We have audited the standalone financial statements of Air India Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as Standalone Financial Statements) We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, the aforesaid Standalone Financial Statements give the information (other than certain information mentioned in Para (g) of Emphasis of Matter), required by the Companies Act, 2013, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2019, its loss (including other comprehensive income), the changes in equity and its cash flows for the year ended on that date. The Company has incurred a net loss of Rs. 84,748.0 Million during the year ended March 31, 2019 and, as of that date, the Company’s current liabilities exceeded its current assets by Rs. 6,52,458.7 Million and it has accumulated losses of Rs. 6,26,936.3 Million which has resulted in complete erosion of the net worth of the company. In spite of these events or conditions which may cast a doubt on the ability of the company to continue as a going concern, the management is of the opinion that going concern basis of accounting is appropriate in view of the continued support of the Government of India and having regard to the other facts mentioned in Note No.54. Our opinion is not modified in respect of this matter Emphasis of Matter We draw attention to; a. Note No. 26 A(a) regarding non provision of interest claims from airport operators and Note No. 26A(b) regarding non-provision of penal charges on delayed payment of Guarantee Fee for reasons stated therein; b. i. Note No. 50 regarding Deferred Tax Asset carried in the accounts in view of the reasons stated therein, the realisation of which would depend on generation of sufficient profits in the future as anticipated / projected by the management; ii. Note No.50 (d) regarding the effect of change in tax rate subsequent to the Balance Sheet date, vide amendments in the Income Tax Act, 1961 and the Finance (No.2) Act 2019, through Taxation Law (Amendment) Ordinance 2019, on the carrying value of deferred tax asset (Net) as disclosed therein. c. Note No. 47 regarding the management’s opinion that there is no decline in the carrying value of investment in a Subsidiary – Air India Express Limited (Carrying Value of Investments aggregating to Rs. 7,800.0 million) and advances of Rs 10,586.1 Million to the said subsidiary company and interest accrued thereon amounting to Rs 924.3 Million even though the net-worth is fully eroded, for the reasons stated therein. d. Note No.29(ix) read with Note No.47 regarding realisability of advances to subsidiary companies including interest accrued thereon amounting to Rs 36,915.7 Million classified as ‘Asset Held for Sale’ as the same is being transferred at carrying value. e. Note No. 35 regarding non-application of Appendix B to Ind AS 21- “The effect of changes in Foreign Exchange rates” in respect of advances received or paid in foreign currency. f. Note No.29 regarding; i. classification of loans identified for transfer to Air India Assets Holding Limited(AIAHL) as current liability; ii. accounting for reimbursement of Rs 13,000.0 Million for the period from 1st October 2018 to 31st March 2019 by AIAHL towards interest costs paid by the Company on the identified loans, as a reduction from finance cost ; iii. no effect being given for certain receivables/transactions with AIAHL pending final reconciliation; iv. classification of certain identified properties as Asset held for sale/ Investment property; and v. classification of investment in subsidiaries along with receivables and payables of the 71 AIR INDIA subsidiaries as Assets held for sale. g. Non-Disclosure of certain information in the standalone financial statements as required by ScheduleIII of the Companies Act, 2013, and Indian Accounting Standards (Ind AS): (i) Terms of repayment, nature of Security separately for each case of borrowings and period & amount of continuing default in respect of borrowings and interest thereon in respect of each borrowing - Refer Note No.13.2 & 18 (ii) Foreign Currency Fluctuation under Finance Cost- Refer Note No. 23(a) (iii) Information regarding dues/payments/interest to Micro & Small Enterprises, if any, included in Trade Payable- Refer Note No 52 (iv) Fair Value of Investment Properties as required in Ind AS 40- Investment property - Refer Note no. 30 (d) Our Opinion is not modified in respect of above matters Key Audit Matters Key audit matters are those matters that in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion and Material Uncertainty in relation to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. 1. Investment in a subsidiary and advance recoverable from said subsidiary 2. Depreciation and impairment of Property, Plant & Equipment, Investment Properties and Intangible assets 3. Provision for Re-delivery of Aircraft 4. Leases and incentives 5. Assets held for sale (Other than Investments in subsidiaries held for sale) 6. Recognition of revenue from transportation services 7. Provisions and Contingent Liabilities and Evaluation of uncertain tax positions 8. Deferred Tax Assets 9. Inventory 10. Provision for receivables 11. Accounting & disclosure for proposed disinvestment