The Paper Products Ltd

9 Months Performance

Net Sales up by 18%

Mumbai, October 27, 2006: The Paper Products Limited (HUHTAMAKI-PPL), India's leading flexible packaging company, today announced its Unaudited Financial Results for the third quarter and the nine months ended September 30, 2006. The company achieved sales of Rs.373.99 crores during the nine months representing a growth of 17.7%, over sales of Rs.317.80 crores in the corresponding nine months of 2005. Continued focus on the company's innovation program NASP "New Applications Structures and Products & Processes" helped to achieve better sales. The profit before tax & extra ordinary items is Rs.33.56 crores as compared to Rs.27.01 crores in nine months last year. The basic and diluted earnings per share excluding extra ordinary items for the nine months is Rs.20.70 as compared to Rs.15.95 in the corresponding period last year.

On comparison between quarters, the company achieved sales of Rs.132.34 crores during the third quarter representing a growth of 27%, over sales of Rs.104.19 crores in the corresponding third quarter of 2005. The profit before tax & extra ordinary items is Rs.11.63 crores as compared to Rs.9.85 crores in Q3 last year. The basic and diluted earnings per share excluding extra ordinary items for the quarter is Rs.7.93 as compared to Rs.5.92 in the corresponding period last year.

Consequent to floods on 26th July 2005 at Thane plant an insurance claim was made for damaged assets. Claim has been settled during the quarter. The Extraordinary item for Q3 2006 of Rs.12.08 crores represents the difference between the settlement amount, the expenditure already incurred upto 30 September 2006 and provision of Rs.5.61 crores estimated to be further incurred on repairs to give a true and fair view of the surplus.

The surplus is being utilised for replacing the damaged discarded equipment. In accordance with accounting standard 10 the cost of new equipment will be capitalised.

Consequently the profit before tax & after extra ordianry items for the Q3-2006 is Rs.23.71 crores & for 9 months ended 30th September 2006 is Rs.45.64 crores. The basic and diluted earnings per share including extra ordinary items for the quarter is Rs.13.05 as compared to Rs.5.25 in the corresponding period last year. The basic and diluted earnings per share including extra ordianry items for the 9 months ended 30th Septmeber 2006 is Rs.25.82 as compared to Rs.15.28 in the corresponding period last year.

As announced earlier, the company has decided to set up a production facility in North India at a cost of Rs.65 crores over a 2 year period. Work on project is progressing satisfactorily & production is expected to commence in November 2006 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 over Rs.500 crores and net capital employed of about Rs.219 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 the world's sixth largest consumer packaging multinational.

PPL is the pioneer and the technology and market leader in Flexible packaging 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, etc.; 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 Amway, Amul, Britannia, Cadbury, Castrol, Coca-cola, Dabur, DS Group, Emami, Eveready, GSK, Godrej, Hindustan Latex, HLL, HPCL, Marico, MICO, Nestle, Perfetti, P&G, TTK-LIG etc. etc.

More at our website : www.pplpack.com

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