of loans, guarantees and investment have been disclosed in the nancial statement,
whenever applicable.
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the nancial year with related
parties were in the ordinary course of business and on arm's length basis.
During the period, Company has entered into transactions with Air India and its subsidiaries. The details
regarding revenue from operations have been given in Financial Statements.
9. DISCLOSURES PERTAINING TO CORPORATE SOCIAL RESPONSIBILITY
Provisions of Section 135 of Companies Act, 2013 relating to Corporate Social Responsibility is not
applicable to the Company as the company has not earned any prots during the year.
10. DETAILS OF REMUNERATION OF EMPLOYEES
Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company is not applicable to the Company being a
Government Company, Vide Notication No.G.S.R.463(E) Dated 5th June, 2015.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS

AND OUTGO
(A) Conservation of Energy & Technology absorption: Your Company has made all efforts wherever
possible for conservation of non renewable sources of energy and utilizing the alternative sources of
17
AIESL
energy. At Delhi Base, initiative was taken towards replacement of existing Hangar lighting with
L.E.D., in order to achieve power saving which resulted into saving of approx. Rs.6.5 Lakhs per
annum.
(B) Foreign exchange earnings and Outgo
(Rs. in Crores)
Earnings NIL
Outgo NIL
12. RISK MANAGEMENT
Your Company does not have any Risk Management Policy as the element of risk threatening the
Company's existence is very minimal.
13. MATERIAL ORDERS OF REGULATORS
No signicant and material orders have been passed by the regulators or courts or Tribunals impacting
the going concern status and company's operation in future during the year.
14. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM
Provisions of Section 177(9) relating to establishment of Vigil Mechanism for directors and employees, to
report a genuine concern, are not applicable to the Company.
However, the holding company i.e. Air India has a separate Vigilance Department which covers the
activities of AIESL also.
15. STATUTORY AUDITOR
Comptroller & Auditor General of India (CAG) has appointed M/s D B KETKAR & Co, Chartered
Accountants as Statutory Auditors of the Company for FY 2017-18.
Qualications or adverse remarks in the Auditors' Report which require any clarication/ explanation are
NIL.
Notes on nancial statements are self-explanatory, and needs no further explanation.
Comments of Comptroller and Auditor General of India
The comments dated 10th December 2018 of the Comptroller and Auditor General of India (C&AG) under
Section 143(6)(b) of the Companies Act, 2013 on the accounts of the Company for the year ended 31 st
March 2017 along with reply of management thereto is attached herewith.
16. SECRETARIAL AUDIT REPORT
Your company had appointed Mr. Jiwan Prakash Saini, Practicing Company Secretary as Secretarial
Auditor to conduct the Secretarial Audit for FY 2017-18. The Secretarial Audit Report given by him is
attached.
18
AIESL
The explanations or comments by the Board on every qualication, reservation or adverse remark or
disclaimer made by the auditor in his report are attached.
17. COMPLIANCE WITH SECRETARIAL STANDARDS
The Secretarial Standards issued by ICSI under Section 118(10) of Companies Act, 2013 were compiled
with by your company to the extent applicable.
18. EXTRACT OF ANNUAL RETURN
In compliance with the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the
Companies (Management and Administration) Rules, 2014, extract of Annual Return is attached.
19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed Management Discussion and Analysis Report is attached.
20. ACKNOWLEDGEMENTS
The Board sincerely acknowledges the support and guidance received from the, Ministry of Civil Aviation,
Comptroller and Auditor General of India, Ministry of Corporate Affairs and other agencies.
For and on behalf of the Board of Directors
Sd/-
Chairman
Place : Delhi
Date : 26 December 2018
19
AIESL
REPORT ON CORPORATE GOVERNANCE
BOARD OF DIRECTORS
As per Articles of Association of the Company, the number of Directors shall not be less than three and not more
than fteen. All of whom shall be appointed by Air India Ltd.
BOARD OF DIRECTORS AS ON 31 MARCH 2018 was as under :
i) Shri Pradeep Singh Kharola Chairman

CMD, Air India Ltd.
ii) Shri Vinod Hejmadi, Nominee of Holding Co. Nominee Director

Director Finance, Air India Ltd.
iii) Ms Gargi Kaul, Nominee of Govt. Govt. Director

(Admin Ministry)
iv) Shri Satyendra Kumar Mishra, Nominee of Govt. Govt. Director

(Admin Ministry)
Shri Rajiv Bansal, CMD, AI was appointed as Chairman on the Board of AIESL, w.e.f. 23.08.2017 in place of
Shri Ashwani Lohani.
Shri Pradeep Singh Kharola, CMD, AI was appointed as Chairman on the Board of AIESL, w.e.f. 12.12.2017 in
place of Shri Rajiv Bansal.
The Board placed on record its appreciation of the valuable services rendered by Shri Ashwani
Lohani and Shri Rajiv Bansal as Chairman.
During the year, all Meetings of the Board and the Annual General Meeting were chaired by the CMD, Air India.
Details regarding the Board Meetings, Annual General Meeting, Directors' Attendance thereat, Directorships
and Committee positions held by the Directors are as under:
BOARD MEETINGS
During the Financial Year 2017-18, six meetings of the Board of Directors were held in terms of requirement of
Section 173 of Companies Act, 2013 the details of which are as below.
S No. Date of Meeting Board Strength No. of Directors Present
1 25.04.2017 4 4
2 22.08.2017 4 4
3 27.11.2017 4 4
4 17.01.2018 4 3
5 07.03.2018 4 3
6 14.03.2018 4 4
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AIESL
Particulars of Directors including their attendance at the Board/Shareholders’ Meetings during the nancial
year 2017-18 are as under:
Name of the Academic Attendance Details of Memberships held in

Director Qualifications out of 6 Directorships Committees
Board held in other
Meetings Companies
held during
the year
Shri Pradeep Phd, Masters in 3 Chairman Chairman

Singh Kharola, Development Air India Ltd. Corporate Social
Chairman (w.e.f. Management Air India Express Ltd. Responsibility Committee,
12.12.2017) Air India Air Transport AIATSL
Services Ltd. Member
Hotel Corporation of Nomination &
India Ltd. Remuneration Committee,
Airline Allied Services AIL
Ltd. Audit Committee, HCI
Director Audit Committee, AIATSL
Air Mauritius Ltd.
Air Mauritius Holdings
Ltd.
Air India SATS
Airport Services Pvt.
Ltd.
Air India Assets
Holding Ltd.
Smt Gargi Kaul M.Phil 4 Government Director Member

Jt Secretary & Air India Limited Audit Committee, AIL
Financial Advisor, Air India Air Transport Strategic Committee, AIL
Ministry of Civil Services Limited Finance Committee, AIL
Aviation Hotel Corporation of CSR Committee, AIATSL
India Limited Audit Committee, Pawan
Air India Engineering Hans Ltd.
Services Ltd. Audit Committee, Solar
Pawan Hans Ltd. Energy Corporation of India
Solar Energy Ltd.
Corporation of India Chairperson
Ltd. Audit Committee, AIATSL
Indian Renewable Audit Committee, AIESL
Energy Development Audit Committee,
Agency Ltd. HCI
Delhi International
Airport Ltd.
21
AIESL

Board held in other
Meetings Companies
held during
the year
Shri Vinod B.Com., ACA 6 Director Chairman

Hejmadi, Air India Ltd. CSR Committee, AICL
Director Finance, Air India Express Ltd. Member
Air India Ltd. Air India Allied Finance Committee, AIL
Services Ltd. Audit Committee, AICL
Hotel Corporation of Audit Committee, HCI
India Ltd. Audit Committee, AIESL
Air India Engineering Audit Committee, AASL
Services Ltd. Audit Committee, AIATSL
Air India Air Transport CSR Committee, AIATSL
Services Ltd. Special Invitee
Air India SATS Audit Committee, AIL
Airport Services Pvt. Co-opted Member
Ltd. Strategic Committee, AIL
Air India Assets
Holding Ltd.
Shri Satyendra M.Tech (Applied 6 Government Director Member
Kumar Mishra Geology) Air India Ltd. Audit Committee, AIESL
Jt Secretary, MA (Public Air India Air Transport Audit Committee, HCI
Ministry of Civil Policy) Services Ltd. Audit Committee, AIL
Aviation Hotel Corporation of Remuneration Committee,
India Ltd. AIL
Air India Engineering CSR Committee, AIL
Services Ltd. Audit Committee, AIATSL
Air India Assets NCR, AIL
Holding Ltd. HR Committee, AIL
Strategic Committee, AIL
Shri Rajiv Bansal, Civil Engineer, 1 Chairman Chairman
Chairman (from IIT, Delhi Air India Ltd. CSR Committee, AIATSL
23.08.2017 to Diploma in Air India Express Ltd. Permanent Invitee
12.12.2017) Finance, ICFAI, Air India Engineering Audit Committee, AIL
Hyderabad Services Ltd. Audit Committee, AASL
Airline Allied Services
Executive Ltd. Audit Committee, AIESL
Masters in Hotel Corporation of Member
International India Ltd. Nomination &
Business, IIFT, Air India SATS Remuneration Committee,
Delhi Airport Services Pvt. AIL
Director Audit Committee, AIATSL
Global Innovation &
Technology Alliance
ONGC
Indian Strategic
Petroleum Reserves
Ltd.
22
AIESL

Board held in other
Meetings Companies
held during
the year
Shri Ashwani Mechanical 2 Chairman Chairman

Lohani, Chairman Engineer & Air India Limited Finance Committee, AIL
(upto 23.08.2017) Fellow of Air India Charters HR Committee, AIL
Chartered Limited Strategic Committee, AIL
Institute of Air India Air Transport Permanent Invitee
Logistic & Services Limited Audit Committee, AIL
Transport Airlines Allied Audit Committee, AIESL
Services Limited Audit Committee, AASL
Hotel Corporation of Member
India Limited Corporate Social
Director Responsibility &
Air India SATS Sustainability Committee,
Airport Services Pvt. AIL
Ltd. Nomination &
Air Mauritius Ltd. Remuneration Committee,
Air Mauritius Holdings AIL
Audit Committee, AIXL
Corporate Social
Responsibility Committee,
AIATSL
Audit Committee, AIATSL
23
AIESL
BOARD COMMITTEES
Audit Committee
As part of DPE Guidelines on Corporate Governance and in compliance with the provisions of the Companies
Act, 2013, the company constituted the Audit Committee of the Board in its 47th Board Meeting held on 26th April
2017 and subsequently reconstituted in its 50th Meeting held on 17th January 2018. Following were its members
as on 31st March, 2018, in their ex-ofcio capacity:
Govt Nominee Director, Ms. Gargi Kaul Chairperson
Govt Nominee Director, Shri Satyendra Kumar Mishra Member
Nominee of Holding Company, Shri Vinod S. Hejmadi Member
CMD, Air India, Sh. Pradeep Singh Kharola Permanent Invitee
Terms of reference of the Committee were as under:
i. To recommend for appointment, remuneration and terms of appointment of auditors of the company;
ii. To review and monitor the auditor's independence and performance, and effectiveness of audit process;
iii. To examine the nancial statement and the auditors' report thereon;
iv. To approve or any subsequent modication of transactions of the company with related parties;
v. To scrutiny of inter-corporate loans and investments;
vi. Valuation of undertakings or assets of the company, wherever it is necessary;
vii. To evaluate of internal nancial controls and risk management systems;
viii. To monitor the end use of funds raised through public offers and related matters.
Audit Committee Meetings held during the year were as under:
S No. Meeting Number Date and time of the Meeting No. of Member Present
1 3rd 25.04.2017 at 1345 Hrs 3
2 4th 22.08.2017 at 1530 Hrs 3
3 5th 27.11.2017 at 1200 Hrs 3

th
4 6 14.03.2018 at 1000 Hrs 3
24
AIESL
Annual General Meetings (AGM) /Extraordinary General Meeting (EGM) during the last three years:
AGM/EGM Number Date and time of the Meeting Venue
12th Adj. AGM 19.03.2018 at 1100 Hrs. Airlines House,

113 Gurudwara Rakabganj Road,
New Delhi 110 001
12th AGM 20.09.2017 at 1600 Hrs. Airlines House,

New Delhi 110 001
EGM 04.07.2017 at 11.15 Hrs. Airlines House,

New Delhi 110 001
11th Adj. AGM 04.07.2017 at 11.00 Hrs. Airlines House,

New Delhi 110 001
25
AIESL
MANAGEMENT DISCUSSION & ANALYSIS REPORT (2017-18)
1. Analysis of Financial Performance :
Revenue
v Total revenue earned during 2017-18 was Rs 794.43 Crores as against Rs. 740.48 Crores during
2016-17 i.e. an increase of approx Rs. 54 crores.
Expenditure
v The total expenditure incurred during the year 2017-18 was Rs. 1290.08 Crores as compared to the
previous year's gure of Rs 1251.36 Crores, an increase of approx Rs. 39 crores.
2. Business Environment Analysis: Regulatory changes
Post New Civil Aviation Policy (NCAP) 2016, the changes have been made in Civil Aviation Requirements
(CAR) as well. Some of these changes in regulatory requirements have positively aided AIESL.
CAR 66 : The changes can be highlighted as below:
l Provisions have been made for issue of Category A license without type rating along-with reduction
in experience requirements for issue of license.
l Requirements for certifying staff engaged in certication of aircraft components have been made
explicit & simple.
l Skill test requirement before issue/ endorsement of license has been replaced with demonstration of
skill.
l Re-examination duration requirement has been changed to 1 month from 3 months for certain basic
knowledge papers.
CAR 145 : The changes can be highlighted as below:
l CAR now allows for exibility in quantum of contracted staff in case of exigency.
l The Open rated Category A certifying staff allows for cross-utilization (subsequent to trainings)
thereby increases exibility in manpower allocation & reduces the overall costs in line maintenance.
l Privileges of category A has been extended to Category B2 AME license holder. This allows for
cross-utilization of existing certifying staff thereby reducing manpower requirements.
CAR 147 (Basic) : The changes can be highlighted as below:
l The AME institutes are now required to have an agreement with CAR 145 approved organizations
for accomplishing practical element of AME course. Subsequently, AIESL has signed SLA with 20
AME institutes. This will help in making available a more readily employable workforce in future.
As per modied CAR 147 Basic for Practical Training Element, Company has signed up with 27
Aeronautical Engineering Institutes located in India, which will generate additional Revenue from
Practical Training for the company.
26
AIESL
4 FUTURE OUTLOOK
AIESL has signed SGHAs with 16 Airlines International and 2 Domestic Airlines. Few of the SGHAs are
under process of signature.
Our branch in SAIFZONE is fully operational and AIESL with its own team is handling Certication and
technical handling of Air India & Air India Express ights at SHJ (Sharjah) and RKT (Ras Al Khaimah). The
efforts are being made to get regulatory approval for handling third party work also at these places. AIESL
has plans to expand Line Maintenance operations to other Emirates by 2019.
5. GOING CONCERN
The high rate of growth in Indian Economy is resulting in more no. of passengers travelling by Air. The
growth in Air Passenger trafc is in double digits. This shall result in more number of aircraft being
operated by Airlines in India. The number of aircraft is expected to double in less than a decade. This will
ensure that MRO's continue to grow in India. AIESL is focusing on capability enhancements, reduction in
manpower costs, providing training facilities. Even in the present scenario AIESL is expected to
turnaround in another couple of years.
6. RISK MITIGATION STRATEGIES
The Company continuously monitors the risk perceptions and takes preventive action for mitigation of
risks on various fronts.
7. INTERNAL CONTROL SYSTEMS
The Company had appointed Sanjay Gupta & Associates as Internal Auditors for the nancial year 2017-
18. The Internal Auditor has carried out an extensive audit, including internal nancial controls.
27
AIESL
CODE OF CONDUCT
DECLARATION
I hereby declare that all the Board Members & Senior Management Personnel have afrmed compliance with
the Code of Conduct as adopted by the Board of Directors for the year ended 31 March 2018.
(H.R. Jagannath)
CEO
Air India Engineering Services Limited
Place : Delhi
28
AIESL
SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2018
(Pursuant to Section 204 (1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment
andRemuneration of Managerial Personnel) Rules, 2014)
To,
The Members,
Airlines House, 113, Gurudwara Rakabganj Road,
New Delhi – 110001.
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence
to good corporate practices by Air India Engineering ServicesLimited (CIN:U74210DL2004GOI125114)
(hereinafter called the Company or AIESL). Secretarial Audit was conducted in a manner that provided me a
reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion
thereon.
Based on my verication of the Air India Engineering Services Limited's books, papers, minute books,
forms and returns led and other records maintained by the company and also the information provided by the
company, its ofcers, agents and authorised representatives during the conduct of secretarial audit and as per
the explanations given to me and the representations made by the Management, I hereby report that in my
opinion, the Company has, during the audit period covering the nancial year ended on 31st March, 2018
generally complied with the statutory provisions listed hereunder and also that the Company has proper Board
processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made
hereinafter:
A. I have examined the books, papers, minute books, forms and returns led and other records made
available to me and maintained by the company for the nancial year ended on 31st March, 2018
according to the applicable provisions of:
i. The Companies Act, 2013 ('the Act') and the rules made there under;
During the period under review the Company has complied with the provisions of Companies Act,
2013, ('the Act') and the rules made thereunder, as applicable, subject to the following
observations:
a) There were few instance of delay in ling of e-forms under the Act and the rules made there
under, but they were regularised by payment of additional fees under the Act.
b) Company has not appointed Independent directors pursuant to sub-section 4& 5 of section 149
of Companies Act, 2013, hence no meeting of independent directors could be held during the
period under audit. Since, the company has not appointed independent directors, the company
has not complied with the provisions of section 177(2) and 178 of Companies Act, 2013 read
with Rule 6 of Companies (Meetings of Board and its Power) Rules, 2014 as regard the
appointment of Independent directors in composition of the Audit Committee.
c) Company has not constituted Remuneration and Nomination Committee of the Board pursuant
to 178of Companies Act, 2013 read with Rule 6 of Companies( Meetings of Board and its
Power) Rules, 2014 as it meets the prescribe criteria as mentioned in Rule 6.
However, appointment of independent directors in public companies which are wholly-owned

subsidiaries of unlisted public companies are not require to appoint independent directors, vide
29
AIESL
notication of MCA , Companies (Appointment and Qualication of Directors) Amendment

Rules, 2017 dated July 5, 2017 .
d) Risk Management Policy:
Provisions of Section 134(3)(n) of Companies Act, 2013 provides that there shall be attached
to nancial statements laid before a company in general meeting, a report by its Board of
Directors, which shall include—
a statement indicating development and implementation of a risk management policy for the
company including identication therein of elements of risk, if any, which in the opinion of the
Board may threaten the existence of the company.
It has been claried that the Company is under process of development of Risk Management
Policy.
DPE Guidelines also emphasize that the Board should ensure the integration and alignment of
the risk management system with the corporate and operational objectives and also that risk
management is undertaken as a part of normal business practice.
Queries raised by Statutory auditors of the company in Audit Observations in relation to

compliance of Companies Act, 2013 which has been replied by the Management in Directors
Report have not been reproduced here.
(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; (Not
applicable to the company)
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (Not applicable
to the company)
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the
extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial
Borrowings; (Not applicable to the company)
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of
India Act, 1992 ('SEBI Act'):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulation, 2011; (Not applicable to the company)
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009; (Not applicable to the company)
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999; (Not applicable to the company)
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008; (Not applicable to the company)
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer
Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not
30
AIESL
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
(Not applicable to the company) and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not
(vi) In aviation sector, following laws are specically applicable to the Company:
l Aircraft Act, 1934
l Civil Aviation Requirements issued by DGCA
AIESL is approved by the DGCA under CAR 145, and CAR 147, both issued by the DGCA. Both
these regulations have been issued under Rule 133B of Indian Aircraft Rule 1937. Besides that, any
person certifying the aircraft needs to hold a license issued under the provision of CAR 66, which is a
regulation under Rule 61.
For the compliance of the mentioned Regulations,
a) AIESL had made the policy documents called "Maintenance Organisation Exposition (MOE)"
and "Maintenance Training Organisation Exposition (MTOE)". These Documents are
approved by the DGCA. Any amendment also needs to be approved by the DGCA.
b) AIESL Quality system needs to carry out frequent internal audits to ensure that each of the
sections is in compliance of the regulations and the provision of MOE/MTOE.
c) DGCA conducts yearly scheduled audits. DGCA also carries out spot-checks, and other
surprise audits.
d) AIESL is audited by agencies getting work done by AIESL, like the Air India and a number of
other airlines.
e) AIESL is also subject to audits by foreign regulators, where AIESL is certifying the aircraft
registered in their respective countries.
f) AIESL is also approved by many foreign regulators like EASA and FAA, who carry out
surveillance audits.
DGCA has issued Civil Aviation Requirements (CAR) under section 4 of Aircraft Act, 1934 read with
Rule 133A of Aircraft Rules, 1937 and the company is required to comply such requirements under
DGCA check systems. While the broad principles of law are contained in the Aircraft Rules, 1937,
Civil Aviation Requirements are issued to specify the detailed requirements and compliance
procedures.
I further report, that the company is generally regular in compliance of aforesaid CAR under
aviation laws and the compliance by the Company of suchaviation laws have not been
reviewed in this Audit which have been subject to review by DGCA and other designated
professionals/authorities.
I have also examined compliance with the applicable clauses of the following:
a) Secretarial Standards issued by The Institute of Company Secretaries of India.
31
AIESL
b) Guidelines on Corporate Governance for Central Public Sector Enterprises as stipulated in the
O.M. No. 18(8)/2005-GM dated 14th May, 2010 of the Ministry of Heavy Industries and Public
Enterprises, Government of India.
c) Being unlisted company, company was not require to enter into any listing agreements with
Stock exchange(s) .
I have examined the framework, processes and procedures of compliance with respect to following
laws applicable to the company on test basis.
Apprentices Act, 1961; Payment of Wages Act,1948; Minimum Wages Act, 1948; Industrial
Disputes Act, 1947; Payment of Bonus Act, 1965; Payment of Gratuity Act, 1972; Contract Labour
(Regulation and Abolition) Act, 1970; Maternity Benet Act, 1961; The Child Labour
(Prohibition&Regulation) Act, 1986; Equal RemunerationAct,1976; The Employment Exchange
(Compulsory Notication of Vacancies) Act,1956,
The Company contributes to Air India and its subsidiary airlines Employees Provident Fund Trusts
under the Provident Fund Act, which governs the Provident Fund Plans for eligible employees.
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Regulation) Act, 2013:
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The
Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding
sexual harassment.
Following observation werefoundregarding compliance of labour laws :
1. Work Committee and Grievance Redressal Committee was not constituted under Industrial
Disputes Act, 1947.
2. No registers and records have been maintained by the company as prescribed under The
Maternity Benet Act, 1961and also No Annual Return has been submitted by the company
under this Act.
3. No compliance is made under The Employment Exchange (Compulsory Notication of

Vacancies) Act, 1947
In connection with aforesaid laws, adequate systems and processes are in place to monitor and
ensure compliance with such laws .
During the audit, it is observed that the Compliance Management System needs to be further
strengthen by taking the following actions:
a) To establish Corporate Compliance Committee and designate a Chief Compliance ofcer and
maintain centralised mechanism to ensure compliance with all applicable laws;
b) To establish and maintain effective co-ordination of functional units and the compliance
department under the overall supervision of the Board;
c) To establish mechanisms to prevent, detect, report and to respond to non-compliances;
d) To present Quarterly compliance Report to the Board;
32
AIESL
e) Identication and classication of various compliance risks;
f) Organisation of compliance Check list, Audit, feed back, remedies.
I further report, that the compliance by the Company of applicable nancial laws, like direct and indirect tax
laws, has not been reviewed in this Audit since the same have been subject to review by statutory nancial
audit and other designated professionals.
During the period under review and as per the explanations and clarications given to me and there
presentations made by the Management, the Company has generally complied with the provisions of the Act,
Rules, Regulations, Guidelines, etc. mentioned above subject to the observation made therein.
I further report that:
Subject to observation made above, the Board of Directors of the Company is duly constituted with proper
balance of Executive Directors, Non-Executive Directors and Nominee Directors. The changes in the
composition of the Board of Directors that took place during the period under review were carried out in
compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings at least seven days in advance and
where the Board meetings are called at shorter notice ,presence of at least one Nominee director is ensured,
agenda and detailed notes on agenda were sent and a system exists for seeking and obtaining further
information and clarications on the agenda items before the meeting and for meaningful participation at the
meeting
Decisions at the Board Meetings, as represented by the management, were taken unanimously.
I further report that as per the explanations given to me and the representations made by the Management and
relied upon by me there are adequate systems and processes in the Company commensurate with the size and
operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and
guidelines. It is informed that the Company has responded to notices for demands, claims, penalties etc. levied
by various statutory / regulatory authorities and initiated actions for corrective measures, wherever necessary.
I further report that during the audit period the company has:
I) During the nancial year, there are no specic events having a major bearing on the company's affairs in
pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.
For J P Saini & Associates

Company Secretaries
Sd/-
(Jiwan Parkash Saini)
Proprietor
FCS No: 3671
Place : New Delhi CP No: 2100
Date : 24th December 2018
Note_1: Specic non compliances / observations / audit qualication, reservation or adverse remarks has
been reported in respect of the above at appropriate place.
Note_2: This Report is to be read with my letter of even date which is annexed as Annexure A and forms an
integral part of this report.
33
AIESL
'Annexure A’
To,
The Members,
Airlines House, 113, Gurudwara Rakabganj Road,
New Delhi – 110001
My report of even date is to be read along with this letter.
1. Maintenance of Secretarial record is the responsibility of the management of the Company. My

responsibility is to express an opinion on these secretarial records based on my audit.
2. I have followed the audit practices and process as were appropriate to obtain reasonable assurance
about the correctness of the contents of the Secretarial records. The verication was done on test basis
to ensure that correct facts are reected in Secretarial records. I believe that the process and practices,
we followed provide a reasonable basis for my opinion.
3. I have not veried the correctness and appropriateness of nancial records and Books of Accounts of
the Company.
4. Where ever required, I have obtained the Management representation about the Compliance of laws,
rules and regulations and happening of events etc.
5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards
is the responsibility of management. My examination was limited to the verication of procedure on test
basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the
efcacy or effectiveness with which the management has conducted the affairs of the Company.
For J P Saini & Associates

Company Secretaries
Sd/-
(Jiwan Parkash Saini)
Proprietor
24thDec., 2018FCS No: 3671
Place: New Delhi CP No: 2100
34
AIESL
REPLY TO SECRETARIAL AUDITOR REPORT FOR FY 2017-18
Audit Observations Management’s Reply
a) There were few instance of delay in ling of e- Statement of Fact

forms under the Act and the rules made there
under, but they were regularised by payment
of additional fees under the Act.
b) Company has not appointed Independent The requirement regarding appointment of

directors pursuant to sub-section 4 & 5 of Independent Directors has been exempted in case of
section 149 of Companies Act 2013, hence wholly owned subsidiary of unlisted company in
no meeting of independent directors could be terms of Rule 4 (2) (a) of Companies (Appointment
held during the period under audit. and Qualication of Directors) Rules 2014 as
amended by Companies (Appointment and
Since, the company has not appointed Qualication of Directors) Amendment Rules, 2017.
Independent Directors, the company has not Hence, the appointment of Independent Directors is
complied with the provisions of section not mandatory in case of AIESL being unlisted and
177(2) and 178 of Companies Act, 2013 read wholly owned subsidiary of Air India.
with Rule 6 of Companies (Meetings of Board
and its Power) Rules, 2014 as regard the In terms of Article 97 of Articles of Association of the
appointment of Independent Directors in company, the directors on Board of AIESL shall be
composition of the Audit Committee. appointed by Air India Ltd. who shall prescribe the
period for which they will hold the ofce.....
Air India, holding company has written to

Administrative Ministry i.e. Ministry of Civil Aviation to
consider the appointment of Independent Directors in
AIESL.
In terms of Section 177 (2) of Companies Act 2013,

the majority of Independent Directors of Audit
Committee shall be Independent Directors. Pending
appointment of Independent Directors on Board of
AIESL, the Audit committee has been constituted
with 3 directors out of which 2 directors are Govt.
Nominee Directors.
The Audit Committee shall be reconstituted on

appointment of Independent Directors on Board of
AIESL by Air India i.e. holding Company.
c) Company has not constituted Remuneration In terms of 178 of Companies Act, 2013, at least one
and Nomination Committee of the Board half of the members of the Nomination and
pursuant to 178 of Companies Act, 2013 read Remuneration Committee should be Independent
with Rule 6 of Companies (Meetings of Board Directors.
and its Power) Rules, 2014 as it meets the
prescribe criteria as mentioned in Rule 6.
35
AIESL

However, appointment of independent The appointment of Independent Directors is not
directors in public companies which are mandatory in case of AIESL being unlisted and
wholly-owned subsidiaries of unlisted public wholly owned subsidiary of Air India.
companies are not require to appoint
independent directors, vide notication of In AIESL, the Nomination and Remuneration
MCA, Companies (Appointment and Committee shall be constituted on appointment of
Qualication of Directors) Amendment Independent Directors on Board of AIESL by Air India
Rules, 2017 dated July 5, 2017 . i.e. holding Company.
d) Risk Management Policy:
Provisions of Section 134(3)(n) of The Company continuously monitors the risk

Companies Act, 2013 provides that there perceptions and takes preventive action for
shall be attached to nancial statements laid mitigation of risks on various fronts.
before a company in general meeting, a
report by its Board of Directors, which shall The observations of auditor regarding Risk
include-a statement indicating development Management Policy have been noted for compliance.
and implementation of a risk management
policy for the company including identic-
ation therein of elements of risk, if any, which
in the opinion of the Board may threaten the
existence of the company.
It has been claried that the Company is

under process of development of Risk
Management Policy.
DPE Guidelines also emphasize that the

Board should ensure the integration and
alignment of the risk management system
with the corporate and operational objectives
and also that risk management is undertaken
as a part of normal business practice.
36
AIESL
MANAGEMENT REPLY ON COMPLIANCE WITH LABOUR LAWS:
1 Work Committee and Grievance Redressal We are in the process of constituting the Works
Committee was not constituted under Committee.
Industrial Disputes Act, 1947.
As far Grievance Redressal Committee is concerned,
we have a Grievance Procedure in place which is
being adopted for all employees.
2 No registers and records have been Air India Ltd was following more benecial policies as
maintained by the company as prescribed compared to Compliance under Maternity Benet Act
under The Maternity Benet Act, 1961and 1961.
also No Annual Return has been submitted
by the company under this Act. However, AIESL has now taken all steps for
compliance of Maternity Benets Act in respect of its
women workforce who are being engaged on Fixed
term Employment basis and not covered under the
benets extended by Air India Ltd.
3 No compliance is made under The Employment Notications have been given wide
Employment Exchange (Compulsory publicity vide our website and newspaper
Notication of Vacancies) Act, 194. publications.
Besides notications are being published in

Employment news also.
37
AIESL
Annexure to Directors' Report for the year 2017-18
FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2018
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Companies
(Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
1. CIN U74210DL2004GOI125114
2. Registration Date 11/03/2004
3. Name of the Company AIR-INDIA ENGINEERING SERVICES LIMITED (AIESL)
Category/Sub category of the

4. Company Limited by shares/Union Government Company
Company
Address of the Registered ofce & AIRLINES HOUSE, 113 GURUDWARA RAKABGANJ
5.
contact details ROAD, NEW DELHI –110001, Ph.No : 011-.23422109
6 Whether listed company No

Name, Address & contact details of
7. the Registrar & Transfer Agent, if N.A.
any.
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities
contributing 10 % or more of the total turnover of the company shall be stated) -
NIC Code % to total

Sr Name and Description of main products / services of turnover of
No the Product/ the
service company
1 T echnical Handling, MRO and other Services 9987 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY:
Holding /
Sr. Name and Address of the % of Applicable
Subsidiary /
No. Company CIN/GIN Shares Section
Associate
1 Air India Limited
113, Airlines House, U62200DL2007GOI161431 Holding 100% 2 (46)
Gurudwara Rakabganj
Road, New Delhi, 110 001.
38
AIESL
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total
Equity) : Category-wise Share Holding
No. of Shares held at the No. of Shares held at the end of the %
Category of beginning of the year year [As on 31-03-2018] Change
Shareholders [As on 01-04-2017] during
the
During % of % of year
Demat Physical the Total Demat Physical Total Total
year Shares Shares
A. Promoters
(1) Indian
a) Individual/ HUF - - - - - - - - -
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - 166,666,500 166,666,500 100 - 166,666,500 166,666,500 100 0.00
e) Banks / FI - - - - - - - - -
f) Any other - - - - - - - - -
Total shareholding of
166,666,500 166,666,500 100 - 166,666,500 166,666,500 100 0.00
Promoter (A)
B. Public Shareholding Not Applicable
1. Institutions
a) Mutual Funds/UTI - - - - - - - - -
b) Banks / FI - - - - - - - - -
c) Central Govt. - - - - - - - - -
d) State Govt.(s) - - - - - - - - -
e) Venture Capital
Funds - - - - - - - - -
f) Insurance
Companies - - - - - - - - -
g) FIIs - - - - - - - - -
h) Foreign Venture
Capital Funds - - - - - - - - -
i) Others (specify)
- - - - - - - - -
Foreign Banks
Sub-total (B)(1):- - - - - - - - - -
39
AIESL
No. of Shares held at the beginning of No. of Shares held at the end of the
the year [As on 01-04-2017] year [As on 31-03-2018] %
Change
Category of
% of % of during
Shareholders Demat Physical Total Demat Physical Total
Total Total the
Shares Shares year
2. Non-Institutions Not Applicable

a) Bodies Corp.
(Market Maker +
LLP)
i) I Indian
ii) Overseas
b) Individuals
i) Individual
shareholders
holding nominal
share capital upto
Rs. 1 lakh
ii) Individual
shareholders
holding nominal
share capital in
excess of Rs.
1 lakh
c) Others (specify)
i) Non Resident
Indians
ii) Non Resident
Indians - Non
Repatriable
iii) Ofce Bearers
iv) Directors
v) HUF
vi) Overseas
Corporate Bodies
vi) Foreign Nationals
vii) Clearing
Members
viii) Trusts
ix) Foreign Bodies -
DR
Sub-total (B)(2):- - - - - - - - - -
Total Public
Shareholding (B) = - - - - - - - - -
(B)(1)+ (B)(2)
C. Shares held by
Custodian for - - - - - - - - -
GDRs & ADRs
Grand Total (A+B+C) 166,666,500 166,666,500 100 - 166,666,500 166,666,500 100 0.00
40
AIESL
B) Shareholding of Promoter-
Shareholding at the beginning Shareholding at the end

of the year of the year % change
% of % of In
Shares Shares Share-
Sr. Shareholder's % of total % of total
Pledged / Pledged / holding
No. Name No. of Shares No. of Shares
Encum- Encum- during
Shares of the Shares of the the
bered to bered
company company year
total to total
shares shares
Air India Limited

1 along with its 166,666,500 100 NIL 166,666,500 100 NIL 0.00
nominees
C) Change in Promoters' Shareholding (please specify, if there is no change)
Sr Particulars Shareholding at the Cumulative Shareholding

No. beginning of the year at end of the year
% of total % of total
No. of No. of
shares of the shares of the
shares shares
company company
At the beginning of the year

Air India Limited 166,666,500 100%
At the end of the year
Air India Limited 166,666,500 100%
D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters

and Holders of GDRs and ADRs):
Shareholding at the Cumulative Shareholding

beginning of the year at end of the year
Sr For Each of the Top 10 Shareholders % of total % of total
No No. of shares of No. of shares of
shares the shares the
company company
1 NOT APPLICABLE
2
3
4
5
6
7
8
9
10
41
AIESL
E) Shareholding of Directors and Key Managerial Personnel:
Shareholding at the Cumulative Shareholding

beginning of the year at end of the year
S. Shareholding of each Directors and % of total % of total
No. each Key Managerial Personnel No. of shares of No. of shares of
shares the shares the
company company
NIL
(Shares Held by Nominees of Air India only,
which includes directors also)
Total
V. INDEBTEDNESS -Indebtedness of the Company including interest

outstanding/accrued but not due for payment.
(In Rs Crore)
Secured Loans
Unsecured Total
excluding Deposits
Loans Indebtedness
deposits
Indebtedness at the beginning of the
financial year
i) Principal Amount - 671,42,85,156 - 671,42,85,156

ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) - 671,42,85,156 - 671,42,85,156
Change in Indebtedness during the
financial year
* Addition - 1371,74,18,132 - 1371,74,18,132

* Reduction - - - -
Net Change - 1371,74,18,132 - 1371,74,18,132
Indebtedness at the end of the
financial year
i) Principal Amount - 2043,17,03,288 - 2043,17,03,288

ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) - 2043,17,03,288 - 2043,17,03,288
42
AIESL
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Not applicable
(In gures)
Sr Particulars of Remuneration Name of MD/WTD/ Manager Total
No * There are no Managing, Whole Time Amount
Directors in the Company.
1 Gross salary - - - - - -
(a) Salary as per provisions contained in
section 17(1) of the Income-tax Act, 1961
(b)Value of perquisites u/s 17(2) Income-
tax Act, 1961
(c)Prots in lieu of salary under section
17(3) Income- tax Act, 1961
2 Stock Option
3 Sweat Equity
4 Commission as % of prot others, specify.
5 Others : (PF, DCS, House Perks tax etc)
T otal (A) - - - - - -
Ceiling as per the Act - - - - - -
B. Remuneration to other directors - Not Applicable

Sr Total
Particulars of Remuneration Name of Directors
No. Amount
1 Independent Directors - - - - - -
Fee for attending board committee
- - - - - -
meetings
Commission - - - - - -
Others, please specify (Fees for
attending Board Sub Committee - - - - - -
Meetings)
T otal(1) - - - - - -
2 Other Non-Executive Directors - - - - - -
Fee for attending board committee
- - - - - -
meetings
Commission - - - - - -
Others, please specify - - - - - -
Total (2) - - - - -
T otal (B)=(1+2) - - - - - -
T otal Managerial Remuneration - - - - - -
Overall Ceiling as per the Act - - - - - -
- - - - - -
43
AIESL
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN

MD/MANAGER/WTD
( gures in Rs)
Sr. Key Managerial Personnel

Particulars of Remuneration CS (On
No. CEO
CFO (On
Total
deputation from deputation from
AI) AI)
1 Gross salary 29,95,200 NIL NIL 29,95,200
(a) Salary as per provisions contained
in section 17(1) of the Income-tax - - - -
Act, 1961
(b) Value of perquisites u/s 17(2)
Income-tax Act, 1961 32,400 - - 32,400
(c) Prots in lieu of salary under section

17(3) Income-tax Act, 1961 - - - -
2 Stock Option - - - -
3 Sweat Equity - - - -
4 Commission - - - -
- as % of prot - - - -
Others, specify. - - - -
5 Others: (PF , DCS, House Perks tax etc) - - - -
Total 30,27,600 NIL NIL 30,27,600
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Details of
Section of Appeal
Penalty / Authority
the Brief made, if
Type Punishment/ [RD / NCLT/
Companies Description any (give
Compounding COURT]
Act Details)
fees imposed
A. COMPANY NIL
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS NIL
Penalty - - - - -
C. OTHER OFFICERS IN DEFAULT NIL
Penalty - - - - -
44
AIESL
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b)
OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF AIR INDIA ENGINEERING
SERVICES LIMITED FOR THE YEAR ENDED 31 MARCH 2018.
The preparation of nancial statement of AIR INDIA ENGINEERING SERVICES LIMITED for the year ended
31 March 2018 in accordance with the nancial reporting framework prescribed under the Companies Act,
2013 (Act) is the responsibility of the Management of the Company. The statutory auditor appointed by the
Comptroller and Auditor General of India under section 139(5) of the Act is responsible for expressing opinion
on the nancial statements under Section 143 of the Act based on independent audit in accordance with the
Standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them
vide their Audit Report dated 03 October 2018.
I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the
nancial statements of AIR INDIA ENGINEERING SERVICES LIMITED for the year ended 31 March 2018
under section 143(6)(a) of the Act. This supplementary audit has been carried out independently without
access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditor
and company personnel and a selective examination of some of the accounting records.
Based on my supplementary audit. I would like to highlight the following signicant matters under section
143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better
understanding of the nancial statements and the related audit report.
A. COMMENTS ON FINANCIAL POSITION

Non Current Assets
Other Intangible Asset (Note 2) Rs. 271.38 Crore
In 2014-15, the Company has capitalized assets under the head “Other Intangible Assets” for an
amount of Rs.271.38 crore incurred during the period October to December 2014 on payment of payroll
expenses, staff expenses, gratuity/leave salary expenses and other general expenses to obtain CAR
145 (License from DGCA for carrying out MRO services). Capitalization of these expenses under
“Other Intangible Assets” was not in accordance with accounting standards, basic accounting
assumptions and principles and accordingly qualied by the Statutory Auditors in their Auditor’s Report
for the period 2014-15, 2015-2016 and 2016-2017.
This is also in contravention to Ind AS 38 and the basic accounting principles. These expenses could
not be said to be directly attributable to create the asset as these employees were performing their
duties in the normal course of business. This has resulted in overstatement of Other Intangible Assets
and understatement of Other Equity (Debit balance of Statement of Prot and Loss) by Rs.271.38 crore.
B. OTHERS
Statement of Changes in Equity
In statement of Changes in Equity, no separate reconciliation for each component (Reserve & Surplus
and Other Comprehensive Income) under “Other Equity” was disclosed in the nancial statements as
required in Ind AS 1.
45
AIESL
Further, closing balance of ‘Other Equity’ was depicted as Rs. 1493.42 crore as on 31.03.2017 whereas
the same was depicted as opening balance for 01.04.2017 as Rs.1500.43 crore.
For and on behalf of the

Comptroller and Auditor General of India
Sd/-
(Prachi Pandey)
Principal Director of Commercial Audit
& Ex-ofcio Member, Audit Board-I,
New Delhi.
Place : New Delhi

46
AIESL
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b)
OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF AIR INDIA ENGINEERING
SERVICES LIMITED FOR THE YEAR ENDED 31 MARCH 2018.
Observations Management’s Reply
Non Current Assets
Other Intangible Asset (Note 2) – Rs.271.38 Crore
In 2014-15, the Company capitalized assets under The directly attributable cost incurred on the
the head “Other Intangible Assets” for an amount of internally developed intangible asset has been
Rs. 271.38 Crore incurred during the period October capitalized in accordance with the requirements of
to December 2014 on payment of payroll expenses, IND AS 38/AS 26.
staff expenses gratuity / leave salary expenses and
other general expenses to obtain CAR 145 (Licence In this regard, it may be stated that the main condition
from DGCA for carrying out MRO Services). for capitalizing an internally developed intangible
Capitalization of these expenses under “Other asset as per AS 26 corresponding to IND AS 38
Intangible Assets” was not in accordance with stipulate that:
accounting standards, basic accounting assump-
tions and principles and accordingly qualied by the l Asset will generate future economic benets
Statutory Auditors in their Auditors Report for the
period 2014-15, 2015-16 and 2016-17. l The Intangible Asset is available for use
This is also in contraventions to Ind AS 38 and the l Ability to measure the expenditure attributable
basic accounting principles. The expenses could not to the Intangible Asset.
be said to be directly attributable to create the asset
as these employees were performing their duties in Since all these conditions are satised in the relevant
the normal course of business. This has resulted in case, AIESL decided to capitalize the cost of
overstatement of Other Intangible Assets and obtaining a License under CAR 145 during 2014-15.
understatement of Other Equity (Debit balance of DGCA license for CAR 145 certication for the MRO
statement of Prot and Loss) by Rs. 271.38 Crores. was received on 01-01-2015. The expenditure
incurred (prior to the commencement of business) in
creating this asset was capitalized in the books of the
company as on 31-03-2015.
Based on this license, the company has also applied

for other certications like FAA, EASA approval for its
facilities. The company therefore believes that there
has been no diminution in the value of the asset as of
date, since the license was issued by DGCA for an
indenite period of time.
In the present case, the intangible asset is the MRO

license which is valid for innity and has nancial
economic benets till the company is in operation.
Further, without the license, the company cannot
operate in the industry.”
47
AIESL
Observations Management’s Reply
Statement of Changes in Equity
In statement of Changes in Equity, no separate The company has not created a separate reserve for
reconciliation for each component (Reserve & Fair Value adjustments through Other Compre-
Surplus and Other Comprehensive Income) under hensive Income (FVOCI) and hence only one
“Other Equity” was disclosed in the nancial reserve reconciliation is required to be prepared in
statements as required in Ind AS 1. Statement of Changes in Equity i.e. for retained
earnings.
Further, closing balance of 'Other Equity' was
depicted as Rs. 1493.42 crore as on 31.03.2017 The statement of Changes in Equity shall be
whereas the was depicted as opening balance for amended as per the requirement of Ind AS 1 i.e.
01.04.2017 as Rs. 1500.43 Crore. showing Retained Earnings and Other Compre-
hensive Income separately before printing of Annual
Accounts after the approval of the Board.
Further the carried forward error is typological in

nature and will be corrected before printing of Annual
Accounts and after the approval of the Board.
48
AIESL
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AIR INDIA ENGINEERING SERVICES

LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying nancial statements of Air-India Engineering Services Limited (“the
Company”), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Prot and Loss, the
Statement of Cash Flows and the Statement of Changes in Equity for the year ended and a summary of
signicant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these nancial statements that give a true and fair view of the
nancial position and nancial performance of the Company in accordance with accounting principles
generally accepted in India including the Indian Accounting Standards specied under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and
other irregularities, selection and application of appropriate accounting policies, making judgements and
estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal
nancial controls, that were operating effectively for ensuring the accuracy and completeness of accounting
records, relevant to the preparation and presentation of the nancial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on these nancial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which
are required to be included in the audit report under the provisions of the Act and Rules made there under.
We have conducted our audit in accordance with the Standards on Auditing specied under Section 143(10) of
the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
nancial statements. The procedures selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal nancial controls relevant to the Company's preparation of the
nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an
adequate internal nancial control system over nancial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the
overall presentation of the nancial statements.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our
modied audit opinion on the nancial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the nancial
statements give the information required by the Act in the manner so required and give a true and fair view in
49
AIESL
conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at
31st March, 2018, and their loss and their cash ows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order, 2016 (“the Order”) issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” a
statement on the matters specied in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as
it appears from our examination of those books.
c) The Balance Sheet, the Statement of Prot and Loss and the Statement of Cash Flows dealt with by
this Report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, the Statement of Prot and Loss, the Statement of Changes in
Equity and the Statement of Cash Flows comply with the Accounting Standards specied under
Section 133 of the Act.
e) On the basis of written representations received from the Directors as on 31st March, 2018, and taken
on record by the Board of Directors, none of the Directors are disqualied as on 31st March, 2018,
from being appointed as a Director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal nancial controls over nancial reporting of the
Company and the operating effectiveness of such controls, refer to our separate report in “Annexure
B” and
g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information
and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigation in Note 27 on its nancial position
in its nancial statements.
(ii) The Company has made a provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, and as required on long term contracts
including derivative contracts.
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund.
For D. B. Ketkar & Co.
FRN: 105007W
Sd/-
N. S.Ketkar
(Partner)
Place: New Delhi Membership No.: 040521
Date: 3rd October 2018
50
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“ANNEXURE A” TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 1 of the Auditor's Report on Other Legal and Regulatory
Requirements of even date to the members of the Company on the financial statements for the year
ended 31st March, 2018.
I. a. The Company has maintained proper records showing full particulars, including quantitative details
and situation of xed assets.
b. As explained to us, the Company has a policy of verication of xed assets on bi-annual basis.
However, physical verication of xed assets except tools was not carried by the management
during the year as per policy.
c. According to the information and explanations given to us and on the basis of our examination of the
records, the Company does not own any immovable property.
ii. a. The management has conducted physical verication of inventory at reasonable intervals during the
year.
b. The procedures of physical verication of inventory followed by the management are reasonable
and adequate in relation to the size of the Company.
c. The Company is maintaining proper records of inventory and no material discrepancies were
noticed on physical verication.
iii. The Company has not granted any loans, secured or unsecured, to companies, rms, Limited Liability
Partnership or other parties covered in the register maintained under section 189 of the Act.
iv. The Company has not granted any loans or provided any guarantees or security to the parties covered
under Section 185 of the Act. The Company has complied with provisions of Section 186 of the Act in
respect of investments made or loans or guarantee or security provided to the parties covered under
Section 186.
v. The Company has not accepted any deposits from the public.
vi. The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the
Act, for any of the services rendered by the Company.
vii. a. According to the information and explanation given to us and based on the records of the Company
examined by us, the Company is not regular in depositing the undisputed statutory dues, including
Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Value Added Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with
the appropriate authorities in India. The extent of arrears of outstanding dues are -
Nature of Statutory Dues Amount Outstanding for more than

6 months as on 31 March 2018
Maharashtra Value Added Tax Act 34,39,847/-
Delhi Value Added Tax Act 2,51,754/-
Finance Act 1994 (Service Tax) 2,02,58,587/-
51
AIESL
b. According to the information and explanation given to us and based on the records of the Company
examined by us, there are no dues of Income Tax, Wealth Tax, Service Tax, Value Added Tax,
Custom Duty and Excise Duty which have not been deposited on account of any dispute.
viii. The Company does not have any loans or borrowings from any nancial institution, banks, government or
debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.
ix. The Company did not raise any money by way of initial public offer or further public offer (including debt
instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
x. According to the information and explanations given to us, no material fraud by the Company or on the
Company by its ofcers or employees has been noticed or reported during the course of our audit.
xi. According to the information and explanations given to us and based on our examination of the records of
the Company, the Company has paid/ provided managerial remuneration in accordance with section 197
read with schedule V of the Companies Act 2013.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi
company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of
the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act
where applicable and details of such transactions have been disclosed in the nancial statements as
required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of
the Company, the Company has not made any preferential allotment or private placement of shares or
fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of
the Company, the Company has not entered into non-cash transactions with directors or persons
connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.
Accordingly, paragraph 3(xvi) of the Order is not applicable.

FRN: 105007W
Sd/-
N. S.Ketkar
(Partner)
52
AIESL
ANNEXURE – B TO THE AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (“the Act”)
We have audited the internal nancial controls over nancial reporting of Air-India Engineering Services
Limited (“the Company”) as of 31st March, 2018 in conjunction with our audit of standalone nancial statements
of the Company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing and maintaining internal nancial controls based
on the internal control over nancial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities
include the design, implementation and maintenance of adequate internal nancial controls that were
operating effectively for ensuring the orderly and efcient conduct of its business, including adherence to
Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of reliable nancial
information, as required under the Companies Act, 2013.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on the Company's internal nancial controls over nancial reporting
based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (“the Guidance Note”) and the Standards on Auditing, issued by
ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable
to an audit of internal nancial controls, both applicable to an audit of Internal Financial Controls and, both
issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial
controls over nancial reporting were established and maintained and if such controls operated effectively in all
material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial
controls system over nancial reporting and their operating effectiveness. Our audit of internal nancial
controls over nancial reporting included obtaining an understanding of internal nancial controls over nancial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on assessed risk. The procedures selected depend on the
auditor's judgment, including the assessment of the risk of material misstatement of the nancial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our
audit opinion on the Company's internal nancial controls system over nancial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A Company's internal nancial control over nancial reporting is a process designed to provide reasonable
assurance regarding the reliability of nancial reporting and preparation of nancial statements for external
purposes in accordance with generally accepted accounting principles. A Company's internal nancial control
over nancial reporting includes those policies and procedures that (1) pertain to the maintenance of records
53
AIESL
that, in reasonable detail, accurately and fairly reect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of nancial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of management and
directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the
nancial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal nancial controls over nancial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal nancial controls over nancial
reporting to future periods are subject to the risk that the internal nancial control over nancial reporting may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
BASIS FOR QUALIFIED OPINION
According to the information and explanations given to us and based on our audit, the following weaknesses
have been identied as at March 31, 2018:
i. The company did not have an effective interface between various functional software relating to
Sales/Revenue with the accounting software resulting in accounting entries being made manually on
periodical basis.
ii. The company uses the information systems partially for maintenance and processing of payroll. We nd
that the leave records are not updated timely resulting in unwanted recoveries of excess salary.
iii. The company did not have an effective internal control system for timely ling and reconciliation of
statutory dues.
iv. The company has not followed the MOU's with the group companies for transfer of employees, as per
the MOU's the companies were supposed to have a separate agreement for transfer of employees. No
such agreement has been executed till date.
MATERIAL WEAKNESS
A 'material weakness' is a deciency, or a combination of deciencies, in internal nancial control over nancial
reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or
interim nancial statements will not be prevented or detected on a timely basis.
OPINION
In our opinion, except for the effects/possible effects of the material weaknesses described above on the
achievement of the objectives of the control criteria, the Company has maintained, in all material respects,
adequate internal nancial controls over nancial reporting and such internal nancial controls over nancial
reporting were operating effectively as of 31st March 2018 based on the internal control over nancial reporting
criteria established by the Company considering the essential components of internal control stated in the
54
AIESL
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.
We have considered the material weaknesses identied and reported above in determining the nature, timing,
and extent of audit tests applied in our audit of March 31, 2018 standalone nancial statements of the
Company, and these material weaknesses do not affect our opinion on the standalone nancial statements of
the Company.

FRN: 105007W
Sd/-
N. S.Ketkar
(Partner)
55
AIESL
“ANNEXURE C” TO THE AUDITORS' REPORT
Report on the Directions under Sub-section 5 of Section 143 of the Companies Act, 2013 (“the Act”)
According to the information and explanations given to us and on the basis of our examination of the records of
the Company we give our comments as below:
Sr. Directions Auditor Comment Impact on

No. Financial
Statements
1. Whether the company has clear title/ Refer Point (i) of Annexure A. Nil
lease deeds for freehold and leasehold Air India Ltd, the parent at Point 5(b) of
respectively? If not please state the area the MOU dated 5th April, 2013 has
of freehold or leasehold land for which title permitted the company to use
deed is not available? buildings, hangers, workshops etc.
The underlying title is held by Air India.
2. Whether there was any case of waiver/ No such case observed. Nil
write off of debts/loans/interests etc. if yes,
the reasons there for and the amount
involved
3. Whether proper records are maintained The company does not have inven- Nil
for inventories lying with third parties & tories with third parties.
assets received as gifts/grants from the
Government or other Authorities. Further no assets were received as
grants from the Government or other
Authorities.

FRN: 105007W
N. S. Ketkar
(Partner)
56
AIESL
BALANCE SHEET AS AT 31 MARCH 2018

(Amount in Rupees)
Particulars Note As at 31st March 2018 As at 31st March 2017 As at 1st April 2016
ASSETS :
1) Non-current Assets
(i) Property, Plant & Equipment 2 859,819,186 975,699,676 1,221,621,684
(ii) Other Intangible Asset 2 2,713,828,069 2,713,828,069 2,713,828,069
(iii) Financial Assets:
a) Loans - - -
b) Others 3 61,525 61,524 56,522
iv) Income Tax Assets
v) Other Non-Current Assets 4 156,935,584 87,681,244 15,827,742
3,730,644,364 3,777,270,513 3,951,334,017
2) Current Assets
i) Inventories 5 415,593,403 - -
ii) Financial Assets: -
a) Trade Receivables 6 7,725,743,314 1,990,274,156 755,121,602
b) Cash and Cash Equivalents 7 14,917,118 117,674,205 440,535,080
c) Bank Balance other than (b) above 8 16,323,900 - -
d) Loans 9 814,708 3,918,658 4,600,824
e) Others
iii) Current Tax Assets 10 411,268,855 138,742,834 10,883,566
iv) Other Current Assets 11 344,834 - 269,750
8,585,006,132 2,250,609,854 1,211,410,822
TOTAL 12,315,650,496 6,027,880,366 5,162,744,839
EQUITY AND LIABILITIES :
1 Equity
i) Equity Share Capital 12 1,666,665,000 1,666,665,000 1,666,665,000
ii) Other Equity 13 (19,448,701,763) ( 15,004,338,073) (9,825,415,914)
(17,782,036,763) (13,337,673,073) (8,158,750,914)
2 Liabilities:
Non Current Liabilities
a) Financial Liabilities
b) Provisions 14 6,306,394,819 6,326,173,985 6,052,626,569
c) Other Liabilities 6,306,394,819 6,326,173,985 6,052,626,569
Current Liabilities
i) Trade Payables 15 1,992,407,827 986,019,430 139,334,836
ii) Other 16 20,919,406,085 7,116,735,781 2,640,467,033
b) Provisions 17 895,406,106 928,867,800 931,493,477
c) Other Non Financial Current Liabilities 18 (15,927,578) 4,007,756,444 3,557,573,839
23,791,292,440 13,039,379,454 7,268,869,185
TOTAL 12,315,650,496 6,027,880,366 5,162,744,839
Signicant Accounting Policies 1

Notes forming part of the Financial Statement 2-40
The accompanying notes are an integral part of the Financial Statements
This is the Balance Sheet referred to in our report of even date.
For and on Behalf of For and on behalf of the Board
Sd/- Sd/- Sd/-

D.B. Ketkar & Co. (Pradeep Singh Kharola) (V.S. Hejmadi)
Chartered Accountants Chairman Director-Finance
FRN : 105007W DIN : 05347746 DIN : 07346490
Sd/- Sd/- Sd/- Sd/-

N.S. Ketkar (Gagan Batra) (Kapil Aseri) (H.R. Jagannath)
Partner Company Secretary Chief Financial Ofcer Chief Executive Ofcer
M.No. 40521
Place : New Delhi

Date : 3rd October 2018
57
AIESL
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2018
(Amount in Rupees)
Particulars Note No. 2017-18 2016-17
Revenue
I Revenue from Operations 19 7,832,619,460 7,404,492,467
II Other Income 20 111,707,419 338,663
III Total Revenue (I+II) 7,944,326,879 7,404,831,130
IV Expenses
Employee Benet Expenses 21 9,600,070,272 10,320,164,415
Finance Costs 22 1,098,591,060 181,836,002
Depreciation and Amortization Expense 23 232,688,979 411,003,133
Other Expenses 24 1,969,540,258 1,600,649,739
Total Expenditure 12,900,890,570 12,513,653,289
Prior Period Adjustments (Net) - -
Total Expenditure After Prior Period Adj 12,900,890,570 12,513,653,289
V Profit/ (Loss) before Exceptional (4,956,563,690) (5,108,822,159)
Items and Tax (III-IV)
VI Exceptional Items - -
VII Profit/ (Loss) before Extraordinary Items and Tax (V+VI) (4,956,563,690) (5,108,822,159)
VIII Tax Expenses : - -
i) Current Tax
ii) Tax Adjustment relating to earlier year - -
iii) Deferred Tax - -
IX Profit/ (Loss) after Tax for the period (IX-X) (4,956,563,690) (5,108,822,159)
X Other Comprehensive Income
Actuarial Gain/(Loss) on Dened benet obligation 512,200,000 (70,100,000)
Total Comprehensive Income (4,444,363,690) (5,178,922,159)
XI Earning per Share of Rs. 10 each
Basic 25 (29.74) (30.65)
Diluted 25 (29.74) (30.65)
Signicant Accounting Policies 1

Notes forming part of the Financial Statement 2-40
As per our report of even date attached
Sd/- Sd/- Sd/-

FRN : 105007W DIN : 05347746 DIN : 07346490
Sd/- Sd/- Sd/- Sd/-

M.No. 40521
Place : New Delhi

58
AIESL
STATEMENT OF CHANGE IN EQUITY FOR THE YEAR ENDED 31ST MARCH 2018
(Figures in Rupees)
A. Equity Share Capital As at 31.03.2018 As at 31.03.2017 As at 01.04.2016
No. of Shares Amount in No. of Shares Amount in No. of Amount in
Rupees Rupees Shares Rupees
Balance at the beginning of the reporting period 1666,66,500 1,6666,65,000 1666,66,500 1,6666,65,000 50,000 5,00,000
Changes in equity share capital during the year
Add: Equity Shares allotted during the year 1666,16,500 16661,65,000
Less :
Balance at the end of reporting period 1666,66,500 1,6666,65,000 1666,66,500 1,6666,65,000 1666,66,500 16666,65,000
(Amount in Rupees)
Retained Other Total

B. Other Equity Comprehensive
Earnings
Income
Balance as at 31.03.2017 (149342,38,073) (701,00,000) (150043,38,073)
Prot/Loss for the year (49565,63,690) (49565,63,690)
Other comprehensive income for the year 5122,00,000 5122,00,000
Balance as at 31.03.2018 (198908,01,763) 4421,00,000 (194487,01,763)
Balance as at 01.04.2016 (98254,15,914) (98254,15,914)

Prot/Loss for the year (51088,22,159) (51088,22,159)
Other comprehensive income for the year (701,00,000) (701,00,000)
Balance as at 31.03.2017 (149342,38,073) (701,00,000) (150043,38,073)
Sd/- Sd/- Sd/-

FRN : 105007W DIN : 05347746 DIN : 07346490
Sd/- Sd/- Sd/- Sd/-

M.No. 40521
Place : New Delhi

59
AIESL
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2017

(Amount in Rupees)
Particulars As at March 31, 2018 As at March 31, 2017
A. CASH FLOW FROM OPERATING ACTIVITIES
Net (Loss) / Prot Before Taxes: (4,956,563,690) (5,108,822,159)
Adjustment for :
Depreciation and amortisation 232,688,979 423,309,507
Loss on Sale of Assets 33,141 -
Provision for Employee Benets 492,420,833 203,447,416
Interest Expense 1,098,591,060 181,836,002
Interest Income (111,707,419) 1,712,026,594 (181,836,002) 626,756,923
Operating (Loss)/Profit Before Working Capital Changes
Adjustments for :
(Increase) / Decrease in Trade and Other Receivables (6,437,153,366) (1,362,059,907)
Increase / (Decrease) in Trade and Other Payables 10,751,912,986 4,314,759,619 5,770,510,269 4,408,450,362
Net Cash Flow (used in)/ from Operating Activities 1,070,222,524 (73,614,873)
B. CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of xed assets (116,841,631) (177,387,499)
Acquisition of other non current assets (69,254,340) (71,858,502)
Interest Income 111,707,419 181,836,002
Net Cash Flow used in Investing Activities (74,388,552) (67,409,999)
C. CASH FLOW FROM FINANCING ACTIVITIES
Interest Expense (1,098,591,060) (181,836,002)
Net Cash Flow from/(used in) Financing Activities (1,098,591,060) (181,836,002)
Net increase/(Decrease) in Cash and Cash equivalents (102,757,088) (322,860,875)
Cash and Cash equivalents (Opening balance) 117,674,205 440,535,080
Cash and Cash equivalents (Closing balance) 14,917,118 117,674,205
Notes
1. The Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian Accounting
Standard 7 (IndAS-7) on “Cash Flow Statements” and present cash ows by operating, investing and nancing
activities.
As per our report of even date attached
Sd/- Sd/- Sd/-

FRN : 105007W DIN : 05347746 DIN : 07346490
Sd/- Sd/- Sd/- Sd/-

M.No. 40521
Place : New Delhi

60
AIESL
NOTES FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31, 2018
NOTE “1”
A. CORPORATE INFORMATION
The company secured DGCA approval for providing MRO services effective 01 January 2015. The MOUs
entered into by the Company with its parent company, Air India Ltd and subsidiary companies of Air India
Ltd, viz. 'Air India Express Ltd' and 'Airline Allied Services Ltd' for rendering their aircraft engineering
related services.
B. ACCOUNTING CONVENTION
i. In accordance with the notication issued by the Ministry of Corporate Affairs, the Group has
adopted Indian Accounting Standards (referred to as “Ind AS”) notied under the Companies (Indian
Accounting Standards) Rules, 2015 with effect from April 1, 2016. Previous period numbers in the
consolidated nancial statements have been restated to Ind AS. These nancial statements are the
rst consolidated nancial statements of the Group which have been prepared in accordance with
Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Group
has presented a reconciliation from the presentation of consolidated nancial statements under
Accounting Standards notied under the Companies (Accounting Standards) Rules, 2006
(“Previous GAAP”) to Ind AS in respect of consolidated shareholders' equity as at March 31, 2017
and April 1, 2016, of the consolidated comprehensive income for the year ended March 31, 2017 and
of the cash ows for the year ended March 31, 2017.
ii. These nancial statements are prepared under historical cost convention on going concern concept
on accrual basis and in accordance with the mandatory accounting standards prescribed under
Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules,
2014, the provisions of the Act (to the extent notied) and guidelines issued by the Institute of
Chartered Accountants of India to the extent applicable.
iii. The preparation of nancial statements in conformity with generally accepted accounting principles
in India requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent liabilities at the date of the nancial statements
and the reported amounts of revenue and expenses during the reporting period. Differences
between the actual results and estimates are recognized in the period in which results are known /
materialized.
iv. The Company being in service sector, there is no specic operating cycle; 12 months period has
been adopted as “the Operating Cycle” in-terms of the provisions of Schedule III to the Companies
Act 2013.
C. SIGNIFICANT ACCOUNTING POLICIES
1. PROPERTY PLANT & EQUIPMENT
Property Plant and Equipment are stated at cost including incidental costs incurred pertaining to the
acquisition and bringing them to the location for use and interest on loans borrowed where
applicable, upto the date of putting the concerned asset to use.
61
AIESL
2. INTANGIBLE ASSETS
DGCA License – all expenses incurred including man power cost prior to three months from the date
of obtaining the License and directly attributable to DGCA License for CAR-145 MRO with
certication has been capitalized.
3. DEPRECIATION / AMORTIZATION
a) Depreciation is provided on all assets on straight-line method over the useful life of assets as
provided in Part C of Schedule II of the Companies Act 2013, keeping a residual value of 5% of
the original cost.
b) Depreciation on additions to “Other Fixed Assets” is provided for the full year in the year of
acquisition and no depreciation is provided in the year of disposal.
c) Intangible asset which have a denite useful economic life are amortized over the estimated
useful life. Intangible Assets which have an indenite useful life are tested for impairment.
4. REVENUE RECOGNITION
a) Revenue is recognized only when it can be reliably measured and it is reasonable to expect
ultimate collection. Revenue from operations includes technical handling revenue, MRO
services revenue & other servicing revenue.
b) Other servicing revenue is recognized on the basis of budgeted rate per block hours multiplied
by actual block hours. MRO services revenue & Technical Handling Revenue are recognized
as shared by Holding company & other group companies and in some of the cases bills are
raised directly by AIESL after completion of services as agreed.
c) Other operating revenue is related to training charges recovered from trainees and recognized
as and when right to receive arises.
d) Income from Interest is recognized on a time proportion basis.
e) Gain or loss arising out of sale/scrap of Fixed Assets over the net depreciated value is taken to
Statement of Prot & Loss as Non-Operating Revenue or Other Expenses.
5. EMPLOYEE BENEFITS
a) Short term employee benefits: All employee benets falling due wholly within twelve months
of rendering the services are classied as short term employee benets. The benets like
salaries, wages, and short term compensated absences etc. and the expected cost of bonus,
ex-gratia are recognized in the period in which the employee renders the related services.
b) Post-employment benefits:
Defined Contribution Plans consist of contributions to Employees Provident Fund and

Employees State Insurance Scheme. The Parent Company, viz Air India Ltd, and subsidiary
airlines of Air India Ltd, viz. 'Air India Charters Ltd' and 'Airline Allied Services Ltd' have created
separate Trusts to administer Provident Fund contributions to which contributions are made
regularly. Air India Charters Ltd' another subsidiary of AIL is remitting to General Provident
Fund (GPF). ESI dues are regularly deposited with government authorities.
62
AIESL
Defined Benefit Plans, which are not funded, consist of Gratuity, Leave Encashment
including Sick Leave and other benets.
The liability for Gratuity and Leave Encashment is actuarially determined under the Projected
Unit Credit Method at the end of the nancial year.
6. IMPAIRMENT OF ASSETS
At each Balance Sheet date, the carrying amount of assets is tested for impairment in terms of AS-28
so as to determine:
a) the provision for impairment loss, if any; and
b) the reversal of impairment loss recognized in previous periods, if any,
Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable
amount.
7. TAXES ON INCOME
Provision for current tax, if any, is made in accordance with the provisions of Income Tax Act, 1961.
Deferred tax is recognised on timing differences between book and taxable prot using the tax rates
and laws that have been enacted or substantively enacted as on the Balance Sheet date. The
Deferred tax assets are recognised and carried forward to the extent that there is a virtual certainty
that the assets will be realised in the future.
8. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) Provisions involving a substantial degree of estimation in measurement are recognized when

there is a present obligation as a result of past events and it is probable that there will be an
outow of resources.
b) Contingent liabilities exceeding Rs.1,00,000/- in each case are disclosed in respect of possible
obligations that may arise from past events but their existence is conrmed by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the
Company.
c) Contingent Assets are neither recognized nor disclosed in the nancial statements.
9. PREPAID EXPENSES/LIABILITY FOR EXPENSES
Pre-paid expenses / Liabilities for expenses recognized – Rs10,000/- and above in each case.
10. INVESTMENTS
Current investments are carried at lower of cost and quoted/fair value, computed category wise.
Long Term Investments are stated at cost. Provision for diminution in the value of long-term
investments is made only if such a decline is other than temporary.
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AIESL
NOTE "2" : PROPERTY PLANT AND EQUIPMENT
The Corporation has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its
Property, Plant and Equipment as recognised in the nancial statements as at the date of transition to Ind AS, measured as
per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2016) as per the following
details:
Net Block as
Particulars Gross Block Accumulated per Previous Ind AS Gross Block as
(At Cost) Depreciation GAAP/Deemed Adjustments per Ind AS
Cost as per
Ind AS
a) Land - - - - -
b) Buildings - - - - -
c) Plant & Equipment
Workshop Equipment,
Instruments, 3,001,930,126 1,866,420,500 1,135,509,626 - 1,135,509,626
Machinery and Plants 177,933,775 91,821,717 86,112,058 - 86,112,058
d) Furniture & Fixtures - - - - -
e) Electrical Fittings - - - - -
f) Computer System - - - - -
g) Vehicles - - - - -
h) Ofce Equipment - - - - -
TOTAL FOR TANGIBLE
ASSETS 3,179,863,901 1,958,242,217 1,221,621,684 - 1,221,621,684
a) Goodwill - - - - -
b) Brands/trademarks - - - - -
c) Computer Software - - - - -
d) Licenses & Franchise 2,713,828,069 - 2,713,828,069 - 2,713,828,069
TOTAL FOR INTANGIBLE
ASSETS 2,713,828,069 - 2,713,828,069 - 2,713,828,069
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AIESL
(Amount in Rupees)
Sr. Particulars GROSS BLOCK DEPRECIATION NET BLOCK
No.
As at Additions Other Deductions / As at As at For Deductions/ Total Upto As at As at
April 01, 2016 Adjustments Adjustments March 31, 2017 April 01, 2016 the year Adjustments March 31, 2017 March 31, 2017 April 01, 2016
TANGIBLE ASSETS :
a) Land - - - - - - - - - - -
b) Buildings - - - - - - - - - - -

Workshop Equipment, Instruments, 1,135,509,626 143,761,371 - 13,005,088 1,292,276,085 - 392,733,304 17,878,976 410,612,280 881,663,805 1,135,509,626
Machinery and Plants 86,112,058 - - - 86,112,058 - 10,070,456 10,070,456 76,041,602 86,112,058
d) Furniture & Fixtures - 6,996,978 - - 6,996,978 - 664,713 - 664,713 6,332,265 -
e) Electrical Fittings - 5,250 - - 5,250 - 499 - 499 4,751 -
f) Computer System - 2,059,865 - - 2,059,865 - 652,359 - 652,359 1,407,506 -
g) Vehicles - 5,754,936 - - 5,754,936 - 186,632 - 186,632 5,568,304 -
h) Office Equipment - 5,804,011 - - 5,804,011 - 1,104,093 18,475 1,122,568 4,681,443 -
TOTAL FOR TANGIBLE ASSETS 1,221,621,684 164,382,411 - 13,005,088 1,399,009,183 - 405,412,056 17,897,451 423,309,507 975,699,676 1,221,621,684
INTANGIBLE ASSETS :
a) Goodwill - - - - - - - - - - -
b) Brands/trademarks - - - - - - - - - - -
c) Computer Software - - - - - - - - - - -
d) Licenses & Franchise 2,713,828,069 - - - 2,713,828,069 - - - - 2,713,828,069 2,713,828,069
TOTAL FOR INTANGIBLE ASSETS 2,713,828,069 - - - 2,713,828,069 - - - - 2,713,828,069 2,713,828,069
TOTAL 3,935,449,752 164,382,411 - 13,005,088 4,112,837,251 - 405,412,056 17,897,451 423,309,507 3,689,527,745 3,935,449,752
PREVIOUS YEAR
Note :
1. As per MOU entered between Air India Limited (AIL) & Air India Engineering Services Limited (AIESL) dated 5th April,
2013 Air India Limited shall transfer all its movable assets such as machinery, equipment etc. pertaining to MRO unit of
AIL to AIESL at a written down value of such moveable assets as on 01-04-2014. It was claried by MOU that written
down value of movable assets transferred from AIL to AIESL shall be the cost of these assets transferred and shall form
part of initial equity contribution.
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AIESL
Sr. Particulars GROSS BLOCK DEPRECIATION NET BLOCK

Other
No. As at Additions Deductions / As at As at For Deductions/ Total Upto As at As at
Adjustments
April 01, 2017 Adjustments March 31, 2018 April 01, 2017 the year Adjustments March 31, 2018 March 31, 2018 April 01, 2017
TANGIBLE ASSETS :
a) Land - - - - - - - - - - -
b) Buildings - - - - - - - - - - -

Workshop Equipment, Instruments, 1,292,276,085 110,557,787 - 635,917 1,402,197,955 410,612,280 218,851,683 602,776 628,861,187 773,336,768 881,663,805
-
Machinery and Plants 86,112,058 - - - 86,112,058 10,070,456 9,861,030 19,931,486 66,180,571 76,041,602
-
d) Furniture & Fixtures 6,996,978 412,428 - - 7,409,406 664,713 703,894 - 1,368,607 6,040,799 6,332,265
-
e) Electrical Fittings 5,250 190,900 - - 196,150 499 36,770 - 37,269 158,881 4,751
-
f) Computer System 2,059,865 169,300 - - 2,229,165 652,359 705,977 - 1,358,336 870,829 1,407,506
-
g) Vehicles 5,754,936 4,501,855 - - 10,256,791 186,632 1,153,004 - 1,339,636 8,917,156 5,568,304
-
h) Office Equipment 5,804,011 1,009,360 - - 6,813,371 1,122,568 1,376,621 2,499,189 4,314,182 4,681,443
-
TOTAL FOR TANGIBLE ASSETS 1,399,009,183 116,841,631 - 635,917 1,516,486,730 423,309,507 232,688,979 602,776 655,395,710 859,819,186 975,699,676
INTANGIBLE ASSETS : 0
a) Goodwill - - - - - - - - - - -
b) Brands/trademarks - - - - - - - - - - -
c) Computer Software - - - - - - - - - - -
d) Licenses & Franchise 2,713,828,069 - - - 2,713,828,069 - - - - 2,713,828,069 2,713,828,069
TOTAL FOR INTANGIBLE ASSETS 2,713,828,069 - - - 2,713,828,069 - - - - 2,713,828,069 2,713,828,069
TOTAL 4,112,837,251 116,841,631 - 635,917 4,230,314,799 423,309,507 232,688,979 602,776 655,395,710 3,573,647,255 3,689,527,745
PREVIOUS YEAR 3,935,449,752 164,382,411 - 13,005,088 4,112,837,251 - 405,412,056 17,897,451 423,309,507 3,689,527,745 3,935,449,752
Note :
1. As per MOU entered between Air India Limited (AIL) & Air India Engineering Services Limited (AIESL) dated 5th April,
2013 Air India Limited shall transfer all its movable assets such as machinery, equipment etc. pertaining to MRO unit of
AIL to AIESL at a written down value of such moveable assets as on 01-04-2014. It was claried by MOU that written
down value of movable assets transferred from AIL to AIESL shall be the cost of these assets transferred and shall form
part of initial equity contribution.
GROSS BLOCK
As at 01.04.16 As at 31.03.17 As at 31.03.18
Workshop Equipment, Instruments, 3,001,930,126 3,158,696,585 3,268,618,455.27
Machinery and Plants 177,933,775 177,933,775 177,933,775
3,179,863,901 3,336,630,360 3,446,552,230
156,766,459 109,921,870
ACCUMULATED DEPRECIATION
As at 01.04.16 As at 31.03.17 As at 31.03.18
Workshop Equipment, Instruments, (1,866,420,500) (2,277,032,780) (2,495,281,687)
Machinery and Plants (91,821,717) (101,892,174) (111,753,204)
(1,958,242,217) (2,378,924,954) (2,607,034,891)
(410,612,280) (218,248,907)
(10,070,457) (9,861,030)
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AIESL
NOTE “3” : OTHER NON CURRENT FINANCIAL ASSET (Amount in Rupees)
Particulars As at 31 Mar-18 As at 31 Mar 2017 As at 31 Mar-16
Deposits - Others (More than 12 Months) 61,524 61,524 56,523
TOTAL 61,524 61,524 56,523
NOTE “4” : OTHER NON CURRENT ASSETS (Amount in Rupees)
Advances Recoverable in Cash or Kind 89,478,568 21,237,021 17,938,659

Capital Advances 2,071,086 3,101,959 -
Security deposit with DGCA 200,000 200,000 200,000
Other 65,185,930 63,142,263 (2,310,916)
TOTAL 156,935,584 87,681,244 15,827,742
NOTE “5” : INVENTORY (Amount in Rupees)
Stores and Spare Parts 4,413,947 - -

Loose Tools 403,792,955 - -
Fuel, Gas, Coal, Oil and lubricants 1,006,496 - -
Non-Aircraft Inventory 6,380,006 - -
TOTAL 415,593,403 - -
NOTE “6” : TRADE RECEIVABLES (Amount in Rupees)
Secured, Considered Good

Unsecured, Considered Good 7,725,743,314 1,990,274,156 755,121,602
Doubtful
TOTAL 7,725,743,314 1,990,274,156 755,121,602
NOTE “7” : CASH AND BANK BALANCES (Amount in Rupees)
Balances with Banks

a) In Current Accounts 14,917,118 117,674,205 440,035,080
b) In Deposit Accounts (Maturity less than12 months) - - -
Cheques, Drafts on Hand - - 500,000
TOTAL 14,917,118 117,674,205 440,535,080
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AIESL
NOTE “8” : BANK BALANCES OTHER THAN CASH EQUIVALENTS (Amount in Rupees)
Balance with Banks

In Margin Money Deposits (3 < Maturity < 12) 16,323,900 - -
TOTAL 16,323,900 - -
NOTE “9” : CURRENT LOANS (Amount in Rupees)
Advances to Employee
Secured - Considered Good 912
Unsecured-Considered Good 3,918,658 4,599,912
Security Deposits 814,708
TOTAL 814,708 3,918,658 4,600,824
NOTE “10” : CURRENT TAX ASSETS (Amount in Rupees)
Total Advance payment for Income Tax and TDS 379,274,616 138,742,834 10,883,566
Balances with Statutory / Govt Authorities 31,994,239 - -
TOTAL 411,268,855 138,742,834 10,883,566
NOTE “11” : OTHER CURRENT ASSET (Amount in Rupees)
Prepaid Expenses 237,476 - 269,750

Advances Recoverable in Cash or Kind - - -
Imprest cash oat with staff 8,000 - -
Interest accrued on investment 99,358
TOTAL 344,834 - 269,750
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AIESL
NOTE “12” : SHARE CAPITAL (Amount in Rupees)
a) AUTHORISED
1000,000,000 Equity Shares
(Previous Year : 1,000,000,000) of Rs.10 each 10,000,000,000 10,000,000,000 10,000,000.000
10,000,000,000 10,000,000,000 10,000,000.000
b) ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARES
1666,66,500 Equity Shares of Rs. 10 each 1,666,665,000 1,666,665,000 1,666,665,000
1,666,665,000 1,666,665,000 1,666,665,000
c) Reconciliation of number of shares :

(Number of Shares) (Share Value Rupees)
Particulars As at March Value As at March Value As at April Value
31, 2018 31, 2017 01, 2016
Equity Shares at the beginning

of the year 166,666,500 1,666,665,000 166,666,500 1,666,665,000 50,000 500,000
Add :Equity Shares Allotted

during the year - - - - 166,616,500 1,666,165,000
Equity Shares at the end of the year 166,666,500 1,666,665,000 166,666,500 1,666,665,000 166,666,500 1,666,665,000
d) Rights Preferences and restriction attached to equity shares
The company has single class of shares i.e. Equity Shares having a par value of Rs. 10 per share. Each holder of equity
shares is entitled to one vote per share.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the
company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
e) Details of Shares held by the Holding Company, Subsidiary & Associates

(Number of Shares) (% of Share Holding)
31, 2018 31, 2017 01, 2016
Shares held by Holding Company

Air India Limited 166,666,500 1,666,665,000 166,666,500 100% 100% 100%
f) Details of Shareholders holding more than 5%

(Number of Shares) (% of Share Holding)
31, 2018 31, 2017 01, 2016
Air India Limited 166,666,500 1,666,665,000 166,666,500 100% 100% 100%
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AIESL
g) Details of Shares Issued & Allotted as fully paid up pursuant to contract without payment being received in cash
(Number of Shares) (Value)
Particulars As at March Value As at March Value
31, 2018 31, 2017
16,66,16,500 Equity Shares of Rs. 10

each were allotted towards the WDV of
engineering assets transferred by the
Holding Company Air India Limited as
on 1st April 2014 towards capital infusion
in terms of clause 5 (a) MoU entered
between Air India Limited & Air India
Engineering Services Limited dated
05th April, 2013)
NOTE “13” : OTHER EQUITY (Amount in Rupees)
Surplus / (Deficit) as per Statement of Profit & Loss

Opening Balance (15,004,338,073) (9,825,415,914) (2,426,709,080)
Prot / (Loss) for the year (4,444,363,690) (5,178,922,159) (5,586,209,333)
Add/Less Prior - - (1,812,497,501)
Closing Balance (19,448,701,763) (15,004,338,073) (9,825,415,914)
TOTAL (19,448,701,763) (15,004,338,073) (9,825,415,914)
NOTE “14” : NON CURRENT PROVISIONS (Amount in Rupees)
Provision for Employee Benefits

a) Gratuity 2,759,138,255 2,507,727,854 2,483,930,080
b) Leave Encashment 1,864,589,897 1,984,890,813 1,805,904,643
c) Other 1,682,666,667 1,833,555,318 1,762,791,846
TOTAL 6,306,394,819 6,326,173,985 6,052,626,569
NOTE “15” : TRADE PAYABLES (Amount in Rupees)
Due to Micro and Small Enterprises - - -

Others Payables 1,992,407,827 986,019,430 139,334,836
(Refer Note No. 33)
TOTAL 1,992,407,827 986,019,430 139,334,836
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AIESL
NOTE “16” : OTHER CURRENT FINANCIAL LIABILITY (Amount in Rupees)
Security Deposit 8,529,232 20,460 -

Earnest Money Deposit 4,092,300 4,200,000 3,300,000
Payable to Employees 449,327,755 389,305,676 407,955,257
Holding Company - Air India Limited- Current Account 9,174,199,759 1,054,261,626 786,778,859
Inter company Payable/Receivable 11,257,503,529 5,660,023,530 1,425,265,897
Others 25,753,510 8,924,488 17,167,019
TOTAL 20,919,406,085 7,116,735,781 2,640,467,033
NOTE “17” : CURRENT PROVISIONS (Amount in Rupees)
Provision for Employee Benefits

a) Gratuity 493,409,930 458,799,175 422,630,996
b) Leave Encashment 390,954,950 465,378,420 506,747,984
c) Other Benets 11,041,226 4,690,205 2,114,497
TOTAL 895,406,106 928,867,800 931,493,477
NOTE “18” : OTHER CURRENT LIABILITIES (Amount in Rupees)
Other Payables (Net) (271,913,137) 3,780,785,823 3,223,318,892

Advance from Customers 81,170,581 23,218,195 2,184,518
Forward Sales (129,031) - (2,692,806)
Others 174,944,009 203,752,426 334,763,235
TOTAL (15,927,578) 4,007,756,444 3,557,573,839
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AIESL
NOTE “19” : REVENUE FROM OPERATION (Amount in Rupees)
Particulars 2017-18 2016-17
1 Sales of Services
Technical Handling Services Revenue 52,281,805 575,914,432
Other Servicing Revenue 7,709,012,927 6,762,925,436
7,761,294,732 7,338,839,868
2 Other Operating Revenue
Engineering Training Revenue 34,569,673 33,772,048
34,569,673 33,772,048
3 Incidental Revenue 36,755,056 31,880,552
36,755,056 31,880,552
Total revenue from operation 7,832,619,460 7,404,492,467
NOTE “20” : OTHER INCOME (Amount in Rupees)
1 Interest Income 111,707,419 338,663
TOTAL 111,707,419 338,663
NOTE “21” : EMPLOYEE BENEFIT EXPENSES (Amount in Rupees)
1 Salaries and Wages 7,617,678,186.07 8,566,808,433

2 Contribution to Provident and Other Funds 343,159,042 343,537,018
3 Staff Welfare Expenses 711,919,278 680,510,645
4 Provision for Gratuity 821,800,532 299,730,810
5 Provision for Leave Encashment 105,513,235 429,577,508
TOTAL 9,600,070,272 10,320,164,415
NOTE “22” : FINANCE COST (Amount in Rupees)
1 Interest Expenses 1,098,591,060 181,836,002
TOTAL 1,098,591,060 181,836,002
NOTE “23” : DEPRECIATION AND AMORITIZATION EXPENSE (Amount in Rupees)
1 Depreciation of Tangible Assets 232,688,979 411,003,133
TOTAL 232,688,979 411,003,133
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AIESL
NOTE “24” : OTHER EXPENSES (Amount in Rupees)
1 Insurance Expenses 246,981 2,536

2 Material Consumed-Aircraft 23,910,091 13,301,841
3 Outside Repairs-Aircraft 54,036,000 1,839,643
4 Handling Charges 269,133,049 147,638,103
5 Communication Charges 9,485,500 5,292,965
6 Travelling Expenses 351,040,954 320,559,632
7 Rent 258,599,324 239,018,420
8 Rates and Taxes 77,152,007 6,264,991
9 Conveyance Expenses 1,043,730 1,836,631
10 Repair Maintenance:
i) Buildings 35,582,213 73,481,654
ii) Others 83,872,144 87,177,454
11 Hire of Transport 57,574,827 53,786,369
12 Hire of Manpower 215,924,293 131,188,396
13 Fees to DGCA 2,107,127 8,338,399
14 Electricity & Heating Charges 379,972,036 401,155,962
15 Consumption of Gas & Fuel 19,567,560 12,803,787
16 Water Charges 7,946,140 13,315,343
17 Publicity & Sales Promotion 81,496 33,480
18 Printing and Stationery 1,439,379 2,919,675
19 Professional & Legal Charges 8,869,740 7,074,444
20 Auditors' Remuneration and Expenses
i) Audit Fees 400,000 200,000
ii) Other Expenses 20,000 50,000
21 Bank Charges 76,561 828,132
22 Other Expenses 109,033,072 72,490,942
23 Exchange Variation 2,006,189 (191,032)
24 Loss on Sale of Assets/Scrap 33,141.31 241,972
25 Passenger Amenities 386,704.15 -
TOTAL 1,969,540,258 1,600,649,739
NOTE “25” : EARNING PER SHARE
Disclosure of Earnings Per Share (EPS) computation as per Indian Accounting Standard -33 of the Instituteof Chartered
Accountants of India:
Prot available for appropriation as per Prot & Loss Account (4,956,563,690) (5,108,822,159)
Weighted average No. of equity shares outstanding during the year 166,666,500 166,666,500
Basic and Diluted EPS (29.74) (30.65)
Face value per equity share 10 10
73
AIESL
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2018
26. Transitions to Ind AS:
These are the Company's first financial statements prepared in accordance with Ind AS:
The Company has adopted all the Ind AS and adoption was carried out in accordance with Ind AS 101
First Time Adoption Indian Accounting Standard. The transition was carried out from Indian GAAP as
prescribed under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Account)
Rules, 2014 which was the previous GAAP.
The Signicant Accounting Policies set out in Note No. – 1 have been applied in preparing the nancial
statement for the year ended 31st March 2018, 31st March 2017 and the opening Ind AS balance sheet on
the date of transition i.e. 1st April 2016.
In preparing opening Ind AS balance sheet as on 1st April 2016 and in presenting the comparative
information for the year ended 31st March 2017, the Company have adjusted amounts reported previously
in the nancial statements prepared in accordance with the Indian GAAP. This note explan how the
transition from Indian GAAP to Ind AS has affected company's nancial position, nancial performance
and cash ows.
a. Exemptions and Exception availed:
Ind AS 101 allows rst-time adopters certain optional exemptions and mandatory exception from the
retrospective application of certain requirements under Ind AS. The Company has applied the
following exemptions:
(i) Ind AS optional exemptions:
Property, Plant and Equipment's, Investment Property and Intangible Assets as Deemed
Cost
The company has opted to avail the exemption made available under Ind AS 101 to continue
the carrying value of all property, plant and equipment and intangible assets as recognized in
the nancial statements as at the date of transition to Ind AS, measured as per the previous
Indian GAAP and use that as deemed cost as at the date of transition i.e. 1st April 2016.
(ii) Ind AS mandatory exceptions:
1. Estimates:
The estimates at April 01, 2016 and at March 31, 2017 are consistent with those made for
the same dates in accordance with Indian GAAP apart from the following item where
application of Indian GAAP did not require estimation:
The Financial assets as reected in the Balance Sheet are fully protected and adequately
secured. Hence, impairment issue does not arise.
The estimates used by the Company to present these amounts in accordance with Ind AS
reect conditions at April 01, 2016, the date of transition to Ind AS and as of March 31,
2017.
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The key estimates considered in preparation of the nancial statements that were not
required under the Previous Indian GAAP are listed below:
- Fair valuation of nancial instruments carried at FVTPL.
- Determination of the discounted value for nancial instruments carried at amortized

cost.
2. De-recognition of financial assets and financial liabilities
The company has elected to use the exemption for de-recognition of nancial assets and
liabilities prospectively i.e. after 1 April 2016.
3. Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classication and measurement of nancial

assets on the basis of the facts and circumstances that exists at the date of transition to
Ind AS.
4. Reconciliations between Previous Indian GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash
ows for previous periods. The following tables and notes represent the reconciliations
from Previous Indian GAAP to Ind-AS:
(i) Reconciliation of Balance Sheet as on 1 April, 2016 :
Particulars Note Amount as Effects of Amount as

Reference per IGAAP* transition per Ind AS
to Ind AS
ASSETS :
(1) Non-current Assets
Property, Plant & Equipment 1,221,621,684 - 1,221,621,684
Other Intangible Asset 2,713,828,069 - 2,713,828,069
Financial Assets:
a) Loans 4,600,824 - 4,600,824
b) Others 56,523 - 56,523
Income Tax Assets (net)
Deferred Tax Assets (net)
Other Non-Current Assets 15,827,742 - 15,827,742
Total Non-Current Assets 3,951,334,017 - 3,951,334,017
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to Ind AS
(2) Current Assets
Inventories
Financial Assets:
a) Trade Receivables 5A 779,706,883 (24,585,280) 755,121,602
b) Cash and Cash equivalents 440,535,080 - 440,535,080
c) Bank balances other than (b) above
d) Loans 4,600,824 - 4,600,824
e) Others
Current Tax Assets 10,883,566 - 10,883,566
Other Current Assets 269,750 - 269,750
Total Current Assets 1,235,996,102 (24,585,280) 1,211,410,822
TOTAL ASSETS 5,187,330,120 (24,585,280) 5,162,744,840
EQUITY AND LIABILITIES
Equity
a) Equity Share Capital 1,666,665,000 - 1,666,665,000
b) Other Equity 5A, 5D (8,012,918,413) (1,812,497,501) (9,825,415,914)
Total Equity (6,346,253,413) (1,812,497,501) (8,158,750,914)
Liabilities
Non-current Liabilities
b) Provisions 5A 4,347,167,882 1,705,458,687 6,052,626,569
Total Non-Current Liabilities 4,347,167,882 1,705,458,687 6,052,626,569
(2) Current Liabilities
i) Trade Payables 5A 56,881,302 82,453,534 139,334,836
ii) Other 2,640,467,033 - 2,640,467,033
b) Provisions 931,493,477 - 931,493,477
c) Other Current Liabilities 3,557,573,839 - 3,557,573,839
Total Current Liabilities 7,186,415,650 82,453,534 7,268,869,185
Total Equity and Liabilities 5,187,330,120 (24,585,280) 5,162,744,839
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Previous Indian GAAP gures have been reclassied to conform to Ind AS presentation requirements for
the purpose of this note
(ii) Reconciliation of Equity as on 31 March, 2017 :

to Ind AS
ASSETS :
(1) Non-current Assets
Property, Plant & Equipment 975,699,676 - 975,699,676
Other Intangible Asset 2,713,828,069 - 2,713,828,069
Financial Assets:
a) Loans
b) Others 61,524 - 61,524
Income Tax Assets (net)
Deferred Tax Assets (net)
Other Non-Current Assets 87,681,244 - 87,681,244
Total Non-Current Assets 3,777,270,512 - 3,777,270,512
(2) Current Assets
Inventories
Financial Assets:
a) Trade Receivables 5A 2,019,866,471 (29,592,315) 1,990,274,156
b) Cash and Cash equivalents 117,674,205 - 117,674,205
c) Bank balances other than (b) above
d) Loans 3,918,658 - 3,918,658
e) Others
Current Tax Assets 138,742,834 - 138,742,834
Other Current Assets -
Total Current Assets 2,280,202,168 (29,592,315) 2,250,609,853
TOTAL ASSETS 6,057,472,681 (29,592,315) 6,027,880,366
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to Ind AS
EQUITY AND LIABILITIES
Equity
a) Equity Share Capital 1,666,665,000 - 1,666,665,000
b) Other Equity 5A, 5D (13,064,519,304) (1,868,675,802) (14,933,195,107)
Total Equity (11,397,854,304) (1,868,675,802) (13,266,530,107)
Liabilities
Non-current Liabilities
b) Provisions 5A 4,492,618,667 1,833,555,318 6,326,173,985
Total Non-Current Liabilities 4,492,618,667 1,833,555,318 6,326,173,985
(2) Current Liabilities
i) Trade Payables 5A 983,028,335 2,991,095 986,019,430
ii) Other 5A 7,043,055,740 2,537,075 7,045,592,815
b) Provisions 928,867,800 - 928,867,800
c) Other Current Liabilities 4,007,756,444 - 4,007,756,444
Total Current Liabilities 12,962,708,319 5,528,169 12,968,236,489
Total Equity and Liabilities 6,057,472,681 (29,592,315) 6,027,880,366
*Previous Indian GAAP gures have been reclassied to conform to Ind AS presentation requirements
for the purpose of this note.
(iii) Reconciliation of Total Comprehensive Income for the year ended 31 March, 2017

to Ind AS
Revenue
From Operations 5A 7,404,502,467 (10,000) 7,404,492,467
Other Income 338,663 - 338,663
Total Revenue (1+2) 7,404,841,130 (10,000) 7,404,831,130
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to Ind AS
Expenses
Employee benet expense 5A 10,190,601,641 58,419,808 10,249,021,449
Finance Costs 181,836,002 - 181,836,002
Depreciation and amortization expense 411,003,133 - 411,003,133
Other expenses 5A 1,595,554,746 5,094,992 1,600,649,739
Prior Period Expenses 5A 77,446,499 (77,446,499) -
Total Expenses 12,456,442,022 (13,931,699) 12,442,510,323
(Loss) before exceptional items and tax (5,051,600,891) 13,921,699 (5,037,679,193)
Exceptional Items -
Prot before tax (VII - VIII) (5,051,600,891) 13,921,699 (5,037,679,193)
Tax expense:-
(Loss) for the year after tax (VII-VIII) (5,051,600,891) 13,921,699 (5,037,679,193)
Other Comperhensive Income 5C
Actuarial Gain/(Loss) on Dened benet obligation 5B - (70,100,000) (70,100,000)
Total Comprehensive Income (5,051,600,891) (56,178,301) (5,107,779,193)
*Previous Indian GAAP gures have been reclassied to conform to Ind AS presentation requirements
for the purpose of this note
(iv) Reconciliation of Total equity as at 31 March 2017 and 1 April 2016
Particulars As at 31st March, 2017 As at 1st April, 2016
Equity Under Previous Indian GAAP (11,397,854,304.16) (6,346,253,412.67)
Prior Period Expenses (Net) (1,868,675,802) (1,812,497,501.16)
Actuarial Valuation of Dened benet plan

reclassied in Other Comprehensive Income 70,100,000.00 -
Other Comprehensive Income (70,100,000.00) -
Equity Under Ind As (13,266,530,106.64) (8,158,750,913.83)
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(v) Reconciliation of Total Comprehensive Income for the year ended 31st March 2017
Particulars 2016-17
Net Prot for the year as per Previous GAAP (5,051,600,891)
Prior Period Expenses (Net) (133,624,801)
Prior Period Expenses for 2016-17 restated

at Opening balance at 1st April, 2016 77,446,499
Actuarial Valuation of Dened benet plan

reclassied in Other Comprehensive Income 70,100,000
Net Profit for the year as per Ind AS (5,037,679,193)
Other Comprehensive Income (70,100,000)
Total Comprehensive Income as per Ind AS (5,107,779,193)
(vi) On account of transition to Ind AS, there are no material adjustments to the Statement of Cash
Flow for the year ended 31 March 2017.
5. Notes to Reconciliation:
A. Prior Period
Under Ind AS – 8, Accounting Policy, Change in Accounting Estimates and Errors,

shall be corrected by retrospective restatement. A prior period expense/income of
Rs. 77.45 million was recognized in F.Y. 2016-17 has been restated as at 1 April,
2016, this restatement result into decrease in retained earnings with corresponding
increase/decrease in asset / liability by Rs. 77.45 million as at 1st April, 2016.
Prior period income / expenses of Rs. 1939.81 million for the year ended 31st March
2018 has been reversed during FY 2017-18, out of which expense of Rs. 1806.19
million Adjusted in retained earnings in the opening balance sheet and income of Rs.
133.62 million has been recognized in FY 2016-17 with corresponding increase /
decrease in Assets / Liabilities.
B. Re-measurement of post employments benefits plans:
Under Ind AS, re-measurements i.e. actuarial gains and losses on the net dened
benet liability are recognized in Other Comprehensive Income instead of
Statement of Prot and Loss. Under Previous Indian GAAP these were forming part
of the Statement of Prot and Loss for the year ended 31st March, 2017. As a result of
this change, the employee benet expense to the extent of actuarial loss amounting
to Rs 70.1 Million for the year ended 31 March 2017 has been reduced and the same
has been reclassied to Other Comprehensive Income.
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C. Other comprehensive income
Under Previous Indian GAAP, there was no requirement to disclose any item of
prot or loss in Other Comprehensive income. However, Ind AS requires certain
items of prot or loss to be reclassied to other comprehensive income. Consequent
to this, the Company has reclassied re-measurement of dened benet plans from
Statement of Prot and Loss to other comprehensive income.
D. Retained earnings
Retained earnings as on 1st April 2016 has been adjusted consequent to the above
Ind AS transition adjustments.
27. Contingent Liabilities not provided for: Claims against the Company not acknowledged as debts
(excluding interest and penalty wherever likely to be applicable) and being contested to the extent
ascertainable and quantiable.
Capital Commitments are in respect of estimated amount of contracts remaining to be executed on

Capital Account: Nil
28. Confirmations/Reconciliations
The company has obtained the balance conrmation of balances receivables and payables from the
holding company and all the subsidiary companies and sister concern of the holding company, which
consist of 97% of receivables and 98% of total payables of the company. However, the company have not
sought the conrmation of other balances receivables and payables as majority of the same was owed by
for AIL and sister concern.
29. Internal Control
The Company is in the process of strengthening the internal control process in the company so as to
ensure the coverage of all the areas as envisaged and ensure effective internal controls at stations,
regional ofces, user departments.
30. Revenue Related Matters:
Third party revenue includes the revenue invoiced and collected by Air India in respect of the Customers
of the company with whom the settlement is through IATA Cleaning House, which constitutes 4.76% of
total revenue. The amount so billed by Holding Company has been transferred to the Company during the
year. During FY 2017-18. the Company has obtained its own IATA Number and have successfully
processed sample transaction for billing through IATA Cleaning House and during the FY 2018-19, the
company intends to start the billing on customers through IATA Cleaning House on its own.
31. Segment Reporting :
The company is engaged in MRO (Maintenance, Repair & Overhaul of aircraft, engines & components)
related business, which is its primary business segment.
32. RETIREMENT BENEFITS
(i) Contributions to Dened Contribution Schemes such as Provident Fund are charged to the Prot &
Loss Account as follows:
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Provident Fund Rs. 33,86,59,150.00 (Previous Year Rs.34,31,28,456.00)
(ii) The Company also provides retirement benets in the form of Gratuity and Leave Encashment on
the basis of valuation, as at the Balance Sheet Date, carried out by independent Actuaries, as per Ind
AS19 issued by the Institute of Chartered Accountants of India.
(a) Privilege Leave Encashment is payable to all eligible employees at the time of retirement.
Leave Encashment liability for the current nancial year is Rs.225,55,44,847.00 (Previous
Year Rs. 245,02,69,233.00).
(b) Dened Benet Plan-Gratuity (Unfunded) :
The Company has a dened benet gratuity plan in India (unfunded). The company's dened
benet gratuity plan is a nal salary plan for employees, which requires contributions to be
made to a separately administered fund. Gratuity is paid from company as and when it
becomes due and is paid as per company scheme for Gratuity. During the year, there were no
plan amendments, curtailments and settlements.
Movement in net Dened Benet (Asset) / Liability.
Gratuity
a) Reconciliation of balances of Dened Benet Obligation

(Amount in Millions)
Particulars Gratuity – Unfunded
2017-18 2016-17
Dened Obligation at the beginning of the year 2951.1 2906.6
Interest Cost 209.2 226.4
Current Service Cost 53.9 62.6
Past Service Cost 597.0
Liability transferred out/Disinvestments
Benets Paid directly by the employer (352.9) (342.4)
Benet paid from the fund
Actuarial (Gain) / Losses on obligation
Demographic Assumptions
Changes in nancial Assumptions (85.1) 91.0
Experience Adjustments (120.7) 6.9
Defined Benefit Obligation at the end of the year 3252.5 2951.1
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b) Amount recognized in Balance Sheet:

2017-18 2016-17
Liability at the end of the year (3252.5) (2951.1)
Funded Status (Surplus/Decit) (3252.5) (2951.1)
Amount Recognized in the Balance Sheet (3252.5) (2951.1)
a) Amount Recognized in Statement of Prot & Loss

2017-18 2016-17
Past Service Cost 597.0
Interest Income
Expenses for the year 860.1 289.0
b) Amount Recognized in Other Comprehensive Income

2017-18 2016-17
Actuarial (Gains)/Losses on Obligation For the Period (205.8) 97.9
Return on Plan Assets
Total (205.8) 97.9
c) Major Actuarial Assumptions
2017-18 2016-17
Discount Rate (%) 7.71% 7.09%
Salary Escalation / Ination (%) 5.50% 5.50%
Expected Return on Plan Assets (%) 2.00% 2.00%
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d) Sensitivity Analysis
Sensitivity Analysis for signicant actuarial assumptions, showing how the dened benet obligation
would be affected, considering increase / decrease of 1% as at 31 March 2018 and 31 March 2017 is
given below:
Particulars Gratuity
2017-18 2016-17
+1 % change in rate of Discounting (128.0) (128.3)
-1 % change in rate of Discounting 139.6 140.6
+1 % change in rate of Salary Increase 104.8 141.4
-1 % change in rate of Salary Increase (103.4) (131.3)
+1 % change in rate of Employee Turnover 20.1 11.1
-1 % change in rate of Employee Turnover (21.3) (11.8)
Medical
a) Reconciliation of balances of Dened Benet Obligation

Particulars Medical
2017-18 2016-17
Dened Obligation at the beginning of the year 1833.6 1705.5
Liability transferred out/Disinvestments
Benets Paid directly by the employer (13.3) (11.8)
Benet paid from the fund
Actuarial (Gain) / Losses on obligation
Demographic Assumptions
Changes in nancial Assumptions (70.8) 142.6
Experience Adjustments (235.6) (170.4)
Defined Benefit Obligation at the end of the year 1682.7 1833.6
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b) Amount recognized in Balance Sheet:

Particulars Medical - Unfunded
2017-18 2016-17
Liability at the end of the year (1682.7) (1833.6)
Funded status (Surplus/Decit) (1682.7) (1833.6)
Amount Recognized in the Balance Sheet (1682.7) (1833.6)
c) Amount Recognized in Statement of Prot & Loss

Particulars Medical
2017-18 2016-17
Past Service Cost - -
Interest Income - -
Expenses for the year 168.8 167.7
d) Amount Recognized in Other Comprehensive Income

Particulars Medical Unfunded
2017-18 2016-17
Actuarial (Gains)/Losses on Obligation For the Period (306.4) (27.8)
Return on Plan Assets
Total (306.4) (27.8)
e) Major Actuarial Assumptions
Particulars Medical
2017-18 2016-17
Discount Rate (%) 7.45% 8.06%
Medical Cost Ination 4.00% 4.00%
Rate of Employee Turnover 2.00% 2.00%
Expected Return on Plan Assets (%) - -
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f) Sensitivity Analysis
Sensitivity Analysis for signicant actuarial assumptions, showing how the dened benet obligation
would be affected, considering increase / decrease of 1% as at 31 March 2018 and 31 March 2017 is
given below:
Particulars Medical
2017-18 2016-17
+1 % change in rate of Discounting (199.5) (224.5)
-1 % change in rate of Discounting 246.7 279.2
+1 % change in rate of Medical cost Ination 254.0 286.5
-1 % change in rate of Medical Cost Ination (207.8) (233.2)
33. The Micro, Small and Medium Enterprises Development Act
The data related to Micro Small and Medium Enterprises is not available and is in process of compilation/
updating masters in SAP. However payments (due, if any) to such undertakings covered under the Micro,
Small and Medium Enterprises Development Act (to the extent identied) have been made within the
prescribed time limit/date agreed upon with the supplier and hence no interest is payable for delayed
payments. In other cases, necessary compliance/disclosure will be ensured in due course.
34. RELATED PARTY TRANSACTIONS
Disclosure of the names and designations of the Related Parties as required by Indian Accounting
Standard (Ind AS-24) during the year 2017-18.
A. Related party:
i. In terms of Ind AS 24, following are related parties which are Government Related entities i.e.
Signicantly controlled and inuenced entities (Government of India) :
Sr. No. Name of Company Relationship
1 Air India Limited Holding
2 Hotel Corporation of India Limited (HCI) Fellow Subsidiary
3 Air India Air Transport Services Limited (AIATSL) Fellow Subsidiary
4 Air India Express Limited (AIEL) Fellow Subsidiary
5 Airline Allied Services Limited (AASL) Fellow Subsidiary
6 Air India SATS Airport Services Private Limited Fellow Joint Venture
(Other than Government related entities)
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A. Board of Directors
Sr. No. Name of Director Designation Remark
1 Shri Pradeep Singh Kharola CMD, Air India Ltd Chairman
2 Ms Gargi Kaul AS&FA, MOCA Government

Nominee Director
3 Shri Satyendra Kumar Mishra Jt. Secretary, Government

MOCA Nominee Director
4 Shri Vinod Hejmadi Director (Finance), Air India

Air India Limited Nominee Director
B. Key Managerial Personnel
Sr.No. Name of Key Managerial Personnel Designation
1. Shri Kapil Aseri Chief Financial Ofcer
2. Shri Gagan Batra Company Secretary
C. Related Party Transactions
(i) There are no transactions with Key Managerial Personnel except remuneration and
perquisites to Chief Executive Ofcer. During the year 2017-18, an amount of
Rs.29,95,200.00 has been paid as remuneration to Chief Executive Ofcer.
(ii) Transactions such as providing MRO related services in the normal course of airline
business are not included above.
(iii) No Loans or Credit Transactions were Outstanding with Directors or Ofcers of the
Company or their relatives at the end of the year.
(iv) In term of Ind AS 24, following are the disclosure requirements related to transactions with
certain Government Related entities i.e. Signicantly controlled and inuenced entities
(Government of India) and other than government related parties:
S. Name of the Entities and 2017-18 2016-17

No. Nature of transactions (Rs.in Mn) (Rs.in Mn)
1. Air India Ltd (AIL)
Revenue from operation 5682.57 5258.31
Expenditure
Medical Benet Scheme-Work.Emp.Families 20.02 19.73
Medical Benet Scheme-Ret.Emp.Families 25.44 14.45
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Salaries - Casual Labour 29.62 49.96
Hotel Expenses - Staff on Duty 29.65 89.43
Staff Transportation Expenses 30.46 33.47
Repair & Maint of Building-Staff Housing Colony 37.99 26.64
Rates & Taxes 48.52 42.78
General Charges 50.42 9.63
Purchase of Medicnes and Accessories 64.46 61.30
Medical Benet Scheme-Retired Employee 131.20 141.29
Staff Travelling Expenses - India 153.78 109.70
Staff Medical Expenses 168.89 154.01
Rent Premises 254.90 237.49
Electricity & Heating Charges 312.40 389.27
Salaries - Staff In India 595.59 858.91
Interest on AI Loan (Holding Company) 924.29 -
Closing Balance (Payable) 13444,92 5811.03
Airline Allied Services Limited
Income
Other Income (Interest) 8.38 –
Expenditure
Salary - 181.48
Staff Travel Exp. - 18.57
Interest Charge - 50.90
Other - 1.50
Closing Balance Receivable / (Payable) 271.64 (88.61)
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Air India Air Transport Services Limited

(AIATSL)
Expenditure
Handling Charges 503.65 145.52
Manpower Cost 39.80 -
Closing Balance (Payable) 1000.73 244.54
Air India Express Limited (AIXL)
Income
Other Income (Interest) 103.21 -
Expenditure
Medical Expenses 5.0 -
Repair Charges 67.88 -
Hotel Expenditure 1.20 -
Closing Balance 1085.17 1174.02
Air India SATS Airport Services Private

Limited (AISATS)
Expenditure
Handling Charges 162.74 -
Closing Balance 205.62 -
35. Corporate Compliance
As per Companies Act 2013, Sec 149(4), the Company has not appointed independent director.
Consequently, the Audit Committee has no independent director. There is no remuneration committee
under Sec 177(2) and Sec 178 respectively.
36. Remuneration to Auditors
The details of the audit fees and expenses of the Auditors:
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(Rupees in Lakhs)
Audit Fees - For the Year 2.00 2.00
Out of Pocket Expenses 0.20 0.00
Total 2.20 2.00
37. Capital Management:
The objective of the company is to maximize the shareholders' value by maintaining an optimum capital
structure. Management monitors the return on capital as well as the debt equity ratio and makes
necessary adjustments in the capital structure for the development of the business.
38. Fair value measurement and financial instruments
a. Financial instruments – by category and fair value hierarchy
The following table shows the carrying amounts and fair value of nancial assets and nancial
liabilities, including their levels in the fair value hierarchy.
(i) As on 1 April, 2016

(Rs. in Millions)
Particulars Carrying Value Fair value measurement

using
FVTPL FVTOCI Amortized Total Level 1 Level 2 Level 3

Cost
Financial Assets
Non-Current
Others 0.06 0.06
Current
Trade Receivable* 755.12 755.12 - - -
Loans 4.60 4.60
Cash & Cash Equivalents* 440.54 440.54 - - -
Others Financial Assets - - -
Total 1200.32 1200.32 - - -
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using

Cost
Financial liabilities
Non-Current
Current
Trade Payables* 139.33 139.33 - - -
Other Financial Liabilities 2,640.46 2,640.46
Total 2779.79 2779.79 - - -
(ii) As on 31 March, 2017

(Rs. In Millions)

using

Financial Assets
Non-Current
Others 0.06 0.06
Current
Trade Receivable* 1,990.27 1,990.27 - - -
Loans 3.92 3.92
Others Financial Assets - - -
Total 2111.92 2111.92 - - -
Non-Current
Current
Trade Payables* 986.02 986.02 - - -
Total 8031.61 8031.61 - - -
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(iv) As on 31 March 2018

(Rs. In Millions)

using
Financial Assets
Non-Current
Others 0.06 0.06
Current
Trade Receivable* 7,904.48 7,904.48 - - -
Bank Balance other
than above 16.32 16.32
Loans 0.81 0.81 - - -
Total 7936.59 7936.59 - - -
Non-Current
Borrowings 19,764.69 19,764.69 - - -
Current
Trade Payables* 2,548.51 2,548.51 - - -
Total 22,779.21 22,779.21 - - -
* The carrying amounts of trade receivables, trade payables, cash and cash equivalents, and other
current nancial assets, approximates the fair values, due to their short-term nature.
The fair values for loans were calculated based on discounted cash ows using a current lending
rate. They are classied as level 3 fair values in the fair value hierarchy due to the inclusion of
unobservable inputs including counterparty credit risk.
b. Fair Value Hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair
value that are either observable or unobservable and consist of the following three levels:
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets and
liabilities.
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Level 2: Inputs are other than quoted prices included within level 1 that are observable for the
asset or liability either directly (i.e. prices) or indirectly (i.e. derived from prices).
Level 3: Inputs are not based on observable market data unobservable inputs. Fair value are
determined in whole or in part using a valuation model based on assumptions that
are neither supported by prices from observable current market transactions in the
same instrument nor are they based on available market data.
39. Financial Risk Management Objective and Policies:
The company has exposure to following risks arising from nancial instruments:
i. Credit Risk
ii. Liquidity Risk
iii. Market Risk –
a. Foreign Currency, and
b. Interest Rate
The Company's principal nancial liabilities comprise of loan and borrowings, trade and other payables.
The main purpose of these nancial liabilities is to nance receivable, and cash and cash equivalents that
derive directly from its operations.
The Company is exposed to credit risk, liquidity risk and market risk. The Company's senior management
oversees the management of these risks. The Board of Directors reviews and agrees policies for
managing each of these risks, which summarized below:
(i) Credit Risk
Credit risk is the risk of nancial loss to the company if a customer or counterparty to a nancial
instrument fails to meet its contractual obligation.
The Company is exposed to credit risk from its operating activities (primarily trade receivables) and
from its investing activities, including deposits with banks and nancial institutions, and other
nancial instruments.
The maximum exposure to the credit at the reporting date is primarily from trade receivables. Trade
receivables are typically unsecured are derived from revenue earned from customers. The
Company does monitor the economic environment in which it operates. The Company manages its
credit risk through credit approvals, establishing credit limits and continuously monitoring credit
worthiness of customers to which the Company brands credit terms in the normal course of the
business.
On adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment
loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for
trade receivable. The provision matrix takes into account available internal credit risk factors such as
the Company's historical experience for customers.
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Trade receivable as at year end primarily includes Rs. 764,00,36,234.75 as on 31st March 2018
(Previous Year as on 31st March 2017 Rs 199,66,48,276.15) relating to revenue generated from
MRO services.
The Companies exposure to credit risk for trade receivables is as follows:
Particulars As at 31/03/2018 As at 31/03/2017 As at 01/04/2016
Gross Loss Gross Loss Gross Loss

Carrying Allowance Carrying Allowance Carring Allowance
Amount Amount Amount
Debts not due 0.00 0.00 0.00 0.00 0.00 0.00
Debts over due 764,00,36,234.75 0.00 199,66,48,276.15 0.00 77,75,22,364.33 0.00
764,00,36,234.75 0.00 199,66,48,276.15 0.00 77,75,22,364.33 0.00
Movement in the allowance for impairment in respect of trade receivables:
Particulars For the year ended For the year ended

31st March 2018 31st March 2017
Balance at the beginning of the Year Nil Nil
Movement during the year Nil Nil
Balance at the end of the Year Nil Nil
(ii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difculty in meeting the obligation
associated with its nancial liabilities that are settled by delivering cash or other nancial assets.
The Company's approach to manage Liquidity is to have sufcient liquidity to meet its liabilities when
they are due, under both normal and stressed circumstances, without incurring unacceptable losses
or risking damage to the Company's reputation.
The Company believes that its liquidity position, including total cash (including bank deposit lien and
excluding interest accrued but not due) anticipated future internally generated funds from
operations, and its fully available, revolving undrawn credit facility of Rs. Nil (31 March 2018: Rs. NIL
April 2017.) will enable it to meet its future known obligation in the ordinary course of business .
However, if a liquidity needs were to arise, the company believes it has access to nancing
arrangement, value of unencumbered assets, which should enable it to meet its ongoing capital,
operating, and liquidity requirement. The Company will continue to consider various borrowing or
leasing options to maximize liquidity and supplement cash requirement as necessary.
The Company's liquidity management process as monitored by management includes the following:
- Day to day funding, managed by monitoring future cash ows to ensure that requirement can
be met.
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- Maintaining rolling forecast of the Company's liquidity position on the basis of expected cash
ows.
- Maintaining diversied credit lines.
Exposure to Liquidity risk
The following are the remaining contractual maturities of nancial liabilities at the reporting data. The
contractual cash ow amount are gross and undiscounted, and includes interest accrued but not due
on building. (Amount in Rupees)
Contractual Cash Flows
As at 31st March 2018 Carrying Upto 1-3 3-5 More Total

amount 1 year Year Year than 5
years
Current
Trade Payables 2,548.51 2,548.51 2,548.51
Other Financial Liabilities 20,250.70 20,250.70 20,250.70
(Amount in Rupees)

years
Current
Trade Payables 986.02 986.02 986.02
(Amount in Rupees)

years
Current
Trade Payables 139.33 139.33 139.33
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AIESL
(iii) Market risk
Market risk is that the fair value and future cash ows of nancial instrument will uctuate because of
changes in market prices. Market risk comprises two type of risk namely: currency risk and interest
rate risk. The objective of market risk management is to manage and control market risk exposure
within acceptable parameters, while optimizing the return.
A. Interest rate risk
Interest rate risk is the risk that the future cash ows of a nancial instrument will uctuate
because of changes in market interest rates. The Company is not exposed to any borrowings.
B. Currency risk
Currency risk is the risk that the future cash ows of a nancial instrument will uctuate because
of changes in foreign exchange rates. The company is exposed to the effects of uctuation in
the prevailing foreign currency rates on its nancial position and cash ows. Exposure arises
primarily due to exchange rate uctuation between the functional currency and other
currencies from the company's operating, investing and nancing activities.
Exposure to foreign Currency Risk
The summary of quantitative data about the Company's exposure to currency risk, as
expressed in Indian Rupees, as at 31 March 2018, 31 March 2017 and 1 April 2016 are as
below:
As at 31st March 2018
Particulars USD EUR GBP AED NPR OMR SGD THB CHF QAR AUD
Financial Assets - - - - - - - - - - -
Trade Receivables - - - - - - - - - - -
Cash and Cash
equivalents - - - - - - - - - - -
Loans - - - - - - - - - - -
Other Financial
Assets - - - - - - - - - - -
Total Financial Assets - - - - - - - - - - -
Financial Liabilities - - - - - - - - - - -
Borrowings - - - - - - - - - - -
Other Financial Liabilities - - - - - - - - - - -
Trade Payables - - - - - - - - - - -
Total Financial Liabilities - - - - - - - - - - -
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Cash and Cash
equivalents - - - - - - - - - - -
Loans - - - - - - - - - - -
Other Financial
Assets - - - - - - - - - - -
Borrowings - - - - - - - - - - -
Trade Payables - - - - - - - - - - -
Cash and Cash
equivalents - - - - - - - - - - -
Loans - - - - - - - - - - -
Other Financial
Assets - - - - - - - - - - -
Borrowings - - - - - - - - - - -
Trade Payables - - - - - - - - - - -
Sensitivity Analysis
A reasonably possible change of (5 %) strengthening/(weakening)of the USD against INR at the reporting
date would have affected the prot or loss and measurement of nancial instruments denominated in US
dollars by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant and ignores any impact of forecast sales and purchases.
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AIESL
Effect in INR (before tax) Profit or Loss
For the year ended 31st march 2018 Strengthening Weakening
5% Movement Nil Nil
USD Nil Nil
Effect in INR (before tax) Profit or Loss
For the year ended 31st march 2017 Strengthening Weakening
5% Movement Nil Nil
USD Nil Nil
40. Previous Year gures have been re-grouped/re-arranged wherever considered necessary to be
compatible with the Schedule III of the Companies Act 2013, to the extent of information being
available and practicable of compilation.
Signatures to the schedules forming part of the Balance Sheet and Statement of Prot and Loss and to the
above notes.
Sd/- Sd/- Sd/-

FRN : 105007W DIN : 05347746 DIN : 07346490
Sd/- Sd/- Sd/- Sd/-

M.No. 40521
Place : New Delhi

98

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AIESL

AIR INDIA ENGINEERING

4. Management Discussion & Analysis Report 26

5. Comments of the Comptroller & Auditor General of India 45

6. Independent Auditors’ Report 49

7. Balance Sheet as at 31 March 2018 57

9. Statement of Change in Equity for the year ended 31 March 2018 59

BOARD OF DIRECTORS (as on 26 DECEMBER 2018)

Shri Pradeep Singh Kharola Chairman

Shri Vinod Hejmadi Director

Smt. Gargi Kaul Director

Shri Satyendra Kumar Mishra Director

Chief Executive Ofﬁcer

Shri H.R. Jagannath

Chief Financial Ofﬁcer

Shri Kapil Aseri

Shri Gagan Batra

M/s. D.B Ketkar & Co.

113 Gurudwara Rakabganj Road

New Delhi 110 001

PERFORMANCE OF THE COMPANY

The nancial performance of your company during FY 2017-18 was as under:

STRENGTHS AND CHALLENGES

MRO SCENARIO- WORLD

The MRO sector describes different types of aircraft repair as:-

(1) Aircraft Structural Repairs,

(2) Engine/ APU's Overhauls/ Repairs

(3) Component repairs,

MRO SCENARIO - INDIA

On behalf of the Board, I seek your continued support, as always.

l Provide a “One Stop” solution to the customer.

l Faster Turn Around Time.

l To capture maximum Third Party work from in and around India.

l To get DGCA approval under CAR 147.

l Continuous monitoring of Quality through quality audit etc.

l Multiskilling of the personnel through cross training to enhance the productivity.

l Optimising operational cost.

1.1. Financial summary and highlights

The Company's nancial performance is given hereunder:

Particulars Financial Year Financial Year

Total Revenue 794.43 740.48

Total Expenses 1290.08 1251.36

Prot (Loss) before tax (495.66) (510.88)

Less Provision of Tax NIL NIL

Prot after tax (495.66) (510.88)

Other Comprehensive Income 51.22 (07.01)

Total Comprehensive Income (444.44) (517.89)

Balance of prot brought forward from previous year (1500.43) (982.54)

Balance carried to Balance Sheet (1944.87) (1500.43)

1.2. Details of revision of Financial Statements or Board's Report

1.4. Transfer of unclaimed dividend to Investor Education and Protection Fund

1.5. Amount which the Board proposes to carry to reserves

1.6. Major events during the year 2017-18

1.6.1Fleet details handled by AIESL during 2017-18 on average basis:-

Type of Aircraft Average No. of Aircraft

1.6.2Utilization/ TDR (Technical Dispatch Regularity) achieved:

Fleet Type Daily Utilization (Hrs) TDR(%)

A319 11.39 99.27

A320 12.11 98.99

A321 13.37 99.20

B787 14.29 97.67

B777 13.78 97.49

B747 7.49 97.30