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Directors Report of STI India Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 30 th Annual Report of the Company along with the Audited Annual Accounts for the financial year ended 31st March, 2015.

FINANCIAL RESULTS AND PERFORMANCE

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 31.03.2015 31.03.2014

Sales / Revenue from Operations 6047.09 5572.80

Profit before Interest, Depreciation & Tax (74.82) 189.86

Less: Interest 4.28 1.44

Profit before Depreciation & Tax (79.10) 188.42

Less: Depreciation 417.83 1238.46

Profit/(Loss) before Tax (496.93) (1050.04)

Less - Provision for Taxes (including Deferred) (18.13) (383.27)

Profit/(Loss) After Tax (478.80) (666.77)

Paid Up Share Capital 2900.00 2900.00

Adjusted Net Worth ofthe Company (2402.01) (1825.69)

EPS (In Rs.) Basic & Diluted (1.65) (2.30)

During the financial year under review -

- The turnover of your company stood at Rs. 6047.09 Lacs as against Rs. 5572.80 Lacs in financial year ended on 31st March, 2014 registering an increase by 8.51%.

- PBIDT decreased to Rs. (74.82) Lacs from Rs. 189.86 Lacs in the previous year.

- Interest cost increased to Rs. 4.28 Lacs from Rs. 1.44 Lacs in the previous year.

DIVIDEND

In view of the operating losses incurred by the Company during the year, the Board of Directors does not recommend any dividend for the year 31st March, 2015

FIXED DEPOSITS

The Company has not accepted or renewed any deposit from public during the year under review.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2015 was Rs. 2900.00 Lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options/sweat equity. Except Dr. R. B. Baheti and Mr. K. N. Garg, Directors of the Company who hold 42 and 40 equity shares respectively, none of the other Directors of the Company hold shares or any other securities of the Company.

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL THE DATE OF REPORT

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report other than those disclosed in the financial statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL CESSATION

Mr. S. D. Naik, Chief Financial Officer had resigned from the services of the Company w.e.f. 30th September, 2014. The Board placed on record its deep appreciation for the valuable services rendered by Mr. Naik during his tenure as Chief Financial Officer of the Company.

APPOINTMENT

(A) Mr. John Mathew as an Additional Independent Director

The Board of Directors at its meeting held on 15th May, 2015 appointed Mr. John Mathew as an Additional Independent Director ofthe Company w.e.f. 15 th May, 2015. The advantage of his vast experience of various fields is available for the benefits of the Company. His appointment as Independent Director is submitted to the shareholders for their approval in the ensuing Annual General Meeting. A brief profile of Mr. John Mathew is also given in the explanatory statement as annexed with the notice of Annual General Meeting.

(B) Ms. Prachi Deshpande as a Director

The Board of Directors at its meeting held on 15th May, 2015 appointed Ms. Prachi Deshpande as an Additional Director of the Company w.e.f. 15th May, 2015. Ms. Deshpande has vast experience in fund raising which will be beneficial to the Company. Her appointment will also fulfill the requirement of having Woman Director on the Board of Directors under the Companies Act, 2013 and Clause 49 of the Listing Agreement. Her appointment as an Additional Director is submitted to the shareholders for their approval in the ensuing Annual General Meeting. A brief profile of Ms. Prachi Deshpande is given in the explanatory statement as annexed with notice of Annual General Meeting.

(C) Mr. K.N. Garg and Mr. A. R. Mundra, Retiring Directors.

Mr. K. N. Garg and Mr. A. R. Mundra Directors of the Company are liable for retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.

(D) Mr. Mukesh Maheshwari as Chief Financial Officer.

In place of Mr. S. D. Naik, the Board of Directors at its meeting held on 30th October, 2014 had appointed Mr. Mukesh Maheshwari, Vice President as Chief Financial Officer of the Company.

Mr. Maheshwari born in 1962, having Masters' Degree in Commerce and Bachelors' Degree in Law. Mr. Maheshwari is associated with the Company since last 29 years and presently, he is holding the position of Vice President of the Company.

Mr. Maheshwari has vide experience of more than 3 decades of Commercial Activities i.e. Accounts & Finance, Purchase, Inventory Control, Excise & Customs, Imports & Exports, Sales Tax, DGFT, Insurance, Transportation & Logistics, Legal Matters, SEZ and Finished goods Warehouse Management etc.

As a Chief Financial Officer, Mr. Maheshwari is expected to add immense value for the long-term growth of the Company. Mr. Maheshwari does not hold any securities in the Company.

(E) Mr. T. N. Anand Reddy and Mr. A. Arumugham as Independent Directors.

In compliance of the requirements of the Companies Act, 2013 and revised clause 49 of the Listing Agreement, the Board appointed all existing Independent Directors viz. Mr. T. N. Anand Reddy and Mr. A. Arumugham as Independent Directors of the Company for a term up to 31st March, 2019. The members of the Company at 29th Annual General Meeting held on 29th September, 2014, have approved the appointment of Independent Directors.

(F) Key Managerial Personnel.

As per requirements of sub-section (1) of Section 203 of the Companies Act, 2013 the Company has the following Key Managerial Personnel:

01. Mr. PrashantAgrawal : Managing Director

02. Mr. Mukesh Maheshwari : Chief Financial Officer

03. Mr. Deepesh Kumar Nayak : Company Secretary DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, the Directors would like to state:

(a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintainance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

A separate exercise was carried out to evaluate the performance of individual Directors including Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The Performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and non-executive Independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation.

The details of programme for familiarization of Independent Directors with the Company, their roles, rights, responsibility in the Company, nature in which he Company operates, business model of the Company and related matters are put up on the website of the Company.

REMUNERATION POLICY

The Board, on recommendation of the Nomination and Remuneration Committee, has approved a policy setting out the criteria for review of responsibilities of the Directors positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees in accordance with the provisions of Section 178 of theAct.

AUDITORS Statutory Auditor

M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai 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. M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai have provided necessary certificate under section 139 (1) read with section 141 of the Companies Act, 2013.

The statutory auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

Auditors' Report: The Auditors' Report to the Shareholders for the year under review does not contain any qualification.

Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Textile activity is not required to be audited, therefore, the Company has not appointed Cost Auditor for the financial year 2014-15. However, the Company is maintaining proper Cost Records as per requirements of the said rules.

Pursuant to Cost Audit (Report) Rule, 2011, the Cost Audit Report for the financial year 2013-14, was filed on 11th August, 2014 vide SRN S30847545.

SecretarialAuditor

As per requirements of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s Rao Saklecha & Co., Practicing Company Secretary, Indore (C.P. No. 6434) to conduct Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate governance practice by the Company.

Secretarial Auditors' Report: The report of the Secretarial Auditor is annexed to this report as Annexure - I. The management comments on the remarks and observations made by secretarial auditor in their report are as under:

Para I (a) of Secretarial Audit Report:

In compliance of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors at its meeting held on 15 th May, 2015 has appointed Mr. John Mathew as Independent Director and Ms. Prachi Deshpande as Woman Director on the Board of the Company. Now, the board has duly constituted as per requirements of the Act and Clause 49 of the Listing Agreement.

Para I (b) ofSecretarialAuditRepwrt:

The Company is in the process of obtaining requisite approval in the ensuing Annual General Meeting as required under Section 197 of the Companies Act, 2013 read with rules made thereunder with regard to remuneration paid to Dr. R. B. Baheti.

Internal Auditor

As per requirements of Section 138(1) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as Internal Auditor of the Company to conduct Internal Audit of business processes, financial reporting & controls, compliance with applicable laws, regulations etc.

CEO / CFO CERTIFICATION

In terms of Clause 49 of the Listing Agreement, the certificates by the Managing Director and Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained and forms part of annual report.

POSTAL BALLOT

Special Resolutions were passed through postal ballot during the year under review under Section 110 of the Companies Act, 2013 and Clause 35B of the Listing Agreement, for obtaining approval of members for related party transactions and to provide corporate guarantee.

The Company followed the procedure as prescribed under the Companies (Management and Administration) Rules, 2014 and Members were provided the facility to cast their votes through electronic voting or through postal ballot. The Board appointed M/s Rao Saklecha & Company, Practicing Company Secretary, Indore as the Scrutinizer for conducting the postal ballot voting process. The scrutinizer submitted his report to the Chairman after the completion of the scrutiny of the postal ballot as well as e-voting. The result of the postal ballot via postal ballot forms and e-voting facility was declared on 03rd December, 2014 and communicated to the stock exchanges and displayed on the Company's website www.stitextile.net The results were also published in the two newspapers as stipulated.

INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE

The company provides a congenial and friendly atmosphere to its employees to maintain cordial relations and motivate them to develop their full potential. Industrial Relations throughout the year were very peaceful & cordial.

To upgrade human skills and improve their efficiencies, the Company continuously organizes workshops on different management areas and also deputes employees to external workshop and seminars.

Your Directors are also committed to good corporate governance as a policy. A detailed report on Corporate Governance is given in the annexure which form part of this report as Annexure II. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement is annexed with the Report on corporate governance.

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

The informations on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure - III".

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return (MGT - 9) pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure - IV to this Report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

As per provisions of sub-section (1) of Section 188 read with the

Companies (Meeting of Board and its Powers) Rules, 2014 and revised clause 49 of the Listing Agreement, as amended, the Company has obtained the prior omnibus approval of the Audit Committee, Board of Directors and Shareholders for all material related parties transactions.

Further, the statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted has been placed before the Audit Committee and the Board of Directors for review, consideration and approval on a quarterly basis.

Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related party(ies) are given in the prescribed Form - AOC - 2 is annexed to this report as Annexure - V.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

MEETING OF BOARD OF DIRECTORS

During the year 04 (Four) Board Meetings were convened and held on 05th May, 2014, 30th July, 2014, 30th October, 2014 and 12th February, 2015. The details in respect of attendance of Directors, sitting fees etc. are given in the Corporate Governance Report.

The intervening gap between the above said Meetings was within the timelines as stipulated under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee consists of the following members:

01. Mr. A. Arumugham : Chairman, Independent Director

02. Mr. T. N. Anand Reddy : Member, Independent Director

03. Mr. K. N. Garg : Member, Non-executive Director

There are no qualifications and observations raised by Audit Committee which required any comments from the Board or Management of the Company.

The details of other committees of the Board has given in the Corporate Governance Report forms part of this report.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors Mr. A. Arumugham, Mr. T. N. Anand Reddy and Mr. John Mathew have submitted their declaration to the Board that they fulfill the criteria as stipulated in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, so as to qualify themselves to be appointed/continued as Independent Directors under the provisions ofthe CompaniesAct, 2013 and Clause 49.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company's shares by the Directors and the designated employees while in possession of unpublished price sensitive informations in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation ofthe Code.

All Directors and the designated employees have confirmed compliance with the Code.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the company has not given any loan and made investment which are covered under the provisions of sections 185 and 186 ofthe Companies Act, 2013.

However, the Company has provided corporate guarantee in connection with credit facilities availed by holding company from banks. The terms and conditions of the guarantee given are not prejudicial to the interest ofthe Company.

In compliance of the act, the requisite approval of the Members under Section 186 of the Act, for providing Corporate Guarantee has obtained through Postal Ballot in the month of December, 2014.

HOLDING, SUBSIDIARY, JOINT VENTURES ASSOCIATES COMPANIES.

Your Company continues to be the Subsidiary of Bombay Rayon Fashions Limited (BRFL). Further, the Company has an Associate and Joint Venture Company STI Sanoh India Limited, Dewas in which the equity participation of the Company is 43.48%. The balance 56.52% share capital is held by Sanoh Industrial Company Limited, Japan. The Company does not have any subsidiary.

CONSOLIDATION OF FINANCIAL STATEMENTS

The Ministry of Corporate Affairs vide notification dated 14th October, 2014 has granted exemption for preparation, placing and filing of Consolidated Financial Statement in respect of Joint Venture or Associate Companies for the financial year 2014-15, therefore, the Audited Statement of Accounts, Auditors' Report thereon and the Reports of the Board of Directors of STI Sanoh India Limited (the Associate and Joint Venture Company) has not been prepared and annexed with the Annual Report. However, proportion of Company's interest and brief financial informations of STI Sanoh India Limited is given under Note No. 36 of SignificantAccounting Policies and Notes.

PERFORMANCE OF JOINT VENTURE COMPANY: STI SANOH INDIA LIMITED.

STI Sanoh India Ltd manufactures double walled copper brazed steel tubes, single wall steel tubes and tubular components. In the domestic automobile market STI Sanoh India supplies to OEMs such as Maruti Udyog, Honda, Tata Motors, Bajaj Auto, Force Motors, Ashok Leyland, Hindustan Motors, Premier Auto, Toyota, Kirloskar Motors and Godrej-GE, Voltas, Videocon, BPL-Sanyo, Carrier Aircon, Electrolux in the air-conditioning and refrigeration industries. At the international level it exports to South East Asian countries and the Gulf region.

STI Sanoh has registered a net profit of Rs. 20.75 crores for the year 2014-15.

A statement containing the salient features of the financial statements of STI Sanoh India Limited, the Joint Venture Company, in the prescribed format AOC-1 is annexed as Annexure- VI.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Due to absence of average net profit and eroded net worth capital, the provisions of section 135 of the Companies Act, 2013 are not applicable.

RISK MANAGEMENT

The Company has in place a mechanism to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risks by means of a properly defined frame work. As required under Clause 49 of the Listing Agreement, the Company has formulated a Policy on Risk Management.

INTERNAL CONTROL SYSTEM AND AUDIT

The Company has appropriate Internal Control System for business processes, financial reporting & controls, compliance with applicable laws, regulations etc. The Internal Control System of the Company is designed to prevent operational risks through a framework of internal controls and processes. Our internal control system ensures that all business transactions are recorded in a timely manner, the financial records are complete, resources are utilized effectively and our assets are safeguarded. We have developed robust policies, procedures, checks and balances to bring discipline in day-to-day functions, for accuraty and timely compilation of data.

In addition, the Audit Committee has appointed M/s Fadnis & Gupte, Chartered Accountants, Indore as the Internal Auditors of the company. The Internal Audit is conducted on monthly basis and the reports of auditor is placed before the Audit Committee in its next meeting. The internal audit ensures safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Further, Internal Auditors observations and findings are discussed with the concerned departments head and suitable corrective actions are taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operation.

CASH FLOW ANALYSIS

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement forms part of annual report.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In order to prevent sexual harassment of women at work, place a new act, the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy.

There were no incidences of sexual harassment reported during the year under review.

PARTICULARS OF EMPLOYEES

The details as required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is give in Annexure - VII.

WHISTLE BLOWER POLICY

In compliance of the requirements of Section 177 of the Companies Act, 2013, Clause 49 of the Listing Agreement and as a measure of good Corporate Governance practice, the Board has formulated a Whistle Blower Policy. The policy comprehensively provides an opportunity for any employee / director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy shall provide for adequate safeguard against victimization of employees and directors who avail of vigil mechanism and also provide for direct access to the Audit Committee.

STATUS OF BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR).

The Company has been declared as a Sick Industrial Undertaking under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) vide Summary of proceedings of the hearing held on 23rd January, 2006 against reference registration No. 743/2002 dated 30th December, 2002. The Hon'ble BIFR Bench has appointed State Bank of India as Operating Agency to prepare Draft Rehabilitation Scheme (DRS).

The Hon'ble BIFR Bench, vide order dated 1st November, 2010 while accepting the report of operating agency, observed that the Company is liable to pay all the outstanding dues of GUJCOT, and directed the Company to prepare DRS taking into account the liability towards GUJCOT.

On appeal by the Company against the said BIFR order, the Appellate Authority for Industrial & Financial Reconstruction (AAIFR) vide order dated 6th April, 2011 directed that the impugned directions passed by the BIFR shall be subject to the final order passed by this Authority in the Appeal. Final hearing from company side since completed and on 29th April, 2013 the AAIFR has remanded the case to BIFR with a direction to hear matter on the points raised in appeal before AAIFR.

The last hearing at the BIFR was on 25 th March, 2015, however the same was not heard as the bench did not function on the said date. No further date of hearing has been notified till date.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

MANAGEMENT DISCUSSIONAND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the stock exchanges, forms part of this report as Annexure - VIII.

CAUTIONARY STATEMENT

Statements in the Board's Report describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

APPRECIATIONS AND ACKNOWLEDGEMENTS

The Board would like to place on record its deep appreciation to the financial institutions, banks, business partners, central and state government authorities, stock exchanges and clients for their support and co-operation during the year.

We would also like to place on record our sincere appreciation for the commitment, dedication and hard work put in by every employee of the Company. We are also deeply grateful for the confidence and faith expressed by the shareholders in the Company.

Your Directors would also like to take this opportunity to acknowledge the excellent support given by Bombay Rayon Fashions Limited, the Holding Company of your company, in providing the financial assistance and excellent management support and guidance at all levels of business. This has enabled the Company to run its business smoothly and effectively for the accomplishment of its objectives.

For and on behalf of the Board of Directors of STI India Limited

Place: Indore (M.P) Dr. R.B. Baheti Date: 15th May, 2015 Chairman DIN : 00008202


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting 29th Annual Report of the Company along with the Audited Annual Accounts for the financial year ended 31st March, 2014.

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 31.03.2014 31.03.2013

Sales / Revenue from Operations 5572.80 4865.95

Profit before Interest, Depreciation & Tax 189.32 45.10

Less: Interest 0.90 0.57

Profit before Depreciation & Tax 188.42 44.53

Less: Depreciation 1238.46 1238.24

Profit/(Loss) before Tax (1050.04) (1193.71)

Less - Provision for Taxes (including Deferred) (383.27) (261.00)

Profit/(Loss) After Tax (666.77) (932.71)

Paid Up Share Capital 2900.00 2900.00

Reserve and Surplus (4725.69) (4058.92)

Adjusted Net Worth of the Company (1825.69) (1158.92)

EPS (In Rs.)

* Basic & Diluted (2.30) (3.22)

OPERATIONS

During the financial year under review -

* the turnover of your company stood at Rs. 5572.80 Lacs as against Rs. 4865.95 Lacs in financial year ended on 31st March, 2014 registering an increase by 14.53%.

* PBIDT increased to Rs. 189.32 Lacs from Rs. 45.10 Lacs in the previous year.

* Interest cost increased to Rs. 0.90 Lacs from Rs. 0.57 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.

THE COMPANIES ACT, 2013

The Ministry of Corporate Affairs (MCA) vide its General Circular No. 08/2014 dated 04th April, 2014 has clarified that the financial statements and documents annexed thereto, auditor''s report and board''s report in respect of financial year that have commenced earlier than 01st April, 2014 shall be governed by the provisions of the Companies Act, 1956 and in line with the same, the Company''s financial statements, auditors report, and Board''s Report and attachments thereto have been prepared in accordance with the provisions of the Companies Act, 1956. With respect to other provisions of the Act, appropriate references have been made in this report to the extent these provisions have become applicable effective 01st April, 2014.

BOARD OF DIRECTORS

Dr. R. B. Baheti, Director of the Company retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. His re-appointment as Director liable to retire by rotation is submitted to the shareholders for their approval in the ensuing Annual General Meeting.

The tenure of office of Mr. Prashant Agrawal as Managing Director was expiring on 24th November, 2013. Therefore, subject to the approval of members in the ensuing Annual General Meeting, the Board of Directors, at its meeting held on 30th October, 2013 re- appointed him as Managing Director of the Company for further period of three years w.e.f. 25th November, 2013 to 24th November, 2016, without remuneration. A draft resolution along with explanatory statements as per Section 102(1) of the Companies Act, 2013 is annexed with the notice.

The Board of Directors at its meeting held on 30th October, 2013 re-appointed Dr. R.B. Baheti as Non-executive Chairman of the Company, for a period of 1 year w.e.f. 01st November, 2013 to 31st October, 2014 on the same terms and conditions of the earlier appointment.

In terms of Section 149 and 152 of the Companies Act, 2013 read with Schedule IV and rules made thereunder and Clause 49 of the Listing Agreement (effective from 01st October, 2014) your Directors are seeking appointment of Mr. T. N. Anand Reddy and Mr. A. Arumugham as Independent Directors of the Company for a term of five consecutive years and not liable to retire by rotation. The Directors have given declarations to the effect that they meet the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement.

The Company has received Notice under Section 160 of the Companies Act, 2013 from member proposing the appointment of Mr. T. N. Anand Reddy and Mr. A. Arumugham as an Independent Directors of the Company together with requisite deposit.

Pursuant to the provisions of Section 203(1) of the Companies Act, 2013 read with Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, the Board of Directors of the Company has re-designated Mr. Prashant Agrawal, Managing Director, Mr. S. D. Naik, Chief Financial Officer and Mr. Deepesh Kumar Nayak, Company Secretary as Key Managerial Personnel of the Company.

PERFORMANCE OF JOINT VENTURE COMPANY:

STI SANOH INDIA LIMITED

STI Sanoh India Ltd manufactures double walled copper brazed steel tubes, single wall steel tubes and tubular components. In the domestic automobile market STI Sanoh India supplies to OEMs such as Maruti Udyog, Honda, Tata Motors, Bajaj Auto, Force Motors, Ashok Leyland, Hindustan Motors, Premier Auto, Toyota, Kirloskar Motors and Godrej-GE, Voltas, Videocon, BPL-Sanyo, Carrier Aircon, Electrolux in the air-conditioning and refrigeration industries. At the international level it exports to South East Asian countries and the Gulf region.

The Company''s Gross Revenue for financial year 2013-14 stood at Rs. 106.51 Crore (Previous Year: Rs. 104.96 Crore). In spite of challenging business environment in the Automobile and Refrigeration sector, the Company has performed better compared to the previous year and we expect that the performance of the Company to be better in the current year.

AUDITORS Statutory Auditor

M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai 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. M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai have provided necessary certificate under section 139 (1) read with section 141 of the Companies Act, 2013.

Cost Auditor

As per 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 M/s R. J. Goel & Co., Cost Accountants, New Delhi, having Firm Registration No. 000026 to audit the cost accounts for the financial year 2013-2014 i.e. from 01st April, 2013 to 31st March, 2014, pursuant to approval of Central Government dated 26.07.2013.

The Cost Audit report for the year ended 31st March 2014 would be submitted to the Central Government within the prescribed timeframe.

Pursuant to Cost Audit Report Rule, due date for filling of Cost Audit Report for the year ended March 31, 2013 was September 27, 2013, which was submitted to the Central Government on 18th September, 2013.

Secretarial Auditor

As per requirements of Section 204(1) of the Companies Act, 2013, the Board of Directors of the Company appointed M/s Rao Saklecha & Co., Practicing Company Secretary, Indore to conduct Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate governance practice by the Company.

AUDITORS'' REPORT

There are no specific observations in the Auditors'' Report requiring specific 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 2013-14, 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 profit/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.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO AND EMPLOYEES

Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo and Information under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given in Annexure I & II forming parts of this report.

INDUSTRIAL RELATIONS AND CORPORATE GOVERNANCE

The company provides a congenial and friendly atmosphere towards its employees to maintain cordial relations and motivate them to develop to their full potential. Industrial Relations throughout the year were very peaceful & cordial.

Your Directors are also committed to good corporate governance as a policy. A detailed report on Corporate Governance is given in the annexure which form part of this report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on corporate governance.

WHISTLE BLOWER POLICY

In compliance of the requirements of Section 177 of the Companies Act, 2013 and as a measure of good Corporate Governance practice, the Board has formulated a Whistle Blower Policy. The policy comprehensively provides an opportunity for any employee / director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy shall provide for adequate safeguard against victimization of employees and directors who avail of vigil mechanism and also provide for direct access to the Audit Committee.

APPRECIATIONS AND ACKNOWLEDGMENTS

Your Directors would like to acknowledge the excellent support given by Bombay Rayon Fashions Limited, the Holding Company of your company, in providing the financial assistance and excellent management support and guidance at all levels of business. This has enabled the Company to run its business smoothly and effectively for the accomplishment of its objectives.

The board also places on record its deep appreciation to the financial institutions, banks, business partners, employees, central and state government authorities, stock exchanges, clients and shareholders for their support and co-operation during the year.

For and on behalf of the Board of Directors of STI India Limited

Place: Mumbai Dr. R.B. Baheti Date: 30th July, 2014 Chairman


Mar 31, 2013

Dear Members,

The Directors have immense pleasure in presenting their 28th Annual Report and the Audited Annual Accounts of the Company for the financial year ended 31st March, 2013.

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 31.03.2013 31.03.2012 Sales /Revenue from Operations 4865.95 10877.73

Profit before Interest, 45.10 1336.99 Depreciation & Tax

Less: Interest 0.57 64.60

Profit before Depreciation & Tax 44.53 1272.39

Less: Depreciation 1238.24 1202.21

Profif(Loss) before Tax (1193.71) 70.18

Less-Provision for Taxes (261.00) 55.00 (inciudingDeferred)

Profit/(Loss) After Tax (932.71) 15.18

Paid Up Share Capital 2900.00 2900.00

Reserve and Surplus (4058.92) (3126.21)

Adjusted Net Worth of the Company (1158.92) (226.21) EPS (In Rs.)

- Basic & Diluted (3.22) 0.05

OPERATIONS:

During the financial year under review -

* the turnover of your company stood at 7 48.66 Crores as against Rs 108.78 Crores in financial year ended on 31.03.2013 registering a decrease by 55.28%. The turnover of the Company as at 31.03.2013 is not comparable with last year as this financial year the revenue from operations was only from 100% Job Work for Bombay Rayon Fashions Ltd. (BRFL).

* PBIDT decreased to 7 45.10 Lacs from 7 1336.99 Lacs in the previous year.

* Interest cost reduced to 7 0.57 Lacs from 7 64.60 Lacs in the previous year.

DIVIDEND

In view of the accumulated losses, the Board of Directors docs not recommend any dividend for the year under review.

AQUISITION OF STAKE BY BOMBAY RAYON FASHIONS LIMITED (BRFL)

During the year under review Bombay Rayon Fashions Limited (BRFL) has acquired majority stake in the Company by purchasing 58,00,000 equity shares representing 20% of the issued, subscribed and paid-up equity share capital of the Company. The said acquisition has triggered open offer by BRFL. Consequently, holding of BRFL had been total 2,71,79,722 Nos. of Equity Shares representing 93.72% of the total paid equity share capital of the Company. BRFL is a listed Company, engaged in the manufacturing and export of Fabrics & Garments. BRFL is having integrated manufacturing facilities for yam dyeing, weaving, processing of fabrics and garmenting. However, with the requirement of Clause 40A of the Listing Agreements with the Stock Exchanges, Bombay Rayon Fashions Limited (BRFL) sold 54,29,722 equity shares aggregating to 18.72% of the total paid up equity share capital of the Company through an offer for sale mechanism. Consequently, the promoter shareholding has decreased up 75% of the total paid'equity share capital of the Company. Now, present shareholding of the promoter is 75% & public shareholding is 25% of the total paid up equity share capital of the Company.

BOARD OFDIRECTORS

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 I, 2010 for a period of 3 years as approved by the shareholders.

Mr. Prashant Agrawal and Mr. A. Arumugham, 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. Upkar Singh Kohli, Special Director ofBIFR was appointed on the Board by Hon'ble BIFR vide their letter dated 26th May, 2010. As per the terms of appointment mentioned in the said letter the appointment was for the period of 3 years or the date on which he attains the age of 65 years, which ever is earlier. As Mr. Upkar Singh Kohli attained the age of 65 years on 18th August, 2012, his appointment as Special Director was up to 18th August, 2012 & consequently he ceased to be a director of the Company w.e.f. 18th August, 2012.

The Board places on record its deep appreciation for valuable contributions rendered by Mr. Upkar Singh Kohli, during his tenure asDirectorofthe Company.

PERFORMANCE OFSTISANOH INDIA LIMITED - THE JOINT VENTURE COMPANY

Your Directors are pleased to inform that growth in the automobile sector has resulted in a good performance by STI Sanoh India Limited, your Joint Venture Company with Sanoh Industrial Co. Limited, Japan. During the year it recorded income at Rs 101.42 Crores (provisional).

As a result of India's expected GDP Growth during the current year and targeted demand growth in automobiles and . refrigeration industries in 2013-14, we expect the performance of the Joint Venture to be better in the current year.

AUDITORS

Statutory Auditor

M/s. V.K. Beswal & Associates, Chartered Accountants, Mumbai having Firm Registration Number 10I083W 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 M/s R. J. Goel & Co., Cost Accountants, New Delhi, having Firm Regd. No. 000026 to audit the cost accounts for the financial year 2012-2013 i.e. from 01.04.2012 to 31.03.2013, pursuant to approval of Central Government dated 26.07.2012. Cost Audit report for the year ended 31st March 2013 would be submitted to the Central Government within the prescribed time frame.

Pursuant to Cost Audit Report Rule, due date for filling of Cost Audit Report for the year ended March 31,2012 was September 27, 2012, which was submitted to the Central Government on 04th January, 2013. The delay in filing of aforesaid documents was due to transformation of version of available E-forms in XBRL mode which came in public domain only after 1st day of January,2013.

The Company has re-appointed to M/s R. J. Goel & Co., Cost Accountants, New Delhi, to audit the cost accounts for the financial year 2013-2014 i.e. from 01.04.2013 to 31.03.2014.

AUDITORS' REPORT

There arc no specific observations 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 2012-13, 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 profit/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 frauds and other irregularities;

4. They have prepared the annual accounts on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

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

There is no employee in the Company whose particulars are required to be given under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

CORPORATE GOVERNANCE

Your Directors arc committed to good corporate governance as a policy. The Audit Committee, Investors Grievance cum Share Transfer Committee and Remuneration Committee have been constituted. A detailed report on Corporate Governance is given in the annexure which forms part of this report.

INDUSTRIAL RELATIONS

The company provides a congenial and friendly atmosphere towards its employees to maintain cordial relations and motivate them to develop to their full potential. Industrial Relations throughout the year were very peaceful & cordial.

APPRECIATION

Your Directors place on record their sincere appreciation to the Financial Institutions, Banks, Central and Stale 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: 10th May, 2013 Chairman


Mar 31, 2012

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


Mar 31, 2011

The Members,

The Directors have great pleasure in presenting their 26th Annual Report and the Audited Annual Accounts of the Company for the financial year ended 31st March, 2011.

FINANCIAL RESULTS

The salient features of the Company's financial results during the year are as under:

(Rs. in Lacs)

PARTICULARS 31.03.2011 31.03.2010

Sales 24997.82 17878.40

Profit before Interest, Depreciation & Tax 2341.45 835.17

Less: Interest 205.61 364.11

Profit before Depreciation & Tax 2135.84 471.06

Less: Depreciation 1156.69 1150.51

Profit/(Loss) before Tax 979.15 (679.45)

Less - Provision for Taxes (including Deferred) (711.51) -

Profit/(Loss) After Tax 1690.66 (679.45)

Balance brought forward from previous year (11473.05) (10793.60)

Waiver of OCDs amount 2828.00 -

Net Profit/(Loss) carried forward to the

Balance Sheet (6954.39) (11473.05)

Less : Share Premium 3773.00 3773.00

Profit & Loss Account (3181.39) (7700.05)

Paid Up Share Capital and Reserve & Surplus 2940.01 2940.01

Adjusted Net Worth of the Company (241.38) (4760.04)

EPS (In Rs.)

- Basic & Diluted 5.83 (2.34)

OPERATIONS:

During the financial year under review -

- the turnover of your company increased by 39.82% to Rs. 249.98 Crores. This is mainly due to better realization on export sale of higher value added products like Organic Cotton, Yarn and knitted fabric mainly to European Markets and increase in production of knitted fabrics to 16.60 lacs kg as against 13.53 lacs kg of previous year;

- PBIDTA is increased to Rs. 2341.45 Lacs against Rs. 835.17 Lacs in the previous year.

- Interest cost reduced to Rs. 205.61 Lacs from Rs. 364.11 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.

AQUISITION OF STAKE BY BOMBAY RAYON FASHIONS LIMITED (BRFL)

During the year under review BRFL has acquired majority stake in the Company by purchasing 86,47,336 equity shares and 3,21,80,000 Optionally Convertible Debentures (OCD's) alongwith the underlying securities / properties including the invoked 1,18,14,114 equity shares of the Company, held by IDBI Trusteeship Services Limited as debenture trustees, from two existing Overseas Private Investors (OPI's) i.e. Spinnaker Investment Group, United Kingdom and Eight Capital & Associates, United States. The said acquisition has triggered open offer by BRFL and presently BRFL is holding 2,13,79,722 equity shares representing 73.72% of paid up equity share capital of the company. After Completion of Open Offer, BRFL has become the new promoters of the Company. BRFL is a listed Company, engaged in the manufacturing and export of Fabrics & Garments. BRFL is having integrated manufacturing facilities for yarn dyeing, weaving, processing of fabrics and garmenting.

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 effective from November 1, 2010 for a period of 3 years subject to the approval of shareholders. The necessary resolution in this regard is proposed at the forthcoming Annual General Meeting.

Mr. K. N. Garg and Mr. S. Sreedhar 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. Arumugham was appointed as Additional Directors with effect from February 9, 2011. The new Director has vide range of experience and exposure of the field of finance & management of trade, business and industry. It is expected that appointment of this new director will add immense value to the Board.

Being additional Director Mr. Arumugham will hold the office till the date of ensuing Annual General Meeting (AGM) of the Company. The Company has received notice from member of the Company proposing candidature of new Director for appointment as Director liable to retire by rotation.

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 27.21% growth in income at Rs.236.98 Crores in comparison to Rs. 186.29 Crores last year.

As a result of India's expected GDP Growth of 8-8.5% during the current year and targeted demand growth in automobiles and refrigeration industries in 2011-12, we expect the performance of the Joint Venture to be further better in the current year.

AUDITORS

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.

Necessary resolution in this regard is proposed at the forthcoming Annual General Meeting.

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.

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 2010-11, 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.

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.

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 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.

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.

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.

APPRECIATION

Your Directors place on record their sincere appreciation to the Financial Institutions, Banks, Central and State Government authorities, representatives of Overseas Private Investors, clients and shareholders for their support and co-operation during the year. The Directors convey their special thanks to the overseas financial partners.

For and on behalf of the Board of Directors For STI India Limited

Dr. R.B. Baheti Chairman

Place: Mumbai Date : June 4, 2011


Mar 31, 2010

The Directors have pleasure in presenting their 25th Annual Report and the Audited Annual Accounts of the Company for the financial year ended 31 st March, 2010.

FINANCIAL RESULTS

The salient features of the Companys financial results during the year are as under:

(Rs in Lacs)

PARTICULARS 9 10 8 9

Sales Other Income 17991.09 17864.48

Expenditures 17155.93 17887.93

Earnings before Interest Depreciation 835.16 (23.45)

Less Interest 364.10 326.90

Less Depreciation 1150.51 1148.10

NetProfit (Loss) for the year (679.45) (1498.45)

(Less) Provision for Tax (FBT) - 11.00

(Less)-Provision for Doubtful Advances - 2450.75

Adjusted Profit (Loss) for the year (679.45) (3960.20)

Balance brought forward from previous year (10793.60) (6833.40)

Net Profit (Loss) carried forward (11473.05) (10793.60) to the Balance Sheet

Less: Share Premium 3773.00 3773.00

Profit Loss Account (7700.05) (7020.60)

Paidup Share Capital & Reserve Surplus 2940.01 2940.01

Adjusted Net Worth of the Company (4760.04) (4080.59)

PERFORMANCE

During the financial year under review, the turnover and other income of your company increased by 0.71% and in value term touched Rs.180 Crores (previous year Rs.179 Crores). However due to stable raw cotton prices during mid of the year under review as well as the impact of Indian Rupee depreciation against US Dollar, Companys EBIDTA margin had improved. During the year the Company had a positive EBIDTA of Rs. 835.16 Lacs against negative EBIDTA of Rs. 23.45 Lacs in the previous year.

Interest cost in the current year, at Rs. 364.10 Lacs, is 11.62% higher than the previous year of Rs. 326.90 Lacs.

However due to export sales of higher value added products, such as Organic Cotton Yarn and Knitted Fabric, mainly to high-end European market helped in receiving comparatively better realization.

The turnover in quantitative term was also at 13031 MT in comparison to 14148 MT in the previous year. The average sales realization was higher at Rs. 120.45 per Kg. (Rs. 109.07). During the year the utilization of Companys knitted fabric capacity was lower producing 13.53 Lacs Kg knitted fabrics in comparison to the production of 13.90 Lacs Kg fabrics in the previous year.

Your Company has been De-bonded w.e.f. 24th April,

2009 from the status of 100% EOU. Now it has greater flexibility to sale its products either in domestic or international market wherever price realisation is better. In addition to working freedom company has also started getting export incentives like DEPB / Duty draw back etc. due to De-bonding.

DIVIDEND

In view of the losses, the Board of Directors does not recommend any dividend for the year under review.

WORKING CAPITAL CONSTRAINTS

The company continued to face working capital constraints during the year. The Company tried various options for securing working capital sanction from Banks including financial institutions andNBFC Companies, but due to lack of sufficient profit margin on its operation and sudden change in the out look for Textile and yarn industry, raising working capital became difficult, which had a direct impact on the profitability of the Company.

OVERSEAS PRIVATE INVESTMENT

The Members are aware that the two Overseas Private Investors (OPIs) i.e. Spinnaker Investment Group, United Kingdom and Eight Capital & Associates, United States who in total had invested an amount of Rs. 141,12,87,500/- in the company towards the subscription of Optionally Convertible Debentures and Convertible Warrants. Due to sharp increase in the raw cotton prices and continuous depreciation in Indian currency against US Dollar in the year under review and previous years, the Company has been unable to generate sufficient revenue to serve the cost of funds received from Overseas Private Investors. The Company had also not been able to redeem above referred OCDs in absence of a sanction of equivalent amount by any Bank to the Company against working capital requirements for which the Company is continuing its efforts.

The OPIs by their communication dated 26th October,

2010 have waived total interest as was due and payable to them from the date of invocation of the pledge i.e. February 14, 2008 till date and also waived the principal due to the extent of Rs. 28,18,00,000/- against total dues of OCD Series 1 to 4. Thereafter the OPIs has on 27th October, 2010 transferred to M/s Bombay Rayon Fashions Limited (BRFL) the 86,47,336 equity shares of the Company and 3,21,80,000 Optionally Convertible Debentures (OCDs) alongwith the underlying securities / properties including the invoked 1,18,14,114 equity shares of the Company held by IDBI Trusteeship Services Limited as debenture trustees. The BRFL would therefore hold share aggregating to 2,04,61,450 equity shares representing 70.56% of paid up equity share capital of the company. BRFL is a listed Company engaged in manufacturing and export of Readymade Garments.

BOARD OF DIRECTORS

Honble BIFR SD Coordination Cell has appointed Mr. Upkar Singh Kohli, as "Special Director" on the Board of the Company by their order dated 26th May, 2010. The Board of Directors welcomes appointment of Mr. Upkar Singh Kohli, as his rich experience will be immensely useful in Companys turnaround.

The term of Dr. R. B. Baheti as Chairman & Managing Director of the Company was up to 31 st October, 2010 and he has expressed his willingness to continue as Non Executive Chairman w.e.f. 1st November, 2010 and eligible for re-appointment. Their re-appointment as Director liable to retire by rotation is submitted to the Shareholders for their approval in the ensuing Annual General Meeting.

Dr. Shashank N. Desai 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.

The Board has appointed Mr. Prashant Agrawal as Managing Director of the Company w.e.f. 25th November, 2010 for 3 years subject to the approval of Shareholders after the nomination received from M/s Bombay Rayon Fashions Limited. Your Company expects to reap rich benefits under the management of Mr. Prashant Agrawal, Managing Director through his global vision and is expected to contribute significantly in identifying new business opportunities and converting them into remunerative projects. The necessary resolution is being included in the notice of Annual General Meeting for approval of the Shareholders of the Company. Your Board of Directors welcomes appointment of Mr. Prashant Agrawal as Managing Director.

Mr. Aman Agrawal and Mr. A.R. Mundra were appointed as Additional Directors with effect from 25th November, 2010. All the new Directors have vide range of experience and exposure of the field of finance & management of trade, business and industry. It is expected that appointment of these new directors will add immense value to the Board.

Being additional Directors these new three directors would hold their office till the date of ensuing Annual General Meeting (AGM) of the Company. The Company has received notices from member of the Company proposing candidature of these two new Directors for appointment as Directors liable to retire by rotation. Accordingly appointment of Mr. Aman Agrawal and Mr. A.R. Mundra is being considered for approval of shareholders in the next AGM as Directors liable to retire by rotation. Your Board of Directors welcomes these appointments.

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 47.57% growth in income at Rs. 186.29 Crores in comparison to Rs. 126.24 Crores last year. Consequently the net profit increased to Rs. 8.89 Crores from Rs. 4.87 Lacs in the previous year.

As a result of Indias expected GDP Growth of 8.4% during the current year and targeted demand growth in automobiles and refrigeration industries in 2010-11, we expect the performance of the Joint Venture to be further batter in the current year.

AUDITORS

M/s Vikas Kochhar & Associates, Chartered Accountants, New Delhi, Auditors due to preoccupation have conveyed their unwillingness to be re-appointed as Auditors of the Company at the conclusion of the ensuing Annual General Meeting of the Company.

M/s. VK. Beswal & Associates, Chartered Accountants, Mumbai being eligible offers themselves to be appointed would be in conformity with the provisions of Section 224(1) (b) of the Companies Act, 1956. Your Directors recommend the appointment of M/s. VK. Beswal & Associates, Chartered Accountants, Mumbai as Statutory Auditors of the Company from conclusion of the ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

Accordingly necessary resolution for appointment of M/s. VK. Beswal & Associates, Chartered Accountants, Mumbai, as Statutory Auditors is being proposed in the notice for approval of the Shareholders.

DIRECTORS* COMMENTS ON AUDITORS

QUALIFICATION

Your Directors have taken note of the observations / suggestions of the Companys Auditors in their report including its annexure and positive measures have been taken to implement the same. All their points have been adequately covered and explained in the report of the Board of Directors as well as in notes to the accounts. The Company has further strengthened the internal control systems and procedures by enlarging and upgrading the scope of work of Internal Auditors.

FIXED DEPOSITS

The Company has neither accepted nor invited any deposits from public under the provisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 during the year under review.

RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

In the preparation of the Annual Accounts for 2009-10, the applicable accounting standards have been followed with proper explanations relating to material departures;

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;

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;

They have prepared the annual accounts on a going concern basis.

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.

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 to the Directors Report. However, as per provisions of Section 219(l)(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.

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.

APPRECIATION

Your Directors place on record their sincere appreciation to the Financial Institutions, Banks, Central and State Government authorities, representatives of Overseas Private Investors, clients and shareholders for their support and co-operation during the year. The Directors convey their special thanks to the overseas financial partners.

For and on behalf of the Board of Directors For STI India Limited

Dr. R.B. Baheti

Place: Mumbai Chairman

Date : 25th November, 2010

 
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