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Summit Securities Ltd.

BSE: 533306 Sector: Financials
NSE: SUMMITSEC ISIN Code: INE519C01017
BSE 00:00 | 18 Mar 556.05 10.55
(1.93%)
OPEN

575.00

HIGH

579.00

LOW

556.00

NSE 00:00 | 18 Mar 550.10 3.40
(0.62%)
OPEN

545.00

HIGH

562.45

LOW

545.00

OPEN 575.00
PREVIOUS CLOSE 545.50
VOLUME 326
52-Week high 931.00
52-Week low 466.00
P/E 7.79
Mkt Cap.(Rs cr) 606
Buy Price 556.05
Buy Qty 20.00
Sell Price 556.05
Sell Qty 30.00
OPEN 575.00
CLOSE 545.50
VOLUME 326
52-Week high 931.00
52-Week low 466.00
P/E 7.79
Mkt Cap.(Rs cr) 606
Buy Price 556.05
Buy Qty 20.00
Sell Price 556.05
Sell Qty 30.00

Summit Securities Ltd. (SUMMITSEC) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their Twenty First Report together with AuditedFinancial Statements for the financial year ended March 312018:

FINANCIAL HIGHLIGHTS:

The summary of financial performance of the Company for the year under review is asgiven below:

(Rs.in Lakhs)

Standalone

Consolidated

For the Year ended March 31 2018 For the Year ended March 31 2017 For the Year ended March 31 2018 For the Year ended March 31 2017
Total Income 8606.67 273.10 14148.00 540.92
Profit before Depreciation & Tax 8449.78 187.17 13810.69 336.37
(-) Depreciation 1.06 1.23 1.06 1.23
Profit/(Loss) before Tax 8448.72 185.94 13809.63 335.14
Add: Excess/(Short) Provision of Tax of earlier years -0.13 376.32 -4.06 375.82
(-) Tax for Current Year 900.64 0.77 1676.77 18.67
(-) Deferred Tax - - - -
Profit/(Loss) after Tax 7547.95 561.50 12128.80 692.28
Appropriation:
Less: Transfer to Special Reserve 1509.59 112.30 3894.96 138.46
Add: Balance brought forward 4554.43 4105.23 10469.89 9916.06
Balance Profit/(Loss) transferred to Balance Sheet 10592.80 4554.43 18703.74 10469.89

FINANCIAL PERFORMANCE:

Revenue:

The total revenue for FY 2017-18 was Rs. 8606.67 lakhs as compared to revenue of Rs.273.10 lakhs of the previous year. The increase in revenue is on account of dividendsinterest income and profit on sale of long term investments. Rs. 7398.28 lakhs and Rs.10750.90 lakhs in the Standalone and Consolidated revenues respectively is on account ofsale of long term investments.

Expenses:

The total expenses for FY 2017-18 were Rs. 157.95 lakhs as compared to expenses of Rs.133.54 lakhs of the previous year mainly on account of increase in legal &professional fees and miscellaneous expenses.

Profit After Tax:

Profit after Tax (PAT) for FY 2017-18 was Rs. 7547.95 lakhs in comparison to PAT of Rs.561.49 lakhs during the previous year. The increase in profit is on account of dividendinterest income profit on sale of long term investments and adjustment of the provisionfor tax of the earlier years. Tax expense for current year pertains mainly to MinimumAlternate Tax (MAT) arising on account of gains booked on sale of long term investments.

Amounts proposed to be carried to reserves:

An amount of Rs. 1509.59 lakhs has been transferred to Special Reserve as per thestatutory requirements.

DIVIDEND:

With a view to conserve resources and based on the cash balance position of theCompany your Directors consider it prudent not to recommend any dividend for the yearunder review.

MANAGEMENT DISCUSSION AND ANALYSIS:

a. Industry Structure & Developments Opportunities and Future Outlook:

The global economy experienced a cyclical recovery in 2017-18 showing signs ofstronger investment and manufacturing activity. However global trade faced severalchallenges with geopolitical issues occupying the centre stage.

India emerged amongst the fastest growing major economies in the world with GDP growthat about 6.7% in 2017-18 and is expected to grow above 7.3% in 2018-19.

Major reforms were undertaken over the past year including the transformational Goodsand Services Tax (GST) that was launched on July 1 2017. The long-festering Twin BalanceSheet problem was decisively addressed by the Government by formulating the new IndianBankruptcy Code (IBC) and implementing a major recapitalization package to strengthen thepublic sector banks. The IBC has provided a resolution framework that will help corporatesclean up their balance sheets and reduce their debts. However addressing the NonPerforming

Assets (NPA) issue of the banks remains a task for the Government and the RBI.

The Company being a Non-Banking Financial Company (‘NBFC') registered with RBI asa NonDeposit Accepting NBFI derives major revenue from its investments. Sectoral policychanges by the Government therefore have direct impact on the profitability of theCompany as the value of the stocks shares and bonds depends on the prevailing capitalmarkets scenario. The future success of the Company continues to depend on its ability toanticipate the volatility of the Stock Markets minimising risks and increasing returnsthrough prudent investment decisions.

The investments of the Company are typically long term in nature and predominantly inthe equity markets. All investments decisions are reviewed by the Board of Directors on aperiodic basis.

b. Risks Threats and Concerns:

Risk management can be construed as the identification assessment and prioritizationof risks followed by co-ordinated and economical application of resources to minimizemonitor and control the probability and/or impact of unfortunate events or to maximizethe realisation of opportunities.

The Risk Management Committee (‘RMC') of the Board of Directors manages andmonitors the Company's risks as detailed herein below under the heading “RiskManagement Process”.

c. Internal control systems and their adequacy:

The Company has an adequate internal audit and control system commensurate with itssize and nature of business to ensure operational efficiency accuracy and promptness infinancial reporting and compliance of various laws and regulations. The Audit Committee ofthe Board of Directors reviews the Internal Audit Report and the adequacy andeffectiveness of internal controls periodically.

d. Human Resources:

Employee relations continued to remain cordial during the year under review. As onMarch 31 2018 there were eight (8) employees including Key Managerial Personnel(‘KMP') of the Company.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Company'sobjectives projections estimates and expectations may constitute “forward lookingstatements'' within the meaning of applicable laws and regulations. Actual results mightdiffer materially from those either expressed or implied.

MATERIAL CHANGES AND COMMITMENTS:

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year on March 312018 towhich the financial statements relate and the date of this report.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with Section 129(3) of the Companies Act 2013 (‘the Act') andRegulation 34 of the Securities

and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (‘the Listing Regulations') the Consolidated Financial Statementsof the Company and its subsidiaries including the statement containing salient featuresof the financial statements of all the subsidiary companies of the Company as set out inprescribed Form AOC-1 forms part of this Annual Report 2017-18.

The Consolidated Financial Statements have been prepared in accordance with theAccounting Standards issued by the Institute of Chartered Accountants of India.

SUBSIDIARY COMPANIES:

There was no change in the subsidiaries joint ventures or associates during the yearunder review.

Further the Financial Statements of these subsidiaries are uploaded on the website ofthe Company in accordance with Section 136 of the Act. The Annual Accounts of thesesubsidiaries and the other related information will be made available to any Member of theCompany seeking such information and also available for inspection at the RegisteredOffice of the Company.

As required under Regulation 16(1)(c) of the Listing Regulations the Company hasformulated the Policy on Materiality of Subsidiaries and the same is published on theCompany's web-site at the link http://summitsecurities.net/PolicvonMaterialSubsidiarv.pdf.

RISK MANAGEMENT PROCESS:

Though the requirements of constitution of the Risk Management Committee contained inRegulation 21 of the Listing Regulations are not yet applicable to the Company the Boardof Directors has constituted the Risk Management Committee of the Board of Directors('Risk Management Committee') in terms of the Guidelines on Corporate Governance issued bythe RBI in the year 2010. The terms of reference of the Risk Management Committee are inaccordance with the aforesaid Guidelines the Act and Listing Regulations as well.

The Risk Management Committee has formulated a Risk Management Policy. This policydefines a process to ensure that a structured disciplined and consistent risk strategyproviding guidance for risk activity within the Company by embedding Enterprise RiskManagement within the culture of the business is in place.

One of the element in the Risk Management Process as defined in the Risk ManagementPolicy is identification and assessment of risks. The identified risks pertaining to thenature of business carried out by the Company comprise of Business Risks Finance RisksRegulatory Risks Environment Risks Information Technology Risks etc. Risk mitigationmeasures are also reviewed alongside the identified risks. A report on risk evaluation andmitigation covering the elements of risks impact and likelihood mitigation measures andrisk assessment is periodically presented before the Risk Management Committee for reviewand also placed before the Board of Directors for information.

RELATED PARTY TRANSACTIONS:

The Company had formulated a Policy on Related Party Transactions for purpose ofidentification and monitoring of Related Party Transactions. The Policy on Related PartyTransactions as approved by the Board is uploaded on the

Company's website under the link http://summitsecurities.net/RelatedPartyTransactionPolicy.pdf.

The details of the transactions entered into by the Company with related parties duringthe year under review which requires reporting in Form AOC-2 in terms of the Section134(3) and 188(1) of the Act read with Rule 8(1) of the Companies (Accounts) Rules 2014is appended with this report as Annexure A.

There are no relationships between the Directors interse nor any relationship betweenthe Key Managerial Personnel inter-se.

None of the Directors or KMP had any pecuniary relationships or transactions vis-a-visthe Company except the sitting fees paid to Directors and remuneration paid to KMPs.

EXTRACT OF THE ANNUAL RETURN:

An extract of the Annual Return pursuant to Section 92(3) of the Act read with Rule 12of the Companies (Management and Administration) Rules 2014 in the Form MGT-9 is appendedwith this report as Annexure B.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:

The Company is registered as non-banking financial company not accepting publicdeposits with the Reserve Bank of India and having its principal business of makinginvestments the Company is exempted from the provisions of sub-section(1) of Section 186of the Act.

PUBLIC DEPOSITS:

The Company has not accepted any deposits within the meaning of sub-section (31) ofSection 2 and Section 73 of the Act and the Rules framed thereunder.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a. Directors :

In accordance with the provisions of the Act and Articles of Association of theCompany Mr. A. N. Misra Non-Executive Director retires by rotation and being eligiblehas offered himself for re-appointment.

b. Key Managerial Personnel:

Pursuant to the provisions of Section 2(51) and Section 203 of the Act read with therules framed thereunder the following persons are the Key Managerial Personnel of theCompany:

1. Mr. Rohin Bomanji Manager;

2. Mr. Paras Mal Rakhecha Chief Financial Officer; and

3. Ms. Jiya Gangwani Company Secretary.

Further there was no change in the Key Managerial Personnel of the Company during theyear under review.

c. Declarations from Independent Directors:

The Company has received declarations as required under Section 149(7) of the Act fromall the Independent Directors stating that they meet the criteria of independence pursuantto Section 149(6) of the Act.

d. Training and Familiarisation Programme for Independent Directors:

Pursuant to the Code of Conduct for Independent Directors specified under the Act andRegulation 25(7) of the Listing Regulations the Company familiarises

its Independent Directors on their roles rights responsibilities in the Companynature of the industry in which the Company operates and business model of the Companyetc. The note on this familiarisation programme is also posted on the Company's websiteunder the link http://summitsecurities.net/ DetailsofFamiliarisationProgramme.pdf.

MEETINGS OF THE BOARD OF DIRECTORS:

The Board of the Company has met four times during the year ended March 312018 thedetails of the meetings of the Board of Directors held during the year are mentioned underthe Corporate Governance Report which forms part of this Annual Report.

BOARD COMMITTEES:

The Board Committees comprise of mandatory committees as per the Act and ListingRegulations viz. Audit Committee Nomination and Remuneration Committee and theStakeholders Relationship Committee. The non-mandatory Board committees comprise of theRisk Management Committee and Asset Liability Management Committee constituted as perapplicable RBI guidelines. Further the IT Strategy Committee was also constituted underthe RBI guidelines. Details of composition of these committees alongwith number ofmeetings held during the year and other related details are set out in the CorporateGovernance Report which forms part of this Report.

AUDIT COMMITTEE:

The detailed composition of the Audit Committee is set out in the Corporate GovernanceReport which forms part of this Report.

There have been no situations where the Board has not accepted any recommendations ofthe Audit Committee.

ANNUAL PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEES:

The Annual Evaluation as required under the Act and the Listing Regulations has beencarried out by the Board of its own performance the performance of each individualDirector (including chairperson of Board and Committees) and its Committees. For thispurpose an Evaluation Questionnaire was circulated to all the Directors and theirresponses were received in a sealed envelope addressed to the Chairman of the Board ofDirectors and results thereof were then discussed in the next meeting of the Board ofDirectors.

The said questionnaire was prepared considering the criteria for evaluation inaccordance with the Company's Policy on Appointment Training Evaluation and Remunerationapproved by the Board on recommendation of the Nomination and Remuneration Committeeinteralia comprising of:

(a) attendance at meetings of the Board and Committees thereof

(b) participation in meetings of the Board or Committee thereof

(c) contribution to strategic decision making

(d) review of risk assessment and risk mitigation

(e) review of financial statements and business performance

(f) contribution to the enhancement of brand image of the Company.

REMUNERATION POLICY:

The Board of Directors has on the recommendation of the Nomination and RemunerationCommittee formulated

a policy on “Appointment Training Evaluation and Remuneration of Directors KeyManagerial Personnel and Senior Management Personnel”. This policy interalia coversthe requirements specified under Section 178(3) of the Act comprising of criteria fordetermining qualifications positive attributes and independence of a director etc.

The Policy provisions covering the requirements under Section 178 of the Act is givenas Annexure C to this report

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) of the Act your Directors to the best of their knowledgeand belief confirm that:

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed alongwith proper explanation relating to material departures if any;

(b) such accounting policies have been selected and applied consistently and suchjudgements and estimates have been made that are reasonable and prudent to give a true andfair view of the state of affairs of the Company in the Balance Sheet as at March 312018and the Statement of Profit and Loss for the financial year ended March 312018;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) the proper internal financial controls were in place and that such internalfinancial controls were adequate and were operating effectively;

(f) the systems to ensure compliance with the provisions of all applicable laws were inplace and that such systems were adequate and operating effectively.

WHISTLE BLOWER POLICY:

The Company has a vigil mechanism named Whistle Blower Policy (‘WBP') fordirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. The WBP isalso posted in the Company's website at the link: http://summitsecurities.net/ WhistleBlower Policy.pdf.

PARTICULARS OF EMPLOYEES:

a. During the year under review no employee was in receipt of remuneration which inaggregate was equal or more than the limit specified under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

b. Statement containing the Disclosures pursuant to Section 197(12) of the Act and Rule5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached as Annexure D to this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT FOREIGNEXCHANGE EARNINGS AND OUTGO:

The Company is a Non-Banking Financial Company and engaged in investments and financialactivities and as such its operations do not account for substantial energy

consumption. However the Company adopts all possible measures to conserve energy andat the same time several environment friendly measures are adopted by the Company.

The provisions relating to research and development and technology absorption are notapplicable to the Company. During the year under review there have been no transactionsin the Company relating to foreign exchange earnings and outgo.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions of Section 135 of the Act were not applicable to the Company during thefinancial year ended March 31 2018 as the Company did not fall into the criteriaspecified in sub-section (1) of Section 135 of the Act.

STATUTORY AUDITORS:

Messrs Chaturvedi & Shah Chartered Accountants were appointed as the StatutoryAuditors of the Company at the Seventeenth AGM of the Company held on September 27 2014to hold office for a period of 4 (four) consecutive years from the conclusion of theSeventeenth AGM till the conclusion of the Twenty First AGM subject to ratification by themembers at every AGM of the Company. Their term accordingly expires at the conclusion ofthe ensuing Twenty First AGM.

Messrs Chaturvedi & Shah Chartered Accountants have confirmed that they areeligible to act as Statutory Auditors if appointed in accordance with Sections 139 and141 of the Act and Rules made thereunder.

The Board of Directors after considering the recommendation of the Audit Committeerecommends the re-appointment of Messrs Chaturvedi & Shah Chartered Accountants asthe Statutory Auditors of the Company to hold office for a period of five years from theconclusion of the ensuing Twenty First AGM up to the conclusion of the Twenty Sixth AGM.

INTERNAL AUDITORS:

M/s. Dinesh Jain & Co. Chartered Accountants are the Internal Auditors of theCompany.

SECRETARIAL AUDITORS:

M/s. Parikh Parekh & Associates Company Secretaries were appointed as theSecretarial Auditors for conducting the Secretarial Audit in accordance with Section 204of the Act for the year ended March 312018. The Secretarial Audit Report prepared inaccordance with sub-section (3) of Section 134 and Section 204(1) of the Act in prescribedForm MR-3 by M/s. Parikh Parekh & Associates Company Secretaries is attached asAnnexure E to this Report.

EXPLANATION AND COMMENTS ON AUDITORS' REPORT AND SECRETARIAL AUDIT REPORT:

There are no qualification reservations or adverse remark or disclaimer made either bythe Statutory Auditor in Auditors Report or by the Company Secretary in Practice(Secretarial Auditor) in his Secretarial Audit Report.

CORPORATE GOVERNANCE:

A report on Corporate Governance along with a certificate from the Auditors of theCompany stipulated pursuant to Regulation 34 of the Listing Regulations are annexed asAnnexure F to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

CHANGE IN THE NATURE OF BUSINESS:

During the year under review there was no change in the nature of business.

INTERNAL FINANCIAL CONTROL:

Details in respect of adequacy on internal financial controls with reference to thefinancial statements are stated in the Management Discussion and Analysis section of thisReport.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:

The Company has in place a policy on Prevention of Sexual Harassment of Women atWorkplace in accordance with the provisions of the Sexual Harassment of Women at theWorkplace (Prevention Prohibition and Redressal) Act

2013. Internal Complaints Committee (‘ICC') had been set up to redress complaints.ICC has not received any complaints during the year under review.

SECRETARIAL STANDARDS:

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.

ACKNOWLEDEMENTS:

The Board of Directors wishes to place on record its gratitude for the continuedsupport and co-operation extended by the Government authorities banks members andemployees of the Company.

On behalf of the Board of Directors
Ramesh D. Chandak
Chairman
DIN:00026581 Place : Mumbai
Date : May 23 2018