The Directors have immense pleasure in presenting their 27th Annual
 Report and the Audited Annual Accounts of the Company for the financial
 year ended 31st March, 2012.
 
 FINANCIAL RESULTS
 
 The salient features of the Company''s financial results during the year
 are as under:
 
                                                    (Rs in Lacs)
 
 PARTICULARS                           For the        For the
 
                                  Year Ended        Year Ended 
                                  31.03.2012        31.03.2011
 
 Sales / Revenue from Operations    10877.73         24997.82
 
 Profit before Interest, 
 Depreciation & Tax                  1337.44          2341.45
 
 Less: Interest                        65.05           205.61
 
 Profit before Depreciation & Tax    1272.39          2135.84
 
 Less: Depreciation                  1202.21          1156.69
 
 Profit/(Loss) before Tax              70.18           979.15
 
 Less - Provision for Taxes 
 (including Deferred)                  55.00          (711.51)
 
 Profit/(Loss) After Tax               15.18          1690.66
 
 Waiver of OCDs amount                   -            2828.00
 
 Paid Up Share Capital               2900.00          2900.00
 
 Reserve and Surplus                (3126.21)        (3141.39)
 
 Adjusted Net Worth of the Company   (226.21)         (241.39)
 EPS (In Rs )
 
 - Basic & Diluted                      0.05             5.83
 
 OPERATIONS:
 
 During the financial year under review -
 
 - the turnover of your company stood at Rs 108.78 Crores as against Rs
 249.98 Crores in financial year ended on 31.03.2011 registering a
 decrease by 56.48%. The turnover of the Company as at 31.03.2012 is not
 comparable with last year as this financial year company has changed
 the style of operation from direct sales to 100% Job Work for Bombay
 Rayon Fashions Ltd. (BRFL).
 
 - PBIDT decreased to Rs 1337.44 Lacs from Rs 2341.45 Lacs in the
 previous year.
 
 - Interest cost reduced to Rs 65.05 Lacs from Rs 205.61 Lacs in the
 previous year.
 
 DIVIDEND
 
 In view of the accumulated losses, the Board of Directors does not
 recommend any dividend for the year under review.
 
 BOARD OF DIRECTORS
 
 The Board of Directors has approved the payment of remuneration to Dr.
 R.B. Baheti as non executive director
 
 of Rs 1 Crore per annum payable monthly with effect from November 1,
 2010 for a period of 3 years as approved by the shareholders.
 
 Mr. Aman Agrawal, Mr. A. R. Mundra and Mr. T. N. Anand Reddy,
 Directors, retire by rotation at the ensuing Annual General Meeting and
 are eligible for re-appointment. Their re-appointment as Directors
 liable to retire by rotation is submitted to the shareholders for their
 approval in the ensuing Annual General Meeting.
 
 Mr. A. V. Narasimha Reddy and Mr. S. Sreedhar Reddy, Directors resigned
 from the Board w. e. f. 22nd September, 2011 and 19th October, 2011
 respectively. The Board places on record its deep appreciation for
 valuable contributions rendered by Mr. A. V.  Narasimha Reddy and Mr.
 S. Sreedhar Reddy during their tenure as Directors of the Company.
 
 PERFORMANCE OF STI SANOH INDIA LIMITED - THE JOINT VENTURE COMPANY
 
 Your Directors are pleased to inform that growth in the automobile
 sector has resulted in an improved performance by STI Sanoh India
 Limited, your Joint Venture Company with Sanoh Industrial Co. Limited.
 During the year it recorded 9.54% growth in income at Rs114.44 Crores
 (provisional) in comparison to Rs 104.47 Crores last year (Audited).
 
 As a result of India''s expected GDP Growth during the current year and
 targeted demand growth in automobiles and refrigeration industries in
 2012-13, we expect the performance of the Joint Venture to be further
 better in the current year.
 
 AUDITORS Statutory Auditor
 
 M/s. V.K. Beswal & Associates, Chartered Accountants having Firm
 Registration Number 101083W the Statutory Auditors of the Company
 retire at the ensuing Annual General Meeting and being eligible, offer
 themselves for reappointment.
 
 Cost Auditor
 
 As per the requirement of the Central Government and pursuant to the
 provisions of Section 233B of the Companies Act, 1956, the audit of the
 cost accounts relating to the Product Textiles was required to be
 carried out every year. The Company has appointed Cost Auditor Mr. R.G.
 Goel, Cost Auditor, New Delhi, having Membership No. 9876 to audit the
 cost accounts for the Financial year 2011-2012 i.e. from 01.04.2011 to
 31.03.2012, pursuant to approval of Central Government vide their
 letter dated 17.06.2011. Cost Audit report for the year ended 31st
 March 2012 would be submitted to the Central Government within the
 prescribed time.
 
 Pursuant to Cost Audit Report Rule, due date for filling of Cost Audit
 Report for the year ended March 31, 2011 was September 27, 2011, which
 was submitted to the Central Government on September 30, 2011.
 
 The Company has re-appointed to Mr. R.G. Goel, Cost Auditor, New Delhi,
 to audit the cost accounts for the financial year 2012-2013 i.e. from
 01.04.2012 to 31.03.2013.
 
 AUDITORS'' REPORT
 
 There are no specific observation in the Auditors'' Report requiring
 further comments under Section 217 (3) of the Companies Act, 1956.
 
 FIXED DEPOSITS
 
 The Company has not accepted or renewed any deposit from public during
 the year under review.
 
 DIRECTOR''S RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement of Section 217(2AA) of the Companies Act,
 1956, your Directors hereby confirm that:
 
 1.  In the preparation of the Annual Accounts for 2011-12, the
 applicable accounting standards have been followed with proper
 explanations relating to material departures;
 
 2.  They have selected such accounting policies and applied them
 consistently and made judgments 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 loss of the
 Company for the financial year;
 
 3.  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;
 
 4.  They have prepared the annual accounts on a going concern basis.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 As required under section 217(1)(e) of the Companies Act, 1956 read
 with the Companies (Disclosures of Particulars in Report of Board of
 Directors) Rules, 1988, particulars of Conservation of Energy,
 Technology Absorption and Foreign Exchange Earnings and Outgo are given
 in the Annexure-I which forms part of this Report.
 
 PARTICULARS OF EMPLOYEES
 
 Pursuant to the provisions of Section 217 (2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the name of and other particulars of an employee is set out in
 the Annexure-II to the Directors'' Report.
 
 However, as per provisions of Section 219(1)(b)(iv) of the said Act,
 the Annual Report excluding the aforesaid information is being sent to
 all members of the Company.  Any member, who is interested in obtaining
 such particulars about an employee, may write to the Company Secretary
 at Registered Office of the company.
 
 CORPORATE GOVERNANCE
 
 Your Directors are committed to good corporate governance as a policy.
 The Audit Committee, Investors Grievance cum Share Transfer Committee
 and Remuneration Committee have been constituted, as required. A
 detailed report on Corporate Governance is given in the annexure which
 form part of this report.
 
 INDUSTRIAL RELATIONS
 
 The company provides a congenial and friendly atmosphere to its
 employees to maintain cordial relations and motivate them to develop to
 their full potential.  Industrial Relations throughout the year were
 very peaceful.
 
 COMPANY SECRETARY
 
 During the year Mr. Rajkumar Bhavsar, Company Secretary has resigned
 from the Company on 09th January, 2012 in whose place Board of
 Directors appointed Mr.  Deepesh Kumar Nayak, as Company Secretary of
 the Company who will also acts as Compliance Officer of the Company,
 w.e.f. 27thApril, 2012.
 
 APPRECIATION
 
 Your Directors place on record their sincere appreciation to the
 Financial Institutions, Banks, Central and State Government
 authorities, clients and shareholders for their support and
 co-operation during the year.
 
                           For and on behalf of the Board of Directors 
 
                           For STI India Limited
 
 Place: Indore             Dr. R.B. Baheti
 
 Date : 04th May, 2012     Chairman