| Dear Members,
The Directors are pleased to present the 20th Annual Report together
with the Audited Statements of Accounts for the year ended 31st March,
2015.
FINANCIAL RESULTS
The summarized financial results of the Company during the year under
review are as under:-
(Rs. in Lacs)
Year Ended Year Ended
31.03.2015 31.03.2014
Total Turnover 281.11 815.26
Gross Profit/(Loss) 146.22 687.18
Less :
(a) Depreciation 3.84 3.57
(b) Finance Cost 27.14 21.66
(c) Provision for Income Tax 34.67 149.32
Net Profit /(Loss) 80.57 512.63
Appropriations
Statutory Reserve Fund 16.11 102.52
General Reserve NIL 40.00
Proposed Dividend 59.96 179.88
Tax on Dividend 12.27 30.57
Balance Brought Forward 1101.38 941.74
Accumulated Profits 1093.61 1101.38
DIVIDEND
In view of the decrease in profitability of the Company, your directors
are please to recommend dividend @ Rs 0.50 per equity share (5%) after
providing for depreciation for the year under review. Payment of
dividend is subject to the approval of the Shareholders at the ensuing
Annual General Meeting.
PERFORMANCE REVIEW & OUTLOOK
During the year, the BSE sensitive Index was at 22455 at the start of
the financial year and ended at 27957 on 31st March, 2015. The year was
marked by high volatility in the stock market. As a result, the
Divestment / Investment activity of the Company was curtailed during
the year and the Company posted a Gross profit of Rs. 146.22 Lacs as
compared to Rs. 687.18 Lacs in the previous year. Net profit after tax
for the year under review was Rs. 80.57 Lacs as compared to Rs. 512.63
Lacs in the previous year.
In the financial year 2014-2015, Indian economic growth rose to 5.2%
from 4.7% last year as a result of the improving macro-economic
situation. Falling oil prices, lower food and commodity prices and the
proactive measures taken by the Government helped in containing
inflation in 2014.
The low economic growth appears to have bottomed out and a gradual
increase in economic activity is expected in 2015. The medium term to
long term growth prospects look positive in view of the Government's
determination to bring in reforms. For the year 2015, the economy is
expected to grow at a higher rate than in 2014. The long term prospect
for the economy is optimistic.
Industry trends and its future prospects have been summed up in the
Management Discussion and Analysis Report which forms part of this
report.
NBFC REGISTRATION WITH RESERVE BANK
The Company submitted the fresh application along with required
documents / information on 19th March, 2014. The information /
clarifications sought thereafter by RBI have also been submitted by the
Company.
The Managing Director met GM-DNBS (RBI) on 02nd September, 2014 in
connection with the pending application of registration and was
informed that the application is under consideration for registration
and shall be disposed off as per the directive of RBI Central office,
Mumbai. RBI has also issued letter dated 03rd September, 2014
informing that the Company's application is under consideration. There
has been no further communication by RBI till date. The Company
Secretary has been rigorously following up the matter with the RBI.
RBI vide its Notification Dated 27th March, 2015 has issued
"Non-Systematically Important Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2015 which came into force with immediate effect. With this
revision in the threshold for systemic significance, the Company would
be categorized as a Non- Systematically Important NBFC on being grated
the Certificate of Registration.
STATUTORY STATEMENTS
(i) Share Capital
The Paid up Equity Share Capital as on 31st March, 2015 stood at Rs.
11,99,23,290 comprising of 1,19,92,329 Equity Shares of Rs. 10/- each.
During the year under review, the Company has neither issued any Shares
with differential voting rights nor granted stock options nor sweat
equity.
The Shareholding of Directors of the Company (including Promoter
Director) is given in the Corporate Governance Report forming part of
this report.
(ii) Number of meeting(s) of the Board
During the year under review, four Board Meetings were convened and
held. The details of such meeting(s) are given in the Corporate
Governance Report. The intervening gap between the meetings was within
the period prescribed under the Companies Act, 2013.
(iii) Public Deposits
The Company has not accepted any deposits from the public under Section
73 of the Companies Act, 2013 read with the Companies (Acceptance of
Deposits) Rules, 2014.
(iv) Significant and other material orders passed by the regulators or
courts
There are no significant material orders passed by the Regulators or
Courts or Tribunal during the year under review which has an impact on
the Going Concern status and Company's operations in future.
(v) Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
(vi) Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars required under Section 134(3)(m) of the Companies Act,
2013 read with Rules 8 of the Companies (Accounts) Rules 2014 in
respect of conservation of energy and technology absorption are not
applicable to your Company.
The total foreign exchange earnings during the year under review and
previous period is NIL and total foreign exchange out go during the
year under review and the previous period is NIL.
STATEMENT PURSUANT TO LISTING AGREEMENT
The Company's equity shares are listed at Bombay Stock Exchange Limited
(BSE), Mumbai. The listing fee for the year under review has been paid
to BSE.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to sub-section (3)(c) & (5) of Section 134 of the Companies
Act, 2013, it is hereby stated that:
a) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
b) the directors have selected such accounting policies and applied
them consistently and made judgments and estimates, that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the Company for that period;
c) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
(i) Subsidiaries
HB Corporate Services Limited and HB Securities Limited are the Wholly
Owned Subsidiaries of the Company. A separate statement containing the
salient features of the Financial Statement of the Company's
Subsidiaries is being provided in Form AOC-1 along with Financial
Statements in terms of Section 129(3) of the Companies Act, 2013. The
Financial Statements of the Subsidiary Companies will be made available
upon request by any member of the Company interested in obtaining the
same. The Financial Statements of the Subsidiary Companies will also be
kept for inspection by any member of the Company at its registered
office. No Company has become or ceased to be Company's Subsidiary
during the year under review.
The Board of Directors has approved a Policy for Determining Material
Subsidiaries in compliance with the provisions of Clause 49 of the
Listing Agreement. The said policy has been uploaded on the website of
the Company viz. www.hbportfolio.com having following web link,
www.hbportfolio.com/lnvestor Information/Corporate Governance.
(ii) Joint Ventures
The Company is not having any Joint Venture business and no Company has
become its Joint Venture during the year under review.
(iii) Associate Companies
In terms of Sec 2(6) of the Companies Act, 2013, Taurus Asset
Management Co. Limited, Taurus Investment Trust Co. Limited, HB
Insurance Advisors Limited and Merwanjee Securities Limited are the
Associate Companies. During the year under review, M/s. Pisces
Portfolios Private Limited, one of the Associate Company has got merged
with HB Estate Developers Limited and the Company has been allotted
fully paid up Equity Shares in consideration of the same. The merged
entity does not qualify to be an Associate Company. A separate
statement containing the salient features of the Financial Statement of
the Company's Associates is being provided in Form AOC-1 along with
Financial Statements in terms of Section 129(3) of the Companies Act,
2013. Except that there has been no change in the status of Associate
Companies.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under Clause 49 of the Listing Agreement with Stock
Exchanges, the Management Discussion and Analysis Report is enclosed as
a part of this report.
CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchange, a
report on the Corporate Governance together with the Certificate from
the Company's Statutory Auditor's confirming compliance(s) forms an
integral part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors has constituted a Corporate Social
Responsibility Committee (CSR Committee) pursuant to the provisions of
Section 135 of the Companies Act, 2013. The composition of the CSR
Committee has been mentioned in the Corporate Governance Report forming
part of this report. The Board of Directors, on the recommendation of
the CSR Committee, has approved the Corporate Social Responsibility
Policy (CSR Policy) of the Company and disclosed its contents in
"ANNEXURE - I" forming part of this report. The CSR Policy has also
been uploaded on the website of the Company viz. www.hbportfolio.com
having following web link, www.hbportfolio.com/lnvestor
Information/CSR.
WHISTLE BLOWER POLICY - VIGIL MECHANISM
In terms of the provisions of Sec 177(9) & (10) of the Companies Act,
2013 and pursuant to the provisions of Clause 49 of the Listing
Agreement, a Vigil Mechanism for Stakeholders, Employees and Directors
of the Company has been established. The Whistle Blower Policy duly
approved by the Board of Directors has been uploaded on the website of
the Company viz. www.hbportfolio.com having following web link,
www.hbportfolio.com/lnvestor lnformation/ Corporate Governance.
RELATED PARTY TRANSACTIONS
The Related Party Transactions that were entered during the financial
year under review were on arm's length basis and were in the ordinary
course of business. There were no materially significant Related Party
Transactions entered into by the Company during the year under review.
None of the Directors has any pecuniary relationships or transactions
vis-a-vis the Company.
The Board of Directors, on the recommendation of the Audit Committee,
has approved a policy to regulate transactions between the Company and
its Related Parties, in compliance with the applicable provisions of
the Companies Act, 2013, the Rules made there under and Clause 49 of
the Listing Agreement. The Policy on Related Party Transactions has
been uploaded on the website of the Company viz. www.hbportfolio.com
having following web link, www.hbportfolio.com/lnvestor
lnformation/Corporate Governance.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Board of Directors has adopted the Risk Management Policy which
sets out the framework for the management of risks faced by the Company
in the conduct of its business to ensure that all business risks are
identified, managed and monitored. The contents of Risk Management
Policy have been included in Management Discussion and Analysis forming
part of this report.
INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate system of internal controls. The
information about Internal Controls is set out in the Management
Discussion and Analysis forming part of this report.
INTERNAL FINANCIAL CONTROLS
The Company has established Internal Financial Control System for
ensuring the orderly and efficient conduct of the business including
adherence to Company's policies, the safeguarding of assets, the
prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records and the timely preparation of
reliable Financial Statements.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and
has adopted a policy on prevention, prohibition and redressal of sexual
harassment at workplace in line with the provisions of Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the rules framed thereunder.
During the financial year 2014-2015, the Company has not received any
complaints on sexual harassment.
AUDITORS
(i) Statutory Auditors
M/s. P. Bholusaria & Co., Chartered Accountants, New Delhi (Firm
Registration No.: 000468N), the Statutory Auditors of the Company, hold
office till the conclusion of the ensuing Annual General Meeting and
being eligible offers themselves for re-appointment. The Company has
received a letter from them to the effect that their re-appointment, if
made would be within the prescribed limits under Section 141(3)(g) of
the Companies Act, 2013 and they are not disqualified for
re-appointment. Observations of the Statutory Auditors are explained,
wherever necessary, by way of notes to accounts.
(ii) Internal Auditors
M/s. M.K. Choudhary & Co., Chartered Accountants, New Delhi performs
the duties of the Internal Auditors of the Company and their report is
reviewed by the Audit Committee from time to time.
(iii) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. A.N. Kukreja,
Proprietor, M/s. A.N Kukreja & Co., Company Secretary in Practice to
undertake the Secretarial Audit of the Company. The Secretarial Audit
Report is enclosed as a part of this report as "ANNEXURE - II" .
The Secretarial Auditors have made following observations in their
Secretarial Audit Report:
(a) The Company does not have a Chief Financial Officer (CFO), as
required under Section 203 of the Companies Act, 2013.
Director's Comment: The management is searching for suitable candidate
for the post of Chief Financial Officer (CFO) of the Company in order
to comply with the provisions of Section 203 of the Companies Act,
2013.
(b) The Company could not spend the eligible profit on Corporate Social
Responsibility (CSR) measures. However, the Company has constituted the
CSR Committee as per applicable provisions of the Act.
Director's Comment: The Company has earmarked the expenditure for CSR
activities for the financial year 2014-2015 as recommended by the CSR
Committee and approved by the Board of Directors of the Company. The
Company wanted to spend the amount on its own by undertaking the
projects, programs or activities as specified in Schedule VII of the
Companies Act, 2013. However the Company could not undertake the
activities due to shortage of time in implementing the same. The
Company will contribute the amount earmarked for the year 2014-2015
during the financial year, 2015-2016. Accordingly, the Annual Report on
the CSR activities has not been included in this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
(a) Appointment / Re-appointment / Resignation of Directors and KMP
As per the provisions of Section 152 of the Companies Act, 2013, Mr.
Anil Goyal, Managing Director shall retire by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for
re-appointment. The Board of Directors recommends his re-appointment.
The Board of Directors on the recommendation of the Nomination and
Remuneration Committee appointed Mrs. Anita Jain as an Additional
Director (Independent Non- Executive) in terms of Sec 161(1) of the
Companies Act, 2013 w.e.f. 31st March, 2015 who holds office up to the
date of this Annual General Meeting and being eligible offer herself
for re-appointment as Director. Mrs. Anita Jain fulfills the criteria
of Independent Director as specified in Sec 149(6) of the Companies
Act, 2013 and the Rules made there under. The Company has received
requisite notice in writing from a member proposing her appointment as
an Independent Director. Your Directors state that Mrs. Anita Jain
possesses appropriate balance of skills, expertise and knowledge and is
qualified for appointment as an Independent Director. The Board of
Directors recommends appointment of Mrs. Anita Jain as an Independent
Director (Non-Executive) of the Company for a term of five years from
the date of this Annual General Meeting and she shall not be liable to
retire by rotation.
The Company has also received declarations from all the Independent
Director(s) confirming that they meet with the criteria of independence
as prescribed both under Section 149(6) of the Companies Act, 2013 and
under Clause 49 of the Listing Agreement with the Stock Exchange.
Mr. Dinesh Kapoor has been appointed as the Company Secretary w.e.f
16th April, 2014 being the Key Managerial Personnel in place of Mrs.
Nishu Tomar, Company Secretary who has resigned w.e.f 15th April, 2014.
(b) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an Annual performance
evaluation of its own performance and of all the Directors individually
as well as the evaluation of the working of Audit, Nomination &
Remuneration and other Compliance Committees. The manner in which the
evaluation has been carried out is explained in the Corporate
Governance Report.
(c) Nomination and Remuneration Policy
The Board of Directors, on the recommendation of the Nomination &
Remuneration Committee, has approved a policy for selection,
appointment & remuneration of Directors, Key Managerial Personnel (KMP)
and Senior Management employees of the Company. The said policy is
enclosed as a part of this report as "ANNEXURE - III".
(d) Remuneration of the Directors / Key Managerial Personnel (KMP) and
Particulars of Employees
The provisions of Rule 5(2) & 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are not applicable,
as there are no such employee who were drawing / in receipt of
remuneration of prescribed amount during the period under review.
The information required pursuant to Section 197(12) of the Companies
Act, 2013 read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 in respect of
Directors / Key Managerial Personnel (KMP) and Employees of the Company
is furnished hereunder:
(i) the ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial year &
(ii) the percentage increase in remuneration of each Director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the financial year.
Sr. Name Category Ratio/Times % Increase
No per Median in
of employee remuneration
remuneration
1. Mr. Anil Goyal Managing Director 7.16 NIL
(Executive)
2. Mr. Lalit Bhasin Director NIL NIL
(Non-Executive)
3. Mr. Jagmohan Director NIL NIL
Lal Suri (Non-Executive)
4. Mr. Raj Kumar Director NIL NIL
Bhargava (Non-Executive)
5. Mr. Ramesh Director NIL NIL
Chandra Sharma (Non-Executive)
6. Mr. Bhuneshwar Director NIL NIL
Lal Chadha (Non-Executive)
7. Mrs. Anita Jain Director NIL NIL
(Non-Executive)
8. Mr. Dinesh Kapoor Company Secretary NIL
(w.e.f 16.04.2014)
9. Mrs. Nishu Tomar Company Secretary NIL
(Up to 15.04.2014)
The Non-Executive Directors are paid only sitting fees for attending
meeting of the Board of Directors and the Committees constituted by the
Board.
(iii) the number of permanent employees on the rolls of Company.
Four
(iv) the explanation on the relationship between average increase in
remuneration and Company performance.
Not Applicable
(v) comparison of the remuneration of the Key Managerial Personnel
against the performance of the Company.
Particulars (Rs. Lacs)
Remuneration of Key Managerial Personnel
(KMP) (aggregated) 63.51
Total Revenue 281.11
Remuneration (as % of revenue) 22.59%
Profit Before Tax (PBT) 115.25
Remuneration (as % of PBT) 55.11%
(vi) variations in the market capitalisation of the Company, price
earnings ratio as at the closing date of the current financial year and
previous financial year and percentage increase over decrease in the
market quotations of the shares of the Company in comparison to the
rate at which the Company came out with the last public offer in case
of listed companies, and in case of unlisted companies, the variations
in the net worth of the Company as at the close of the current
financial year and previous financial year.
Particulars As at As at Variation
31st March, 31st March,
2015 2014
Closing rate of Share (BSE) (Rs.) 20.50 18.00 13.89%
EPS (Consolidated) (Rs.) (3.69) 1.01 (265.35%)
Market Capitalization (Rs./Lacs) 2458.43 2158.62 13.89%
Price Earning ratio 5.56 17.82 (68.80)%
(vii) average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration.
Nil
(viii) Comparison of each remuneration of the Key Managerial Personnel
against the performance of the Company.
(Rs. Lacs)
Particulars Managing Company
Director Secretary*
Remuneration 51.22 12.29
Revenue 281.11 281.11
Remuneration (as % of revenue) 18.22% 4.37%
Profit Before Tax (PBT) 115.25 115.25
Remuneration (as % of PBT) 44.44% 10.67%
* Aggregate remuneration of Ms. Nishu Tomar, Company Secretary (Up to
15.04.2014) and Mr. Dinesh Kapoor, Company Secretary (w.e.f
16.04.2014).
(ix) the key parameters for any variable component of remuneration
availed by the directors.
Nil
(x) the ratio of the remuneration of the highest paid director to that
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year.
None
(xi) The remuneration paid to the Directors / Key Managerial Personnel
(KMP) is in accordance with the remuneration policy of the Company.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under sub-section (3) of
Section 92 in Form MGT-9 is enclosed as a part of this report as
"ANNEXURE - IV".
ACKNOWLEDGMENTS
Your Directors wish to thank and acknowledge the co-operation,
assistance and support extended by the Banks, Company's Shareholders
and Employees.
FOR AND ON BEHALF OF THE BOARD
Sd/-
LALIT BHASIN
Place: Gurgaon (Chairman)
Date : 28th May, 2015 DIN: 00002114 |