The Directors have pleasure in presenting the 22nd Annual Report and
 the Audited statement of Accounts of the Company for the year ended 31
 st December, 2006.
 
 FINANCIAL RESULTS
 
                                                         Rs. in OOP
                                       01/04/2006 to     01/04/2005 to 
                                       31/12/2006        31/03/2006
 
 Sales                                    1565827           1733825
 Other Incomes                              10937             14104
 Profit before Finance
 Charges, Depreciation and Tax             220366            246474
 Finance Charges -                           1901             29765
 Profit before Depreciation and Tax        218464            216709
 Depreciation                               90164             53689
 Profit / (Loss) before Tax                128300            163020
 Provision for Tax                        (45362)           (61018)
 Profit / (Loss) after Tax                  82938            102002
 Balance as per last Balance Sheet
 brought forward                           371254            269252
 Balance carried to Balance Sheet          454192            371254
 
 In view of the proposed capital investments the Directors do not
 recommend any dividend for the year under review.
 
 Change in the Constitution of Financial Year
 
 Your Company has adopted calendar year as the financial year consisting
 of 12 months starting from 1st of January every year and ending on 31s1
 December of the same calendar year Consequent to the above decision the
 Company closed books of accounts and prepared final accounts for the
 period of nine months commenced from 1st April 2006 and ended on 31st
 December 2006.
 
 Internal Control Systems And Adequacy
 
 Your Company has adequate Internal Control Systems commensurate with
 the size and the nature of operations.  The company follows a
 risk-based approach to evaluation of various internal controls in
 place. The coverage of the internal audits, regular management
 operational reviews and audit committee review meetings further
 strengthens the internal Control Systems of your Company. ERP system
 has further improved the internal controls in the various business
 processes besides providing online management information reports,
 which have aided management operational decisions.
 
 DIRECTORS
 
 During the period under review, Mr. Sanjiv Kumar, Managing Director of
 the Company resigned from the office w e f 31st July, 2006. The Board
 places on record its sincere and warm appreciation of the valuable
 guidance received from Mr. Sanjiv Kumar during his tenure.
 
 Mr. Subramanian Venkataraman was appointed as an Additional Director
 and Managing Director by the Board w.e.f. 1st April 2007 and will hold
 office as Director till the date of ensuing Annual General Meeting. His
 appointment has been sought to be made by members pursuant to Section
 257 of the Companies Act, 1956.
 
 Mr. Claude-Alain Tardy resigned from the Board w.e.f. 25* April, 2007.
 The Board places on record its sincere and warm appreciation of the
 valuable guidance received from Mr. Claude-Alain Tardy.
 
 Mr. Anand Mahajan appointed in casual vacancy caused by resignation of
 Mr. Martin Smith is due to retire by rotation and being eligible,
 offers himself for re-appointment. His appointment has been sought to
 be made by members pursuant to Section 257 of the Companies Act, 1956.
 
 Mr. Lalit Bhasin is due to retire by rotation and being eligible,
 offers himself for re-appointment.
 
 Mr. Vikas Vig is due to retire by rotation and being eligible, offers
 himself for re-appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As stipulated in Section 217(2AA) of Companies Act, 1956, your
 Directors subscribe to the Directors Responsibility Statement and
 confirm that:
 
 (i) In the preparation of the Annual Accounts for the financial year
 ended 31st December 2006, the applicable Accounting Standards have been
 followed along with proper explanation relating to material departures,
 if any;
 
 (ii) Appropriate accounting policies have been selected and applied
 consistently and judgments and estimates that are reasonable and
 prudent have been made so as to give a true and fair view of the state
 of affairs of the Company for the financial year ended at 31st December
 2006 and of the profit of the Company for that year;
 
 (iii) Proper and sufficient care has been taken 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;
 
 (iv) The Annual Accounts for the financial year ended at
 31stDecember2006 have been prepared on agoing concern basis.
 
 AUDITORS
 
 Price Waterhouse, Chartered Accountants, who retire at the ensuing
 Annual General Meeting, have expressed their
 
 willingness to continue as the Statutory Auditors of the Company.
 Confirmation has been received from them that if they are appointed as
 Statutory auditors, their appointment shall be within the limits as
 prescribed under Section 224(1 B) of the Companies Act 1956.
 
 PARTICULARS OF CONSERVATION OF ENERGY.  TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Information on Energy Conservation and Technology Absorption required
 to be disclosed under section 217(1 )(e) of the Companies Act, 1956
 read with the Companies (Disclosure of Particulars in the Report of the
 Board of Directors) Rules, 1988, forming part of the Directors Report
 for the year ended 31st December 2006 is enclosed as Annexure which
 forms part of this Report.
 
 PARTICULARS OF EMPLOYEES
 
 Particulars of Employees as required under Section 217(2A) of the
 Companies Act, 1956, read with the Companies (Particulars of Employees)
 Rules, 1975 are given in the annexed statement and forms part of this
 report.
 
 DELISTING OF SECURITIES
 
 In accordance with the SEBI (Delisting of Securities) Guidelines, 2003
 the Company has been voluntarily delisted from The Stock Exchange
 Mumbai, The Calcutta Stock Exchange and The National Stock Exchange of
 India Limited. The Delhi Stock Exchange has also delisted the shares of
 the Company subject to the clearance from SEBI.
 
 CORPORATE GOVERNANCE
 
 India Gypsums philosophy on good Corporate Governance envisages a
 combination of business practices that result in enhancement of the
 value of the Company to the shareholders and simultaneously enable the
 Company to fulfill its obligations to the other stakeholders such as
 customers, employees, vendors, dealers, and financiers and to the
 society at large. Your Company firmly believes that such practices are
 founded upon the core values of transparency, professionalism,
 empowerment, equity and accountability. Your Company makes best
 endeavors to uphold and nurture these core values in all facets of its
 operations and aims to increase and sustain its corporate value through
 growth and innovation.
 
 Board Committees Audit Committee
 
 In terms of Section 292A of the Companies Act, 1956, an Audit Committee
 of the Company has been re-constituted in the Board Meeting held on
 29.01.2004, primarily to review the following-
 
 Financial Reporting / Disclosure information Appointment and removal of
 external auditor
 
 Annual financial statements before submission to the Board
 
 1. Internal control systems Current Audit Committee composition
 
 Mr. Vikas Vig, Chairman of the Committee
 
 Mr. Anand Mahajan
 
 Mr. Subramanian Venkataraman
 
 The Audit Committee met during the year for two times.  The Chairman of
 the Committee was present at the Annual General Meeting held on
 30-11-2006 to attend to the shareholders queries.
 
 Share Transfer Committee
 
 Current Share Transfer Committee Composition
 
 Mr. Vikas Vig, Chairman of the Committee
 Mr. Subramanian Venkataraman
 Mr. Sanjay Bahl
 
 ACKNOWLEDGEMENTS
 
 The Directors acknowledge the support and assistance given by the
 Saint-Gobain Companies under the Group.  The Directors wish to place on
 record their appreciation of the dedicated efforts made by the
 employees of the Company at all levels. The Directors also take this
 opportunity to thank the shareholders, business partners and Government
 Authorities for their continued support to the Company.
 
                           For and on behalf of the Board of Directors
 
 Mumbai                         Anand Mahajan Subramanian Venkataraman
 Date:5th June, 2007                 CHAIRMAN     MANAGING DIRECTOR