డైరెక్టర్ల నివేదిక Shamken Spinners Ltd.

Mar 31, 2011

The 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 Government's 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 Auditor's 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 Company's 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