Your Directors are pleased to present the 29th Annual Report and the AuditedAccounts of your Company for the financial year ended 31st March 2016.
The Financial performance of the Company for the year is summarised below:
(Rs. in lacs)
|PARTICULARS ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Total Revenue ||384.27 ||813.27 |
|Total Expenses ||283.53 ||308.45 |
|Profit for the Year before Tax and exceptional items ||100.74 ||504.83 |
|- Tax Expenses (including earlier years) ||12.18 ||5.28 |
|- Exceptional items ||0.00 ||0.00 |
|Profit After tax and Exceptional Items ||88.56 ||499.54 |
|Earning per Equity Shares (Before exceptional items) || || |
|- EPS Basic (Rs.) ||0.37 ||2.10 |
|- EPS Diluted (Rs.) ||0.37 ||2.10 |
|(After Exceptional Items) || || |
|- EPS Basic (Rs.) ||0.37 ||2.10 |
|- EPS Diluted (Rs.) ||0.37 ||2.10 |
In order to conserve resources for the future Directors of your company do notrecommend any dividend for the year ended 31st March 2016.
PERFORMANCE REVIEW & OUTLOOK
The global economy experienced challenging conditions in fiscal 2016 with weak growthand divergent monetary policies in advanced economies slowdown in China and significantdecline in commodity prices. The Indian economy continued to make progress during theyear with improvement in key macroeconomic parameters and focused government initiativesto drive sustainable growth. Led by the manufacturing finance and electricity sectorsgovernment expects GDP growth for FY 2015-2016 to be around 7.4%. While financial marketsstabilised from the second half of the previous year economic sentiment continued toremain bullish though improvements were limited in real economy During the year underreview Income from operations was Rs. 384.27 Lakhs (previous year Rs. 813.27 Lakhs)comprising Dividend Income Rs. 44.03 Lakhs (previous year Rs. 156.72 Lakhs) Interest onLoan / ICD Rs. 428.75 Lakhs (previous year Rs. 175.09 Lakhs) Securities Trading Loss Rs.19.10 Lakhs (previous year gain of Rs. 26.56 Lakhs) Loss booked on Sale of InvestmentsRs. 123.45 Lakhs (previous year Profit of Rs. 107.54 Lakhs) and Provisions for diminutionin the value of Investment written back Rs. 54.04 Lakhs (previous year Rs. 347.37 Lakhs).Net Profit before Tax and exceptional items for the year was Rs. 100.74 Lakhs (previousyear Rs. 504.83 Lakhs) With a change of Government at the Centre curtailing of inflationsome reduction in the interest rates positive policy pronouncements and high expectationsof fiscal consolidation coupled with demand stimulus and structural de-bottleneckingmeasures to curb black money and tightening of regulatory frame work in this regardeconomic growth in the current and medium term has shown improvement over the previousyear. This is a positive for the Capital market. First signs of this were reflected in theupswing in the Equity indices in the previous fiscal year. Industry Trends and its futureprospects have been summed up in the Management Discussion and Analysis Report which formspart of this Annual Report.
SCHEME OF ARRANGEMENT
The Board of Directors of the Company in their meeting held on 11th February2016 have approved a Composite Scheme of Arrangement between HB Stockholdings Limited(the company) HB Portfolio Limited and HB Estate Developers Limited and theirrespective members and creditors under Sections 391 to 394 read with Sections 100 to 104of the Companies Act 1956 or any corresponding provisions of the Companies Act 2013subject to various Statutory approvals as may be required. The appointed date of theScheme of Arrangement is 1st April 2015. The Company has submitted all the documentsrelating to the Scheme of Arrangement with BSE and NSE Stock exchange(s) for seeking theirNo Objection enabling it to file the Scheme before the High Courts./Tribunals. A Copy of draft Scheme of Arrangement with all necessary annexures is availableat the website(s) of NSE and BSE and also available at Companys web site atwww.hbstockholdings.com
SUBSIDIARY AND ASSOCIATES COMPANIES
In compliance with the provision of Section 129(3) of the Companies Act 2013 thecompany has prepared Consolidated Financial Statement along with its wholly ownedsubsidiary Company. As on 31st March 2016 the Company had one IndianSubsidiary. The Company has one associate company within the meaning of Sec 2(6) of theCompanies Act 2013. The Consolidated Financial Statement for the year 2015-16 forms apart of the Annual Report and Accounts and shall be laid before the Annual GeneralMeeting. A Report on the performance and the financial position of the Subsidiary andAssociate Companies in form AOC-1 forms part of the Consolidated Financial Statement.
The company does not have an unlisted material subsidiary as per Reg 24(1) of SEBI(Listing Obligation and Disclosure Requirements) Reg 2015 in the immediately precedingaccounting year. In Compliance to Reg 16 ( c ) of the Listing Regulations all listedcompanies was to formulate a policy of determining Material Subsidiary. Accordingly aPolicy for material Subsidiary was formulated by the Audit Committee and approved by theBoard and the same was posted on the web site of the Company and may be accessed at the weblink www.hbstockholdings.com
RELATED PARTY TRANSACTIONS
All Related Party Transactions during the financial year were entered into onarms length basis and were in the ordinary course of business; hence the provisionsof Section 188 of the Companies Act 2013 are not attracted. No disclosure is required inthis regard. Further there are no Material Related Party Transactions made during theyear under review by the Company with its Directors Key Managerial Personnel or otherdesignated persons and others. Policy on Related Party Transactions is uploaded on thecompanys website and may be viewed at web link www.hbstockholdings.com.
Internal Control Systems and their Adequacy
The Internal Control System of the Company is commensurate with the size scale andoperations of its business operation which covers all the locations. To maintainobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board. The scope and authority of the Internal Audit function hasbeen detailed in the Audit Committee section of the Corporate Governance Report of theCompany.
Internal Auditors of the Company monitors and evaluates the efficacy and adequacy ofinternal control systems in the company its compliance with the operating systemsaccounting procedures and policies at all locations of companys operation. InternalAudit Report stimulates other functional departments to improve their systems andprocedures to strengthen the controls. All these issues are regularly placed before theAudit Committee meeting for its deliberations and monitoring.
In order to achieve sustained business growth the Company has laid a ComprehensiveRisk Assessment and minimization procedure. The Company has developed a Risk Managementprocess to ensure that all current and future risk exposures are identified assessedquantified appropriately mitigated minimised and managed which is reviewed by the AuditCommittee and approved by the Board from time to time. These procedures are reviewed toensure management controls risks through means of a properly defined framework; best riskmanagement policies are followed and risk minimisation exercises to be attributed and sameare monitored by Audit Committee of the Board.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
Regulation 34(3) read with Schedule V of the SEBI Listing Regulations 2015 Managementdiscussion and Analysis Report Corporate Governance Report and Certificate from theStatutory Auditors forms part of the Annual Report and information in respectthereof has been disclosed in the enclosed document. Your Company is committed to maintainthe applicable Corporate Governance standards and is committed to ensure their duecompliance or modifications if any that may be stipulated by SEBI and communicated fromtime to time through stock exchange(s) and company timely observe these forimplementation.
NOMINATION AND REMUNERATION COMMITTEE
In terms of Section 178 of the Companies Act 2013 read with Regulation 19 of SEBI(LODR) Regulations 2015 a Nomination and Remuneration Committee was reconstituted ofindependent directors on the Board of the Company. Nomination and Remuneration Policy ofthe Company forming part of the Boards Report and enclosed at Annexure I. Thedetailed terms of reference of the Nomination and Remuneration Committee number and dateof the meetings held attendance of the directors etc. are given separately in theattached Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board constituted a Corporate Social Responsibility Committee (CSR) pursuant toSection 135 of the Act and as per composition stipulated in the Corporate GovernanceReport forming part of the Annual Report. The Board after consultations approved theCorporate Social Responsibility Policy of the Company and disclosed its contents in the AnnexureII. The details of the CSR Policy can be viewed on the website of the Company at wwwhbstockholdings.com.
Average Net profit of the Company in respect of immediately preceding three financialyears was not sufficient enough as per these rules hence Company has not incurred anyamount towards CSR activities during the financial year 2015-2016.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
A Vigil mechanism / Whistle Blower Policy was approved in compliance of Section 177 (9)of the Companies Act 2013 read with Reg 22 of the SEBI Listing Regulations effective from01st October 2014. The Policy was amended effective from 1st December 2015enabling stakeholders to freely communicate their concerns about illegal or unethicalpractices and for the directors and employees to report concerns about unethicalbehaviour actual or suspected fraud or violation of the Companys Code of Conduct orethics Policy. During the year under review no matter relating to Vigil Mechanism wasreported. A Copy of Board approved Whistle Blower Policy is posted on the Companys websiteat www.hbstockholdings.com.
AUDITORS Statutory Auditors
M/s. P. Bholusaria & Co. Chartered Accountants New Delhi having FRN 000468N wereStatutory Auditors of the Company and they hold office till the conclusion of the ensuingAnnual General Meeting and being eligible offers themselves for reappointment. The Companyhas received a Letter from them to this effect that their re-appointment if made would bewithin the prescribed limits under Section 141(3) (g) of the Companies Act 2013 and theyare not disqualified for reappointment.
M/s M K Choudhary & Co. Chartered Accountants New Delhi was appointed InternalAuditors of the Company by the Board in terms of Sec 138 of the Companies Act 2013.Internal Audit Report are regularly placed before the Audit Committee of the Board fortheir review and follows up.
M/s A N Kukreja & Co. Company Secretaries was appointed by the Board to undertakethe Secretarial Audit for the year 2015-2016 pursuant to the provisions of Section 204 ofthe Companies Act 2013 and other applicable rules. The Secretarial Audit Report in MR-3is annexed herewith and marked as Annexure III.
Observation on Auditors and Secretarial Auditors Report
There are no qualifications observations reservation or adverse remarks made by theStatutory Auditors and Secretarial Auditors in their Report(s) save and exceptdisclaimer made by them in discharge of their professional duties.
DIRECTORS & OTHER KEY MANAGERIAL PERSONNEL Appointment and Reappointment ofDirectors & KMP
Companys Board members are eminent persons with proven competence and integrity.They have financial literacy experience leadership qualities and the ability of thinkingstrategically. Companys Directors have a significant degree of commitment anddevotion and spares their adequate time for the meetings and for other deliberations.During the year Mr. J M L Suri Executive Director of the Company resigned at the close ofbusiness hours on 21st May 2015 and Board accepted his resignation and placedon record the appreciation for the valuable contribution made during the tenures of hisservices as the Executive Director of the Company. The Board of Directors on therecommendation of Nomination and Remuneration Committee on 11th February 2016reappointed Mr. Vijay Sood Managing Director for a further period of Two years on thecompletion of his current terms on 30th April 2016. A Special Resolution in respect ofreappointment(s) and payment of remuneration has been placed before the shareholders inthe 29th Annual General Meeting.
On the recommendation of Nomination and Remuneration Committee Mr. Jag Mohan Lal Surihas been retained as Executive Director (Operations) w. e. f 22nd May 2015 as aSenior Executive of the Company on the remuneration and other terms and conditions as maybe applicable to him.
As per Article 89(1) and (2) of the Article of Association of the Company read with theprovisions of Section 152 of the Companies Act 2013 Mr. Anil Goyal Director of theCompany shall retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
Meeting of Board of Director(s)
The Board of Directors of the Company meets at regular intervals to discuss and decideon company / business policy and strategy apart from other routine businesses. The Boardmeetings are normally held in Gurgaon and Notice of the meetings are given well in advanceto all the directors. Agenda of the Board and Committee meetings are circulated at least aweek prior to the date of the meeting including notes on the items to be discussed at themeeting(s) to enable directors of the Company to take an informed decision. Details of theBoard Meeting(s) held are given in the Corporate Governance Report attached withDirectors Report.
Annual Evaluation of the Board
An annual evaluation was carried out by the Board of its own performance as well as ofevaluation of the working of all its Committees and the individual directors includingChairman of the Board. While undertaking the evaluation a structured questionnaire wasprepared and sent to Board Committee and individual directors. An Evaluation of Boardfunctioning quality quantity and timeliness of information flow quality andtransparency of Board discussions and Boards effectiveness in dissemination ofinformation to the shareholders and other stakeholders was carried out based on theresponses received from the Directors.
Performance of the Board and committees on the basis of their effectiveness incarrying out their mandated functions were reviewed based on various performanceparameters. The performance parameter of the Chairman was carried out by the IndependentDirectors at a separate meeting of the Independent Directors.
Declaration by Independent Directors
Mr. Gulshan Rai Mr. Harbans Lal and Mrs Asha Mehra are Independent Director(s) on theBoard of the Company. Declaration Forms under Section 149(6) of the Companies Act 2013were received from all the Independent Directors confirming that they respectively metwith the criteria of Independence as prescribed both in Companies Act 2013 and in Reg16(b) of the SEBI Listing Regulations.
The Board on the recommendation of the Nomination & Remuneration Committee hasframed a policy for selection and appointment of Directors Senior Managerial personneland payment of remuneration to them. The said Nomination and Remuneration Policy is statedand being a part of the Corporate Governance Report.
Remuneration of Directors Key Managerial Personnel and Employee
Disclosure pertaining to Remuneration and other details as required under section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial personnel) Rules 2014 is marked as Annexure to theDirectors Report which is annexed hereto and forms a part of the BoardsReport.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) read with sub section (5) of the Companies Act 2013the Directors Responsibility Statements hereby states that a) in the preparation of theAnnual Accounts the applicable accounting standards have been followed along with properexplanation relating to material departures; b) The Directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit or loss of the Company forthat period; c ) The Directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; d) The Directors had prepared the annual financial statements have beenprepared on a going concern basis and e) The Directors have laid down proper internalfinancial controls to be followed by the Company and that such internal financial controlswere adequate and operating effectively. f) The Directors have devised proper systems toensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
Information as per Section 134 (3) (m) of the Companies Act 2013:
The particulars under Section 134 (3)(m) of the Companies Act 2013 read with Rules8(1) of Companies (Accounts) Rules 2014 information in respect of conservation of energyand technology absorption are not applicable to your Company.
During the year under review there was no Earnings or outgo of Foreign Exchange by theCompany.
Particulars of Employees
A statement containing particulars of employees required pursuant to Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) of the Companies (Appointment andRemuneration of Managerial personnel) Rules 2014 is given in an annexure and forms part ofthe Directors Report and marked as Annexure IV.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is requiredunder section 92 of the Companies Act 2013. The extract of Annual Return in Form MGT-9 isannexed herewith as "Annexure-V "
The Board of Directors of your Company states that no disclosure or reporting isrequired in respect of the following items as there were no transactions on these itemsduring the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of Equity Shares with differential rights as to dividend voting or otherwise.
3. Neither the Managing Director nor the Whole-time Director of the Company receivesany remuneration or commission from any of its subsidiaries.
4. No significant and material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Companys operations in future.
5. As per the Annual Report submitted by the Committee for Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 during the year underreview there was no case filed or pending for review.
6. There was no change in the nature of business during the year under review.
7. None of the company have become or ceases to be the subsidiary joint venture orassociate of this company during the year under review.
8. No Listing Fee and other dues are pending to the Stock exchange(s) and otherdepositories.
Your Directors would like to express their appreciations for the assistance andcooperation received from banks customers members and other stake holders during theyear under review. Your Directors also wish to acknowledge the valuable services renderedby the executive and staff of the Company at all levels.
For and on Behalf of The Board of Directors
| ||Sd/- |
|Place : Gurgaon ||LALIT BHASIN |
|Dated : 28th May 2016 ||CHAIRMAN |
| ||DIN 00002114 |
ANNEXURE TO DIRECTORS REPORT
Information as per Section 197 of the Companies Act 2013 read with Rule 5(2) and 5(3)of the Companies (Appointement and Remuneration of Managerial Personnel) Rules 2014 andforming part of Directors Report for the year ended 31st March 2016.
|Name of Employee/ Age (Years) ||Date of Employment ||Qualifications ||Designation/ Nature of job ||Gross Remuneration (Rs.) during the year ended 31st March 2016 ||Particulars of previous Employment (Designation & Name of the Employer ||Experience (No. of years) ||Whether relative of any Director or Manager of the Company |
|Mr. Vijay Sood 58 Yrs. ||30-04-2007 ||AICWA MBA from IIM Ahmedabad. Advance Management Programme from Wharton Business School USA ||Managing Director ||Rs. 8624775/- ||Group CFO Renaissance Services SAOG Oman ||37 ||No |
Note: Remuneration includes salary Cost of leased accommodation Companyscontribution to Provident Fund wherever applicable and other sums & allowancesactually received by the employee during the financial year and the Perquisites are valuedin accordance with the Income Tax Act 1961 and Rules made there under. The appointment ofManaging Director is contractual and he does not hold any Equity Shares in the Company.