DIRECTORS' REPORT

To

The Members

Shamken Cotsyn Limited

Your Directors have pleasure in presenting the 25th Annual Report together with Audited Statements of Accounts of the Company for the financial year ended March 31, 2013.

The financial performance of the Company, for the year ended March 31, 2013 is summarized below:

FINANCIAL RESULTS

Particulars                                                                     Year Ended                       Year Ended

                                                                                          31.03.2013                         31.03.2012

Profit/Loss b/f from previous year                  (6677.61)                                (6127.80)

DIVIDEND

In view of the accumulated losses, your Board is unable to declare any dividend for the period under review. DIRECTORS

Shri H.B. Chaturvedi and Shri Amit Chaturvedi, Directors of the Company, retire by rotation and being eligible, offer themselves for re-appointment. Your Board recommends their appointments as Directors. 

AUDITORS' REPORT

The observations of the auditors in their report, read with the relevant notes to accounts, are self explanatory and don't require any comment from the Directors of the Company. STATUTORY AUDITORS

M/s J.P. Chaturvedi and Company, Chartered Accountants, retire at the ensuing Annual General Meeting of the Company and have given their consent for re-appointment.  The Company has 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 KAG and 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 of the Company, viz. Shri Sanjay Chaturvedi, Shri Amresh Jha and Shri SK Rishi. The accounts have been duly reviewed by the Audit Committee. CORPORATE GOVERNANCE 

As required by Clause 49 of the Listing Agreement, Report on Management Discussion and Analysis, Certificate from the Company Secretary in Practice regarding compliance of conditions of Corporate Governance and Corporate Governance Report, are annexed as Annexure � II, III and IV respectively and forms 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 terms of section-58A of the Companies Act, 1956 from the public during the current financial year. However, deposits received earlier are still due and certain payments have been made by the Company to few FD Holders in spite of financial constraint faced by the Company and moreover all the assets of the Company has been taken over by the ARCIL under SARFAESI ACT, 2002.

 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, 1956 the Directors confirm:

a.        that in the preparation of the accounts for the year ended March 31, 2013, the applicable Accounting Standards had been generally followed alongwith proper explanation relating to material departures:

b.        that the directors had selected such accounting policies applied consistently and made 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 year ended and of the Profit and loss account of the Company for that period;

c.         that the directors had taken proper and sufficient care for the maintenance 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 year ended March 31, 2013 had prepared on a going concern basis;

e.        that the Company has adequate Internal Control System in place to ensure compliance of law applicable to the Company;

f.         that the Auditor's qualifications are self explanatory and are disclosed to the Notes on Accounts attached as per Note No. 22. Since the net worth of the Company is completely eroded, the Company is 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/Lenders. This is also disclosed in the Notes on Accounts and Auditors' Report. Other remarks are not related to the current financial year, they pertain to earlier years and the Management has already given the explanation during the year in which the event was occurred. 

 APPRECIATION      

Your Directors wish to convey their thankful appreciation for the constant and enthusiastic support of the Company's Customers, Distributors, Suppliers, Bankers, 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.

By Order of the Board

For SHAMKEN COTSYN LIMITED

Place: New Delhi                                            AMIT CHATURVEDI          SANJAY CHATURVEDI 

Date:  30.07.2013                                                   Director                                  Director            

The Company's Account for the current year has been prepared for the period of 12 months i.e. from 01-04-2012 to 31-03-2013. During the period under review your Company has clocked a turnover of Rs. 529.22 lacs excluding other income. The Company has incurred a net loss of Rs. 475.01 lacs after providing a depreciation of Rs.594.17 lacs. The Company has made Cash Profit of Rs 119.16 lacs and earned Cash Profit of Rs. 44.35 lacs in the immediate preceding reporting period. This depicts the overall improvement in the financials of the Company despite the Company being in red. This is attributed to severe strict measures to revive the Company in order to put it on track as early as possible. As the economy booming and the demands of the Company's product improving we expect to make a significant turnaround very soon. Further, the entire assets of the Company's Noida unit have been acquired by the "ARCIL" (a group of secured lenders) under the provisions of SARFAESI Act, 2002.

In view of the accumulated losses, your Board is unable to declare any dividend for the period under review.

CONSERVATON OF ENERGY a) energy conservation measures taken : All round efforts are being made b) additional investment and proposal, if any, : Made for energy conservation to reduce being implemented for reduction wastage. Energy conservation has been of consumption of energy; made a part of work culture. c) impact of measures at (a)and (b) above : Power for per Mtr. of fabric for reduction of consumption of energy d) Power & fuel Consumption : As per Form "A" Attached

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 fabrics, 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, the above efforts e.g. product Improvement in manufacturing process improvement, cost reduction, resulting in cost and wastages reduction product development, import substitution etc. during the manufacturing process and Acceptability of the product in the international market 3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished: a) Technology Imported : Nil b) Year of Import c) Has technology been fully absorbed? d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. Note: Figures have been re-arranged and re-grouped wherever required in the Directors' Report and Management Discussion and Analysis along-with annexure thereon.

MANANGEMENT DISCUSSION and ANALYSIS REPORT

OPERATION and OUTLOOK

The Company's Account for the current year has been prepared for the period of 12 months i.e. from 01-04-2012 to 31-03-2013. During the period under review your Company has clocked a turnover of Rs. 529.22 lacs excluding other income. The Company has incurred a net loss of Rs. 475.01 lacs after providing a depreciation of Rs.594.17 lacs. The Company has made Cash Profit of Rs 119.16 lacs and earned Cash Profit of Rs. 44.35 lacs in the immediate preceding reporting period. This depicts the overall improvement in the financials of the Company despite the Company being in red.

This is attributed to severe strict measures to revive the Company in order to put it on track as early as possible.

As the economy booming and the demands of the Company's product improving we expect to make a significant turnaround very soon.

Further, the entire assets of the Company's Noida unit have been acquired by the �ARCIL� (a group of secured lenders) under the provisions of SARFAESI Act, 2002.

SWOT ANALYSIS FOR THE COMPANY

Strengths

Your Company is in the business of processing of grey cloths for the exporters. The Company has cheap power and fuel cost, cheap labour and easy availability of water to carry out the process.

Weaknesses and Threats

Your Company is heavily dependent on the easy availability of raw material and to ensure its genuine supply we remain in touch with its suppliers. We have been able to procure these materials in constant touch with the vendors.

Opportunities

The Indian textile is growing considerably, resulting increase in the export of garments from India. We are looking forward to avail these opportunities.

ENVIRONMENT SAFETY

Your Company has installed proper plants to fulfill its obligations towards environmental safety. INTERNAL CONTROL SYSTEM andADEQUACY Your 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 and DEVELOPMENT

Expenditures on Research and Development is not separately allocated and identified. The constant endeavor to upgrade existing manufacturing facilities result in the improvement in the production.

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, economical and social situation. Further, Government Regulations, tax structure, demand and supply conditions, cost of raw materials and their availability and other related factors can also have a bearing on the above statements.

By Order of the Board

For SHAMKEN COTSYN LIMITED

Place: New Delhi                                            AMIT CHATURVEDI          SANJAY CHATURVEDI 

Date:  30.07.2013                                                   Director                                  Director            

a) activities relating to exports, initiatives : As mentioned in Director's Report taken to increase exports, development of new export markets for product and services and export plans; b) total foreign exchange used and earned i) Foreign Exchange used : Nil : Nil ii) Foreign Exchange earned : Nil : Nil

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.

Pursuant to section 217 (2AA) of the Companies Act, 1956 the Directors confirm: a. that in the preparation of the accounts for the year ended March 31, 2013, the applicable Accounting Standards had been generally followed alongwith proper explanation relating to material departures: b. that the directors had selected such accounting policies applied consistently and made 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 year ended & of the Profit & loss account of the Company for that period; c. that the directors had taken proper and sufficient care for the maintenance 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 year ended March 31, 2013 had prepared on a going concern basis; e. that the Company has adequate Internal Control System in place to ensure compliance of law applicable to the Company; f. that the Auditor's qualifications are self explanatory and are disclosed to the Notes on Accounts attached as per Note No. 22. Since the net worth of the Company is completely eroded, the Company is 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/Lenders. This is also disclosed in the Notes on Accounts and Auditors' Report. Other remarks are not related to the current financial year, they pertain to earlier years and the Management has already given the explanation during the year in which the event was occurred.

that the Auditor's qualifications are self explanatory and are disclosed to the Notes on Accounts attached as per Note No. 22. Since the net worth of the Company is completely eroded, the Company is 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/Lenders. This is also disclosed in the Notes on Accounts and Auditors' Report. Other remarks are not related to the current financial year, they pertain to earlier years and the Management has already given the explanation during the year in which the event was occurred