Your Directors are pleased to present the Twenty Fourth Annual Report on the businessand operations of the Company together with the Audited Financial Statements for the yearended March 31 2020.
A summary of the Company's financial results for the Financial Year 2019-20 is asunder:
|Particulars || |
| ||March 31 ||March 31 ||March 31 ||March 31 |
| ||2020 ||2019 ||2020 ||2019 |
|Revenue from Operations ||246.92 ||203.64 ||246.92 ||203.64 |
|Other Income ||46.77 ||3.85 ||48.50 ||3.20 |
|Total Income ||293.69 ||207.49 ||295.42 ||206.84 |
|Total Expenses including Depreciation and Finance Costs ||604.20 ||767.36 ||599.11 ||766.11 |
|Profit/(Loss) Before Tax ||(310.51) ||(559.87) ||(303.69) ||(559.27) |
|Tax Expense/(Income) ||- ||(200.58) ||- ||(200.58) |
|Profit/(Loss) After Tax ||(310.51) ||(359.29) ||(303.69) ||(358.69) |
The Standalone Gross Revenue from operations for FY 2020 was Rs. 246.92 million(Previous Year: Rs. 203.64 million) registering a growth of 21.25%. The Company hasincurred a loss of Rs. 310.51 million against Rs. 359.29 million reported in the PreviousYear.
The Consolidated Gross Revenue from operations for FY 2020 was Rs. 246.92 million(Previous Year: Rs. 203.64 million) registering a growth of 21.25%. The Consolidated lossof the Company has reduced to Rs. 303.69 million (Previous Year: Rs. 358.69 million).
Pursuant to the Hon'ble High Court of Allahabad Judgement dated October 26 2016 on aPublic Interest Litigation filed in 2012 (challenging the validity of the ConcessionAgreement and seeking the Concession Agreement to be quashed) wherein the Hon'ble HighCourt of Allahabad held the two specific provisions relating to levy and collection of feeto be inoperative but refused to quash the Concession Agreement. Consequently collectionof user fee from the users of the Noida Bridge has been suspended from October 26 2016.However the Company continues to fulfil its obligations as per the Concession Agreementincluding maintenance of Project Assets.
Pursuant to the proceedings filed by the Union of India under Sections 241 and 242 ofthe Companies Act 2013 the National Company Law Tribunal Mumbai Bench("NCLT") by way of an Order dated October 1 2018 suspended the erstwhileBoard of Directors of Infrastructure Leasing & Financial Services Limited("IL&FS") and re-constituted the same with persons proposed by the Union ofIndia (such reconstituted Board referred to as the "New Board"). The NationalCompany Law Appellate Tribunal New Delhi (the "NCLAT") has passed an Order ofmoratorium on October 15 2018 in respect of actions (as set out therein) that cannot betaken against IL&FS and its group companies including Noida Toll Bridge CompanyLimited ("NTBCL") which includes amongst others institution or continuationof suits or any other proceedings by any party or person or bank or company etc. againstIL&FS' and its group companies in any Court of Law/Tribunal/Arbitration Panel orArbitration Authority and any action by any party or person or bank or company etc. toforeclose recover or enforce any security interest created the assets of IL&FS'and its group companies. Moreover NCLT Mumbai Bench vide its Order dated April 26 2019has also granted exemption to IL&FS and its Group Companies NTBCL regardingappointment of Independent Directors and Women Directors.
IMPACT OF GLOBAL CRISIS: COVID-19
The novel coronavirus (COVID-19) outbreak which was declared as a global pandemic byWorld Health Organization on 11 March 2020 continues to spread across the globe includingIndia resulting in significant impact on global and India's economic environment includingvolatility in the capital markets. The Company has assessed and evaluated the impact ofCOVID-19 to the extent possible on its operations as well as its financial statements.There is no material impact on the financial statements for the year ended March 31 2020due to the COVID-19 pandemic situation in the country.
Since March 16 2020 the Government of India followed by Government of NCT Delhi andGovernment of Uttar Pradesh have been issuing various measures/directions/guidelines/orders to all commercial and industrial establishments and to impose "lock-down"and curfews and preventing inter-state and intra-state travel and requiring offices to beclosed. As a result of the complete nationwide lockdown initially imposed from March 252021 for 21 days and extended twice till 31st May 2020 and the gradual re-opening oflimited activities in a calibrated manner in areas outside containment zones there is aimpact on the Revenue from operations during the Financial Year ended 2020-21 (Space forAdvertisement and the Rental Income from Office Space) owing to the restrictions andconsequential waivers. Although the Company continues to exhibit resilience amind theseuncertain times the management belives that considering the Company's historicalperformance and liquidity the Company will be able to mitigate the risks associated withCOVID-19. The Company will however continue to closely monitor any changes to the futureeconomic conditions that may have impact on its business and financial position. TheCompany does not anticipate any challenges in its ability to continue as going concern ormeeting its Operating obligations.
DIVIDEND AND RESERVES
Due to inadequate profits your Directors are not recommending any dividend for the FY2019-20 to the Shareholders. During the year under review no amount from profit wastransferred to General Reserve.
The Company has not made payment of monthly interest and quarterly repayment on accountof Secured Term Loan ("Facility") from ICICI Bank Limited for the period fromMay 2018 to March 2020. However based on the ICICI Bank demand note the totaloutstanding amount upto March 31 2020 is Rs. 56.44 Crores i.e. Rs. 11.44 Crores onaccount of interest and the balance amount of Rs. 45.00 Crores towards principalre-payment (previous year the total outstanding amount was Rs. 50.00 Crores i.e/ Rs. 5.00Crores on account of interest and the principal amount of Rs. 45.00 Crores). The Companyhas received several notices from ICICI Bank including the notice dated September 272018 for loan recall and notice of acceleration of the facility.
The total unsecured short term loan from IL&FS Transportation Networks Limited("ITNL") as on March 31 2020 stood at Rs 17.80 Crores a loan aggregating to Rs6.50 Crores has been rolled over for a further period of one year and the balance loan ofRs 11.29 Crores was not rolled over.
However the National Company Law Appellate Tribunal had vide order dated October 152018 ("NCLAT Order") in the matter of Union of India v Infrastructure Leasingand Financial Services Ltd. & Ors. Company Appeal (AT) No. 346 of 2018 andInfrastructure Leasing and Financial Services Ltd. v Union of India & Ors. CompanyAppeal (AT) No. 347 of 2018 granted a stay on inter alia any action by any party orperson to foreclose recover or enforce any security interest created over the assets ofIL&FS and its group companies including NTBCL. The stay was effective immediately andwould continue till further orders.
Moreover the Hon'ble NCLAT vide its judgement dated March 12 2020 has approved therevised Resolution Framework submitted by New Board along with its amendments. In the saidorder Hon'ble NCLAT has also approved October 15 2018 as the cut-off for initiation ofresolution process of the Company. Accordingly basis the said order and the applicabilityof the Cut-off date the Company has not provided the Finance Cost on Borrowings.
Hon'ble High Court of Allahabad had vide its Judgement dated October 26 2016 on aPublic Interest Litigation filed in 2012 (challenging the validity of the ConcessionAgreement and seeking the Concession Agreement to be quashed) has directed the Company tostop collecting the user fee holding the two specific provisions relating to levy andcollection of fee to be inoperative but refused to quash the Concession Agreement.Consequently Collection of user fee from the users of the NOIDA Bridge has been suspendedfrom October 26 2016.
Taking cognizance of financial crisis in IL&FS Limited Union of India has filedpetition against IL&FS limited u/s 241 and 242 of the Companies Act 2013 on October01 2018 to suspend existing Board of Directors and appoint its nominees as directors ofIL&FS Limited to manage the affairs of the IL&FS Limited and its Group Companies.NCLT vide its order dated October 31 2018 has directed the Union of India to implead allGroup Companies as party respondent in the matter. Accordingly the Company being GroupEntity of the IL&FS Limited has become party to the matter.
Pursuant to NCLAT order dated February 04 2019 IL&FS Limited has segregated theGroup Entities into Green/Amber/ Red Category. The Company has been classified as RedEntity (i.e. entity which can't meet their payment obligations even towards senior securedfinancial creditors) based on 12 months cash flow.
Presently your Company is generating revenue mainly from outdoor advertising on DNDFlyway and rent for use of the toll plaza for collection of Entry Tax and EnvironmentCompensation Charge by the Contractor appointed by South Delhi Municipal Corporation andLicence fee for use of space near DND for mobile towers.
The paid up Equity Share Capital as at March 31 2020 stood at Rs. 1861.95 million.During the year under review the Company has not issued shares or convertible securitiesor shares with differential voting rights nor has granted any stock options or sweatequity or warrants. As on March 31 2020 none of the Directors of the Company holdinstruments convertible into Equity Shares of the Company.
FINANCE AND ACCOUNTS
As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2020 has been prepared in accordance with the Indian AccountingStandards (Ind AS) notified under Section 133 of the Companies Act 2013 (hereinafterreferred to as "The Act") read with the Companies (Accounts) Rules 2014 asamended from time to time. The estimates and judgements relating to the FinancialStatements are made on a prudent basis so as to reflect in a true and fair manner theform and substance of transactions and reasonably present the Company's state of affairsprofits and cash flows for the year ended March 31 2020. The Notes to the Financial
Statements adequately cover the standalone and consolidated Audited Statements and forman integral part of this Report.
The Company has one subsidiary ITNL Toll Management Services Limited("ITMSL"). The audited accounts of the subsidiary as well as the ConsolidatedFinancial Statements of the Company are prepared in accordance with relevant IndianAccounting Standards issued by the Institute of Chartered Accountants of India and formsan integral part of this Report. Pursuant to Section 129(3) of the Act read with Rule 5 ofthe Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements of subsidiaries/ associate companies/joint ventures is given in FormAOC-1 which forms an integral part of this Report as
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as "Listing Regulations") is provided in aseparate section and forms an integral part of this Report.
As per Regulation 34(3) read with Schedule V of the Listing Regulations a Report onCorporate Governance practices followed by the Company along with a certificate frompracticing Company Secretaries on compliance with the provisions of Corporate Governanceis annexed to this Report.
EXTRACT 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 Act is annexed as Annexure-6 which forms an integral partof this Report.
In accordance with the provisions of Section 152 of the Act and the Company's Articlesof Association Mr. Manish Kumar Agrawal Director retires by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for reappointment. The Boardrecommends his re-appointment for the consideration of the Members of the Company at theforthcoming Annual General Meeting. Brief profile of Mr. Manish Kumar Agarwal has beengiven in the Notice convening the Annual General Meeting.
During the year under review the Board of Directors on recommendation of theNomination and Remuneration Committee appointed Mr. Kazim Raza Khan and Mr. Bijay KumarPanda as additional Directors representing IL&FS Transportation Networks Limited onthe Board of Directors of the Company in accordance with Section 161 of the Act witheffect from July 24 2020 to hold office up to the date of ensuing Annual General Meeting.The Company has received requisite notices in writing from a member proposing Mr. KazimRaza Khan and Mr. Bijay Kumar Panda's name for the office of
Director. Accordingly the Board recommends the resolution in relation to appointmentof Mr. Kazim Raza Khan and Mr. Bijay Kumar Panda as Non-executive Directors for theapproval by the Members of the Company. Brief profiles of Mr. Kazim Raza Khan and Mr.Bijay Kumar Panda have been given in the Notice convening the Annual General Meeting.
Mr. Ajai Mathur Managing Director of the Company had resigned from the office ofDirectorship of the Company with effect from July 23 2019 due to personal reasons andwork constraints. Your Directors place on record their sincere appreciation of thecontribution made by him to the growth of the Company.
None of the Directors of the Company are disqualified from being appointed as Directorsas specified under Section 164 of the Act.
Pursuant to the provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as "ListingRegulations") the composition of Board of Directors of the listed entity shall havean optimum combinations of executive and non-executive directors with at least one womandirector. Presently the constitution of Board of Directors of the Company was not inconformity with the provisions of the Companies Act and Listing Regulations. HoweverNational Company Law Tribunal (NCLT) Mumbai Bench vide its Order dated April 26 2019 hasgranted exemption to IL&FS and its Group Companies including NTBCL regardingappointment of Independent Directors and Women Directors. With this order provisions ofthe Act and Listing Regulations are deemed to be complied with in respect of appointmentof Independent Directors and Women Directors till the end of the moratorium period i.e.next date of further order in this regard.
Since there is no Independent Director on the Board the declarations required underSection 149(6) of the Act and Regulation 16 (b) of the Listing Regulations are notapplicable. During the year under review the non-executive directors of the Company hadno pecuniary relationship or transactions with the Company other than sitting fees andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
NUMBER OF MEETINGS OF THE BOARD
The Board of Directors of the Company met five times during the year under review. Thedetails of the Meetings of the Board held during the Financial Year 2019-20 forms part ofthe Corporate Governance Report.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company:
1. Mr. Rajiv Jain: Chief Executive Officer (Officiating) 2. Mr. Gagan Singhal: CompanySecretary 3. Mr. Amit Agrawal: Chief Financial Officer
COMMITTEES OF THE BOARD
The Board of Directors have the following Committees: 1. Audit Committee 2. Nominationand Remuneration Committee 3. Stakeholders' Relationship Committee
The details of the Committees of the Board along with their composition number ofmeetings and attendance at the meetings are provided in the Corporate Governance Report.
Pursuant to the provisions of the Act and the Corporate Governance requirements asprescribed by Listing Regulations the Company has devised a Policy for performanceevaluation of the Board and Committees of Directors both executive and non-executive. Astructured questionnaire was prepared covering various aspects of the Board'sfunctioning execution and performance of duties obligations and governance. Anevaluation of performance for FY 2019-20 has been conducted. The Directors have expressedtheir satisfaction with the performance of each of the Directors Committees and theBoard.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Being an Infrastructure Company provisions of Section 186 of the Act are notapplicable.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a Vigil Mechanism/ Whistle Blower Policy to report genuineconcerns or grievances concerning instances of unethical behaviour 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 onwww.ntbcl.com.
The Company has not received any complaints under this policy during the year underreview.
NOMINATION REMUNERATION AND BOARD DIVERSITY POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The Policy broadly lays down the guiding principles philosophy and the basis for paymentof remuneration to Executive and Non-executive Directors (by way of sitting fees andcommission) Key Managerial Personnel Senior Management and other employees. The policyalso provides the criteria for determining qualifications positive attributes andIndependence of Director and criteria for appointment of Key Managerial Personnel / SeniorManagement and performance evaluation which are considered by the Nomination andRemuneration Committee and the Board of
Directors while making selection of the candidates. The above policy has been posted onthe website of the Company in the investor information section at www.ntbcl.com.
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 entered intoone "material" Related Party Transaction during the year for whichResolution is placed for approval of the shareholders at their ensuing AnnualGeneral Meeting. Accordingly the provisions of Section 188 of the Act are attracted anddisclosure in form AOC-2 is part of this Director's Report as Annexure-1A. Thereare no materially significant Related Party Transactions entered into by the Company withPromoters Directors or Key Managerial Personnel which may have a potential conflict withthe interest of the Company at large.
The Company has a Related Party Transaction framework. The policy on Related PartyTransactions has been uploaded in the Investor section of the Company's website atwww.ntbcl.com. All Related Party Transactions regardless of their size are placed beforethe Audit Committee and in case a Transaction needs approval as per the Policy it isrecommended to the Board by the Audit Committee. Omnibus approval was obtained on anAnnual Basis from the Audit Committee for transactions which are repetitive in nature. Astatement on all Related Party Transactions is placed before the Audit Committee and Boardfor review on a quarterly basis. Other than remuneration none of the Directors have anypecuniary relationship or transactions vis--vis the Company.
ITNL Toll Management Services Limited is a material subsidiary of the Company as perthe thresholds laid down under the Listing Regulations. The Board of Directors of theCompany has approved a Policy for determining material subsidiaries which is in line withthe Listing Regulations as amended from time to time. The Policy was adopted with effectfrom April 1 2019 in line with the amendments made to the Listing Regulations. The Policyhas been uploaded in the Investor section on the Company's website at www.ntbcl.com.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
Income Tax Matters
During the year the Company has received the assessment order from Income TaxDepartment on December 27 2019 u/s 143(3) of the Income Tax Act 1961 for the AssessmentYear 2016-17 and 2017-18 wherein a demand amounting Rs. 357.00 crores and Rs 383.48 croreshas been raised based on the historical dispute with the Tax Department which is primarilyon account of addition of arrears of designated returns to be recovered in futurevaluation of land and other recoveries. The Company has filed an appeal with the firstlevel Appellate Authority.
The Company has received the order from CIT(A) on April 25 2018 and pursuant to theCIT (A) order the AO has also passed consequential orders in respect of AYs 2006-07 to2014-15 giving effect to the CIT (A)'s appellate orders and has enhanced the demand by Rs.10893.30 crores. The enhancement of the demand was primarily on account of Valuation ofLand. The Company has filed an appeal along with the stay application with Income TaxAppellate Tribunal (ITAT). The matter was heard by ITAT on December 19 2018 January 22019 and February 6 2019 and based on NCLAT order dated October 15 2018 ITAT adjournedthe matter sine die with directions to maintain status quo.
During November 2018 CIT (A) Noida has passed the penalty order for AY 2006-07 to2014-15 and based on which Assessing Officer Delhi has imposed a penalty amountingRs.10893.30 Crores during December 2018. The Company has filed an appeal along with thestay application with Income Tax Appellate Tribunal (ITAT). On March 29 2019 ITAT hasdirected Assessing Officer to dispose of the stay application and the matter was adjournedto May 03 2019.
SLP before Supreme Court
The local resident welfare associations (Federation of Noida Resident WelfareAssociations- FONRWA) had filed a Public Interest Litigation ("PIL") in 2012 inthe Allahabad High Court ("HC") challenging the validity of the ConcessionAgreement and seeking the Concession Agreement to be quashed. The Hon'ble HC of Allahabadin a judgement dated October 26 2016 held that the two specific provisions relating tolevy and collection of fee to be inoperative but refused to quash the ConcessionAgreement. Consequently collection of user fee from the users of the NOIDA Bridge wassuspended from October 26 2016. However the Company continues to fulfil its obligationsas per the Concession Agreement including maintenance of Project Assets.
The Company had challenged the HC Judgment before the Hon'ble Supreme Court of India("SC") by way of Special Leave Petition (SLP No. 33403 of 2016). The Hon'ble SChad on November 11 2016 passed an order in the aforesaid matter requesting theComptroller and Auditor General of India ("CAG") to assist the court in thematter by verifying the claim of the Company that the Total Cost of the Project has notbeen recovered in accordance with the terms of the Concession Agreement dated 12.11.1997.The CAG filed an Affidavit along with sealed cover report to SC on March 22 2017. The CAGreport clearly specified that Total Cost of Project had not been recovered by the Company.The CAG report also contained some other observations by the CAG which were outside thescope of its remit. The SC bench directed that the CAG Report be kept in a sealed coverand need not be provided to the
Respondents in the case. The SC stated that the CAG report will continue to remain in asealed cover.
The matter was heard by the SC on March 5 2019. The SC had issued a notice on theinterim application filed by NOIDA seeking to stay the ongoing arbitration proceedingsbetween the Company IL&FS and NOIDA during the pendency of the subject SLP before theSC. On the hearing on March 25 2019 the SC had directed that the InterlocutoryApplication (IA) filed by NOIDA in the NTBCL SLP be placed and taken up with the SLP Filedby NOIDA in relation to the Delhi HC Order and be heard together with the same. The IA hadtherefore been directed to be listed with the said SLP (Diary Number 10503 Of 2019). OnApril 12 2019 the SC heard the matter alongwith the IA No. 170774 of 2019 filed by NOIDAand stayed the proceedings in the arbitration and fixed the matter for final disposal. Atthe last hearing held on April 25 2019 the SC asked Registry Office to report as to whythe present case has been listed for final disposal contrary to the order of this courtand the matter will be listed for hearing post summer vacation. On January 30 2020 anapplication seeking vacation of the stay on arbitration for review was filled by theCompany and the matter is pending before the Hon'ble Supreme Court.
The Judgment of the Hon'ble HC of Allahabad had constituted a Change in Law as per theConcession Agreement which obligates NOIDA to modify or cause to modify the ConcessionAgreement so as to place the Company in substantially the same legal commercial andeconomic position as it was prior to such Change in Law. Accordingly the Company had senta proposal dated November 17 2016 under Section 6.3B(a) of the Concession Agreementnotifying NOIDA of the resultant Change in Law and occurrence of Events of Default .However NOIDA failed to take any steps in pursuance of the said proposal. The Companythen sent a Notice of Arbitration to NOIDA on February 14 2017 pursuant to Section 26.1of the Concession Agreement. The Company had appointed Mr. Justice Vikramajit Sen (Retd)as its designated Arbitrator. However NOIDA had not nominated its arbitrator. In light ofthe foregoing the Company had filed a petition on July 20 2017 under Section 11(4) ofthe Arbitration and Conciliation Act 1996 ("A & C Act") in the Hon'ble HCof Delhi which heard the said petition on October 24 2017 and appointed Mr. Justice S.BSinha (Retd.) as the arbitrator on NOIDA's behalf. The Arbitral Panel comprising of Mr.Justice (Retd.) Satya Brata Sinha and Mr Justice (Retd) Vikramjit Sen and Hon'ble Justice(Retd) R.C. Lahoti as Presiding Arbitrator had been constituted on November 15 2017. Atthe preliminary hearing of the Arbitral Tribunal on December 2 2017 schedule of steps tobe followed upon had been agreed upon.
In compliance with the schedule NTBCL had submitted their Statement of Claimaggregating to approximately Rs. 70000000000/- (Rupees Seven Thousand Crores) excludinginterest and costs. Separately IL&FS as the project sponsor and party to theConcession Agreement had filed an impleadment application with the Arbitral Tribunal alongwith a Statement of Claim. NOIDA had also filed a counterclaim Statement of Defence andan Application under Section 16 of the A & C Act raising jurisdictional objectionsbefore the Arbitral Tribunal. The Company and IL&FS have filed their reply to theapplication of NOIDA under Section 16 objecting to the maintainability of the claimswithin the stipulated time. NOIDA too has filed its written submissions on May 18 2018for arguments on application under Section 16 of the A & C Act. On May 19 2018 theArbitral Tribunal heard the arguments of the legal counsel of NOIDA and on June 2 2018the Arbitral Tribunal heard the objections and arguments of the legal counsel ofIL&FS. On September 12 2018 NOIDA had moved an application for the amendment oftheir counter claim which was opposed by the Company's Legal Counsel. On September 202018 the Arbitrators stated that
(a) amendment of the counter claim filed by NOIDA be left open to be considered at thefinal hearing and the Company has been given time to file its reply to the said counterclaims on or before October 31 2018
(b) The next date of hearing is November 13 2018 for
(i) settling the points for determination
(ii) determining the order of production of witnesses and issuing such furtherdirections as needed
(c) March 5 2019 to March 9 2019 are appointed for recording evidence and (d) April8 2019 to April 13 2019 and April 15 2019 are appointed for final hearing.
Due to the order of NCLAT dated October 15 2018 passed in the matter of IL&FS andits group Companies including NTBCL the arbitration proceedings by NOIDA against theCompany were kept in abeyance by the Arbitral Panel. NOIDA had also filed an Applicationfor Directions in the Hon'ble Supreme Court (SC) seeking a stay on the arbitralproceedings and the stay of the interim award dated August 10 2018 (rejecting NOIDA'sSection 16 application) passed by the Arbitral Tribunal. On account of the sad demise ofJustice (retd.) S. B. Sinha on March 19 2019 who was representing NOIDA the NOIDA hadnominated Justice (retd.) G. P. Mathur to replace late Justice (retd.) S.B. Sinha and theArbitration Tribunal had been re-constituted on April 25 2019. Due to reconstitution ofthe Tribunal the following revised schedule of hearing was decided by the ArbitrationTribunal
|Date ||Purpose |
|Sept 4/5/6/7 2019 ||For recording Cross-Examination on the two witnesses |
|Oct 14 15 16 17 2019 ||Final hearing submissions for the two Claimants not exceeding 2 days each |
|Nov 4567 2019 ||Submissions for the Respondent followed by Rejoinder Submissions |
However during the proceedings on 12.04.2019 in the matter of NTBCL v FONRWA &Ors. (SLP(C) No. 33403 of 2016) the Supreme Court has granted a stay on the arbitrationproceedings.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Act:
(i) that in the preparation of the Annual Accounts for the year ended March 31 2020the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(ii) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the profit ofthe Company for the year ended on that date;
(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) the annual accounts have been prepared on a going concern basis;
(v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
(a) STATUTORY AUDITORS
M/s. N. M. Raiji & Co. Chartered Accountants (Firm Registration No. 108296W) wereappointed as Statutory Auditors of the Company for a period of five consecutive years atthe Twenty First Annual General Meeting (AGM) of the Members held on September 25 2017 ona remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors.Their appointment was subject to ratification by the Members at every subsequent AGM heldafter the AGM held on September 25 2017. Pursuant to the amendments made to Section 139of the Companies Act 2013 by the Companies (Amendment) Act 2017 effective from May 72018 the requirement of seeking ratification of the Members for the appointment of theStatutory Auditors has been withdrawn from the Statute. Hence the resolution seekingratification of the Members for continuance of their appointment at this AGM is not beingsought.
There is no audit qualification reservation or adverse remark for the year underreview. The opinion is unmodified however Independent Auditor has given emphasis onmatter as detailed in the Independent Auditor's Report.
(b) COST AUDITOR
Pursuant to Section 148 of the Companies Act 2013 and the Companies (Cost Records andAudit) Rules 2014 framed there under the Company is not required to appoint the CostAuditors for FY 2019-20.
(c) SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Act and rules made thereunder theCompany has appointed M/s Singh A & Associates a firm of Company Secretaries inPractice (CP 8295/ FCS 7563) to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is annexed as Annexure 4 and forms an integral part of thisReport.
M/s Singh A & Associates observed the followings:
The company is in default of complying with the followings Corporate GovernanceRegulations of SEBI (LODR) 2015:
Regulation 17 18 19 20 and 25 with respect to Board of Directors Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee with respectto Independent Directors respectively and specifically non compliance relating toappointment of Independent Directors and Woman Director.
Section 149 177 178 of the Companies Act 2013 with respect to appointment ofIndependent Directors Woman Director Audit Committee and Nomination and RemunerationCommittee and Stakeholder Relationship Committee respectively.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal audit is entrusted to M/s. Thakur Vaidyanath Aiyer & Co.Chartered Accountants. The main thrust of internal audit is to test and review controlsappraisal of risks and business processes besides benchmarking controls with bestpractices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.
The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
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. A Risk Management Policy was approved by the Board of Directors of the Company onApril 30 2015. Risk procedures are periodically reviewed to ensure control on risksthrough properly defined framework.
CORPORATE SOCIAL RESPONSIBILITY
Since the provisions of Section 135 of the Companies Act 2013 are not applicable onthe Company. The CSR Policy of the Company may be accessed in the investor informationsection on the Company's website at www.ntbcl.com. An Annual Report on CSR Activities asrequired under the Companies (Corporate Social Responsibility Policy) Rules 2014 is setout as Annexure 3 to this Report.
ENVIRONMENT HEALTH AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
In order to comply with provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder the Companyhas formulated and implemented a policy on prevention prohibition and redressal ofcomplaints related to sexual harassment of women at the workplace. All women employeeseither permanent temporary or contractual are covered under the above policy. The saidpolicy has been uploaded on the internal portal of the Company for information of allemployees. An Internal Complaint Committee (ICC) has been set up in compliance with thesaid Act. During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has neither earned nor spent any foreign exchange during the year underreview.
OTHER STATUTORY DISCLOSURES
The Disclosure required under Section 197(12) of the Act read with the Rule 5(1) 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as Annexure 5(a) 5(b) and forms an integral part of this Report.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the Equity Shares of the Company.
The Company has not accepted any Deposits within the meaning of Section 73 of the Actread with the Companies (Acceptance of Deposits) Rules 2014 during the year underreview.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Reporting as required by Regulation 34(2) of the ListingRegulations is not applicable to the Company for the year under review.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There was no material change and commitment which materially affect the financialposition of the Company occurred between the financial year ended on March 31 2020 andthe date of this report.
EMPLOYEE STOCK OPTION PLANS
The Company has two employees 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 Options under ESOP 2004 weregranted as per the pricing formula approved by the shareholders.
Statements in this Directors' Report and Management Discussion and Analysis Reportdescribing the Company's objectives projections estimates expectations or predictionsmay be "forward-looking statements" within the meaning of applicable securitieslaws and regulations. Actual results could differ materially from those expressed orimplied.
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support your Company'sachievements would not have been possible. Your Directors also wish to thank itscustomers dealers agents suppliers investors and bankers for their continued supportand faith reposed in the Company.
By order of the Board
For Noida Toll Bridge Company Limited