Shamken Spinners Ltd Directors Report

SHAMKEN SPINNERS LIMITED ANNUAL REPORT 2010-2011 DIRECTORS REPORT Your Directors present the Annual Report together with audited accounts of the Company for the period ended 31st March, 2011. In Rupees FINANCIAL HIGHLIGHTS YEAR ENDED YEAR ENDED 31.3.2011 31.03.2010 Sales & Other Income 3,422 454,315 Profit/Loss After Tax (59,860,583) (120,216,471) Profit/Loss b/f from previous year (1,403,708,280) (1,283,491,809) Profit/Loss available for appropriation (1,463,568,863) (1,403,708,280) DIVIDEND In view of the accumulated losses your Board is unable to declare any dividend for the period under review. DIRECTORS Shri Sanjay Chaturvedi, Director of the Company, retires by rotation and being eligible, offer himselves for re-appointment. Your Board recommends his appointment as a Director. AUDITORS REPORT The observations of the auditors in their report read with the relevant notes to accounts are self explanatory and do not require further explanation. AUDITORS The Auditors of the Company, M/s J P Chaturvedi & Company, Chartered Accountants, retire at the ensuing Annual General Meeting of the Company and have given their consent for re-appointment. The Company ahs also received a Certificate from them under Section 224(1B) of the Companies Act, 1956. COST AUDITORS The Central Governments cost Audit order specifies audit of Cost Accounting Records for certain specified products every year. The Board of Directors, subject to the approval of the Central Government, has appointed M/s M K Kulshreshtha & Associates, Cost Accountants, to carry out the cost audit for the Period under review at remuneration to be decided by the Board of Directors. AUDIT COMMITTEE The Company has an Audit Committee consisting of three Directors, viz. Shri Amit Chaturvedi, Shri Amresh Jha and Shri Sanjay Chaturvedi. The accounts have been duly reviewed by the Audit Committee. CORPORATE GOVERNANCE As required by Clause 49 of the Listing Agreement, the reports on Management Discussion and Analysis, Corporate Governance as well as the Certificate from the Company Secretary in Practice regarding compliance of conditions of Corporate Governance, are annexed as annexure - II, III & IV respectively and form an integral part of this report. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Information pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosures of particulars in the report of Board of Directors) Rule, 1988 is given in the Annexure-1, forming part of this report. FIXED DEPOSITS Your Company has not accepted any fixed Deposits in term of Section-58A of the Companies Act 1956, from the public during the year under review. However, deposits, received in the preceding periods and due for payment still continue to be outstanding for which management application to the Company Law Board for further extension of time against of its earlier order for repayment of deposits is in process. PARTICULARS OF EMPLOYEES Information in accordance with the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rule, 1975 as amended, there is no employee employed by the Company either for whole or part of the year drawing remuneration in excess of the limits laid down under the rules mentioned above. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217 (2AA) of the Companies Act, the Directors confirm that in preparation of Annual Accounts. a. That in the preparation of the accounts for the Period ended on 31st March, 2011 the applicable Accounting Standards have been generally followed. b. That such Accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the Period ended 31st March 2011. c. That proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d. That the accounts for the period ended 31st March 2011 have been prepared on a going concern basis. e. That the Company has adequate Internal System and Control in place to ensure compliance of law applicable to the Company. f. The Auditors qualifications are self explanatory and are disclosed to the Notes of accounts attached as per Schedule 20. With respect to the interest not provided on term loans and capital loans, your Company is negotiating with Bankers for One Time Settlement (OTS) Scheme, which is likely to get the substantial relief towards to the liability. This is to submitted that since the net worth of the Company is completely eroded, so,, neither provide nor paying interest to the secured term lenders and all the Accounts of the Company has been classified as NPA in the Books of respective Bankers. This is also disclosed in the Notes to Accounts and Auditors Report. Other remarks are not related to this year, they pertain to earlier years and the Management has already given the explanation during the year the event was occurred. APPREICATION Your Directors wish to convey their thankful appreciation for the constant and enthusiastic support of the Companys Customers, Distributors, Suppliers, Bankers and Financial Institutions, and the State and Central Governments, without which the Company would not have been able to accomplish whatever it has actually attained. Your Directors also take this opportunity to express their appreciation of the earnest efforts put in by the employees, at all levels, in achieving the corporate Objectives. For and on behalf of the Board Sd/- Sd/- Sanjay Chaturvedi Amit Chaturvedi Director Director Place: New Delhi Date : 23/08/2011 ANNEXURE-I Information in accordance with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988: Statement of particulars pursuant to Companies (Disclosure of Particulars in the report of Board of Directors) Rule, 1988 PARTICULARS Year Ended Year Ended 31-03-2011 31-03-2010 A. CONSERVATON OF ENERGY a) energy conservation measures taken: - Nil - b) additional investment and proposal, if any,: - Nil - being implemented for reduction of consumption of energy; c) impact of measures at (a)and (b) above of : - Nil - for reduction of consumption of energy d) Power & fuel Consumption : - Nil - B. TECHNOLOGY ABSORPTION a) efforts made in Technology absorption: As Per form B Attached C. FOREIGN EXCHANGE EARNING AND OUTGO a) activities relating to exports, initiatives taken to increase exports, development of new export markets for product and services, and export plans - Nil - b) total foreign exchange used and earned i) Foreign Exchange used : - Nil - ii) Foreign Exchange earned : - Nil - NOTES: AS THE COMPANYS OPERATION WAS SUSPENDED DUE TO FUND CONSTRANT. THE ABOVE MENTIONED INFORMATION IS NOT APPLICABLE. FORM - B (Form for Disclosure of Particulars with respect to absorption) Research and Development (R&D) 1. Specific areas in which R&D : Improvement in methods of Carried by the Company manufacturing cost effectiveness and efficiencies 2. Benefits derived as a result of : Newer & improved methods of the above R&D manufacturing yarn, cost reduction improvement in efficiencies 3. Future plan of action : To continues for development of better products and improvement in quality & efficiencies 4. Expenditure on R&D (a) Capital : It is an on-going process and (b) Recurring there is no specific allocation (c) Total and identification of expenditure (d) Total R&D expenditure as a of R&D percentage of total turnover Technology Absorption, Adoption & Innovation 1. Efforts, in brief, made towards : The Company is regularly pursuing technology absorption, adaption the up-gradation of technology for innovation the development of new product 2. Benefits derived as a result of : Improvement of quality of products, manufacturing process improvement, the above efforts e.g. Product cost reduction, product Improvement in resulting in cost reduction and wastages during the manufacturing process and acceptability of the product in the international market 3. In case of imported technology : Nil (imported during the last 5 years reckoned from the beginning of the financial year following information may be furnished Note: Figures have been re-arranged and re-grouped wherever required in the Directors Report and management Discussion and analysis along-with annexure thereon Annexure-II MANANGEMENT DISCUSSION & ANALYSIS REPORT OPERATION & OUTLOOK The Company account for the current year has been prepared for the period of 12 months i.e. from 01-04-2010 to 31-03-2011. During the year under review no commercial activities have been carried out by the Company and the Company has incurred a cash loss of Rs 56.35 Lacs in comparison to the previous year. Due to fund constraint the plant of the Company has been closed during the year under review. We are trying our best to get the plant restarted. In view of the above your Company is still in red. We hope to make a come back after getting our scheme sanctioned for the revival of the Company. Further whole of the Company has been possession by ARCIL under the SARFAESI Act and your Company has filed an appeal against the possession of ARCIL before the Allahabad High Court and the matter is pending. Subsequently, the Directors of your Company have been expected that they will get free their unit very soon. SWOT ANALYSIS FOR THE COMPANY Strengths Your company is one of the leading producers of cotton and synthetic yarn, having world class manufacturing facilities. We are poised to make a stride in international market with our State of Art Manufacturing facilities and competitive strengths. Weaknesses & Threats However due to suspend manufacturing activities the Company has not experienced any problem during the year. Further, your Company has approached Board of Industrial & Financial Reconstruction for the revival of the Company and expecting favorable response in the larger interest of the Company and its stakeholders. Opportunities The Indian Cotton and Synthetic market has thrown in a plethora of opportunities to the liberalization and demolition of quota system in USA and other European Market. With the emergence of strong middle class in Indian economy and having larger disposable income in the hands of the Consumers we expect the textile industry to make a significant contribution in coming days ahead. ENVIRONMENT SAFETY Your Company has installed proper plants to fulfill its obligations towards environmental safety. INTERNAL CONTROL SYSTEM & ADEQUECY Company has a well defined internal Control system that is adequate and Commensurate with size and nature of business. Clear roles, responsibilities and authorities, coupled with internal information Systems, and ensure appropriate information flow to facilitate effective monitoring. RESEARCH & DEVELOPMENT Expenditures on Research and Development is not separately allocated and identified. DISCLAIMER: Statements in this report describing the current industry, outlook, opportunities etc. reflect the estimation and opinion of the Company. The same are based on certain assumptions and expectations of future events. The actual results may substantially diverge from the same as they depend upon the worldwide political, economic and social situation. Further, Government regulations, tax structure, demand & supply conditions, cost of raw materials & their availability and other related factors can also have a bearing on the above statements. For and on behalf of the Board Sd/- Sd/- Sanjay Chaturvedi Amit Chaturvedi Director Director Place: New Delhi Date : 23/08/2011