Noida Toll Bridge Company Ltd.
|BSE: 532481||Sector: Infrastructure|
|NSE: NOIDATOLL||ISIN Code: INE781B01015|
|BSE LIVE 15:40 | 21 Sep||15.45||
|NSE 15:41 | 21 Sep||15.40||
|Mkt Cap.(Rs cr)||288|
|Mkt Cap.(Rs cr)||287.68|
Noida Toll Bridge Company Ltd. (NOIDATOLL) - Director Report
Company director report
Your Directors have pleasure in presenting the Annual Report along with the AuditedAccounts for the financial year ended March 312016.
(Rs. in Million)
The Income from Operations has increased from ' 1229.92 million to ' 1289.56 milliona 4.85% increase while Profit after Tax (PAT) has increased by 1.94% over the PreviousYear.
The reduction in Profit Before Tax (PBT) is primarily on account of change in theuseful life of the Intangible Asset "Right to collect toll" and Building whichhas been revised to 30 years as consequence of the recent development wherein the Board ofDirectors of the Company on July 9 2015 considered and approved a draft proposal(subject to approval by NOIDA and the Company's Shareholders) for modification to clausesin the Concession Agreement including terminating the concession period on March 312031.
Consequent to the change in useful life depreciation expense in the statement ofProfit and Loss is higher by '281.50 Mn. However increase in PAT by 2% is primarily onaccount of the reversal of Deferred Tax Liability during the year ended March 31 2016 -consequent upon the change in the useful life certain portion of timing difference inrespect of depreciation will reverse during the tax holiday period. Anticipated taxbenefits of such reversal for the full year have been considered in estimated annualeffective income tax rate and accordingly tax expenses of ' 234.20 Mn has been reversedduring the year.
DIVIDEND AND RESERVES
Your Directors have recommended a dividend of 30% (' 3.00/- per share of '10/- each)for the FY 2015-16 which includes the interim dividend of 15% C 1.5/- per share of '10/-each) paid out in the month of March 2016 and balance to be paid out after approval of theShareholders at the Annual General Meeting of the Company to be held in September 2016.
During the year under review no amount from profit was transferred to General Reserve.
The Company has repaid Secured Loan (Deep Discount Bonds) amounting to ' 224.03 Mnduring the year under review in accordance with scheduled repayment terms.
During the year under review the Company has drawndown a secured term loan amountingto ' 430 million.
There has been an overall increase in Average Daily Traffic by 1.55% and in Revenue by7.45% during the financial year 20152016 as compared to the Previous year mainly onaccount of an increase in user fees in December 2014. While commercial traffic haswitnessed a fall by 4.26% car traffic has increased by 2.2% and two-wheeler traffic hasincreased marginally by 1.4%. The slowdown in commercial traffic (heavy vehicles) startedfrom November 2015 due to the levy of "Environment Compensation Charge" (ECC) onnon-destined commercial vehicles entering Delhi. The imposition of the ECC resulted inheavy vehicles taking alternate routes thus reducing commercial traffic on the facility.
The Annual Average Daily Traffic (AADT) during the year under review was 116949vehicles as against 115162 vehicles in the Previous Year. The Annual Average Revenue/Dayhas increased to ' 3.03 million during the year under review from ' 2.82 million in thePrevious Year indicating an increase of around 7.45%.
The Average Daily Traffic (class wise) and Average Daily Revenue during the year underreview is presented in the Table below:
During the year under review the Company successfully upgraded its Toll Technology andextended its ETC methods of payment to include Radio Frequency Identification Device(RFID) technology. The new technology is state of the art' and designed forapplication of new and multiple methods of payment like video tolling credit cardsmobile tolling etc. The technology will enable the Company to focus on increasing usage ofelectronic toll payment methods thereby increasing throughput through the toll plaza andreducing the waiting time and will also enable faster cash transactions. The high accuracyof the Automatic Vehicle Classification system as well as the ICS cameras also minimizeleakage.
The Company is entitled to annual CPI linked/formula driven increases in User Feeswhich have not been permitted at regular intervals since April 2009. The last partial UserFee increase was implemented with effect from December 20 2014.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A Management Discussion and Analysis Report for the year under review as stipulatedunder Listing Regulations is attached and forms part of this Report.
The Issued and Subscribed Equity Share Capital of the Company on March 31 2015 was '1861950020/-. There were no allotments of shares during the year and hence the sharecapital on March 312016 remains the same.
The Company has one subsidiary ITNL Toll Management Services Limited. The auditedaccounts of the subsidiary as well as the Consolidated Financial Statements of theCompany along with its subsidiary form part of this Report. A statement containing salientfeatures of the financial statement of subsidiaries/associate companies in the prescribedForm AOC- 1 is annexed to this Report as Annexure 1.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. ArunSaha Director retires by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for re-appointment. The Board recommends his re-appointment forthe consideration of the Members of the Company at the ensuing Annual General Meeting.
None of the Directors of the Company are disqualified from being appointed as Directorsas specified under Section 164 of the Companies Act 2013.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 and Regulation16 (b) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015. During the year under review the nonexecutive directors of theCompany had no pecuniary relationship or transactions with the Company other than sittingfees commission and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Company.
During the year under review there has been no change in the composition of the Boardof Directors of the Company.
Pursuant to the provisions of the Companies Act 2013 and the Corporate Governancerequirements as prescribed by Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has devised a Policy forperformance evaluation of all the Independent Directors Board and Committees ofDirectors both executive and non-executive. A structured questionnaire was preparedcovering various aspects of the Board's functioning execution and performance of dutiesobligations and governance. An evaluation of performance for FY 201516 has been conducted.The Directors have expressed their satisfaction with the performance of each of theDirectors Committees and the Board.
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. HarishMathur Executive Director & CEO Ms. Monisha Macedo Whole Time Director Mr. RajivJain CFO and Ms. Pooja Agarwal Company Secretary continue as Key Managerial Personnelof the Company. There has been no change in the Key Managerial Personnel during the yearunder review.
The following policies of the Company are annexed to this Report:
1. Selection Criteria for Independent Directors of the Company along with the Criteriafor Independence (Annexure 2)
2. Remuneration Policy for Directors Key Managerial Personnel and other employees(Annexure 3)
NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met eight times during the year under review.Details on the Meetings form part of the Corporate Governance Report.
As per Section 177 of the Companies Act 2013 the Audit Committee of Directorscomprises 6 Directors out of which 4 are Independent. The Independent Directors on theCommittee are; Mr. R.K. Bhargava (Chairman) Dr. Sanat Kaul Mr. Piyush Mankad and Mr.Deepak Premnarayen. The other Members are Mr. Arun Saha Director and Mr. Harish MathurExecutive Director & CEO.
All recommendations made by the Audit Committee were accepted by the Board.
Detailed composition of the Committee along with information on the meetings held andattended are given in the Corporate Governance Report.
WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower / Vigil Mechanism Policy to report genuineconcerns or grievances concerning instances of unethical behavior actual or suspectedfraud or violation of the Company's Code of Conduct and Business Ethics Policy. The Policycan be accessed on the website of the Company in the investor information section on
The Company has not received any complaints under this policy during the year underreview.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (Prevention Prohibitionand Redressal) ACT 2013
The Company has in place an anti Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. All employees of the Company andits subsidiary (permanent contractual temporary trainees) are covered under thisPolicy. One complaint was received and redressed during the year under review.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
In terms of Section 135 of the Companies Act 2013 the Company's Corporate SocialResponsibility Committee (CSR Committee) has been constituted and consists of fiveDirectors out of which two are Independent. The Independent Directors are Mr. R. K.Bhargava Chairman and Dr. Sanat Kaul Director. Other Members are Mr. Arun Saha and Mr.K. Ramchand Directors and Mr. Harish Mathur Executive Director & CEO. Details of theCommittee along with information on the meetings held and attended are given in theCorporate Governance Report.
The CSR Committee has formulated and recommended to the Board a Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by theCompany which has been approved by the Board. The CSR Policy may be accessed in theinvestor information section on the Company's website www.ntbcl.com.
The Report on CSR activities conducted during the year under review as required underthe Companies (Corporate Social Responsibility Policy) Rules 2014 is set out as Annexure4 and forms part of this Report.
The Company has not accepted any Fixed Deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014 duringthe year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
It may be noted that during the year under review the Company has not made anyinvestments nor given any loans / guarantees / provided security in connection with a loangranted to any person or body corporate in terms of Section 186 of the Companies Act2013.
Further being an Infrastructure Company provisions of Section 186 of the CompaniesAct 2013 are not applicable.
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review were on anarm's length basis and in the ordinary course of business. The Company has not enteredinto any "material" Related Party Transactions during the year. Accordingly theprovisions of Section 188 of the Companies Act 2013 are not attracted and disclosure inform AOC-2 is not required to be given. There are no materially significant Related PartyTransactions entered into by the Company with Promoters Directors or Key ManagerialPersonnel which may have a potential conflict with the interest of the Company at large.
The Company has developed a Related Party Transaction framework which was approved bythe Audit and Board of Directors of the Company at their meetings held on January 282015. The policy on Related Party Transactions has been uploaded in the investorinformation section of the Company's website www.ntbcl.com.All Related Party Transactions regardless of their size are placed before the AuditCommittee and in case a Transaction needs approval as per the Policy it is recommendedto the Board by the Audit Committee. Omnibus approval was obtained on an annual basis fromthe Audit Committee for transactions which are repetitive in nature. A statement on allRelated Party Transactions is placed before the Audit Committee and Board for review on aquarterly basis. Other than remuneration none of the Directors have any pecuniaryrelationship or transactions vis-a-vis the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year Income Tax Department has raised a demand of ' 196.47 crores forAssessment Year 2013-14 which is primarily on account of addition of arrears of designatedreturns to be recovered in future from toll revenue subsidy on account of allotment ofLand. The Company has filed an appeal with the first Appellate Authority. Consequent uponthe application made by the Company the Income tax department have stayed the demand upto January 312017.
In the earlier years Income Tax Department has initiated assessment and reassessmentu/s147 of the Income Tax Act 1961 for Assessment Years 2007-2008 2008-2009 and 20122013and raised a demand primarily on account of addition of arrears of designated returns tobe recovered in future from toll and other recoveries as per the Concession Agreement. TheCompany has filed an appeal by the first Appellate Authority. Pending disposal of anappeal by the Appellate Authority on the application of the Company the Income TaxDepartment has stayed the demand up to January 31 2017 or disposal of appeal by CIT(A)whichever is earlier. Details provided in Notes to Accounts.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There was no material change and commitment which materially effect the financialposition of the Company occurred between the financial year ended on March 31 2016 andthe date of this report.
EMPLOYEE STOCK OPTION PLANS
The Company has two employee stock option plans viz. ESOP 2004 and ESOP 2005.
During the year the Company has not granted any stock options. All stock optionsgranted in the past have been exercised allotted or have lapsed.
No options have been granted under ESOP 2005 so far and 205000 options remain to begranted under ESOP 2004. Options under ESOP 2004 were granted as per the pricing formulaapproved by the shareholders.
The Company's Equity Shares of '10/- each aggregating to ' 1861950020/- are listedon the Bombay Stock Exchange Ltd. and the National Stock Exchange of India Ltd.
10815 Secured Deep Discount Bonds which were listed on the Bombay Stock Exchange Ltd.and the National Stock Exchange of India Ltd. have been redeemed on November 3 2015 asper the terms of allotment read with the Scheme of Restructuring approved by the Hon'bleHigh Court of Judicature at Allahabad.
The Company's Global Depository Receipts (GDR) are listed on the Alternative InvestmentMarket (AIM) segment of the London Stock Exchange.
INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS)
Pursuant to listing on the Alternative Investment Market (AIM) segment of the LondonStock Exchange (LSE) the Company is required to prepare and submit annual and semi-annualfinancial statements prepared in accordance with IFRS to AIM.
A reconciliation of Equity and Income statements under Indian GAAP and IFRS as on March31 2015 and March 31 2016 have been included in this Annual Report. The IFRS results aswell as annual audited financials prepared under Indian GAAP are available on theCompany's web site: www.ntbcl.com
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has not earned any foreign exchange during the year.
The Company had the following foreign exchange outgo:
During the year under review the Company has replaced the conventional Sodium Vapourlamps being used in the Street Lighting System with energy efficient LED bulbs to reduceits energy costs. Saving of around 40-50% on energy costs for lighting are expected to beachieved while simultaneously increasing the lux levels.
The Company is also in the process of setting up a solar power generation system forits captive use.
On repayment of long term loans and Deep Discount Bonds of the Company CARE haswithdrawn the rating assigned to the same.
As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance practicesfollowed by the Company along with an Auditors' certificate on compliance with theprovisions of Corporate Governance is annexed and forms part of this Report.
The Company has carried out a detailed exercise at the operational as well as thecorporate/strategic level to identify and categorize risks with business and functionalheads.
Being an operational project the risks associated with revenue and Government supporthave become more significant over the years. Strategic risks viz. Revenue FinancialTermination General and Vendor Risks have also been identified and evaluated and themitigation plan in existence has also been recorded.
A Risk Management Policy was approved by the Board of Directors of the Company on April30 2015.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls. The Company's internalcontrol system is commensurate with its size scale and complexity of its operations. Theinternal audit is entrusted to M/s Patel & Deodhar Chartered Accountants. The mainthrust of the internal audit is to review controls and flag areas of concern and non-compliances if any. No fraud has been reported so far.
DIRECTORS RESPONSIBILITY STATEMENT
The provisions of Section 134(5) of the Companies Act 2013 requires the Board ofDirectors to provide a statement to the members of the Company in connection withmaintenance of books records and preparation of Annual Accounts in conformity withaccepted accounting standards and past practices followed by the Company. Pursuant to theforgoing and on the basis of representations received from the operating management andafter due enquiry it is confirmed that:
(1) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(2) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(3) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(4) The Directors have prepared the annual accounts on a going concern basis;
(5) The Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and are operating effectively.
(6) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems were adequate and operating effectively.
Pursuant to the provisions of Section 139 of the Companies Act 2013 M/s. Luthra &Luthra Chartered Accountants were appointed as the Auditors of the Company to holdoffice from the conclusion of the Annual General Meeting (AGM) held on September 29 2014till the conclusion of the 21st AGM of the Company to be held in 2017 for a period ofthree years subject to ratification of their appointment by the Members at every AGM. Acertificate confirming their eligibility under Section 141 of the Companies Act 2013 andRules framed thereunder to continue as Auditors for FY 2016-17 has been received from theAuditors. The Members are required to ratify the appointment of M/s. Luthra & LuthraChartered Accountant as Statutory Auditors of the Company to enable them to continue asthe Statutory Auditors till the conclusion of the AGM to be held for FY 2016-17 and toauthorize the Board to determine their remuneration.
There are no audit qualifications in the financials for the year under review.
Pursuant to Section 148 of the Companies Act 2013 and the Companies (Cost Records andAudit) Rules 2014 framed thereunder the Board of Directors had appointed. Mr. VijaykumarC Solanki (Membership Number 29520) Cost Accountants as the Cost Auditor of the Companyfor FY 2016-17. Mr. Solanki has also confirmed his eligibility for appointment for the FY2016-17 and that he is free from any disqualifications for being appointed as Cost Auditorunder the provisions of the Companies Act 2013. The Board of Directors has recommended tothe Members that the remuneration payable to Mr. Solanki Cost Auditor for FY 2016-2017be approved at the ensuing Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules framedthereunder the Company has appointed GSK & Associates (Registration NumberP2014UP036000) to undertake the Secretarial Audit of the Company. The Secretarial AuditReport is annexed as Annexure 5 and forms part of the Directors' Report.
There are no qualifications in the secretarial audit for the year under review.
OTHER STATUTORY DISCLOSURES
The Company had eight employees as on March 31 2016. None of the employees were inreceipt of remuneration of ' 1 crore or more during the year under review.
The information required under Section 197(2) of the Companies Act 2013 read with theCompanies (Appointment and remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors' Report for the year under review is given as Annexure 6 to theReport.
The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 is not applicable tothe Company for the year under review.
EXTRACTS OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 as requiredunder Section 92 of the Companies Act 2013 is annexed to this Report as Annexure 7.
The Board of Directors place on record their appreciation for the continued supportextended to them by various Government Authorities Banks Financial Institutions thePromoter and Shareholders of the Company.
The Directors would also like to place on record their appreciation for the hard workand dedication of the employees of the Company at all levels.
By order of the Board
For Noida Toll Bridge Company Limited
R. K. Bhargava
DIN : 00016949
Date: July 29 2016