The Directors are pleased to present the 34th Annual Report together withthe Audited Financial Statements for the year ended 31st March 2017.
The Financial Results of the Company during the year under review are summarized asunder:-
( Rs. In Lakhs)
|PARTICULARS ||Year Ended 31.03.2017 ||Year Ended 31.03.2016 |
|Total Turnover ||75.39 ||25.13 |
|Gross Profit/(Loss) ||10.41 ||43.20 |
|Less : || || |
|(a) Depreciation ||0.00 ||0.00 |
|(b) Finance Cost ||0.00 ||0.00 |
|(C) Provision for Income Tax- Deferred/(Credit) ||0.52 ||0.28 |
|Net Profit /(Loss) ||9.89 ||(43.48) |
|Appropriations || || |
|Statutory Reserve Fund ||0.00 ||0.00 |
|General Reserve ||1.98 ||0.00 |
|Proposed Dividend ||0.00 ||0.00 |
|Tax on Dividend ||0.00 ||0.00 |
|Balance Brought Forward || || |
|Accumulated Profits ||(2904.59) ||(2912.50) |
In view of the brought forward losses the directors regret their inability torecommend dividend for the year under review.
PERFORMANCE REVIEW & OUTLOOK
During the year the BSE sensitive Index was at 27597 at the start of the financialyear and ended at 25479 in March 2017. The year was marked by high volatility in thestock market. As a result the Divestment/ Investment activity of the Company wascurtailed during the year and the Company posted a Gross Profit of ' 9.37 Lakhs ascompared to Gross profit of Rs. 43.20 Lakhs in the previous year. Net Profit after tax forthe year under review was ' 9.89 Lakhs as compared to the net profit of ' (43.48) Lakhs inthe previous year.
According to IMF World Economic Outlook overall Indian economy is expected to grow at7.00-7.75 per cent during FY 2017-18 despite the uncertainties in the global market. GDPGrowth is projected to be stronger in 2017 as compared to 2016. The medium term to longterm growth prospects look positive in view of the Government's determination to bring inreforms. For the year 2017 the economy is expected to grow at a higher rate than in 2016.The long term prospect for the economy is optimistic.
Industry Trends and its future prospects have been summed up in the ManagementDiscussion and Analysis Report which forms part of this report.
(i) Share Capital
The Paid up Equity share capital as on 31st March 2017 is Rs.110041095/-. During the year under review the Company has neither issued shares withdifferential voting rights nor granted stock options or sweat equity.
The Shareholding of Directors of the Company (including Promoter Director) is given inthe Corporate Governance Report forming part of this report.
(ii) No. of Meeting(s) of the Board
During the year four (4) Board Meetings were convened and held. The details of theBoard Meetings are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013.
(iii) Public Deposits
Your Company has neither invited nor accepted any deposits from the public /shareholders pursuant to Section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 during the year under review.
(iv) Significant and other material orders passed by the Regulators or Courts
There are no significant material orders passed by the Regulators / Courts or Tribunalduring the year under review which has an impact on the Going Concern status and Company'soperations in the future.
(v) Particulars of Loans Guarantees or Investments under section 186
Details of Loans Guarantees or Investments made by the Company in the ordinary courseof business covered under the provisions of Section 186 of the Companies Act 2013 aregiven in the notes to the Financial Statements.
(vi) Particulars of Contracts or Arrangements with Related Parties
Details of Contracts or arrangements covered under the provisions of Section 188 of theCompanies Act 2013 are given in the notes to the Financial Statements.
(vii) Conservation of Energy Technology Absorption and foreign and outgo
The particulars under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 ofthe Companies (Accounts) Rules 2014 with regard to conservation of energy and technologyabsorption are not applicable to the Company. During the year under review there were noearnings or outgo in foreign exchange.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)1 and sub-section (5) of the Companies Act 2013 Directorsof your Company hereby state and confirm that:
a) in the preparation of the Annual Accounts for the year ended 31st March2017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit of the company for the same period;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls in the company that are adequate andwere operating effectively.
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from Mr. L.N. Malik and Mrs. Meenakshi GopalIndependent Directors of the Company confirming that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and applicableprovisions as per Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT
As required under Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion& Analysis Report; a Report on the Corporate Governance together with the ComplianceCertificate from the Company's Statutory Auditor's confirming compliance(s) forms anintegral part of this report.
WHISTLE BLOWER POLICY -VIGIL MECHANISM
In terms of the provisions of Sec 177(9) & (10) of the Companies Act 2013 andRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015a Vigil Mechanism for Stakeholders Employees and Directors of the Company has beenestablished. The Whistle Blower Policy duly approved by the Board of Directors has beenuploaded on the website of the Company www.hbleasing . com having following web linkwww.hbleasing.com/Investor Information/Corporate Governance.
RELATED PARTY TRANSACTIONS
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and on Arm's Length basis. There were no materially significant Related PartyTransactions entered into by the Company during the year under review. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC-2 is not applicable. None of the Directors has anypecuniary relationships or transactions vis-a-vis the Company.
The Board of Directors on the recommendation of the Audit Committee has approved aPolicy to regulate transactions between the Company and its Related Parties in compliancewith the applicable provisions of the Companies Act 2013 the Rules made there under andRegulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The policy on Related Party Transactions has been uploaded on the website of theCompany www. hbleasing.com.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
The Company endeavors to preserve the confidentiality of un-published price sensitiveinformation and to prevent misuse of such information. The Company is committed totransparency and fairness in dealing with all Stakeholders and in ensuring adherence toall laws and regulation in force.
The Board of Directors has adopted the Code of Conduct for regulating monitoring andreporting of trading by insiders and other connected persons in compliance withRegulation 9 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Code of Conduct lays down guidelines and procedures to be followed anddisclosures to be made while dealing with the Shares of the Company as well as theconsequences of violation. The Code of Conduct has been formulated for prevention ofInsider Trading and to maintain the highest standards of dealing in Company Securities.
PRESERVATION OF DOCUMENTS & ARCHIVAL POLICY
In terms of Regulation 9 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors intheir meeting held on 12th February 2016 has adopted a Policy for Preservationof Documents & Archival thereof classifying them in two categories as follows:
(a) documents whose preservation shall be permanent in nature;
(b) documents with preservation period of not less than eight years after completion ofthe relevant transactions.
The said Policy has been uploaded on the website of the Company www.hbleasing.com DEVELOPMENTAND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Board of Directors has adopted the Risk Management Policy which sets out theframework for the management of risks faced by the Company in the conduct of its businessto ensure that all business risks are identified managed and monitored. The contents ofRisk Management Policy have been included in Management Discussion and Analysis formingpart of this report.
PREVENTION OF SEXUAL HARRASMENT OF WOMEN AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace. The Board ofDirectors in their meeting held on 28th May 2016 has reconstituted theInternal Complaint Committee as per the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. The Internal Complaint Committee comprises of following members:
i. Mrs. Banmala Jha Presiding Officer (Senior V.P. Legal - HB Stockholdings Limited)
ii. Mrs. Madhu Suri Member (Working in the Delhi Legal Services Authority as aCounsellor)
iii. Mr. Anil Goyal Member (Managing Director)
iv. Ms. Sukhmani Walia Member (Company Secretary)
The functions of the Committee are mentioned in the Corporate Governance Report. Nocomplaint was received during the year and no complaint was pending to be resolved as on31.03.2017.
INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY
The Company has proper and adequate system of Internal Controls. The information aboutInternal Controls is set out in the Management Discussion and Analysis forming part ofthis report.
INTERNAL FINANCIAL CONTROLS
The Company has established Internal Financial Control System for ensuring the orderlyand efficient conduct of the business including adherence to Company's Policies thesafeguarding of assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliableFinancial Statements.
AUDITORS OF THE COMPANY
a) Statutory Auditors
The term of M/s. P. Bholusaria & Co. Chartered Accountants New Delhi (FirmRegistration No.: 000468N) existing Statutory Auditors of the Company shall expire at theensuing Annual General Meeting as per the provisions of Section 139 of the Companies Act2013.
On the recommendations of the Audit Committee the Board of Directors in their meetingheld on 26th May 2017 considered and recommended for the appointment of M/sG.C. Agarwal & Associates Chartered Accountants (FRN: 017851N) as the new StatutoryAuditors of the Company for a term of five (5) consecutive years subject to the approvalof the Members to hold office from the conclusion of 34th Annual GeneralMeeting until the conclusion of 39th Annual General Meeting of the Company. TheCompany has received a letter from them to the effect that their appointment if madewould be within the prescribed limits under Section 14l(3)(g) of the Companies Act 2013and they are not disqualified for appointment.
M/s G.C. Agarwal & Associates Chartered Accountants Delhi (FRN 017851N) has beenassociated with the CA profession since last Thirty Three (33) years. The Firm is engagedin the Audit of Private and Public Limited Companies Societies and various otherentities. These audits include Statutory & Tax Audits Internal and Management andSystem Audits Stock Audits and other Special Assignments. The Firm is holding a PeerReview Certificate issued by The Institute of Chartered Accountants of India New Delhi.
Observations of the Statutory Auditors are explained wherever necessary by way ofNotes to the Financial Statements.
b) Internal Auditors
M/s. Marv & Associates LLP (Formerly M.K. Choudhary & Co.) CharteredAccountants New Delhi performs the duties of the Internal Auditors of the Company andtheir report is reviewed by the Audit Committee on quarterly basis.
c) 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 hasappointed Mr. Amar Nath Kukreja M/s. A. N. Kukreja & Co. Company Secretary inPractice to undertake the Secretarial Audit of the Company. The Secretarial Audit Reportis enclosed as a part of this report as "ANNEXURE - I".
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 (DIN:00001938) Managing Director shall retire by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. The Board of Directorsrecommends his re-appointment.
The Company has also received declarations from all the Independent Director(s)confirming that they meet with the criteria of Independence as prescribed both underSection 149(6) of the Companies Act 2013 and under Regulation 16(1)(b) 25(1) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
(b) Nomination and Remuneration Policy
The Board of Directors has on the recommendation of the Nomination and RemunerationCommittee approved a policy for selection appointment & remuneration includingcriteria for determining qualifications positive attributes of Directors Key ManagerialPersonnel (KMP) and Senior Management employees of the Company in pursuant to theprovisions of Section 178 of the Companies Act 2013 and Regulation 19 read with Part D ofSchedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The said policy forms a part of this Report as "Annexure II".
(c) Board Diversity
The Company recognizes the importance and benefits of having the diverse Board toenhance quality of its performance.
The Company believes that a diverse Board will enhance the quality of the decisionsmade by the Board by utilizing the different skills qualification professionalexperience gender knowledge etc. of the members of the Board necessary for achievingsustainable and balanced growth of the Company. The Board of Directors on therecommendations of the Nomination and Remuneration Committee has adopted a Policy onDiversity of Board of Directors in terms of Regulation 19 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
(d) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Regulation 19 (4) as perSecurities Exchange and Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsAudit Nomination and Remuneration and Compliance Committees. The manner in which theevaluation has been carried out is explained in the Corporate Governance Report.
(e) Remuneration of the Directors / Key Managerial Personnel (KMP) and Particularsof Employees
The provisions of Rule 5(2) & 5(3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are not applicable as there are no such employee whowere drawing / in receipt of remuneration of prescribed amount during the period underreview.
The Company has one Executive Director Mr. Anil Goyal. No remuneration is paid to himas he holds the office of the Managing Director of HB Portfolio Limited and opts to drawhis remuneration from HB Portfolio Limited. The non-executive directors are paid onlysitting fees for attending the meeting of the Board of Directors and the Committeesconstituted by the Board.
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of Directors / Key Managerial Personnel (KMP) and Employees of the Companyis furnished hereunder:
(i) the ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year &
(ii) the percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year.
|Sr. No. ||Name ||Category ||Ratio/Times per Median of employee remuneration ||% Increase in remuneration |
|1. ||Mr. Anil Goyal ||Managing Director (Executive) ||NIL ||NIL |
|2. ||Mr. Lalit Bhasin ||Director (Non-Executive) ||NIL ||NIL |
|3. ||Mr. L.N. Malik ||Director (Non-Executive) ||NIL ||NIL |
|4. ||Mrs. Meenakshi Gopal ||Director (Non-Executive) ||NIL ||NIL |
|5. ||Ms. Sukhmani Walia ||Company Secretary ||NIL || |
|6. ||Mr. C.P. Singh ||Chief Financial Officer ||NIL || |
(iii) There is no increase in the median remuneration of employees in the financialyear.
(iv) the number of permanent employees on the rolls of Company - Two
(v) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Nil
(vi) the key parameters for any variable component of remuneration availed by thedirectors: Not Applicable
(vii) The remuneration paid to the Directors / Key Managerial Personnel (KMP) is inaccordance with the remuneration policy of the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return is required under section92(3) of the
Companies Act 2013 in Form MGT-9 in annexed herewith as "Annexure III".
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 |
| ||HB LEASING AND FINANCE COMPANY LIMITED |
| ||Sd/- |
| ||LALIT BHASIN |
|Place : Gurugram ||CHAIRMAN |
|Date : 26th May 2017 ||(DIN: 00002114) |