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Noida Toll Bridge Company Ltd.

BSE: 532481 Sector: Infrastructure
NSE: NOIDATOLL ISIN Code: INE781B01015
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VOLUME 5981
52-Week high 10.33
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P/E
Mkt Cap.(Rs cr) 137
Buy Price 7.38
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Sell Price 7.40
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OPEN 7.30
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VOLUME 5981
52-Week high 10.33
52-Week low 5.13
P/E
Mkt Cap.(Rs cr) 137
Buy Price 7.38
Buy Qty 547.00
Sell Price 7.40
Sell Qty 25.00

Noida Toll Bridge Company Ltd. (NOIDATOLL) - Director Report

Company director report

DEAR MEMBERS

Your Directors are pleased to present the Twenty Fifth Annual Report on the businessand operations of the Company together with the Audited Financial Statements for thefinancial year ended March 31 2021 ("year under review").

CORPORATE OVERVIEW AND GENERAL INFORMATION

The Noida Toll Bridge Company Limited ("NTBCL/the Company") was promoted byInfrastructure Leasing & Financial Services Limited ("IL&FS") as aspecial purpose vehicle for the implementation of the Delhi Noida Bridge Project on aBuild Own Operate and Transfer (BOOT) basis. The Concession Agreement (Concession)executed between the Company IL&FS and New Okhla Industrial Development Authority("NOIDA") in November 1997 gives the Company the right to levy a User Fee. TheGovernments of Uttar Pradesh and National Capital Territory of Delhi have in January1998 executed a Support Agreement in favour of the Project/Concessionaire.

The Delhi Noida Bridge (commonly known as the DND Flyway or DND) was opened to trafficin February 2001 and is an eight lane 7.5 kms tolled facility across the Yamuna Riverconnecting Noida to South Delhi with a four lane. A 1.7 km link connecting the DND Flywayto Mayur Vihar was commissioned in June 2007 (Phase I)/January 2008 (Phase II).

NTBCL is a public company with Equity Share listed on the National Stock Exchange andthe Bombay Stock Exchange in India.

FINANCIAL SUMMARY AND HIGHLIGHTS

A summary of the Company's financial results for the Financial Year 2020-21 is asunder: (Rs. in Lakhs)

Particulars Standalone Consolidated
March 31 2021 March 31 2020 March 31 2021 March 31 2020
Revenue from Operations 1293.14 2469.22 1293.14 2469.22
Other Income 65.60 467.66 68.87 485.00
Total Income 1358.74 2936.88 1362.01 2954.22
Total Expenses including Depreciation and Finance Costs 5404.34 6041.97 5357.50 5991.13
Profit/(Loss) Before Tax (4045.60) (3105.09) (3995.49) (3036.91)
Tax Expense/(Income) - - - -
Profit/(Loss) After Tax (4045.60) (3105.09) (3995.49) (3036.91)

Since the novel coronavirus (COVID-19) outbreak was declared as a global pandemic byWorld Health Organization on March 11 2020 the Government of India followed byGovernment of NCT Delhi and Government of Uttar Pradesh have since March 16 2020 beenissuing various measures/ directions/guidelines/orders to all commercial and industrialestablishments and have imposed "lock down" and curfews preventing inter-stateand intra-state travel including requiring offices to be closed.

As a result of the complete nationwide lockdown initially imposed from March 25 2020for 21 days and extended twice till May 312020 and the gradual re-opening of limitedactivities in a calibrated manner in areas outside containment zones there has been animpact on the revenue from operations (space for advertisement and the rental income fromletting of office space) during the year ended March 312021 owing to the restrictions andconsequential waivers to Licensee.

The Standalone Gross Revenue from operations for FY 2021 was Rs. 1293.14 lakhs(Previous Year: Rs. 2469.22 lakhs) registering a reduction of 47.63%. The Company hasincurred

a loss of Rs. 4045.60 lakhs against Rs. 3105.09 lakhs reported in the Previous Year.

The Consolidated Gross Revenue from operations for FY 2021 was Rs. 1293.14 lakhs(Previous Year: Rs. 2469.22 lakhs) registering a reduction of 47.63%. The Consolidatedloss of the Company has reduced to Rs. 3995.49 lakhs (Previous Year: Rs. 3036.91 lakhs).

In April 2021 just as economic activities were slowly reviving and business werestarting to resume normal operations the second wave of COVID-19 has hit the country andderailed all economic activities for the second time. Although unlike first wave theresponse to the second wave has been localised. During the second wave the combinedeffect of the curfew imposed in NCT of Delhi and Noida there has been a significantimpact on the revenue from operations (space for advertisement and the rental income fromletting of office space. The Company will however continue to closely monitor any changesto the future economic conditions that may have impact on its business and financialposition.

The Company continues to exhibit resilience amid these uncertain times the managementbelieves that considering the Company's historical performance and liquidity the Companywill be able to mitigate the risks associated with COVID-19.

Hon’ble High Court of Allahabad had vide its Judgement dated October 26 2016 ona Public 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 and an appeal has been filed before Hon’ble Supreme Court ofIndia seeking an Interim Stay on the said Judgment.

On November 11 2016 Hon’ble Supreme Court issued its Interim Order denying theinterim stay and sought assistance of CAG to verify whether the Total Cost of the Projectin terms of the Concession Agreement has been recovered or not by the Company. CAG hassubmitted its report to Hon'ble Supreme Court and the bench has directed on September 142018 that the report submitted by CAG be kept in sealed cover.

The Special Leave Petition (SLP) is still pending for final adjudication in theHon’ble Supreme Court. The Company has also notified NOIDA that the Judgement of theHon’ble Allahabad High Court read with the Interim Order of the Hon’ble SupremeCourt of India constitute a 'change in law' under the Concession Agreement and submitted adetailed proposal for modification of the Concession Agreement so as to place the Companyin substantially the same legal commercial and economic position as it was prior to thesaid Change in Law. Since NOIDa did not act on the proposal the Company had sent a noticeof arbitration to NOIDA.

The Arbitral Tribunal has been constituted and both the Company and NOIDA havesubmitted their claims and counter claims. Further NOIDA had filed an application underSection 16 of the Arbitration and Conciliation Act 1961 on the maintainability of thearbitration proceedings which was rejected by the Arbitral Tribunal vide order datedAugust 10 2018. NOIDA had filed an application in the Delhi High Court under Section 34of the Arbitration and Conciliation Act1961 challenging the Arbitral Tribunal orderdated August 10 2018 which has been disposed off by the Delhi High Court on January 312019 without any relief to NOIDA. NOIDA has also filed an application for directionsbefore the Hon’ble Supreme Court seeking a stay on arbitral proceedings. On April 122019 the Hon’ble Supreme Court directed a stay on Arbitral proceedings.

Based on legal opinion and the Board's reliance on the provisions of the Concessionagreement (relating to Compensation and other recourses) the Company is confident thatthe underlying value of the Intangible and other assets are not impaired. The Companycontinues to fulfil its obligations as per the Concession Agreement including maintenanceof 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 NTBCL which includes amongstothers institution or continuation of suits or any other proceedings by any party orperson or bank or company etc. against IL&FS and its Group Companies in any Court ofLaw/Tribunal/Arbitration Panel or Arbitration Authority and any action by any party orperson or bank or company etc. to foreclose recover or enforce any security interestcreated the assets of IL&FS and its Group Companies. Moreover NCLT Mumbai Bench videits Order dated April 26 2019 has also granted exemption to IL&FS and its GroupCompanies NTBCL regarding appointment of Independent Directors and Women Directors.Further the Hon’ble NCLAT vide its Order 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 date forinitiation of resolution process of IL&FS and its Group Companies. Accordingly theCompany has not accrued any interest on all its loans and borrowings with effect fromOctober 15 2018 ("Cut-off date").

There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport other than the impact of COVID-19 on the business operations of the Companydetailed in this Report as well as in Notes to the Financial Statements of the Company.Other than the COVID-19 pandemic there were no material events that had an impact on theaffairs of your Company. There is no change in the nature of your Company’s businessduring the year under review.

DIVIDEND AND RESERVES

The Company has not made payment of monthly interest and quarterly repayment on TermLoans for the period from May 2018 to March 2021 and a Resolution Process is beingimplemented for IL&FS and its Group Companies including NTBCL in proceedings pendingbefore the Hon’ble National Company Law Tribunal Mumbai Bench and the Hon’bleNational Company Law Appellate Tribunal under Sections 241 -242 of the Companies Act2013 your Company is unable to pay dividend to the shareholders until the satisfaction ofall its dues. Considering the magnitude of loss incurred in the financial year the Boarddoes not recommend any dividend for the year ended March 31 2021.

During the year under review the Company has incurred a net loss of Rs. 40.46 Crore.As a result the Company has not transferred any amount to the General Reserve for theFinancial Year ended March 31 2021.

OVERVIEW OF THE ECONOMY AND IMPACT OF THE COVID- 19 PANDEMIC

Since the novel coronavirus (COVID-19) outbreak was declared as a global pandemic byWorld Health Organization on March 11 2020 the Government of India followed byGovernment of NCT Delhi and Government of Uttar Pradesh have since March 16 2020 beenissuing various measures/ directions/guidelines/orders to all commercial and industrialestablishments and have imposed "lock-down" and curfews preventing inter-stateand intra-state travel including requiring offices to be closed.

As a result of the complete nationwide lockdown initially imposed from March 25 2020for 21 days and extended twice till May 312020 and the gradual re-opening of limitedactivities in a calibrated manner in areas outside containment zones there has been animpact on the revenue from operations (space for advertisement and the rental income fromletting of office space) during the year ended March 312021 owing to the restrictions andconsequential waivers to Licensee.

Your Company is conscious of the significant disruption and impact COVID-19 can have onits employees investors and the communities in which it operates. We are working hard tocontain and mitigate its impact. The Company does not anticipate any challenges in itsability to continue as going concern or meeting its financial obligations. As thesituation is unprecedented the Company is closely monitoring the situation as it evolvesin the future.

The primary objectives of your Company’s response to the pandemic are to ensurethe safety and wellbeing of its employees and stakeholders and to secure the financialand operational resilience of the Company.

DEBT REPAYMENT

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 2021. However based on the ICICI Bank demand note the totaloutstanding amount upto March 31 2021 is Rs. 63.77 Crores i.e. Rs. 18.77 Crores onaccount of interest and the balance amount of Rs. 45.00 Crores towards principalre-payment (previous year the total outstanding amount was Rs. 56.44 Crores i.e/ Rs. 11.44Crores 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 312021 stood at Rs 17.80 Crores.

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 Limited & Ors. Company Appeal (AT) No. 346 of 2018 andInfrastructure Leasing and Financial Services Limited 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 approvedthe revised Resolution Framework submitted by New Board along with its amendments. In thesaid Order Hon’ble NCLAT has also approved October 15 2018 as the cut-off forinitiation of Resolution Process of the Company. Accordingly basis the said order and theapplicability of the Cut-off date the Company has not provided the Finance Cost onBorrowings.

OPERATIONS

Hon’ble High Court of Allahabad had vide its Judgement dated October 26 2016 ona Public 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 Union of India has filed petitionagainst IL&FS limited u/s 241 and 242 of the Companies Act 2013 on October 012018 tosuspend existing Board of Directors and appoint its nominees as directors of IL&FSLimited to manage the affairs of the IL&FS Limited and its Group Companies. NCLT videits Order dated October 31 2018 has directed the Union of India to implead all GroupCompanies as party respondent in the matter. Accordingly the Company being Group Entityof the IL&FS has become party to the matter.

Pursuant to NCLAT Order dated February 04 2019 IL&FS has segregated the GroupEntities into Green/Amber/Red Category. The Company has been classified as Red Entity(i.e. entity which can’t meet their payment obligations even towards senior securedfinancial creditors) based on 12 months cash flow.

Presently the 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.

SHARE CAPITAL

The paid up Equity Share Capital as at March 312021 stood at Rs. 1861950020 dividedinto 186195002 of Rs. 10/- each. During the year under review the Company has notissued shares or convertible securities or shares with differential voting rights nor hasgranted any stock options or sweat equity or warrants. As on March 31 2021 none of theDirectors of the Company hold instruments 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 2021 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. There are no material departures from the prescribed normsstipulated by the Accounting Standards in preparation of the Annual Accounts. Theestimates and judgements relating to the Financial Statements are made on a prudent basisso as to reflect in a true and fair manner the form and substance of transactions andreasonably present the Company’s state of affairs profits and cash flows for theyear ended March 31 2021.

Accounting policies have been consistently applied during the year under review.Management evaluates all recently issued or revised accounting standards on an ongoingbasis. The Company discloses consolidated and standalone financial results on a quarterlybasis which are subjected to limited review and publishes consolidated and standaloneaudited financial results on an annual basis. There were no revisions made to thefinancial statements during the year under review.

CONSOLIDATED FINANCIAL STATEMENTS

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 of the Companies (Accounts)Rules 2014 a statement containing salient features of the financial statements ofSubsidiaries/ Associate Companies/Joint Ventures is given in Form AOC-1 as Annexure-I andforms an integral part of this Report.

RELATED PARTY TRANSACTIONS

A significant quantum of related party transactions undertaken by the Company are withits subsidiary and Group Companies engaged in providing Operation and Maintenance Facilityat DND Flyway.

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 enteredinto one Material Related Party Transaction during the year under review for whichrequired Resolution 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 in terms of Section 134 of the Act is part of this asAnnexure-II. Further there were no Material Related Party Transaction during the yearunder review with the Promoters Directors or Key Managerial Personnel which may have apotential conflict with the interest of the Company at large. All Related PartyTransactions are mentioned in the notes to financial statements forming part of the AnnualReport.

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 sitting fee none of the Directors have anypecuniary relationship or transactions vis-a-vis the Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

Being an Infrastructure Company provisions of Section 186 of the Act are notapplicable.

MATE RIAL SUBSI DIARY

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 has been uploaded in theInvestor section on the Company’s website at www.ntbcl.com.

DIRECTORS

In accordance with the provisions of Section 152 of the Act and the Company’sArticles of Association Mr. Dilip Lalchand Bhatia Director of the Company retires byrotation at the forthcoming Annual General Meeting ("aGm") and being eligibleoffers himself for re-appointment. The Board recommends the proposal of his re-appointmentfor the consideration of the Members of the Company at the forthcoming AGM and the samehas been mentioned in the Notice convening the AGM. A brief profile of Mr. Dilip LalchandBhatia has also been provided therein.

During the year under review the Board of Directors on recommendation of theNomination and Remuneration Committee appointed Mr. Rakesh Chatterjee and Mr. Santanu Senas additional Directors on the Board of Directors of the Company in accordance withSection 161 of the Act with effect from December 18 2020 and August 30 2021respectively to hold office up to the date of ensuing Annual General Meeting. Mr. RakeshChatterjee is Group General Counsel Legal in IL&FS Limited since September 2020 andMr. Santanu Sen is leading the Strategic Support Unit (SSU) at IL&FS Group inaddition to resolution management of stressed assets. The Company has received requisitenotices in writing from members proposing Mr. Rakesh Chatterjee’s and Mr. SantanuSen’s name for the office of Directors. Accordingly the Board recommends theresolution in relation to appointment of Mr. Rakesh Chatterjee and Mr. Santanu Sen asNon-executive Director for the approval by the Members of the Company. Brief profiles ofMr. Rakesh Chatterjee and Mr. Santanu Sen have been given in the Notice convening the AGM.

Mr. Bijay Kumar Panda Nominee Director of the Company had resigned from the office ofDirectorship of the Company with effect from July 26 2021 due to his 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.

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: Company Secretary

3. Mr. Amit Agrawal: Chief Financial Officer MEETINGS OF THE BOARD / COMMITTEES

The Board/Committee Meetings are pre-scheduled and a tentative annual calendar of theMeetings is circulated to the Directors well in advance to help them plan their schedulesand ensure meaningful participation. Should the need arise in the case of special andurgent business the Board’s approval is obtained by passing resolutions throughcirculation as permitted by law which are confirmed in the subsequent Board Meeting. TheCompany has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings.

The Board of Directors of the Company met five times during the year under review. Thedetails of the number of Meetings of the Board held during the Financial Year 2020-21 andthe attendance therein forms part of the Report on Corporate Governance.

In view of the pandemic-related travel restrictions all Board Meetings took placevirtually. Measures were taken to ensure security of information and confidentiality ofprocess and at the same time ensuring convenience of the Board Members. The CompanySecretary and the Chairman of the Meeting(s) ensured that all the applicable provisionsrelated to the holding of Meetings through video conferencing were complied with for suchvirtual Meetings.

During the year under review the Board accepted all recommendations made to it by itsvarious Committees.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and 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.

BOARD EVALUATION

The purpose and intent of Board evaluation is in essence linked to extension orcontinuation of the term of appointment of the Directors appointed by the Members of theCompany based on the process of evaluation carried out by the Independent Directors andthe Board.

You are aware that on October 12018 Union of India ("UOI") (acting throughthe Ministry of Corporate Affairs) had filed a petition with Hon’ble NCLT seekingimmediate suspension of the Board of Directors of IL&FS and appointment of a new Boardof Directors amongst others on the grounds of mismanagement and compromise in corporategovernance norms and risk management by the erstwhile Board of the Company and that theaffairs of the Company being conducted in a manner prejudicial to the public interest.Pursuant to the above developments the New Board of IL&FS also initiatedreconstitution of the Board of Directors of the Group Companies including NTBCL.

The New Board members are akin to Independent Directors and not Independent Directors.Further the requirement of appointing Independent Directors has been dispensed by NCLTOrder dated April 26 2019 for IL&FS and the Group Companies including NTBCL. In theabsence of Independent Directors the process of Board evaluation would anyway beredundant due to non-applicability of relevant provisions of the Companies Act 2013 andSEBI (LODR) Regulation 2015. In view thereof the Board has not followed the process ofperformance evaluation of the Board Committees and the Directors during the FY 2020-21.However an application has been made to MCA with a view to seek appropriate dispensationfrom the NCLT seeking exemption from the applicability of the provisions of Section 178(2) and Schedule IV (VII & VIII) of the Companies Act 2013 and the SEBI (LODR)Regulation 2015.

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.

CORPORATE GOVERNANCE

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-VIII which forms an integral part ofthis Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Income Tax Matters

The Company has received the assessment order from Income Tax Department on December272019 u/s 143(3) of the Income Tax Act 1961 for the Assessment Year 2016-17 and 2017-18wherein a demand amounting Rs. 357 crores and Rs 383.48 crores has been raised based onthe historical dispute with the Tax Department which is primarily on account of additionof arrears of designated returns to be recovered in future valuation of land and otherrecoveries. The Company has filed an appeal with the first level Appellate Authority. Withtransition to the Faceless Appeals as introduced vide Faceless Appeal Scheme 2020 boththe appeals have been transferred to the National Faceless Appeal Center (NFAC). A noticewas received from the NFAC fixing the date of compliance for 13.01.2021 however thematter was adjourned and no further notice has been issued thereafter.

Further on May 15 2021 the Company has received a Show Cause Notice u/s 270A fromNational Faceless Assessment Centre for the AY 2016-17 and AY 2017-18 and the Company hasrequested to keep the penalty proceedings in abeyance as the appeals on merits arecurrently pending before the Commissioner of Income Tax (Appeals).

The Income Tax Department has in earlier years raised a demand of Rs. 1340.03 Croreswhich was primarily on account of addition of arrears of designated returns to berecovered in future from toll and revenue subsidy on account of allotment of land.Pursuant upon the receipt of order from CIT(A) on April 25 2018 the Company has receivedthe notice of demand dated March 31 2018 from the Assessing Officer (AO) Income TaxDepartment New Delhi in respect of AYs 2006-07 to 2014-15 giving effect to the order fromCIT (A) whereby an additional tax demand of Rs. 10893.30 Crores was raised. Theenhancement of the demand was primarily on account of valuation of land. The Company hasfilled an appeal along with the stay application with Income Tax Appellate Tribunal(ITAT). The matter was heard by ITAT on December 19 2018 January 2 2019 and February 62019 and based on NCLAT order dated October 15 2018 ITAT adjourned the matter sine diewith directions to maintain status quo.

During November 2018 the 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 amounting to Rs.10893.30 Crores during December 2018. The Company has filed an appeal along with the stayapplication with Income Tax Appellate Tribunal (ITAT). The matter was heard by ITAT onMarch 29 2019 and May 03 2019 ITAT has adjourned the matter sine die with directions tomaintain status quo.

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 ofAllahabad in a judgement dated October 26 2016 held that the two specific provisionsrelating to levy and collection of fee to be inoperative but refused to quash theConcession Agreement. Consequently collection of user fee from the users of the NOIDABridge was suspended from October 26 2016. However the Company continues to fulfil itsobligations as per the Concession Agreement including maintenance of Project Assets.

The Company had challenged the HC Judgment before the Hon’ble Supreme Court ofIndia ("SC") by way of Special Leave Petition (SLP No. 33403 of 2016). TheHon’ble SC had on November 112016 passed an order in the aforesaid matterrequesting the Comptroller and Auditor General of India ("CAG") to assist thecourt in the matter by verifying the claim of the Company that the T otal Cost of theProject has not been recovered in accordance with the terms of the Concession Agreementdated 12.11.1997. The CAG filed an Affidavit along with sealed cover report to SC on March22 2017. The CAG report clearly specified that Total Cost of Project had not beenrecovered by the Company. The CAG report also contained some other observations by theCAG which were outside the scope of its remit. The SC Bench directed that the CAG Reportbe kept in a sealed cover and need not be provided to the Respondents in the case. The SCstated that the CAG report would continue to remain in a sealed 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’s SLP be placed and taken up with theSLP Filed by NOIDA in relation to the Delhi HC Order and be heard together with the same.The IA had therefore been directed to be listed with the said SLP (Diary Number 10503 of2019). On April 12 2019 the SC heard the matter alongwith the IA No. 170774 of 2019 filedby NOIDA and stayed the proceedings in the arbitration and fixed the matter for finaldisposal.

The matter was subsequently listed and came up for hearing on April 25 2019 howeverarguments were not heard on that date. Subsequently On January 312020 the Company filedan application for vacation of interim stay granted vide order dated April 12 2019. Inview of outbreak of COVID-19 the functioning of the Supreme Court was limited to urgentmatters only. Pursuant to the filling of letter of urgency the matter was heard by Hon'bleSupreme Court on September 212020 October 05 2020 November 18 2020 January 20 2021March 16 2021 and April 15 2021however the matter was not taken up for effectivehearing.

Subsequently on July 08 2021 an interim application seeking vacation of stay wasfiled before the Hon’ble Supreme Court of India. Pursuant to the filling of Letter ofUrgency on July 22 2021 before the Learned Registrar (Mentioning) the matter wasmentioned on July 26 2021. On August 10 2021 the Hon’ble Supreme Court wasrequested for a specific date for final hearing of the matter especially in view of gravefinancial exigencies which had resulted in it not being able to provide for the necessaryfinance to undertake structural maintenance of the bridge. Further the Hon’bleSupreme Court was also requested to vacate the stay on Arbitration. The next date ofhearing is September 08 2021 as presently been notified by the Hon’ble SupremeCourt.

Arbitration Matter

The Judgment of the Hon’ble HC of Allahabad had constituted a Change in Law as perthe Concession Agreement which obligates NOIDA to modify or cause to modify theConcession Agreement so as to place the Company in substantially the same legalcommercial and economic position as it was prior to such Change in Law. Accordingly theCompany had sent a proposal dated November 17 2016 under Section 6.3B(a) of theConcession Agreement notifying NOIDA of the resultant Change in Law and occurrence ofEvents of Default . However NOIDA failed to take any steps in pursuance of the saidproposal. The Company then sent a Notice of Arbitration to NOIDA on February 14 2017pursuant to Section 26.1 of the Concession Agreement. The Company had appointed Mr.Justice Vikramajit Sen (Retd.) as its designated Arbitrator. However NOIDA had notnominated its Arbitrator. In light of the foregoing the Company had filed a petition onJuly 20 2017 under Section 11(4) of the Arbitration and Conciliation Act 1996 ("A& C Act") in the Hon’ble HC of Delhi which heard the said petition onOctober 24 2017 and appointed Mr. Justice S.B Sinha (Retd.) as the Arbitrator onNOIDA’s behalf. The Arbitral Panel comprising of Mr. Justice (Retd.) Satya BrataSinha and Mr. Justice (Retd.) Vikramjit Sen and Hon’ble Justice (Retd.) R.C. Lahotias Presiding Arbitrator had been constituted on November 15 2017. At the preliminaryhearing of the Arbitral Tribunal on December 2 2017 schedule of steps to be followedupon 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 and anApplication under Section 16 of the A & C Act raising jurisdictional objections beforethe Arbitral Tribunal. The Company and IL&FS have filed their reply to the applicationof NOIDA under Section 16 objecting to the maintainability of the claims within thestipulated time. NOIDA too has filed its written submissions on May 18 2018 for argumentson application under Section 16 of the A & C Act. On May 19 2018 the ArbitralTribunal heard the arguments of the legal counsel of NOIDA and on June 2 2018 theArbitral Tribunal heard the objections and arguments of the legal counsel of IL&FS. OnSeptember 12 2018 NOIDA had moved an application for the amendment of their counterclaim which was opposed by the Company’s Legal Counsel. On September 20 2018 theArbitrators stated that (a) amendment of the counter claim filed by NOIDA be left open tobe considered at the final hearing and the Company has been given time to file its replyto the said counter claims on or before October 31 2018 (b) The next date of hearing isNovember 13 2018 for (i) settling the points for determination (ii) determining theorder of production of witnesses and issuing such further directions as needed (c) March5 2019 to March 9 2019 are appointed for recording evidence and (d) April 8 2019 toApril 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 (rejectingNOlDA’s Section 16 application) passed by the Arbitral T ribunal. On account of thesad demise of Justice (Retd.) S. B. Sinha on March 19 2019 who was representing NOIdAthe NOIDA had nominated Justice (Retd.) G. P. Mathur to replace late Justice (Retd.) S.B.Sinha and the Arbitration Tribunal had been re-constituted on April 25 2019. Due toreconstitution of the Tribunal the following revised schedule of hearing was decided bythe Arbitration Tribunal:

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 4/5/6/7 201 9 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 2021the 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 312021 and of the loss 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.

AUDITORS

(a) Statutory Auditors

Messrs N. M. Raiji & Co. Chartered Accountants (ICAI FRN 108296W) were appointedas Statutory Auditors of the Company for a period of five consecutive years at the TwentyFirst Annual General Meeting (AGM) of the Members held on September 25 2017 on aremuneration 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. Hence the resolution seeking ratification of theMembers for continuance of their appointment at this AGM is not being sought.

The Statutory Auditors’ Report forms part of the Annual Report. There is no auditqualification reservation or adverse remark for the year under review. There was noinstance of fraud during the year under review which required the Statutory Auditors toreport to the Audit Committee and / or Board under Section 143(12) of Act and Rules framedthereunder. 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 2020-21.

(c) SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and rules made thereunder theCompany has appointed Messrs Kumar Wadhwa & Co. Company Secretaries (C.P. No. 7027)to undertake the Secretarial Audit of the Company and its Material Subsidiary. TheSecretarial

Audit Report is annexed as Annexure-V and forms an integral part of this Report. TheSecretarial Auditor has not expressed any qualification in their Secretarial Audit Reportfor the year under review for the Company as well as its material subsidiary.

Messers Kumar Wadhwa & Co. observed the followings:

The Company has not complied with the regulation 17 18 19 20 and 25 of SEBI (ListingObligation and Disclosure Requirements) 2015 along with section 149 177 and 178 of theCompanies Act 2013 in respect of composition of Board of Directors Audit CommitteeNomination and Remuneration Committee Stakeholder Relationship Committee due tonon-appointment of Independent Directors and Woman Director.

The constitution of Board of Directors of the Company was not in conformity with theprovisions of the Companies Act and Listing Regulations. NCLT Mumbai Bench vide its Orderdated April 26 2019 has granted exemption to IL&FS and its Group Companies includingNTBCL regarding appointment of Independent Directors and Women Directors. With thisorder provisions of the Act and Listing Regulations are deemed to be complied with tillthe end of the moratorium period i.e. next date of further order in this regard.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control which is constantly assessed. TheCompany’s internal control system is commensurate with its size scale andcomplexities of its operations. The internal audit for the year under review was entrustedto Messrs Thakur Vaidyanath Aiyer & Co. Chartered Accountants.

The main thrust of internal audit is to review business risks test and reviewcontrols assess business processes besides benchmarking controls with best practices inthe 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 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.

RISK MANAGEMENT

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.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances and toprovide adequate safeguards against victimization of persons who may use such mechanism.The Whistle Blower Policy provides details for direct access to the Chairman of the AuditCommittee has been posted on the website of the Company at www.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 forpayment of remuneration to Executive and Non-executive Directors (by way of sitting feesand commission) Key Managerial Personnel Senior Management and payment of remunerationto other employees.

The policy also provides the criteria for determining qualifications positiveattributes and Independence of Director and criteria for appointment and removal ofDirectors Key Managerial Personnel / Senior Management and performance evaluation whichare considered by the Nomination and Remuneration Committee and the Board of Directors.

The Policy sets out a framework that assures fair and optimum remuneration to theDirectors Key Managerial Personnel Senior Management Personnel and other employees suchthat the Company’s business strategies values key priorities and goals are inharmony with their aspirations. The policy lays emphasis on the importance of diversitywithin the Board encourages diversity of thought experience background knowledgeethnicity perspective age and gender are considered at the time of appointment.

The Nomination Remuneration and Board Diversity policy is directed towards rewardingperformance based on review of achievements. It is aimed at attracting and retaining highcalibre talent.

The Nomination Remuneration and Board Diversity Policy is displayed on the website ofthe Company in the investor information section at www.ntbcl.com.

CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Companies Act 2013 as on April 12018 theCompany’s Corporate Social Responsibility (CSR) Committee consisted of threeDirectors including two Independent Directors. Since the provisions of Section 135 of theCompanies Act 2013 are not applicable on the Company. However NCLT Mumbai Bench videits Order dated April 26 2019 has granted exemption to IL&FS and its Group Companiesincluding NTBCL in respect of appointment of Independent Directors and Woman Director.The CSR Policy of the Company may be accessed in the investor information section on theCompany’s website at www.ntbcl.com. An Annual Report on CSR Activities as requiredunder the Companies (Corporate Social Responsibility Policy) Rules 2014 is set out asAnnexure-IV 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 soas to ensure safety of all concerned compliances of environmental regulations andpreservation of 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.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company considers its employees the most valuable resource and ensures thestrategic alignment of HR practices to business priorities and objectives. The Companystrongly believes in fostering a culture of trust and mutual respect amongst its employeesand seeks to ensure that values and ethos are understood by everyone and are the referencepoint in all people matters.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as required by Regulation 34(2) of the ListingRegulations is not applicable to the Company for the year under review.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

A detailed disclosure with regard to the IEPF-related activities undertaken by yourCompany during the year under review forms part of the Report on Corporate Governance.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not own any manufacturing facility there is nothing to reportunder the Energy Conservation and Technology Absorption particulars pursuant to Section134(3)(m) of the Act read with the Rules 8(3) of the Companies (Accounts) Rules 2014.

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-VI VII 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.

FIXED DEPOSITS

The Company has not accepted any Deposits within the meaning of Section 73 of the Actread with the Companies (Acceptance of Deposits) Rules 2014 as amended during the yearunder review.

COM PLIANCE WITH SECRETARIAL STANDARDS

During the year under review your Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.

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 312021 and thedate 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.

CAUTIONARY STATEMENT

Statements in this Directors’ Report describing the Company’s objectivesprojections estimates expectations or predictions may be "forward-lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make difference to the Company’s operations include raw material availabilityand its prices cyclical demand

and pricing in the Company’s principal markets changes in Government regulationsTax regimes economic developments within India and the countries in which the Companyconducts business and other ancillary factors.

ACKNOWLEDGEMENT

Your Directors wish to place on record sincere gratitude and appreciation for thecontribution made by the employees at all levels for their hard work support dedicationtowards the Company.

Your Directors thank the Government of India and the State Governments for theirco-operation and appreciate the relaxations provided by various Regulatory bodies tofacilitate ease in compliance with provisions of law.

Your Directors also wish to thank its customers business associates suppliersinvestors and bankers for their continued support and faith reposed in the Company.

By order of the Board

For Noida Toll Bridge Company Limited

Chandra Shekhar Rajan

Chairman

DIN : 00126063

Date: August 11 2021

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