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Summit Securities Ltd.

BSE: 533306 Sector: Financials
BSE 00:00 | 29 May 295.30 10.30






NSE 00:00 | 29 May 297.15 1.25






OPEN 295.00
52-Week high 604.95
52-Week low 203.00
P/E 22.84
Mkt Cap.(Rs cr) 322
Buy Price 295.30
Buy Qty 1.00
Sell Price 299.25
Sell Qty 1.00
OPEN 295.00
CLOSE 285.00
52-Week high 604.95
52-Week low 203.00
P/E 22.84
Mkt Cap.(Rs cr) 322
Buy Price 295.30
Buy Qty 1.00
Sell Price 299.25
Sell Qty 1.00

Summit Securities Ltd. (SUMMITSEC) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their Twenty Second Report together with AuditedFinancial Statements for the financial year ended March 31 2019:


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 2019 For the Year ended March 31 2018 For the Year ended March 31 2019 For the Year ended March 31 2018
Total Income 1478 8607 11334 14148
Profit before Depreciation & Tax 1277 8450 11022 13811
(-) Depreciation 2 1 2 1
Profit/(Loss) before Tax 1275 8449 11020 13810
Add: Excess/(Short) Provision of Tax of earlier years 3 - 3 -4
(-) Tax for Current Year 6 901 54 1677
Profit/(Loss) after Tax 1272 7548 10969 12129
Less: Transfer to Special Reserve 255 1509 916 3895
Add: Balance brought forward 10593 4554 18704 10470
Profit/(Loss) at the end of the year 11610 10593 28757 18704



The total revenue for FY 2018-19 was Rs. 1478 lakhs as compared to revenue of Rs. 8607lakhs of the previous year due to lower sales of long-term investments which was Rs. 85lakhs for FY 2018-19 as compared to Rs. 7398 lakhs in the previous year for standalonefinancial statements and Rs. 11334 lakhs for FY 2018-19 as compared to Rs. 14148 lakhs inthe previous year for consolidated financial statements. The cashflow arising from theprofits for the year has been redeployed into business investments. Expenses: The totalexpenses for FY 2018-19 were Rs. 203 lakhs as compared to expenses of Rs. 158 lakhs forthe previous year. The increase is mainly on account of CSR contribution of Rs. 19 lakhsfor the FY 2018-19 as against Nil in the previous year and increase in professional feespostage and courier expenses and miscellaneous expenses. Profit After Tax: Profit afterTax (PAT) for FY 2018-19 was Rs. 1272 lakhs in comparison to PAT of Rs. 7548 lakhs duringthe previous year mainly due to lower profit on sale of long-term investments of Rs. 85lakhs for FY 2018-19 as compared to Rs. 7398 lakhs in the previous year for standalonefinancial statements. Profit on sale of long-term investments is Rs. 7558 lakhs for FY2018-19 as compared to Rs. 10751 lakhs in the previous year for consolidated financialstatements.

Amounts proposed to be carried to reserves:

An amount of Rs. 255 lakhs has been transferred to Special Reserve as per the statutoryrequirements.


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.


a. Industry Structure & Developments Opportunities and Future Outlook:

Global economy showed signs of a slowdown and continued to face geo-political issueswith rising US-China trade disputes and tariffs and overall protectionism. Global GDPgrowth moved slightly downwards to 3.6 percent during the last year from 3.8 percent inthe prior year. The global expansion has faded on the backdrop of weakening financialmarket sentiment trade policy uncertainty and concerns about China's outlook.

The United States showed relatively strong fundamentals towards growth bolstered byfiscal stimulus; however activity in the Euro Area has been weaker than expected owingto slowing net exports. In Emerging Markets growth has stalled owing to softeningexternal demand tighter external financing conditions and policy uncertainties.

Indian economy faced a challenging year with most sectors performing below expectationowing to muted demand and challenging liquidity position. The capex cycle is yet tokick-in and the NBFC crisis that Indian markets face is augmenting the issue further. TheCompany being a Non-Banking Financial Company (‘NBFC') registered with RBI as aNon-Deposit 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 financial markets minimising risks and increasingreturns through 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 realization 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 2019 there were eight (8) employees including Key Managerial Personnel(‘KMP') of the Company.

e. Details of change in return on Net Worth as compared to the immediately previousfinancial year along with a detailed explanation thereof:

Return on Net Worth for FY 2018-19: 2.37% Return on Net Worth for FY 2017-18: 14.42%Change in return on Net Worth as compared to immediately preceding previous financialyear: (12.05%).

f. Details of significant changes (i.e. change of 25% or more as compared toimmediately previous financial year) in Key Financial Ratios along with detailedexplanations therefor:

Particulars As on % Change
March 31 2019 March 31 2018
Debtors Turnover Not Applicable Not Applicable Not Applicable
Inventory Turnover Not Applicable Not Applicable Not Applicable
Interest Coverage Ratio Not Applicable Not Applicable Not Applicable
Current Ratio 3.01 2.22 35.59%
Debt Equity Ratio 0.0069 0.0072 -4.17%
Operating Profit Margin (%) 86.28 98.20 -12.14%
Net Profit Margin (%) 86.05 87.95 -2.16%

There is significant change in one ratio i.e. Current Ratio due to increase in BankFixed Deposits during the year.


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.


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 31 2019 towhich the financial statements relate and the date of this report.


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 andDisclosure Requirements) Regulations 2015 (‘the Listing Regulations') theConsolidated Financial Statements of the Company and its subsidiaries including thestatement containing salient features of the financial statements of all the subsidiarycompanies of the Company as set out in prescribed Form AOC-1 forms part of this AnnualReport 2018-19.

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


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

Further the Financial Statements of the subsidiaries are uploaded on the website ofthe Company in accordance with Section 136 of the Act. The Financial Statements 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:


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(‘RMC') in terms of the Guidelines on Corporate Governance issued by the Reserve Bankof India (RBI) in the year 2010. The terms of reference of the RMC are in accordance withthe aforesaid Guidelines the Act and Listing Regulations as well.

RMC has formulated a Risk Management Policy. This policy defines a process to ensurethat a structured disciplined and consistent risk strategy providing guidance for riskactivity within the Company by embedding Enterprise Risk Management within the culture ofthe 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 RMC for review and also placed beforethe Board of Directors for information.


The Company had formulated a Policy on Related Party Transactions for purpose ofidentification and monitoring of Related Party Transactions. The Policy on Related PartyTransactions was revised pursuant to requirements under the Act and Listing Regulations asamended in 2018 and approved by the Board of Directors. The Policy is uploaded on theCompany's website under the link: RelatedPartyTransactionPolicy.pdf.

The Company has not entered into any transaction with related parties during the yearunder review which requires reporting in Form AOC-2 in terms of the Section 134(3) and188(1) of the Act read with Rule 8(1) of the Companies (Accounts) Rules 2014.

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

None of the Directors nor KMP had any pecuniary relationships or transactions vis-a-visthe Company except the sitting fees paid to Directors and remuneration paid to KMPs.


Pursuant to Section 134(3)(a) of the Act read with Section 92(3) of the Act and Rule 12of the Companies (Management and Administration) Rules 2014 an extract of the AnnualReturn in Form MGT-9 for the year ended March 31 2019 is given as Annexure A tothis report and is also published on the Company's website


The Company is registered as a non-banking financial company not accepting publicdeposits with the Reserve Bank of India and having its principal business of makinginvestments the Company is accordingly exempted from the relevant provisions underSection 186 (11) of the Act.


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.


a. Directors : In accordance with the provisions of the Act and Articles ofAssociation of the Company Mr. H. N. Singh Rajpoot (DIN: 00080836) Non-ExecutiveDirector retires by rotation and being eligible has offered himself for re-appointment.

Mr. H. C. Dalal (DIN: 00206232) Mr. Prem Kapil (DIN: 06921601) and Ms. Sneha Ranade(formerly known as Ms. Sneha Karmarkar) having (DIN: 06878346) were appointed asIndependent Directors of the Company at the Seventeenth (17th) Annual GeneralMeeting (AGM) of the Company held on September 27 2014 to hold office for a term of five(5) consecutive years with effect from the date of the 17th AGM of the Companyi.e. from September 27 2014 upto September 26 2019. Accordingly their term as theIndependent Directors of the Company concludes at the ensuing Twenty Second (22nd)AGM. Further Mr. H. C. Dalal Mr. Prem Kapil and Ms. Sneha Ranade are qualified to beIndependent Director(s) pursuant to Section 149 (6) of the Act and applicable provisionsunder the Listing Regulations.

Accordingly it is proposed to re-appoint Mr. H. C. Dalal Mr. Prem Kapil and Ms. SnehaRanade as Non-Executive Independent Directors for a second term of five (5) years witheffect from September 27 2019 up to September 26 2024 and they shall not be liable toretire by rotation. Their re-appointment for second term of five years is being placedbefore the shareholders for their approval at the ensuing annual general meeting.

Mr. Ramesh Chandak (DIN: 00026581) Non-Executive Director has qualified to be anIndependent Director pursuant to Section 149(6) of the Act and applicable provisions ofthe Listing Regulations. Accordingly it is proposed to appoint Mr. Chandak as aNon-Executive Independent Director for a term of five (5) consecutive years with effectfrom September 27 2019 up to September 26 2024 and he shall also not be liable to retireby rotation.

Further considering Mr. H. C. Dalal Mr. Kapil and Mr. Chandak attain the age ofseventy-five years and pursuant to provisions of Regulation 17(1A) of the ListingRegulations Board recommends special resolution(s) for appointment / re-appointment ofaforesaid directors. b. Key Managerial Personnel: Mr. Rohin Bomanji was appointed as theManager of the Company by the Members at the 19th AGM held on September 282016 for a period of 3 years w.e.f. August 5 2016. The present term of Mr. Bomanji asManager is completing on August 4 2019. Upon recommendation of the Nomination andRemuneration Committee the Board of Directors of the Company at their meeting held onAugust 2 2019 have approved the re-appointment of Mr. Rohin Bomanji as Manager of theCompany for a period of three (3) years w.e.f. August 5 2019 upto August 4 2022 subjectto approval of members at the ensuing AGM.

Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Actread with the rules framed thereunder the following persons were Key Managerial Personnelof the Company as on March 31 2019:

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.

Accordingly the Board recommends the reappointment of Mr. Rohin Bomanji as Manager ofthe Company at the ensuing AGM.

c. Declarations from Independent Directors: In terms of the provisions of sub-section(6) of Section 149 of the Act and Regulation 16 and other applicable provisions underListing Regulations including amendment thereof the Company has received declarationsfrom all the Independent Directors of the Company that they meet with the criteria ofindependence as provided in the Act and Listing Regulations. There has been no change inthe circumstances affecting their status as an Independent Director during the year.Further the Non-Executive Directors of the Company had no pecuniary relationship ortransactions with the Company other than sitting fees commission and reimbursement ofexpenses if any incurred by them for the purpose of attending meetings of the Company.

d. Familiarisation Programme for Independent Directors: Pursuant to the Code of Conductfor Independent Directors specified under the Act and Regulation 25(7) of the ListingRegulations the Company familiarises its Independent Directors on their roles rightsresponsibilities in the Company nature of the industry in which the Company operates andbusiness model of the Company etc. The note on this familiarisation programme is alsoposted on the Company's website under the link: Prog_for_Ind.pdf.


The Board of Directors met four times during the year ended March 31 2019 the detailsof the same are mentioned in the Corporate Governance Report which forms part of thisAnnual Report.


The Board Committees comprise of mandatory committees as per the Act and ListingRegulations viz. Audit Committee Nomination and Remuneration Committee Corporate SocialResponsibility Committee and the Stakeholders Relationship Committee. The non-mandatoryBoard committees comprise of the Risk Management Committee Asset Liability ManagementCommittee and IT Strategy Committee constituted as per applicable RBI guidelines. Detailsof composition of these committees alongwith number of meetings held during the year andother related details are set out in the Corporate Governance Report which forms part ofthis Report.


The detailed composition and terms of reference of the Audit Committee is set out inthe Corporate Governance Report which forms part of this Report.

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


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 its Committees. For this purpose anEvaluation Questionnaire was prepared considering the criteria for evaluation inaccordance with the Company's "Nomination and Remuneration Policy" approved bythe Board on recommendation of the Nomination and Remuneration Committee taking intoaccount the applicable provisions under the Act and the rules made thereunder the ListingRegulations read with the Circulars issued by SEBI in this regard which interalia coveredvarious aspects such as participation in meetings contribution to strategic decisionmaking core governance and compliance etc. The aforesaid Evaluation Questionnaire wascirculated to all the Directors and their responses were received in a sealed envelopeaddressed to the Chairman of the Board of Directors and results thereof were thendiscussed in the next meeting of the Board of Directors.


During the year under review the "Policy on Appointment Training Evaluation andRemuneration of Directors and Senior Management Personnel" was renamed to"Nomination and Remuneration Policy" and revised by the Board of Directorsbased on the recommendation of the Nomination and Remuneration Committee considering theprovisions of the Act and the Listing Regulations as amended in 2018. The Policy interaliacovers the requirements specified under Section 178(3) of the Act comprising of criteriafor determining qualifications positive attributes and independence of a director etc.The Detailed Policy duly modified in terms of the Listing Regulations as amended duringthe year is given as Annexure B and is also posted on the Company's website underthe link: Policy.pdf.


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 31 2019and the Statement of Profit and Loss for the financial year ended March 31 2019;

(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.


During the year under review based on the recommendations of the Audit Committee theBoard of Directors revised the Whistle Blower Policy considering the provisions of the Actand Listing Regulations as amended in 2018 and renamed the existing Whistle Blower Policyto Whistle Blower Policy and Vigil Mechanism. The Policy is also posted in the Company'swebsite at the link: http://

PARTICULARS OF EMPLOYEES: a. During the year under review no employee was inreceipt of remuneration which in aggregate was equal to or more than the limit specifiedunder 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 theAct and Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is attached as Annexure C to this Report.


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 and at the same timeseveral 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.


During the year under review the Board had constituted a Corporate SocialResponsibility ("CSR") Committee in terms of the provisions of Section 135 ofthe Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014inter alia to formulate and recommend to the Board the Corporate Social ResponsibilityPolicy as specified in the Act to recommend the amount of expenditure to be incurred onthe activities to be undertaken by the Company as per the CSR Policy to monitor the CSRPolicy of the Company from time to time and to carry out any other function as may beassigned to the CSR Committee. Details of the composition of the CSR Committee have beendisclosed separately as part of the Corporate Governance Report. In accordance withSchedule VII of the Act the Company had adopted a CSR Policy outlining various CSRactivities to be undertaken by the Company in the areas of health water sanitationpromoting education skill development etc. The CSR policy of the Company is available onthe Company's website at the link:

The report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is attached as Annexure D.


M/s. Chaturvedi & Shah Chartered Accountants were reappointed as the StatutoryAuditors of the Company at the Twenty First AGM of the Company held on September 27 2018to hold office from the conclusion of the Twenty First AGM till the conclusion of theTwenty Sixth AGM. During the year under review the firm of M/s. Chaturvedi & ShahChartered Accountants Statutory Auditors had been converted into an LLP with same FirmRegistration Number and accordingly known as M/s. Chaturvedi & Shah LLP CharteredAccountants. M/s. Chaturvedi & Shah LLP Chartered Accountants have confirmed thatthey are eligible to act as the Statutory Auditors of the Company for FY 2019-20.


M/s. Dinesh Jain & Co. Chartered Accountants were the Internal Auditors of theCompany for the FY 2018-19. Based on the recommendations of the Audit Committee the Boardof Directors at their meeting held on May 15 2019 appointed M/s. V. S. Somani & Co.Chartered Accountants as the Internal Auditors of the Company for FY 2019-20.


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 31 2019. The Secretarial Audit Report prepared inaccordance with sub-section (3) of Section 134 and Section 204(1) of the Act in theprescribed Form MR-3 by M/s. Parikh Parekh & Associates Company Secretaries isattached as Annexure E to this 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 the Secretarial Audit Report. Further the Statutory Auditorshave not reported any instances of fraud to the Central Government and Audit Committee asper the provisions of Section 143(12) of the Act read with Rule 13 of the Companies (Auditand Auditors) Rules 2014.


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 as AnnexureF to this Report.


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.


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


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.


The provisions of Section 148(1) of the Act are not applicable to the Company.


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. During the year under review nocomplaints were received by ICC.


The Institute of Company Secretaries of India has currently mandated compliance withthe Secretarial Standards on board meetings and general meetings. During the year underreview the Company has complied with the applicable Secretarial Standards.


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
Place : Mumbai Chairman
Date : August 2 2019 DIN: 00026581