Sportking India Ltd

Dear Members

The Directors of your Company are pleased to present their 35^th Annual Report on the affairs of the Company together with Financial Statement of the Company for the year ended 31^st March, 2024.

1. CORPORATE OVERVIEW AND INFORMATION

The Company was incorporated in in 1989 and emerged as one of India's leading textile company & owns 3 state-of-the-art manufacturing facilities in India equipped with latest machinery, producing yarns that are a benchmark in quality. The company produces well diversified range of grey and dyed textile yarns to cater to the demands of weaving and knitting industry in domestic as well as international markets. With presence in more than 30 countries, Sportking India Ltd. is representing India on a world stage with a commitment to deliver superior quality products among evolving trends in customer preferences.

2. FINANCIAL RESULTS

The Financial Statements of the Company for the year ended 31st March, 2024 had been prepared in accordance with Indian Accounting Standards (Ind AS). The financial performance of your Company for Financial Year(s) 2023-24 and 2022-23 are as under:

3. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT BUSINESS REVIEW Economic Outlook

The world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023. A slight acceleration for advanced economies—where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025—will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now—at 3.1 percent—is at its lowest in decades. Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually.

The overall risks around the outlook are becoming better balanced, but substantial uncertainty remains. High geopolitical tensions remain a significant near-term adverse risk, particularly if the evolving conflicts in the Middle East were to intensify and disrupt energy and financial markets, pushing up inflation and reducing growth. Further reductions in inflation may also be slower than expected if cost pressures and margins remain elevated, particularly in services. This could result in slower-than-expected reductions in policy interest rates, exposing financial vulnerabilities and potentially generating a sharper slowdown in labour markets.

Another key downside risk is that the future impact of higher real interest rates proves stronger than anticipated. Debt-service burdens are already high and could rise further as low-yielding debt is rolled over, or as fixed-term borrowing rates are renegotiated. Some sectors, particularly commercial real estate, remain hard pressed and corporate bankruptcies and defaults are now above pre-pandemic levels in several countries, posing risks to financial stability. Growth could also disappoint in China, either due to the persistent weakness in property markets or smaller-than-anticipated fiscal support over the next two years, although activity could be stronger than expected if fiscal support is extensive or well-targeted.

On the upside, demand growth could prove stronger than expected, especially in advanced economies if households and corporates draw more fully on the savings accumulated during the pandemic. Continued strong labour force growth in many countries might also enable inflation to fall more quickly than anticipated. Against this backdrop, the key policy priorities are to ensure a durable reduction in inflation, establish a fiscal path that will address rising pressures, and undertake reforms to raise sustainable and inclusive growth in the medium term.

Amidst the global challenges, the Indian economy has stayed resilient and has emerged as the fastest growing major economy of the world in FY2024 for the third successive year. Indian economy remained resilient with robust 7.6% growth rate of GDP in FY 2023- 24 over and above 7% growth rate in FY 2022-23. India has been a key growth engine for the world, contributing 16% to the global growth in 2023.

Headline inflation has been on a moderating path during FY2024 with food price pressures interrupting the descent even as core inflation softened across its goods and services components. Industrial and farm input price pressures remain muted and organized sector wage growth stayed steady. Average CPI inflation stood at 5.4% in FY2024 as compared to 6.7% in FY2023. The prospects of fixed investment remain bright with business optimism, healthy Corporate and Bank balance sheets, robust government capital expenditure and signs of upturn in the private capex cycle.

The International Monetary Fund (IMF) has raised India's growth forecast for 2024-25 to 6.8% from 6.5% on the back of strong domestic demand and a rising working- age population. Double-digit growth rate of Construction sector (10.7%), followed by a good growth rate of Manufacturing sector (8.5%) have boosted the GDP growth in FY 2023-24. Private consumption in in the first half of FY 2023-24 was the highest since FY15 and this led to a boost to production activity resulting in enhanced capacity utilization across sectors.

Textile Outlook

The textile market size has grown strongly in recent years. It will grow from $638.03 billion in 2023 to $689.54 billion in 2024 at a compound annual growth rate (CAGR) of 8.1%. The growth witnessed in the historical period can be ascribed to factors such as the expansion of the global population, heightened demand for man-made fibers, government initiatives supporting the textile industry, robust economic growth in emerging markets, and the implementation of restrictions on plastic usage. The textile market size is expected to see strong growth in the next few years. It will grow to $903.45 billion in 2028 at a compound annual growth rate (CAGR) of 7.0%. The anticipated growth in the upcoming period can be attributed to factors such as the continued increase in global population and urbanization, the rapid expansion of e-commerce, heightened expenditure on leisure activities, the growing retail penetration, increased internet accessibility and smartphone usage, and a rising preference for contactless delivery solutions.

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. Strong economic growth in the first quarter of FY23 helped India overcome the UK to become the fifth-largest economy and showed a strong recovery from the COVID-19 pandemic shock. The textile and apparel industry is an integral part of India's economy contributing approximately 2.3% to the GDP, 13% to industrial production and 12% to exports, according to Invest India. It is also the second largest employer in the country offering employment to 45 million people and 100 million in allied industries.

World cotton production is projected to reach nearly 117 million bales in 2024/25 (up by 4.6 million bales). Growing moderately at an average 1.5% per year, it is estimated to increase by 18.4 million bales, or 16% above 2023/24, to around 130.7 million bales by 2033/34. By 2033/34, leading cotton producers are projected to be China (24%), India (22%), Brazil (13%), United States (11%), Pakistan (6%), and Australia (5%). Global cotton consumption is projected at 114.3 million bales in 2024/25 (up by 1.8 million bales). It is estimated to grow by about 17.2 million bales over the projection period, or 15% above 2023/24, growing at a modest rate of 1.5% per year.

For Indian textile industry, this fiscal year was one of the most challenging years, posing challenges like raw material availability, price volatility, diminishing demand, capacity under-utilization and dumping of imported fabrics and garments from China and Bangladesh. The buying by the US and EU has remained quite low and that too for an unusually longer period, which has affected the exports badly and emerged as a drag on growth. India's textile export declined further in FY 2023-24 to US$ 34.4 billion. This is a consecutive decline year on year after the boom immediately after Covid. Geo-political issues across the major markets and higher interest rate to regulate inflation are cited as the prime reasons for the decline. Indian Textile & Apparel export dwindled approx. 3% from last year's value of US$ 35.5 billion while if compared to US$ 41 billion of FY 2021-22, the fall in export is whopping 16%. Readymade garments which constitute around 42% of the export basket declined 10% in 2023-24 to US$ 14.5 billion. Among the export markets, North America topped with US$ 11 billion, followed by Europe at US$10 billion while West Asia and North Africa contributed US$ 4 billion.

The only silver lining is that export of Cotton Yarn, Fabrics, Made-ups and Handloom products witnessed a significant increase of US$ 740 billion in FY 2023-24 over the previous fiscal. Also, apparel export is expected to perform better in current financial year from the dismal performance of last year. Apart from the geopolitical unrest and high interest rate, escalated logistic costs due to Red Sea crisis have also played a spoilsport affecting textile exports.

The domestic industry had been consistently demanding the imposition of MIP to restrict the influx of cheaper synthetic fabric. The alleged dumping of synthetic fabric, especially from China, based on under-invoicing practices, was causing significant damage to the domestic synthetic fabric industry. During a Textile Advisory Group (TAG) meeting in the Government had assured the industry that the issue of undervalued imports of knitted fabrics would be addressed within a few months. The enforcement of MIP provides much-needed relief to an industry that has suffered from this practice for years and is seen as a crucial step in protecting the domestic industry and ensuring a fair marketplace for all stakeholders. The decision is expected to effectively curb the import of undervalued synthetic knitted fabrics being dumped into India, thus encouraging the industry to continue upholding the standards to foster growth, innovation, and prosperity within the textile sector.

Federation of Indian Export Organizations (FIEO) said, the overall western economy has taken a hit, especially in terms of recession in some parts of the globe. "This has caused a drop in consumer confidence in those countries. The persisting Red Sea crisis has escalated sea freight by about 100%, while air freights have gone up by up to 200% due to the demand for ferrying goods through air cargo. However, the fall in textile exports is being corrected since the decrease in exports between FY22. The Apparel Exports Promotion Council (AEPC), expressed optimism for a recovery, citing recent months' improvements and anticipated benefits from FTAs signed between India, the UK, and the EU, along with government initiatives like the PLI Scheme and PM MITRA Park to boost production capabilities

The Interim Budget 2024 saw Rs. 1,000 crore higher allocations for the textile and apparel sector. Of the total allocation of Rs. 4,392.85 crore compared with Rs. 3,443.09 crore last year, the Budget provided Rs. 600 crore for the procurement of cotton by the Cotton Corporation of India (CCI) under the price support scheme. The allocation for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme has seen a 5.8% increase, while the Remission of State Levies on Exported Products (RoSCTL) has seen a substantial 10% boost. On a positive note, the allocation for the PM Mitra scheme stands at Rs 300 crore. The budget also demonstrates a commendable commitment to the development of technical textiles and research and development (R&D). This emphasis on investment in these areas is indicative of a forward-thinking approach to bolstering the textile industry.

This FY 2024-25 dawns, the signs of revival seen in the US market have raised the hopes for exports to improve in the upcoming months. According to rating agencies, India's textiles industry is expected to rebound in calendar year (CY) 2024 on three tailwinds: consistent improvement in domestic demand, gradual recovery in exports and balancing raw material prices. As per the Experts after experiencing contraction for a year, textile production and exports are trotting back to normal. A steady reduction of inventory pileup during the holiday season in the West continues to drive export demand. With improving consumer demand big retailers in the overseas markets will have to restock inventory, leading to improvements in the order flow.

The Company is dealing in the Yarn Segment only and Company is persistently facing such challenges and is taking necessary steps to strengthen its export/ indigenous market operations with more value added/ sustainable yarn products/customer base.

Further the Company has adequate liquidity and financial resources to meet its operational requirements, financial commitments/ service of debt obligations and statutory liabilities as per indications available as on date.

Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes) in key financial ratios (change of 25% or more as compared to the immediately previous financial year. The detail is as under:-

Ratios where there has been a significant change as compared to previous year

The company had achieved EBIDTA/Sales ratio of 10.13% during FY 2023-24 vis -a-vis EBIDTA/Sales ratio of 13.17% in the previous FY 2022-23 which has decreased mainly due to decrease in yarn prices as compare to previous financial year. The current year net profit after tax is Rs. 7034.56 Lakhs against previous year net profit after tax of Rs. 13198.20 Lakhs which was down by almost 46.70% due to due to rising depreciation and finance cost.

FINANCIAL ANALYSIS

Production/Revenue

The year started on a very sombre note with many headwinds faced by our industry like expensive raw materials, supply chain issues, inventory accumulation with the whole chain. Even though the Company has earned revenue from operation of Rs. 237714.19 Lakhs, a growth of 7.80% year to year. During the year under review, the company has achieved production of 80845 M.T. of Cotton/Synthetic Yarn against previous year production of 61769 M.T. which had increased by 23.60% due to increase in spindle capacity by almost 35%. The company has achieved a gross turnover/operating income of Rs. 237714.19 Lakhs (including export incentives of Rs. 5736.23 Lakhs) as compared to Rs. 220502.30 Lakhs (including export incentives of Rs. 4507.46 Lakhs) in the previous year. The values of the exports were at Rs. 111949.81 lakhs in the current year as compared to Rs. 100232.08 Lakhs in the previous year.

Profitability

During the year under review, the Company had achieved Earning before Depreciation, Interest, Tax and Amortization (EBIDTA) of Rs. 24086.26 Lakhs with EBIDTA/Sales ratio of 10.13% during FY 2023-24 as compared to Rs. 29035.00 Lakhs with EBIDTA/ Sales ratio of 13.17% in the previous FY 2022-23 which has decreased mainly due to decrease in yarn prices as compare to previous financial year. The cost of interest had increased to Rs. 5907.29 Lakhs as compared to Rs. 2304.89 Lakhs in the previous year due to Increase in Utilization of Working Capital Limit on account of Stocking of raw cotton Bales.

The Company earned profit before tax of Rs. 9590.43 Lakhs as compared to previous year Rs. 18949.80 Lakhs. After providing for current tax of Rs. 2158.61 Lakhs (Previous year Rs. 4887.18 Lakhs), Prior Period Tax of negative value of Rs. 50.45 Lakhs (Previous Year Rs. 7.64 Lakhs) Deferred tax liabilities of Rs. 447.71 lakhs (Previous Year of Rs. 856.78 Lakhs), there was a net profit after tax of Rs. 7034.56 Lakhs against previous year net profit after tax of Rs. 13198.20 Lakhs. Total Other Comprehensive Income for current financial year is Rs.12.74 lakhs as compared to Rs. 72.00 Lakhs in previous year and the net profit after tax and other comprehensive income was Rs. 7047.30 Lakhs as compared to previous year net profit after tax and other comprehensive income of Rs. 13270.20 Lakhs. The company earned gross cash profit (before tax) of Rs. 18178.97 Lakhs against Rs. 23764.80 Lakhs in the previous year and cash profit (after current taxes) of Rs. 16070.81 Lakhs against Rs. 18869.98 Lakhs in the previous year.

During the year review the company status got upgraded by Ministry of Commerce industry from a Three Star Export House to Four Star Export House. In the upcoming financial year, company will continue to evaluate all options on expanding capacity and exploring new markets and strengthening our domestic presence and introducing new yarns in our repertoire.

RESOURCE UTILISATION

Fixed Assets

The net Block of Property, Plant and Equipment as at 31st March, 2024 was Rs. 78584.27 Lakhs as compared to Rs. 75696.44 Lakhs in the previous year which has increased on account of installation of Solar Power Plant. The Capital work in progress was nil for year ended 31st March, 2024 as compared to Rs. 662.07 Lakhs in the previous year.

During this year, capacity expansion of spindles, which we have fully integrated in existing capacity. Now total spindles count stands 378576 Spindles. All phases of rooftop solar power plant completed and total capacity stands at 25 megawatts.

Current Assets and Current Liabilities

The current assets as on 31st March, 2024 were Rs. 115496.66 Lakhs as against Rs. 78491.84 Lakhs in the previous year. Inventory level was at Rs. 64504.71 Lakhs as compared to the previous year level of Rs. 37197.82 Lakhs. Trade Receivables level was at Rs. 35606.32 Lakhs (including Bill discounted/Negotiated of Rs.3538.79 Lakhs) as compared to the previous year level of Rs. 23369.00 Lakhs (including bill discounted/Negotiated of Nil Lakhs). The current liabilities as on 31st March 2024 were Rs.62469.23 Lakhs as against Rs. 29813.40 Lakhs in the previous year.

LIQUIDITY & CAPITAL RESOURCES

The position of liquidity and capital resources is given below:

CREDIT RATING

CRISIL Ratings Limited had upgraded/assigned the following credit rating of the Company:

Further all the External Credit ratings is available on Company's website i.e. www.sportking.co.in

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been established in the Company and that such controls are adequate and operating effectively. The Company has laid down certain guidelines and processes which enables implementation of appropriate internal financial controls across the organization. Such internal financial controls encompass policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Statutory Auditors in their audit report have opined that these controls are operating effectively. The Audit team develops an audit plan based on the risk profile of the business activities. The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in the Company, their compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. Audit observations and corrective action(s) thereon are presented to the Audit Committee. The Audit Committee reviews the reports submitted by the Internal Auditors

5. HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The company recognizes its human resources as its most valuable asset and takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company has specialized professionals in the respective fields to take care of its operations and allied activities. The Company is committed to nurturing, enhancing and retaining the top talent through superior learning. This is critical pillar to support the organization's growth and its sustainability in the long run. During the year under review, the company enjoyed cordial relationship with workers and employees at all levels.

6. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

Not Applicable

7. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

Not Applicable

8. DIVIDEND

The Board has recommended a Final Dividend of Rs. 5/- per equity share of face value of Rs. 10/- each on fully paid equity shares amounting to Rs. 635.36 Lakhs and 5% on Non-Cumulative Non- Convertible Redeemable Preference Shares of face value of Rs. 10/- each amounting to Rs. 34.16 Lakhs for FY 2023-24. Dividend on equity shares is subject to approval of members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source. The Dividend will be paid to members whose names appear in the register of members as on record date and in respect of shares held in dematerialized form, it will be paid to the members whose names are furnished by NSDL and CDSL as beneficial owners as on that date.

The provisions of Section 125(2) of the Companies Act, 2013 relating to Transfer of Unclaimed Dividend to Investor Education and Protection Fund do not apply as there was no dividend declared and paid by the company in the past 7 years. The Company had formulated a Dividend Distribution Policy and is annexed hereto as "Annexure A" and forms part of this Report. The Policy is also available on Company's website i.e. https://sportking.co.in/wp-content/uploads/2022/07/Dividend-Distribution-Policy-SIL. pdf

Shareholders may kindly note that pursuant to SEBI Circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37 dated March 16, 2023 effective April 01, 2024, dividend payments shall be withheld in case of shares held in physical mode where any of the KYC details viz PAN, choice of Nomination, Contact details, Mobile number, Bank details and Specimen signatures are not updated as on the record date for payment of dividend. Further, pursuant to SEBI Circular- SEBI/HO/MIRSD/MIRSD-PoD-1/P/ CIR/2023/37 dated March 16, 2023, intimation in this regard has been sent to the shareholders holding shares in physical mode about the need for Updation of KYC details. Shareholders are requested to update the KYC details by submitting the relevant ISR forms duly filled in along with self-attested supporting proofs. The forms can be downloaded from the websites of the Company and the RTA.

9. SHARE CAPITAL

The paid up Equity Share Capital as at 31st March, 2024 stood at Rs. 1286.80 Lakhs divided into 12707200 Equity Shares of the face value of Rs. 10/- each (Rs. 1270.72 Lakhs plus amount of Rs. 16.08 Lakhs paid up on forfeited Equity Shares minus Amount of Rs. 58.00 lakhs paid on buyback of Equity shares) vis-a-vis Rs. 1344.80 Lakhs as at 31st March, 2023 divided into 13287200 Equity Shares of the face value of Rs. 10/- each (Rs. 1328.72 Lakhs plus amount of Rs. 16.08 Lakhs paid up on forfeited Equity Shares).

Further, after obtaining the approval from the Board of Directors on January 28, 2023, the Company has initiated buyback process in accordance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018 in respect of buyback of 5,80,000 equity shares having face value of Rs.10/-each from the Shareholders of the Company on proportionate basis by way of tender offer route at a price of 950/- per share for an aggregate amount of Rs. 5510 lakhs (8.01% of the aggregate paid-up equity share capital and free reserves as per the latest audited financial statements of the Company for the financial year ended March 31, 2022) . The buy-back process has been completed on 17th April, 2023.

The paid up 5% Redeemable Non-Cumulative Non-Convertible Preference Shares Capital as at 31st March, 2024 stood at Rs. 683.20 Lakhs divided into 68,32,000 Preference shares of face value Rs. 10/- each vis-a-vis Rs. 683.20 Lakhs as at 31st March, 2023 divided into 68,32,000 Preference Shares of face value of Rs. 10/- each.

During the year under review, the Company has not issued any equity shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March, 2024 none of the Directors of the Company hold instruments convertible into equity shares of the Company.

Further subject to the approval of members of the Company and statutory authority(ies) if any, the Board of Directors at its Meeting held on 20th July 2024 has approved, the sub-division/ split of equity shares of the Company, such that 1 (one) equity share having face value of Rs. 10/- (Rupees ten only) each, fully paid-up, be sub-divided into 10 (ten) equity shares having face value of Rs. 1/- (Rupee one only) each, fully paid- up ranking pari-passu in all respects with effect from such date as may be fixed for this purpose by the Board ("Record Date").

In the opinion of the Board of Directors, the proposed sub-division/ spilt will make the equity shares of the Company more affordable and is expected to encourage participation of investors at large and therefore it is in the best interest of the investors and the Company.

The sub-division/ split of equity shares of the Company as aforesaid will require alteration to the existing Capital Clause i.e., Clause V of the Memorandum of Association of the Company. There will not be any change in the amount of authorised, subscribed, issued and paid-up share capital of the Company on account of sub-division/ split of the equity shares. Further, such sub-division/ split shall not be construed as reduction in share capital of the Company, in accordance with the applicable provisions of the Companies Act, 2013.

10. SUBSIDIARY/ASSOCIATE/JOINT VENTURE COMPANIES

The Company does not have any Subsidiary /Associate/Joint Venture Companies.

11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators/Court/Tribunals that would impact the going concern status of the Company and its future operations.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In accordance with the provisions of the Companies Act, 2013 read with Rules made thereunder, the disclosure relating to the CSR activities pursuant to section 134(3) of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014, is annexed hereto as "Annexure B" and forms part of this Report.

The CSR Policy of the Company may be accessed on the Company's website at the link: https://sportking.co.in/wp-content/ uploads/2022/07/CSR-Policy.pdf

13. RISK MANAGEMENT POLICY

The Company has adopted a Risk Management Policy formulated under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and has been duly approved by the Board of Directors with an objective of ensuring sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. The Policy on Risk Management may be accessed on the Company's website at the https://sportking.co.in/wp-content/uploads/2022/07/Risk-Management-Policv.pdf.

14. RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company with related parties during the financial year were in the ordinary course of business and on an arm's length basis. Omnibus Approval was obtained on yearly basis in respect of transaction which is repetitive in nature. All the Related Party transactions are placed before the Audit Committee and the Board for review and approval on quarterly basis.

During the year under consideration, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed as "Annexure-C". Details of all RPTs are mentioned in the notes to financial statements forming part of the Annual Report.

The Company in terms of Regulation 23 of SEBI (LODR) Regulations, 2015, submits the disclosures of Related Party transactions to stock exchange and also publishes the same on its website. The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the https://sportking.co.in/pdf/Related-Partv-Transaction-Policv.pdf

15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE:

The company has not given any loans, guarantees or made investments under the provisions of Section 186 of the Companies Act, 2013.

16. DIRECTORS

In accordance with the Articles of Association of the Company and as per the provision of Section 152 of the Companies Act, 2013, Mrs. Anjali Avasthi (DIN: 06911970), Non-Executive Non-Independent Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible offers herself for re-appointment.

In the last Annual General Meeting of the Company held on 16^th September, 2023, shareholders of the company through special resolution had re-appointed Dr. Sandeep Kapur as Independent Director of the Company for a second term of five consecutive years w.e.f. 17^th September, 2023 till the conclusion of Annual General Meeting to be held in the year 2028 and he shall not liable to retire by rotation.

The Company has received declarations from all Independent Directors confirming that they meet the relevant independence criteria as laid down in Section 149(6) of the Companies Act, 2013 as well as the Regulation 16(1)(b) and 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board also confirms that all the Independent Director on the Board of the Company are registered with the Indian Institute of Corporate Affairs (IICA) as notified by the Central Government under section 150(1) of the Companies Act, 2013.

In the opinion of the Board, the Independent Directors fulfills the conditions of independence, are independent of the management, possess the requisite integrity, experience, expertise, proficiency and qualifications to the satisfaction of the Board of Directors. The details of remuneration paid to the members of the Board is provided in the Report on Corporate Governance.

17. KEY MANAGERIAL PERSONNEL

The following are the Key managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013 read with rule 3 and 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

18. AUDIT COMMITTEE

The Company had an Audit Committee of the Board of Directors, the members of which are Mr. Prashant Kochhar, Dr. Sandeep Kapur, Mrs. Harpreet Kaur Kang and Mr. Naresh Kumar Jain. Mr. Prashant Kochhar is the Chairman of the Committee.

The Committee is empowered to look into all the matters related to finance and accounting and its terms of reference are as per regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with section 177 of The Companies Act, 2013.

MEETINGS OF THE BOARD AND AUDIT COMMITTEE

During the year, Board Meetings and Audit Committee Meetings were duly convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

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 carried out the annual performance evaluation of its own performance, Committees of the Board and each Director individually. A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.

The Independent Directors of the Company met without the presence of Non-Independent Directors and members of the management to review the performance of Non-Independent Directors and the Board of Directors as a whole, review the performance of the Chairman and Managing Director of the Company and to assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors. The performance evaluation of the Independent Directors was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.

NOMINATION AND REMUNERATION POLICY

In compliance with Section 178 of the Companies Act, 2013, the Board of the directors has constituted Nomination and Remuneration Committee who has framed a policy in relation to the remuneration of Directors, Key Managerial Personnel and Senior Management of the Company and the criteria for their selection and appointment which is stated in the Corporate Governance Report.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

Your Company is focused to ensure that ethics continue to be the bedrock of its corporate operations. It is committed to conducting its business in accordance with the highest standards of professionalism and ethical conduct in line with the best governance practices

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 has formulated a whistle blower policy for vigil mechanism for directors and employees reporting for unethical behavior, fraud and mismanagement or violation of Company's code of conduct.

The Policy provides adequate protection to the Directors, employees and business associates who report unethical practices and irregularities. The Policy provides details for direct access to the Chairman of the Audit Committee. Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy. The detailed Policy on Whistle Blower/Vigil Mechanism as approved by the Board may be accessed from the Company's website at the link: https://sportking. co.in/wp-content/uploads/2022/07/Whistle-Blower-Policv.pdf

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013

The Company has always provided a congenial atmosphere for work that is free from discrimination and harassment, including sexual harassment. It has provided equal opportunities of employment to all without regard to their caste, religion, color, marital status and sex.

The Company has in place Policy on Prevention, Prohibition and Redressal of Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted an Internal Complaints Committee for redressal of grievances regarding sexual harassment received by the Committee. All employees are covered under this Policy. During the year under review, the Company has not received any complaints of sexual harassment. The Company has complied with all the applicable provisions of the said Act.

19. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards had been followed.

ii) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reason able and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended on 31^st March, 2024.

iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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 the company and that such internal financial controls were adequate and were operating effectively.

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. AUDITORS AND THEIR REPORT STATUTORY AUDITORS

The Members of the Company in their Annual General Meeting held on 30^th September, 2022 had re-appointed M/s. SCV & Co, LLP, Chartered Accountants (Firm registration No. 000235N/N500089) as Statutory Auditors of the Company for a further period of five years from the conclusion of forthcoming Annual General Meeting till the conclusion of the 38^th Annual General Meeting to be held in the year 2027 on such remuneration as may be decided by the Board of Directors in consultation with the Statutory Auditors of the Company.

The Statutory Auditors of the Company had submitted Auditors' Report on the accounts of the Company for the Financial Year ended 31st March, 2024. There is no audit qualification reservations or adverse remarks or disclaimer in the said financial statements. The comments in the Auditors' Report read with Notes to Accounts are self- explanatory and do not call for any further explanation.

SECRETARIAL AUDITORS

Section 204 of the Act, inter-alia requires every listed company to undertake Secretarial Audit and annex with its Board's Report a Secretarial Audit Report given by a Company Secretary in practice in the prescribed form. In line with the requirement of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Regulation 24A of the Listing Regulations and other applicable provisions, if any, the Board of Directors of the Company had appointed M/s Sunny Kakkar and Associates, Company Secretaries (FCS NO - 10111, CP NO-12712) to carry out Secretarial Audit for the financial year 2023-24.

The Secretarial Audit Report for the Financial Year ended 31st March, 2024 is annexed as "Annexure-D" to this Report. This report is unqualified and self-explanatory and does not call for any further comments/explanations.

Further the Board of Directors in its Meeting held on 27^th April, 2024 and pursuant to the provision of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has appointed M/s Sunny Kakkar and Associates, Company Secretaries (FCS NO - 10111, CP NO-12712) as Secretarial Auditor to conduct Secretarial Audit for the Financial Year 2024-25.

COST AUDITORS

M/s R.R. & Company, Cost Accountants had submitted Cost Audit Report along with Annexure for the Financial Year ended 31st March, 2024. There is no a qualification reservation or adverse remarks or disclaimer in the said report.

The Board of Directors, on the recommendation of Audit Committee, has re-appointed M/s R.R. & Company, Cost Accountants, (Firm Registration No. 000323) as Cost Auditor to audit the cost accounts of the Company's for the Financial Year 2024-25. As required under provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, a resolution seeking members' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the AGM for their ratification.

21. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the Financial Year 2023-24 has been uploaded on Company's website at www.sportking.co.in.

22. LISTING OF SECURITIES

The fully paid up 12707200 Equity Shares (face Value of Rs. 10/- each) of the Company are listed on BSE Limited and National Stock Exchange of India Limited (NSE) for trading as on 31.03.2024. The Company has also paid the listing fees for financial year 2024-25 to BSE and NSE within the prescribed due time.

23. ENVIRONMENT AND SAFETY

The Company is conscious of importance of environment clean and safety operations. The company conducts operation in such a manner as to ensure safety of all concerned, compliances of environmental regulations and prevention of various natural resources. The Company has successfully completed the commissioning of 15.2 MW Rooftop Solar Power Project at Ludhiana and Bathinda Unit and now the total capacity of the solar stands at 25.2 megawatts. Rooftop solar power helps in reducing of greenhouse gas emissions and also reduced Company's dependency on external sources.

24. PUBLIC DEPOSITS:

The Company has not raised any deposits from the public. 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 are not attracted.

25. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption and foreign exchange earnings & outgo is given in "Annexure-E" of this report.

26. 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 Managerial Personnel) Rules, 2014 and statement showing the names and other particulars of the employees 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 F" of this report.

27. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING(BRSR)

The Business Responsibility & Sustainability Report for the year ended 31st March, 2024 as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 annexed to this report as "Annexure-G" and also available on the Company's website.

28. CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all Senior Manager Personnel in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Company's website

The Code lays down the standard procedure of business conduct which is expected to be followed by the directors and all Senior Manager Personnel in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

29. CORPORATE GOVERNANCE

The Corporate Governance, which forms an integral part of this Report, are set out as separate Annexure, together with the Certificate from the Practicing Company Secretary regarding compliance with the requirements of Corporate Governance as stipulated in regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

30. GENERAL DISCLOSURES

According to Board of Directors, there were no disclosure or reporting required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to issue of equity shares with differential voting rights as to dividend, voting or otherwise.

2. Significant or material orders passed by the regulators or courts or tribunals which impact the going concern status and Company's operation in future.

3. No Change in the nature of the Business.

4. No fraud has been reported by the Auditors to the Audit Committee.

5. During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

31. CAUTIONARY STATEMENT

Statements in this Directors' Report and Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

32. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the co-operation from the Bankers, Financial Institutions and Government Bodies & Business Associates and also seek their co-operation in future too. Your Directors also record their appreciation of the services rendered by the employees of the Company.