The Directors of your Company have pleasure in presenting the
 Twenty-Third Annual Report of the Company with the Audited Annual
 Accounts for the Year ended at 31st March 2008.
 
 FINANCIAL HIGHLIGHTS:
 
 The Financial Results of the Company for the year ended 31st March, 2008
 are as under:
 
                                                       (Rs.in lakhs)
 Particulars                                 2007-2008    2006-2007
 
 Sales and other Income                         954.84      1801.88
 
 Total Manufacturing & 
 Administrative Expenditures                   1021.78      1860.17
 
 Profit/(Loss) before 
 Interest, Depreciation & Tax                   (66.94)      (58.29)
 
 Interest and Finance Charges                   213.79       197.16
 
 Profit/(loss) Before 
 Depreciation and Taxation                     (280.73)     (255.45)
 
 Depreciation                                   121.28       125.28
 
 Fringe Benefit Tax                               0.93         1.35 
 
 Provision for taxation
 
 Profit/(Loss) after Taxation                  (402.94)     (382.08)
 
 Prior Period Adjustments                        (0.72)        9.95
 
 Balance b/f from previous year               (3057.44)    (2685.31)
 
 Balance carried to Balance Sheet             (3461.10)    (3057.44)
 
 OPERATIONS:
 
 The operations of your company during 2007-08 were far from
 satisfactory. During the year the sales and operating income of your
 Company at Rs.955 Lacs, reduced by 48% from Rs. 1802 Lacs in the
 previous year resulting in a large portion of your operating expenses
 remaining unabsorbed. The net loss of the Company during the year at
 Rs. 403 lacs was marginally higher in comparison to previous year
 losses of Rs. 382 Lacs on accounts of saving in raw material and stores
 cost and strict control over the expenses.
 
 Actually the continued scarcity of good quality raw material, steep
 rise in the overall cost of inputs, absence of working capital finances
 and lower scale of activities have made the operations of the Company
 economically unviable. Therefore the accumulated losses till end of the
 current financial year have mounted to Rs.3461 Lacs. In view of this
 continued heavy losses in the operations, the Management of the company
 explored various possibilities to continue manufacturing operations but
 were forced to close the manufacturing unit with effect from the close
 of the business hour on 16th February, 2008. The company management
 having tried all the alternate options does not see any possibility of
 revival of the company in future in the current operating
 circumstances.
 
 CLOSURE OF THE COMPANY:
 
 In the circumstances explained above and with a view to conserve
 available resources from further depletion as well as to save.  further
 administrative and maintenance cost on the loss making operations, the
 Company has given a closure notice to the Labour Secretary, Department
 of Labour, Government of Karnataka, Bangalore intimating closure of the
 Manufacturing operations in the Company with effect from close of the
 business hour on 16th February, 2008. The dues of all the employees
 and workers of the Company (except gratuity) have been settled and now
 from 17th February, 2008 and onwards there is no employee working in
 the Company.
 
 POSTAL BALLOT FOR DISPOSAL OF THE UNDERTAKING:
 
 Your Board of Directors considered that in the current financial and
 economic conditions the Company cannot sustain its operation further
 and therefore, there is an urgent need to find out ways for settling
 dues of all the secured as well as unsecured lenders besides, taking
 practical steps for saving the existing resources of the Company from
 any further losses for the benefit of all stake holders of the Company.
 Your Board therefore considered that entering into one time settlement
 with all the lenders by disposal of the fixed and non-fixed assets of
 the Company could be the only way to save further losses and erosion
 into the value of assets and resources of the Company.
 
 Members of the Company are aware that the disposal of undertaking
 either whole or in part or disposal of the fixed and non-fixed assets
 of the Company including land, building, plant and machineries etc.
 will require necessary approval from shareholders by ordinary
 resolution u/s 293(1 )(a) of the Companies Act, 1956 and as per section
 192A of the Act read with Companies (passing of the resolution by
 postal ballot) Rules, 2001, this approval of the shareholders are to be
 obtained by means of a postal ballot.  Therefore the Company had sent
 Postal Ballot Form to all the shareholders of the Company for their
 consent or dissent on the proposal of disposing off all the fixed and
 non-fixed assets of the Company including land, building, plant and
 machineries etc.
 
 The Board of Directors wish to inform that members have given a good
 response (52.04% or 62,45,180 shares) for the postal ballot
 formalities. The majority of members of the Company have endorsed the
 views of your Board of Directors by giving their assent to the disposal
 of unit as only 0.02% shareholders (representing 2600 shares) of the
 Company have conveyed their dissent whereas 51.91% shareholders
 (representing a 62,29,280 shares) of the Company have conveyed their
 assent to the resolution proposed in this regard through postal ballot
 and approved the same.
 
 Having received the approval of the Members, the Company is moving
 forward with the prospective buyers to negotiate, finalize and execute
 necessary documents for disposal of the assets in whole or in part and
 to take all other necessary actions in this regard.
 
 SETTLEMENT WITH THE SECURED LENDERS:
 
 The Company is in the process of negotiation, finalization and
 execution of necessary documents with its secured lenders, whose
 outstanding liabilities are proposed to be paid by disposal of the
 assets of the Company. The Company has already reached to a settlement
 with State Bank of India; State Bank of Mysore and Unit Trust of India.
 The liabilities of other secured lenders are also proposed to be
 settled similarly.
 
 FUTURE OUTLOOK:
 
 As the company is in the process of disposal of its land, building,
 plant & machinery and other fixed assets, the prospects of the company
 in future appear to be critical. The management of the Company also
 does not expect to commence operations at any other alternate place and
 therefore any turnaround in the Company in the near future is very
 difficult. However the Company shall continue to look for market
 opportunities in the same business line and utilize its experience to
 generate some regular revenue from its activities so that liabilities
 of other unsecured creditors can be settled and any excess available
 thereafter be used to refund to the shareholders of the Company.
 
 DIVIDEND:
 
 In view of the loss, your Directors regret their inability to recommend
 dividend for the year.
 
 DEMATERIALISATION FACILITIES:
 
 The Company is continuing the agreement with Central Depository
 Services (India) Ltd.(CDSL). Accordingly, the equity shares of the
 Company can now be held in the electronic form with CDSL and the
 members can have their holding in depository account.  The ISIN number
 allotted by CDSL to the equity shares of the Company is INE 057G01019.
 Members who have not converted their shares into demat form may get the
 same done as the equity shares of the company shall be tradable in
 dematerialized mode only on the stock exchanges.
 
 DELISTING OF SECURITIES FROM STOCK EXCHANGES:
 
 Equity shares of the Company are continued to be listed at Five Stock
 Exchanges. As there is no trading in the Equity Share of the Company at
 any of the Stock Exchanges the Board of Directors have decided to
 de-list its equity from three Stock Exchange i.e Madhya Pradesh Stock
 Exchange, Indbre, Madras Stock Exchange, Chennai and The Stock
 Exchange, Ahemdabad but keeping the listings at Bangalore (BGSE) and
 Bombay Stock Exchanges. Necessary resolution in these regard has
 already been passed by the shareholder in the 19th Annual General
 Meeting. The listing of Equity Shares shall continue lor trading at BSE
 and BGSE.
 
 DIRECTORS:
 
 Mr. Ajay Jajoo, Director of your Company retires by rotation at the
 ensuing Annual General Meeting and being eligible offers himself for
 re-appointment as a Director liable to retire by rotation.
 
 AUDITORS:
 
 The Auditors, M/s. Brahmayya & Co., Chartered Accountants, Bangalore,
 retire at the conclusion of the ensuing Annual General Meeting and
 being eligible offers themselves for re-appointment.  «
 
 REPORT ON CORPORATE GOVERNANCE:
 
 The Company has fairly complied with the requirement of Corporate
 Governance in terms of Clause 49 of the listing agreement.  A detailed
 report on Corporate Governance is annexed as Annexure forming part of
 this report.
 
 DIRECTORS RESPONSIBILITY STATEMENT:
 
 Your Directors confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 (ii) the accounting policies are consistently applied and reasonable,
 prudent judgement and estimates are made so as to give a true and fair
 view of the state of affairs of the Company at the end of the financial
 year;
 
 (iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 (iv) the Directors have prepared the annual accounts on a going concern
 basis.
 
 RESPONSE TO AUDITORS QUALIFICATION:
 
 Auditors Report Point No.3(v) - One of the independent directors of
 the Company has become disqualified because of his directorship in
 other company. Despite the adverse financial status of affairs of the
 company, the Board of Directors is looking for a suitable alternative
 for the independent directors for appointment in the Board.
 
 Annexure to Auditors Report Point No. 15 - The demand of sales tax
 dues is due to late submission of C & H forms against which the company
 has filed appeal before the appropriate authorities which has been
 heard and the order is awaited in our favour. It is expected that the
 liability on this account will not be more than Rs.25 lacs, which the
 company is prepared to pay when the final demand, if any, is raised on
 us. The custom duty dues as referred in Audit report are disputable
 against which the Company has tiled appeal before the appropriate
 authorities and the case is yet to be heard.
 
 Annexure to Auditors Report Point No.17 - In view of the continuous
 losses incurred in business operations and that the Companys
 processing activities having been closed w.e.f.17th February 2008 , the
 Company has not been able to pay its dues to State Bank of India and
 State Bank of Mysore for its working capital liabilities and the dues
 of Unit Trust of India in respect of debentures subscribed by UTI. The
 Company has however proposed to settle the outstanding liability of
 these Banks & Financial Institutions through one time settlement out of
 the proceeds of sale of assets. The residual amount available is also
 being used to pay the liabilities of other debenture holders.
 
 Other comments of the Auditors are already quantified and adequately
 dealt with elsewhere in the notes to the accounts or Annual Report.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 (a) CONSERVATION OF ENERGY:
 
 The Company has placed continuous thrust on saving of electrical energy
 in the factory and office area. The total energy consumption and energy
 consumption per unit of production as per form A is not given, as the
 Company is not covered under the list of specified industries.
 
 (b) TECHNOLOGY ABSORPTION:
 
 There is no significant change in the technology adopted by the company
 apart from cost effective modifications done around the Machines. The
 Company has absorbed fully the technology installed in all areas of
 operation.
 
 (c) RESERCH AND DEVELOPMENT:
 
 As a policy, continuous thrust on Research and Development is being
 maintained.
 
 PARTICULARS OF EMPLOYEES:
 
 The Company had no employees in the category mentioned in Section 217
 (2A) of the Companies Act, 1956. From 17th February, 2008 and onward
 there is no employee working in the Company.
 
 FIXED DEPOSITS:
 
 The Company has not accepted any deposits from the public during the
 year ended on 31st March, 2008.
 
 ACKNOWLEDGEMENT:
 
 The Directors are pleased to record their appreciation for the support
 and contributions made by all the concerned agencies.
 
                                                By order of the Board
                                       For GLOBAL STONE INDIA LIMITED
 
 Date:  30th June, 2008                              (Rajendra Prasad)
 Place: Indore                                               Director