The Directors of your company are pleased to present their 30th Annual Report on theaffairs of the company together with Audited Accounts of the Company for the year ended31st March 2019.
1. FINANCIAL RESULTS
The financial statements of the Company for the financial year ended 31st March 2019had been prepared in accordance with Indian Accounting Standards (Ind AS). The financialperformance of your Company for financial years 2018-19 & 2017-18 are as under:
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations (Net) ||116046.64 ||105467.42 |
|Other Income ||203.81 ||1287.83 |
|Profit before Depreciation Interest and Tax (PBDIT) ||13094.68 ||11420.20 |
|Interest and Financial expenses ||3947.46 ||2904.77 |
|Profit before Depreciation and Tax (PBDT) ||9147.22 ||8515.43 |
|Depreciation and Amortization ||5365.42 ||5627.39 |
|Profit before Tax (PBT) ||3781.80 ||2888.04 |
|Provision for Tax || || |
|Current Tax ||908.40 ||1745.48 |
|Prior Period Tax ||19.56 ||-148.28 |
|Deferred Tax ||451.81 ||-625.00 |
|Profit after Tax (PAT) ||2402.03 ||1915.84 |
|Other Comprehensive Income (Net of Tax of Rs. -11.19 Lakhs in Current Year and Rs. -8.83 Lakhs in previous year) ||20.82 ||16.69 |
|Total Comprehensive Income for the period ||2422.85 ||1932.53 |
|Earnings Per Equity Share (In Rs.) || || |
|Basic ||67.45 ||53.80 |
|Diluted ||67.45 ||53.80 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Global growth is expected to remain over 3.0% in 2019 and 2020. However the steadypace of expansion in the global economy masks an increase in downside risks that couldpotentially exacerbate development challenges in many parts of the world according to theWorld Economic Situation and Prospects 2019. The global economy is facing a confluence ofrisks which could severely disrupt economic activity and inflict significant damage onlonger-term development prospects. These risks include an escalation of trade disputes anabrupt tightening of global financial conditions geo-political issues and intensifyingclimate risks.
After strong growth in 2017 and early 2018 global economic activity slowed notably inthe second half of last year reflecting a confluence of factors affecting majoreconomies. China's growth declined following a combination of needed regulatory tighteningto rein in shadow banking and an increase in trade tensions with the United States. Theeuro area economy lost more momentum than expected as consumer and business confidenceweakened and car production in Germany was disrupted by the introduction of new emissionstandards investment dropped in Italy as sovereign spreads widened and external demandespecially from emerging Asia softened. Elsewhere natural disasters hurt activity inJapan. Trade tensions increasingly took a toll on business confidence and so financialmarket sentiment worsened with financial conditions tightening for vulnerable emergingmarkets in the spring of 2018 and then in advanced economies later in the year weighingon global demand. Conditions have eased in 2019 as the US Federal Reserve signaled a moreaccommodative monetary policy stance and markets became more optimistic about a US-Chinatrade deal but they remain slightly more restrictive than in the fall.
In many developed countries growth rates have risen close to their potential whileunemployment rates have dropped to historical lows. The growth in global industrialproduction and merchandise trade volumes has been tapering since the beginning of 2018especially in trade-intensive capital and intermediate goods sectors. Global inflationremains moderate but is on an upward trend in the majority of countries. Rising oilprices contributed to additional inflationary pressures in oil-importing countries overthe course of most of 2018 while currency depreciation against the US dollar put upwardpressure on imported prices in many countries. By contrast some of thecommodity-exporting countries in Africa and the Commonwealth of Independent States (CIS)that experienced sharp currency depreciations in response to the commodity price shocks of2014/15 have seen inflation recede in 2018 as the exchange-rate shock has been absorbedinto the price level. Ongoing trade disputes can be expected to put some upward pressureon inflation in 2019 as the impact of tariffs passes through value chains to consumerprices. In developed economies rising capacity constraints have put some upward pressureon inflation and headline inflation generally exceeds Central Banks' targets in Europeand North America.
The Indian economy retained its tag of the fastest growing major economy in the worldin FY 2018-19 for a second year in a row as it continued its climb on an upward growthpath. The economy registered a growth rate of 6.8% during the 2018-19 periods as perquarterly (Q4) estimates of the Central Statistical Office. The Indian economy started thefiscal year 2018-19 with a healthy 8.2% growth in the first quarter on the back ofdomestic resilience. Growth eased to 7.3% in the subsequent quarter due to rising globalvolatility largely from financial volatility normalized monetary policy in advancedeconomies externalities from trade disputes and investment rerouting. Further theIndian rupee suffered because of the crude price shock and conditions exacerbated asrecovery in some advanced economies caused faster investment outflows. However economicactivity decelerated sharply to 5.8% in Q4 as compared to 6.6% in Q3 Despite softergrowth the Indian economy remains one of the fastest growing and possibly the leastaffected by global turmoil. In fact the effects of the aforementioned external shockswere contained in part by India's strong macroeconomic fundamentals and policy changes(including amendments to the policy/code related to insolvency and bankruptcy bankrecapitalization and foreign direct investment). RBI in its monetary policy statement of7th August 2019 has projected a GDP growth of 6.90% for the current fiscal 2019-20 withrisk evenly balanced.
The Indian economy witnessed robust industrial growth during FY 2018-19 and themomentum is expected to continue next year as well. The Index of Industrial Production(IIP) with base 2011-12 for the April-January period for 2018-19 registered a 4.4%increase over the corresponding period for the previous year. Eleven out of twenty-threeindustry-groups exhibited positive growth during 2018-19 over the previous year with theindustry groups "Manufacture of Food Products" and "Manufacture of WearingApparel" recording highest growth rates at 17% and 16.4% respectively.
The global textile and apparel industry is continuously evolving. Over the years ithas witnessed multiple shifts in consumption and production patterns including shifts ingeographical manufacturing hubs as the industry is driven by the availability of cheaplabour. The textile and apparel trade is predicted to grow at a CAGR of 3.7% during theperiod 2018-28. During this period the increase in apparel trade is expected to be at aCAGR of 4.5% and textiles at a CAGR of 2.5%. Even though apparel industry is dominated bydeveloped markets of EU and the US the emerging markets led by countries such as IndiaChina Russia and Brazil are becoming consumption markets. Simultaneously India and Chinahave strong textile manufacturing base and thus are emerging as both sourcing andconsuming nations.
The Indian Textiles and Apparels (T&A) industry accounts for approximately 4% ofthe global T&A market. The T&A industry is one of the largest and the mostimportant sectors for the Indian economy in terms of output foreign exchange earnings andemployment. The industry contributes approximately 7% to industrial output in value terms2% to the GDP and 15% to the country's export earnings. It also provides direct employmentto over 45 million people and is the second largest provider of employment afteragriculture.
As per the Confederation of Indian Textile Industry (CITI) India's textiles and apparelexports continued to decline in FY 2019 as the total textile products exports remainedflat during the said period. Total textile products grew a mere 1.66 per cent to US $35.96 billion as compared to US $ 35.38 billion the previous fiscal as the apparelshipments went down 3.42 %. The export of textiles products grew 6.19% to US $ 19.83billion during the fiscal under review as compared to US $ 18.67 billion a year ago andthat of apparels declined sharply by 3.40% to US $ 16.13 billion during the fiscal 2019 asagainst US $ 16.70 billion in the previous financial year It also maintained that amongtextile products cotton yarn fabrics made-ups handloom products continued to be thelargest export earner with a growth of 9.22% during the fiscal 2019 to US $ 11.206billion. The decline in the country's apparel exports in FY19 was primarily driven by asharp decline witnessed in shipments to the United Arab Emirates (UAE) from July 2017onwards after the introduction of GST and reduction of duty drawback rates in October lastyear.
The Indian government has come up with a number of export promotion policies for thetextiles sector. It has allowed 100 per cent FDI in the Indian textiles sector under theautomatic route. The Government of India has increased the basic custom duty to 20 percent from 10 per cent on 501 textile products to boost Make in India and indigenousproduction and approved a scheme for rebate of all state and central embedded levies forapparel and made-up textile segments which would make shipments zero-rated therebyboosting the country's competitiveness in export markets. The decision has significance asshipments from neighboring countries like Sri Lanka Bangladesh and Vietnam enjoy zeroduty access to the EU which is the biggest export market for India's apparel sector.Under Regular Union Budget 2019-20 the government has allocated Rs700 crore (US$ 97.02million) for Amended Technology Upgradation Fund Scheme (ATUFS). China's risingmanufacturing cost and shifting of focus from exports to its own growing domesticconsumption will offer an opportunity for the Indian textiles sector to grab the marketshare of China in the developed world especially the European countries and the UnitedStates which cumulatively comprise around 60 percent of the global export market.Retaliatory tariffs between China and USA is bound to have a ripple effect on othernations' economies. With this move the USA's domestic market will become costlier and atthe same time Chinese Garment factories will lose business. But the competition will risein other markets. However this is a good opportunity for India to cater to the US market.The conclusion of the much-awaited Indo-EU FTA will open up new opportunities for exports.However its delay is certainly restricting export of textiles to the EU as competingnations like Pakistan and Bangladesh enjoy the duty benefit of 6% to 8% as against IndianProducts. The increase in export benefits announced in March 2019 in Made-ups will giverelief to exporters in times to come. The World including the advanced countries arebecoming increasingly inward-looking and resorting to protectionist measures therebyputting multilateral system of trading at risk. This could pose a serious challenge in theexport markets. The duty free import of fabrics from China into Bangladesh and in returnthe Garments are being imported duty free into India from Bangladesh is hitting hard theIndian Textile Industry.
Cotton yield in India is likely to decline this year to hit a three-year low due tocrop damage following drought in its major growing states including Gujarat andMaharashtra the two states jointly contributing half of India's cotton output. The CottonAdvisory Board (CAB) estimates India's cotton output at 31.2 million bales (1 bale = 170kg) for 2018-19 compared with 37 million bales in the previous year. India's CottonImporter are set to double amid crop shortfall for the 2018-19 season which end inSeptember 2019. While Cotton industry estimates import to cross 30 lakh bales (each of 170Kg) for the season double from 15.8 lakh bales reported last year. Demand for the cottonyarn to grow at slower pace of 4.5% in fiscal year 2020 as compared with 5.6% in theprevious financial year. The slowdown will be mainly driven by tepid growth in domesticdemand at 2.9%-3% in fiscal 2020.
The Company is dealing in the Yarn Segment only and Company is persistently workinghard to face such challenges by cost reduction with economies of scales by commissioningof 68256 Spindles (33% increase in capacity) process improvements minimizing wastage andimproving productivity & quality to mitigate the cost pressure in our overalloperations. We are moving ahead through our result oriented strategies for futuresustainability & development.
Key Financial Ratios (S)
In accordance with the SEBI (Listing Obligations and Disclosure Requirements)(Amendment) Regulations 2018 the Company is requiring to give details of significantchanges (change of 25% or more as compared to the immediately previous financial year) inkey financial ratios. The detail is as under:-
|Ratio ||Unit ||31st March 2019 ||31st March 2018 ||Changes (%) ||Remarks |
|Debtor Turnover || || || || || |
|Ratio ||Days ||30 ||34 ||11.76 ||Improvement |
|Inventory Turnover || || || || || |
|Ratio ||Days ||97 ||97 ||Nil ||- |
|Interest Coverage || || || || || |
|Ratio ||Times ||4.31 ||3.32 ||29.81 ||Improvement |
|Current Ratio ||Times ||1.03 ||1.09 ||5.50 ||Part of Long Term |
| || || || || ||Funds deployed in the |
| || || || || ||Expansion Project. |
|Debt Equity Ratio ||Times ||1.21 ||0.86 ||40.69 || |
|Operating Profit Margin ||% ||3.08 ||2.29 ||34.50 ||Improvement |
|Net Profit Margin ||% ||2.07 ||1.23 ||68.29 ||Improvement |
|Return on Net Worth ||% ||9.99 ||9.54 ||4.72 ||Improvement |
Ratios where there has been a significant change as compared to previous year
The Company had installed/ commissioned the Brownfield Project of 68256 Spindles atBathinda Unit (Punjab) for manufacture of Cotton Yarn at an appraised cost of Rs. 265 Crsand New Term Loan of Rs. 170 Crs availed/ sanctioned by the Banks due to which there issignificant increase in the Debt Equity Ratio and decrease in the current ratio of theCompany. All other Key Ratios had improved with the improved financial performance/prudent financial management.
During the year under review the company achieved production of 46862 M.T. ofCotton/Synthetic Yarn against previous year production of 44692 M.T. showing an increaseof about 4.85%. The company achieved a gross turnover/operating income of Rs. 116046.64Lakhs (including export incentives of Rs. 783.56 Lakhs) as compared to Rs. 105467.42 Lakhs(including export incentives of Rs. 1667.52) in the previous year showing a growth ofabout 10.03%.The value of the exports remained flat at the level of Rs. 55757.47 Lakhs(Previous Year Rs. 56664.62 Lakhs). The full year impact of the performance of the newcapacity of 68256 Spindles (33%) will be reflected in the financial year 2019-20.
The company achieved Gross Profit (Profit before depreciation interest and income tax)of Rs.13094.68 Lakhs with GP ratio of 11.28% during FY 2018-19 as compared to Rs. 11420.20Lakhs in the previous FY 2017-18 with GP ratio of 10.82% which has improved due to priceimprovement. The interest cost increased to Rs. 3947.46 Lakhs as compared to Rs. 2904.77Lakhs in the previous year due to increased level of bank borrowings with a part ofexisting fund deployed in expansion project and higher rate of interest/charges on creditfacilities. The company earned gross cash profit (before tax) of Rs. 9147.22 Lakhs againstRs. 8515.43 Lakhs in the previous year and cash profit after current taxes of Rs. 8219.27Lakhs against Rs. 6918.23 Lakhs in the previous year as deferred tax provision is a noncash item. The Company earned profit before tax of Rs. 3781.80 Lakhs as compared toprevious year Rs. 2888.04 Lakhs. After providing for current tax of Rs. 908.40 Lakhs(Previous year Rs. 1745.48 Lakhs) Prior Period Tax of Rs. 19.56 Lakhs (Previous Year Rs.-148.28 Lakhs) Deferred tax liabilities of Rs. 451.81 Lakhs (Previous Year Rs. -625.00Lakhs) there was a net profit after tax of Rs. 2402.03 Lakhs against previous year netprofit after tax of Rs. 1915.84 Lakhs.
Other Comprehensive Income (Net of tax)for current financial year is Rs. 20.82 Lakhs ascompared to Rs. 16.79 Lakhs in previous year and the net profit after tax andcomprehensive income was Rs. 2422.85 Lakhs as compared to previous year net profit aftertax and comprehensive income of Rs. 1932.53 Lakhs.
The Company had already installed/ commissioned the Brownfield Expansion Project of68256 Spindles at Bathinda Unit (Punjab) for manufacture of Cotton Yarn at a cost of Rs.265 Crs as appraised by Technical Cell of SBI which was financed by the term loans of Rs.170 Crs and Cash Accruals of Rs. 80 Crs and Preference Share Capital of Rs. 15 Crs issuedto the Promoter and Promoter Group which was fully commissioned by the end of February2019 well before the schedule commercial operation date of April 2019 as per TEV Reportshowing the management's capability of implementing large size of projects without anytime and cost overrun. The Installed Capacity of the Company had increased from 204624Spindles to 272880 Spindles as on 31st March 2019. The New Expansion project is an anchorproject for which the company will be entitled to fiscal incentives (including exemptionof electricity duty of 10%) as per the Punjab Industrial and Development Policy 2017.Since the expansion project is a power intensive unit the overall cost of power will below for the new project by 10% as compared to current rates of power.
The Net Block of Property Plant and Equipment/ Capital work in Progress as at 31stMarch 2019 was Rs. 50397.52 Lakhs as compared to Rs. 31668.99 Lakhs in the previous yearas the company has successfully completed the Brownfield Expansion Project of 68256Spindles for manufacture of Cotton yarn at its Bathinda Unit.
Current Assets and Current Liabilities
The current assets as on 31st March 2019 were Rs. 58702.09 Lakhs as against Rs.48203.80 Lakhs in the previous year. Inventory level was at Rs. 30965.13 Lakhs as comparedto the previous year level of Rs. 28134.57 Lakhs. Trade Receivables level was at Rs.19389.43 Lakhs (including Bill discounted/Negotiated FC/INR of Rs. 8617.51 Lakhs) ascompared to the previous year level of Rs. 13169.56 Lakhs (including billdiscounted/Negotiated FC/INR of Rs. 4574.03 Lakhs). The current liabilities as on 31stMarch 2019 were Rs. 69004.96 Lakhs as against Rs. 44496.25 Lakhs in the previous year. TheCurrent Liabilities increased due to Capex Usance Letter of Credit /Acceptance Payable ofRs. 12100.94 Lakhs of New Machinery installed at Bathinda Unit which is part of NewSanctioned Term Loans shown in the other financial liabilities instead of Long TermBorrowings .Trade payable level was at Rs. 17087.17 Lakhs as compare to the previous yearlevel of Rs. 7970.45 Lakhs due to increase amount of import of raw cotton made on cashagainst documents through banks.
LIQUIDITY & CAPITAL RESOURCES
The position of liquidity and capital resources is given below:
|Particulars ||FY 2018-19 ||FY 2017-18 |
|Cash & Cash Equivalents || || |
|Beginning of the year ||80.89 ||52.06 |
|End of the year ||67.93 ||80.89 |
|Net Cash provided/ (used) by: || || |
|Operating Activities ||9719.61 ||13860.18 |
|Investing Activities ||-10569.44 ||-3692.85 |
|Financial Activities ||836.87 ||-10138.50 |
The company is utilizing cash accruals for meeting term loans repayment commitmentsfinancing of capital expenditure etc.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has internal audit department to oversee internal control systems andprocedures to ensure efficiency of decisions for optimum utilization and protection ofresources and compliance with applicable statutory laws and regulations and internalpolicies. Reports are submitted by the internal auditor to the Audit Committee of theBoard and necessary action/recommendation are made there after by the said committee.Continuous efforts are being made to further improve and strengthen the internal controlsystems.
HUMAN RESOURCES / INDUSTRIAL RELATIONS
The company recognizes its human resources as its most valuable asset and takes pridein the commitment competence and dedication shown by its employees in all areas ofbusiness. The Company has specialized professionals in the respective fields to take careof its operations and allied activities. The Company iscommitted to nurturing enhancingand retaining the top talent through superior learning. This is critical pillar to supportthe organization's growth and its sustainability in the long run. During the yearunderreview thecompany enjoyed cordial relationship with workers and employees at all levels.
No dividend was declared by the company for FY 2018-19. The provisions of Section125(2) of the Companies Act 2013 relating to Transfer of Unclaimed Dividend to InvestorEducation and Protection Fund do not apply as there was no dividend declared and paid bythe company in the past 10 years.
3. SHARE CAPITAL
During the year under review the Company had issued 1500000 Redeemable PreferenceShares of Rs. 10/- at a premium of Rs. 90/- each on Private Placement Basis to Promotersand Promoters Group and fund received by the company had been utilized for financing theExpansion project of 68256 Spindles costing Rs. 265 Crs .
During the year under review the Company has not issued any equity shares withdifferential voting rights nor has granted any stock options or sweat equity. As on 31stMarch 2019 none of the Directors of the Company hold instruments convertible into equityshares of the Company.
The paid up Equity Share Capital as at 31st March 2019 stood at Rs. 344.35 Lakhs (Rs.356.10 Lakhs minus Calls in Arrears of Rs. 11.74 Lakhs) divided into 3561000 Equity Sharesof the face value of Rs. 10/- each while the paid up Redeemable Preference Shares Capitalas at 31st March 2019 stood at Rs. 10.02 Crores divided into 10016200 Preference Shares ofRs. 10/- each.
4. SUBSIDIARY/ASSOCIATE/JOINT VENTURE COMPANIES
The Company does not have any subsidiary /associate/joint venture companies.
5. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
There are no significant and material orders passed by the Regulators/Court/Tribunalsthat would impact the going concern status of the Company and its future operations.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the provisions of section 135 of the Companies Act 2013 every company havingnet worth of rupees five hundred crore or more or turnover of Rs. one thousand crore ormore or a net profit of rupees five crore or more during any financial year is required tospend in every financial year at least 2% of the average net profits made during the threeimmediate preceding financial years on CSR activities.
The disclosure relating to the CSR activities pursuant to section 134(3) of theCompanies Act 2013 read with Rule 9 of the Companies (Accounts) Rules 2014 and Companies(Corporate Social Responsibility) Rules 2014 is annexed hereto as "Annexure A"and forms part of this Report.
7. BUSINESS RISK MANAGEMENT
The Board of Directors in their meeting has formulated Risk Management Policy of theCompany. The aim of Risk Management policy is to maximize opportunities in all activitiesand to minimize adversity. The policy includes identifying type of risks and itsassessment risk handling monitoring and reporting which in the opinion of the Board maythreaten the existence of the Company. The Risk Management policy may be accessed on theCompany's website.
8. RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of businessand on an arm's lengthbasis. All the Related Party transaction placed before the Audit Committee for approval.Omnibus Approval was obtained on yearly basis in respect of transaction which isrepetitive in nature. All the Related Party transactions are placed before the AuditCommittee and the Board for review and approval on quarterly basis.
During the year the Company had not entered into any contract/arrangement/transactionwith related parties which could be considered material in accordance with the provisionsof Regulation 23 of the SEBI(Listing Obligations and DisclosureRequirements)Regulations2015. Accordingly the disclosure of Related Party Transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable. Suitable disclosureas required by the Accounting Standard (Ind-AS 24) has been made in the notes to theFinancial Statements.
The Policy on dealing with related partytransactions as approved by the Board may beaccessed on the Company's website at the www.sportking.co.in.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans guarantees or made investments under theprovisions of Section 186 of the Companies Act 2013.
In accordance with the provision of Section 152 of the Companies Act 2013 Sh. Rajkumar Avasthi (DIN: 01041890) Managing Director of the company is liable to retire byrotation at the forthcoming Annual General Meeting and being eligible offers himself forre-appointment.
Mr. Sandeep Kapur (DIN: 07016726) who was appointed by the Board of Directors as anAdditional Non Executive Independent Director of the Company on 3rd November 2018 pursuantto the provisions of section 161(1) of the Companies Act 2013 and holds office upto thedate of the ensuing Annual General Meeting of the Company (to be held in September 2019)and the board recommends regularization of appointment of Mr. Sandeep Kapur fromadditional non-executive Independent Director to Non Executive Independent Director for aperiod of five years w.e.f. 3rd November 2018 (as recommended by Nomination andRemuneration Committee) subject to the approval of the members.
As required by the provisions of Regulation 17 (1A) of SEBI (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2018 the board also recommends thecontinuation of holding of office of Non Executive Independent Director of the Company byDr. (Mrs.) Harbhajan Kaur Bal (DIN: 00008546) who has attained the age of 75 years up tothe expiry of her present term in the year 2020 subject to the approval of the members.
All independent directors have given declarations that they meet the criteria ofindependence as laid downunder section 149(6) of the Companies Act 2013 and regulation 25of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
KEY MANAGERIAL PERSONNEL
The following are the Key managerial Personnel of the Company pursuant to Section 203of the Companies Act 2013 read with rule3 and 8 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
1. Mr. Munish Avasthi (Managing Director)
2. Mr. Parveen Gupta (Chief Financial Officer)
3. Mr. Lovlesh verma (Company Secretary)
During the Year Mr. Nikhil Kalra (Company Secretary) left and in his place Mr. LovleshVerma was appointed as Company Secretary of the Company.
The Company has an Audit Committee of the Board of Directors the members of which areSh. Prashant Kochhar Smt. Harbhajan Kaur Bal and Sh. Sunil Puri. Sh. Prashant Kochhar isthe Chairman of the committee.
The committee is empowered to look into all the matters related to finance andaccounting and its terms of reference are as per regulation 18 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with section 177 of TheCompanies Act 2013.
NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
During the year Board Meetings and Audit Committee Meetings were convened and held thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013 and regulation18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Pursuant to the provisions of the Companies Act 2013 and regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit and Nomination & Remuneration Committees. Theperformance evaluation of the independent directors was completed. The performanceevaluation of the Managing Director and Non - Independent Directors were carried out bythe independent directors. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.
NOMINATION AND REMUNERATION POLICY
The Board of the directors has constituted Nomination and Remuneration Committee whohas framed a policy in relation to the remuneration of Directors Key Managerial Personneland Senior Management of the Company and the criteria for their selection and appointmentwhich is stated in the Corporate Governance Report.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
Pursuant to Section 177(9-10) of the Companies Act 2013 and regulation 22 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a whistle blower policy for vigil mechanism for directors and employeesreporting for unethical behavior fraud and mismanagement or violation of Company's codeof conduct. The details of the Policy are also posted on the website of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards hadbeen followed.
ii) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that were reason able and prudent so as to give a trueand fair view of the state of affairs of the Company at the end of the financial year andof the profit of the Company for the year ended on 31st March 2019.
iii) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
iv) The directors had prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls were adequate and were operatingeffectively.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
11.AUDITORS AND THEIR REPORT
The Statutory Auditors of the Company had submitted Auditors' Report on the accounts ofthe Company for the financial year ended 31st March 2019.There is no audit qualificationreservations/ or adverse remarks or disclaimer in the said financial statements. Thecomments in the Auditors' Report read with Notes to Accounts are self- explanatory and donot call for any further explanation. As per the amended provisions of Section 139 of theCompanies Act 2013 ratification of the appointment of statutory auditors by theshareholders of the Company is not required now.
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company appointedM/s B.K. Gupta & Associates Company Secretaries to undertake the Secretarial Audit ofthe Company for the financial year 2018-19. The Secretarial Audit Report is annexedherewith as "Annexure B".
There is no audit qualification reservations or adverse remarks or disclaimer in thesecretarial audit report during the year under review.
The Board of Directors has appointed M/s R.R. & Company Cost Accountants as theCost Auditors of the Company to conduct Audit of the cost records of the company for theFY 2019-20. However as per provisions of Section 148 of the Companies Act 2013 readwith Companies (Cost Records and Audit) Rules 2014 the remuneration to be paid to theCost Auditors is subject to ratification by members. Accordingly the remuneration to bepaid to M/s R.R & Company Cost Accountants for financial year 2019-20 is placed forratification before the members at the Annual General Meeting.
12. EXTRACT OF ANNUAL RETURN
The details of the Extract of the Annual Return (Form MGT-9) as of 31st March 2019pursuant to the Section 92 of the Companies Act 2013 forming part of this report asAnnexure "C" and as per provisions of Section 134(3) (a) same is s placed on thewebsite of the Company i.e. www.sportking.co.in.
13. LISTING OF SECURITIES
The fully paid up 3195200 Equity Shares of company are listed on Bombay Stock Exchange(BSE) Limited for trading as on 31.03.2019. The Company has also paid the listing fees forfinancial year 2019-20 to BSE.
14. ENVIRONMENT AND SAFETY
The Company is conscious of importance of environment clean and safety operations. Thecompany conducts operation in such a manner as to ensure safety of all concernedcompliances of environmental regulations and prevention of various natural resources.
15. PUBLIC DEPOSITS:
The Company has not raised any deposits from the public except the interest freeunsecured loan from the Promoter Director of the Company. The detail of which are asunder:
|Name of the Promoter Director ||Date of Receipt of Loan ||Amount of Loan (in Rs) |
|Mr. Munish Avasthi ||23.12.2010 ||10000000 |
Hence the provisions of Section 73 of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 with regard to acceptance of deposits from public arenot attracted.
16. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regardingconservation of energy technology absorption and foreign exchange earnings & outgo isgiven in "Annexure-D" of this report.
17. PARTICULARS OF EMPLOYEES
The disclosures in respect of managerial remuneration as required under Section 197(12)read with Rule 5(1) of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 and statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3)Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 is given in"Annexure E" of this report.
18. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all Senior Manager Personnel in the course of day to day businessoperations of the company. The Company believes in "Zero Tolerance" againstbribery corruption and unethical dealings / behaviors of any form and the Board has laiddown the directives to counter such acts. The Code has been posted on the Company'swebsite
The Code lays down the standard procedure of business conduct which is expected to befollowed by the directors and all Senior Manager Personnel in their business dealings andin particular on matters relating to integrity in the work place in business practicesand in dealing with stakeholders.
19. CORPORATE GOVERNANCE
The Corporate Governance which forms an integral part of this Report are set out asseparate Annexure together with the Certificate from the auditors of the Companyregarding compliance with the requirements of Corporate Governance as stipulated inregulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
Your Directors wish to place on record their appreciation of the co-operation from theBankers Financial Institutions and Government Bodies & Business Associates. YourDirectors also record their appreciation of the services rendered by the employees of thecompany.
| ||By Order of the Board |
| ||For Sportking India Limited |
| ||(Raj Kumar Avasthi) |
|Place : Ludhiana ||Chairman |
|Date : 13th August 2019 ||DIN: 01041890 |
|Regd. Office : || |
|5/69 Guru Mansion 1st Floor || |
|Padam Singh Road Karol Bagh || |
|New Delhi - 110005 || |