HB Portfolio Ltd.
|BSE: 532333||Sector: Financials|
|NSE: N.A.||ISIN Code: INE638B01025|
|BSE 00:00 | 28 Jan||18.60||
|NSE 05:30 | 01 Jan||HB Portfolio Ltd|
|Mkt Cap.(Rs cr)||20|
|Mkt Cap.(Rs cr)||20.01|
HB Portfolio Ltd. (HBPORTFOLIO) - Director Report
Company director report
To the Members
Your Directors are pleased to present the 24th Annual Reporttogether with the Audited Financial Statement for the Financial Year ended 31stMarch 2019.
The summarized financial results of the Company during the year underreview are as under:-
(? In Lacs)
(*) Pursuant to the Scheme of Arrangement.
The Board of Directors after considering holistically the relevantcircumstances and keeping in view the current market conditions has decided that it wouldbe prudent not to recommend any Dividend for the Financial Year 2018-2019.
TRANSFER TO GENERAL RESERVE
The Board of Directors of your Company has decided not to transfer anyamount to the General Reserve for the year under review.
PERFORMANCE REVIEW & OUTLOOK
The Company posted Total Revenue of ' 420.84 Lacs and Net Profit aftertax of ' 160.02 Lacs for the Financial Year ended 31st March 2019. Thefinancial figures for the current year are not comparable with previous year due toaccounting effect given in the Financial Statements for the Financial Year ended 31stMarch 2018 from the Appointed Date(s) i.e. 01st April 2015 & 03rd April2015 pursuant to the sanction of the Scheme of Arrangement (the Scheme')between HB Stockholdings Limited (HBSL) HB Portfolio Limited (HBPL) and HB EstateDevelopers Limited (HBEDL) and their respective Shareholders and Creditors under Sections391 to 394 read with Section 100 to 104 of the Companies Act 1956.
The Indian economy in FY 2018-19 started with a healthy 8.2% growth inthe first quarter on the back of domestic resilience. Growth eased to 7.3% in thesubsequent quarter due to rising global volatility largely from financial volatilitynormalized monetary policy in advanced economies externalities from trade disputes andinvestment rerouting. Further the Indian rupee depreciated because of the crude priceshock and conditions exacerbated as recovery in some advanced economies caused fasterinvestment outflows.
Equities remained volatile in the Financial Year 2018-19 amidstgeo-political risks such as trade wars and Brexit tight financial conditions fears ofslowing global growth and liquidity crisis in NBFCs. FY 2018-19 witnessed sharp drop inprimary market activity in terms of both number of transactions and capital raised as thenumber of Initial Public Offerings (IPOs'). The major stock indices touched anall-time high during the year but were trimmed owing to volatility towards the end of theyear. The rally in the large caps was one of the narrowest seen in the history of Indianequity markets. Mid and small capitalisation stocks underperformed due to risk aversionemanating from high relative valuations and FPI outflows.
Industry trends and its future prospects have been summed up in theManagement Discussion and Analysis Report which forms part of this report.
SCHEME OF ARRANGEMENT
The Hon'ble National Company Law Tribunal (NCLT) Chandigarh Benchat Chandigarh vide its Order Dated 22nd December 2017 sanctioned the Scheme ofArrangement between HB Stockholdings Limited (HBSL) HB Portfolio Limited (HBPL) and HBEstate Developers Limited (HBEDL) and their respective Shareholders and Creditors underSections 391 to 394 read with Section 100 to 104 of the Companies Act 1956.
The Scheme came into effect on 30th January 2018 from theAppointed Date(s) i.e. 01st April 2015 & 03rd April 2015 in amanner more particularly defined in the Scheme.
The Copy of Scheme of Arrangement along with all other documents areavailable on the Company's website having following web link
http://www.hbportfolio.com/Scheme of Arrangement.html
NBFC REGISTRATION WITH THE RESERVE BANK OF INDIA
The Company had filed fresh application for registration on 08thMarch 2016 with the Reserve Bank of India (RBI). The information / clarifications soughtthereafter by RBI from time to time have been duly submitted by the Company. RBI vide itsletter dated 18th July 2017 has returned the Company's application withthe advice that the existing financial business of the Company may be merged /amalgamated with any of the Registered Group NBFC. Accordingly the Company vide itsletter dated 19th February 2018 has written to RBI for either transfer oflicense of one of the Group NBFC to the Company or for issue of fresh Certificate ofRegistration to the Company in lieu of surrender of NBFC Certificate by one of the GroupNBFC Company.
(i) Share Capital
The Paid up Equity Share Capital as on 31st March 2019stood at ' 107642300/- comprising of 10764230 Equity Shares of ' 10/- each. During theyear under review the Company has neither issued any Shares with differential votingrights nor granted stock options nor sweat equity.
The Shareholding of Directors of the Company (including PromoterDirector) 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 andheld. The details of such meeting(s) are given in the Corporate Governance Report. Themaximum interval between any two meeting(s) did not exceed 120 days as prescribed in theCompanies Act 2013.
(iii) Public Deposits
The Company has not accepted any Deposits from the Public under Section73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules2014.
(iv) Significant and other material orders passed by the regulators orcourts
There are no significant material orders passed by the Regulators orCourts or Tribunal during the year under review which has an impact on the Going Concernstatus and Company's operations in future.
(v) Particulars of Loans Guarantees or Investments
The principal business activity of the Company is to undertakefinancial services investing and dealing in various kinds of securities. Details ofLoans Guarantees and Investments made by the Company in the ordinary course of itsbusiness are given in the notes to the Financial Statements.
(vi) Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
The particulars required under Section 134(3)(m) of the Companies Act2013 read with Rules 8 of the Companies (Accounts) Rules 2014 in respect of conservationof energy and technology absorption are not applicable to your Company.
The total foreign exchange earnings during the year under review andprevious period is NIL and total foreign exchange out go during the year under review andthe previous period is NIL.
(vii) Change in the Nature of Business
There is no change in the nature of business of the Company during theyear under review.
(viii) Maintenance of cost records
The nature of Company's business / activities is such thatmaintenance of cost records under Section 148(1) of the Companies Act 2013 is notapplicable to the Company.
(ix) Material Changes and commitments
No material changes and commitments have occurred between the end ofthe financial year to which the financial statements relate and date of this reportaffecting the financial position of the Company.
(x) Reporting of frauds by the Auditors
No fraud has been noticed or reported by the Statutory Auditor'sduring the course of their Audit.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has following Subsidiaries as on 31st March2019:
(*) Unlisted Material Subsidiary Company
a) HB Insurance Advisors Limited got amalgamated with Company'sanother Subsidiary namely HB Corporate Services Limited w.e.f. 14th May 2018pursuant to the Scheme of Amalgamation of RRB Master Holdings Limited HBB PropertiesPrivate Limited HB Insurance Advisors Limited HB Telecommunications Limited and HB PrimaCapital Limited (the Transferor Companies) with HB Corporate Services Limited (theTransferee Company) under Sections 391 to 394 of the Companies Act 1956 / Section 230-232of the Companies Act 2013 sanctioned by the Hon'ble National Company Law Tribunal(NCLT) Chandigarh Bench at Chandigarh and Principal Bench New Delhi vide their orderdated 07th November 2017 and 13th April 2018 respectively.Accordingly HB Insurance Advisors Limited ceased to be Company's Subsidiary duringthe year under review.
b) The status of HB Corporate Services Limited has been changed fromWholly Owned Subsidiary (WoS) to Subsidiary Company of HB Portfolio Limited as theShareholding of HB Portfolio Limited has gone down from 100% to 97.40% pursuant to thesaid Scheme of Amalgamation.
A separate statement containing the salient features of the FinancialStatement of the Company's Subsidiaries is being provided in Form AOC-1 alongwith Financial Statements in terms of Section 129(3) of the Companies Act 2013. TheFinancial Statements of the Subsidiary Companies will be made available upon request byany Member of the Company interested in obtaining the same. The Financial Statements ofthe Subsidiary Companies will also be kept for inspection by any Member of the Company atits Registered Office.
The Board of Directors has approved a Policy for Determining MaterialSubsidiaries in compliance with the provisions of Regulation 16 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Policy for DeterminingMaterial Subsidiary has been suitably modified as per the provisions of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as amended from time to time.The said Policy is available on the website of the Company having following web linkhttp://www.hbportfolio.com/PdfFiles/PDMS.pdf
(ii) Joint Ventures
The Company is not having any Joint Venture business and no Company hasbecome its Joint Venture during the year under review.
(iii) Associate Companies
In terms of Sec 2(6) of the Companies Act 2013 Merwanjee SecuritiesLimited and Har Sai Investments Limited are the Associate Companies. A separate statementcontaining the salient features of the Financial Statement of the Company'sAssociates is being provided in Form AOC-1 along with Financial Statements in termsof Section 129(3) of the Companies Act 2013.
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT
As required under Regulation 34(3) read with Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion & Analysis Report; a Report on the Corporate Governance together with theCompliance Certificate from the Company's Statutory Auditor's confirmingcompliance(s) forms an integral part of this report.
WHISTLE BLOWER POLICY - VIGIL MECHANISM
In terms of the provisions of Sec 177(9) & (10) of the CompaniesAct 2013 and pursuant to the provisions of Regulation 22 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a Vigil Mechanism for StakeholdersEmployees and Directors of the Company has been established. The Whistle Blower Policyduly approved by the Board of Directors is available on the website of the Company havingfollowing web link http://www.hbportfolio.com/PdfFiles/WBP.pdf
RELATED PARTY TRANSACTIONS
The Related Party Transactions that were entered during the financialyear under review were on arm's length basis and were in the ordinary course ofbusiness. The Audit Committee has accorded its omnibus approval for the said transactions.The Company has not entered into any materially significant Related Party Transactionunder Sec 188 of the Companies Act 2013. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2is not applicable. None of the Directors has any pecuniary relationships or transactionsvis-a-vis the Company.
In terms of Regulation 23 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 read with Company's Policy on Related PartyTransactions and with the approval of the Shareholders the Company entered into materialrelated party transaction with HB Estate Developers Limited by subscribing 2000000 (TwentyLakhs) 9% Non-Cumulative Redeemable Preference Shares (Series III) of ' 100/- each issued& allotted by HB Estate Developers Limited on Private Placement basis to the Companyaggregating to ' 200000000/- (Rupees Twenty Crores Only) during the year under review.
The Board of Directors on the recommendation of the Audit Committeehas approved a Policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 theRules made there under and Regulation 23 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Policy on Related Party Transactions has beensuitably modified as per the applicable provisions of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended from timeto time. The Policy is available on the website of the Company having following web linkhttp://www.hbportfolio.com/PdfFiles/RPT.pdf
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
The Company endeavors to preserve the confidentiality of un-publishedprice sensitive information and to prevent misuse of such information. The Company iscommitted to transparency and fairness in dealing with all Stakeholders and in ensuringadherence to all laws and regulation in force.
The Board of Directors has adopted the Code of Conduct for regulatingmonitoring and reporting of trading by insiders and other connected persons in compliancewith Regulation 9 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Code of Conduct lays down guidelines and procedures to be followedand disclosures 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.The Code of Conduct has been suitably modified as per the provisions of the InsiderTrading Regulations and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended from time to time.
Further the Policy and procedure for inquiry in case of leak ofunpublished price sensitive information or suspected leak of unpublished price sensitiveinformation have been framed in line with the provisions of the Insider TradingRegulations as amended.
PRESERVATION OF DOCUMENTS & ARCHIVAL POLICY
In terms of Regulation 9 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors in their meeting held on 10th February 2016 has adopted a Policy forPreservation of Documents & Archival thereof classifying them in two categories asfollows:
(a) documents whose preservation shall be permanent in nature;
(b) documents with preservation period of not less than eight yearsafter completion of the relevant transactions.
The said Policy is available on the website of the Company havingfollowing web link http://www.hbportfolio.com/PdfFiles/PDAP.pdf
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Board of Directors has adopted the Risk Management Policy whichsets out the framework for the management of risks faced by the Company in the conduct ofits business to ensure that all business risks are identified managed and monitored. Thecontents of Risk Management Policy have been included in Management Discussion andAnalysis forming part of this report.
PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace. TheBoard of Directors in their meeting held on 08th August 2014 constituted theInternal Complaint Committee and adopted a Policy on prevention prohibition and redressalof sexual harassment at workplace in line with the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. The Internal Complaint Committee comprises of following members:
(i) Mrs. Banmala Jha Presiding Officer (Sr. V.P Legal - HB EstateDevelopers Ltd.)
(ii) Mrs. Madhu Suri Member (Working in the Delhi Legal ServicesAuthority as a Counsellor)
(iii) Mr. Anil Goyal Member (Managing Director)
(iv) Mr. Dinesh Kapoor Member (Company Secretary)
The Company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The women employees were made awareabout the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and rules made there under and the provisions ofInternal Complaint Policy of the Company.
Disclosure in relation to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 is given as under:
INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY
INTERNAL FINANCIAL CONTROLS
The Company has established Internal Financial Control System forensuring the orderly and efficient conduct of the business including adherence toCompany's Policies the safeguarding of assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable Financial Statements.
(i) Statutory Auditors
The Shareholders in the 22nd Annual General Meeting held on26th September 2017 had appointed G. C. Agarwal & Associates'Chartered Accountants Delhi (FRN 017851N) as the Statutory Auditors for a term of five(5) consecutive years i.e. from the conclusion of the 22nd Annual GeneralMeeting to the conclusion of 27th Annual General Meeting to be held in the year2022.
As per the amended provisions of Sec 139(1) of the Companies Act 2013the requirement of ratification of the appointment of Statutory Auditors by members atevery general meeting has been omitted. Accordingly the resolution is proposed for theapproval of members at the ensuing Annual General Meeting to dispense with the requirementof annual ratification of appointment of G.C. Agarwal & Associates'Chartered Accountants Delhi (FRN 017851N) for its remaining tenure as the StatutoryAuditors of the Company.
Observations of the Statutory Auditors are explained wherevernecessary by way of Notes to the Financial Statements.
(ii) Internal Auditors
Marv & Associates LLP' Chartered Accountants New Delhiperform the duties of the Internal Auditors of the Company and their report is reviewed bythe Audit Committee on quarterly basis.
(iii) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Mr. A.N. Kukreja Proprietor A.N Kukreja & Co.'Company Secretary in Practice to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is enclosed as a part of this report as ANNEXURE -I.
The Secretarial Auditors have made following observations in theirSecretarial Audit Report:
(a) The Company did not have Chief Financial Officer (CFO) during theyear under review. In order to comply with the said requirement the Company has appointedCFO effective from 27.05.2019 being its Key Managerial Personnel (KMP) as per theprovisions of Section 203 of the Companies Act 2013.
Director's Comment: No comments required as the Auditorsobservation is self explanatory in itself.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors has constituted a Corporate SocialResponsibility Committee (CSR Committee) pursuant to the provisions of Section 135 of theCompanies Act 2013. The composition of the CSR Committee has been mentioned in theCorporate Governance Report forming part of this report. The Board of Directors on therecommendation of the CSR Committee has approved the Corporate Social ResponsibilityPolicy (CSR Policy) of the Company which is available on the website of the Company havingfollowing web link http://www.hbportfolio.com/CSR/PdfFiles/CSR.pdf. No changes have beenmade to the CSR Policy of the Company during the year under review.
Brief outline / salient features of the CSR Policy of the Company areas follows:
> The Company endeavors to adopt an integrated approach to addressthe community societal & environmental concerns by taking one or more of theactivities allowed as per Section 135 of the Companies Act 2013 and the applicable rulesand regulations.
> To identify the activities in response to felt societal needs indiverse areas and to implement them with full involvement and commitment in a time boundmanner.
> To provide financial assistance in the form of grant-in-aidassistance and corpus fund support etc. to support supplement and improve the quality oflife of different segments of the Society.
> As a responsible corporate entity the Company will consistentlystrive for opportunities to meet the expectation of its stake holders by pursuing theconcept of sustainable development with focus on the social welfare activities.
> A total allocation of amount as prescribed by the Companies Act2013 and approved by the Board earmarked every year for implementation of CSR activities.
As a part of the CSR initiatives your Company has undertaken CSRactivity towards eradicating hunger poverty malnutrition and promotion of education inaccordance with Schedule VII of the Companies Act 2013 during the financial year2018-2019. The report on CSR activities is attached as ANNEXURE - II formingpart of 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.Lalit Bhasin (DIN: 00002114) Director (Chairman) shall retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. The Board ofDirectors recommends his re-appointment.
Mr. Harbans Lal (DIN: 00076405) aged 77 years is proposed to beappointed as Non-Executive Independent Director of the Company on the recommendation ofthe Nomination and Remuneration Committee of the Board of Directors. The Company hasreceived requisite consent from Mr. Harbans Lal to act as Director of the Company and adeclaration to the effect that he is not disqualified under sub-section (2) of Section 164of the Companies Act 2013 and is not debarred from holding the office of director byvirtue of any SEBI Order or any other such authority. In the opinion of the Board Mr.Harbans Lal fulfill the conditions specified in the Act and the criteria of IndependentDirector in terms of the provisions of Section 149 of the Companies Act 2013 andRegulation 16(1)
(b) of SEBI Listing Obligations and Disclosure Requirements)Regulations 2015 and he is independent of the management. The Board recommends to theShareholders that the appointment of Mr. Harbans Lal would be of immense benefit to theCompany considering his knowledge background and extensive experience in the bankingsector.
Mr. Raj Kumar Bhargava (DIN: 00016949) aged 83 years and Mr. RameshChandra Sharma (DIN: 00023274) aged 80 years are proposed to be re-appointed asNonExecutive Independent Directors for second term of five consecutive years. The Companyhas received a declaration to the effect that they are not disqualified under sub-section(2) of Section 164 of the Companies Act 2013 and are not debarred from holding the officeof director by virtue of any SEBI Order or any other such authority. In the opinion of theBoard Mr. Raj Kumar Bhargava and Mr. Ramesh Chandra Sharma fulfill the conditionsspecified in the Act and the criteria of Independent Director in terms of the provisionsof Section 149 of the Companies Act 2013 and Regulation 16(1)(b) of SEBI ListingObligations and Disclosure Requirements) Regulations 2015 and they are independent of themanagement. On the recommendation of the Nomination and
Remuneration Committee the Board of Directors recommends to theShareholders that the association of Mr. Raj Kumar Bhargava and Mr. Ramesh Chandra Sharmawould be beneficial to the Company based on their performance evaluation consideringtheir knowledge background extensive experience and contributions made by them duringtheir tenure and it is desirable to re-appoint them as Non-Executive Independent Directorsof the Company for second term of five consecutive years.
It is proposed to continue the Directorship of Mr. Jag Mohan Lal Suri(DIN: 00002373) Non-Executive Director of the Company in terms of Regulation 17(1A) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended.He is 81 years old and associated with the Company since 1994. He is highly experienced inCorporate Administration and has successfully contributed towards the growth of theCompany. The Company has received a declaration to the effect that he is not disqualifiedunder sub-section (2) of Section 164 of the Companies Act 2013 and is not debarred fromholding the office of director by virtue of any SEBI Order or any other such authority. Onthe recommendation of the Nomination and Remuneration Committee the Board recommends tothe Shareholders that the association of Mr. Jag Mohan Lal Suri would be beneficial to theCompany considering his knowledge background extensive experience and contributions madeby him during his tenure and it is desirable to continue his Directorship as Non-ExecutiveDirector of the Company.
Mr. Bhuneshwar Lal Chadha (DIN: 00242990) Non-Executive IndependentDirector resigned from the Board on 21st August 2018 due to his old age andill health and there were no other material reasons other than those provided. After threemonths of his resignation he left for his heavenly abode on 08th December2018. His contributions and guidance during the deliberations at the Board and Committeemeetings have been of immense help to the Company. Mr. Chadha was a great human being andhe will remain forever in everyone's thoughts and prayers and may his divine soulrest in peace.
(b) Declaration from Independent Directors
Mr. Raj Kumar Bhargava Mr. Ramesh Chandra Sharma and Mrs. Anita Jainare NonExecutive Independent Directors on the Board of the Company. The Company hasreceived declarations from all the Independent Director(s) confirming that they meet withthe criteria of Independence as prescribed both under Section 149(6) of the Companies Act2013 and under Regulation 16(1)(b) 25 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
(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 including criteria for determining qualifications positive attributes ofDirectors Key Managerial Personnel (KMP) and Senior Management employees of the Company.
Brief outline / salient features of the Nomination and RemunerationPolicy are as follows:
> Nomination and Remuneration Committee has been empoweredinter-alia to carry out the following functions:
Identification and selection of persons for appointment asDirector KMP or at Senior Management level considering their qualification experienceand integrity.
Determining the appropriate size diversity and composition ofthe Board.
Developing a succession plan for the Board and Senior Managementof the Company.
To recommend all remuneration in whatever form payable tosenior management.
Considering and determining the remuneration based upon theperformance to attract retain and motivate members of the Board.
Approving the remuneration of the Senior Management includingKMPs of the Company.
Evaluation of performance of the Board its committeesindividual directors and Senior Management Personnel on yearly basis.
To extend or continue the term of appointment of the IndependentDirector on the basis of the report of performance evaluation of Independent Directors
> Approval of the Shareholders by way of Special Resolution isrequired in following cases:
To appoint or continue the employment of any person asWhole-time Director who has attained the age of seventy years.
To appoint a person or continue the directorship of any personas a nonexecutive director who has attained the age of seventy five years.
To re-appoint Independent Directors for second terms of fiveconsecutive years.
Payment of fees or compensation to executive directors who arepromoters or members of the promoter group exceeding particular limits specified in thepolicy.
The annual remuneration payable to a single non-executivedirector exceeds fifty per cent of the total annual remuneration payable to allnonexecutive directors.
> Executive Directors / Managing Director are paid remuneration asper applicable provisions of the Companies Act 2013 and rules made there under.
> Non-Executive Directors are paid sitting fees for attending eachmeeting of the Board of Directors and the Committees constituted by the Board. The sittingfee for each meeting of Board of Directors and the Committee of Directors has been fixedby the Board of Directors within the overall ceiling laid down under the Companies Act2013.
Following changes have been made in the Nomination and RemunerationPolicy of the Company as per the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended:
1) The Nomination and Remuneration Committee to recommend to the Boardall remuneration in whatever form payable to the Directors key managerial personnel andSenior Management.
2) Senior Management means officers / personnel ofthe Company who are members of the core management team excluding Board of Directorscomprising all members of management one level below the chief executive officer /managing director / whole time director / manager (including chief executive officer /manager in case they are not part of the board) and shall specifically include companysecretary and chief financial officer.
3) The Company shall not appoint a person or continue the directorshipof any person as a non-executive director who has attained the age of seventy five yearsunless a special resolution is passed to that effect in which case the explanatorystatement annexed to the notice for such motion shall indicate the justification forappointing such a person.
4) The fees or compensation payable to executive directors who arepromoters or members of the promoter group shall be subject to the approval of theshareholders by special resolution in general meeting if-
(i) the annual remuneration payable to such executive director exceedsrupees 5 crore or 2.5 per cent of the net profits of the company whichever is higher; or
(ii) where there is more than one such director the aggregate annualremuneration to such directors exceeds 5 per cent of the net profits of the company:
Provided that the approval of the shareholders under this provisionshall be valid only till the expiry of the term of such director.
5) The approval of shareholders by special resolution shall be obtainedevery year in which the annual remuneration payable to a single non-executive directorexceeds fifty per cent of the total annual remuneration payable to all non-executivedirectors giving details of the remuneration thereof.
The complete Nomination and Remuneration Policy of the Company isavailable on the website of the Company having following web linkhttp://www.hbportfolio.com/PdfFiles/NRC.pdf
(d) Board Diversity
The Company recognizes the importance and benefits of having thediverse Board to enhance quality of its performance.
The Company believes that a diverse Board will enhance the quality ofthe decisions made by the Board by utilizing the different skills qualificationprofessional experience gender knowledge etc. of the members of the Board necessary forachieving sustainable 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.
(e) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and applicableprovisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out an Annual performance evaluation of its own performanceand of all the Directors individually as well as the evaluation of the working of AuditNomination & Remuneration and other Compliance Committees. The manner in which theevaluation has been carried out is explained in the Corporate Governance Report.
(f) Remuneration of the Directors / Key Managerial Personnel (KMP) andParticulars of Employees
The provisions of Rule 5(2) & 5(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are not applicable as there are nosuch employee who were drawing / in receipt of remuneration of prescribed amount duringthe period under review.
The information required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of Directors / Key Managerial Personnel (KMP) andEmployees of the Company is furnished hereunder:
(i) The ratio of the remuneration of each Director to the medianremuneration of the employees of the Company for the financial year; and
(ii) The percentage increase in remuneration of each DirectorChief Financial Officer Chief Executive Officer Company Secretary or Manager if any inthe financial year.
(*) Resigned from the Board w.e.f 21st August 2018.
The Non-Executive Directors are paid only sitting fees for attendingmeeting of the Board of Directors and the Committees constituted by the Board.
(iii) There is no increase in the median remuneration of employeesin current financial year as compared to previous financial year.
(iv) There are five permanent employees on the rolls of the Companyas on 31st March 2019.
(v) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year as compared tothe percentile increase in the managerial remuneration: Nil
(vi) The key parameters for any variable component of remunerationavailed by the directors: Not Applicable
(vii) The remuneration paid to the Directors / Key ManagerialPersonnel (KMP) is in accordance with the remuneration policy of the Company.
During the year under review the Company has complied with allapplicable Secretarial Standards issued by the Institute of Company Secretaries of India(ICSI).
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under sub-section (3) ofSection 92 in Form MGT-9 is enclosed as a part of this report as ANNEXURE - III.
The Annual Return (Form MGT-7) filed by the Company for FY 2017-18 withthe Registrar of Companies is available on the website of the Company having following weblink http://www.hbportfolio.com/Annual Return/index.html
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to sub-section (3) & (5) of Section 134 of the CompaniesAct 2013 it is hereby stated that:
a) in the preparation of the Annual Accounts the applicable AccountingStandards have been followed along with proper explanation relating to materialdepartures;
b) the Directors have selected such Accounting Policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the State of Affairs of the Company at the end of theFinancial Year and of the Profit or Loss of the Company for that period;
c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the Directors had prepared the Annual Accounts on a going concernbasis;
e) the Directors have laid down Internal Financial Controls to befollowed by the Company and that such Internal Financial Controls are adequate and wereoperating effectively; and
f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your Directors wish to thank and acknowledge the co-operationassistance and support extended by the Banks Company's Shareholders and Employees.