SHAMKEN SPINNERS LIMITED
ANNUAL REPORT 2010-2011
Your Directors present the Annual Report together with audited accounts of
the Company for the period ended 31st March, 2011.
FINANCIAL HIGHLIGHTS YEAR ENDED YEAR ENDED
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)
In view of the accumulated losses your Board is unable to declare any
dividend for the period under review.
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.
The observations of the auditors in their report read with the relevant
notes to accounts are self explanatory and do not require further
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
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.
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.
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
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
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
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.
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
Sanjay Chaturvedi Amit Chaturvedi
Place: New Delhi
Date : 23/08/2011
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
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 COMPANY'S 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
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
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
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
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
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.
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.
Your Company has installed proper plants to fulfill its obligations towards
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
RESEARCH & DEVELOPMENT
Expenditures on Research and Development is not separately allocated and
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
Sanjay Chaturvedi Amit Chaturvedi
Place: New Delhi
Date : 23/08/2011