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26

BOARD OF DIRECTORS

Mr. Lalit Bhasin Chairman

Mr. R. K. Bhargava Director

Mr. B. L. Chadha Director

Mr. R. C. Sharma Director

Mr. J.M.L. Suri Director

Mr. Anil Goyal Managing Director

COMPANY SECRETARYMs. Nishu Tomar

AUDITORSP. Bholusaria & Co.Chartered Accountants26/11, Shakti Nagar,Delhi - 110 007

REGISTERED OFFICEPlot No. 31, Echelon Institutional Area,Sector-32, Gurgaon - 122 001, HaryanaPh : 0124-4675500, Fax : 0124-4370985Email : [email protected]

WEBSITEwww.hbportfolio.com

REGISTRAR & SHARE TRANSFER AGENTRCMC Share Registry Pvt. Ltd.,B-106, Sector - 2,Noida - 201 301Ph : 0120-4015880, Fax : 0120-2444346Email : [email protected]

CONTENTS

Notice ................................................................................................... 1

Directors’ Report .................................................................................. 2

Management Discussion and Analysis &Report on Corporate Governance ...................................................... 3

Auditors’ Report ................................................................................... 6

Balance Sheet ...................................................................................... 7

Statement of Profit & Loss Account .................................................... 7

Cash Flow Statement .......................................................................... 7

Significant Accounting Policies and Notes to Account .................... 8

Consolidated Accounts of the Company ......................................... 16

1

HB PORTFOLIO LIMITED

NOTICENOTICE is hereby given that the 18th Annual General Meeting of the Company will be held asfollows:Day : TuesdayDate : 10th September, 2013Time : 11.00 A. M.Place : GIA House, I.D.C., Mehrauli Road, Opp. Sector 14, Gurgaon (Haryana) - 122 001.

to transact the following business/(s):AS ORDINARY BUSINESS:1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2013 and

the Profit & Loss Account for the year ended on that date together with the Report ofDirectors and Auditors thereon.

2. To declare dividend on equity shares3. To appoint a Director in place of Mr. R.K Bhargava, who retires by rotation and being

eligible offers himself for re-appointment.4. To appoint a Director in place of Mr. J.M.L Suri, who retires by rotation and being

eligible offers himself for re-appointment.5. To appoint Auditors and to fix their remuneration.

BY THE ORDER OF THE BOARDFor HB PORTFOLIO LIMITED

Place : Gurgaon NISHU TOMARDate : 25.05.2013 COMPANY SECRETARY

NOTES1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A

PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND THEPROXY NEED NOT BE A MEMBER. A PROXY IN ORDER TO BE EFFECTIVE MUSTBE LODGED AT THE REGISTERED OFFICE OF THE COMPANY AT LEAST 48HOURS BEFORE THE TIME OF THE MEETING.

2. Explanatory Statement(s) pursuant to section 173(2) in respect of the special businessherein is annexed hereto and form part of this notice.

3. The Register of Members and Share Transfer Books of the Company shall remain closedfrom 5th September, 2013 to 10th September, 2013 (Both days inclusive).

4. Dividend, if declared at the Annual General Meeting will be paid within 30 days thereofto those members whose names appear on the Register of Members of the Companyafter giving effect to all valid requests for transfer of shares lodged with the Companyon or before the close of business hours on 4th September, 2013 or to their mandates.The dividend in respect of shares held in dematerialised form would be payable to thebeneficial owners of shares recorded with the depositories as at the end of 4th September,2013 as per the details furnished by the Depositories for the purpose.

5. Securities and Exchange Board of India (SEBI) has made mandatory for all Companiesto use the bank account details furnished by the shareholders for distributing dividendthrough Electronic Clearing Service (ECS), wherever ECS and Bank details are available.In the absence of ECS facility being made available for any reason, the Companies arerequired to print the bank account details on the payment instrument for distribution ofdividends to the investors. Accordingly shareholders holding shares in physical form

are requested to notify their bank details giving the name of the bank, the branch, the accountnumber to the Company's Registrar and Share Transfer Agent, M/s RCMC Share Registry Pvt.Ltd. In case the holdings are in dematerialised form, the said details should be conveyedto their Depository Participant. Shareholders who wish to avail the ECS facility offeredby the Company should in addition to the aforesaid bank details also furnish a photocopyof the cheque leaf to Company's Registrar and Share Transfer Agent in case of holdingin physical mode and to the Depository Participant in case of dematerialised holding.The bank particulars of the shareholders recorded with the Depository Participant ason the book closure date, the data of which will be received through Depositories willbe used by the Company for printing on dividend warrants. This would ensure that thedividend warrants cannot be deposited in any account other than the one specified onthe warrants. For safety and in the interest of shareholders, it is important that bankaccount details are correctly provided to the Depository participants. The bank details(mandate) for shares held in physical form will not be applicable/applied for sharesheld in dematerialised form and vice versa.

6. Members/Proxies should bring Attendance Slips duly filled in for attending the meeting.7. Shareholders seeking any information with regard to Accounts are requested to write

to the Company at least 7 days before the date of the meeting so as to enable themanagement to keep the information ready.

8. Members are requested to:(a) Notify any change in their address to the Company including PINCODE to the

Registrar and Share Transfer Agent of the company namely, RCMC ShareRegistry Pvt. Ltd., B-106, Sector-2, Noida. Phones: 4015880. Fax 2444346.E-mail: [email protected]. Members whose shareholding is in electronicmode are requested to direct change of address notifications and bankparticulars for receiving the dividend, if declared, through electronic credit underECS, to their respective Depository participants.

(b) Bring their copies of Annual Report with them to the meeting as the same will notbe supplied again at the Meeting as a measure of economy.

9. Details of Directors seeking appointment/ reappointment at the ensuing Annual GeneralMeeting (Pursuant to Clause 49 of the Listing Agreement).

10. The Company is implementing the "Green Initiative" as per Circular Nos. 17/2011 dated April 21, 2011 and 18/2011 dated April 29, 2011 issued by the Ministryof Corporate Affairs (MCA) to enable electronic delivery of notices/ documentsand annual reports to shareholders. Henceforth, the email addresses indicatedin your respective Depository Participant (DP) accounts which will be periodicallydownloaded from NSDL/ CDSL will be deemed to be your registered email addressfor serving notices/ documents including those covered under Section 219 ofthe Companies Act, 1956. The Notice of AGM and the copies of audited financialstatements, directors report, auditors report etc. will also be displayed on thewebsite www.hbportfolio.com of the Company and the other requirements of theaforesaid MCA circular will be duly complied with.Members holding shares in electronic mode are therefore requested to ensureto keep their email addresses updated with the Depository Participants.Members holding shares in physical mode are also requested to update theiremail addresses by writing to the Registrar and Share Transfer Agent of theCompany at the address mentioned in 7(a) above quoting their folio number(s).

ANNEXURE TO THE NOTICE

Notes on directors seeking appointment / re-appointment as required under Clause 49 of the Listing Agreement entered into with Stock Exchange:

PROFILE OF DIRECTORS SEEKING APPOINTMENT / REAPPOINTMENT

AT THE ENSUING (18th) AGM (Refer Note No. 3 and 4 of the Notice for AGM)

Name of the Director Mr. R.K Bhargava Mr. J.M.L Suri

Date of Birth 26th October, 1935 27th April, 1938Date of Appointment 25th July, 2001 18th August 1994Profile/ Expertise in Specific functional Areas. Administration AdministrationQualifications M.A. & B.A. (Hons.) Engineer

List of directorship in other Public 1. Kajaria Ceramics Ltd. 1. HB Stockholdings LimitedCompanies.(As on 31st March 2013) 2. Duncans Industries Limited 2. HB Estate Developers Ltd

3. Noida Toll Bridge Co. Ltd. 3. RRB Securities Ltd.4. Inovoa Hotels & Resorts Ltd. 4. Mount Finance Ltd.5. Asian Hotels Ltd. (West) 5. HB Corporate Services Ltd.

6. RRB Master Holdings Ltd.7. HB Insurance Advisors Ltd.8. Bhasin Investments Ltd.9. HB Telecommunications Ltd.10. HB Prima Capital Ltd.11. AHL Hotels Ltd.12. Raja Ram Bhasin Share and Stock Brokers Limited13. Bhasin Share and Stock Brokers Limited

Membership of Committee of the Audit Committee Audit CommitteeBoard in other Public Companies 1. Duncans Industries Ltd. 1. HB Estate Developers Ltd.(As on 31st March 2013) 2. Noida Toll Bridge Co. Ltd. 2. RRB Securities Ltd.

3. Asian Hotels Ltd. (West)4. Kajaria Ceramics LtdShareholder/InvestorGrievance Committee Shareholder/InvestorGrievance Committee1. Duncans Industries Limited 1. HB Estate Developers Ltd.2. Noida Toll Bridge Co. Ltd. 2. HB Stockholdings Ltd.3. Asian Hotels Ltd. (West)

Shares held by the Director 7118 500 (Jointly with his wife)

BY THE ORDER OF THE BOARDFor HB PORTFOLIO LTD.

Place : Gurgaon NISHU TOMARDate : 25.05.2013 COMPANY SECRETARY

2


DIRECTORS’ REPORTTo the Members,Your Directors are pleased to present the 18th Annual Report together with the AuditedStatements of Accounts for the year ended 31st March 2013.

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

(` in Lakhs)Year Ended Year Ended

PARTICULARS31.03.2013 31.03.2012

Total Turnover 809.20 484.76Gross Profit/(Loss) 693.72 372.62Less :(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) 541.13 297.15AppropriationsStatutory Reserve Fund 108.23 59.44General Reserve 40.00 20.00Proposed Dividend 179.88 179.88Tax on Dividend 30.57 29.18Balance Brought Forward 759.29 750.64Accumulated Profits 941.74 759.29

DIVIDENDIn view of the Company having distributable profits after providing for depreciation, your directorsare 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 whichwas 17,430 at the start of the financial year 2012-13 made a recovery to reach at 20,203 inJanuary 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 andan upward trend was seen from June 2012 till January 2013. Even though the health of thedomestic industry remained fragile during the year, an inflow of USD 22 billion into the Indianequities by overseas investors supported the market. However volatile prices of index stockshave 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 subduedon account of halted investment demand, declining exports and weakening business andconsumer 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 firstquarter to 4.8% in the fourth quarter. The Inflation measured by the Wholesale Price Indexwhich 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-foodinflation. However, the food inflation moved into double digits.

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

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

STATUTORY STATEMENTSYour 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 yourcompany. The total foreign exchange earnings during the year under review and previousperiod is NIL and total foreign exchange out go during the year under review and the previousperiod 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 suchemployee who were drawing/ in receipt of remuneration of prescribed amount during theperiod 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 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 of thecompany at the end of the financial year and of the profit or loss of the company for thatperiod. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding the assetsof the company and for preventing and detecting fraud and other irregularities. Further, theDirectors have prepared the annual accounts on a going concern basis.

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

CORPORATE GOVERNANCEThe report of Corporate Governance for the year under review is annexed hereto and forms apart of the Director's Report.

STATEMENT PURSUANT TO LISTING AGREEMENTThe Company's equity shares are listed at Bombay Stock Exchange Ltd, Mumbai. The listingfee for the year under review has been paid to BSE.

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

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

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

ACKNOWLEDGMENTSYour Directors wish to thank and acknowledge the co-operation, assistance and supportextended by the Banks, Company's Shareholders and Employees.

FOR AND ON BEHALF OF THE BOARD

Place : Gurgaon LALIT BHASINDate : 25.05.2013 CHAIRMAN

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Name of the Subsidiary HB Securities Ltd. HB Corporate Services Ltd.

The Financial Year of the subsidiary ended on 31.03.2013 31.03.2013

No. of Equity Share held by the Holding Company as on date 72,07,570 Equity Shares of ` 10/- each 42,51,070 Equity Shares of ` 10/- each

Extent of Holding 100% 100%

The Net Aggregate of the profit / (loss) of subsidiary so far as they concernthe members of the company for the year ended 31st March 2013

(i) For the financial year of the subsidiary ` (9,77,305) ` (18,918)

(ii) For the previous financial periods of the subsidiary ` (34,22,386) ` (24,318)

The net aggregate of the profit/ (loss) of subsidiary so far as they concernthe members of the company and which are dealt with in the accountsof the company for the year ended 31st March 2013.

(i) for the financial year of the subsidiary Nil Nil

(ii) for the previous financial periods of the subsidiary Nil Nil

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HB PORTFOLIO LIMITEDHB PORTFOLIO LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS1. Operating Results

The company's total income for the year under review is ` 809.20 lakhs as compared to` 484.76 lakhs in the previous year. During the year under review the total expensesamounted to ̀117.75 Lakhs as compared to ` 115.17 Lakhs during the previous year.

2. Industry Trends and Business AnalysisThe year was marked by high volatility in the stock market, and most asset class remainedsubdued. Crude oil prices remained in the range of 80 to 105 US dollar and commodity pricesremained high. Inflation remained high even though the economy has slowed down withexpected growth of 5.4% per annum. High interest rates by the Reserve Bank to curtailinflation have affected Industrial growth. All these developments have been viewed negatively.

3. Opportunities and ThreatsWith the globalization and electronic age, Indian stock market changed over the pastdecade. Nearly 100% of all transactions are executed through electronic media onlinetrading system. The developments of high-tech and transparent markets with anincreasingly wide geographic footprint have increased the number of trading venuesoffering diverse pools of liquidity.Current elevated rates of inflation pose significant risks to future growth. With the attentionof Government focused in containing the inflation, the economic growth may see adeceleration with corporates turning in moderate growth.

4. Future Prospects and OutlookRecent years have seen a lot of change and turmoil in Indian Industry. The problems ofthe global economy after its meltdown in previous 2-3 years have also not gone away.China's economy which was a strong growth engine has been slowing down especiallyin the housing and infrastructure sectors. The problems of Eurozone are making thenascent global recovery look weak. Asia and Japan continues to see growth though itscomposition varies across the region depending upon exposure to the export sector indifferent countries. Indian economy is likely to see a reasonable growth of 5-6% in thenear term though inflation, oil prices, budget deficits, interest rates, commodity pricesand infrastructural bottleneck remain areas of concern.

5. Risks and concernsThe Company like any other Company is exposed to specific risks that are particular toits business and the environment within which it operates. The company is exposed tothe market risk (including liquidity risk) and also the factors that are associated withcapital market, which inter alia includes economic/business cycle, fluctuations in thestock prices in the market, besides the interest rate volatility, and credit risk.The Company is confident of managing these risks by maintaining a conservativefinancial profile, and by following prudent business and risk management practices.

6. Internal control system and their adequacyThe Company has proper and adequate system of internal controls to ensure that allits assets are safeguarded and protected against loss from unauthorized use ordisposition of assets and that the transactions are recorded and reported.The Company ensures adherence to all internal control policies and procedures aswell as compliance with all regulatory guidelines. Besides, the Audit Committee reviewsthe internal controls at periodic intervals in close coordination with the Internal Auditors.

7. Financial performancea) Share Capital: The Company's issued and subscribed share capital consists of

Equity Share capital only. The paid-up share capital of the company as at 31stMarch 2013 stood at Rs.11,99,23,290 comprised of 1,19,92,329 Equity Sharesof Rs.10/- each.

b) Reserves and Surplus: During the year under review the reserves and surplus is` 10528.16 lakhs as against Rs 10197.48 lakhs during the previous year.

c) Non- Current Assets: During the year under review the Non- Current assets stoodat ` 8299.57 Lakhs as against ` 9716.77 Lakhs during the previous year.

(d) Current Assets & Current Liabilities: The current assets and current liabilities &provisions for the year under review stood at ` 3927.08 lakhs and ` 462.97 Lakhsrespectively against Rs.2188.26 lakhs and ` 469.16 Lakhs for the previous year.

8. Human ResourcesThe company has adequate human resources which is commensurate with the currentvolume of activity and is reviewed by the management periodically and the companywould induct competent personnel on increase/expansion of the activity.

9. Cautionary Statement:Statements in this "Management's Discussion and Analysis" describing the Company'sobjectives, projections, estimates, expectations or predictions may be "forward lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's operations include interest rates and changesin the Government regulations, tax regimes, economic developments and other factorssuch as litigation etc.

REPORT ON CORPORATE GOVERNANCE1. Company’s philosophy on Corporate Governance

The Company's philosophy on Corporate Governance envisages adopting the highstandards of transparency, accountability and ethics in all transactions and interactionswith all stakeholders including but not limited to the shareholders, the Government,Suppliers, Contractors and other business associates.

2. Size and Composition of the BoardThe Board of Directors of your company comprises of 6 directors out of whom 5 arenon-executive and 4 directors are Non- Executive Independent directors. The non-executive directors are proficient in their own fields and bring with them decades ofrich experience. Mr. Lalit Bhasin is the Non - Executive Chairman of the Board of Directorsof the Company. Mr. Anil Goyal is the Managing Director of your company. He has tohis credit nearly 30 years of corporate experience. He is responsible for overallmanagement of the company. The composition of the Board is in conformity with theClause 49 of the Listing Agreement.

Six Board meetings were held during the year under review on 24th May, 2012, 31st July,2012, 5th September, 2012, 6th November, 2012, 12th February, 2013 and 21st March, 2013.The particulars regarding composition of the Board of Directors and its Meetings heldduring the year are given here under: -

Name of the Category Directorships in other Committee No. of Board AttendedDirector public companies# Membership held in Meetings during Last Shares

Other public companies# the year AGM held

Director Chairman Member Chairman Held Attended

Mr. Lalit Bhasin Promoter Non Executive 14 4 6 NIL 6 6 Yes 7424304

Mr. J.M.L. Suri Independent Non Executive 13 NIL 4 1 6 6 Yes 500*

Mr. R.K.Bhargava Independent Non Executive 5 1 7 4 6 6 Yes 7118

Mr. B.L. Chadha Independent Non Executive NIL NIL NIL NIL 6 6 Yes NIL

Mr. R.C. Sharma Independent Non Executive 5 NIL 3 NIL 6 6 Yes NIL

Mr. Anil Goyal Non-Independent Executive 11 NIL 5 1 6 6 Yes NIL

# As on 31.03.2013* Jointly held with wife.

In terms of the provisions of the Articles of Association of the company, one-third directors ofthe company retire at every annual general meeting. Accordingly, Mr. R.K. Bhargava and Mr.J.M.L Suri would retire by rotation at the ensuing Annual General Meeting and being eligibleoffers themselves for re-appointment.

3. Board CommitteesThe Board of Directors of your company has in its meeting held on 28th July 2001constituted two committees namely; Shareholders/Investors Grievance Committee andAudit Committee in due compliance with Section 292A of the Companies Act, 1956and Clause 49 of the Listing Agreement. The Board has also constituted a RemunerationCommittee on 19th December 2001. Each of these committees is having its own charterduly approved by the Board.

(A) Audit Committee: The Audit Committee as reconstituted on 27th July 2004comprises of Mr. R.K. Bhargava as its Chairman, Mr. J.M.L. Suri and Mr. B.L. Chadha, asits Members and the Company Secretary of the Company as Secretary to the Committee.The Audit Committee has been empowered, inter-alia, to carry out the followingfunctions:

1. To lay down, review and revise the accounting policies of the company.2. To review the financial operations and performance of the company.3. To review the Quarterly, half-yearly and annual financial accounts and other financial

reports and statements, before placement thereof before the Board of Directors.

4. To consider and constitute sub-committees, wherever necessary for carrying out and/or monitoring the financial operations of the company.

5. To appoint whenever deemed expedient, an independent internal auditor to carry outcontinuous audit of the accounts and systems of the company, and also consider and/or review the appointment and removal of auditors of the company.

6. To consider and set up adequate internal control systems and review and monitor thesame in consultation with the internal auditors and the auditors of the company andensure compliance of the same.

7. To receive, discuss and consider the observations and reports of the internal auditorsand auditors of the company from time to time.

8. To review and investigate on the matter of financial nature, as and when deemednecessary and expedient.

9. To give report and/or recommendations to the Board on the matters concerning financialoperations of the company.

10. To invite and summon any executive of the company and/or appoint experts, wherevernecessary, and discuss with them the matters relating to the finance, audit and internalcontrol system etc.

11. To obtain legal and professional advise wherever found necessary and expedient.12. To consider and act on any matters as or included under Clause 49 of the Listing

Agreement and/or as may be so included from time to time, whether provided here inabove or not.

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HB PORTFOLIO LIMITEDHB PORTFOLIO LIMITED

13. To deal with any other matters related and or incidental to the above or as may beassigned, in addition to the aforesaid, by the Board from time to time.

During the year under review four Audit Committee Meetings were held on 24th May,2012, 31st July, 2012, 6th November, 2012 and 12th February, 2013 and the samewere attended by all the committee members.

The Audit Committee plays a crucial role in running of the Corporate GovernanceFunctions. During the year the roles and responsibility of the Audit Committee havebeen effectively carried out. The Audit Committee reviewed the financial operationsand performance of the Company, interacted with the Auditors and Internal Auditors,considered the reports of the Auditors and provided its valuable suggestions andrecommendations to the Board of Directors from time to time.

(B) Shareholders / Investors Grievance Committee: The Shareholders / InvestorsGrievance Committee comprises of Mr. J. M. L. Suri as its Chairman, Mr. R. K. Bhargavaand Mr. Anil Goyal as its Members and the Company Secretary as Secretary to theCommittee. The Shareholders committee has been empowered, inter-alia, to carry outthe following functions: -1. To consider and approve the transfer, transmission and issue of fresh/duplicate

share certificates.2. To review the status of dematerialization of company's shares and matters

incidental thereto.3. To review and monitor the approval to the transfers and transmissions made by

the Executive Director, under executive authority delegated to him from time to time.4. To monitor the matters of litigation related to shareholders and take decisions

relating thereto.5. To consider, review and monitor the matters related to the shareholders

grievances.6. To consider and finalize the Report on Corporate Governance to be annexed

with the Annual Report of the company.7. To deal with any other matters related and/or incidental to the shareholders.

The Mr. Anil Goyal, Managing Director has, however, been empowered to approvetransfers up to 10,000 Equity Shares under one folio at a time.During the year under review 10 (Ten) Shareholders Committee Meetings wereheld on 27th April, 2012, 24th May, 2012, 25th June, 2012, 31st July, 2012, 15th

September, 2012, 16th October, 2012, 6th November, 2012, 26th December, 2012,12th February, 2013, and 21st March, 2013 and the same were attended by all thecommittee members.

(C) Remuneration Committee: The Board of Directors in their meeting held on 19thDecember 2001 had constituted Remuneration Committee in terms of the provisions ofthe Listing Agreement. The Committee as reconstituted on 30th October 2004,comprises - Mr. R.K. Bhargava as its Chairman, Mr. B.L. Chadha and Mr. R.C. Sharmaas its members. The committee has been empowered, inter-alia, to consider andapprove remuneration paid/payable to Managing Director and other managerialpersonnel as per the provisions of the Companies Act.No Remuneration Committee Meeting was held during the year.Remuneration paid during the year ended 31st March 2013 is as under:

Director Relationship with Sitting Fees Salary & Commission,other Director(s) Paid (Rs.) Perks (Rs.) if any

Mr. Lalit Bhasin N.A 60,000/- Nil Nil

Mr. J.M.L. Suri N.A. 1,20,000/- Nil Nil

Mr. R.K. Bhargava N.A. 1,20,000/- Nil Nil

Mr. B.L. Chadha N.A. 1,00,000/- Nil Nil

Mr. R.C. Sharma N.A. 60,000/- Nil Nil

Mr. Anil Goyal N.A. NIL 51,22,000/- Nil

The non-executive directors are paid sitting fees for attending each meeting of theBoard of Directors and the Committees constituted by the Board. The sitting fee foreach meeting of Board of Directors and the Committee of Directors is fixed by theBoard of Directors within the overall ceiling laid down under the Companies Act.

The aggregate value of salary and perquisites paid for the year ended March 31, 2013to Mr. Anil Goyal, Managing Director is as follows:-

Salary ` 31,20,000/- and Perquisites ` 20,02,000/-

Besides this he is entitled to Company's contribution to Provident Fund, SuperannuationFund or Annuity Fund, to the extent not taxable and Gratuity and encashment of leaveat the end of tenure.

The notice period for the Managing Director is three months and there is no severance fee.

(D) Finance and Borrowings Committee: The Board of Directors in their meeting heldon 30th April 2003 constituted a Finance and Borrowings Committee. The Committeecomprises of Mr. JML Suri, Mr. R.K. Bhargava and Mr. Anil Goyal as its members. TheCommittee has been empowered, inter-alia, to carry out the following functions:

a. To sanction and approve borrowing of funds from any financial institution, banksor any body (ies) corporate, otherwise than on debentures not exceeding a sumof ` 50 crores etc.

b. To approve creation of security for borrowings whether by way of a promissorynote/post dated cheques or by way of a mortgage, charge, hypothecation ofassets of the company, which shall include both movable and immovable assetsof the company or by any combination thereof;

c. To approve deeds and documents to be executed with the lenders (which termshall include financial institution, banks or any body(ies) corporate in connectionwith the borrowings approved by the committee including loan agreement, deedof hypothecation etc.;

d. To delegate power/ authority to any director/officer or any authorised person/signatory of the company to execute the documentation on behalf of the companyand to affixation of Common Seal of the company to any of the documents;

e. To approve opening of new bank account and / or closing of the existing bankaccount, as the case may be:The presence of any two directors shall constitute a valid quorum for transactionof the business of the committee. During the year under review no meeting ofFinance and Borrowings Committee was held.

4. General Body MeetingsDetails of Annual General Meetings:(i) Location and time where the last 3 AGM's were held

Year Type Location Date Time

2011-12 AGM GIA House, I.D.C.,Mehrauli Road,Opp. Sector 14,Gurgaon - 122 001(Haryana) 05.09.2012 11.00 A.M

2010-11 AGM GIA House, I.D.C.,Mehrauli Road,Opp. Sector 14,Gurgaon - 122 001(Haryana) 19.08.2011 11.00 A.M

2009-10 AGM GIA House, I.D.C.,Mehrauli Road,Opp. Sector 14,Gurgaon - 122 001(Haryana) 20.08.2010 11.00 A.M.

(ii) List of Special Resolutions passed in the previous 3 AGMs

S. No. Subject Matter AGM Reference andDate of passing

1 • Appointment of Managing Director 17th AGMfor a further period of five years 05.09.2012

2 • Approval for increase/revision in 15th AGMremuneration of Mr. Anil Goyal, 20th August, 2010Managing Director of the Company.

(iii) Whether Special Resolutions were put through postal ballot last year No

(iv) Are polls proposed to be conducted through postal ballot this year No

5. DISCLOSURES

I. There have been no materially significant related party transactions, pecuniarytransactions or relationships other than those disclosed in the financial statementsfor the year ended 31st March 2013 (Refer Note No 22 to the notes to accounts)forming part of Balance Sheet and Profit & Loss Account). Accordingly, the samehave not been reproduced here.

II. No penalty has been imposed nor any strictures have been passed by the StockExchanges or SEBI or any other Statutory Authority on any matter related to CapitalMarkets during the last three years.

III. The Company has adopted a code of conduct applicable to all Directors and seniormanagement personnel of the Company and the same has been posted on the websiteof the Company www.hbportfolio.com. For the year under review, all directors and seniormanagement personnel have confirmed their adherence to the provisions of said code.

IV. None of the Company's subsidiaries viz., HB Securities Ltd. and HB CorporateServices Ltd. is "Material Non-Listed Subsidiary" in terms of Clause 49 of the ListingAgreement. However, the financial results and the investments (as and when made)are placed before the Audit Committee of the Company regularly for review.

V. The Managing Director (CEO & CFO) of the Company has, as required under clause49 of the Listing Agreement, given the certificate on the review of financial statements,including Cash Flow, for the year ended 31st March, 2013 to the Board of Directors.

VI. Risk Assessment and Minimization procedures are in existence and are reviewedperiodically.

VII. Whistle Blower policy a Non - Mandatory requirement has not been reviewed by the Company.

VIII. All the mandatory requirements under Clause 49 (relating to Corporate Governance norms)of the Listing Agreement are being adhered to / complied with. The Non Mandatoryrequirement relating to Remuneration Committee has been adopted by the Company.

6. MEANS OF COMMUNICATION

I. Quarterly Results: Dissemination through Stock Exchange, Company's Website andthrough publication in newspaper as required under Listing Agreement.

II. Newspaper wherein results normally published: Business Standard Hindi & English.

III. Website where displayed: www.hbportfolio.com

IV. The website also displays official news releases and important communicationsmade to Stock Exchange. As and when any presentation is made to institutionalinvestors the same would be simultaneously uploaded in the Company's Website.

5

7. GENERAL SHAREHOLDER INFORMATIONI. Ensuing Annual General Meeting Date, time and venue:

Location : GIA House, I.D.C., Mehrauli Road, Opp. Sector 14,Gurgaon (Haryana) – 122 001

Date : 10th September, 2013Time : 11.00 A.M.

II. Financial Year : 1st April 2012 to 31st March 2013III. Date of Book Closure : 5th September, 2013 to 10th September, 2013IV. Dividend Payment Date:

Subject to the approval of dividend by the shareholders, dividend warrants will bemailed to eligible members/ beneficial owner's (in respect of shares held indematerialized form) on or before 9th October, 2013

V. Listing on Stock ExchangesThe Company's equity shares are listed at Bombay Stock Exchange Limited, Mumbai

VI. Stock Code:The Company's scrip code at BSE is 532333.

VII. Market Price Data: The monthly High, Low price of the Company during each monthin the last financial year at BSE is as under:

Month High Low Close Price Volume

Apr 2012 27.15 23.25 24.05 401661

May 2012 25.00 20.05 22.25 432093

Jun 2012 24.75 21.00 22.00 237515

Jul 2012 24.95 21.90 22.30 605368Aug 2012 26.65 21.30 22.00 726212

Sep 2012 24.00 21.00 22.65 693596

Oct 2012 27.00 22.90 23.10 1282386

Nov 2012 25.70 22.30 24.30 799466Dec 2012 25.90 23.15 24.50 478338

Jan 2013 26.10 23.50 24.00 841875

Feb 2013 24.40 21.75 22.10 265545

Mar 2013 22.00 17.60 18.00 584516

VIII. Performance in Broad based indices:

IX. Stock Performance-Absolute returns1 YEAR

HB Portfolio -25.16BSE Sensex 8.76BSE 200 7.07

X. Registrar and Transfer Agents:RCMC Share Registry Pvt. Ltd.B-106, Sector-2, Noida - 201301Phones: - 0120-4015880. Fax: 0120 - 2444346.E-mail:- [email protected].

XI. Share Transfer SystemShare Transfers are registered and returned within a period of 15 days from the dateof receipt, if the documents are clear in all respects. The authority for transfer ofshares has been delegated to the Managing Director for transfer of shares up to afixed number beyond which the matters are placed before the shareholdersCommittee, which meets as and when required. As reported by Company's RTA allvalid requests for transfer during the year under review were transferred withinstipulated time limit.

XII. The status of Investor's Grievance Redressal from 1.04.2012 to 31.03.2013 is as under:

Nature of Grievance Received Cleared

Relating to Dividend 15 15

Relating to transfer, transmission, exchange etc. 6 6

Non Receipt of Annual Report 2 2

TOTAL 23 23

XIII. The distribution of shareholdings of the company as on 31st March 2013 is as under:

Shareholders ShareholdingNo. of Shares

Nos. % to total Shares % to total

Up to 5,000 72803 99.50 3078345 25.67

5,001-10,000 204 0.28 147875 1.23

10,001-20,000 73 0.10 107219 0.89

20,001-30,000 28 0.04 68289 0.5730,001-40,000 12 0.02 41609 0.35

40,001-50,000 11 0.02 50205 0.42

50,001-1,00,000 15 0.02 107425 0.90

1,00,001 and above 22 0.03 8391362 69.97TOTAL 73168 100.00 11992329 100.00

The category-wise distribution of Shareholders is as follows:

Category No of Shares held % of Shareholding

A. Promoters Holding

• Indian Promoter 78,58,464 65.53• Foreign Promoters 0 0.00

B. Public Shareholding (Institutions)

• Mutual Funds and UTI 1,275 0.01• Banks/Financial Institutions 25 0.00• Foreign Institutional Investors 0 0.00

C. Public Shareholding (Non Institutions)

• Bodies Corporate 2,57,388 2.15• NRIs 89,320 0.74• Indian Public 37,82,502 31.55• Clearing Member/ Intermediary 3,355 0.03

Total 1,19,92,329 100.00

XIV. Dematerialzation of Share and LiquidityThe trading in the Equity Shares of the Company has come under compulsorydematerialization w.e.f. 26th February 2001 in terms of the SEBI-Notification No.SMDRP/ POLICY/CIR - 23 / 2000 dated 29th May 2000.The company has joined the National Securities Depository Ltd. (NSDL) and CentralDepository Services (India) Ltd. (CDSL). The ISIN No. allotted to the Company isINE638B01017. As at 31st March 2013, 99,10,644 Equity Shares of the Companyare held in dematerialized form constituting 82.64% of the Company's subscribedshare capital.

XV. The Company has no outstanding GDRs/ ADRs/ Warrants or any other instrumentsconvertible into equity.

XVI. Address for CorrespondenceHB Portfolio LimitedHB House, 31, Echelon Institutional Area,Sector-32, Gurgaon – 122 001.

Managing Director’s Declaration on Code of ConductThe Members ofHB Portfolio LimitedI, Anil Goyal, Managing Director (As Chief Executive Officer and as Chief Financial Officer) ofthe Company declare that all the members of the Board of Directors; and Senior Managementof the Company have affirmed compliance with the Code of Conduct.

For HB Portfolio LimitedAnil Goyal

Date : 25.05.2013 Managing Director

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCETo the Members ofHB Portfolio LimitedGurgaon.

We have examined the compliance of conditions of Corporate Governance by HB PORTFOLIOLIMITED for the year ended on 31st March 2013, as stipulated in Clause 49 of the ListingAgreement of the Company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination has been limited to a review of the procedures andimplementation thereof, adopted by the Company for ensuring the compliance with theconditions of Corporate Governance as stipulated in the said clause. It is neither an audit noran expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given tous, and based on the representations made by the Directors and the management, we certifythat the Company has complied with the conditions of Corporate Governance as stipulatedin Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of theCompany nor the efficiency or effectiveness with which the management has conducted theaffairs of the Company.

FOR P. BHOLUSARIA & COMPANYCHARTERED ACCOUNTANTS

Place : Gurgaon AMIT GOELDated : 25.05.2013 PARTNER

(Membership No. 92648)


6


INDEPENDENT AUDITOR'S REPORTTHE MEMBERS OFHB PORTFOLIO LIMITED

Report on the Financial StatementsWe have audited the accompanying financial statements of HB PORTFOLIO LIMITED("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statementof Profit and Loss and Cash Flow Statement for the year then ended, and a summary ofsignificant accounting policies and other explanatory information.Management's Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with the accounting Principles generally accepted in India includingAccounting Standards referred to in sub-section (3C) of section 211 of the Companies Act,1956 ("the Act"). This responsibility includes the design, implementation and maintenanceof internal control relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement, whether due to fraud or error.Auditor's ResponsibilityOur responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued bythe Institute of Chartered Accountants of India. Those Standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriatenessof accounting policies used and the reasonableness of the accounting estimates madeby management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.OpinionIn our opinion and to the best of our information and according to the explanations givento us, the aforesaid financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:a) in the case of the Balance Sheet, of the state of affairs of the Company as at March

31, 2013;b) in the case of the Statement of Profit and Loss, of the profit for the year ended on

that date; andc) in the case of the Cash Flow Statement, of the cash flows for the year ended on that

date.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued

by the Central Government of India in terms of sub-section (4A) of section 227 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:a) we have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit;b) in our opinion, proper books of account as required by law have been kept by

the Company so far as appears from our examination of those booksc) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement

dealt with by this Report are in agreement with the books of account.d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash

Flow Statement comply with the Accounting Standards referred to in subsection(3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March31, 2013, taken on record by the Board of Directors, none of the directors isdisqualified as on March 31, 2013, from being appointed as a director in termsof clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For P. BHOLUSARIA & CO.Chartered Accountants

FRN : 000468N

Place : Gurgaon (AMIT GOEL)Dated : 25th May, 2013 PARTNER

M.No. 92648

ANNEXURE TO AUDITORS’ REPORTRe. HB Portfolio Ltd.Referred to in Paragraph 1 under the heading of "Report on other legal and RegulatoryRequirements" of our report of even date for the year ended 31st March, 20131. a. The Company has maintained proper records showing full particulars including

quantitative details and situation of fixed assets.b. As explained to us, the fixed assets have been physically verified by the

management during the year in a phased periodical manner, which in our opinionis reasonable, having regard to the size of the company and nature of its assets.No material discrepancies were noticed on such physical verification

c. In our opinion, the Company has not disposed of substantial part of fixed assetsduring the year that would affect going concern status of the Company.

2. a. As explained to us, the company does not have any inventories. The Shares/securities held as investments have been physically verified by the managementat reasonable intervals during the year.

b. In our opinion and according to the information and explanations given to us, theprocedures of physical verification of Shares/securities followed by the managementare reasonable and adequate in relation to the size of the Company and the natureof its business and activities.

c. The Company has maintained proper records of investments. As explained to us,no material discrepancies have been noticed on physical verification of investmentsas compared to the book records.

3. a) The Company had granted unsecured loans of ` 9,00,00,000/- during the earlieryears to one company covered in the register maintained under Section 301 of theCompanies Act, 1956. The year end balance and maximum amount outstanding atany time during the year of such loan is ` 9,00,00,000/-.

b) In our opinion and according to the information and explanations give to us, therate of interest and other terms and conditions of such loan is prima facie, notprejudicial to the interest of the company.

c) The loanee Company is regular in payment of interest and principal as stipulated.d) There is no overdue amount receivable.e) As informed to us, the company has not taken any loans, secured or unsecured

from companies, firms or other parties covered in the register maintained underSection 301 of the Companies Act, 1956. Accordingly, the provisions of Clause4(iii) (e, f and g) of the Companies (Auditor's Report) order, 2003 are not applicableto the company.

4. In our opinion and according to the information and explanations given to us, there isadequate internal control system commensurate with the size of the Company and thenature of its business for the purchases of Investments and fixed assets and sale ofgoods (Investments). During the year, there was no Sale of Services. During the courseof our audit, we have neither come across nor we have been informed of any instance ofmajor weakness in the aforesaid internal control system.

5. a. In our opinion and according to the information and explanations given to us, theparticulars of contracts or arrangements referred to in Section 301 of the CompaniesAct, 1956 have been entered into in the register required to be maintained underthat section.

b. In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of such contracts or arrangements have been madeat prices which are reasonable having regard to the market price prevailing at therelevant time.

6. The Company has not accepted any deposits from the public.7. In our opinion the internal audit system of the Company is commensurate with its size

and nature of its business.8. The nature of the company's business/activities is such that Clause 4(viii) of the Companies

(Auditor's Report) Order 2003 regarding maintenance of Cost Records is not applicableto the company.

9 a. According to the records of the Company, undisputed statutory dues includingProvident Fund, Income Tax, Wealth Tax, cess and other statutory dues as applicablehave been generally regularly deposited by the company during the year with theappropriate authorities except for non payment of installments of advance tax.According to the information and explanations given to us, no undisputed amountspayable in respect of the aforesaid dues were outstanding as at 31st March, 2013for a period of more than six months from the date of becoming payable except for` 57,15,000/- on account of Advance Tax installments for June and September,2012 quarters.

b. According to the records of the Company, there are no disputed statutory dues thathave not been deposited on account of matters pending before appropriateauthorities.

10. The company does not have accumulated losses. The company has not incurred cashlosses during the financial year covered by our audit or in the immediately precedingfinancial year.

11. Based on our audit procedures and according to the information and explanation givento us, we are of the opinion that the Company has not defaulted in repayment of dues tofinancial institutions or banks. The company does not have any debenture holder.

12. In our opinion and according to the information and explanation given to us, no loansand advances have been granted by the Company on the basis of security by way ofpledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society.Therefore, clause 4(xiii) of the Companies (Auditor's Report) order 2003 is not applicableto the company.

14. The Company has maintained proper records of transactions and contracts in respectof investments in shares, securities and other investments and timely entries have beenmade therein. All shares, securities and other investments have been held by theCompany in its own name except for certain shares given as margin/pledged or baddeliveries pending for rectification.

15. The Company has given guarantees for loans taken by others from banks or financialinstitutions. According to the information and explanations given to us, we are of theopinion that the other terms and conditions thereof are not prima-facie prejudicial to theinterests of the Company.

16. The Company has not raised any term loans during the year.17. According to the information and explanations given to us and on an overall examination

of the Balance Sheet of the Company, we report that the company has not raised anyfunds during the year either on long term or on short term basis.

18. During the year, the Company has not made any preferential allotment of shares toparties and companies covered in the Register maintained under Section 301 of theCompanies Act, 1956.

19. No debentures have been issued by the company and hence the question of creatingsecurities in respect thereof does not arise.

20. The Company has not raised any money by way of public issue during the year.21. In our opinion and according to the information and explanation given to us, no fraud on

or by the Company has been noticed or reported during the year.

For P. BHOLUSARIA & CO.Chartered Accountants

FRN : 000468N

Place : Gurgaon (AMIT GOEL)Dated : 25th May, 2013 PARTNER

(M. No. 92648)

7


BALANCE SHEET AS AT 31ST MARCH, 2013As at As at

Particulars Note(s) 31st March, 2013 31st March, 2012(In `) (In `)

EQUITY AND LIABILITIES

Shareholders’ FundsShare Capital 2 122659589 122659589Reserves and Surplus 3 1052815799 1019748330

--------------------------------------- ---------------------------------------1175475388 1142407919

=========================== =============================Non-Current LiabilitiesLong Term Provisions 4 892254 1179220

--------------------------------------- ---------------------------------------892254 1179220

Current LiabilitiesTrade Payable 5 446500 10458522Other Current Liabilities 6 13360713 11729693Short Term Provisions 7 32490177 24727967

--------------------------------------- ---------------------------------------46297390 46916182

--------------------------------------- ---------------------------------------1222665032 1190503321

=========================== =============================ASSETSNon-Current AssetsFixed Assets

Tangible assets 8 878468 1411074Non-current investments 9 794305562 935460691Deferred Tax Assets(Net) 10 264401 296847Long term loans and advances 11 34508440 34508440

--------------------------------------- ---------------------------------------829956871 971677052

Current AssetsTrade Receivables 12 36113388 –Cash and Cash equivalents 13 92829579 14199376Short-Term Loans and Advances 14 258902224 202142851Other Current Asssets 15 4862970 2484042

--------------------------------------- ---------------------------------------392708161 218826269

--------------------------------------- ---------------------------------------1222665032 1190503321

=========================== =============================SIGNIFICANT ACCOUNTINGPOLICIES AND NOTESON ACCOUNTS 1 to 31

As per our Report of even date

For P. BHOLUSARIA & CO. For and on behalf of the BoardChartered AccountantsFRN : 000468N

AMIT GOEL ANIL GOYAL J.M.L. SURIPartner Managing Director DirectorMembership No.: 092648

Place : Gurgaon NISHU TOMARDate : 25th May, 2013 Company Secretary

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2013

Year Ended Year EndedParticulars Note(s) 31st March, 2013 31st March, 2012

(In `) (In `)

Revenue from operations 16 80240211 48243813Other Income 17 680259 231898

----------------------------------- -----------------------------------Total Revenue 80920470 48475711

----------------------------------- -----------------------------------

Expenses:Employee Benefit Expense 18 7127878 6675488Depreciation 8 226579 303370Other Expenses 19 4577209 4204914Contingent Provision against Standard Asssets -156750 333310

----------------------------------- -----------------------------------Total Expenses 11774916 11517082

----------------------------------- -----------------------------------

----------------------------------- -----------------------------------Profit for the year before Tax 69145554 36958629

----------------------------------- -----------------------------------

Tax expense:Current tax 15000000 7500000Deferred Tax charge/(credit) 32446 (256002)

----------------------------------- -----------------------------------Profit for the year after Taxation 54113108 29714631

----------------------------------- -----------------------------------

Earning per equity share:Equity share of Par value ` 10/-eachBasic and Diluted 28 4.51 2.48

SIGNIFICANT ACCOUNTINGPOLICIES AND NOTESON ACCOUNTS 1 to 31

As per our Report of even dateFor P. BHOLUSARIA & CO. For and on behalf of the BoardChartered AccountantsFRN : 000468NAMIT GOEL ANIL GOYAL J.M.L. SURIPartner Managing Director DirectorMembership No.: 092648Place : Gurgaon NISHU TOMARDate : 25th May, 2013 Company Secretary

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013(Amount in `) (Amount in `)

Particulars Year Ended Year Ended31st March, 2013 31st March, 2012

A) CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax and Extraordinary Items 69145554 36958629

Adjustment for :

Depreciation 226579 303370

Loss on sale of fixed assets 120468 0

Contribution of Gratuity and Leave encashment 278908 0

Contingent Provision against Standard Assets -156750 333310

Operating Profit before Working Capital Changes 69614759 37595309

Adjustment for :

Loan and advances and other Receivables -95253507 -125992525

Investments 141155129 85337485

Current and Non-current Liabilities -8665060 12444048

Cash Generated from operation 106851321 9384317

Income tax paid -7500000 -9355198

Net Cash from Operation Activities 99351321 29119

B) CASH FLOW FROM INVESTMENTS ACTIVITIES

Purchase of Fixed Assets -44441 0

Sale of Fixed Assets 230000 0

Net Cash used in Investing Activities 185559 0

(Amount in `) (Amount in `)Particulars Year Ended Year Ended

31st March, 2013 31st March, 2012

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds/(-) repayment of Borrowings 0 0

Dividend Paid -17988494 -17988494

Tax on dividend -2918183 -2918183

Net Cash used in Financing Activities -20906677 -20906677

Net Increase in Cash & Cash Equivalents A+B+C 78630203 -20877558

Cash and Cash Equivalents 14199376 35076934

(Opening Balance)


(Closing Balance)





8

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS FOR THEYEAR ENDED 31ST MARCH, 20131. SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPRATION OF FINANCIAL STATEMENTS:The Financial Statements are prepared under the Historical Cost Convention methodin accordance with the generally accepted Accounting Principles and the AccountingStandards referred to in Section 211(3C) of the Companies Act, 1956.

1.2 USE OF ESTIMATESThe preparation of financial statements in conformity with generally acceptedaccounting principles (GAAP) requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and thedisclosures of contingent liabilities on the date of financial statements and reportedamounts of revenue and expenses for that year. Actual results could differ fromthese estimates. Any revision to accounting estimates is recognized prospectivelyin current and future periods.

1.3 REVENUE RECOGNITION1.3.1 All Income & Expenditure are accounted for on accrual basis except in case

of uncertainties where accrual is postponed upto resolution of uncernainty.1.3.2 Investments are capitalised at cost inclusive of brokerage, Service Tax,

Education Cess,transfer stamps and Security Transaction Tax.DepositoryCharges and other miscellaneous transaction charges which due to practicaldifficulty cannot be identified/allocated to a particular transaction are chargeddirectly to the Statement of Profit and Loss.

1.4 FIXED ASSETSFixed Assets are stated at cost less depreciation.

1.5 DEPRECIATIONDepreciation is provided on Fixed Assets on Straight Line method at the rates andin the manner specified in Schedule XIV to the Companies Act, 1956.

1.6 INVESTMENTS1.6.1 Non current/Long Term Investments are valued at cost.Provision for

diminution in the value of Long term/Non current Investments is made onlyif such a decline is other than temporary.

1.7 EMPLOYEE BENEFITS1.7.1 Employee Benefits are recognized/accounted for on the basis of revised

AS-15 detailed as under :-1.7.2 Short Term Employee benefits are recognized as expense at the

undiscounted amount in the Profit & Loss account of the year in which theyare incurred.

1.7.3 Employee benefits under defined contribution plans comprise of contribution toProvident Fund and Superannuation. Contributions to Provident Fund are depositedwith appropriate authorities and charged to Profit & Loss account. Contribution toSuperannuation are funded with Life Insurance Corporation of India.

1.7.4 Employee Benefits under defined benefit plans comprise of gratuity andleave encashment which are accounted for as at the year end based onactuarial valuation by following the Projected Unit Credit (PUC) method.Liability for gratuity is funded with Life Insurance Corporation of India.

1.7.5 Termination benefits are recognized as an Expense as and when incurred.1.7.6 The actuarial gains and losses arising during the year are recognized in the

Profit & Loss account of the year without resorting to any amortization.

1.8 TAXATIONTax expenses for the year comprises of Current tax and deferred tax charge orcredit. The deferred Tax Asset and deferred Tax Liability is calculated by applyingtax rates and tax laws that have been enacted or substantially enacted by theBalance Sheet date. Deferred Tax assets arising mainly on account of broughtforward losses and unabsorbed depreciation under tax law are recognised only ifthere is virtual certainty of its realisation. Other deferred tax assets are recognisedonly to the extent there is a reasonable certainty of realisation in future. DeferredTax Assets/Liabilities are reviewed at each balance sheet date based ondevelopment during the year, further future expectations and available case lawsto reassess realisation/ liabilities.

1.9 IMPAIRMENT OF FIXED ASSETSConsideration is given at each balance sheet date to determine whether there isany indication of impairment of the carrying amount of the Company’s Fixed Assets.If any indication exists, an asset’s recoverable amount is estimated. An impairmentloss is recognized whenever the carrying amount of an asset exceeds its recoverableamount. The recoverable amount is the greater of the net selling price and value inuse. In assessing value in use, the estimated future cash flows are discounted totheir present value based on an appropriate discount factor.Reversal of impairment losses recognized in prior years is recorded when there isan indication that the impairment losses recognized for the asset no longer exist orhave decreased. However, the increase in carrying amount of an asset due toreversal of an impairment loss is recognized to the extent it does not exceed thecarrying amount that would have been determined (net of depreciation) had noimpairment loss been recognized for the assets in prior years.

1.10 CONTINGENCIES:The company creates a provision when there is present obligation as result of apast event that probably requires an outflow of resources and a reliable estimatecan be made of the amount of the obligation. A disclosure for a contingent liability ismade when there is a possible obligation or a present obligation that may, butprobably will not, requires an outflow of resources. When there is a possibleobligation or a present obligation in respect of which the likelihood of outflow ofresources is remote, no provision or disclosure is made.

NOTES ON ACCOUNTS FOR THE YEAR ENDED MARCH 31,2013The Previous year figures have been regrouped/reclassified,wherever necessary to conformto the Current Year's presentation.

2. SHARE CAPITAL

As at As atParticulars 31st March, 2013 31st March, 2012

(In `) (In `)

AUTHORIZED2,00,00,000 (2,00,00,000) Equity Shares 200000000 200000000of ` 10/- each.1,00,00,000 (1,00,00,000) Redeemable 100000000 100000000Preference Shares of `10/- each

300000000 300000000

ISSUED1,28,21,630(1,28,21,630) 128216300 128216300Equity Shares of ` 10/- each.

128216300 128216300

SUBSCRIBED & PAID UP1,19,92,329 (1,19,92,329) Equity Shares of 119923290 119923290` 10/- each fully paid up.

119923290 119923290

Add: Forfeited shares- 8,29,301( 8,29,301) 2736299 2736299Equity Shares

(Amount originally paid up) 122659589 122659589

– Issued Share capital of the Company has only one class of shares referred to asequity shares having Par value of ` 10/. Each holder of Equity Shares is entitled toOne vote per share.

– Reconcilation of the number of shares outstanding and Amount of Share Capitalas on 31st March, 2013 & 31st March, 2012 is as under:

As at 31st March, 2013 As at 31st March, 2012Particulars

No. of Shares Amount (`) No. of Shares Amount (`)

Number of shares at the 11992329 119923290 11992329 119923290beginning

Number of shares at the end 11992329 119923290 11992329 119923290

– Particulars of Shares in the company held by each shareholder holding more than5% shares:

As at 31st March, 2013 As at 31st March, 2012Number of shareholder No. of Shares % of No. of Shares % of

Held holding Held holding

Lalit Bhasin 7424304 61.91 6896122 57.50

– In the event of the Liquidation of the company,the holder of equity shares will beentitled to receive any of the remaining assets of the company,after distribution ofall Preferential amounts.The distribution will be in proportion to the number of eq-uity shares held by the shareholders.

3. RESERVES AND SURPLUS


(In `) (In `)

Securities Premium Reserve-opening balance 499736601 499736601Add: Addition during the year 0 0

499736601 499736601

Statutory Reserve -Opening balance * 137829719 131886793Add: Transferred from Surplus 10822622 5942926

148652341 137829719

General Reserve-opening balance 306252875 304252875Less: Transferred from Surplus 4000000 2000000

310252875 306252875

Surplus -opening balance 75929135 75064107Add: Net Profit after tax transferred 54113108 29714631from Statement of Profit & Loss

130042243 104778738Less:Transferred to Statutory Reserve 10822622 5942926Transferred to General Reserve 4000000 2000000Proposed Dividend on Equity shares(Dividend Per Equity Share ` 1.50/-(Previous Year ` 1.50/-) 17988494 17988494Tax on Dividend 3057145 2918183Surplus-Closing balance 94173982 75929135

1052815799 1019748330

(*) Created by way of transfer of specified percentage of profits as per section 45IC ofReserve Bank of India (Amendment) Act,1997.Appropriation from Reserves shallbe for the purposes as may be specified by Reserve Bank of India.


9

8. FIXED ASSETS (Amount In `)

G R O S S B L O C K D E P R E C I A T I O N N E T B L O C K

S. As at Addition Deduction As at As at For the Deduction/ As at As on As atNo. Particulars 01.04.2012 during the during the 31.03.2013 31.03.2012 year Adjustments 31.03.2013 31.03.2013 31.03.2012

year year during the year

Tangible Assets1 Furnitures & Fixtures 21643 0 0 21643 17644 1370 0 19014 2629 39992 Vehicles 2689402 0 1024680 1664722 1419721 176018 674212 921527 743195 12696813 Office Equipment 278276 0 0 278276 188930 13218 0 202148 76128 893464 Data Processing Machine 205362 44441 0 249803 157314 35973 0 193287 56516 48048

Total 3194683 44441 1024680 2214444 1783609 226579 674212 1335976 878468 1411074

(Previous Year) 3194683 0 0 3194683 1480239 303370 0 1783609 1411074 1714444

9. INVESTMENTS

Face Value Balance as at 31st March, 2013 Balance as at 31st March, 2012 Name of the Company

(In `) Qty.(Nos.) Amount (In `) Qty.(Nos.) Amount (In `)

NON CURRENT INVESTMENTS (AT COST) (LONG TERM INVESTMENTS)

A. TRADE INVESTMENTS (QUOTED)INVESTMENT IN EQUITY INSTRUMENTS

– FULLY PAID UP EQUITY SHARESAhluwalia Contracts (I) Ltd 2 0 0 102500 23677542Crompton Greaves Limited 2 111027 467682 111027 467682H S I L Ltd 2 2500 46500 2500 46500IDBI Ltd 10 70000 6208096 70000 6208096The Indian Hotels Ltd 1 100000 5728253 100000 5728253Jai corp Ltd 1 3000 3052216 3000 3052216Jaiprakash Associates Ltd. 2 6046657 202060700 9921657 331551294Jai Prakash power venture Ltd 10 23762 1734175 23762 1734175Jaypee Infratech Ltd 10 355000 14954367 700000 29487483RRB Securities Ltd. 10 100000 10000000 100000 10000000Sumit Securities Ltd 10 2837 689305 2837 689305JSW Steel Ltd 10 8000 4325413 8000 4325413Tata Global Beverages Ltd 10 1000 67814 1000 67814Tata Steel Ltd 2 20000 9700767 20000 9700767Unitech Ltd. 2 0 0 742600 83557959Ultramarine & Pigments Ltd. 2 0 0 50000 960023

TOTAL (A) (TRADE INVESTMENTS) 6843783 259035287 11958883 511254522

B. NON TRADE INVESTMENTS (UNQUOTED)

B.1 INVESTMENT IN EQUITY INSTRUMENTS

– FULLY PAID UP EQUITY SHARES– IN WHOLLY OWNED SUBSIDIARY COMPANIESHB Securities Ltd. 10 7207570 89075700 7207570 89075700HB Corporate Services Ltd. 10 4251070 51010700 4251070 51010700-–IN ASSOCIATE COMPANIESTaurus Investment Trust Co. Ltd. 10 49040 498999 49040 498999


4. LONG TERM PROVISIONS


(In `) (In `)

Provisions For Employees Benefit

Leave encashment 805983 688730

Gratuity (Net) – 404219

Others

Contingent provision against standard Assets 86271 86271

892254 1179220

5. TRADE PAYABLE


(In `) (In `)

Trade payable

(Including due to related 446500 10458522

Parties-Refer Note No.22

446500 10458522

6. OTHER CURRENT LIABILITIES


(In `) (In `)

Unclaimed Dividend * 12571544 10882006Expenses Payable 671636 720285TDS Payable 117533 127402

13360713 11729693

* There is no amount due and outstanding to be transferred to Investor Education &Protection Fund.

7. SHORT TERM PROVISIONS


(In `) (In `)

Provisions For Employees BenefitLeave encashment 19829 16921OthersIncome Tax [Net of advance tax & TDS` 5,08,30,292/-Previous Year ` 4,36,07,382/-] 8869708 1092618Doubtful Debt and Advances 1914251 1914251Proposed Dividend 17988494 17988494Tax on Dividend 3057145 2918183Contingent Provision against Standard Assets 640750 797500

32490177 24727967

10




HB Insurance Advisors Ltd. 10 20010 200100 20010 200100Taurus Asset Management Co. Ltd. 10 6275000 58140000 6275000 58140000Pisces Portfolio Pvt Ltd. 10 3189980 69899800 3189980 69899800- IN OTHER COMPANIESHar Sai Investments Ltd. 10 200000 2000000 200000 2000000Kesoram Textiles Ltd. 10 49699 357071 49699 357071- PARTLY PAID UP EQUITY SHARES- IN ASSOCIATE COMPANYTAURUS ASSET MANAGEMENT CO LIMITED 10 1250000 37500000

TOTAL (B.1) 22492369 308682370 21242369 271182370

B.2 INVESTMENT IN PREFERENCE SHARESFULLY PAID-UP REDEEMABLE PREFERENCE SHAREHB ESTATE DEVELOPERS LTD.(9% NON CUMULATIVE) 100 750000 75000000 0 0

TOTAL (B.2) 750000 75000000 0 0

B.3 INVESTMENT IN MUTUAL FUNDSFULLY PAID UP UNITSTaurus Mutual Fund-Libra Tax Shield-96 10 400000 3836000 400000 3836000SBI Multipliers 10 500 5220 500 5220Taurus Mutual Fund - Bonanza Exclusive Growth Scheme 10 1888673 28546685 1983673 29982579Taurus Mutual fund-Corpus — 200000 — 200000

TOTAL (B.3) 2289173 32587905 2384173 34023799

B.4 PREFERENCE SHARES APPLICATION(OPTIONALLY CONVERTIBLE)Venus Portfolio Pvt Ltd. (9 % Non-Cumulative) 100 1190000 119000000 1190000 119000000

TOTAL (B.4) 1190000 119000000 1190000 119000000

TOTAL (B) (NON TRADE INVESTMENTS) (B.1+B.2+B.3+B.4) 26721542 535270275 24816542 424206169

TOTAL (A+B)-NON CURRENT/LONG TERM INVESTMENTS 33565325 794305562 36775425 935460691

Notes As at As atMarch 31, 2013 March 31, 2012

9.1 Aggregate Amount of Quoted Investments 25,90,35,287/- 51,12,54,522/-9.2 Market Value of Quoted Investments 45,43,93,197/- 93,19,85,722/-9.3 Aggregate Amount of Unquoted Investments 53,52,70,275/- 42,42,06,169/-9.4 Investment Costing ` 78266119/- (Previous Year ` 169257194/-) were lying Pledged/given as Margin as at the year end9.5 In the opinion of the management no provision is required for Diminution amounting to ` 9854719/- (Previous Year ` 83088683/-) in the value of some of the Long term/Non current

investment, as the same is considered to be temperary.9.6 Market Value of Shares listed but not Quoted have been taken at cost.

10. DEFERRED TAX ASSETS


(In `) (In `)

Deferred Tax AssetsLeave Encashment/Gratuity 267935 360097

Deferred Tax Less: LiabilityFixed Assets 3534 63250

264401 296847

11. LONG TERM LOANS AND ADVANCES


(In `) (In `)

(Unsecured, Considered Good)-StandardSecurity Deposits * 34508440 34508440

34508440 34508440

*Includes Deposits given to related Party Refer Note no. 22 .

12. TRADE RECEIVABLES


(In `) (In `)

(Unsecured,Considered Good)a) Outstanding exceeding six months – –b) Others (Due from related Parties-Refer

Note no. 22) 36113388 –

36113388 0

13. CASH & CASH EQUIVALENTSAs at As at

Particulars 31st March, 2013 31st March, 2012(In `) (In `)

Balances with Banks– In Current and Deposit Accounts* 4974107 3053442– In Earmarked Dividend Accounts 12571544 10882006Cheques-on Hand 75000000 0Cash-on-Hand 283928 263928

92829579 14199376*Includes Fixed deposits with Bank with more than12 months maturity ` NIL/- ` 21,00,000/-Fixed deposits are time deposits with Bank which can be withdrawn by the Companyat any point of time without prior notice or penalty on the Principal.

14. SHORT TERM LOANS AND ADVANCESAs at As at


Unsecured,Considered Good,Unless otherwise stated:Loans and Advances to Related 178900000 169500000Parties (Refer Note no. 22)-StandardOthersClaim Recoverable-doubtful 1914251 1914251Other Recoverable* 687973 228600Advance against share application Money-Standard 77400000 30500000

258902224 202142851

* Includes Prepaid Expenses,Imprest for expenses and Claim Recoverable.15. OTHER CURRENT ASSETS


(In `) (In `)

Interest accured but not due on Bank deposits 16285 16718Interest accured but not due on Loans 4846685 2423343Dividend Receivable 0 43981

4862970 2484042

11


16. REVENUE FROM OPERATIONS (Amount in `)

For the For theParticulars Year ended Year ended


Profit on sale of Long term/Non current 64941031 26687010Investments (Net)Interest Income on Loans(Tax deducted at Source ` 10,77,041/- 10770411 15235343(Previous Year ` 15,23,535/-)Dividend on Long term/Non-current 4528769 6321460invesment (Gross)

80240211 48243813

Considering the nature /activities of company,the Income from Investment and Financeactivities are shown Operational Income.

17. OTHER INCOME (Amount in `)



Interest On Fixed Deposits (Tax Deduction 193851 171132at Source ` 19,385/- (Previous year ` 17,113/-)Miscellaneous Income 486408 60766

680259 231898

18. EMPLOYEE BENEFIT EXPENSES (Amount in `)



Salaries and Benefits 6574968 5483331Contribution to Provident fund and other fund 537556 1160984Staff welfare 15354 31173

7127878 6675488

19. OTHER EXPENSES (Amount in `)



Rent/Facility Charges 967692 949944Vehicle Running and Maintenance 304164 238864Insurance 14337 32665Travelling & Conveyance 195141 193589Communication 747636 701457Printing & Stationery 411249 460373Legal & Professional 443126 528081Loss on sale of fixed asset 120468 0Listing Fee 44944 44120Advertisement 80960 177802Director Sitting fees 485216 402000Depository and Custodial 78032 106303Miscellaneous 381241 162872Auditors Remuneration– Audit Fees 112360 112360– Tax Audit Fees 16854 16854– Income Tax Matters 117608 15000– Certification and others 56180 303002 62630 206844

4577209 4204914

20. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

Contingent Liabilities(a) Guarantees given on behalf of Subsidiary Company HB Securities Limited

` 15,00,00,000/- (Previous Year ` 15,00,00,000/-)(b) Income Tax demand ` Nil/-(Previous year ̀ 36,23,154/-) against which the company

has preferred appeal before the appropriate authorities.

Commitments(a) ` 1,25,00,000 (Previous Year ` Nil) on Account of Uncalled Money in Respect of

Partly Paid up shares.

21 QUANTITATIVE DETAILSQuantitative information in respect of Investments in securities:’

NON CURRENT/LONG TERM INVESTMENTSEQUITY INSTRUMENTS

Particulars Current Year Previous Year

Qty. (Nos.) Amount (`) Qty. (Nos.) Amount (`)

Opening Balance 33201252 782436892 34081752 817018643Purchases/conversions 1250000 37500000 896500 59450272/SubscriptionSales/conversions 5115100 314762021 1777000 118210908

Closing Balance 29336152 567717657 33201252 782436892

PREFERENCE SHARES




Closing Balance 1940000 194000000 1190000 119000000

MUTUAL FUNDS




Closing Balance 22839173 32587905 2384173 34023799

22. RELATED PARTY TRANSACTIONS

22.1 List of related parties with whom transactions have taken place and relationship:a) Subsidiaries.

1. HB Securities Limited2. HB Corporate Services Limited

b) Key Managerial Personnel1 Shri Anil Goyal, Managing Director

c) Person having control/significant influence /major shareholders1. Shri Lalit Bhasin

d) Enterprises over which control/significant influence exist of the relatives ofpersons mentioned in(c ) above :-1 RRB Master Securities Delhi Ltd.

e) Companies under direct or indirect common control/significant influence:1. HB Stockholdings Ltd.2. HB Estate Developers Ltd.3. RRB Master Holdings Ltd.4. RRB Securities Ltd.

f) Associates1. Merwanjee Securities Ltd.2. Taurus Asset Management Co. Ltd.

22.2 Transactions during the financial year ended 31.03.2013 with related Parties are as under:-

Sr. Nature of Transaction Related Party Related Party Related Party Related Party Related Party Related PartyNo. Referred Referred Referred referred referred referred

in 1(a) above in 1(b) above in 1(c) above in 1(d) above in 1(e) above in 1(f) above

1 Purchase of Investments through them Nil Nil Nil Nil Nil Nil(Nil) (Nil) (Nil) (59450272) (Nil) (Nil)

2 Sale of Investment through them Nil Nil Nil 309439337 Nil 5322685(Nil) (Nil) (Nil) (113823872) (Nil) (4387036)

3 Depository Charges Paid 36009 Nil Nil Nil Nil Nil(12717) (Nil) (Nil) (Nil) (Nil) (Nil)

4 Loans / Advances / Margin Given 13000000 Nil Nil 20000000 Nil Nil(139500000) (Nil) (Nil) (Nil) (Nil) (Nil)

5 Loan / Advance / margin Received / recovered 21850000 Nil Nil 1750000 Nil Nil(70000000) (Nil) (Nil) (Nil) (90000000) (Nil)

6 Reimbursement of expenses 15918 Nil Nil Nil Nil Nil(24215) (Nil) (Nil) (Nil) (Nil) (Nil)

12


Sr. Nature of Transaction Related Party Related Party Related Party Related Party Related Party Related PartyNo. Referred Referred Referred referred referred referred

in 1(a) above in 1(b) above in 1(c) above in 1(d) above in 1(e) above in 1(f) above

7 Remuneration and other services Nil 5122000 Nil Nil Nil Nil(Nil) (4616614) (Nil) (Nil) (Nil) (Nil)

8 Payment against current liabilities and Provisions Nil Nil Nil 10012022 Nil Nil(Nil) (Nil) (Nil) (Nil) (Nil) (Nil)

9 Sitting Fee Nil Nil 60000 Nil Nil Nil(Nil) (Nil) (50000) (Nil) (Nil) (Nil)

10 Dividend paid Nil Nil 10344183 Nil 201240 Nil(Nil) (Nil) (10344185) (Nil) (201240) (Nil)

11 Interest Income on loan Nil Nil Nil Nil 10770411 Nil(Nil) (Nil) (Nil) (Nil) (15235343) (Nil)

12 Rent Paid Nil Nil Nil Nil 967692 Nil(Nil) (Nil) (Nil) (Nil) (949944) (Nil)

13 Investment made Nil Nil Nil Nil 75000000 57500000(Nil) (Nil) (Nil) (Nil) (Nil) (Nil)

14 Investment Reedeemed Nil Nil Nil Nil Nil 20000000(Nil) (Nil) (Nil) (Nil) (Nil) (Nil)

15 Outstanding as on 31.03.2013– Receivable in respect of Expenses recoverable 76268 Nil Nil Nil Nil Nil

(60350) (Nil) (Nil) (Nil) (Nil) (Nil)

– In respect of Security Deposit Paid for Premises on Rent Nil Nil Nil Nil 34500000 Nil(Nil) (Nil) (Nil) (Nil) (34500000) (Nil)

– Receivables in respect of Loan, advances 60650000 Nil Nil 18250000 94846685 10000000 and Interest receivable (69500000) (Nil) (Nil) (Nil) (92423343) (10000000)

– Trade Receivables Nil Nil Nil 36113388 Nil Nil(Nil) (Nil) (Nil) (Nil) (Nil) (Nil)

– Guaranties given 150000000 Nil Nil Nil Nil Nil(150000000) (Nil) (Nil) (Nil) (Nil) (Nil)

– Trade payables Nil Nil Nil Nil Nil Nil(Nil) (Nil) (Nil) (10012022) (Nil) (Nil)

Note : Figures in brackets related to previous year.

22.3 Disclosure in respect of outstanding closing balance of related party transactions.i) Trade payable includes ` Nil (Previous year 1,00,12,022/-) to RRB Master Securities (Delhi) Ltd.ii) Security Deposit given includes ` 3,45,00,000/- (Previous year ` 3,45,00,000/- ) to HB Estate Developers Ltd.iii) Loan and advances includes loan of ` 9,00,00,000/- (Previous year ` 9,00,00,000/-) to HB Estate Developers Ltd,Margin Money of ` 1,82,50,000 (Previous Year ` Nil) to RRB

Master Securities (Delhi) Ltd. and advances against Share Application Money of ` 4,06,50,000/- (Previous year ` 4,95,00,000/- ) to HB Securities Ltd.; ` 2,00,00,000/- (Previousyear ` 2,00,00,000/-) to HB Corporate Services Ltd. and `1,00,00,000/- (Previous year ` 1,00,00,000/-) to Merwanjee Securities Ltd.

iv) Expenses recoverable includes ` 76,268/- (Previous year ` 60,350/-/) from HB Corporate Services Ltd.v) Interest receivable includes ` 48,46,685/- (Previous year ` 24,23,343/--) from HB Estate Developers Ltd.vi) Guarantee given in respect of HB Securities Ltd. ` 15,00,00,000/- (Previous year ` 15,00,00,000/- )vii) Trade Receivables includes ` 3,61,13,388/- (Previous Year ` Nil/-) due from RRB Master securities (Delhi) Ltd.

23 SEGMENT REPORTINGIn the opinion of Management there are no separate reportable segments as per Accounting Standard Segment reporting (AS-17).

24. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD - 15

Defined Contribution PlanAmount recognized as expense for defined contribution plans are as under: -

Particulars Current Year Previous Year Head under which shownin the Profit & Loss account

Contribution to 4,95,476/- 4,09,225/- Contribution to Provident fundProvident Fund and other fund.

Contribution to 1,00,000/- 1,00,000/- Contribution to Provident fundsuperannuation fund and other fund.

Defined Benefit PlanMovement in net liability

Gratuity Leave EncashmentParticulars (Funded) (Unfunded)

Current Previous Current PreviousYear Year Year Year

Present value of obligations 31,95,822/- 23,10,816/- 7,05,651/- 7,10,556/-as at beginning of the year (A)

Interest Cost (B) 2,55,666/- 1,84,865-/ 58,057/- 62,174/-

Current service cost (C) 1,54,730/- 1,18,775/- 37,475/- 36,341/-

Benefits paid (D) Nil Nil (2,16,667/-) (1,66,667/-)

Actuarial loss/ (gain) on (1,79,542/-) 5,81,336/- 2,41,296/- 63,247/-obligation (E)

Present value of obligations 34,26,676/- 31,95,822/- 8,25,812/- 7,05,651/-as at the end of the year(F=A+B+C-D+E)

The amounts recognized in the Balance Sheet and Profit & Loss Account are as follows :

Gratuity LeaveParticulars (Funded) (Unfunded)


Present value of obligation (A) 34,26,676/- 31,95,822/- 8,25,812/- 7,05,651/-

Estimated fair value of plan 38,72,302/- 27,91,603/- 0.00 0.00assets (B)

Net Liability/(Asset) (C=A-B) (4,45,626/-) 4,04,219/- 8,25,812/- 7,05,651/-

Amounts in theBalance Sheet

Liabilities/(Asset) (4,45,626/-) 4,04,219/- 8,25,812/- 7,05,651/-

Amount charged to Profit& Loss Account

Current Service Cost 1,54,730/- 1,18,775/- 37,475/- 36,341/-

Interest Cost 2,55,666/- 1,84,865-/ 58,057/- 62,174/-

Expected Return on (2,88,774/-) (2,33,247/-) 0.00 0.00Plan Asset

Actuarial(Gain)/Loss 1,79,542/- 5,81,366/- 2,41,296/- 63,247/-

(57,920/-) 6,51,759/- 3,36,828/- 1,61,762/-

Head under which shown in Contribution to Provident Salaries & benefitsthe Profit & Loss account Fund and other Fund

13


The Actual Return on Plan Assets is as follows:

Gratuity

Particulars Current PreviousYear Year

Actual return on plan assets 2,88,774/- 2,33,247/-

Following are the Principal Actuarial Assumptions used as at the balance sheet date

Gratuity


Discount Rate 8% 8%

Expected Rate of Return on Plan Assets 9% 9%

Salary Escalation Rate 6% 6%

A reconciliation of the opening and closing balances of the fair value of plan assets:

Sl. Gratuity

No. Particulars Current PreviousYear Year

Opening Fair Value of Plan Assets 27,91,603/- 25,48,356/-

i) Expected Return on Plan Assets 2,88,774/- 2,33,247/-

ii) Actuarial Gains / (Losses) Nil Nil

iii) Contribution by the Employer 7,91,925/- 10,000/-

iv) Benefits Paid Nil Nil

Closing Fair Value of Plan Assets 38,72,302/- 27,91,603/-

25 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD AS-19 FOR LEASES:-Operating Leasea) Particulars of the minimum lease payments under Operating Lease:-

Not Later than One year ` 9,67,692/- (Previous Year ` 9,49,944/-)Later than one year but not ` NIL (Previous Year ` NIL)Later than five yearsLater than five years ` NIL (Previous Year ` NIL)

b) Minimum lease payments recognised in the statement of profit & loss account duringthe year ended 31st March 2013 is ` 9,67,692/- (Previous Year ` 9,49,944/-).

c) General description of the lease arrangement.– The Lessee shall not sublet or otherwise part with possession of a part or whole of

the premise without the previous consent in writing of the lessor.– The lessee shall use the premises for commercial purposes only.

26 Due to Micro,Small and Medium EnterprisesTo the extent information available with the company,it has no dues to the Micro,Smalland medium enterprises as at 31st March, 2013 and 31st March, 2012.

27 Disclosure of Loans/Advances in the nature of loans in terms of provision ofclause 32 of Listing Agreement with Stock Exchanges- (Amount in `)

S. Particulars Outstanding Max. Balance Outstanding Max. BalanceNo. Balance outstanding Balance outstanding

as on during as on during the31.03.2013 the year 31.03.2012 previous year

i. Loans & Advances Nil Nil Nil Nilin the nature of Loansto subsidiaries.

ii. Loans & Advances in Nil Nil Nil Nilthe nature of loans toAssociates.

iii. Loans & Advances in Nil Nil Nil Nilthe nature of loanswhere there is norepayment schedule,no interest or interestbelow Section 372A ofthe Companies Act,1956

iv. Loans & Advances inthe nature of loans tofirms/companies inwhich directors areinterested.*

HB Estate 9,48,46,685/- 9,48,99,946/- 9,24,23,343/- 9,48,73,316/-Developers Ltd.

HB Stockholdings Ltd. Nil Nil Nil 9,25,96,439/-

* Loan given at Marketrate of Interest.The balance shown isinclusive of interestreceivable.

S. Particulars Outstanding Max. Balance Outstanding Max. BalanceNo. Balance outstanding Balance outstanding

as on during as on during the31.03.2013 the year 31.03.2012 previous year

v. Investments by Loanee No. of Shares Amount No. of Shares Amountin the Shares of parentcompany and subsidiarycompany when thecompany has madeloan or advance inthe nature of Loan. Nil Nil Nil Nil

28 Earning per share pursuant to Accounting Standard (AS-20) “Earning Per Share”

Particulars Current Year Previous Year(in `) (in `)

Net Profit as Per Statement of Profit and Lossattributable to Equity Shareholders. 54113108 29714631

Earning Per Share (face value of ` 10 each)

Weighted Average Nos. of Equity Share 1,19,92,329 1,19,92,329Outstanding

Basic and diluted Earning per share (`) 4.51 2.48

29 Dividend paid to Non-Resident Shareholders:-The Company has not remitted any dividend in foreign currency and does not haveinformation as to the extent to which remirrance,if any,in foreing currency on account ofdividends have been made by/on behalf of non-resident shareholders. The Particularsof dividend Paid to non-resident shareholders are as under:-

S. Particulars Current PreviousNo. Year Year

a No. of Non-resident shareholders 611 626

b No. of Equity Shares held by them 83386 86993

c i) Amount of Dividend Paid (Gross) (in `) 1,25,079/- 1,30,490/-

ii) Tax deduction at source — —

iii) Year to which dividend relates 2011-12 2010-11

30 The company made an application for issue of Certificate of Registration with ReserveBank of India (RBI) under Section 45IA of the Reserve Bank of India Act, 1934. Theapplication of the company was, however, returned by RBI vide its letter dated December24, 2004 with an advice to resubmit the application on the completion of SEBI's enquiryagainst the group companies. In an Appeal filed by the company before the AppellateAuthority (in the Ministry of Finance) against the aforesaid decision of RBI, the AppellateAuthority vide its Order dated September 25, 2006, directed the company to resubmitthe application along with the latest balance sheets and other relevant details within 30days to RBI and RBI to thereafter decide the case by obtaining necessary responsefrom SEBI within 3 months from the date of receipt of the Order. The company resubmittedits application to RBI’s Regional Office at New Delhi on 23rd October 2006 as per theaforesaid directions of the Appellate Authority. Additional details / documents /clarifications as required by RBI from time to time were submitted.The company vide its letters dated 11th October, 2010 and 29th January, 2011 intimatedthe RBI about the disposal of pending proceeding by the SEBI and also furnished copyof SEBI orders. The RBI vide its letter dated 29th March , 2011 advised the company tomake a fresh application for issue of Certificate of Registration. As directed by RBI, thecompany filed a fresh application on 20th June 2011.The necessary queries/informationraised/sought by RBI from time to time were filed.The Company has now been advised by RBI to resubmit application with updated dataand in accordance with Circular No. RBI/2012-13/319 DNBS.CC.PD.NO. 312/03.10.01/2012-13 dated December 7,2012. As advised by RBI,the company is in process ofupdating the data and resubmitting the same.

30.1 In view of the above facts, the provisions of Non-Banking Financial (Non-DepositAccepting or Holding) Companies Prudential Norms (Reserve Bank) Directors, 2007)are yet to be applicable to the company. However, as a matter of prudent and properpractice, disclosure of details as required by Para 13 of aforesaid directions is beinggiven. Similarly the transfer of profit to Reserve Fund as required by Reserve Bank ofIndia (Amendment) Act, 1997 is also being made.

31 Schedule as required in terms of Paragraph 13 of Non-Banking Financial (Non-DepositAccepting or Holding) Companies Prudential Norms (Reserve Bank) Directions,2007

14


(` in lakhs)

Particulars

LIABILITIES SIDE :(1) Loans and advances availed by the NBFCs Amount Amount

inclusive of interest accrued thereon but not paid: outstanding overdue

(a) Debentures : Secured Nil Nil(Nil) (Nil)

: Unsecured Nil Nil(Nil) (Nil)

(other than falling within the meaning of public deposits)(b) Deferred Credits Nil Nil

(Nil) (Nil)(c) Term Loans Nil Nil

(Nil) (Nil)(d) Inter-corporate loans and borrowing Nil Nil

(Nil) (Nil)(e) Commercial Paper Nil Nil

(Nil) (Nil)(f) Public Deposits Nil Nil

(Nil) (Nil)(g) Other Loans (Vehicle Loan) Nil Nil

(Nil) (Nil)(2) Break-up of (1)(f) above (Outstanding public

deposits inclusive of interest accruedthereon but not paid):a) In the form of Unsecured debentures Nil Nil

(Nil) (Nil)b) In the form of partly secured debentures i.e. debentures

where there is a shortfall in the value of security Nil Nil(Nil) (Nil)

c) Other public deposits Nil Nil(Nil) (Nil)

ASSETS SIDE :(3) Break-up of Loans and Advances including bills Amount outstanding*

receivables [other than those included in (4) below] :(a) Secured Nil

(Nil)(b) Unsecured 3318.00

(2369.00)*Net of Provisions Other than on Standard Assets; Also includes Security deposits,trade receivables and other advances not strictly credit exposure.

(4) Break up of Leased Assets and stock on hire andhypothecation loans counting towards EL/HP activities

(i) Lease assets including lease rentals under sundry debtors :(a) Financial lease Nil

(Nil)

(b) Operating lease Nil(Nil)

(ii) Stock on hire including hire charges under sundry debtors:(a) Assets on hire Nil

(Nil)(b) Repossessed Assets Nil

(Nil)

(iii) Hypothecation loans counting towards EL/HP activities(a) Loans where assets have been repossessed Nil

(Nil)(b) Loans other than (a) above Nil

(Nil)(5) Break-up of Investments :

Current Investments1. Quoted :

(i) Shares : (a) Equity Nil(Nil)

(b) Preference Nil(Nil)

(ii) Debentures and Bonds Nil(Nil)

(iii) Units of mutual funds Nil(Nil)

(iv) Government Securities Nil(Nil)

(v) Others (please specify) Nil(Nil)

Unquoted :(i) Shares : (a) Equity Nil

(Nil)(b) Preference Nil

(Nil)(ii) Debentures and Bonds Nil

(Nil)(iii) Units of mutual funds Nil

(Nil)(iv) Government Securities Nil

(Nil)(v) Others (please specify) Nil

(Nil)

Long Term investments1. Quoted :

(i) Shares : (a) Equity 2590.35(5112.55)

(b) Preference Nil(Nil)

(ii) Debentures and Bonds Nil(Nil)

(iii) Units of mutual funds Nil(Nil)

(iv) Government Securities Nil(Nil)

(v) Others (please specify) Nil(Nil)

2. Unquoted :(i) Shares : (a) Equity 3086.82

(2711.82)(b) Preference 750.00

(Nil)(ii) Debentures and Bonds Nil

(Nil)(iii) Units of mutual funds 325.87

(340.24)(iv) Government Securities Nil

(Nil)(v) Others (please specify) 1190.00

(1190.00)

(6) Borrower group-wise classification of all leased assets, stock-on-hire and loansand advances :

Amount net of provisionsCategory ---------------------------------------------------------------------------------------------

Secured Unsecured Total

1. Related Parties(a) Subsidiaries — 607.00 607.00

(—) (695.00) (695.00)(b) Companies in the same group — 1837.00 1837.00

(—) (1269.00) (1269.00)(c) Other related parties — 100.00 100.00

(—) (100.00) (100.00)2. Other than related parties — 774.00 774.00

(—) (305.00) (305.00)

Total — 3318.00 3318.00(—) (2369.00) (2369.00)

(7) Investor group-wise classification of all investments (current and long term) inshares and securities (both quoted and unquoted):*

Market Value / Break up or Book Value (Net ofCategory

fair value or NAV(*) Provisions)

1. Related Parties

(a) Subsidiaries 1311.21 1400.86(1321.18) (1400.86)

(b) Companies in the same group 780.00 850.00(100.00) (100.00)

(c) Other related parties 2581.50 1662.39(2866.44) (1287.39)

2. Other than related parties 6554.37 4029.8(11330.96) (5376.36)

--------------------------- ---------------------------Total 11227.08 7943.05

(15618.58) (9354.61)======================== ========================

(8) Other information

Particulars ` in Amount

(i) Gross Non-Performing Assets —(—)

(a) Related parties —(—)

(b) Other than related parties —(—)

(ii) Net Non-Performing Assets —(—)

(a) Related parties —(—)

(b) Other than related parties —(—)

(iii) Assets acquired in satisfaction of debt —l(—)

15





STATEMENT PURSUANT TO SECTION 212(8) OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES (Amount in `)

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2013

Name of the Share Capital Reserves Equity & Assets Investments Turnover Profit Tax Profit after ProposedSubsidiary & Surplus Liabilities before Expenses Taxation DividendCompany Taxation

HB Corporate 42510700 8147967 70763850 70763850 Nil Nil -18918 Nil -18918 NilServices Limited (4210700) (8166885) (70766850) (70766850) (Nil) (Nil) (-24318) (Nil) (-24318) (Nil)

HB Securities 92075700 8387507 208321052 208321052 14508867 4479429 -980650 -3345 -977305 NilLimited (92075700) (9364812) (228572557) (228572557) (15221367) (3429634) (-3336575) (85811) (-3422386) (Nil)

* The figures in bracket relates to the previous year.


retail space, multipurpose commercialpremises, multi-family residential buildings,multi-tenanted commercial premises,industrial or warehouse space, hotels,land acquisition, development andconstruction, etc.). Exposure would alsoinclude non-fund based (NFB) limits;

(iii) Investments in Mortgage Backed —Securities (MBS) and other (—)securitised exposures -*a. Residential, —

(—)b. Commercial Real Estate. —

(—)

b) Indirect Exposure —(—)

Fund based and non-fund based exposures —on National Housing Bank (NHB) and Housing (—)Finance Companies (HFCs).

* The company has made certain investments in equity shares of the companies which are inthe real estate sector. The same are reflected in the Balance Sheet. However, since theseinvestments are not Mortgage backed securities / other securitized exposures, the same arenot mentioned here.

Additional Disclosure as per Para 10 of aforesaid Directions

1. CRAR

Items %

i) CRAR (%) 100.50(92.44)

ii) CRAR - Tier I capital (%) 100.9(92.34)

iii) CRAR - Tier II Capital (%) 0.11(0.10)

2. ExposuresExposure to Real Estate Sector

Category Amount ` in Lacsa) Direct Exposure —

(—)

(i) Residential Mortgages - —(—)

Lending fully secured by mortgages on —residential property that is or will be occupied (—)by the borrower or that is rented;(Individual housing loans up toRs.15 lakh may be shown separately)

(ii) Commercial Real Estate - —(—)

Lending secured by mortgages on —commercial real estates (office buildings, (—)

3. Asset Liability Management

Maturity pattern of certain items of assets and liabilities (` In lacs)

1 day to Over one Over 2 Over 3 Over 6 Over 1 year Over 3 years Over 5 years Total30/31 days month to months upto months upto months upto to 3 years to 5 years

(one month) 2 months 3 months 6 months 1year

Liabilities

Borrowings from banks — — — — — — — — —(—) (—) (—) (—) (—) (—) (—) (—) (—)

Market Borrowings — — — — — — — — —(—) (—) (—) (—) (—) (—) (—) (—) (—)

Assets

Advances/Drs 410.00 – – – 2563.00 345.00 – – 3318.00(24.00) (–) (–) (–) (2000.00) (345.00) (–) (–) (2369.00)

Investments – – – – – – – 7943.05 7943.05(–) (–) (–) (–) (–) (–) (–) (9354.60) (9354.60)

Note: Figure in Bracket related to Previous Year.

16

AUDITORS’ REPORTTo,The Board of Directors,HB PORTFOLIO LIMITED1. Report on the Consolidated Financial Statements.We have audited the accompanying consolidated financial statements of HB PORTFOLIO LIMITED("the Company") and its subsidiaries, which comprise the Consolidated Balance Sheet as at March31, 2013, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statementfor the year then ended, and a summary of significant accounting policies and other explanatoryinformation.2. Management's Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation of these Consolidated financial statements thatgive a true and fair view of the consolidated financial position, consolidated financial performanceand consolidated cash flows of the Company in accordance with the accounting Principles generallyaccepted in India including Accounting Standards referred to in sub-section (3C) of section 211 ofthe Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation andmaintenance of internal control relevant to the preparation and presentation of the consolidatedfinancial statements that give a true and fair view and are free from material misstatement, whetherdue to fraud or error.3. Auditor's ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based onour audit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the consolidated financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considersinternal control relevant to the Company's preparation and fair presentation of the consolidatedfinancial statements in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of the accounting estimates made by management, as well as evaluating theoverall presentation of the consolidated financial statements. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion.4. OpinionIn our opinion and to the best of our information and according to the explanations given to us, theconsolidated financial statements give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

a) In the case of Consolidated Balance Sheet, of the consolidated state of affairs of theCompany as at 31st March, 2013 and

b) In the case of Consolidated Statement of Profit & Loss, of the consolidated loss of theCompany for the year ended on that date and

c) In the case of Consolidated Cash Flow Statement, of the Consolidated Cash Flow of theCompany for the year ended on that date.

5. Other mattersWe did not audit the financial statements of subsidiaries which reflect total assets (Net) of `279084902/- as at March 2013, total revenue of Rs.4479429/- and net cash flows amounting to `59146915/- for the year then ended which have been audited by other Auditors whose report havebeen furnished to us, and our opinion, in so far as it relates to the amounts included in respect of thesubsidiaries is based solely on the report of the other auditors.The financial statements of four associates companies are unaudited and our opinion in so far as itrelates to the amounts included in respect of these four associates companies is based solely onthe management certified financial statements. The financial statement of one associate companyis available for year ended 31.03.2012 and these financial statements have been audited by otherauditor and our opinion,in so far it relates to amount included in respect of this associate is basedsolely on their reports. (also refer note no.23).

For P. BHOLUSARIA & CO.CHARTERED ACCOUNTANTS

FRN : 000468N

Place : Gurgaon AMIT GOELDate : 25th May, 2013 Partner

(M. No. 92648)

HB PORTFOLIO LIMITED (Consolidated Accounts)

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2013As at As at

Particulars Note(s) 31st March, 2013 31st March, 2012(In `) (In `)

EQUITY AND LIABILITIESShareholders’ FundsShare Capital 2 142659589 142659589Reserves and Surplus 3 1142499504 1175841090

--------------------------------------- ---------------------------------------1285159093 1318500679

Non-Current LiabilitiesLong Term Provisions 4 987514 1123614

--------------------------------------- ---------------------------------------987514 1123614

Current LiabilitiesShort term borrowings 5 60633324 60459512Trade Payable 6 446500 10458522Other Current Liabilities 7 19871422 28777754Short Term Provisions 8 30130919 23637713

--------------------------------------- ---------------------------------------111082165 123333501

--------------------------------------- ---------------------------------------1397228772 1442957794

=========================== =============================ASSETSNon-Current AssetsFixed Assets

Tangible assets 9 3349551 4104004Non-current investments 10 767376263 974656725Deferred Tax Assets(Net) 11 193369 222470Long term loans and advances 12 58255940 63255940

--------------------------------------- ---------------------------------------829175123 1042239139

Current AssetsInventories 13 13411 13411Trade Receivables 14 36114501 998Cash and Cash equivalents 15 178272218 40495100Short-Term Loans and Advances 16 348291831 357233057Other Current Asssets 17 5361688 2976089

--------------------------------------- ---------------------------------------568053649 400718655

--------------------------------------- ---------------------------------------1397228772 1442957794

=========================== =============================SIGNIFICANT ACCOUNTINGPOLICIES AND NOTESON ACCOUNTS 1 to 31





CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2013

Year Ended Year EndedParticulars Note(s) 31st March, 2013 31st March, 2012

(In `) (In `)

Revenue from operations 18 82299833 49245242Other Income 19 3064057 2647386

--------------------------------------- ---------------------------------------Total Revenue 85363890 51892628

--------------------------------------- ---------------------------------------

Expenses:

Employee Benefit Expense 20 8542829 9830782

Depreciation 9 716341 784301

Other Expenses 21 8115483 7346499

Contingent Provision

against Standard Asssets -156750 333310--------------------------------------- ---------------------------------------

Total Expenses 17217903 18294892--------------------------------------- ---------------------------------------

--------------------------------------- ---------------------------------------Profit/-Loss for the year before Tax 68145987 33597736

--------------------------------------- ---------------------------------------

Tax expense:Current tax 15000000 7500000Deferred Tax charge/(credit) 29101 -179707Tax adjustments for earlier years 0 9517

--------------------------------------- ---------------------------------------Profit/-Loss for the year after Taxation 53116886 26267926

--------------------------------------- ---------------------------------------Add: Share of Profit/-Loss in Associates -65412833 -108915203

--------------------------------------- ---------------------------------------

Profit/-Loss for the year -12295947 -82647277

Earning per equity share: 29

Equity share of Par value ` 10/-eachBasic and Diluted -1.13 -6.99

SIGNIFICANT ACCOUNTINGPOLICIES AND NOTESON ACCOUNTS 1 to 31

As per our Report of even dateFor P. BHOLUSARIA & CO. For and on behalf of the BoardChartered AccountantsFRN : 000468N



17

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013(Amount in `) (Amount in `)

Particulars Year Ended Year Ended31st March, 2013 31st March, 2012

A) CASH FLOW FROM OPERATION ACTIVITIES

Net Profit before tax and Extraordinary Items 2704053 33597736

Adjustment for :

Depreciation 716341 784301

Loss on sale of fixed assets 120468 0

Contingent Provision against Standard Assets -156750 333310

Operating Profit before Working Capital Changes 3384112 34715347

Adjustment for :

Loans and advances and other Receivables -25521027 -184045779

Investments 207280462 85337485

Current and Non-current Liabilities -19051208 13498365

Cash Generated from operation 166092339 -50494582

Income tax paid -7500000 -9364715

Net Cash from Operation Activities 158592339 -59859297

B) CASH FLOW FROM INVESTMENTS ACTIVITIES

Purchase of Fixed Assets -312356 -15000

Sale of fixed assets 230000 0

Net Cash used in Investing Activities -82356 -15000

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds/(-) repayment of Borrowings 173812 15316269

Dividend Paid -17988494 -17988494

Tax on dividend -2918183 -2918183

Net Cash used in Financing Activities -20732865 -5590408

Net Increase in Cash & Cash Equivalents A+B+C 137777118 -65464705


(Opening Balance)


(Closing Balance)

Components of cash and cash equivalents at the end of the year

Cash in Hand 475241 455241

Cheques in Hand 75000000 0

Balances with scheduled Banks:

-In current and deposit accounts 78184477 15427359

153659718 15882600






18


SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON CONSOLIDATED FINANCIALSTATEMENTS FOR THE YEAR ENDED 31ST MARCH, 20131. SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS

1.1 PRINCIPLES OF CONSOLIDATIONThe consolidated Financial Statements relate to HB Portfolio Ltd. (the company)and its subsidiary companies HB Securities Ltd. and HB Corporate Services Ltd.The consolidated financial statements have been prepared in accordance withAccounting Standard (AS-21) “Consolidated Financial Statements” on the followingbasis:a) The Financial statements of the Company and the subsidiary companies have

been combined on a line by line basis by adding together the book values oflike items of assets, liabilities, income and expenses, after fully eliminatingintra-group balances and intra-group transactions resulting in unrealised profitor losses.

b) As far as possible, the consolidated financial statements have been preparedusing uniform accounting policies for like transactions and other events in thesimilar circumstances and are presented to, in the same manner as thecompany’s separate financial statements.

c) In the case of associates, where the company directly or indirectly throughsubsidiaries holds more than 20% of the equity (except where significantinfluence does not exist), Investments in Associates are accounted for usingequity method in accordance with the Accounting Standard (AS)-23 “Accountingfor Investments in Associates in Consolidated Financial Statements”.

d) The company accounts for its shares in the change in net assets of theassociates, post acquisition after eliminating unrealized profit & loss resultingfrom transaction between the company and its associates to the extent of itsshare, through its profit & loss account to the extent such change in attributableto the associate’s profit and loss account and through its reserves for thebalance, based on available information.

1.2 INVESTMENTSInvestments other than in associates have been accounted as per AccountingStandard (AS)-13 “Accounting for Investment”

1.3 OTHER SIGNIFICANT ACCOUNTING POLICIESThese are set out under “Significant Accounting Policies” as given in the FinancialStatements of HB Portfolio Ltd. Ltd. and its subsidiaries HB Securities Ltd. and HBCorporate Services Ltd.

NOTES ON CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH31, 2013The Previous year figures have been regrouped/reclassified,wherever necessary to conformto the Current Year's presentation

2. SHARE CAPITAL


(In `) (In `)

AUTHORIZED2,00,00,000 (2,00,00,000) Equity Shares 200000000 200000000of ` 10/- each.

1,00,00,000 (1,00,00,000) Redeemable 100000000 100000000Preference Shares of ` 10/- each

40,000(40,000) Redeemable 6% Cumulative 40000000 40000000Preference Shares of ` 1000/-each

340000000 340000000

ISSUED1,28,21,630(1,28,21,630) Equity Shares 128216300 128216300of ` 10/- each fully paid up.

20,000(20,000) Redeemable 6% 20000000 20000000Cumulative Preference Shares of` 1000/-each fully paid up

148216300 148216300

SUBSCRIBED & PAID UP1,19,92,329 (1,19,92,329) Equity Shares 119923290 119923290of ` 10/- each fully paid up.

119923290 119923290Add: Forfeited shares- 8,29,301 2736299 2736299(8,29,301) Equity Shares(Amount originally paid up)20,000(20,000) Redeemable 6% 20000000 20000000Cumulative Preference Shares of` 1000/-each fully paid up

142659589 142659589

– Issued Share capital has two classes of shares referred to as equity shares andPreference Shares having Par value of ` 10/- and ̀ 1000/- respectively. Each holderof Equity Shares is entitled to One vote per share.

– Preference Shares are of par value of ` 1000/- each and have a preference ofDividend (cumulative) of 6%. The Shares were allotted in financial year 2007-08 on13.12.2007 for a term of 7 years which were redeemable at par in 3 annualinstallment of Rs.330/-, Rs.330/- and Rs.340/- per share at the expiry of 5th, 6thand 7th year respectively from the date of allotment. The above redemption hasbeen extended to 12th, 13th and 14th year from the date of allottment. Thus `

6600000/-, ` 6600000/- and ` 6800000/- would be redeemable in FY 2019-20, FY2020-21 and FY 2021-22 respectively.

– Reconcilation of the number of shares outstanding and Amount of Share Capitalas on 31st March, 2013 & 31st March, 2012 is as under:

Equity Shares:

As at 31st March, 2013 As at 31st March, 2012ParticularsNo. of Shares Amount (`) No. of Shares Amount (`)

Number of shares at the 11992329 119923290 11992329 119923290beginningNumber of shares at the end 11992329 119923290 11992329 119923290

Preference Shares:

As at 31st March, 2013 As at 31st March, 2012ParticularsNo. of Shares Amount (`) No. of Shares Amount (`)

Number of shares at the 20000 20000000 20000 20000000beginningNumber of shares at the end 20000 20000000 20000 20000000

– Particulars of Shares in the company held by each shareholder holding more than5% shares:

As at 31st March, 2013 As at 31st March, 2012Number of shareholder No. of Shares % of No. of Shares % of

Held holding Held holding

Equity Shares:

Lalit Bhasin 7424304 61.91 6896122 57.50

Preference Shares:

HB StockHolding Limited 10000 50.00 10000 50.00HB Leasing & Finance 5000 25.00 5000 25.00Company LimitedRRB Securities Limited 5000 25.00 5000 25.00

– In the event of the Liquidation of the company, the holder of equity shares will beentitled to receive any of the remaining assets of the company,after distribution ofall Preferential amounts.The distribution will be in proportion to the number of equityshares held by the shareholders.

3. RESERVES AND SURPLUS


(In `) (In `)

Securities Premium Reserve-opening balance 499736601 499736601Add: Addition during the year 0 0

499736601 499736601Statutory Reserve-Opening balance * 137829719 131886793Add: Transferred from Surplus 10822622 5942926

148652341 137829719General Reserve-opening balance 305644543 303644543Add: Transferred from Surplus 4000000 2000000

309644543 305644543Surplus -opening balance 232630227 344127107Add: Net Profit after tax transferred -12295947 -82647277from Statement of Profit & Loss

220334280 261479830Less:Transferred to Statutory Reserve 10822622 5942926Transferred to General Reserve 4000000 2000000Proposed Dividend on Equity shares 17988494 17988494(Dividend Per Equity Share ` 1.50,Previous Year ` 1.50/-)Tax on Dividend 3057145 2918183Surplus-Closing balance 184466019 232630227

1142499504 1175841090

(*) Created by way of transfer of specified percentage of profits as per section 45ICof Reserve Bank of India (Amendment) Act,1997. Appropriation from Reservesshall be for the purposes as may be specified by Reserve Bank of India.

4. LONG TERM PROVISIONS


(In `) (In `)

Provision for Employees BenefitLeave Encashment 901243 765377Gratuity (Net) 0 271966Others– Contingent provision against 86271 86271

standard Assets

987514 1123614

19


5. SHORT TERM BORROWINGS


(In `) (In `)

From Banks:

Overdraft Facility-secured* 60633324 60459512

60633324 60459512

*Overdraft facility from bank is secured against guarantee and pledge of Shares andalso Guarantee of Shri Lalit Bhasin (Director).

6. TRADE PAYABLE


(In `) (In `)

Trade payable

(Including due to related Parties 446500 10458522-Refer Note No.26

446500 10458522

7. OTHER CURRENT LIABILITIES


(In `) (In `)

Unclaimed Dividend* 12571544 10882006Advance from customers 5909553 16731118Expenses Payable 1262679 1018545TDS Payable 127646 146085

19871422 28777754

* There is no amount due and outstanding to be transferred to Investor Education &Protection Fund.

8. SHORT TERM PROVISIONS


(In `) (In `)

Provisions For Employees BenefitLeave encashment 22531 19285OthersIncome Tax 6507748 0Doubtful Debt and Advances 1914251 1914251Proposed Dividend 17988494 17988494Tax on Dividend 3057145 2918183Contingent Provision against Standard Assets 640750 797500

30130919 23637713

9. FIXED ASSETS (Amount In `)

G R O S S B L O C K D E P R E C I A T I O N N E T B L O C K

S. As at Addition Deduction As at As at For the Deduction/ As at As on As atNo. Particulars 01.04.2012 during the during the 31.03.2013 31.03.2012 year Adjustments 31.03.2013 31.03.2013 31.03.2012

year year during the year

Tangible Assets

1 Furnitures & Fixtures 21643 0 0 21643 17644 1370 0 19014 2629 3999

2 Vehicles 8448750 0 1024680 7424070 6223547 512995 674212 6062330 1361740 2225203

3 Office Equipment 1121569 174763 0 1296332 387917 59197 0 447114 849218 733652

4 Data Processing Machine 4785177 89541 0 4874718 4694933 56668 0 4751601 123117 90244

5 Generator 1802318 48052 0 1850370 751412 86111 0 837523 1012847 1050906

Total 16179457 312356 1024680 15467133 12075453 716341 674212 12117582 3349551 4104004

(Previous Year) 16164457 15000 0 16179457 11291152 784301 0 12075453 4104004 4873305

10. INVESTMENTS



NON CURRENT INVESTMENTS (AT COST) (LONG TERM INVESTMENTS)

(1) IN ASSOCIATES– UNQUOTED (NON-TRADE) FULLY PAID UP

EQUITY SHARESTaurus Investment Trust Co. Ltd. 10 49040 49040Cost of acquisition 498999 498999Add /(Less) : Group Share of Profits/(Losses) upto year end 2703061 2208499

3202060 2707498

Pisces Portfolios Ltd. 10 3189980 3189980Cost of acquisition 69899800 69899800Add /(Less) : Group Share of Profits/(Losses) upto year end 122084058 156693814

191983858 226593614

Merwanjee Securities Ltd. 10 1200000 1200000Cost of acquisition 12000000 12000000Add /(Less) : Group Share of Profits/(Losses) upto year end 6737033 6156000

18737033 18156000

Taurus Asset Management Co. Ltd.Cost of acquisitionFully Paid up shares 10 6275000 58140000 6275000 58140000Partly Paid up shares 10 1250000 37500000 0 0Add /(Less) : Group Share of Profits/(Losses) upto year end -32675818 -797146

62964182 57342854

HB Insurance Advisors Ltd. 10 20010 20010Cost of acquisition 200100 200100Add /(Less) : Group Share of Profits/(Losses) upto year end -200100 -200100

0 0

11984030 276887133 10734030 304799966

20




2. INVESTMENTS (IN OTHERS)A. TRADE INVESTMENTS

INVESTMENT IN EQUITY INSTRUMENTS-FULLY PAID UP EQUITY SHARES (QUOTED)Ahluwalia Contracts (I) Ltd 2 0 0 102500 23677542Crompton Greaves Limited 2 111027 467682 111027 467682H S I L Ltd 2 2500 46500 2500 46500IDBI Ltd 10 70000 6208096 70000 6208096The Indian Hotels Ltd 1 100000 5728253 100000 5728253Jai corp Ltd 1 3000 3052216 3000 3052216Jaiprakash Associates Ltd. 2 6046657 202060700 9921657 331551294Jai Prakash power venture Ltd 10 23762 1734175 23762 1734175Jaypee Infratech Ltd 10 355000 14954367 700000 29487483RRB Securities Ltd. 10 100000 10000000 100000 10000000Sumit Securities Ltd 10 2837 689305 2837 689305JSW Steel Ltd 10 8000 4325413 8000 4325413Tata Global Beverages Ltd 10 1000 67814 1000 67814Tata Steel Ltd 2 20000 9700767 20000 9700767Unitech Ltd. 2 0 0 742600 83557959Ultramarine & Pigments Ltd. 2 0 0 50000 960023

TOTAL (A) (TRADE INVESTMENTS) 6843783 259035287 11958883 511254522

B. NON TRADE INVESTMENTSB.1 INVESTMENT IN EQUITY INSTRUMENTS

-FULLY PAID UP EQUITY SHARES (QUOTED)Bee Electronics Machine Ltd 10 6500 184501 6500 184501Nitta Gelatin India Ltd 10 0 0 15000 712500Nahar Spning Mills Ltd 5 607 42490 607 42490Pasupati Spning & Wvg. Mills Ltd 10 1520 282335 4000 282335Tata Tea Ltd. 10 1163 505500 1163 505500Nahar Capital and financial services Ltd 10 258 36120 258 36120-FULLY PAID UP EQUITY SHARES (UNQUOTED)Har Sai Investments Ltd. 10 200000 2000000 200000 2000000Kesoram Textiles Ltd. 10 49699 357071 49699 357071Delhi Stock Exchange Limited 1 47044 1457921 47044 1457921

TOTAL (B.1) 306791 4865938 324271 5578438

B.2 INVESTMENT IN PREFERENCE SHARESHB ESTATE DEVELOPERS LTD. (9% CUMULATIVE) 100 750000 75000000 0 0

TOTAL (B.2) 750000 75000000 0 0

B.3 INVESTMENT IN MUTUAL FUNDSFULLY PAID UP UNITSTaurus Mutual Fund-Libra Tax Shield-96 10 400000 3836000 400000 3836000SBI Multipliers 10 500 5220 500 5220Taurus Mutual Fund - Bonanza Exclusive Growth Scheme 10 1888673 28546685 1983673 29982579Taurus Mutual fund-Corpus — 200000 — 200000

TOTAL (B.3) 2289173 32587905 2384173 34023799

B.4 PREFERENCE SHARES APPLICATION(OPTIONALLY CONVERTIBLE)VENUS PORTFOLIO PVT LTD.(9% NON CUMULATIVE) 100 1190000 119000000 1190000 119000000

TOTAL (B.4) 1190000 119000000 1190000 119000000

TOTAL B (B.1+B.2+B.3+B.4) (NON TRADE INVESTMENTS) 4535964 231453843 3898444 158602237

TOTAL (2) (A+B)-NON CURRENT/LONG TERM 11379747 490489130 15857327 669856759INVESTMENTS-OTHER THAN ASSOCIATESTOTAL (1+2) NON CURRENT/LONG TERM INVESTMENTS 23363777 767376263 26591357 974656725

Notes As at As atMarch 31, 2013 March 31, 2012

10.1 Aggregate Amount of Quoted Investments 26,00,86,233 51,30,17,968/-10.2 Market Value of Quoted Investments 45,89,09,952 93,38,76,880/-10.3 Aggregate Amount of Unquoted Investments 50,72,90,030 46,16,38,757/-10.4 In the opinion of the management no provision is required for Diminution amounting to ` 9854719/- (Previous year ` 8,30,88,683/-) in the some of the value of Long term/Non current

investment, as the same is considered to be temporary.

11. DEFERRED TAX ASSETSAs at As at


Deferred Tax AssetsLeave Encashment/gratuity 268770 384511Deferred Tax LiabilityFixed Assets 75401 162041

193369 222470

12. LONG TERM LOANS AND ADVANCESAs at As at


(Unsecured,Considered Good)-StandardSecurity Deposits * 58255940 63255940

58255940 63255940

*Includes Deposits given to related Party refrer Note no. 25

13. INVENTORIES


(In `) (In `)

Stock In Trade* 13411 13411(Shares/Securities)

13411 13411*Valued at lower of cost or Market Price

14. TRADE RECEIVABLEAs at As at


Unsecured,Considered Good:More than 6 months 775 854Others (Includes due from Relatedparties-Refer Note no.25) 36113726 144

36114501 998

21


15. CASH & BANK BALANCE


(In `) (In `)

Cash & Cash EquivalentBalances with Banks– In Current and Deposit Accounts* 65612933 4545353– In Earmarked Dividend Accounts 12571544 10882006Cheques on Hand 75000000 0Cash-on-Hand 475241 455241Other Bank balancesDeposit with bank** 24612500 24612500

178272218 40495100

* Includes Fixed deposits with Bank ` NIL/- ` 21,00,000/-with more than 12 months maturity**Includes ` 87500/-(Previous year ` 87500/-) lien marked with Delhi Stock Exchange,` 5000000/-(Previous Year ` 5000000/-) lien marked with NSE/NSCCL, ̀19525000/-(Previous Year ` 19525000/-) lien marked for Bank Guarantee with NSE.

16. SHORT TERM LOANS AND ADVANCES


(In `) (In `)

Unsecured,Considered Good,Unless otherwise stated:Loan and Advances to Related Parties(Refer Note no. 25) 118250000 100000000OthersClaim Recoverable-Doubtful 1914251 1914251Amount Recoverable from employees 533122 582100Advance for Purchase of Property 148642503 221475072Advance against share application 77400000 30500000Money-StandardOther Recoverable* 1551955 707751Income Tax and TDS [Net of 0 2053883Provision for Income tax ` Nil(Previous year ` 4,47,00,000)

348291831 357233057

* Includes Prepaid Expenses,Imprest for expenses and Claim Recoverable.

17. OTHER CURRENT ASSETS


(In `) (In `)

Interest accured but not due on Bank deposits 515003 508765Interest accured but not due on Loans 4846685 2423343Dividend Receivable 0 43981

5361688 2976089

18. REVENUE FROM OPERATIONS (Amount in `)



Profit on sale of Long term/Non current 66070340 26687010Investments (Net)Interest Income on Loans(Tax deducted at Source ` 1077041/- 10770411 15235343(Previous Year ` 1523535/-)Dividend Income (Gross)– On Long Term/Non current Investments 4603112 6434267– on Stock in Trade 1160 736Income from. Services rendered/Commission (Net) 854810 887886

82299833 49245242

Considering the nature /activities of company, the Income from Investment and Financeactivities are shown Operational Income.

19. OTHER INCOME (Amount in `)



Interest On Fixed Deposits 2440438 2217685Liability no longer required written back 0 48628Miscellaneous Income 486408 60766Interest on Income Tax refund 137211 320307

3064057 2647386

20. EMPLOYEE BENEFIT EXPENSES (Amount in `)



Salaries and Benefits 8002944 8342057Contribution to Provident fund and other fund 524531 1457552Staff welfare 15354 31173

8542829 9830782

21. OTHER EXPENSES (Amount in `)



Rent/Facility Charges 967692 949944Vehicle Running and Maintenance 956120 629261Repair and Maintanance-others 967047 800428Insurance 105763 134299Travelling & Conveyance 441261 449099Communication 835958 701457Printing & Stationery 415814 465696Legal & Professional 611228 717781Loss on sale of fixed asset 120468 0Electricity 814498 620913Listing Fee 44944 44120Advertisement 80960 177802Director Sitting fees 485216 402000Vsat charges 103943 158930Depository and Custodial 42023 93586Miscellaneous 792186 716221Auditors Remuneration– Audit Fees 130478 142978– Tax Audit Fees 19354 31854– Income Tax Matters 124350 47500– Certification and others 56180 330362 62630 284962

8115483 7346499

22. The accompanying consolidated financial statement includes the accounts of HBStockholdings Ltd. and its following subsidiaries:-

Name of Company Country of Proportion of ownership FinancialIncorporation interest and relationship Year end

HB Securitites Ltd India 100% Subsidiary of HB 31.03.2013Portfolio Ltd

HB Corporate India 100% Subsidiary of HB 31.03.2013Securities Ltd. Portfolio Ltd

23. The accompanying Consolidated Financial Statements consider the followingAssociates Companies.

S. Name of Associates Company Country of Proportion ofNo. Incorporation ownership interest

(i) Taurus Asset Management Co. Ltd.(*) India 50.00% (50.00%)

(ii) Taurus Investment Trust Co. Ltd.(**) India 50.00% (50.00%)

(iii) HB Insurance Advisors Ltd.(*) India 39.96% (39.96%)

(iv) Marwanjee Securities Ltd.(*) India 48.00% (48.00%)

(v) Pisces Portfolios Private Limited(*) India 49.84% (49.84%)

* Valuation done on the basis of available unaudited, management certified financialstatements for year ended 31.03.2013.** Valuation has been considered on the basis of last audited financial statement foryear ended 31.03.2012

24. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

Contingent LiabilitiesIncome Tax demand ` Nil/-(Previous year ` 36,23,154/-) against which the companyhas preferred appeal before the appropriate authorities.Commitmentsa) ` 1,25,00,000/- (Previous Year ` Nil) on account of uncalled call money in respect ofPartly Paid up Shares.

25 RELATED PARTY TRANSACTIONS25.1 List of related parties with whom transactions have taken place and relationship:

a) Key Managerial Personnel1. Shri Anil Goyal, Managing Director2. Shri Praveen Gupta-Director

b) Associates:1. Merwanjee Securities Ltd.2. Pieces Portfolios Pvt.Ltd.3. Taurus Asset Management Co.Ltd

c) Person having control/significant influence /major shareholders1. Shri Lalit Bhasin

d) Enterprises over which control/significant influence exist of the relatives ofpersons mentioned in (c) above :-1. RRB Master Securities Delhi Ltd.

e) Companies under direct or indirect common control/significant influence:1. HB Stockholdings Ltd.2. HB Estate Developers Ltd.3. HB Leasing and Finance Co.Ltd4. RRB Securities Ltd.5. RRB Masterholdings Ltd.

22


25.2 Transactions during the financial year ended 31.03.2013 with related Parties as under:-Sr. Nature of Transaction Related Party Related Party Related Party Related Party Related PartyNo. Referred Referred Referred referred referred

in (a) above in (b) above in (c) above in (d) above in (e) above1 Purchase of Investments through them Nil Nil Nil Nil Nil

(Nil) (Nil) (Nil) (59450272) (Nil)

2 Sale of Investment through them Nil 5322685 Nil 309439337 Nil(Nil) (4387036) (Nil) (113823872) (Nil)

3 Margin Paid/Received (Net) Nil Nil Nil 32400000 Nil(Nil) (Nil) (Nil) (73200000) (Nil)

4 Remuneration and other services 5122000 Nil Nil Nil Nil(6292214) (Nil) (Nil) (Nil) (Nil)

5 Sitting Fee Nil Nil 60000 Nil Nil(Nil) (Nil) (50000) (Nil) (Nil)

6 Dividend Paid Nil Nil 10344183 Nil 201240(Nil) (Nil) (10344185) (Nil) (201240)

7 Loan advance/margin given Nil Nil Nil 20000000 Nil(Nil) (Nil) (Nil) (Nil) (Nil)

8 Brokerage charges received in respect of Sale/Purchase of securities Thru us. Nil Nil Nil Nil 4611(Nil) (Nil) (Nil) (Nil) (169803)

9 Depository charges received 317 Nil Nil 14322 72067(571) (Nil) (Nil) (10809) (93264)

10 Interest Income on loan Nil Nil Nil Nil Nil(Nil) (Nil) (Nil) (Nil) (15235343)

11 Rent Paid Nil Nil Nil Nil 967692(Nil) (Nil) (Nil) (Nil) (949944)

12 Payment against Liabilities Nil Nil Nil 10012022 Nil(Nil) (Nil) (Nil) (Nil) (Nil)

13 Loan Received back Nil Nil Nil Nil Nil(Nil) (Nil) (Nil) (Nil) (90000000)

14 investment made Nil 57500000 Nil Nil 75000000(Nil) (Nil) (Nil) (Nil) (90000000)

15 investment redeemed Nil 20000000 Nil Nil Nil(Nil) (Nil) (Nil) (Nil) (90000000)

14 Outstanding as on 31.03.2013- Payable in respect of Current Liabilities Nil Nil Nil Nil Nil

(Nil) (Nil) (Nil) (26851658) (Nil)

- In respect of Security Deposit Paid for Premises on Rent Nil Nil Nil Nil 34500000(Nil) (Nil) (Nil) (Nil) (34500000)

- Receivables in respect of Loan, advances and Interest receivable Nil 10000000 Nil 27857813 94846685(Nil) (10000000) (Nil) (Nil) (92423342)

- Trade Receivable Nil Nil Nil 36113388 Nil(Nil) (Nil) (Nil) (Nil) (Nil)

Note : Figures in brackets related to previous year.

25.3 Disclosure in respect of outstanding closing balance of related party transactions.i) Trade payable includes ` Nil/- (Previous year ` 1,00,12,022/-) to RRB Master

Securities (Delhi) Ltd.ii) Security Deposit given includes ` 3,45,00,000/- (Previous year ` 3,45,00,000/-) to

HB Estate Developers Ltd. iii) Loan and advances includes loan of ` 9,00,00,000/- (Previous year ` 9,00,00,000/-) to

HB Estate Developers Ltd.; Margin money of ` 18250000 (Previous Year Rs.Nil) toRRB Master securites (Delhi) Ltd, and `1,00,00,000/- (Previous year `1,00,00,000/-) toMerwanjee Securities Ltd.

iv ) Interest receivable includes ` 48,46,685/- (Previous year ` 24,23,343/-) from HBEstate Developers Ltd.

v) Advances from customers includes ` 1,63,93,106/- (Previous year ` 1,63,93,106/-)from RRB master securities Ltd.

vi) Trade Receivables includes ` 3,61,13,388/- (Previous Year ` Nil/-) due from RRBMaster securities (Delhi) Ltd.

26 SEGMENT REPORTINGIn the opinion of Management there are no separate reportable segments as perAccounting Standard Segment reporting (AS-17).

27 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD - 15Defined Contribution PlanAmount recognized as expense for defined contribution plans are as under: -

Particulars Current Year Previous Year Head under which shownin the Profit & Loss account

Contribution to 5,89,743/- 5,97,168/- Contribution to Provident fundProvident Fund and other fund.Contribution to 1,00,000/- 1,00,000/- Contribution to Provident fundsuperannuation fund and other fund.

Defined Benefit PlanMovement in net liability

Gratuity Leave EncashmentParticulars (Funded) (`) (Unfunded) (`)


Present value of obligations 34,25,523/- 32,68,096/- 7,84,662/- 10,87,295/-as at beginning of the year (A)



Interest Cost (B) 2,74,042/- 2,61,447/- 64,558/- 95,139/-

Current service cost (C) 1,75,198/- 1,83,740/- 45,302/- 43,139/-

Benefits paid (D) Nil/- 9,23,077/- (2,29,147/-) (5,41,467/-)

Actuarial loss/ (gain) on obligation (E) (1,60,757/-) 6,35,287/- 2,58,399/- 1,00,556/-

Present value of obligations 37,14,006/- 34,25,523/- 9,23,774/- 7,84,662/-as at the end of the year(F=A+B+C-D+E)

The amounts recognized in the Balance Sheet and Profit & Loss Account are as follows:



Present value of obligation (A) 37,14,006/- 34,25,523/- 9,23,774/- 7,84,662/-

Estimated fair value of plan 42,66,924/- 31,53,557/- Nil Nilassets (B)

Net Liability/(Asset) (C=A-B) (5,52,918/-) 2,71,966/- 9,23,774/- 7,84,662/-

Amounts in the Balance Sheet

Liabilities/(Asset) (5,52,918/-) 2,71,966/- 9,23,774/- 7,84,662/-Amount charged toProfit & Loss Account

Current Service Cost 1,75,198/- 1,83,740/- 45,302/- 43,139/-

Interest Cost 2,74,042/- 2,61,447/- 64,558/- 95,139/-Expected Return on (3,21,357/-) (3,20,120/-) Nil NilPlan AssetActuarial(Gain)/Loss 1,98,327/- 5,81,366/- 2,58,399/- 1,00,556/-

(1,65,212)/- 7,60,384/- 3,68,259/- 2,38,834/-Head under which shown in Contribution to Provident Salaries & benefitsthe Profit & Loss account Fund and other Fund

23


The Actual Return on Plan Assets is as follows

Gratuity


Actual return on plan assets 3,21,357/- 3,20,120/-

Following are the Principal Actuarial Assumptions used as at the balance sheet date

Gratuity


Discount Rate 8% 8%

Expected Rate of Return on Plan Assets 9% 9%

Salary Escalation Rate 6% 6%

A reconciliation of the opening and closing balances of the fair value of plan assets :

Sl. Gratuity

No. Particulars Current PreviousYear Year

Opening Fair Value of Plan Assets 31,53,557/- 36,49,703/-

i) Expected Return on Plan Assets 3,21,357/- 3,20,120/-

ii) Actuarial Gains / (Losses) 0.00 0.00

iii) Contribution by the Employer 7,92,010/- 1,06,811/-

iv) Benefits Paid Nil/- 9,23,077/-

Closing Fair Value of Plan Assets 42,66,924/- 31,53,557/-

28 Disclosure pursuant to Accounting Standard AS-19 for Leases: -Operating Lease

a) Particulars of the minimum lease payments under Operating Lease:-Not Later than One year ` 9,67,692/- (Previous Year ` 9,49,944/-)Later than one year but not ` NIL (Previous Year ` NIL)Later than five yearsLater than five years ` NIL (Previous Year ` NIL)

b) Minimum lease payments recognised in the statement of profit & loss accountduring the year ended 31st March 2013 is ` 9,67,692/- (Previous Year ` 9,49,944/-).

c) General description of the lease arrangement.– The Lessee shall not sublet or otherwise part with possession of a part or

whole of the premise without the previous consent in writing of the lessor.– The lessee shall use the premises for commercial purposes only.

29. Earning per share pursuant to Accounting Standard (AS-20) “Earning Per Share”


Net Profit/(Loss) as Per Statement of Profit and Loss. 53116886 26267926

Add: Share of Profit/-Loss in Associates -65412833 -108915203

Less:Preference Share dividend 1200000 1200000

Net Profit/-Loss available for equity Shareholders -13495947 -83847277

Earning Per Share (face value of `10 each)

Weighted Average Nos. of Equity Share Outstanding 1,19,92,329 1,19,92,329

Basic and diluted Earning per share (`) -1.13 -6.99

30 The company made an application for issue of Certificate of Registration with ReserveBank of India (RBI) under Section 45IA of the Reserve Bank of India Act, 1934. Theapplication of the company was, however, returned by RBI vide its letter dated December24, 2004 with an advice to resubmit the application on the completion of SEBI's enquiryagainst the group companies. In an Appeal filed by the company before the AppellateAuthority (in the Ministry of Finance) against the aforesaid decision of RBI, the AppellateAuthority vide its Order dated September 25, 2006, directed the company to resubmit theapplication along with the latest balance sheets and other relevant details within 30 daysto RBI and RBI to thereafter decide the case by obtaining necessary response from SEBIwithin 3 months from the date of receipt of the Order. The company resubmitted itsapplication to RBI’s Regional Office at New Delhi on 23rd October 2006 as per theaforesaid directions of the Appellate Authority. Additional details / documents / clarificationsas required by RBI from time to time were submitted.

The company vide its letters dated 11th October, 2010 and 29th January, 2011 intimatedthe RBI about the disposal of pending proceeding by the SEBI and also furnished copy ofSEBI orders. The RBI vide its letter dated 29th March , 2011 advised the company tomake a fresh application for issue of Certificate of Registration. As directed by RBI, thecompany filed a fresh application on 20th June 2011.The necessary queries/informationraised/sought by RBI from time to time were filed.

The Company has now been advised by RBI to resubmit application with updated dataand in accordance with Circular No. RBI/2012-13/319 DNBS.CC.PD.NO. 312/03.10.01/2012-13 dated December 7,2012. As advised by RBI,the company is in process ofupdating the data and resubmitting the same.

31. Interest Paid is net of reimbursement received detailed as under:


Interest paid to bank on overdraft facility 7963812/- 8651269/-

Less: Reimbursement received 7963812/- 8651269/-for Interest Paid on overdraft facility

Net Amount NIL NIL

23





Folio No. ........................................

(To be filled in by the Shareholder)

HB PORTFOLIO LIMITEDPROXY FORM

I/We .............................................................................................................................................................................................................................................

of.......................................................................................................................................................................................................................................................................

being a member(s) of HB PORTFOLIO LIMITED, hereby appoint.......................................................................................................................................

...............................................................................................................................................................................................................................................................

of ..................................................................................................................................................................................................................................... or

failing him/her of ........................................................................................................................................................................................................................

as my/our proxy to attend and vote for me/us on my/our behalf at the 18th Annual General Meeting of the Company to be held on 10th of September, 2013

and at any adjournment thereof. As witness my hand/our hands this day.................................of 2013.

DP-Id : ...................................................................................

Client-Id : ...................................................................................

Signed by the Said : ...............................................................................

NOTE : The proxy must be deposited at the Registered Office of the Company at Plot No. 31, Echelon Institutional Area, Sector-32, Gurgaon - 122 001,Haryana not less than 48 hours before the time of holding the Meeting.

HB PORTFOLIO LIMITEDATTENDANCE SLIP

18TH ANNUAL GENERAL MEETING

Time : 11.00 A.M., 10th day of September, 2013

Place : GIA House, I.D.C. Mehrauli Road, Opp. Sector - 14, Gurgaon - 122 001, Haryana

FULL NAME OF THE FIRST SHAREHOLDER.............................................................................................................................................................................

Joint Shareholders, if any.............................................................................................................................................................................................................

Father’s/Husband’s Name ............................................................................................................................................................................................................

Address in full...............................................................................................................................................................................................................................

FULL NAME(S) OF THE PERSON ATTENDING THE MEETING AS A PROXY/SHAREHOLDER(S)

.....................................................................................................................................................................................................................................................................

I/We hereby record my/our presence at the 18th Annual General Meeting held on Tuesday, 10th day of September, 2013 at 11.00 A.M. at GIA House,I.D.C. Mehrauli Road, Opp. Sector - 14, Gurgaon - 122 001, Haryana

Folio No. / DP-Id : ......................................................................................

Client-Id : ......................................................................................

No. of Shares : ...................................................................................... Signature(s).......................................................

Members may please note that the Auditorium Authorities do not permit carrying of bags/articles/snack packets etc. inside the meeting hall. TheCompany will not make any arrangements for safe keeping of articles etc. outside the Hall. Members may make their own arrangements which shall besolely at their risk and cost and the Company will in no way be responsible for any loss/theft of articles etc.

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