MIRA INFORM REPORT

Report Date :

27.12.2011

IDENTIFICATION DETAILS

Name :	AIR INDIA CHARTERS LIMITED

Registered Office :	21^st Floor, Air India Building, Nariman Point, Mumbai – 400021, Maharashtra

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	09.09.1971

Com. Reg. No.:	11-015328

Capital Investment / Paid-up Capital :	Rs. 300.000 Millions

CIN No.: [Company Identification No.]	U62100MH1971GOI015328

TAN No.: [Tax Deduction & Collection Account No.]	MUMA21946B

PAN No.: [Permanent Account No.]	AABCA0534F

Legal Form :	A Closely Held Public Limited Liability Company

Line of Business :	Providing Ground Handling Services to Customer airlines.

No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ca (17)

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate

Payment Behaviour :	Slow

Litigation :	Clear

Comments :	Subject is a Government of India Company It is an established company having moderate track. There appears a huge accumulated loss recorded by the company. Profitability of the company is under pressure. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings on a secured trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	21^st Floor, Air India Building, Nariman Point, Mumbai – 400021, Maharashtra, India
Tel. No.:	91-22-28318826 / 22796496
Fax No.:	91-22-22023686
E-Mail :	aa.khandekar@airindia.in

DIRECTORS

As on 30.09.2011

Name :

Mr. Lakkadi Rajasekhar Reddy

Designation :

Director

Address :

B I Hudco Place August Kranti marg, New Delhi – 110049, Delhi, India

Date of Birth/Age :

22.03.1966

Date of Appointment :

08.08.2008

DIN No.:

02321204

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U62100MH1971GOI015328	Air India Charters Limited	Director	08-08-08	08-08-08	-	Active	NO
2	U62100DL1981GOI011262	Vayudoot Limited	Director	08-08-08	08-08-08	-	Active	NO
3	U51101DL1983GOI016518	Airline Allied Services Limited	Director	08-08-08	08-08-08	-	Active	NO
4	U63013CH2010GOI031999	Chandigarh International Airport Limited	Director	28-01-10	28-01-10	29-03-10	Active	NO

Name :

Mr. Syed Nasir Ali

Designation :

Director

Address :

Quarter No.1, Type 5, Lodi Road, New Delhi – 110003, India

Date of Birth/Age :

27.04.2010

Date of Appointment :

04.05.1965

DIN No.:

03113580

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U62100DL1981GOI011262	Vayudoot Limited	Director	27-04-10	27-04-10	-	Active	NO
2	U51101DL1983GOI016518	Airline Allied Services Limited	Director	27-04-10	27-04-10	-	Active	NO
3	U62100MH1971GOI015328	Air India Charters Limited	Nominee director	27-04-10	27-04-10	-	Active	NO

Name :

Mr. Nandan Rohit

Designation :

Chairman Cum Managing Director

Address :

22B, Sterling Apartment, Peddar Road, Mumbai – 400020, Maharashtra, India

Date of Birth/Age :

27.01.1957

Date of Appointment :

12.08.2011

DIN No.:

02195896

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U01122UP2002SGC026490	Uttar Pradesh Beej Vikas Nigam	Director	23-04-08	23-04-08	30-06-08	Active	YES
2	U62200DL1985GOI022233	Pawan Hans Helicopters Limited	Nominee director	28-12-09	28-12-09	16-08-11	Active	NO
3	U62200DL2007GOI161431	Air India Limited	Managing director	12-08-11	12-08-11	-	Active	NO
4	U62100DL1981GOI011262	Vayudoot Limited	Director	12-08-11	12-08-11	-	Active	NO
5	U62100MH1971GOI015328	Air India Charters Limited	Director	12-08-11	12-08-11	-	Active	NO
6	U55101MH1971GOI015217	Hotel Corporation Of India Limited	Director	12-08-11	12-08-11	-	Active	NO
7	U51101DL1983GOI016518	Airline Allied Services Limited	Director	12-08-11	12-08-11	-	Active	NO
8	U63090DL2003PLC120790	Air India Air Transport Services Limited	Nominee director	13-09-11	13-09-11	-	Active	NO
9	U74210DL2004PLC125114	Air-India Engineering Services Limited	Nominee director	13-09-11	13-09-11	-	Active	NO
10	U74900DL2010PTC201763	Air India Sats Airport Services Private Limited	Director	16-09-11	16-09-11	-	Active	NO

Name :

Mr. Fali Homi Major

Designation :

Director

Address :

101, M S Apartments, 81, Robertson Road, Frazer Town, Bangalore – 560005, Karnataka, India

Date of Birth/Age :

29.05.1947

Date of Appointment :

10.05.2011

Name :

Mr. Srinivasa Venkat

Designation :

Director

Address :

8, Air India Apartments, 61B, Pali Hill, Babdra (West), Mumbai – 400050, Maharashtra, India

Date of Birth/Age :

17.10.1957

Date of Appointment :

12.12.2011

DIN No.:

03616104

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U74900DL2010PTC201763	Air India Sats Airport Services Private Limited	Director	16-09-11	16-09-11	-	Active	NO
2	U62200DL2007GOI161431	Air India Limited	Whole-time director	12-12-11	12-12-11	-	Active	NO
3	U62100MH1971GOI015328	Air India Charters Limited	Director	12-12-11	12-12-11	-	Active	NO

KEY EXECUTIVES

Name :	Ms. Aditi Ashok Khandekar
Designation :	Secretary
Address :	202, Hurrah Citi of Joy J Dosa Road, Mulund West, Mumbai – 400080, Maharashtra, India
Date of Birth/Age :	04.05.1965
Date of Appointment :	12.12.1996

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Names of Shareholders		No. of Shares
Air India Limited		2999989
Air India Limited with Sharma Umesh Amod		1
Air India Limited with Srinivasa Venkat		1
Air India Limited with Srikrishnan V		1
Air India Limited with Chandra Sekhar S		1
Air India Limited with Anand Rakesh		1
Air India Limited with Unni K M		1
Air India Limited with Brara Deepak		1
Air India Limited with Khurana Anita		1
Air India Limited with Vaz F J		1
Air India Limited with Jadhav Arvind		1
Air India Limited with Kundra S K		1
TOTAL		3000000

Equity Share Break up (Percentage of Total Equity)

As on 30.09.2011

Category	Percentage
Government Companies	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Providing Ground Handling Services to Customer airlines.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Standard Chartered Bank, 90 M G Road, Fort, Mumbai – 400001, Maharashtra, India

Facilities :

Unsecured Loan	As on 31.03.2010 (Rs. in Millions)	As on 31.03.2009 (Rs. in Millions)
From Banks	10398.000	10514.40
Foreign Currency Loan from Bank (Amount repayable within one year Rs. NIL Previous year Rs. 1822.900 millions)	0.000	1822.900
Debenture Repayable with in one year (950 Unsecured , redeemable non convertible debenture of face value of Rs. 1.000 millions each at interest rate of 9.38% ) Guraneeted by government of India to the extent of Rs. 950.000 Millions Pervious year Nil)	950.000	0.000
Total	11348.000	12337.300

Banking Relations :	--

Auditors :
Name :	J P J Associates Chartered Accountant
Address :	2/C/46, Shri Rajendra Co-operative HSG Society, Govind Nagar, Borivali West, Mumbai – 400092, Maharashtra, India
Tel. No.:	91-22-2921474
Fax No.:	91-9821466771/2
E-Mail :	jpjassociates@rediffmail.com
PAN.:	AABFJ6339C

Holding Company:	Air India Limited Cin No: U62200DL2007GOL161431

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
3000000	Equity Shares	Rs.100/- each	Rs.300.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

3000000

Equity Shares

(The entire share capital is held by National Aviation Company of India Limited, A Company formed under the companies act, 1956 and its nominees)

Rs.100/- each

Rs.300.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		300.000	300.000	300.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		427.100	0.000	0.000
4] (Accumulated Losses)		(7146.900)	(3540.000)	(60.600)
NETWORTH		(6419.800)	(3240.000)	239.400
LOAN FUNDS
1] Secured Loans		0.000	0.000	18895.600
2] Unsecured Loans		11348.000	12337.300	5385.000
TOTAL BORROWING		11348.000	12337.300	24280.600
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
Future Reserve Obligation		27374.900	25730.200	0.000

TOTAL		32303.100	34827.500	24520.000

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		37564.800	32683.800	21856.100
Capital work-in-progress		0.000	2586.500	4023.700

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	384.400	397.400	283.500
	Sundry Debtors	792.900	287.300	407.400
	Cash & Bank Balances	247.900	188.900	160.200
	Other Current Assets	1.200	1.300	0.700
	Loans & Advances	1259.000	1562.500	916.800
Total Current Assets		2685.400	2437.400	1768.600
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	3945.900	1892.400	888.500
	Other Current Liabilities	3964.700	956.500	2216.800
	Provisions	36.500	31.300	23.100
Total Current Liabilities		7947.100	2880.200	3128.400
Net Current Assets		(5261.700)	(442.800)	(1359.800)

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		32303.100	34827.500	24520.000

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Operating Revenue	13453.500	13733.200	8749.000
		Other Income	565.100	430.300	2854.100
		TOTAL (A)	14018.600	14163.500	11603.100

Less	EXPENSES
		Payment to and Provisions for Employees Including Crew Allowances	1127.900	1054.600	670.900
		Fuel and Oil Aircraft	6573.100	7789.100	4806.800
		Insurance Aircraft	153.100	120.700	88.000
		Navigation, Landing, Housing and Parking	1162.000	931.400	667.700
		Hire and Lease Rental Charges	1609.300	1503.500	1443.200
		Handling Charges	1337.900	1283.100	596.300
		Material Consumed Aircraft	328.200	156.500	88.500
		Outside Repairs Aircraft	521.800	272.600	286.000
		Passenger Amenities	286.800	225.200	150.800
		Commission (Net)	94.900	135.800	106.600
		Communication Charges Reservation Systems Others	17.200 5.200	13.300 7.300	15.200 2.600
		Traveling Expenses Crew Others	224.000 30.400	195.000 45.800	105.800 46.900
		Other Expenses	320.000	517.000	349.500
		TOTAL (B)	13791.800	14250.900	9424.800

Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		226.800	(87.400)	2178.300

Less	FINANCIAL EXPENSES (D)		2051.200	1780.000	1415.100

	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(1824.400)	(1867.400)	763.200

Less/ Add	DEPRECIATION/ AMORTISATION (F)		1782.500	1535.500	865.900

	PROFIT/(LOSS) BEFORE TAX (E-F) (G)		(3606.900)	(3402.900)	(102.700)

Less	TAX (H)		0.000	(6.900)	(762.100)

	PROFIT/(LOSS) AFTER TAX (G-H) (I)		(3606.900)	(3396.000)	659.400

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(3456.600)	(60.600)	(720.000)

	BALANCE CARRIED TO THE B/S		(7063.500)	(3456.600)	(60.600)

	Earnings/loss Per Share (Rs.)		(1202.30)	(1132.00)	219.800

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(25.73)	(23.98)	5.68

Net Profit Margin (PBT/Sales)	(%)	(26.81)	(24.78)	(1.17)

Return on Total Assets (PBT/Total Assets}	(%)	(8.96)	(9.69)	(0.43)

Return on Investment (ROI) (PBT/Networth)		0.56	1.05	(0.42)

Debt Equity Ratio (Total Liability/Networth)		(3.00)	(4.70)	114.49

Current Ratio (Current Asset/Current Liability)		0.34	0.85	0.56

LOCAL AGENCY FURTHER INFORMATION

CIVIL AVIATION SCENARIO

2009-2010

Airline markets rose strongly at the end of 2009 with growth concentrated in the emerging markets of Asia, Latin America and the Middle East. Airlines in the large developed markets of Europe and North America faced sluggish market growth. Helped by the strong year, IATA (International) Air Transport Association) cut its estimate of 2009 net losses from US$11 billion to US$9.4 billion.

During the second half of 2009, demand rebounded at an annualised rate of 12% for passenger and 28% for cargo. There was a strong upturn in air travel and air freight demand at year end, while capacity cuts remained in place. Passenger and freight load factors rose to at least pre-recession levels as a result. Fares showed an uptrend, though premium revenues were still 30% down on early 2008 arid economy was down 1.6%.

Air transport is an energy intensive industry, so when oil prices spiked in 2008, fuel made up 33% of operating costs on average. By the start of 2009, oil prices had fallen back to around $40 a barrel. However, from that low point the industry has faced continuously rising fuel prices. By year-end 2009, crude oil prices had risen 85%. To $74 a barrel, as economic recovery began to raise demand and as futures markets, anticipating strengthening, economic recovery, added tci upward pressures. The volatility in fuel prices has meant airline hedging strategies met only moderate success. Surges in fuel ‘price can be highly destabilizing, especially form the Low Cost Carriers and one of the few risk management options that they can employ to counter this is to aim for higher yields.

Thus, although the industry has seen volumes and yields rising since the middle of 2009, there is still a long way to go before the revenue levels seen in early 2008 are recovered.

OUTLOOK FOR 2010

As per IATA estimates, the year 2010 needs to be looked at with cautious optimism Global traffic is back to pre-recession levels with load factors nearing 80% and the bottom line is improving. IATA has upgraded its global industry forecast to a full-year profit of $8.9 billion for the year 2010-11. Asia Pacific airlines continue to lead the recovery and are expected to post aggregate earnings of $5.2 billion in 2010. A 33% hike in Cargo traffic and a 23% increase in intra-Asia business travel are driving the improvement.

2009-10

As per data available with the Airports Authority of India, scheduled international passenger carnage to/from India for the year 2009-10 registered a growth of 8.8% compared to 2008-09 while the domestic carriage increased by 15.6%. During 2009-10, the international and domestic carriage stood at 34.370 million arid 44.680 million respectively. 101 airports, Delhi superseded CSI Airport, Mumbai by becoming the highest passenger handling airport in India.

The growth in the domestic carriage, since June 2009 was led mainly by budget flying the combined market share of low-cost carriers (LCCs) is close to 7Q per cent now.

The lean travel month of March 2010 saw passenger load factors of airlines going down from impressive 80-90 per Cent highs in the December 2009 to February 2010 period. Big players saw their loads in the range of 74 per cent to 66.5 per cent. Pure LCCs registered the highest loads.

OUTLOOK FOR 2010

The new fiscal (2010-11) has started on an upbeat note for domestic airlines. Passenger numbers increased 26% In April, with a domestic carriage of 41.88 lakh passengers. Most domestic carriers saw flight occupancy of 70-80 per cent as demand improved in April. Domestic carriers have maintained double digit growth for the past many months on the back of a robust economy.

According to data available with the Directorate General of Civil Aviation (DGCA), domestic airlines carried 162.82 lakh passengers in January-April 2010, up 22 per cent over 133.41 Iakh in the corresponding period last year. Domestic air traffic has shifted towards low-cost airlines forcing full-service carriers to keep fares competitive.

Most of the carriers are expanding their operations, as the growth in the sector has stabilized on the back of strong economy and improved market sentiment. While full- service carriers are cautiously adding flights, the low cost carriers have indicated aggressive fleet induction plans. According to a market analysis report for the Asia Pacific region by Frost and Sullivan, booming economies, lower labor costs and rising disposable incomes are harbingers of good news for low cost carriers in the region.

The report further says that, the LCC market is expected to see an increase from 116 million passengers in 2008 to 217 million in 2012. The fleet of LCCs in the region is expected to increase from 450 to 830 during the same period.

LCCs typically operate from secondary city airports, providing a cost advantage over legacy carriers. Still, airport charges account for an estimated 20% of LCC’s total cost in Asia Pacific and the absence of low cost terminals in the region adds to overhead costs.

Fuel and oil costs account for 40% of the LCC revenues so volatility in cost can significantly impact LCC profitability. Additionally, lack of infrastructure has an adverse effect on the earners.

Provided conditions continue to favour the expansion of air travel, there is little doubt that LCCs will continue to drive it. Indeed, it is likely that the low cost model, or local variants of it, will become even more dominant in domestic travel in the future, and play increasing role in regional travel (in to the Middle East and Southeast Asia) as well.

REVIEW OF PERFORMANCE

The highlights of the Physical and Financial Performance of the company for 2009-10 vis-a-vis 2008-09 are as under:

The Scheduled Services Revenue, before revenue sharing with the holding company National Aviation Company of India Limited (NACIL), declined marginally from Rs.17131.200 millions in 2008-09 to Rs. 17103.600 millions 2009-10. The lower revenue, despite increased operations, was primarily due to a 5.7% decline in passenger load factor and a drop in the yield of 4.6%.

During the year the Total Revenue of the company, after revenue sharing with NACIL, was Rs. 14018.600 millions as compared to Rs. 14163.500 millions for the year 2008-09, representing a decrease of approximately 1.02%. The total expenditure of the company was Rs.17625.500 millions as against Rs. 17566.400 millions for the year 2008-09, representing an marginal increase of 0.34 %.

Operating expenses increased in proportion to the increase in the number of flights operated in 200.9-10. However, the major increases in .other costs such as Insurance cost by Rs.32.400 millions (26.84%), Depreciation by Rs 247.100 millions (16.09%), Interest on borrowings by Rs. 410.400 millions (47.73%) and Material Consumption by Rs.342.900 millions (98.11%) was largely offset by the savings ii Fuel Cost by Rs. 1216.000 millions resulting in a marginal overall increase in Total Expenses by Rs. 59.200 millions (0.34%).

The Net Loss before taxation was Rs.3606.900 millions as against Rs. 3402.900 millions in 2008-09.

AIR INDIA EXPRESS OPERATIONS

FLEET SIZE

As on 31 March 2009 the Company had a fleet of 21 B737-800 aircraft (including 7 dry leased aircraft). During the year 2009-10 four owned B737-800 aircraft joined the fleet and three leased aircraft were grounded for lease return. Thus as on 31 March 2010 the Company had 22 B737-800 aircraft (including 4 dry leased aircraft) in it and fleet

OPERATIONS

Air India Express ended 2008-09 with 174 international flights per week. The Summer 2009 schedule started on 29 March. One month later, on 30 April 2009 two flights per week were introduced with the routing Chennai- Thiruchirapalli-Abu Dhabi in order to tap the huge market from Thiruchirapalli to the United Arab Emirates capitalizing on the emergence of Abu Dhabi as the new destination of choice, following the financial upheaval in Dubaj.

A daily flight was introduced between Mumbai and Dhaka on code-share basis with Air India in June 2009. This: flight offered excellent connectivity from ‘Bangladesh to European and North American destinations over Mumbai. At the same time, frequency on Dhaka-Kolkata-Singapore route was increased from three to four due to the excellent performance of the route since its inception.

Keeping in mind the global economic slowdown and the resultant impact on the travel industry, this year Air India ‘Express focused more on consolidation of its operations in its existing, markets rather than expanding to new markets

Frequency of operations was increased on sectors like Thiruvanathapuram-Abu Dhabi and Kochi-Abu Dbabi from five each to seven each in July 2009, thereby providing a complete daily product from the three cities in Kerala Kozhikode, Kochi and Thiruvananthapuram) to Abu Dhabi. The Amritsar-Dubai flights were also made daily, while the frequency of the Lucknow-Dubai flight was increased from three to four per week, in August- keeping in view the performance of these routes both in terms of passenger numbers as well as yields.

August also saw the increase’s frequency of Kochi-Sharjah flights to daily in view of the profitability of the operation. Kochi thus had a complete product to UAE with a daily flight each to Dubai, Sharjah and Abu Dhabi as well as a flight to A1 Ain

September 2009, an aircraft was placed in New Delhi and thrice weekly flights were introduced from Delhi and Amritsar to Abu Dhabi and Muscat to cater to the rising demand of these destinations from North India after the slump in Dubai.

Winter season, starting 25 October, saw further consolidation of routes resulting in a marked increase in capacity. The number of flights from Kerala to Muscat was doubled from six times a week to twelve times a week — seven shared by Kozhikode and Thiruvananthapuram and five shared by Kochi and Thiruvananthapuram.

Delhi was added to the Mumbai-Bahram-Doha thrice weekly flight in order to provide better connectivity to the North India market. The newly placed aircraft in Delhi was used to operate these flights.

An additional flight was introduced on the Thiruvananthapuram-Dubai route effective winter 2009-10 giving a daily operation from each of the three cities in Kerala to Dubai.

Operations on the Bahrain-Doha route were also strengthened. Two direct Kozhikode Doha-Bahrain flights were introduced in addition to one more flight shared by Kochi and Kozhikode, making the operation from Kozhikode and Kochi a daily one. The number of flights from Thiruvananthapuram to Doha and Bahrain were reduced from three to two in view of mediocre performance of the route. Totally, nine flights a week operated from Kerala to Doha and Bahrain.

During the fog period from 15 December 2009 to 7 February 2010, one aircraft was based in Dubai to operate flights to Amritsar in the short fog free window during the day. After the fog period was over, it was decided to retain the aircraft in Dubai to operate the Amritsar, Luelnow and Jaipur flights, in order to eliminate the dead legs. from Delhi to Jaipur and Luclcnow and reduce the operating cost drastically. This move also resulted in additional capacity from these cities to Dubai.

From the end of December 2009 till the beginning, of January 2010, the airline faced an acute shortage of cockpit crew resulting in large scale disruption of flights for the first time since Air India Express commenced operations in 2005. The Company was forced to use a Boeing 747-400 aircraft from Air India to cater to the peak season traffic between India and UAE. In total 16 flights were cancelled and many more disrupted in three weeks due to ‘the unavailability of cockpit crew. Since then, more cockpit crew has been and continues to be inducted into the airline to ensure that a similar situation is avoided in the future.

In January2010, flights like Srinagar-Dubai, Hyderabad-Dubai and Nagpur- Ahmectabad - Dubai were withdrawn in view of the’ continuous heavy cash losses incurred by these flights since their introduction.

During the year 2009-10 Air India Express carried about 2.550 million passengers as against 2.240 million passengers in 2008-09, constituting a growth of 13.8%. This is quite significant in view of the global recessionary scenario and the resultant slump in the airline industry worldwide.

The current year 2010-11 began on .a tragic note with the crash of IX 812, Dubai Mangalore on 22 May 2010 in Mangalore.

This year has witnessed the beginning of a global turnaround, resulting in an upward tend for the airline industry and specifically for Air India Express. The seat factors and revenue have improved significantly over the Last year. By September 2010 alone, Air India Express’ has carried 1.300 million passengers and we foresee a significant improvement by the year-end.

FORM 8

Corporate identity number of the company	U62100MH1971GOI015328
Name of the company	AIR INDIA CHARTERS LIMITED
Address of the registered office or of the principal place of business in India of the company	21^st Floor, Air India Building, Nariman Point, Mumbai – 400021, Maharashtra Email: AA.Khandekar@airindia.in
This form is for	Creation of charge
Type of charge	Movable Property (not being pledge)
Particular of charge holder	Standard Chartered Bank, 90 M G Road, Fort, Mumbai – 400001, Maharashtra, India Email: Chandrashekhar.Mahale@standardchartered.com
Nature of instrument creating charge	Deed of Hypothecation dated 29 September 2009.
Date of instrument Creating the charge	22.12.2009
Amount secured by the charge	Rs. 1759.068 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest: One month LIBOR plus 230 BPS Terms of Repayment: 29^th January 2009 Margin : NA Extent and Operation of Charge: The charge is a specific first priority charge applicable on the aircraft to secure the secured obligations specified in the attached Deed of Hypothecation dated 22 December 2009.
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Aircraft B737-800 bearing Registration No.VT-AYD MSN No. 36340 with Engines MSN Nos. 802726 and 802727

Fixed Assets:

Aircraft Fleet and Equipment
Vehicles
Plant and Machinery
Furniture and Fixtures
Office Appliances and Equipments
Computer Systems
Ramp Equipments

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.52.72
UK Pound	1	Rs.82.70
Euro	1	Rs.68.90

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	2
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	2
--LEVERAGE	1~10	2
--RESERVES	1~10	3
--CREDIT LINES	1~10	-
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		17

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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	Capability to overcome financial difficulties seems comparatively below average.	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
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

384.400

792.900

247.900

1.200

1259.000

2685.400

3945.900

3964.700

36.500

7947.100

(5261.700)

(25.73)

(26.81)

(8.96)

0.56

(3.00)

0.34

Unit