AUDITOR’S REPORT

TO THE MEMBERS OF M/S.DELFT NATURAL STONES (P) LTD., BANGALORE.

1. We have audited the attached balance sheet of M/s.Delft Natural Stones (P) Ltd., as at 31st March 2009 and the profit & Loss Account of the Company for the year ended on that date annexed thereto. These financial statement are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2 We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditor’s Report) order, 2003, issued by the Central government of India in terms of section 227(4A) of the Company’s Act 1956, we give in the Annexure, a statement on the matters specified in paragraph 4 & 5 of the said order to the extent applicable to the company.

4 Further to our comments in the annexure referred to in paragraph 3

above, We report that :

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our Audit;

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b) In our opinion, proper Books of Accounts as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in Agreement with the Books of Accounts;

d) In our Opinion, the Profit and Loss Account and the Balance Sheet dealt with by this report comply with the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act 1956 to the extent applicable .

e) Based on representations made by the Directors of the company as on 31.03.09 and taken on record by the board of directors, in our opinion the directors of the company are not prima facie disqualified from being appointed as a Director U/s 274(1)(g) of “The Companies Act 1956”

5 In our opinion and to the best of our the information and according to the explanations given to us , the said accounts, read with other notes there on give the information required by the Companies Act. 1956, in the manner so required and also give true and fair view in conformity with the accounting principles generally accepted in India :

(i) In the case of Balance Sheet, of the State of Affairs of the company as at 31st March 2009, and

(ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

For G.A. SIVAKUMAR & CO.,

CHARTERED ACCOUNTANTS

Place : Bangalore (G.A. SIVAKUMAR)Dated: 05.09.09 Proprietor.

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ANNEXURE TO AUDITOR’S REPORT

M/S. DELFT NATURAL STONES PRIVATE LIMITED., (Referred to in Paragraph 3 of our Report of even date.)

1) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars including quantitative details and situated of fixed assets.

b) The Company has physically verified the assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information explanations given to us no material discrepancies were noticed on such verification.

c) In our opinion and according to the information and explanations given to us, the company has not made any substantial disposals of fixed assets during the year.

2) In respect of its inventories : In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. 3) In respect of loans and advances: The Company has not taken any loans and advances during the year under audit.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. To the best of our knowledge and according to the information and explanations given to us, there is no continuing failure to correct major weakness in such internal control procedures.

5) The Company is not required to maintain cost regards under section 209 (1) (d) of the Companies Act,1956.

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6) In respect of statutory dues:a) According to the records of the Company, the company is generally regular in depositing undisputed statutory dues including Income-Tax ,Sales-Tax & Profession tax other material statutory dues with in appropriated authorities.b) There are no undisputed statutory dues payable for a period of more than six month from date the became payable as at 31st march 2008 7) In respect of whether the company has defaulted in repayment of due to a financial institution:

The Company has not taken any loan from any financial institutions or any banks etc., during the year under audit.

8) In respect of whether Term Loan were applied:

The Company has not applied for any term loans from any institutions during year under audit.

9) According to the information and explanations given to us, and on an overall examination of the books of accounts of the Company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to finance short-term assets.

10) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

11) The nature of the company’s business/activities during the year is such that requirements of clauses (v), (vi), (vii), (x), (xii), (xiii), (xv), (xviii), (xix) and (xx) of paragraph 4 of the Companies ( Auditor's Report) Order, 2003 are not applicable to the Company for this year.

for G.A. SIVAKUMAR & CO., Chartered Accountants

Place : Bangalore Dated : 05.09.09

G.A. Sivakumar ProprietorMembership No. 028979.

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M/S DELFT NATURAL STONES PRIVATE LIMITED

NOTES TO ACCOUNTS:

SIGNIFICANT OF ACCOUNTING POLICIES:

1) The accounts are prepared on principles applicable to a going concern with revenues / expenses recognized and accounted on their accrual.

2) Fixed Assets: The fixed assets are stated at cost. Cost includes all expenses incurred for acquisition of assets.

3) Depreciation :The Company has been consistently providing depreciation at the rate prescribed as per Companies Act. 1956.

4) Confirmation of balances have been sent /called for from parties with whom the company has transaction and the management confirms same are receivable / payable.

5) Revenue Recognition : Revenue are other income from sales is accounted on mercantile system.

6) Income-Tax : Provision for Income-Tax is computed in accordance with the provisions of the Income-Tax Act, Rules 1962.

7) Number of employees who are in receipt of or are entitled to emoluments amounting in all to Rs. 24,00,000/- per year or Rs. 2,00,000/- per month or more : NIL

8) Details of Turnover:Sales Turnover of Trade Goods : Rs. 94,08,833/-

Purchases Turnover of Trade Goods : Rs. 55,42,409/-

9) Earning in Foreign Exchange Export of goods on FOB basis : Rs. 94,08,833/- Interest received on EEFC Deposit : NIL

10) Expenditure in Foreign Currency : On Foreign Travel : NIL Advertisement & Sales Promotion : NIL

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7 Figures for the previous year have been recast/restated when ever necessary.

Place : BangaloreDated : 05-09-09

VIDE OUR REPORT ATTACHED For G.A. SIVAKUMAR & Co.,Chartered Accountants.

G.A. Sivakumar S.S. Shakila S.K. Suresh Proprietor. Director Director

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M/S DELFT NATURAL STONES PRIVATE LIMITED

Regd. Office: No. 100, “R.K.COLONY” 6TH CROSS, II PHASE,,

J.P. NAGAR, BANGALORE – 560 078.

Date: 05-09-09

NOTICE OF THE FIFTH ANNUAL GENERAL MEETING

NOTICE is hereby given by that the FIFTH ANNUAL GENERAL MEETING of the members of M/s. DELFT NATURAL STONES PRIVATE LIMITED will be held at No.100, R.K. Colony, II Phase, J.P.Nagar, Bangalore – 560 078. on Monday 30th September 2009 at 11.30 A.M. to transact the following business:

1. To receive and consider and adopt the audited profit and loss account for the period ended 31st March , 2009 and Balance Sheet as on that and report of the Directors and Auditors thereon.

2. To appoint auditors and fix their remuneration.

By ORDER OF THE BOARD

DIRECTOR.

NOTE: A Member entitled to attend and Vote at the meeting is entitled to appoint a proxy to attend to vote instead of himself and a proxy need not be member of the Company.

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M/S DELFT NATURAL STONES PRIVATE LIMITED

Regd. Office: No. 100, “R.K. COLONY” II PHASE, J.P. NAGAR

BANGALORE – 560 078.

Date:05-09-09

REPORT OF THE DIRECTORS

YOUR DIRECTORS Welcome you to the FIFTH ANNUAL GENERAL MEETING of the Company and are pleased to place before you their report and audited accounts for the period ended March 31st, 2009.

1. The Company has made a net profit of Rs. 1,64,914 /- on its achieved turnover of Rs. 94,08,833/- for the year ended 31.03.09.

2. M/s. G.A. SIVAKUMAR & CO., Chartered Accountants,

Bangalore being eligible offer themselves for re-appointment as Auditors of the Company.

3. DIRECTOR’S RESPONSIBILITY STATEMENT:

Following is the Director’s responsibility statement as required under section 217 (2AA) of the Company’s Act, 1956, in respect of the financial Statements:

That is, in the preparation of the financial statement, the applicable accounting standards have been followed along with proper explanation relating to material departures;

That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in according with the

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provisions of the Company’s Act, 1956 for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities;

That the Directors have prepared the annual accounts on a going concern basis.

By ORDER OF THE BOARD

DIRECTOR.

M/S . DELFT NATURAL STONES PRIVATE LIMITED:

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BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE FOR THE YEAR ENDED MARCH 31, 2009. ( Pursuant to Part VI of Schedule of the Companies Act.1956)

I. Registration Details

Registration No. U14102KA2004PTCO33186 State code.08Balance Sheet Date : 05-09-09

II. Capital raised during the year (Amount in Rs. Thousands)

Public Issue Right Issue

NIL NIL

Bonus Issue Private PlacementNIL NIL

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets 407.94 407.94

Sources of Funds

Paid –up- Capital Reserves an Surplus 100.00 307.94

Secured Loans Unsecured Loans NIL NIL

Application of Funds

Net Fixed Assets Investments

299.12 113.97

Net Current Assets Misc. Expenditure (5.15)

Accumulated Losses

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NILIV. Performance of Company ( Amount in Rs. Thousand)

Turnover Total Expenditure 9934.47 9769.56

Exceptional items ----

Profit/Loss Before Tax Profit /Loss after Tax 164.91 93.64

(Please Tick appropriate Box + for Profit , - for Loss) Earning Per Share in Rs. 09.36 .

V. Generic Names of Three Principle Products/Services of Company

a. Item Code No. : N.A (ITC Code)

Production Description : Blocks of Natural Stones Granite & Marbles.

b. Item Code No. : N.A Product Description : N.A.

c. Item Code No. : N.A (ITC Code)

Product Description : N.A

Place : BangaloreDated :05-09-09 VIDE OUR REPORT ATTACHED For G.A. SIVAKUMAR & CO.,Chartered Accountants.

G.A. Sivakumar S.S. Shakila S. K. Suresh Proprietor. Director Director.

AUDIT ENGAGEMENT LETTER

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To the Board of Directors / Managing Director,Delft Natural Stone (P) Ltd.No. 100, “R.K. COLONY”II PHASE, J.P. NAGARBANGALORE.

Dear Sirs, You have requested that we audit the balance sheet of M/s. Delft Natural Stones (P) Ltd., as at 31st March, 2009 and the related Profit and Loss account and the year ended on that date. We are pleased to confirm our acceptance and our understanding of this engagement by means of this letter. Our audit will be conducted with the objective of our expressing an opinion on the financial statements. We will conduct our audit in accordance with the auditing standards generally accepted in India and with the requirements of the Companies Act, 1956. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. However, having regard to the test nature of an audit, persuasive rather than conclusive nature of audit evidence together with inherent limitations of any accounting and internal control system, there is an unavoidable risk that even some material misstatements of financial statements, resulting from fraud, and to a lesser extent error, if either exists, may remain undetected. In addition to our report on the financial statements, we expect to provide you with a separate letter concerning any material weaknesses in accounting and internal control systems, which might come to our notice. The responsibility for the preparation of financial statements on a going concern basis is that of the management. The management is also responsible for selection and consistent application of appropriate accounting policies, including implementation of applicable accounting standards along with proper explanation relating to any material departures from those accounting standards. The management is also responsible for making judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the entity at the end of the financial year and of the profit or loss of the entity for that period The responsibility of the management also includes the maintenance of adequate

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accounting records and internal controls for safeguarding of the assets of the company and for the preventing and detecting fraud or other irregularities. As part of our audit process, we will request from management written confirmation concerning representations made to us in connection with the audit. We also wish to invite your attention to the fact that our audit process is subject to 'peer review' under the Chartered Accountants Act, 1949. The reviewer may examine our working papers during the course of the peer review. We look forward to full cooperation with your staff and we trust that they will make available to us whatever records; documentation and other information are requested in connection with our audit.

This letter will be effective for future years unless it is terminated, amended or superseded. Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements for our audit of the financial statements. For G.A.Sivakumar & Co Chartered Accountants

(G.A.SIVAKUMAR) Proprietor.

Acknowledged on behalf of Delft Natural Stones (P) Ltd by

(S.K.SURESH)Director

Date :

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Dated: ………..2009

Dear Sirs,

Sub: Representation letter –Audit of Annual Accounts for the year 2008-09---------------------------------------------------------------------------------------------------------------This representation letter is provided in connection with your audit of the financial statements of ………………………, for the year ended 31st March, 2009 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the financial position of…………………….. , as of 31st March, 2009 and of the results of operations for the year then ended. We acknowledge our responsibility for preparation of financial statements in accordance with the requirements of the Companies Act, 1956 and recognized accounting policies and practices, including the Accounting Standards issued by the Institute of Chartered Accountants of India.

We confirm, to the best of our knowledge and belief, the following representations:

ACCOUNTING POLICIES

1. The accounting policies, which are material or critical in determining the results of operations for the year or financial position, are set out in the financial statements and are consistent with those adopted in the financial statements for the previous year. The financial statements are prepared on accrual basis.

ASSETS

2. The company has a satisfactory title to all assets and there are no liens or encumbrances on the Company’s assets, except for those that are disclosed in Note X to the financial statements.

FIXED ASSETS

3. The net book values at which fixed assets are stated in the balance sheet are arrived at:

(a) after taking into account all capital expenditure on additions thereto, but no expenditure properly chargeable to revenue;

(b) after eliminating the cost and accumulated depreciation relating to items sold, discarded, demolished or destroyed;

(c) after providing adequate depreciation on fixed assets during the period.

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CAPITAL COMMITMENTS

4. At the balance sheet date, there were no outstanding commitments for capital expenditure excepting those disclosed in Note X to the financial statements.

INVESTMENTS

5. The current investments as appearing in the balance sheet consist of only such investments as are by their nature readily realisable and intended to be held for not more than one year from the respective dates on which they were made. All other investments have been shown in the balance sheet as ‘long-term investments’.

6. Current investments have been valued at the lower of cost and fair value. Long-term investments have been valued at cost, except that any permanent diminution in their value has been provided for in ascertaining their carrying amount.

7. In respect of offers of right issues received during the year, the rights have been either been sub-scribed to, or renunciated, or allowed to lapse. In no case have they been renunciated in favour of third parties without consideration, which has been properly accounted for in the books of account.

8. All the investments produced to you for physical verification belong to the entity and they do not include any investments held on behalf of any other person.

9. The entity has clear title to all its investments including such investments which are in the process of being registered in the name of the entity or which are not held in the name of the entity and there are no charges against the investments of the entity except those appearing in the records of the entity.

INVENTORIES

10. Inventories at the year-end consisted of the following:

Raw Materials (including components) RsWork-in-Process RsFinished Goods (including by-products) RsMaintenance supplies and Stores & Spare Parts RsLoose Tools RsOthers (specify each major head separately) Rs

TOTAL Rs

11. All quantities were determined by actual physical count or weight or measurement that was taken under our supervision and in accordance with written instructions, on as at 31st March, 2008 issued on 31st March, 2008, except as follows:………………….………………….

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12. All goods included in the inventory are the property of the entity, none of the goods are held as consignee for others or as bailee, and, except as set out below, none of the goods are subject to any charge.………………….………………….

13. All inventories owned by the entity, wherever located, have been recorded including goods sent on consignment.

14. Inventories do not include goods sold to customers for which delivery is yet to be made.

15. Inventories have been valued on the following basis / bases: Raw Materials (including components)Work-in-Process Finished Goods (including by-products) Maintenance supplies and Stores & Spare Parts Loose Tools Others (specify each major head separately) (In describing the basis / bases of valuation, the method of ascertaining the cost [e.g FIFO, Average Cost or LIFO] should also be stated. Similarly, the extent to which overheads have been included in the cost should also be stated.)

16. The following provisions have been made in respect of excess, slow-moving, damaged, or obsolete inventories and these, in our view, are adequate.……………………….. ………………… ……………………….. …………………

17. No item of inventories has a net realizable value in the ordinary course of business, which is less than the amount at which it is included in inventories.

18. The basis / bases of valuation is/are the same as that / those used in the previous year, except as set out below:

Class of inventory Basis of valuation Effect of change inBasis of ValuationThis Year Last Year

DEBTORS LOANS AND ADVANCES

19. The following items appearing in the books as at 31-3-2008 are considered good and fully recoverable with the exception of those specifically shown as "doubtful” in the balance sheet

Sundry debtors Rs. Loans and advances Rs.

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OTHER CURRENT ASSETS

20. In the opinion of the Board of Directors, other current assets have a value on realisation in the ordinary course of the company’s business, which is at least equal to the amount at which they are stated in the balance sheet, except as stated in Note X to the financial statements.

LIABILITIES

21. We have recorded all known liabilities in the financial statements.22. We have disclosed in notes to the financial statements all guarantees that we have

given to third parties and all other contingent liabilities.23. Contingent liabilities disclosed in the notes to the financial statements do not include

any contingencies which are likely to result in a loss and which, therefore, required adjustment of assets or liabilities.

PROVISIONS FOR CLAIMS AND LOSSES

24. Provision has been made in the accounts for all known losses and claims of material amounts.

25. There have been no events subsequent to the balance sheet date, which require adjustment of, or disclosure in, the financial statements or notes thereto.

PROFIT AND LOSS ACCOUNT

26. Except as disclosed in the financial statements, the results for the year were not materially affected by:

(a) transactions of a nature not usually undertaken by the company;(b) circumstances of an exceptional or non-recurring nature;(c) charges or credits relating to prior years;(d) changes in accounting policies.

GENERAL

27. The following have been properly recorded and, when appropriate, adequately disclosed in the financial statements:

(a) Losses arising from sale and purchase commitments.(b) Agreements and options to buy back assets previously sold.(c) Assets pledged as collateral.

28. There have been no irregularities involving management or employees who have a significant role in the system of internal control that could have a material effect on the financial statements.

29. The financial statements are free of material misstatements, including omissions.

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30. The company has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance. There has been no non-compliance with requirements of regulatory authorities that could have a material effect on the financial statements in the event of non-compliance.

31. We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities reflected in the financial statements.

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