SRI VASAVI INDUSTRIES LIMITED
ANNUAL REPORT 2010-2011
Your Directors are pleased to present their Twenty-sixth Annual Report of
the Company together with the Audited Accounts for the year ended March 31,
Rs In lakhs
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)
Directors have not recommended dividend for the year 2010-11 in view of
lossess incurred during the year.
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.
Smt G Saraswathi, Chairperson and Promoter Director ceased to be a Director
consequent to passing away w.e.f. 09.07.2011.
Sri G Buatchiraju 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 YBMR 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 Janaradha 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 new directors.
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
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 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, 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.
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.
During the year under review, your Company neither invited nor accepted any
fixed deposits from the public.
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.
REPLIED 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.
The Audit committee of the Company was constituted under Section 292A of
the companies Act 1956.
DEMATERIALISATION OF SHARES:
The companys shares are in compulsory Demat mode under both National
Securities Depository Limited [NSDL] and Central Depository Services
LISTING OF SECURITIES & INVESTOR SERVICES:
The equity shares of the Company are listed with the Stock Exchange,
During the financial year, the companys shares were not traded as the
trading was suspended. Company has complied with all listing agreement
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
ENERGY CONSERVATION, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EEARNINGS
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 remained cordial through out the year.
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
Bangalore G Eswara Rao
September 01, 2011 CHAIRMAN AND MANAGING DIRECTOR
FORM - A
[See Rule 2]
Conversation of Energy
A. Power and fuel consumption
Sl. Description Current Year Previous Year
No. 2010-11 2009-10
a. Purchased Units 157264445 131838544
Total amount Rs 6582 4857
Rate per Unit - Rs. 4.18 4.00
b. Own Generation:
i. Through Diesel Generator Units
Units per ltr of diesel Cost/unit NIL NIL
ii. Through steam turbing/generator - Units
Units per ltr of fuel oil/gas cost/units NIL NIL
2 Coal NIL NIL
3 Furnace Oil
Quantity [k ltrs] [Rolling Division] NIL 365
Total Amount `Rs. 214
Average Rate `Rs. 28.02
B Consumption per unit of production
Electricity Units 3692 3169
Furnace Oil ltr [Rolling Division] 0 62
Coal [specify quality] NIL NIL
FORM - B
[See Rule 2]
B. Technology absorption
Efforts made in technology absorption : NIL
C. Foreign exchange earnings / (outgo) USD. (9040)
2. RESEARCH AND DEVELOPMENT (R & D)
Specific areas in which R & D carried out
by the company NIL NIL
2. Benefits derived as a result of the above R&D NIL NIL
3. Future plan of action NIL NIL
4. Expenditure on R & D (in Rs.)
a) Capital expenditure NIL NIL
b) Recurring Expenditure NIL NIL
d) Total R & D Expenditure as a
Percentage of Total Turnover NIL NIL
TECHNOLOGY ABSORPTION,ADOPTION AND INNOVATION
1. Efforts in brief made towards absorption,adoption and innovation
2. Benefits,derived as a result of the above efforts
3. In case of imported technology (imported during the last 5 years
reckoned from the beginning of the financial year) the following
information may be furnished:
a) Technology Imported NA
b) Year of Import
c) Has technology been fully absorbed
d) If not fully absorbed, areas where this has not taken place, reason
thereof and future plans of action.
Bangalore G Eswara Rao
September 01, 2011 CHAIRMAN AND MANAGING DIRECTOR
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure and Developments:
The Company's core business is production of steel and metallurgical
products. Post economic melt down, there has been an improvement in prices
for the Company's products. The consumption of High Carbon Ferro Chrome
(HCFC) is directly proportional to the consumption of stainless steel. The
global stainless steel market which is estimated at 20 million Tonnes is
expected to grow at a steady pace of 10% p.a. which will throw open vast
opportunities HDFC manufacturers.
Opportunities and Threats:
A continuous demand for stainless steel in the international market is
expected to throw significant opportunities to this business. How ever
expansion of projects by existing players who are having both mines and
power plants may lead to some negative impact, similarly, the existing
monopolistic pricing is always considered a threat to this industry in
addition to frequent changes in power tariff.
There are two divisions in the Company i.e. Rolling mill division and Ferro
Alloys division. , The performance of each division for the Financial Year
2010-11 is as following:
a. Rolling Division - Installed Capacity - 108000 MT Actual Prod - 14 MT
b. Ferro Division - Installed Capacity - 48000 MT Actual Prod - 42577 MT
As pointed out, the future looks very promising and the company expects to
do much better.
Risks and Concerns
The price volatility of both raw material and finished goods coupled with
competition is a major risk and concern.
The Company registered a turnover of Rs. 27015 lacs for the year ended
March 31,2011 (previous year Rs.23205 lacs) with a net loss of Rs. 814 lacs
(previous year net loss 1269 lacs). The Company's performance due to the
continuation of economic slow down up to the first half of the year and
also stoppage of production at its rolling mill.
Human Resources / Industrial Relations :
Your Company continued its good record of industrial relations with its
employees / workers. Your Company has dedicated man power at all levels.
Internal Control Systems and Their Adequacy:
Your Company's Internal Auditors and Audit Committee provide continuous and
independent internal checks. Internal audit recommendations reviewed by the
management and the Audit Committee continuously.