REG - Noida Toll Bridge Co - IFRS Audited Results for the Year to 31 March 2016 <Origin Href="QuoteRef">NOID.NS</Origin> - Part 5
06/09/2016 14:50
- Part 5: For the preceding part double click ID:nRSF1084Jd
the Group, which
comprise cash and
cash equivalents,
loans and advances
and available-for
-sale financial
assets, the Group's
exposure to credit
risk arises from
default of the
counterparty, with
maximum exposure
equal to the carrying
amount of these
instruments.
Since the Group
trades only with
recognised third
parties, there is no
requirement for
collateral. However
wherever management
feels adequate,
obtain collateral in
the form of bank
guarantees or
security deposits
from the third
parties.
25. Financial
Instruments
Fair Values
The carrying value of
all financial assets
and liabilities are
representatives of
their fair values at
respective balance
sheet date. The
carrying value of the
fixed rate debts of
the Group are
considered to be
equal to their fair
value following debt
restructuring, which
resulted in a
reduction of the
effective interest
rate of all debt
(Note 12).
Interest Rate Risk
The following table
set out the carrying
amount, by maturity,
of the Group's
financial instruments
that are exposed to
interest rate risk:
As at March 31, 2016: (in US$)
Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 Years Total
Assets
Loans to staff 2,637 1,895 1,130 831 852 7,186 7,345
Borrowings
Term Loan-Bank 540,012 1,080,672 1,081,321 1,081,321 1,081,321 1,618,091 6,482,738
As at 31 March 2015: (in US$)
Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 Years Total
Assets 3,369 3,454 2,685 1,890 903 7,626 19,927
Loans to staff
Borrowings
Deep Discount Bonds 3,413,422 - - - - 3,413,422
Interest on financial
instruments classified as
fixed rate is fixed until
the maturity of the
instrument. The other
financial instruments of
the Group that are not
included in the above
tables are non-interest
bearing and are therefore
not subject to interest
rate risk. There are no
instruments at floating
rates of interest.
Credit risk
There are no significant
concentrations of credit
risk within the Group.
26. Fair Value Measurement
The following table
provides the fair value
measurement hierarchy of
the company's asset as of
March 31, 2016
Fair Value Measurement using
Asset measured at fair value Date of valuation Total Quoted Price in active Markets Significant Observable Inputs SignificantUnobservableInputs
(Level 1) (Level 2) (Level 3)
Intangible Asset March 31, 2016 68,450,279 - - 68,450,279
Available for sale Investment March 31, 2016 3,334,657 3,334,657 - -
There have been no
transfers between Level 1
and Level 2 during the
period.
Management determined that
the intangible assets
constitute one class of
asset under IFRIC 12,
based on the nature,
characteristics and risk
of the asset.
27. Segment Reporting
The Concession Agreement
with NOIDA confers certain
economic rights to the
Group. These include
rights to charge toll and
earn advertisement
revenue, development
income and other economic
rights. The income stream
of the Group comprises of
toll income and
advertising income for the
year for which IFRS
compliant financial
statements of the Group
have been prepared.
Both these rights are
directly or indirectly
linked to traffic on the
Delhi Noida Toll Bridge
and are broadly subject to
similar risks. Toll
revenue is fully variable
while license fee from
advertisement is fixed to
a certain extent. The
operating risk in both the
cases is similar and the
expenses cannot be
segregated as the Company
does not have separate
departments for the
management of each
activity. The Management
Information System also
does not capture both
activities separately. As
both emanate from the same
Concession Agreement and
together form a part of
the Return as specified in
the Concession Agreement,
the Group does not have
different business
reporting segments.
Similarly, the Group
operates under a single
geographical segment.
28. Salient aspects of
Service Concession
Arrangement
NOIDA has irrevocably
granted to NTBCL the
exclusive right and
authority during the
concession period to
develop, establish,
finance, design,
construct, operate, and
maintain the Delhi Noida
Toll Bridge as an
infrastructure facility.
NOIDA has further granted
the exclusive right and
authority during the
concession period in
accordance with the terms
and conditions of the
agreement to:
-Enjoy complete and
uninterrupted possession
and control of the lands
identified constituting
the Delhi Noida Toll
Bridge site.
-Own all or any part of
the project assets.
-Determine, demand,
collect, retain and
appropriate a Fee from
users of the Delhi Noida
Toll Bridge and apply the
same in order to recover
the Total Cost of Project
and the Returns thereon.
-Restrict the use of the
Delhi Noida Toll Bridge by
pedestrians, cycle
Rickshaws etc from the
Delhi Noida Toll Bridge.
-Develop, establish,
finance, design,
construct, operate,
maintain and use any
facilities to generate
development income arising
out of the Development
Rights that may be granted
in accordance with the
provisions of the
Concession agreement.
-Appoint subcontractors or
agents on Company's behalf
to assist it in fulfilling
its obligations under the
agreement.
SIGNIFICANT TERMS OF THE
ARRANGEMENT THAT MAY
AFFECT THE AMOUNT, TIMING
AND CERTAINTY OF FUTURE
CASH FLOW
Concession Year
The Concession Year shall
commence on 30 December
1998 (the Effective Date)
and shall extend until the
earlier of:
• A year of 30 years from
the Effective Date;
The date on which the
Concessionaire shall
recover the total cost of
the project and the
returns as determined by
the independent auditor
and the independent
engineer through the
demand and collection of
fee, the receipt,
retention and
appropriation of
development income and any
other method as determined
by the parties.
In the event of NTBCL not
recovering the total
project cost and the
returns thereon within the
specified time the
Concession Year shall be
extended by NOIDA for a
year of 2 years at a time
until the total project
cost and the returns
thereon have not been
recovered by the
Concessionaire.
In the past, New Okhla
Industrial Development
Authority has been in
discussion with the
Company to consider
modifications of a few
terms of the Concession
Agreement. Considering the
recent developments, the
Company at it's 9th July
2015 Board meeting,
approved the draft
proposal (Subject to
approval by Noida &
Shareholders) for
terminating the concession
& handing over the bridge
on March 31, 2031 &
freezing the amount
payable as on 31st March
2011.
Return
Return means the
designated return on the
Total Cost of the project
recoverable by the
concessionaire from the
effective date at the rate
of 20 % per annum.
Independent Auditor
An Independent Auditor
shall be appointed for the
entire term of the
Concession Agreement. The
Independent Auditor shall
approve the format for the
maintenance of accounts,
the accounting standards
and the method of cost
accounting to be followed
by the Concessionaire. The
Independent Auditor shall
audit, on a quarterly
basis the Concessionaire's
accounts.
The Independent Auditor
shall also certify the
Total Cost of Project
outstanding and compute
the returns thereon from
time to time on a per
annum basis.
Fees
The Concession Agreement
had determined the Base
Fee Rates which have been
determined and set
according to 1996 figures
and shall be revised to
determine the initial fee
to be applied to the users
of the project on the
Project Commissioning Date
(the "Initial Fee Rate").
The following are the Base
Fee Rates:
Vehicle Type One Way Fee in Rs.
Earth moving / 30
construction vehicle
For each additional axle 10
beyond 2 axle
Truck - 2 axles 20
Bus - 2 axles 30
Light Commercial Vehicle 20
Cars and other four 10
wheelers
Three wheelers 10
Two wheelers 5
Non-motorised vehicles -
The Initial Fee Rate shall
be determined strictly in
accordance with the
increase in the CPI, based
upon the Base Fee Rates as
determined in the
Concession Agreement and
shall be revised in
accordance with the
following formula:
IFR = CPI (I)*Base Fee
Rate/CPI (B)
Where
IFR = Initial Fee Rate
CPI ( I ) = Consumer Price
Index for the month
previous to the month of
setting the Initial Fee
Rate
CPI ( B ) = Consumer Price
Index of the month in
which this Agreement is
entered into
The Fee Rates are to be
revised annually by the
Fee Review Committee. Fee
rates are revised as per
the following formula:
RFR = CPI ( R ) * IFR /
CPI ( I )
Where
RFR = Revised Fee Rate
CPI ( R ) = Consumer Price
Index for the month
previous to the month in
which the revision is
taking place
CPI ( I ) = Consumer Price
Index for the month
previous to the month of
setting the initial fee
rate
IFR = Initial Fee Rate
Fee Review Committee
A Fee Review Committee was
established which
comprised of one
representative each of
NOIDA, the Concessionaire
and a duly qualified
person appointed by the
representatives of NOIDA
and Concessionaire who
shall also be the Chairman
of the Committee. The Fee
Review Committee shall
• review the need for a
revision to existing rates
of Fee upon occurrence of
unexpected circumstances;
• review the formula for
revision of fees
Cost of Project and
calculations of return
The total project cost
shall be the aggregate of:
• Project Cost
• Major Maintenance
Expenses
• Shortfalls in recovery
of Returns in a specific
financial year
The Project Cost had to be
determined on the Project
Commissioning date by the
Independent Auditor with
the assistance of the
Independent Engineer.
The amounts available for
appropriation by NTBCL for
the purpose of recovering
the total project cost and
the returns thereon shall
be calculated at annual
intervals from the
Effective Date in the
following manner:
Gross revenues from Fee
collections, income from
advertising and
development income
Less: O&M expenses
Less: Taxes (excluding any
customs or import duties)
Major Maintenance Expenses
'Major Maintenance
Expenses' refer to all
expenses incurred by NTBCL
for any overhaul of, or
major maintenance
procedure for, the Delhi
Noida Toll Bridge or any
portion thereof that
require significant
disassembly or shutdown
the Delhi Noida Toll
Bridge including those
teardowns overhauls,
capital improvements and
replacements to major
component thereof), which
are (i) to be conducted
upon the passage of the
number of million standard
axels or (ii) not
regularly schedule. The
Independent Engineer shall
determine the necessity,
of conducting the major
maintenance and certify
that the work has been
executed in accordance
with specifications.
TRANSFER OF THE PROJECT
UPON TERMINATION OF
CONCESSION PERIOD
On the transfer date,
NTBCL shall transfer and
assign the project assets
to NOIDA or its nominated
agency and shall also
deliver to NOIDA on such
dates such operating
manuals, plans, design
drawings and other
information as may
reasonably be required by
NOIDA to enable it to
continue the operation of
the bridge.
On the transfer date, the
bridge shall be in fair
condition subject to
normal wear and tear
having regard for the
nature of asset,
construction and life of
the bridge as determined
by the Independent
Engineer. NTBCL shall
ensure that on the
transfer date, the bridge
is in the condition so as
to operate at the full
rated capacity and the
surface riding quality of
the bridge will have a
minimum performance level
of 3000 - 3500 mm per Km
when measured by bump
integrator.
The asset shall be
transferred to NOIDA for a
sum Re. 1/-. NOIDA shall
be responsible for the
cost and expenses in
connection with the
transfer of the asset.
OTHER OBLIGATIONS DURING
THE CONTRACT TERM
Major Repairs and
Unscheduled Maintenance
NTBCL shall inform the
Independent Engineer when
the work is necessary and
use materials that allow
for rapid return to normal
service and organise work
cruise to minimise
disruptions. The
Independent Engineer to
approve work prior to
commencement and after
repairs are completed
Independent Engineer shall
confirm that maintenance/
repairs confirm to the
required standards.
Overlay
Based on traffic
projections and overlay
and design Million
Standard Axel (MSA), NTBCL
shall indicate, in annual
report vis-à-vis the MSA
projections, the point of
time at which the pavement
shall require an
'overlay'.
Overlay is defined as a
strengthening layer which
is require over the entire
extent of pavement of the
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