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Sumit Woods Ltd.

BSE: 535107 Sector: Infrastructure
NSE: SUMIT ISIN Code: INE748Z01013
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Sumit Woods Ltd. (SUMIT) - Director Report

Company director report

Your Directors delightfully present the 23rd Annual Report on the businessand operation of the Company together with the Audited Financial Accounts (Consolidatedand Standalone) for the year ended 31st March 2019

FINANCIAL HIGHLIGHTS

(Rupees in Lakhs)

Particulars

Consolidated

Standalone

2019 2018 2019 2018
Total Turnover 4219.97 3139.31 1982.53 1738.79
Other Income 103.99 293.82 79.36 126.68
Profit/(Loss) before Finance Cost
1446.90 1684.52 899.82 1001.00
Depreciation & Amortisation and Taxation
Less: 1. Finance Cost 431.12 605.99 338.07 481.81
2. Depreciation & Amortisation 52.13 65.69 52.12 65.69
Profit/ (Loss) Before Taxation 963.65 1012.84 509.63 453.50
Less: Provision for Taxation
Current Tax 291.94 248.95 136.69 139.52
Deferred Tax -5.15 10.64 -5.15 -10.64
Net Profit/(Loss) for the Year 676.86 774.53 378.09 324.62
Less: Income Tax paid for earlier year - - - -
Profit/(Loss) after Taxation 676.86 774.53 378.09 324.62
Add: Other Comprehensive Income
Total Comprehensive Income 676.86 774.53 378.09 324.62
Add : Balance of Profit (Loss) from earlier
2495.84 1721.31 1927.50 1602.88
years and From JV and LLP
Amount available for Appropriations 3172.70 2495.84 2305.59 1927.50
Add: Transfer from Debenture - - - -
Redemption Reserve
Less: Dividend - - - -
Tax on distributed Profits - - - -
Balance carried forward 3172.70 2495.84 2305.59 1927.50

Notes: Previous years figures have been reclassified/regrouped wherever necessaryto correspond with those of the current year.

STATE OF COMPANY'S FINANCIAL AFFAIR

Consolidated Financials

During the year under review your Company s consolidated total revenue stood atRs.4219.97 lakh as compared to Rs.3139.31 lakh for the previous year representing anincrease of 34.42%; profit before tax stood at Rs.963.65 lakh for the year under review ascompared to Rs 1012.84 lakh for the previous year representing an decrease of 4.86%; andthe total comprehensive income stood at Rs. 676.86 lakh as compared to Rs.774.53 lakh forthe previous year representing an decrease of 12.61%.

Standalone Financials

During the year under review the total revenue stood at Rs.2061.89 lakh as comparedto Rs.1865.46 lakh for the previous year representing an increase of 10.53%; profitbefore tax stood at Rs.899.82 lakh for the year under review as compared to Rs. 1001 lakhfor the previous year representing a decrease of 10.11%; and the total comprehensiveincome stood NIL lakh for the year under review as well as previous year.

NATURE OF BUSINESS

The Company is engaged in the activities of Real Estate Development. On the real estatedevelopment front the Company develops residential commercial retail and socialinfrastructure projects.

CHANGE IN THE NATURE OF BUSINESS

During the year the Company has not changed its business.

TRANSFER TO RESERVES

It is not proposed to transfer any amount to reserves out of the profits earned duringFY 2018-19.

DIVIDEND

Your Directors are having a view of conserving the resources of company and for thatreason the directors are not recommending any dividend.

DEPOSITS

During the year under review your Company neither accepted any deposits nor there wereany amounts outstanding at the beginning of the year which were classified as Deposits interms of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 and hence the requirement for furnishing of details of depositswhich are not in compliance with the Chapter V of the Companies Act 2013 is notapplicable.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

The Board of Directors at its meeting held on 23rd May 2019 subject toconsent of the members of the Company approved and recommended issue of bonus equityshares of the Company in the proportion of 1:1 that is 1 (One) fully paid-up equity shareof Rs.10/- (Rupees Ten only) each for every 1 (One) existing fully paid-up equity share of10/- (Rupees Ten only) each by capitalising a sum not exceeding Rs. 160000000/- (RupeesSixteen Crore only) out of capital redemption reserve / securities premium account and/orany other permitted reserves / surplus of the Company as may be considered appropriate.The Company s shares have been listed on NSE SME Emerge since 10th September2018 till date. Due to Proposed Issue of Bonus Shares paid up capital of the company isproposed to increase to 305870440 i.e. it is likely to increase beyond twenty fivecrore rupees as stated in Reg.106(U)(2) and hence to comply with the regulation 106(U)(2)it is required to migrate from NSE SME Emerge to NSE Main Board. Further The Company sOperation have been increasing at a rapid pace. In view of increasing business activitiesand for strong brand building the Board of Directors has accordingly decided to migratefrom NSE SME Emerge to NSE Main Board. The Listing on the Main Board is likely to havewider participation from investors at large and trading in the Equity Shares of theCompany on the

Main Board will go on the long way in enhancing the image and goodwill of the Company.The benefits of listing on the Main Board in the form of market Capitalization enhancedliquidity larger participation visibility etc. will accrue to the Shareholders of theCompany.

By Migrating on the Main Board the goodwill and the growth of the Company will increaseand Company will be able to expand its business. The Migration Policy from SME Platform toMain Board requires approval of members by way of Special Resolution. The Shareholdersapproval for the said purpose is sought through this resolution as required under ChapterXB of SEBI ICDR Regulations.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company is an equal opportunity provider and continuously strives to build a workculture which promotes the respect and dignity of all employees across the Organization.In order to provide women employees a safe working environment at workplace and also incompliance with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules framed thereunder the Company hasformulated a well-defined policy on prevention prohibition and redressal of complaintsrelating to sexual harassment of women at the workplace. All women who are associated withthe Company either as permanent employees or temporary employees or contractual personsincluding service providers at Company sites are covered under the above policy. The saidpolicy has been uploaded on the internal portal of the Company for information of allemployees.

No complaints pertaining to sexual harassment of women employees from any of theCompany s locations were received during the year ended 31st March 2019.

CORPORATE GOVERNANCE

Reports on Corporate Governance and Management Discussion and Analysis in accordancewith SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") along with a certificate from Auditors regardingcompliance of the Corporate Governance are given separately in this Annual Report.

All Board Members and Senior Management Personnel have affirmed compliance with thecode of conduct for the financial year 2018-19. A declaration to this effect signed by theChief Executive Officer of the Company is contained in this annual report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of Company Mr. Mitaram Jangid retires by rotation and being eligible offershimself for reappointment. Brief details of Mr. Mitaram Jangid as required underRegulation 36(3) of Listing Regulations are provided in the notice of the ensuing AnnualGeneral Meeting. The members approval is being sought at the ensuing Annual GeneralMeeting for the above appointment.

The Company has received declarations from all the Independent Directors of theCompany confirming that they meet the criteria of independence as prescribed under theCompanies Act 2013 and Regulation 16(1)(b) SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Pursuant to the provisions of Section 203 of the Companies Act 2013 Ms. Sayli Munjwas appointed as the Company Secretary and Compliance Officer of the Company with effectfrom 12th February 2019 and Ms. Priyanka Waghela was appointed as ChiefFinancial Officer with effect from 12th April 2019 based on the recommendationof the Nomination and Remuneration Committee of the Board.

During the year under review Ms. Rekha Dekhale resigned from the position of CompanySecretary with effect from 1st February 2019.

REMUNERATION POLICY AND CRITERIA FOR SELECTION OF CANDIDATES FOR APPOINTMENT ASDIRECTORS KEY MANAGERIAL PERSONNEL AND SENIOR LEADERSHIP POSITIONS

The Company has in place a policy for remuneration of Directors Key ManagerialPersonnel and Employees of senior leadership Position as well as well-defined criteria forthe selection of candidates for appointment to the said positions which has been approvedby the Board. The Policy broadly lays down the guiding principles philosophy and thebasis for payment of remuneration to the executive and non-executive Directors (by way ofsitting fees and commission) Key Managerial Personnel. The criteria for selection ofcandidates for the above positions cover the various factors and attributes which areconsidered by the Nomination & Remuneration Committee and the Board of Directors whilemaking a selection of the candidates. The above policy along with the criteria forselection is available at the website of the Company athttp://www.sumitwoods.com/images/policies/Nomination%20and%20Remuneration%20Polic y.pdf

FAMILIARIZATION PROGRAM FOR THE INDEPENDENT DIRECTORS

The Company has over the years developed a robust familiarization process for the newlyappointed directors with respect to their roles and responsibilities way ahead of theprescription of the regulatory provisions. The process has been aligned with therequirements under the Act and other related Regulations. This process inter-alia includesproviding an overview of the Real Estate Industry the Company s business model the risksand opportunities etc. Details of the Familiarization Programme are explained in theCorporate Governance Report and are also available on the Company s website athttp://www.sumitwoods.com/images/policies/Familarization%20for%20Independent%20Directors.pdf

BOARD EVALUATION

The Board has carried out its annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration Risk Management and Compliance Committees as mandated under the Actand SEBI Listing Regulations. The criteria applied in the evaluation process are explainedin the Corporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year 7 (Seven) Board Meetings 2 (Two) Audit Committee Meetings 1 (One)Nomination and Remuneration Committee Meeting and 1 (One) Corporate Social ResponsibilityCommittee Meeting were convened and held. Details of meetings of the Board and itscommittees along with the attendance of the Directors therein have been disclosed in theCorporate Governance Report.

DETAILS OF REMUNERATION TO DIRECTORS

The information relating to remuneration of Directors and details of the ratio of theremuneration of each Director to the median employee s remuneration and other details asrequired pursuant to section 197(12) of the Act read along with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached as Annexure4 to the report

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Particulars of guarantees or Investments covered under section 186 of the CompaniesAct 2013 have been given or provided during the year are provided in Annexure 5 to thereport.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has developed a Related Party Transactions Manual and Standard OperatingProcedures for the purpose of identification and monitoring Related Party transactions.All transactions with Related Parties are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee and the Board isobtained for the transactions which are foreseeable and of a repetitive nature. Thetransactions entered into pursuant to the approvals so granted are subjected to audit anda statement giving details of all related party transactions is placed before the AuditCommittee and the Board of Directors on a quarterly basis. The statement is supported by acertificate from the Whole-Time Director. The policy on Related Party Transactions asapproved by the Board of Directors has been uploaded on the Company s website and can beseen at the linkhttp://www.sumitwoods.com/images/policies/Policy%20on%20Related%20Party%20Transactio n.pdfDuring the year the Company had not entered into any contract/arrangement/ transactionwith related parties which could be considered material in accordance with the policy ofthe Company on materiality of related party transactions. Accordingly the disclosure ofRelated Party Transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC 2 is not applicable

None of the Directors and the Key Managerial Personnel has any pecuniary relationshipsor transactions vis--vis the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism which includes a Whistle Blower Policyfor its Directors and Employees to provide a framework to facilitate responsible andsecure reporting of concerns of unethical behaviour actual or suspected fraud orviolation of the Company s Code of Conduct & Ethics. The Whistle Blower Policy isposted on the website of the Company and the web-link to the same ishttp://www.sumitwoods.com/images/policies/Whistle%20Blower%20Vigil%20Mechanism%20Policy.pdf

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls in place with reference tofinancial statements. These are continually reviewed by the Company to strengthen the samewherever required. The internal control systems are supplemented by internal audit carriedout by an independent firm of Chartered Accountants and periodical review by theManagement. The Audit Committee of the Board addresses issues raised by both the InternalAuditors and the Statutory Auditors.

SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES

The Company has one Subsidiary Company Mitasu Developers Private Limited. This companyis not material subsidiary as per the thresholds laid down under the SEBI ListingRegulations. Policy for determining material subsidiaries in line with the SEBI ListingRegulations. The Policy is also being revised effective from 1st April 2019 inline with the amendments made to the SEBI Listing Regulations. The Policy has beenuploaded on the Company s website at:http://www.sumitwoods.com/images/policies/Policy%20for%20Determining%20Material%20Subsidiaries.pdf

RISK MANAGEMENT POLICY

The Company has a well-defined risk management framework in place which provides anintegrated approach for identifying assessing mitigating monitoring and reporting ofall risks associated with the business of the Company. Although the Company is notmandatorily required to constitute the Risk Management Committee but to ensure effectiverisk management the Board of Directors constituted the Risk Management Committee tomonitor and review risk management assessment and minimization procedures and toidentify review and mitigate all elements of risks which the Company may be exposed to.

The Company recognizes that risk is an integral and unavoidable component of itsbusiness. Hence the Company has adopted a Risk Assessment and Management policy("Policy") to formalize risk based decision-making together with managementprocesses. Risks are managed through a formal risk process as set forth in the Policy.This policy articulates the requirements for processes which include identifyingassessing measuring and monitoring risk activities across the organization andestablishes governance roles for risk management.

AUDITORS

Statutory Auditors

M/s. SSRV & Associates. Chartered Accountants Mumbai (FRN - 135901W) appointedas Statutory Auditors of the Company at the 22nd AGM held on 30thSeptember 2017 till the conclusion of 27th AGM to be held in 2022 subject toratification of their appointment by the Members at every intervening Annual GeneralMeeting held thereafter. The requirement of seeking ratification of the members forcontinuance of their appointment has been withdrawn consequent upon the changes made bythe Companies (Amendment) Act 2017 with effect from 7th May 2018.Hence theresolution seeking ratification of the members for their appointment is not being placedat the ensuing Annual General Meeting.

Secretarial Auditor

A Secretarial Audit Report given by M/s. Kudtarkar & Associates Practicing CompanySecretaries is annexed with the report as Annexure 2 and forms an integral part of thisReport. The report is self-explanatory and do not call for any further comments.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration in excess of the limits prescribed underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014. Information as required under the provisions of Rules 5(2) & 5(3) of theCompanies appointment and Remuneration of Managerial Personnel) Rules 2014 are set outin

Directors Report.

LISTING WITH STOCK EXCHANGES

At present the equity shares of the Company are listed on the Emerge-the SME GrowthPlatform of National Stock Exchange at Mumbai with effect from 10th September2018.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

INSIDER TRADING REGULATIONS

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations 1992read with SEBI (Prohibition of Insider Trading) Regulations 2015 as amended from time totime the code of conduct for prevention of insider trading and the Code for CorporateDisclosures ("Code") as approved by the Board from time to time are in forceby the Company.

CORPORATE SOCIAL RESPONSIBILITY

The Annual Report on CSR activities for the financial year 2018-19 is enclosed asAnnexure 1.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYfS OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company s future operations.

PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo as per section 134(3)(2) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 for the year ended 31st March 2018 are provided underAnnexure 3 to this report.

BUSINESS RESPONSIBILITY REPORTING

A separate section on Business Responsibility forms part of this Annual Report asrequired under Regulation 34(2)(f ) of SEBI Listing Regulations.

ANNUAL RETURN

The Annual Return of the Company has been placed on the website of the Company and canbe accessed at http://sumitwoods.com/investors.php Pursuant to the provisions of Section92(1) of the Companies Act 2013 as amended by the Companies Amendment Act 2017

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards issued by the Institute of Companies Secretaries of India (SS1 andSS2) respectively relating to Meetings of the Board and its Committees which havemandatory application.

DIRECTORSf RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Act: a) that in the preparation of the annual financial statements forthe year ended 31st March 2019 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures if any;

b) that such accounting policies as mentioned in Note 1 of the Notes to the Accountshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as on 31st March 2019 and of the profit of the Company for theyear ended on that date;

c) that 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) that the annual accounts have been prepared on a going concern basis;

e) that proper internal financial controls laid down by the Directors were followed bythe Company and such internal financial controls are adequate and were operatingeffectively; and

f) that proper systems to ensure compliance with the provisions of all applicable lawshave been devised and such systems were adequate and were operating effectively.

ACKNOWLEDGMENTS

The Directors would like to thank all the Stakeholders including FinancialInstitutions Banks Government Authorities Power Utilities Regulators CustomersVendors and Members for their continued support to the Company.

Your Directors also wish to place on record their deep sense of appreciation for theexcellent services of the employees at all levels and all other associated with theCompany.

By Order of the Board of Directors for Sumit Woods Limited

(formerly known as Sumit Woods Private Limited)

Bhushan Nemlekar Whole-Time Director

DIN: 00043824

Registered Office:

B - 1101 Express Zone Diagonally Opp. to Oberoi Mall W.E. Highway Malad (East)Mumbai 400097

Place: Mumbai

Date: 23rd May 2019