InterGlobe Aviation Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021

1. The above standalone financial results for the quarter and year ended 31 March 2021 of InterGlobe Aviation Limited (the "Company") were reviewed by the Audit Committee and subsequently approved by the Board of Directors at their respective meetings held on 5 June 2021. The results have been subjected to an audit by the Statutory Auditors of the Company pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("SEBI LODR Regulations"), who have issued an unmodified opinion on the same. For standalone financial results, the figures for the quarter ended as on 31 March 2021 and the corresponding quarter ended in the previous year are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures upto the end of the third quarter of the relevant financial year. Also, the figures upto the third quarter of the respective financial year were subject to limited review.

2. The income tax authority has assessed and revised the taxable income of the Company up to Assessment Year ("AY") 2018-19 on account of disallowance of certain expenses and in respect of the tax treatment of certain incentives received from the manufacturer with the acquisition of aircraft and engines. The Company has not yet received assessment orders for subsequent years.
The Company has received favourable orders from the final fact-finding authority, the Income Tax Appellate Tribunal ("ITAT") for AY 2007-08, 2008-09 and 2009-10 against certain such disallowances and/or adjustments made by the tax authority. However, the tax authority's appeal against the order of the ITAT is pending before the Hon'ble High Court and for AY 2012-13, the matter has been referred to Special Bench of ITAT. However, the Company believes, based on legal advice from counsels, that the view taken by ITAT is sustainable in higher courts and accordingly, no provision is required to be recorded in the books of account.
During the current quarter, under Direct Tax Vivad se Vishwas scheme ("DTVSVS"), the Company has accepted the order passed by tax authorities to conclude the matters for AY 2008-09 and 2009-10. However, the final administrative order is awaited from tax authorities for AY 2008-09 and 2009-10.
The tax exposure (excluding interest and penalty) for various matters arising up to AY 2018-19 i.e. the last year assessed, amounts to Rs. 4,907.19 in case the incentives are held to be taxable on an amortized basis over the initial lease period. The above amounts are net of Rs. 5,331.67, which represents minimum alternate tax recoverable written off in the earlier years. However, the exposure could increase to Rs. 14,029.94 in case the incentives are held to be taxable on a receipt basis.

3. During the quarter ended 31 March 2021, the Company has paid Integrated Goods and Services Tax ("IGST") amounting to Rs. 640.27 under protest, on re-import of repaired aircraft, aircraft engines and other certain aircraft parts, to custom authorities and therefore as at 31 March 2021, cumulative amount paid under protest is Rs. 8,539.11. In this regard, the Company has also filed the appeals before the Appellate authorities. The Company, based on legal advice from counsels, believes that no IGST is payable on such re-import of repaired aircraft, aircraft engines and other certain aircraft parts and accordingly, such amounts have been shown as recoverable. During the previous quarter, the Company has received favourable order from the Customs Excise and Service Tax Appellate Tribunal ("CESTAT"), New Delhi.

4. Based on the "management approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Maker ("CODM") evaluates the Company's performance at an overall company level as one segment i.e. "air transportation services" based on the nature of operations, the risks and rewards and the nature of the regulatory environment across the Company's network and the interchangeability of use of assets across the network routes of the Company. Accordingly, the disclosures as per Regulation 33 (1)(e) read with Clause (L) of Schedule IV of the SEBI LODR Regulations are not applicable for the Company.

5. (a) Mr. Aditya Pande, erstwhile Chief Financial Officer resigned with effect from 21 February 2021.
(b) Mr. Jiten Chopra has been appointed as the Chief Financial Officer of the Company with effect from 22 February 2021.

6. The Company had filed an application for settlement before the Securities and Exchange Board of India ("SEBI") under the SEBI (Settlement Proceedings) Regulations, 2018 in relation to a show cause notice dated 10 November 2020 (the "Show Cause Notice") issued by the SEBI pursuant to the complaints filed by one of the promoters. The SEBI has accepted the Company's application for settlement of the adjudication proceeding pursuant to the Show Cause Notice and issued the Settlement Order. Accordingly, the Company, while neither admitting or denying the alleged violations, has paid an amount of Rs. 21.03 after which the adjudication proceedings have now concluded.

7. InterGlobe Enterprises Private Limited and Mr. Rahul Bhatia, as claimants (the "IGE Group"), submitted a Request for Arbitration dated 1 October 2019 to the London Court of International Arbitration under the shareholders agreement dated 23 April 2015 (as amended on 17 September 2015) (the "Shareholders Agreement") executed between, inter-alia, the IGE Group, Mr. Rakesh Gangwal, The Chinkerpoo Family Trust, Ms. Shobha Gangwal (together with Mr. Gangwal and The Chinkerpoo Family Trust, the "RG Group") and the Company. The IGE Group and the RG Group are promoters of the Company. The Company has been named as a respondent as it is a party to the Shareholders Agreement. The Company has been named as a proper party to the arbitration and no monetary claim, including any compensation, has been sought against the Company by the IGE Group or the RG Group and accordingly the Company believes that the claims filed in the arbitration do not impact the financial results of the Company. The pleadings of the IGE Group, the RG Group and the Company in the arbitration have now been completed.

8. During the quarter ended 31 March 2021, the Company has renegotiated its existing agreements with an Original Equipment Manufacturer ("OEM") for spare engines support and provision of maintenance services which settles claims pursuant to these agreements that the Company and OEM had raised against each other. The net financial impact arising from this settlement has been recorded in these financial results.

9. During the year ended 31 March 21, the Company's operations were severely affected due the ongoing Covid-19 Pandemic. We have been ramping up our operations in a phased manner, in accordance with Government directions, post the lockdown imposed by the Central Government in May 2020. Our international operations remained significantly curtailed. We were also witnessing a steady recovery in demand. However, starting March 2021, the second wave of Covid-19 has hit the country leading to a significant drop in demand which has impacted our revenue and profitability for the quarter.
While there is uncertainty in the revenue environment in the near term which is expected to normalise in the long-run, IndiGo's balance sheet continues to remain strong with sufficient liquidity as of 31 March 2021. We continue to remain focused to reduce our unit costs. Stringent controls have been put in place on all discretionary spends and capital expenditures are being approved on a case-to-case basis. We are closely monitoring the current environment and will continue to take necessary actions that strengthen our cash position.
Health and safety of our passengers and employees has always been of paramount importance for us. This has become even more relevant during the current pandemic. To ensure the well-being of our passengers, we have introduced several measures including contactless boarding, strict enforcement of social distancing norms, regular sanitisation of our aircraft and provision of PPE kit, masks and face shields. To ensure our employees are protected, all employees are being vaccinated and support is being provided to tide over through this crisis.
The Company has assessed the recoverability of the carrying amount of assets while preparing the Company's financial results as of and for the quarter and year ended 31 March 2021. We have performed sensitivity analysis on the assumptions used and based on current estimates, expect the carrying amount of these assets will be recovered. We have a strong cash position as of 31 March 2021 and hold our current investments in highly liquid funds and bank fixed deposits. We have met and expect to meet all our ongoing cash obligations pertaining to our lease rentals, debt repayments and any other financial obligations. Through this period of uncertainty, we will continue to monitor, any material changes to future economic conditions impacting our financial position.

10. Earnings per share is not annualized for the quarter ended 31 March 2021, 31 December 2020 and 31 March 2020.

11. During the quarter ended 31 March 2021, 46,500 equity shares of Rs. 10 each were issued and allotted under the InterGlobe Aviation Limited Employees Stock Option Scheme - 2015. Consequently, the issued and paid up share capital of the Company as on 31 March 2021 stands increased to Rs. 3,849.10.

12.(a) During the quarter ended 31 March 2021, the Company has granted 185,000 stock options to its Whole Time Director and Chief Executive Officer in accordance with the InterGlobe Aviation Limited Employees Stock Option Scheme 2015, which was approved by the shareholders through postal ballot on 10 April 2021.

12.(b) The managerial remuneration paid by the Company to its Whole Time Director and Chief Executive Officer in accordance with the limits prescribed under Section 197 read with Schedule V of the Companies Act, 2013, was approved by the shareholders at the Annual General Meeting held on 4 September 2020. Further, the revision in remuneration and minimum remuneration for the year ended 31 March 2021 on account of grant of the stock options, which amounts to a stock compensation charge of Rs. 19.22, was approved by the shareholders through postal ballot on 10 April 2021.


Ronojoy Dutta
Whole Time Director & Chief Executive Officer