MIRA INFORM REPORT

Report Date :

16.02.2007

IDENTIFICATION DETAILS

Correct Name :	INDIAN AIRLINES LIMITED
Registered Office :	Airlines House, 113 Gurdwara Rakabganj Road, New Delhi – 110 001, India
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	01.05.1992
Com. Reg. No.:	55-48582
CIN No.:	U62100DL1992PLC048582
TAN No.: (Tax Deduction & Collection Account No.)	DELI00508E
Legal Form :	Government of India Undertaking Company.
Line of Business :	Air Transport Services

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 5 Millions
Status :	Good
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a Government of India company having moderate track and performance. Financial position is moderate. Payments are usually correct and met as per commitments as it is backed by Government of India. The company can be considered normal for business dealings at usual terms and conditions.

LOCATIONS

Registered Office :	Airlines House, 113 Gurdwara Rakabganj Road, New Delhi – 110 001, India
Tel. No.:	91-11-23718951 / 23730932/23422190
Fax No.:	91-11-23711730 / 23731404 / 23730573 / 23716722/23422189
E-Mail :	1. info@indian-airlines.nic.in 2. ialprek@hubnie.in 3. ictariff@vsnl.net 4. ialrkcsc@hub.nic.in 5. flying.returns@imrbint.com 6. contact@indianairlinespackages.com 7. gmsales@nda.vsnl.net.in 8. iacccdgm@vsnl.net 9. cgoinfo@bol.net.in 10. ialprck@hub.nic.in 11. vidur60@hotmail.com
Website :	http://www.indian-airlines.nic.in
Head Office :	Central Space Control, Indian Airlines Computer Centre, Indira Gandhi International Airport, New Delhi - 110 037
Tel. No.:	91-11-25696950 / 25696327 / 25675301
Fax No.:	91-11-25675718
Branches :	Located at :- DOMESTIC Agra, Amritsar, Bhopal, Delhi, Gwalior, Jaipur, Jammu, Jodhpur, Khajuraho, Leh, Lucknow, Raipur, Srinagar, Udaipur, Varanasi, Chandigarh, Ahmedabad, Bhavnagar, Bhuj, Mumbai, Goa, Indore, Jamnagar, Mangalore, Nagpur, Pune, Rajkot, Vadodara, Bangalore, Calicut, Cochin, Coimbatore, Hyderabad, Chennai, Madurai, Tiruchirapalli, Trivandrum, Vishakhapatnam, Silchar, Tezpur, Bhilai, Faridabad, Kanpur, Hubli, Balgaum, Nasik, Mysore, Tirupati, Vijayawada, Darjeeling and Gangtok. INTERNATIONAL Karachi, Sharjah, Muscat, Kuwait, Ras-al-Khaimah, Al-Fujairah, Colombo, Male, Singapore, Kualalumpur, Bangkok, Chittagong, Dhaka, Kathmandu, Kabul and Lahore. The company’s operations at Kabul and Lahore have been temporarily suspended.

DIRECTORS

Name :

Ms. Chawla Sushma

Designation :

Chairman cum Managing Director

Address :

A – 19, Inder Puri, New Delhi – 110012

Date of Birth/Age :

30.08.1950

Date of Appointment :

12.06.2005

Name :

Mr. Mishra K Prashanta

Designation :

Director

Address :

C – II/40, Tilak Lane, New Delhi – 110003

Date of Birth/Age :

07.081948

Date of Appointment :

13.12.2004

Name :

Mr. V Thuasidas

Designation :

Director

Address :

22 – B, Sterling Apartment, 38, Peddar Raoda, Mumbai – 400026

Date of Birth/Age :

25.03.1948

Date of Appointment :

05.022004

Name :

Mr. Ramalingam K

Designation :

Director

Address :

No. 1, Airport Lane, Safdarjung Airport, New Delhi – 110003

Date of Birth/Age :

10.12.1948

Date of Appointment :

12.05.2004

Name :

Mr. Srivastava K A

Designation :

Director

Address :

D – I, 17, Indian Airlines Colony, Vasant Vihar, New Delhi – 110057

Date of Birth/Age :

28.05.1954

Date of Appointment :

5.10.2005

Name :

Mr. Goyal K A

Designation :

Director

Address :

D – 11, Defence Colony, New Delhi – 110024

Date of Birth/Age :

08.041948

Date of Appointment :

05.102005

Name :

Mr. Balakrishnan S M

Designation :

Director

Address :

E – 711, Mavilla, Mayur Vihar Phase – I, Delhi – 110091

Date of Birth/Age :

21.12.1949

Date of Appointment :

07.102005

Name :

Mr. Menon Raghu

Designation :

Director

Address :

C – II/38, Tilak Lane, New Delhi – 110003

Date of Birth/Age :

10.09.1951

Date of Appointment :

22.12.2006

Name :

Mr. Grover S H

Designation :

Director

Address :

B 1A/72 C, Janak Puri, New Delhi – 110058

Date of Birth/Age :

6^th May, 1954

Date of Appointment :

12.02.1997

Name :

Mr. Sunil Arora

Designation :

Chairman

Address :

C – III/73, Shahjahan Road, New Delhi – 110001

Date of Birth/Age :

13.04.956

Date of Appointment :

26.05.2000

Name :

Mr. Upadhyay K A

Designation :

Director

Address :

D – 2 – 3, Sector – 13, R K Puram, New Delhi – 110066

Date of Birth/Age :

13.01.1953

Date of Appointment :

13.02.2004

Name :

Mr. Damodaran M

Designation :

Director

Address :

6, Normandie, 2^nd Floor, Carmichael Road, Mumbai – 400026

Date of Birth/Age :

04.05.1947

Date of Appointment :

01.10.2003

Name :

Mr. Shetty P V

Designation :

Director

Address :

C/O, I D B I, IDBI Tower, WTC Complex, Cuffe Parade, Mumbai – 400005

Date of Birth/Age :

12.06.1947

Date of Appointment :

03.03.2005

Name :

Mr. Narayen Sanjay

Designation :

Director

Address :

C – II/39, Tilak Lane, New Delhi – 110003

Date of Birth/Age :

06.061952

Date of Appointment :

01.022005

Name :

Mr. T. S. Chandrasekar

Designation :

Deputy Managing Director

Name :

Mr. V. Subramanian

Designation :

Director

Name :

Mr. D. V. Gupta

Designation :

Director

Name :

Mr. P. P. Vora

Designation :

Director

Name :

Mr. F. S. Naziri

Designation :

Director

Name :

Mr Rajesh Kumar Singh

Designation :

Director

Address :

D-II/325, Vinay Marg, Chankya Puri, New Delhi – 110021, India

Date of Birth/Age :

12.06.1963

Date of Appointment :

27.06.2006

Directorship in other companies :

CIN of company	U62100DL1992PLC048581
Name of the company	Air India Limited
Designation	Director
CIN of company	U55101MH1971PLC015217
Name of the company	Hotel Corporation of India Limited
Designation	Director
CIN of company	U63090DL2003PLC120790
Name of the company	Air India Air Transport Services Limited
Designation	Director
CIN of company	U99999DL1985GOL022233
Name of the company	Pawan Hans Helicopters Limited
Designation	Director
CIN of company	U63013DL2003GOL121950
Name of the company	IAL Airport Services Limited
Designation	Director

Name :

Mr Vipin Kumar Sharma

Designation :

Director

Address :

214, Mavilla Apartments, Mayur Vihar, Phase – I, Delhi – 110091, India

Date of Birth/Age :

18.09.1955

Date of Appointment :

30.11.2006

KEY EXECUTIVES

Name :	Mr. Hermit Singh Grover
Designation :	Company Secretary
Address :	B-1-A/72, C Janakpuri, new Delhi – 110058, India
Date of Birth/Age :	12.05.1954
Date of Appointment :	12.02.1997

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
M/s. President of India	432136482
Mr. Prased Ajay	1
Mr. Prashanta K Mishra	1
Mr. Menon Raghu	1
Mr. Singh K R	1
Ms.Singh Neelam	1
Mr. Chopra S M	1
Mr. Ramakrishnan K	1
Total	432136489

BUSINESS DETAILS

Line of Business :

Air Transport Services

GENERAL INFORMATION

No. of Employees :	About 18715
Bankers :	v State Bank of India, 11, Parliament Street, Delhi - 110 001, India v Bank of India v Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
Facilities :	--

Banking Relations :	Satisfactory
Auditors :	v G S Mathur & Company Chartered Accountants v Gupta & Gupta Chartered Accountants 4/8, Asaf Ali Road, New Delhi – 110002 v Das Gupta and Associates Chartered Accountants B-4, Gulmohar Park, New Delhi - 110049
Associates/Subsidiaries :	ASSOCIATES · All Government of India Undertaking Companies SUBSIDIARIES v Name : Vayudoot Limited CIN : U62100DL1981PLC011262 v Airline Allied Services Limited It is a wholly owned subsidiary has been revitalised and has commenced its operation with effect from 15^th April, 1996, in the name of Alliance Air. Twelve B-737 aircraft have been made available to Alliance Air for its operations and 6 aircrafts have since been registered in its name. v Name : IAL Airport Services Limited CIN : U63013DL2003GOI121950

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
94,99,58,200	Equity Shares	Rs. 10/- each	Rs. 9499.582 Millions
50,04,180	Equity Shares	Rs. 10/- each	Rs. 500.418Millions
	Total		Rs. 10000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
43,21,36,489	Equity Shares	Rs.10/- each	Rs. 4321.365 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		4321.365	1071.400	1071.400
2] Reserves & Surplus		5685.188	5659.600	5661.800
4] (Accumulated Losses)		(9572.552)	(10067.600)	(10723.700)
NETWORTH		434.001	(3336.600)	(3990.500)
LOAN FUNDS
1] Secured Loans		3130.750	3134.300	4068.900
2] Unsecured Loans		263.480	1185.600	2839.000
TOTAL BORROWING		3394.230	4319.900	6907.900
TOTAL		3828.231	983.300	2917.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		12937.078	15651.800	17929.100
Capital work-in-progress		43.998	126.200	36.900
INVESTMENT		29.847	1124.000	663.500
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	985.363	1164.700	1446.200
	Sundry Debtors	9899.179	8740.900	6932.700
	Cash & Bank Balances	3093.023	828.700	1012.700
	Other Current Assets	354.192	180.000	196.100
	Loans & Advances	4805.077	1852.100	1905.300
Total Current Assets		19136.834	12766.400	11493.000
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	24104.173	23753.500	22793.600
	Provisions	4215.353	4931.600	4411.500
Total Current Liabilities		28319.526	28685.100	27205.100
Net Current Assets		(9182.692)	(15918.700)	(15712.100)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3828.231	983.300	2917.400

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	57888.216	53625.700	47256.700
Profit/(Loss) Before Tax	630.028	567.700	1314.600
Provision for Taxation	135.000	60.000	40.000
Profit/(Loss) After Tax	495.028	507.700	1274.600
Total Expenditure	57258.188	49710.800	42185.200

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	0.85	0.94	2.69
Net Profit Margin (PBT/Sales)	(%)	1.08	1.06	2.78
Return on Total Assets (PBT/Total Assets}	(%)	1.96	3.36	4.36
Return on Investment (ROI) (PBT/Networth)		1.45	(0.17)	(0.33)
Debt Equity Ratio (Total Liability/Networth)		73.07	(8.89)	(7.55)
Current Ratio (Current Asset/Current Liability)		0.67	0.44	0.42

LOCAL AGENCY FURTHER INFORMATION

GOLDEN JUBILEE CELEBRATIONS: 

During the year, the Company completed 50 years of glorious flying and celebrated its Golden Jubilee. Various new schemes were launched by the company to marl( the event and special issues of 'Swagat' and 'Darpan', the Company's in-flight reading magazines were brought out. A special logo on account of the Golden Jubilee was also made which was given widespread publicity through print as well as visual media. A special IA Postal Stamp to mark the 50 years of Indian Airlines was also released by the Director of Postal Services. 

COST CONTROL AND ECONOMY MEASURES: 

Indian Airlines exercises comprehensive budgetary control and strict monitoring of expenditure as a matter of Company policy. It has constituted a high level Cost Control Committee to identify areas amenable to cost control, making recommendations and review progress on a continuous basis across all vital areas

AIRCRAFT UTILIZATION: 

In absence of induction of new aircraft and the burgeoning aircraft maintenance costs of its ageing fleet, IA, in order to overcome its capacity constraints, has been consistently improving upon its aircraft utilization. The Aircraft Utilization during the current year also improved remarkably when compared to the previous year. In respect of A-320, the aircraft utilization in terms of hours per annum per aircraft was 3426 hours as compared to 3389 hours in the previous year. In respect of A-300, the Aircraft Utilization was 2853 hours as against 2753 hours in the previous year. 

HISTORY

In 1953, a new dream took shape - to airlink the vast South Asian subcontinent by a single, modern and efficient airline. The airline was Indian Airlines. Today, Indian Airlines, together with its fully owned subsidiary Alliance Air, is one of the largest regional airline systems in Asia with a fleet of 62 aircraft(4 wide bodied Airbus A300s, 41 fly-by-wire Airbus A320s, 11 Boeing 737s, 2 Dornier D-228 aircraft and 4 ATR-42).

Indian Airlines has been setting the standards for civil aviation in India since its inception in 1953. It has many firsts to its credit, including introduction of the wide-bodied A300 aircraft on the domestic network, the fly-by-wire A320,Domestic Shuttle Service, Walk-in Flights and Flexi-fares. Its unique orange and white logo emblazoned on the tails of all its aircraft is perhaps the most widely recognised Indian brand symbol that has over the years become synonymous with service, efficiency and reliability.

Profile

Indian Airlines incpororated under Air Corporations Act 1953 along with Air India as Indian Airlines. In 1991 Indian Airlines Limited was incorporated under the Companies Act, 1956 with an objective to take over all the assets and liabilities of Indian Airlines after the repeal of Air Corporation Act, 1953 and to provide safe, efficient, adequate, economical and properly co-ordinated air transport services. Indian Arilines is a schedule – ‘A’ PSE in Transportation Services sector under the administrative control of M/o Civil Aviation having 100% Government holding with its registered and corporate office at New Delhi.

Industrial / Business Activities

Indian Airlines is one of the pioneering enterprises providing services in the field of Air transportation through its 4 A – 300, 41 A – 320 and 11 B – 737 aircrafts. It has one subsidiary namely Airline Allied Services Limited, which operate as Alliance Air Vayudoot Limited continued to be a shell company with Indian Airline (pending finalization of various legal formalities). The enterprise driven by a workforce of 18715 employees as on 31.03.2005.

Key Performance Factors

Company has ‘Very Good’ MOU rating during the year 2004-05.

Press Releases:

PARLIAMENTARY CONSULTATIVE COMMITTEE ON CIVIL AVIATION MEETS TO DISCUSS ‘INDIAN AIRLINES LIMITED’

The Parliamentary Consultative Committee on Civil Aviation met here today. The subject matter of the meeting was Indian Airlines Limited. The Committee was informed about the performance of Indian Airlines by its acting CMD Ms. Sushma Chawla. The Committee was told that IAs market share has declined due to a fall in its capacity share. From a capacity share of 65.2% in 1997-98 and an accompanying market share of 65.9%, in 2004-05 the capacity share declined to 41.7% and the market share to 38.2%. Members were also informed that various cost control measures taken up by Indian Airlines has resulted in a saving of Rs. 1480 Millions in the year 2004.

Indian Airlines offers Ground Handling services to 19 airlines, including leading international airlines such as British Airways, Emirates, Lufthansa, Singapore Airlines, Malaysia Airlines, Silk Air, Srilankan Airlines etc., at 14 airports in India. IAs Ground Handling revenues has grown from Rs. 1800 Millions generated in 2003-04 to Rs. 2004-05 to Rs. 2210 Millions in 2004-05.

Indian Airlines gave a detailed fleet augmentation/replacement scheme. Its short term requirements are being met through lease. IA presently has 17 A320 aircraft on lease, 4 ATRs inducted on lease exclusively for North East, lease of 10 more A320 under evaluation, 5 A319 aircraft on lease for Alliance Air to join from winter 2005 and Lease of 6 more ATRs under evaluation by Alliance Air.

Among its future plans Indian Airlines plans to have a dedicated freighter operations by converting its 737 aircrafts into freighters. The IA Board gave it’s approval to this operation in May 2005. It plans to lease 12 wide body aircrafts for expanding its international network. It also plans to take 6 ATRs on lease for development of a feeder network on routes other than the North-East, to be operated by Alliance Air.

Indian Airlines also plans joining a global airline alliance in the long term. According to the airlines the benefits include greater interline flows, access to new markets thru code sharing, global image enhancement, up-gradation of technology and service standards, etc.

Members, cutting across party lines while appreciating the effort made by Indian Airlines to come out of the red and improving its performance tremendously in the past few years, expressed concern about IAs falling capacity and market shares. Members also expressed concern about pilot shortages and depleting fleet strength of Indian Airlines.

The meeting was chaired by Shri Praful Patel, Minister of Civil Aviation. The Members who attended the meeting were: S/Shri Tusharbhai A. Choudhary, Madhu Goud Yashki, Sachin Pilot, Ananth Kumar, Ratilal K. Verma, Ashok Argal, Ramswaroop Koli, Tarit Baran Topdar, A. Krishnaswamy, Umakant Yadav, Mohammad Shahabuddin, Anandrao Vithoba Adsul, Smt. Sumitra Mahajan, Dr.(Prof.) Prasanna Kumar Patasani, Santosh Bagrodia, K.B. Krishna Murthy, Janardan Dwivedi, Balavant Apte, Tarlochan Singh, Dinesh Trivedi, Smt. Sarla Maheshwari, Abdul Wahab Peevee, Pramod Mahajan, Dr. Vijay Mallya, Rajeev Shukla, Bashistha Narain Singh and Smt. Ambika Soni.

Abacus To Distribute Indian Airlines Domestic Routes

Abacus International and Indian Airlines signed an agreement in January 2005 giving the GDS access to all Indian Airlines domestic fares.

No.02/2005 Singapore 01 February 2005

From 6th January, Abacus-connected travel agencies across India will be able to book travel for their customers on Indian Airlines directly from their Abacus terminals.

“Abacus has been a distribution partner for Indian Airlines since 1991. With this agreement, company looks forward to building on that relationship and helping Indian Airlines make the most of strong growth in Indian domestic travel,” said Mr. Rogelio Sarreal, Vice President, Associate Sales, Abacus International.

“With travel deregulation gathering pace in India and new players entering the market, it is essential that carriers maintain a strong competitive position. This agreement will enable Indian Airlines to save costs on maintaining their standalone reservation terminals while providing their travel agents with an easier way to access Indian Airlines fares directly through their Abacus terminals,” said Mr Sarreal.

“Partnering with Indian Airlines is an important step in the growth of Abacus in India. I am confident that our partnership with Indian Airlines will help optimise our operational efficiencies and enhance our competitiveness in the market,” said Mr. Stuart Crighton, Head South & West Asia, Abacus International.

This is the second such agreement Abacus International has reached with a major carrier. Malaysia Airlines outsourced its entire domestic inventory distribution to Abacus in Malaysia in 2003.

Mr Sarreal said Abacus was committed to the Indian market, which was one of the key drivers of growth in regional travel.

“With a buoyant economy, rising incomes and the ongoing liberalisation of the aviation sector, India is on the brink of an explosion in travel,” said Mr Sarreal. “We are looking forward to playing a role with the technology, solutions and guidance to help the Indian travel industry realise its potential.”

This form is for	Creation of Mortgage / Charge
Charge identification number of the charge to be modified	10029103
Corporate identity number of the company	U32100DL1992PLC048592
Name of the company	INDIAN AIRLINES LIMITED
Address of the registered office or of the principal place of business in India of the company	Airlines House, 113 Gurdwara Rakabganj Road, New Delhi – 110 001, India
Particular of charge holder	Bank of India Connaught Circus, new Delhi – 110001, Delhi, India
Date of instrument Creating the charge	19.09.2006
Amount secured by the charge	Rs. 2500.000 Millions
Date of latest modification prior to the present modification	06.06.2005

Name of the Company	INDIAN AIRLINES LIMITED
Presented By	VOLITO WORLWIDE AB, SWEDEN
1) Date and description of instrument creating the change	Assignment of Insurance dated 21.06.2005
2) Amount secured by the charge/amount owing on the securities of charge	Rupee equivalent of USD 40 million (being the agreed value of the contingent which are now existing, or at any time hereafter arising, whether or not for the payment of money and including without limitation any obligation or liability to pay damages) which are now or which may at any time and from time to time hereafter be due, owing payable or by the company to the charge holder under or in connection with the aircraft lease agreement dated 15.11.2001 (as amended and novated by the Novation agreement dated 21.06.2005) in respect of the airbus A320-231 aircraft bearing manufacturer’s serial number 314 (“the Aircraft”) leased by the charge holder to the company.
3) Gist of the terms and conditions and extent and operation of the charge.	The charge operates as a continuing charge to secure the terms of he aircraft lease agreement dated 15.11.2001 (as amended and novated by the Novation agreement dated 21.06.2005) in respect of the aircraft and the charge is created on the collateral defined to be the insurance and any and all requisition proceeds. The charge is available from the period commencing from the dated of the deed and ending on the dated on which the secured obligations have been unconditionally and irrevocably paid, satisfied and discharge in full.
5) Name and Address and description of the person entitled to the charge.	Volito Worlwide AB, Sodra Fordstadsgatan 4, SE211 43, Malmo, Sweden
6) Date and brief description of instrument modifying the charge	NA
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	NA

Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Letter of Hypothecation dated 29.08.95
2) Amount secured by the charge/amount owing on the securities of charge	USD 4924533.49
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of spares Inventory consisting of Boeing (Non – rotables) IGI Airport, New Delhi to the extent of Rs. 260.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	The above foreign currency loan of USD 4924633.49 is secured by first charge on Stock as mentioned in coloumn No. 3 above. The charge operates as continued security. Interest charge as per bank rules as may be notified by bank from time to time.
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	110A, Letter of Hypothecation Dated 26.09.1997
2) Amount secured by the charge/amount owing on the securities of charge	F 16, Letter of Continuity Rs. 100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Aircraft Spares at New To the Extent of Rs. 135.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 13.50% p.a. Plus 0.50% ie. 14% p.a. compounded quarterly Charge operations as continuous Limit Bifurcated as Working capital Demand Loan for Rs. 80.000 Millions and Cash Credit portion of Rs. 20.000 Millions
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	9.07.2001 Agreement of Hypothecation of goods to secure demand cash credit on 3.08.2001
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Inventories of stores, spares consumables in Mumbai stores/ Depots
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest : 7.75% p.a. with monthly rests or any such other retes as may be charged by the bank, margin 25% Exclusive charge on Mumbai Stocks
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
6) Date and brief description of instrument modifying the charge	04.02.2004 Agreement of Hypothecation of Goods to secure demand cash credit. Earlier modified by instrument dated 15.11.2002
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	04.02.2004 Enhancement of Cash Credit limit from Rs. 600.000 Millions to Rs. 800.000 Millions on the same terms and conditions except rate of interest which had been reduced to 7.75% 28.09.2001 – Enchancement of cash credit limit from Rs. 250.000 Millions to 400.000 Millions 15.11.2002 – Enhancement of cash credit limit from Rs. 400.000 Millions to Rs. 600.000 Millions.
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	9.07.2001 Agreement of Hypothecation of Goods to secure demand cash credit
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Inventories of stores, spares consumables in Mumbai stores/ Depots on exclusive charged basis and inventories Delhi Depot
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest : 7.75% p.a. with monthly rests or any such other retes as may be charged by the bank, margin 25% Exclusive charge on Mumbai Stocks
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
6) Date and brief description of instrument modifying the charge	13.09.2004 Agreement of Hypothecation of Goods to secure demand cash credit. Earlier modified by instrument dated 04.02.2004
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	13.09.2004 Enhancement of Cash Credit limit from Rs. 800.000 Millions to Rs. 1800.000 Millions on the same terms and conditions except rate of interest which had been reduced to 7.75%– Enchancement of cash credit limit from Rs. 250.000 Millions to 400.000 Millions 28.09.2001 – Enhancement of cash credit limit from Rs. 250.000 Millions to Rs. 400.000 Millions. 15.11.2002 – Enhancement of cash credit limit from Rs. 400.000 Millions to Rs. 600.000 Millions. 4.02.2004 – Enhancement of cash credit limit from Rs. 600.000 Millions to Rs. 800.000 Millions.
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Agreement of loan for overall limit (CI) and agreement of Hypothecation of Goods and assets dated 27^th December, 2002 and Regd. 22.01.2003
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1000.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Two Aircraft bearing no VT – EFX and VT EHC respectively
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 10.25% on Rs. 500.000 Millions for INR loan Portion Interest @ LIBOR plus 75 basis points for FCNR (B) loan of Rs. 500.000 Millions Repayable in 100 daily installment of Rs. 10.000 Millions each per working day
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Industrial Finance Branch, 6^th Floor, Vijay Building, Barakhamba Road, New Delhi
6) Date and brief description of instrument modifying the charge	Supplementary agreement of loan increase in the overall limit dated 5.12.2003 and supplementary agreement of hypothecation of goods and assets for increases in the overall limit dated 5.12.2003
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Now the limit had been enhanced from to Rs. 1220.000 including Rs. 20.000 Millions for DDP. The total borrowing limit is also secured by hypothecation of Airbus aircraft A -300 The term loan of Rs. 200.000 Millions will repay in 30 monthly installment of Rs. 6.667 Millions
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Agreement of loan for overall limit (CI) and agreement of Hypothecation of Goods and assets dated 27^th December, 2002 and Regd. 22.01.2003 Modified on 5.12.2003 up to Rs. 1220.000 Millions
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1000.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Two Aircraft bearing no VT – EFX and VT EHC respectively
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 10.25% on Rs. 500.000 Millions for INR loan Portion Interest @ LIBOR plus 75 basis points for FCNR (B) loan of Rs. 500.000 Millions Repayable in 100 daily installment of Rs. 10.000 Millions each per working day
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Industrial Finance Branch, 6^th Floor, Vijay Building, Barakhamba Road, New Delhi
6) Date and brief description of instrument modifying the charge	Supplementary agreement of loan increase in the overall limit dated 19.12.2003 and supplementary agreement of hypothecation of goods and assets for increases in the overall limit dated 19.12.2003
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Now the limit had been enhanced from to Rs. 1220.000 including Rs. 1615.000 Millions for DDP. The total borrowing limit is also secured by hypothecation of Airbus aircraft A -300
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	110A, Letter of Hypothecation Dated 20.11.97 F 16, Letter of Continuity
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Aircraft Spares at New To the Extent of Rs. 135.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 13.50% p.a. Plus 0.50% ie. 14% p.a. compounded quarterly Charge operations as continuous Limit Bifurcated as Working capital Demand Loan for Rs. 80.000 Millions and Cash Credit portion of Rs. 20.000 Millions
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	DPN dated 7.11.97 FIIOG – Supplemental deed of hypothecation dated 7.11.97
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	The limit is increased from Rs. 100.000 Millions to Rs. 200.000 Millions

Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Letter of Hypothecation dated 29.08.95
2) Amount secured by the charge/amount owing on the securities of charge	USD 4924533.49
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of spares Inventory consisting of Boeing (Non – rotables) IGI Airport, New Delhi to the extent of Rs. 260.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	The above foreign currency loan of USD 4924633.49 is secured by first charge on Stock as mentioned in coloumn No. 3 above. The charge operates as continued security. Interest charge as per bank rules as may be notified by bank from time to time.
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	110A, Letter of Hypothecation Dated 26.09.1997
2) Amount secured by the charge/amount owing on the securities of charge	F 16, Letter of Continuity Rs. 100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Aircraft Spares at New To the Extent of Rs. 135.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 13.50% p.a. Plus 0.50% ie. 14% p.a. compounded quarterly Charge operations as continuous Limit Bifurcated as Working capital Demand Loan for Rs. 80.000 Millions and Cash Credit portion of Rs. 20.000 Millions
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	9.07.2001 Agreement of Hypothecation of goods to secure demand cash credit on 3.08.2001
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Inventories of stores, spares consumables in Mumbai stores/ Depots
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest : 7.75% p.a. with monthly rests or any such other retes as may be charged by the bank, margin 25% Exclusive charge on Mumbai Stocks
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
6) Date and brief description of instrument modifying the charge	04.02.2004 Agreement of Hypothecation of Goods to secure demand cash credit. Earlier modified by instrument dated 15.11.2002
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	04.02.2004 Enhancement of Cash Credit limit from Rs. 600.000 Millions to Rs. 800.000 Millions on the same terms and conditions except rate of interest which had been reduced to 7.75% 28.09.2001 – Enchancement of cash credit limit from Rs. 250.000 Millions to 400.000 Millions 15.11.2002 – Enhancement of cash credit limit from Rs. 400.000 Millions to Rs. 600.000 Millions.
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	9.07.2001 Agreement of Hypothecation of Goods to secure demand cash credit
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Inventories of stores, spares consumables in Mumbai stores/ Depots on exclusive charged basis and inventories Delhi Depot
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest : 7.75% p.a. with monthly rests or any such other retes as may be charged by the bank, margin 25% Exclusive charge on Mumbai Stocks
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
6) Date and brief description of instrument modifying the charge	13.09.2004 Agreement of Hypothecation of Goods to secure demand cash credit. Earlier modified by instrument dated 04.02.2004
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	13.09.2004 Enhancement of Cash Credit limit from Rs. 800.000 Millions to Rs. 1800.000 Millions on the same terms and conditions except rate of interest which had been reduced to 7.75%– Enchancement of cash credit limit from Rs. 250.000 Millions to 400.000 Millions 28.09.2001 – Enhancement of cash credit limit from Rs. 250.000 Millions to Rs. 400.000 Millions. 15.11.2002 – Enhancement of cash credit limit from Rs. 400.000 Millions to Rs. 600.000 Millions. 4.02.2004 – Enhancement of cash credit limit from Rs. 600.000 Millions to Rs. 800.000 Millions.
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Agreement of loan for overall limit (CI) and agreement of Hypothecation of Goods and assets dated 27^th December, 2002 and Regd. 22.01.2003
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1000.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Two Aircraft bearing no VT – EFX and VT EHC respectively
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 10.25% on Rs. 500.000 Millions for INR loan Portion Interest @ LIBOR plus 75 basis points for FCNR (B) loan of Rs. 500.000 Millions Repayable in 100 daily installment of Rs. 10.000 Millions each per working day
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Industrial Finance Branch, 6^th Floor, Vijay Building, Barakhamba Road, New Delhi
6) Date and brief description of instrument modifying the charge	Supplementary agreement of loan increase in the overall limit dated 5.12.2003 and supplementary agreement of hypothecation of goods and assets for increases in the overall limit dated 5.12.2003
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Now the limit had been enhanced from to Rs. 1220.000 including Rs. 20.000 Millions for DDP. The total borrowing limit is also secured by hypothecation of Airbus aircraft A -300 The term loan of Rs. 200.000 Millions will repay in 30 monthly installment of Rs. 6.667 Millions
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Agreement of loan for overall limit (CI) and agreement of Hypothecation of Goods and assets dated 27^th December, 2002 and Regd. 22.01.2003 Modified on 5.12.2003 up to Rs. 1220.000 Millions
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1000.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Two Aircraft bearing no VT – EFX and VT EHC respectively
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 10.25% on Rs. 500.000 Millions for INR loan Portion Interest @ LIBOR plus 75 basis points for FCNR (B) loan of Rs. 500.000 Millions Repayable in 100 daily installment of Rs. 10.000 Millions each per working day
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Industrial Finance Branch, 6^th Floor, Vijay Building, Barakhamba Road, New Delhi
6) Date and brief description of instrument modifying the charge	Supplementary agreement of loan increase in the overall limit dated 19.12.2003 and supplementary agreement of hypothecation of goods and assets for increases in the overall limit dated 19.12.2003
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Now the limit had been enhanced from to Rs. 1220.000 including Rs. 1615.000 Millions for DDP. The total borrowing limit is also secured by hypothecation of Airbus aircraft A -300
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	110A, Letter of Hypothecation Dated 20.11.97 F 16, Letter of Continuity
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Aircraft Spares at New To the Extent of Rs. 135.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 13.50% p.a. Plus 0.50% ie. 14% p.a. compounded quarterly Charge operations as continuous Limit Bifurcated as Working capital Demand Loan for Rs. 80.000 Millions and Cash Credit portion of Rs. 20.000 Millions
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	DPN dated 7.11.97 FIIOG – Supplemental deed of hypothecation dated 7.11.97
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	The limit is increased from Rs. 100.000 Millions to Rs. 200.000 Millions
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Hypothecation Of intangible movable property dated 18.11.1999
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	All tangible movable assets of the company Including in particular all stocks parts stores and tools
4) Gist of the terms and conditions and extent and operation of the charge.	First charge by way of Hypothecation Of tangible movable assets Working capital demand Rs. 250.000 Millions with a min 12.4% at such other rates as may motified of the company by the bank time to time
5) Name and Address and description of the person entitled to the charge.	Bank of India, Conmaught Cirus, New Delhi
6) Date and brief description of instrument modifying the charge	Nil
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Nil

Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Letter of Hypothecation dated 20.09.1995
2) Amount secured by the charge/amount owing on the securities of charge	USD 4948782.16
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of spares Inventory consisting of Boeing (Non – rotables) IGI Airport, New Delhi and Bombay Airport respectively to the extent of Rs. 280.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	The above foreign currency loan of USD 4948782.16 is secured by first charge on Stock as mentioned in coloumn No. 3 above. The charge operates as continued security. Interest charge as per bank rules as may be notified by bank from time to time.
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Letter of Hypothecation dated 29.08.95
2) Amount secured by the charge/amount owing on the securities of charge	USD 4924533.49
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of spares Inventory consisting of Boeing (Non – rotables) IGI Airport, New Delhi to the extent of Rs. 260.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	The above foreign currency loan of USD 4924633.49 is secured by first charge on Stock as mentioned in coloumn No. 3 above. The charge operates as continued security. Interest charge as per bank rules as may be notified by bank from time to time.
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	110A, Letter of Hypothecation Dated 26.09.1997
2) Amount secured by the charge/amount owing on the securities of charge	F 16, Letter of Continuity Rs. 100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Aircraft Spares at New To the Extent of Rs. 135.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 13.50% p.a. Plus 0.50% ie. 14% p.a. compounded quarterly Charge operations as continuous Limit Bifurcated as Working capital Demand Loan for Rs. 80.000 Millions and Cash Credit portion of Rs. 20.000 Millions
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	Not Available
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Available
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	9.07.2001 Agreement of Hypothecation of goods to secure demand cash credit on 3.08.2001
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Inventories of stores, spares consumables in Mumbai stores/ Depots
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest : 7.75% p.a. with monthly rests or any such other retes as may be charged by the bank, margin 25% Exclusive charge on Mumbai Stocks
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
6) Date and brief description of instrument modifying the charge	04.02.2004 Agreement of Hypothecation of Goods to secure demand cash credit. Earlier modified by instrument dated 15.11.2002
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	04.02.2004 Enhancement of Cash Credit limit from Rs. 600.000 Millions to Rs. 800.000 Millions on the same terms and conditions except rate of interest which had been reduced to 7.75% 28.09.2001 – Enchancement of cash credit limit from Rs. 250.000 Millions to 400.000 Millions 15.11.2002 – Enhancement of cash credit limit from Rs. 400.000 Millions to Rs. 600.000 Millions.
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	9.07.2001 Agreement of Hypothecation of Goods to secure demand cash credit
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Inventories of stores, spares consumables in Mumbai stores/ Depots on exclusive charged basis and inventories Delhi Depot
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest : 7.75% p.a. with monthly rests or any such other retes as may be charged by the bank, margin 25% Exclusive charge on Mumbai Stocks
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Large Corporate Branch, A – 9, Connaught Place, New Delhi – 110001
6) Date and brief description of instrument modifying the charge	13.09.2004 Agreement of Hypothecation of Goods to secure demand cash credit. Earlier modified by instrument dated 04.02.2004
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	13.09.2004 Enhancement of Cash Credit limit from Rs. 800.000 Millions to Rs. 1800.000 Millions on the same terms and conditions except rate of interest which had been reduced to 7.75%– Enchancement of cash credit limit from Rs. 250.000 Millions to 400.000 Millions 28.09.2001 – Enhancement of cash credit limit from Rs. 250.000 Millions to Rs. 400.000 Millions. 15.11.2002 – Enhancement of cash credit limit from Rs. 400.000 Millions to Rs. 600.000 Millions. 4.02.2004 – Enhancement of cash credit limit from Rs. 600.000 Millions to Rs. 800.000 Millions.
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Agreement of loan for overall limit (CI) and agreement of Hypothecation of Goods and assets dated 27^th December, 2002 and Regd. 22.01.2003
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1000.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Two Aircraft bearing no VT – EFX and VT EHC respectively
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 10.25% on Rs. 500.000 Millions for INR loan Portion Interest @ LIBOR plus 75 basis points for FCNR (B) loan of Rs. 500.000 Millions Repayable in 100 daily installment of Rs. 10.000 Millions each per working day
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Industrial Finance Branch, 6^th Floor, Vijay Building, Barakhamba Road, New Delhi
6) Date and brief description of instrument modifying the charge	Supplementary agreement of loan increase in the overall limit dated 5.12.2003 and supplementary agreement of hypothecation of goods and assets for increases in the overall limit dated 5.12.2003
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Now the limit had been enhanced from to Rs. 1220.000 including Rs. 20.000 Millions for DDP. The total borrowing limit is also secured by hypothecation of Airbus aircraft A -300 The term loan of Rs. 200.000 Millions will repay in 30 monthly installment of Rs. 6.667 Millions
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Agreement of loan for overall limit (CI) and agreement of Hypothecation of Goods and assets dated 27^th December, 2002 and Regd. 22.01.2003 Modified on 5.12.2003 up to Rs. 1220.000 Millions
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1000.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Two Aircraft bearing no VT – EFX and VT EHC respectively
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 10.25% on Rs. 500.000 Millions for INR loan Portion Interest @ LIBOR plus 75 basis points for FCNR (B) loan of Rs. 500.000 Millions Repayable in 100 daily installment of Rs. 10.000 Millions each per working day
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Industrial Finance Branch, 6^th Floor, Vijay Building, Barakhamba Road, New Delhi
6) Date and brief description of instrument modifying the charge	Supplementary agreement of loan increase in the overall limit dated 19.12.2003 and supplementary agreement of hypothecation of goods and assets for increases in the overall limit dated 19.12.2003
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Now the limit had been enhanced from to Rs. 1220.000 including Rs. 1615.000 Millions for DDP. The total borrowing limit is also secured by hypothecation of Airbus aircraft A -300
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	110A, Letter of Hypothecation Dated 20.11.97 F 16, Letter of Continuity
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Aircraft Spares at New To the Extent of Rs. 135.000 Millions
4) Gist of the terms and conditions and extent and operation of the charge.	Interest at 13.50% p.a. Plus 0.50% ie. 14% p.a. compounded quarterly Charge operations as continuous Limit Bifurcated as Working capital Demand Loan for Rs. 80.000 Millions and Cash Credit portion of Rs. 20.000 Millions
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Parliament Street, New Delhi
6) Date and brief description of instrument modifying the charge	DPN dated 7.11.97 FIIOG – Supplemental deed of hypothecation dated 7.11.97
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	The limit is increased from Rs. 100.000 Millions to Rs. 200.000 Millions
Name of the Company	India Airlines Limited
Presented By	Indian Overseas Bank
1) Date and description of instrument creating the change	Hypothecation Of intangible movable property dated 18.11.1999
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 250.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	All tangible movable assets of the company Including in particular all stocks parts stores and tools
4) Gist of the terms and conditions and extent and operation of the charge.	First charge by way of Hypothecation Of tangible movable assets Working capital demand Rs. 250.000 Millions with a min 12.4% at such other rates as may motified of the company by the bank time to time
5) Name and Address and description of the person entitled to the charge.	Bank of India, Conmaught Cirus, New Delhi
6) Date and brief description of instrument modifying the charge	Nil
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Nil

ADOPTION OF efficient management systems combined with serious cost cutting and improved operations have considerably improved the liquidity position of the state-owned Indian Airlines. An endorsement of the new financial strategy is reflected in the Indian Airlines recording a net profit of Rs 280.000 Millions in the first quarter (April-June) of 2005-06 against Rs 59.500 Millions in the corresponding previous period despite an unprecedented rise in the ATF (Aviation Turbine Fuel) price.

Over the past few years Indian Airlines passed through a difficult phase with mounting competition from private operators and severe liquidity crunch. Oil companies and foreign store suppliers were constantly reminding the carrier of their outstanding dues. Even as banks were reluctant to extend additional credit facilities, pressure was building from unions and associations for early settlement of their arrears.

All this and the challenge from competing private airlines sent the Indian Airlines management looking for administrative and financial solutions. Today, the airline is seemingly out of clouds and its liquidity position has improved considerably.

Much of the credit should go to the former Chairman and Managing Director, Mr Sunil Arora, who has gone back to his parent cadre, Rajasthan, at the end of his tenure, and the incumbent chief, Ms Sushma Chawla, who made cost control an obsession to revive the fortunes of IA.

Of the staggering Rs 3800.000 Millions payable to retired and serving employees, only Rs 900.000 Millions remains payable, to serving employees; all arrears of the retired employees have been fully paid. Indian Airlines discharged this without creating any fresh liability, thanks to effective cash management.

The long-term loans taken for aircraft acquisition which stood at Rs 1,6280.000 Millions as on March 31, 2000 were down to a mere Rs 1470.000 Millions as on March 31, 2005. This means that in these five years, which were worst for the airline industry especially after 9/11, Indian Airlines cleared Rs 14810.000 Millions of debt, mainly from internal accruals; the company never defaulted on its debt service obligation. Its short-term loan position also has improved.

The Indian Airlines board had earlier approved an increased borrowing limit of Rs 5000.000 Millions to meet the short-term fund requirement. Initially, the company borrowed right up to the limit, but brought it down to Rs 2300.000 Millions as on May 31, 2005. This became possible because of effective budgetary and cost-control measures.

After sustained negotiations with banks to reduce the interest rates, the interest cost element was reduced and the average rate of borrowing brought down from 12 per cent to 9.5 per cent per annum. While the reduction in the rate saved Rs 70 Millions, Indian Airlines gained nearly Rs 520.000 Millions on the renewal of the Aviation Insurance Policy for the period October 2003 to September 2004. It saved another Rs 300.000 Millions on insurance policy renewal for the period beginning October 2004.

The Department of Public Enterprises accorded an "Excellent" rating to IA for its performance for 2003-04; the airline had won it last in 1997-98. The airline hopes to do an encore in 2004-05. The outstandings of the oil companies have been reduced considerably and only current month bills are pending against the earlier outstanding of three months.

A major reason for Indian Airlines' financial turnaround was the serious cost-control exercise. For instance, a cost-benefit analysis was made mandatory before undertaking any major project.

Also put through were a drastic cut in overtime payment, freeze on recruitment other than operational and voluntary retirement schemes, rationalisation of staff facilities, reduction in staff on duty travel, temporary postings, crew layover expenditure, fuel tanking and streamlining of material consumption, stores and spares. These measures led to savings of Rs 1020.000 Millions in 2002-03, Rs 1900.000 Millions in 2003-04 and Rs 1480.000 Millions in 2004-05.

One reason for lower cost saving in the year ended March 31, 2005 was the unprecedented rise in ATF prices; ATF constitutes 35 per cent of the airlines operating cost. ATF prices went up by 30 per cent in 2004-05 to an average of Rs 27,500 per kilolitre against Rs 21,000 a kilolitre in 2003-04. It rose further by 27 per cent in May 2005 to Rs 34,800 per kilolitre.

The estimated fuel cost of Indian Airlines and Alliance Air rose from Rs 8660.000 Millions in 2000 to Rs 2,7500.000 Millions in 2005-06 which is Rs 6000.000 Millions more than budgeted estimates.

Besides rising fuel cost, Indian Airlines also had to deploy far more capacity on Category II and III routes due to social and political compulsions than competing private airlines resulting in a huge but avoidable loss.

Against a mandated minimum laid down in the Route Dispersal Guidelines of the DGCA (Directorate-General for Civil Aviation) for deploying only 10 per cent of Category I capacity on Category II routes, 1 per cent of Category I routes on intra-Category II route and 50 per cent of Category II routes on Category III routes, Indian Airlines deploys 18.5 per cent, 1.9 per cent and 70.6 per cent respectively. This pushed up the annual financial loss of Rs 400.000 Millions on excess Category II operations and Rs 1500.000 Millions on excess Category III operations.

Just imagine the status of Indian Airlines were it to save Rs 1900.000 Millions by deploying the right capacity, as mandated under the Route Dispersal Guidelines. For one its net profits would have been up Rs 2000.000 Millions in 2004-05 when it reported a net profit of only Rs 175.000 Millions and even more in the previous two years after adjusting for the fuel cost which has only risen except for a modest drop in the intervening period.

So, Indian Airlines appears to have been given a bad name after comparing it unfairly with private carriers; Indian Airlines flies more on sectors where the earnings are less, and is also called upon to do various emergency duties.

Often there is a tendency to compare, again unfairly, the employee ratio of Indian Airlines with other carriers. The total staff strength of Indian Airlines has been reduced from 20,554 in 2000-01 to 18,504 in 2004-05 or by about 10 per cent. Alliance Air, its subsidiary, employs 842 people, mostly on contract.

With 67 aircraft in the Indian Airlines fleet, the aircraft-employee ratio worked out to 1:289 as on March 31, 2005 against 1:404 at the beginning of 2000. Even this ratio is high because Indian Airlines performs various non-core activities such as major maintenance and surface transport which are mostly outsourced by private carriers.

If such activities are contracted out, and comparable activities taken into account, then IA's aircraft-employee ratio would come down to 1:192 which compares favourably with leading airlines such as Singapore (1:161), British Airways (1:178), KLM (1:220), Virgin Atlantic (1:282), Air Lanka (1:434), Thai Airways (1:321), Malaysian Airlines (1:321) and Air France (1:245).

With IA staff getting productivity linked incentives (PLI), like their Air India counterparts, the increase in its fleet size will further improve the aircraft-employee ratio except for the mandatory recruitment of pilots and engineers. Of its 67-aircraft fleet, IA has three Airbus A300s, 47 A320s (of which 17 are leased), 11 Boeing 737-200s, two Dorniers and four leased ATRs.

Pending induction acquisition of the 43 Airbus aircraft, IA plans to augment its fleet (including replacement) by dry leasing 10 A320s, five A319s and six ATRs. Indian Airlines proposes to retire five Boeing 737-200s and convert them into freighters to augment its cargo capacity. It is also leasing 12 wide-body aircraft to widen and deepen its international operations.

The airline has managed its finances well with relentless cost controls as is reflected in increased revenues even as expenses rise, available seat kilometres, revenue passenger kilometres, seat factor and passengers carried. All it needs is strong government support. If the Government relieves it of the burden of excess deployment on Cat II and III routes, quickly approves its new fleet plan and accords early clearance for joint ventures for its MRO (Maintenance, Repair and Overhaul) and ground handling companies, IA's fortunes will soar higher.

Indian Airlines Q1 net up at Rs 28.45 cr

Company’s Bureau

New Delhi , July 18

INDIAN Airlines (IA) has reported a net profit of Rs 284.500 Millions during the first quarter of the current year, compared to Rs 59.500 Millions during the same period in the previous year.

Official sources said that during the period under review the airline carried 1.9 million passengers - up from 1.7 million during the previous corresponding period.

IA reported an increase of 16.7 per cent in its expenses during the first quarter while revenues were up 18.4 per cent. The airline was able to record a better performance despite the increase in prices of aviation turbine fuel.

Officials, however, said it was still too early to predict how the year would finish and added that the improved performance was due to strict cost control measures and improved physical performance.

"The budget estimates for the whole year will be ready by the end of March. We hope to continue with this trend and end the year on a positive note," IA officials said.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 44.07
UK Pound	1	Rs. 86.17
Euro	1	Rs. 57.97

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

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