Released On : 29-July-2003

Results - Q2 - 2003 (Apr - June) and Half Year 2003 (Jan - June)
Declared at the board meeting held today 29/7/03

Highlights

About The Paper Products Limited (PPL):

PPL is India's leading manufacturer of primary consumer packaging with annual gross sales exceeding Rs.400 crores, and net capital employed of Rs.175 crores.

PPL is the pioneer and the technological and market leader in Flexible packaging and Labelling. The Flexibles range is wide, diversified and sophisticated, encompassing 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, etc.; and also for seeds, specialized chemicals, electronics and many other specific specialized uses including anti-spurious packaging. The Labelling products range includes latest leading edge technologies - Shrink sleeves, Heat transfer labels, Pressure sensitive labels, Metallised labels and Wrap around labels.

PPL is also into manufacturing of specialized cartons and cartoning systems, manufacture of poly films, specialized barrier metallising and high-end application extrusion coating. The company's packaging machines division enables it to offer complete packaging solutions to the customer. PPL mainly caters to the premium segment of packaging and its customer profile includes HLL, Nestle, GSK, Cadbury, Britannia, Coca-cola, Perfetti, Marico, P&G, Amway, Emami, Dabur, Eveready, Godrej Sara Lee, etc. etc. Its market share in this segment is about 52%.

PPL's manufacturing facilities are located at Thane, Silvassa and Hyderabad. Today, PPL is a joint venture with the global packaging major - Huhtamaki Oyj, Finland who hold 58% of the equity capital. Huhtamaki is the world's sixth largest consumer packaging multinational.
More at our web site : www.pplpack.com

Q2 - 2003 Results:
The Net sales for the second quarter (Apr-June) of 2003 are at Rs.979 million as compared to Rs.791 million in the second quarter of 2002. This represents a 24% growth in sales. The Profit before tax is Rs.84 mn as compared to Rs.98 mn in the Q2 of the previous year. The Profit after Tax is Rs.59 mn as compared to Rs.69 million in the Q2 of 2002.

Half Year - 2003
The Net sale for the half year ended June 03 is Rs1847 mn as compared to Rs 1504 mn in the first half of 2002. This represents a 23% growth in sales. The Profit before tax for the first half of the current year is Rs 160 mn as compared to Rs 174 mn in the first half of the last year. The Profit after tax for the first half of the current year is Rs 109 mn as compared to Rs 128 mn the previous year.

The Top line represents a robust growth of 23% in difficult market conditions. The company's innovation programme, NASP - "New Applications Structures and Products", continued to create new business. The robust growth also represents the ever-growing confidence of customers in PPL's commitment to meet their ever-demanding needs for focused service, good value and innovation for growth.

The fall in PBT level is purely due to the erosion in value addition caused by the relentless raw material price increase. Part of the reason for the raw material price increase has been the Crude oil price increase, resulting in increasing prices of all polymer resins and polymer-based substrates & in solvents and fuels, sometimes-disproportionate increases due to the monopolistic and protected markets of some principal raw materials. But a main component of input price increase has been the massively disproportionate increase in prices of polyester films driven unilaterally by film manufacturers, and under protection of anti-dumping duties, which provide the barrier to competitive imports.

While raw material prices have increased it has been extremely difficult, for the moment, to pass on these input price increases due to the reluctance of customers to accept any price increase. Consequently there has been a squeeze on margins.

Going Forward:
The robust top line growth, in the first half of this year, gives confidence for the rest of the year.

The second quarter did see some softening of input prices, though still much higher than the prices prevailing in the last quarter of last year. With the Iraq war now behind us and crude prices possibly softening, and depending on polyester film future pricing, we could hope for some improvement in margins in the remaining quarters.

The strong volume growth also enables us to step away from business which is becoming relatively lower end in terms of quality needs, and still have a large market for growth.

All things considered, we are hopeful for a partial recovery of margins, and we also we look to volumes to further help recover the bottom line. Hence the strategy for the remaining part of the year would focus on consolidating the strengthened market position, continually developing the company's innovation program (NASP), and maintaining volume growth.

Awards:
Huhtamaki, Finland, awarded PPL 'The Company of the Year' (for the year 2002) amongst about 120 companies in the Huhtamaki group. This is the second year in succession that PPL is being recognized. In the year 2001, Mr. Suresh Gupta, CEO was awarded the 'Manager of the Year' by Huhtamaki.
awarded the 'Manager of the Year' by Huhtamaki. PPL was also given "Triple A Performance" awards in the years 2001 & 2002 - two years in succession by the Executive Board of Huhtamaki.
PPL won yet again The World Star Award 2002 for 'Anti-Counterfeit Holographic Cartons for MICO-DFI' and the Asia star award 2002 for 'Pure Magic - Speciality Premium Cartons for Britannia'.

Contact Person:
Mr. M.K. Srinivasan
Senior Vice President - Finance

Tel:	+91 - 22 - 2534 3691
	+91 - 22 - 2534 5024 (D)
	98211 35774 (M)