Directors Report of Sri Vasavi Industries Ltd.

Mar 31, 2011

The Directors are pleased to present their Twenty- sixth Annual Report of the Company together with the Audited Accounts for the year ended March 31,2011.

FINANCIAL RESULTS

(Rs. In lakhs) 2010-11 2009-10

Turnover . 27015 23,205

Profit before depreciation (464) (819)

Depreciation 459 554

Provision for Taxation 6.59 (104)

Net Profit (814) (1269)

Profit from previous year (10116) (8847)

Balance carried to Balance Sheet (10930) (10116)

DIVIDEND:

Directors have not recommended-dividend for the year 2010-11 fin view of losses incurred during the year.

OPERATIONS

During the year under review, the Company registered a turnover of Rs. 27015 Lakhs as against Rs.23205 Lakhs of previous year with a net loss of Rs.814 Lakhs [previous year loss of Rs.1269 lakhs. The turnover has increased due to increase in volume of sales quantity and marginally better price compared to the Previous Year.

OUTLOOK FOR THE FUTURE -

However in the post economic slow down scenario, the demand as well as prices of Ferro Alloys have been showing an increasing trend both at national and international levels. The company expects to put up a much better performance during the year 2011-12.

Directors

Smt G Saraswathi, Chairperson and Promoter Director ceased to be a Director consequent to passing away w.e.f. 09.07.2011.

Sri G Butchiraju and Sri BPM Vittal ceased to be Directors consequent to their resignation w.e.f. 01.09.2010 and 01.12.2010 respectively.

Sri N K Das, Executive Director ceased to be Director w.e.f. 01.09.2011 consequent to submission of resignation letter.

Sri Bompada Janardhana Rao and Sri Kotla Chandrasekhara Rao were appointed in casual vacancies w.e.f. 01.09.2010 and 01.09.2011 respectively.

In terms of Section 260 of the Companies Act, 1956, Sri YBVR Murthy was appointed as Additional Director w.e.f. 01.09.2011 and holds office until the date of the ensuing Annual General Meeting.

Notices have been received from members, pursuant to Section 257 of the Companies Act, 1956, together with the prescribed deposit, proposing the appointment of Sri B Janaradhana Rao, Sri YBVR Murthy and Sri Kotla Chandrasekhara Rao as Directors at the ensuing - annual general meeting.

The Board places its record of appreciation for outgoing Directors for their contribution and welcomes the new Directors..

Corporate Governance

As required under Clause 49 of the Listing Agreement, Report on Management Discussion and Analysis and Corporate Governance are given separately, which form part of this Annual Report.

Directors Responsibility Statement

Pursuant to Section 217[2AA] of the Companies Act, 1956, your Directors confirm that:

i. in the preparation of the annual accounts for the year March 31, 2011, the applicable Accounting Standards have been followed and that there were no material departures.

ii. the accounting policies sleeted by them have been applied consistently, judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and the Loss of the Company for the period ended March 31, 2011.

iii. they have taken proper and sufficient care for the 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.

iv. the annual accounts have been prepared on a going concern basis.

Auditors

M/s. Nekkanti Srinivasu & Co, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. They have confirmed their willingness to act as Auditors of the Company for the financial year 2011-12 and confirmed that their re- appointment, if made, would be within prescribed limits under Section 224 (1B) of the Companies Act, 1956.

Fixed Deposits

During the year under review, your Company neither invited nor accepted any fixed deposits from the public.

AUDITORS OBSERVATIONS:

i. Note No.6 to Notes on Accounts, regarding valuation of investments and non-provision of diminution in the value of the investments(un quoted) for the reasons stated therein.

REPLIES TO AUDITORS OBSERAVATION:

i. These investments are meant to be held as long term investments and any diminution in value, if any, will be a temporary phenomenon.

AUDIT COMMITTEE:

The Audit committee of the Company was constituted under Section 292A of the companies Act 1956.

DEMATERIALISATION OF SHARES:

The company's shares are in compulsory Demat mode under both National Securities Depository Limited [NSDL] and Central Depository Services Limited [CDSL].

LISTING OF SECURITIES & INVESTOR SERVICES:

The equity shares of the Company are listed with the Stock Exchange, Mumbai.

During the financial year, the company's shares were not traded as the trading was suspended. Company has complied with all listing agreement clauses.

PARTICULARS OF EMPLOYEES:

None of the employee is covered under Section 217 [2A] of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended.

ENERGY CONSERVATION, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EEARNINGS AND OUTGO:

The information under Section 217(1 )(e) Companies Act, 1956 read with Companies [Disclosure of Particulars in the Report of the Board of Directors] Rules, 1988, is forming part of this report.

INDUSTRIAL RELATIONS:

Industrial relations remained cordial through out the year.

Acknowledgement

Your Directors acknowledge with gratitude and wish to place on record their appreciation for the valuable support and kind co-operation received from the Central and State Government authorities, Financial Institutions, Banks, Shareholders and staff at all levels during the year.

On behalf of the Board of Directors

G Eswara Rao

Chairman & Managing Director

Bangalore

September 1,2011

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Mar 31, 2010

The Directors have pleasure in presenting the Twenty Third Annual Report of the company for the year ended March 31, 2010.

FINANCIAL RESULTS

(Rs. In lakhs)

2009-10 2008-09

Total Turnover 23205 37232

Profit before (819) (1090) Depreciation

Depreciation 554 570

Provision for Taxation (104) 196

Net Profit (1269) (1857) Profit from

Previous year (8847) (6990)

Balance carried to Balance Sheet (10116) (8847)

OPERATIONS:

During the year under review, the Company registered a turnover of Rs. 23205 lacs for the year, (previous year Rs.37232 lacs) with a net loss of Rs. 1269 lacs (previous year net loss Rs.1857 lacs). The turnover has declined due to the effect of global economic slowdown which continued up to the first half of the year and also stoppage of production operations at rolling division from July 09 onwards for undertaking modernization work in the Plant.

OUTLOOK FOR THE FUTURE-

How ever in the post economic slow down scenario, the demand as well as prices of Ferro Alloys have been showing an increasing trend both at national and international levels. The company expects to put up a much better performance during the year 2010-11.

DIRECTORS:

Smt Grandhi Saraswathi, Director retires by rotation at the ensuing Annual General Meeting and being eligible offer herself for reappointment The appointment needs to be confirmed by shareholders at the AGM.

DIVIDEND:

Directors do not recommend Dividend for the year 2009-10 in view of the losses incurred during the year.

CORPORATE GOVERNANCE:

As required under Clause 49 of the Listing Agreement, Report on Management Discussion and Analysis end Corporate Governance and share holder information are given separately, which form part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Se:.217 (2AA) of the Companies Act, 1956 your Directors confirm that

i) in the preparation of Annual Accounts, for the year March 31, 2010, the applicable accounting standards have been followed and that there were no material departures;

ii) the accounting policies selected by them have been applied consistently, judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and the Loss of the Company for the period ended March 31, 2010.

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance of the provisions of the 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 a going concern basis.

AUDITORS:

M/s. Nekkanti Srinivasu & Co., Chartered Accountants, retire at the ensuing Annual General Meeting. You are requested to appoint the auditors till conclusion of next Annual General Meeting and fix their remuneration.

FIXED DEPOSITS:

During the year under review, the Company has not accepted any fixed deposits from the public.

AUDITORS OBSERVATIONS:

Reference is invited to the following comments of the auditor:

i. Note No. 6 to Notes on Accounts,

regarding valuation of investments and non-provision of diminution in the value of the investments (un quoted) for the reasons stated therein.

Replies to Auditors Observations:

i. These investments are meant to be held as long term investments and any diminution in value, if any, will be a temporary phenomenon.

AUDIT COMMITTEE:

The Audit committee of the Company was constituted under Section 292 A of the companies Act 1956.

DEMATERIALISATION OF SHARES:

The company's shares are in compulsory Demat mode under both National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).

PARTICULARS OF EMPLOYEES

None of the employees of the company is covered by Section 217 (2A) read with the Companies (Particulars of Employees) Rules, 1975 as amend id.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information under Section 217{l)(e) read with the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 is given in the Annexure being a part of this report.

LISTING OF SECURITIES & INVESTOR SERVICES:

The Equity shares of the Company are listed with the Stock exchanges at Mumbai.

During the financial year the company's shares were not traded as the trading was suspended. Company has complied with all listing agreement clauses.

INDUSTRIAL RELATIONS:

Industrial relations remained cordial through out the year.

ISSUE OF SHARES

During the year the company has not allotted any shares.

ACKNOWLEDGEMENTS:

The directors acknowledge with gratitude and wish to place on record their appreciation for the valuable support and kind co-operation received by the company from the Central Government, Government of Andhra Pradesh, Financial Institutions, Banks, Share holders and staff at ail levels during the year,

By order of the Board of Directors

(G. ESWARA RAO) Vice Chairman and Managing Director

Place: Hyderabad Date : September 01, 2010