Bafna Spinning Mills & Exports Ltd Directors Report

To,

The Members,

BAFNA SPINNING MILLS & EXPORTS LIMITED

Your Directors have pleasure in presenting the 21^st Annual Report of the Company together with the Audited Accounts for the financial year ended on 31^st March 2012.

During the current year your company has achieved a reasonable level of growth. We are hoping that the phenomenal growth shall be achieved during the next coming years.

2. Directors

Mrs. Uma Bafna, Director of the company retires at the ensuring Annual General meeting and eligible for re-appointment.

3. Personnel

Your directors wish to place on record their appreciation for the contribution to growth of the business made by employees at all levels. Information as required pursuant to section 217(2A) of the companies Act, 1956 has not been given, as it is not applicable.

4. Sub-division of Equity Shares:

In order to improve liquidity of the Companys Shares in the Stock Market and to make it affordable to the small investors, the Board of Directors of the Company at their meeting held on 08/03/2011 considered it desirable to sub-divide the nominal value of the equity portion of the Authorized capital of the Company. This requires alteration of Clause V of Memorandum of Association. Hence, permission of shareholders for such was taken in the duly convene Extra Ordinary General Meeting of the Company held on 1^st April, 2011. After that, equity Shares of the Company including the paid up Equity Shares are sub divided such that each existing Equity Shares in the Authorized Share Capital having face value of Rs. 5/-(Rupees Five) each sub-divided into 5(five) equity shares of the face value of Rs.l/-(Rupees One) each.

Your Company has filed necessary e-forms on MCA portal regarding sub division of Equity shares.

5. Auditors

M/s K R Shah & Associates, Chartered Accountants, Ahmadabad, Auditor of the Company retire at the conclusion of ensuing Annual General Meeting and being eligible, offer themselves for Re-appointment.

6. Deposits

During the year, Company has not accepted inter corporate Deposits, which falls under Section 58A of Companies Act, 1956.

7. Energy. Technology And Foreign Exchange

The additional information required to be disclosed in terms of notification No.1029 dated 31^st December, 1998 issued by the Department of Company Affairs, Ministry of Finance is not applicable.

8. Directors Responsibility Statement

Pursuant to Section 217(2A) of Companies Act, 1956, the Directors confirm that:

i. In the preparation of Annual Accounts, appropriate accounting standard have been followed.

ii. Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give true and fair view of state of affairs of the company at the end of financial year ended 31st March, 2012.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv. The Annual Accounts have been prepared on going concern basis.

9. Auditors Qualification

Auditors have qualified their report to the members of the Company. In this connection directors of the Company have discussed the same at arms length on the recommendation of audit committee and have imitated to take necessary action so as to show fair view of state of affairs of the company in the coming financial year.

10. Report on Corporate Governance

Compliance Report on Corporate Governance is a part of Annual Report is annexed herewith.

11. Acknowledgements

Your Directors wish to please on record their appreciation of the whole hearted co-operation extended to company from various departments of the central and state governments, company bankers and financial institutions and employees of the company and look forward for the same cordial relationship in coming years.