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Directors Report of HB Portfolio Ltd.

Mar 31, 2015

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


Mar 31, 2013

To the Members,

The Directors are pleased to present the 18th Annual Report together with the Audited Statements of Accounts for the year ended 31st March 2013.

FINANCIAL RESULTS

The summarized financial results of the Company during the year under review are as under:-

(Rs. in Lakhs) Year Ended Year Ended

PARTICULARS 31.03.2013 31.03.2012

Total Turnover 809.20 484.76

Gross Profit/(Loss) 693.72 372.62

Less :

(a) Depreciation 2.27 3.03

(b) Finance Cost 0.00 0.00

(c) Provision for Income Tax 150.32 72.44

Net Profit /(Loss) 541.13 297.15

Appropriations

Statutory Reserve Fund 108.23 59.44

General Reserve 40.00 20.00

Proposed Dividend 179.88 179.88

Tax on Dividend 30.57 29.18

Balance Brought Forward 759.29 750.64

Accumulated Profits 941.74 759.29

DIVIDEND

In view of the Company having distributable profits after providing for depreciation, your directors are please to recommend dividend @ Rs 1.50 per equity share (15%) for the year under review.

PERFORMANCE REVIEW & OUTLOOK

The year was marked by high volatility in the stock market. The BSE sensitive Index which was 17,430 at the start of the financial year 2012-13 made a recovery to reach at 20,203 in January 2013 and finally declined at the year end to close at 18,835 on 31st March, 2013. While the year started on a poor note, there were frequent bouts of recovery & volatility and an upward trend was seen from June 2012 till January 2013. Even though the health of the domestic industry remained fragile during the year, an inflow of USD 22 billion into the Indian equities by overseas investors supported the market. However volatile prices of index stocks have caused a fear in the domestic investors and they were by and large sellers in every rally. Amidst global slowdown and uncertainty, the economic activity in India remained subdued on account of halted investment demand, declining exports and weakening business and consumer confidence. The loss of growth momentum continued throughout the year 2012- 13. The Gross Domestic Product (GDP) during 2012-13 slowed down from 5.5% in the first quarter to 4.8% in the fourth quarter. The Inflation measured by the Wholesale Price Index which remained sticky at above 7.5% through first half of 2012-13, fell to 5.96% in March, 2013. The softening of global commodity prices and lowering of prices moderated non-food inflation. However, the food inflation moved into double digits.

During the year the Company posted a Gross profit of Rs. 693.72 lakhs as compared to Rs. 372.62 Lakhs in the previous year. Net profit after tax for the year under review was Rs. 541.13 lakhs as compared to Rs. 297.15 lakhs in the previous year.

Industry Trends and its future prospects have been summed up in the Management Discussion and Analysis Report which forms part of this report.

STATUTORY STATEMENTS

Your Company has not accepted any deposits from the public during the year under review. The particulars under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 on conservation of energy, 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.

The provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, are not applicable, as there is no such employee who were drawing/ in receipt of remuneration of prescribed amount during the period under review.

Pursuant to Section 217(2AA) it is hereby stated that in the preparation of the Annual Accounts, the applicable accounting standards have been followed. 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. 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. Further, the Directors have prepared the annual accounts on a going concern basis.

SUBSIDIARIES OF THE COMPANY

In terms of the General Circular No. 2/2011 dated 8th February, 2011 of Ministry of Company Affairs under section 212(8) of the Companies Act, 1956, a copy of the Balance Sheet, profit and Loss Account, Report of Directors and Auditors of the subsidiaries namely HB Securities Ltd. and HB Corporate Services Ltd. have not been attached with the Balance Sheet of the Company. However the financial data of the subsidiaries have been furnished under "Summary of Financial Information of Subsidiary Companies" and forms part of this Annual Report. The annual accounts of the subsidiary companies will be made available upon request by any member of the Company interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept for inspection by any member of the company at its registered office.

CORPORATE GOVERNANCE

The report of Corporate Governance for the year under review is annexed hereto and forms a part of the Director''s Report.

STATEMENT PURSUANT TO LISTING AGREEMENT

The Company''s equity shares are listed at Bombay Stock Exchange Ltd, Mumbai. The listing fee for the year under review has been paid to BSE.

AUDITORS REPORT

Observations of the Auditors are explained, wherever necessary, by notes to accounts.

AUDITORS

The Auditors, M/s P. Bholusaria & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for reappointment.

DIRECTORS

Mr. R.K. Bhargava and Mr. J.M.L Suri Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

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

Place: Gurgaon LALIT BHASIN

Date :25.05.2013 CHAIRMAN


Mar 31, 2012

The Directors are pleased to present the 17th Annual Report together with the Audited Statements of Accounts for the year ended 31st March 2012.

FINANCIAL RESULTS

The summarized financial results of the Company during the year under review are as under.

(Rs. in Lakhs)

Year Ended Year Ended PARTICULARS 31.03.2012 31.03.2011

Total Turnover 484.76 654.22

Gross Profit/(Loss) 372.62 548.06

Less :

(a) Depreciation 3.03 3.03

(b) Finance Cost 0.00 0.06

(c) Provision for Income Tax 72.44 97.86

Net Profit /(Loss) 297.15 447.11

Appropriations

Statutory Reserve Fund 59.44 89.42

General Reserve 20.00 200.00

Proposed Dividend 179.88 179.88

Tax on Dividend 29.18 29.18

Balance Brought Forward 750.64 802.02

Accumulated Profits 759.29 750.64

DIVIDEND

In view of the Company having distributable profits after providing for depreciation, your directors are please to recommend dividend @ Rs 1.50 per equity share (15%) for the year under review.

PERFORMANCE REVIEW & OUTLOOK

During the year, the BSE Sensitive Index which was 19420 at the start of the financial year, after making a low of 15,454 in December 2011, ended at 17,404 on 30th March, 2012. The stock market remained in low gear in 2011. As a result, the Divestment/ Investment activity of the company was curtailed during the year and the Company posted a Gross profit of 372.62 lakhs as compared to Rs. 548.06 Lakhs in the previous year. Net profit after tax for the year under review was 297.15 lakhs as compared to Rs. 447.11 Lakhs in the previous year. Inflation, high interest rates, weak rupee, foreign fund outflows, high commodity prices, euro zone debt crises and so on, weighted on the stock market. Indian Stock Market showed a worst performance after 2008 when U.S financial crises stuck. Inflation clearly remained the biggest and most engraved concern for India this year. Soaring prices of food and essential commodities compelled the Reserve Bank of India to raise interest rates several times during the year. The rupee continued to fall on sustained foreign capital outflows. The weakening rupee added to the inflationary pressure which is a severe setback for corporate India as it would mean higher interest rate outflow and repayment liability on its foreign currency debt.

Internationally, the euro zone debt crises remained the biggest business story of 2011. The crises deepened as the trouble that started with Greece spread to Italy, Portugal, and Spain and speculation mounted about the collapse of the euro zone. India cannot stay immune to the deteriorating situation in the euro zone.

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 OF INDIA

The Company's application dated 16th August, 2011 has been returned by RBI and the Company has been advised by the Reserve Bank of india vide its letter dated March 20, 2012 to file fresh application for registration as NBFC.

STATUTORY STATEMENTS

Your Company has not accepted any deposits from the public during the year under review. The particulars under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 on conservation of energy, 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.

The provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, are not applicable, as there is no such employee who were drawing/ in receipt of remuneration of prescribed amount during the period under review.

Pursuant to Section 217(2AA) it is hereby stated that in the preparation of the Annual Accounts, the applicable accounting standards have been followed. The Director's 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. The Director's 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. Further, the Director's have prepared the annual accounts on a going concern basis.

SUBSIDIARIES OF THE COMPANY

In terms of the General Circular No. 2/2011 dated 8th February, 2011 of Ministry of Company Affairs under section 212(8) of the Companies Act, 1956, a copy of the Balance Sheet, statement of profit and Loss Account, Report of Directors and Auditors of the subsidiaries namely HB Securities Ltd. and HB Corporate Services Ltd. have not been attached with the Balance Sheet of the Company. However the financial data of the subsidiaries have been furnished under "Summary of Financial Information of Subsidiary Companies" and forms part of this Annual Report. The annual accounts of the subsidiary companies will be made available upon request by any member of the Company interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept for inspection by any member of the company at its registered office.

CORPORATE GOVERNANCE

The report of Corporate Governance for the year under review is annexed hereto and forms a part of the Director's Report.

STATEMENT PURSUANT TO LISTING AGREEMENT

The Company's equity shares are listed at Bombay Stock Exchange Ltd, Mumbai. The listing fee for the year under review has been paid to BSE.

AUDITORS REPORT

Observations of the Auditors are explained, wherever necessary by notes to accounts.

AUDITORS

The Auditors, M/s P Bholusaria & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for reappointment.

DIRECTORS

During the year under review, Mr. Anil Goyal was re-appointed as the Managing Director of the Company for the further period of 5 years w.e.f. 20th February, 2012.

Mr. Lalit Bhasin and Mr. R.C Sharma Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

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

Place : Gurgaon LALIT BHASIN

Date : 24.05.2012 CHAIRMAN

 
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