The Paper Products Ltd

12 Months Performance

Net Sales up by 15.8%

Mumbai, January 31, 2007: The Paper Products Limited (HUHTAMAKI-PPL), India's leading flexible packaging company, today announced its audited Financial Results for the year ended December 31, 2006. The company achieved sales of Rs.501.21 crores during the year, representing a growth of 15.8%, over sales of Rs.432.86 crores in the year 2005. The profit before tax (PBT) & extra ordinary items is Rs.42.82 crores as compared to Rs.38.69 crores in the last year. The basic and diluted earnings per share (EPS) excluding extra ordinary items for the year is Rs.26.73 as compared to Rs.22.71 in the last year. Including extra ordinary items, PBT in 2006 was Rs. 54.90 crores compared to Rs. 37.89 crores in 2005. Including these extra-ordinary items EPS for 2006 was Rs. 31.85 compared to Rs. 22.07 for 2005.

The Board of Directors has recommended a dividend of Rs. 9 per share. The Board of Directors has also recommended dividing one equity share of the face value of Rs.10 each fully paid-up into five equity shares of the face value of Rs.2 each fully paid-up.

In comparison between quarters, the company achieved sales of Rs.127.22 crores during the Q4-2006 representing a growth of 10.6%, over sales of Rs.115.07 crores in Q4-2005. The profit before tax & extra ordinary items is Rs.9.26 crores in Q4-2006 as compared to Rs.11.68 crores in Q4-2005. The basic and diluted earnings per share excluding extra ordinary items for Q4-2006 is Rs.6.03 as compared to Rs.6.76 in Q4-2005.

The sales growth during the year was driven by the company's innovation programme NASP "New Applications, Structures and Products & Processes". This helped offset the continued pressure on margins from high raw material prices and customer pressure against commensurate selling price revisions, and our consequential action to withdraw from some non remunerative businesses.

Consequent to floods on 26th July 2005 at Thane plant an insurance claim was made for damaged assets. Claim has been settled during the Q3-2006. The extraordinary item for the year 2006 of Rs.12.08 crores represents the difference between the settlement amount, the expenditure already incurred and estimated to be further incurred on repairs. This surplus is being utilized for replacing the damaged equipments.

As informed earlier the company has been implementing a project of setting up a production facility in North India in the State of Uttaranchal at a cost of Rs.65 crores. Work on project is progressing satisfactorily & commercial production has commenced in January 2007 in a phased manner.

About The Paper Products Limited (HUHTAMAKI-PPL):

PPL is India's leading manufacturer of primary consumer packaging with annual gross sales of about Rs.580 crores, and net capital employed of about Rs.266 crores.

Since 1999, PPL is a joint venture with the global packaging major - Huhtamaki Oyj, Finland who hold about 59% of the equity capital. Huhtamaki is one of the world's top ten consumer packaging multinational.

PPL is a pioneer and the technology and market leader in Flexible packaging in India with manufacturing facilities at Thane, Silvassa and Hyderabad. It meets the packaging needs of almost the entire range of FMCG segments including personal products, personal wash, laundry, foods, sauces, beverages, bakery products, spices, chocolates and confectionery, dairy and also for seeds, specialized chemicals, electronics and many other specific specialized uses including anti-spurious packaging.

The Package Protection and Decoration products range includes latest leading edge technologies - Shrink sleeves, Wrap arounds, Heat transfers, Pressure sensitives and Metallised paper labels.

Manufacturing of specialized cartons and cartoning systems, manufacture of poly films, specialized barrier metallising and high-end application extrusion coating are also part of PPL's product offerings. The company's packaging machines division offers complete packaging solutions to customers.

PPL mainly caters to the premium segment of packaging and its clients include Amul, Britannia, Cadbury, Castrol, Coca-cola, Dabur, DS Group, Emami, Eveready, GSK, Godrej, Hindustan Latex, HLL, HPCL, Marico, MICO, Nestle, Pepsi, Perfetti, P&G, Tata Tea,TTK-LIG, Wipro and may more. These are all leading multinationals and Indian Business Groups operating in India and abroad.

More at our website : www.pplpack.com

Mr. Ravi Chidambaram Controller - Finance & Joint CFO The Paper Products Limited Tel: +91 - 22 - 2534 5024 (D) Board: +91 - 22 - 2534 3691- Ext. 172 Mobile +91 - 98216 04825