Dear Members,
 
 The Directors of your Company hereby present the 24th Annual Report of
 the Company together with the Accounts for the year ended 31st March,
 2011.
 
 FINANCIAL RESULTS                               (Rs. in Crores)
 
                                         2010 - 2011   2009 - 2010
 
 Sales                                         38.66         30.65
 
 Profit before Interest
 
 Depreciation & Tax                           (23.35)         5.25
 
 Less: Interest                                 2.23         10.06
 
 Profit / (Loss) before
 
 Depreciation & Tax                           (25.58)        (4.81)
 
 Less: Depreciation                             4.26          4.12
 
 Profit / (Loss) before tax                   (29.84)        (8.93)
 
 Less: Provision for fringe
 
 benefit tax                                    0.20          0.09
 
 Profit / (Loss) for the year                 (30.04)        (9.02)
 
 OPERATIONS AND BUSINESS PLAN
 
 During the year under review your company has achieved the total sale
 of Rs.38.66 crores, comprising the sale of Time Shares Rs.9.9 crores
 and through Resort Operations Rs.28.76 crores.
 
 Resort Operations
 
 During the year, the Company embarked on a renovation program of its
 resorts in order to raise the standards of the accommodation and resort
 ambience to contemporary standards. Renovation and refurbishment work
 commenced in August of last year. Painting of the exteriors and
 interiors of all resorts was undertaken, along with considerable work
 in landscaping and ground maintenance. New linen, television sets and
 room amenities have been introduced across the network. In addition,
 considerable progress was achieved in the area of replacing mattresses
 and furnishings. It is to be noted that approximately 70 rooms have
 been completely renovated to modern design standards.
 
 In 2010-11, the Company also focused on considerably raising the
 service standards of the resorts. To achieve this, the Company inducted
 new management teams at all resorts and added 400 employees to its
 resort team strength. Simultaneously, the Company redefined its product
 and service design standards to meet the expectations of India''s
 increasingly discerning consumers. In the area of Food & Beverage,
 service infrastructure was upgraded and considerable effort taken to
 train staff to deliver a superior Food & Beverage experience. New menus
 were introduced to serve guests a choice of Indian and Global cuisine.
 
 In addition to the above efforts, the Company also added several new
 facilities in the areas of in- house and destination related Holiday
 Activities and Recreation. Each resort has a Holiday Activities team
 who interact with guests, encouraging them to participate in fun-filled
 activities during the day and entertainment filled with games, music
 and dance in the evenings.
 
 One major initiative undertaken during the year has been the
 introduction of Wellness Spas at several of the Company''s resorts.
 Staffed with trained personnel in wellness regimes, the spas offer
 guests a menu of timeless therapies to rejuvenate the mind, body and
 spirit.
 
 DIRECTORS
 
 Your Directors, Mr.Sidharth Shankar and Mr.K.Chandrasekaran retire by
 rotation at the ensuing Annual General Meeting and being eligible,
 offer themselves for re-appointment.
 
 Mr.E.S.Ganapathy, Mr.G.Sundaram and Mr.S.Sethuraman, have resigned as
 Directors from the Board of the Company with effect from 07-02-2011.
 The Board placed on record its appreciation for the excellent services
 rendered by them during their tenure as Directors of the Company.
 
 Mr.Siddharth Mehta and Mr.Shahzaad Dalai have been appointed as
 Additional Directors on the Board of the Company with effect from
 07-02-2011 and shall hold office up to the date of the Annual General
 Meeting. The Company has received notices under Section 257 of the
 Companies Act, 1956, along with a deposit of Rs.500/- from the Members
 signifying their intention to propose Mr.Siddharth Merita and
 Mr.Shahzaad Dalai for the Office of Director of the Company.
 
 Mr.R.Subramanian resigned as Chairman and Managing Director from the
 Board of the Company on 1st July, 2011. He pioneered the then novel
 concept of Vacation Ownership (or Time Sharing as it was popularly
 known) in the Holiday Industry in India. This made Holidays hassle-
 free and affordable to more than one lakh members who joined the
 Sterling family. He steered the Company from a single resort started in
 1988 to 14 resorts spread across the country in all important tourism
 destinations.  His timely professional guidance enabled the Company to
 overcome the challenges faced during the period of Global economic
 crisis particularly in the Hospitality segment. The Board of Directors
 recorded their sincere appreciation for the valuable services rendered
 by Mr.R.Subramanian during the past 25 years.
 
 Mr.Ramesh Ramanathan has been appointed as an Additional Director and
 as Managing Director & CEO of the Company for a period of 5 (Five)
 years with effect from 1st July, 2011. He holds office up to the date
 of the ensuing Annual General Meeting. The Company has received a
 Notice under Section 257 of the Companies Act 1956, along with the
 deposit of Rs.500/- from a member signifying his intention to propose
 Mr.Ramesh Ramanathan as candidate for the Office of the Director.
 
 Mr.Siddharth Mehta has been designated as Chairman of the Company with
 effect from 1st July, 2011. Mr.Sidharth Shankar has been designated as
 Vice Chairman of the Company with effect 1st July, 2011.
 
 EMPLOYEE STOCK OPTION SCHEME / EMPLOYEES STOCK PURCHASE SCHEME
 
 Under the Employees Stock Option Scheme-2007, 16,66,000 Equity Shares
 of Rs.10/- each were allotted and no options are pending.
 
 Under the Employees Stock Option Scheme-2009, 14,12,000 equity shares
 were allotted. The Balance 88,000 options are yet to be exercised.
 
 Under the Employees Stock Purchase Scheme-2010, 4,85,000 shares have
 been allotted. The balance 16,15,000 shares are yet to be allotted the
 details of options granted under ESOS-2007 and ESOS-2009 are given in
 Annexure-A in accordance with SEBI (Employees Stock Option Scheme &
 Employees Stock Purchase Scheme) Guidelines 1999 and any modifications
 thereto.
 
 SHARE CAPITAL
 
 Your Company has raised Rs.538.65 lakhs (being 90%) through issue of
 17,10,000 Equity Shares of Rs.10/- each at a price of Rs.35/-
 (including a premium of Rs.25/- per Equity Share) on conversion of
 Warrants.
 
 Your Company has raised Rs.131.25 lakhs (being 75%) through issue of
 5,00,000 Equity Shares of Rs.10/- each at a price of Rs.35/- (including
 a premium of Rs.25/- per Equity Share) on conversion of Warrants.
 
 Your Company has raised Rs.166.60 lakhs through issue of 16,66,000
 Equity Shares of Rs.10/- each at par, under ESOS-2007 .
 
 Your Company has raised Rs.100.00 lakhs through issue of 10,00,000
 Equity Shares of Rs.10/- each at par, under ESOS-2007 and ESOS - 2009.
 
 Further, during the current year your Company has raised Rs.41.20 lakhs
 through issue of 4,12,000 Equity shares of Rs.10/- each under ESOS-2009
 on 14-07-2011 and Rs.48.50 lakhs through issue of 4,85,000 Equity
 Shares of Rs.10/- each under ESPS-2010 on 14-07-2011.
 
 ISSUE OF 30,00,000 WARRANTS ON PREFERENTIAL BASIS.
 
 The Members at the Extraordinary General Meeting held on 28-01-2009
 have passed a special resolution for issue and allotment of 30,00,000
 Warrants at a price of Rs.35/- per Warrant on preferential basis.
 Subsequently, 30,00,000 Warrants were allotted at the Board Meeting
 held on 12-02-2009. The In-principle approval was granted by both
 Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited
 (MSE). The 12,90,000 warrants were converted into 12,90,000 Equity
 Shares on 25th March, 2010, 6,35,000 Warrants were converted into
 6,35,000 Equity Shares on 8th April, 2010 and the balance 10,75,000
 Warrants were converted into 10,75,000 Equity Shares on 4th August
 2010. The said Equity Shares are listed on the Madras Stock Exchange
 Limited and Bombay Stock Exchange Limited.
 
 ISSUE OF 5,00,000 WARRANTS ON PREFERENTIAL BASIS.
 
 The Members at the Extraordinary General Meeting held on 25-05-2009
 have passed a special resolution for issue and allotment of 5,00,000
 Warrants at a price of Rs.35/- per Warrant on preferential basis.
 Subsequently, 5,00,000 Warrants were allotted at the Board Meeting held
 on 04-06-2009. The In-principle approval was granted by both Bombay
 Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE).
 Out of the above, 4,00,000 Warrants were converted into 4,00,000 Equity
 Shares on 20th August, 2010 and the balance 1,00,000 Warrants were
 converted into 1,00,000 Equity Shares on 02-12-2010. The said Equity
 Shares are listed on the Madras Stock Exchange Limited and Bombay Stock
 Exchange Limited.
 
 PROCEEDS OF PREFERENTIAL ISSUES
 
 The details of utilization of proceeds of Preferential Issues upto 31st
 March, 2011 are setout in the statement attached herewith in Annexure -
 B.
 
 STATUS OF PROCEEEDINGS UNDER SECTION 408 OF THE COMPANIES ACT, 1956
 
 The Members are informed that the Hon''ble High Court passatkan Order,
 granting stay of the Orders of the Hon''ble Company Law Board, Chennai,
 pending disposal of the Appeal under CMA No.3647 of 2005.  The stay is
 still in force.
 
 FIXED DEPOSIT
 
 Your Company has not accepted any fresh Deposits from the public during
 the year.
 
 AUDITORS
 
 The Joint-Auditors of the Company M/s.R.Subramanian and Company,
 Chartered Accountants, Chennai, and M/s.V.Sankar Aiyar & Co., Chennai,
 retire at the conclusion of this Annual General Meeting and are
 eligible for re- appointment.
 
 The Company has received confirmation that their
 
 appointment will be within the limits prescribed under Section 224(1B)
 of the Companies Act, 1956.  The Audit Committee of the Board has
 recommended their appointment. The necessary resolution is being placed
 before the shareholders for approval.
 
 AUDIT, INVESTOR GRIEVANCES, REMUNERATION AND COMPENSATION COMMITTEES
 
 In terms of Clause 49 of the Listing Agreement of the Stock Exchanges
 and pursuant to the provisions of Section 292A of the Companies Act,
 1956, the details pertaining to Audit Committee, Investor Grievances
 Committee, Remuneration Committee, Share Transfer Committee and
 Compensation Committee are furnished in the Report on Corporate
 Governance which is annexed herewith.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 In terms of Clause 49 of the Listing Agreement of the Stock Exchanges,
 Management Discussion and Analysis Report is annexed herewith and forms
 part of this Report.
 
 REPORT ON CORPORATE GOVERNANCE
 
 The Company has complied with the Corporate Governance Code as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges. A separate section on Corporate Governance, along with a
 certificate from the Statutory Auditors of the Company confirming the
 compliance is annexed.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors''
 to the best of their knowledge and belief confirm that
 
 1.  in the preparation of the Profit and Loss Account for the Financial
 Year ended 31st March, 2011 and the Balance Sheet as at that date
 (Annual Accounts), the applicable accounting standards have been
 followed;
 
 2.  that the Directors'' had selected such accounting policies and
 applied them consistently and made judgements and estimates that are
 reasonable and prudent so as to give a True and Fair view of the state
 of affairs of the Company at the end of the financial year and of the
 profit and loss of the Company for that year;
 
 3.  that the Directors had 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;
 
 4.  that the Directors had prepared the Annual Accounts for the
 Financial Year ended 31st March, 2011 on a going concern basis.
 
 SUBSIDIARY COMPANIES
 
 As on 31st March, 2011, Your Company had three Subsidiary Companies
 namely,
 
 1. M/s.Sterling Holidays (Ooty) Limited.
 
 2. M/s.Sterling Holiday Resorts (Kodaikanal) Limited and
 
 3. M/s.Manchanda Resorts Private Limited.
 
 There has been no material change in the nature of business of the
 subsidiaries. A statement containing brief financial details of the
 subsidiaries is included in the Annual Report.
 
 In compliance with the provisions of the Listing Agreements entered
 into by the Company with the Stock Exchanges, a Consolidated Financial
 Statement of the Company and all its subsidiaries is attached. The
 Consolidated Financial Statements have been prepared in accordance with
 the relevant Accounting Standards as prescribed under Section 211(3C)
 of the Companies Act, 1956 (Act). These financial statements disclose
 the assets, liabilities, income, expenses and other details of the
 Company and its subsidiaries.
 
 Pursuant to the provision of Section 212(8) of the Act, the Ministry of
 Corporate Affairs vide its circular dated February 8, 2011 has granted
 general exemption from attaching the Balance Sheet, Profit and Loss
 Account and other documents of the subsidiary companies with the
 Balance Sheet of the Company. A statement containing brief financial
 details of the Company''s subsidiaries for the Financial Year ended 31st
 March, 2011 is included in the Annual Report. The annual accounts of
 these subsidiaries and the related detailed information will be made
 available to any member of the company/its subsidiaries seeking such
 information at any point of time and are also available for inspection
 by any member of the Company/its subsidiaries at the registered office
 of the Company. The annual accounts of the said subsidiaries will also
 be available for inspection, as above, at the head offices/registered
 offices of the respective subsidiary companies. The Company shall
 furnish a copy of details of annual accounts of subsidiaries to any
 member on demand.
 
 COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF
 DIRECTORS) RULES, 1988
 
 In terms of the above Rules, the particulars relating to Conservation
 of Energy, Technology Absorption and Foreign Exchange Earnings and
 Outgo required in terms of Section 217(l)(e) of the Companies Act, 1956
 read with the Companies (Disclosure of Particulars in the Report of
 Board of Directors) Rules, 1988 are given in Annexure - C which forms
 part of the Directors'' Report.
 
 PARTICULARS OF EMPLOYEES
 
 There are no employees of your Company who come within the purview of
 Sec. 217(2A) of the Companies Act, 1956 during the year under review.
 
 DEMATERIAUSATION OF EQUITY SHARES
 
 As mentioned in our earlier Annual Reports, the Company''s Equity Shares
 are in the compulsory demat mode with effect from 28th August, 2000, as
 per Circular No.SMDRP / Policy / CIR-23/2000 dated 29th May, 2000
 issued by Securities and Exchange Board of India (SEBI).  This has been
 facilitated through arrangement with M/s.National Securities Depository
 Limited (NSDL) and M/s.Central Depository Services (India) Limited
 (CDSL).  A large number of our shareholders have taken advantage of
 dematerialisation facility. M/s.Cameo Corporate Services Limited,
 Chennai, has been appointed as the Registrar and Share Transfer Agent
 of the Company.
 
 CEO / CFO CERTIFICATION
 
 The Managing Director and the Senior Vice President -Finance have
 submitted a certificate to the Board regarding the Financial statements
 and other matters as required under Clause 49 V of the Listing
 Agreement.
 
 OPEN OFFER ANNOUNCED BY M/S.INDUS HOSPITALITY FUND LTD AND M/S.INDIA
 DISCOVERY FUND LTD.
 
 The Board of Directors of the Company at their meeting held on
 04-06-2009 have allotted 78,82,200 Equity Shares to M/s.lndus
 Hospitality Fund Ltd, pursuant to the Special Resolution passed at the
 Extraordinary General Meeting held on 25-05-2009. M/s.lndus Hospitality
 Fund Ltd along with M/s.lndia Discovery Fund Ltd have issued Public
 Announcement on 08-06-2009, to acquire 95,85,717 fully paid Equity
 Shares of the Company at an offer price at Rs.36.25 per share in
 accordance with the Regulations and Guidelines issued by SEBI.
 
 M/s.Gujarat Industrial Investment Corporation Limited (GIIC) have filed
 a Civil suit in the Hon''ble Court of 2nd Additional Senior Civil Judge
 at Gandhinagar, Gujrat in connection with the convening of
 Extraordinary General Meeting on 25th May, 2009, wherein the allotment
 of Equity Shares on preferential basis to M/s.lndus Hospitality Fund
 Limited and M/s.Blue Ocean Investment Trust was approved by the
 shareholders.
 
 The Company has taken necessary legal action to defend the case in this
 regard. Subsequently, a One Time Settlement has been reached between
 the Company and GIIC. The Open Offer opened on 10-11-2010 and closed on
 29-11-2010 and 6,518 Equity Shares have been acquired by the Acquirer.
 
 ACKNOWLEDGEMENTS
 
 The Board of Directors take this opportunity to express their sincere
 thanks to the Central and State Governments, Financial Institutions and
 Bankers and other Creditors for their valuable support and assistance
 during this period. The Directors also wish to thank the Shareholders
 and Timeshare Customers who have supported the Company in this hour of
 need. Our Directors look forward to receiving continued support from
 them.
 
 The Directors also wish to thank the employees of the Company for their
 dedicated performance and also place on record their wholehearted
 commitments to the Company and combined efforts to turnaround the
 Company.
 
                                      For and on behalf of the Board
 
 Place: Chennai                                      SIDDHARTH MEHTA
 
 Date: 13th August 2011                                     CHAIRMAN