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U.S. SECURITIESAND EXCHANGE COMMISSION

WASHINGTON, D.C.20549

 

FORM 40-F

 

o            Registration Statement Pursuant to Section 12 of theSecurities Exchange Act of 1934

or

ý      Annual Report Pursuant to Section 13(a) or 15(d) of the

Securities Exchange Act of 1934

| For the fiscal year ended

September 30, 2006
 
Commission File Number

333-06552
 

**TembecIndustries Inc.**

(Exact name of Registrant as specified in      its charter)
** **

**N/A**
(Translation of Registrant's name into      English (if applicable))
** **

**Quebec**
(Province or other jurisdiction of      incorporation or organization)
** **

**2611, 2621, 2631**
(Primary Standard Industrial Classification      Code Number (if applicable))
** **

**N/A**
(I.R.S. Employer Identification Number (if      applicable))
** **

**800, René-Lévesque Blvd., Suite 1050,      Montreal, QC, Canada H3B 1X9**

**Telephone:  (514) 871-0137**
(Address and telephone number of      Registrant's principal executive offices)
 

**Richard B. Raymer, Esq., Hodgson Russ LLP**

**One M&T Plaza, Suite 2000**

**Buffalo, New York 14203**

**Telephone:  (716) 856-4000**
(Name, address (including zip code) and

telephone number (including area code)      

of agent for services in the United States)

 
 

Securities registered or tobe registered pursuant to Section 12(b) of the Act.

 

**N/A**
 
**N/A**
Title of each class
** **
Name of each exchange on which registered
 

Securities registered or tobe registered pursuant to Section 12(g) of the Act

 

**N/A**
Title of class
**N/A**
Title of class
 

Securities for which thereis a reporting obligation pursuant to Section 15(d) of the Act.

 

**Senior Notes due June 30, 2009      Senior Notes due February 1, 2011      Senior Notes due March 15, 2012**
Title of class
 

 

For annual reports, indicate by check mark the information filed with this Form:

 

ý Annual information form
 
ý       Audited financial statements
 

Indicate the number ofoutstanding shares of each of the issuer's classes of capital/or common stock asof the close of the period covered by the annual report. 

 

**536,807,704 Class  A shares16,627,500 Series 2 Class B shares9,103,710 Series 4 Class B shares**

****Indicate by check mark whether theRegistrant by filling the information contained in this Form is also therebyfurnishing the information to the Commission pursuant to Rule 12g3-2(b) underthe *Securities Exchange Act of 1934* (the "Exchange Act"). If "Yes" ismarked, indicate the filing number assigned to the Registrant in connection withsuch Rule. 

** **

Yes o
 
82-                           
 
No ý
 

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the preceding 12 months (or forsuch shorter period that the Registrant was required to file such reports) and(2) has been subject to such filing requirements for the past 90 days. 

 

Yes ý
 
No o
 

 

 

 

 

**Disclosure Controls andProcedures**

** **

                 As of theend of the Registrant's fiscal year ended September 30, 2006, an evaluation ofthe effectiveness of the Registrant's ''disclosure controls and procedures'' (assuch term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities ExchangeAct of 1934, as amended (the ''Exchange Act'')) was carried out by theRegistrant's management with the participation of the President and ChiefExecutive Officer and Executive Vice-President, Finance and Chief FinancialOfficer.  Based upon that evaluation, the Registrant's President and ChiefExecutive Officer and Executive Vice-President, Finance and Chief FinancialOfficer have concluded that as of the end of that fiscal year, the Registrant'sdisclosure controls and procedures are effective to ensure that informationrequired to be disclosed by the Registrant in reports that it files or submitsunder the Exchange Act is (i) recorded, processed, summarized and reportedwithin the time periods specified in Securities and Exchange Commission rulesand forms and (ii) accumulated and communicated to the Registrant's management,including its President and Chief Executive Officer and ExecutiveVice-President, Finance and Chief Financial Officer, to allow timely decisionsregarding required disclosure.

 

                It should benoted that while the Registrant's President and Chief Executive Officer andExecutive Vice-President, Finance and Chief Financial Officer believe that theRegistrant's disclosure controls and procedures provide a reasonable level ofassurance that they are effective, a control system, no matter how wellconceived or operated, can provide only reasonable, not absolute, assurance thatthe objectives of the control system are met.

 

**Management Report onInternal Control Over Financial Reporting**

 

                TheRegistrant's management is responsible for establishing and maintaining adequateinternal control over financial reporting to provide reasonable assuranceregarding the reliability of the Registrant's financial reporting and thepreparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. The Registrant's internal control overfinancial reporting includes those policies and procedures that (i) pertain tothe maintenance of records, that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Registrant; (ii)provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of the Registrant arebeing made only in accordance with authorizations of management and directors ofthe Registrant; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use or disposition of theRegistrant's assets that could have a material effect on the financialstatements.  Because of its inherent limitations, internal control overfinancial reporting may not prevent or detect misstatement.

 

                Managementassessed the Registrant's internal control over financial reporting as ofSeptember 30, 2006, the end of its fiscal year. Management based its assessmenton criteria established in Internal Control - Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission. Management'sassessment included evaluation of such elements as the design and operatingeffectiveness of key financial reporting controls, process documentation,accounting policies, and the Registrant's overall control environment.

 

                Based on itsassessment, management has concluded that the Registrant's internal control overfinancial reporting was effective as of the end of the fiscal year to providereasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external reporting purposes inaccordance with generally accepted accounting principles.  

 

**[Signed]**
** **
**[Signed]**
** **

** **

/s/ James M. Lopez
** **
** **

** **

/s/ Michel Dumas
James M. Lopez

President and Chief    Executive Officer
 
Michel Dumas

Executive    Vice-President, Finance and    Chief Financial Officer

 

**Changes in Internal Controls Over FinancialReporting**

 

                During thefiscal year ended September 30, 2006, there were no changes in the Registrant'sinternal control over financial reporting that have materially affected or arereasonably likely to materially affect the Registrant's internal control overfinancial reporting. 

 

**Audit Committee Financial Expert**

 

                  The Board of Directors of theRegistrant has determined that Messrs. Gilles Chevalier (Chairman) and Norman M.Betts are audit committee financial experts (as defined in paragraph 8(b) ofGeneral Instruction B to Form 40-F).  All of the members of the Registrant'sAudit Committee would be considered an independent director within the meaningset out in Canadian legislation, specifically Multilateral Instrument 52-110 *Audit Committees*, and would be considered independent as defined in Rule10A-3(b) under the Securities Exchange Act of 1934.

 

**Code of Ethics**

 

                The Registrant has adopted a Code of Ethics and Business Conduct thatapplies to its President and Chief Executive Officer and ExecutiveVice-President, Finance and Chief Financial Officer as well as all of itsdirectors, officers, employees, consultants, suppliers and other persons workingon behalf of the Registrant or the Registrant's subsidiaries.

  

                No waiverswere granted from the Registrant's Code of Conduct during the period covered bythis report. 

 

                TheRegistrant's Code of Ethics and Business Conduct is available on theRegistrant's website at www.tembec.com and has been filed by theRegistrant at www. SEDAR.com and under cover of form 6-K on the SEC's website atwww.sec.gov on November 30, 2005.

 

**Principal Accountant Feesand Services**

 

                Thedisclosure provided under the headings *Auditors*and *Policies andProcedures for the Engagement of Audit and Non-Audit Services* each as setforth in Item 10 of the Annual Information Form filed as an Exhibit  hereto, isincorporated by reference herein. 

 

**Off-balance SheetArrangements**

 

                TheRegistrant has no material off-balance sheet arrangements that have or arereasonably likely to have a current or future effect on its financial condition,changes in financial condition, revenues or expenses, results of operations,liquidity, capital expenditures or capital resources that is material toinvestors.

 

**Tabular Disclosure ofContractual Obligations**

 

                Thedisclosure provided on page 35 in Management's Discussion and Analysis filed asan Exhibit hereto, is incorporated by reference.

 

**Undertaking and Consentto Service of Process**

 

                TheRegistrant undertakes to make available, in person or by telephone,representatives to respond to inquires made by the Commission staff, and tofurnish promptly, when requested to do so by the Commission staff, informationrelating to the securities in relation to which the obligation to file an annualreport on Form 40-F arises, or transactions in said securities.

 

 

                On December22, 2005, the Registrant filed a Form F-X in connection with each class ofsecurities to which the obligation to file this Form 40-F arises.  Any change tothe name and address of the agent for service of process shall be communicatedpromptly to the Commission by amendment to Form F-X.

** **

** **

**SIGNATURES**

** **

                Pursuant tothe requirements of the Exchange Act, the Registrant certifies that it meets allof the requirements for filing on Form 40-F and has duly caused this Form 40-Fto be signed on its behalf by the undersigned, thereto duly authorized.

 

 

 

 

DATE:     December    21,    2006
TEMBEC INDUSTRIES INC.

 

 

By:/s/  Antonio    Fratianni 

Name:  Antonio Fratianni

Title:    Vice    President, General Counsel and Secretary
 

 

 

 

 

 

**EXHIBITS**

** **

The following documents arefiled as exhibits to this Form 40-F:

 

Exhibit Number
Document
99.1
Annual Information Form    for the fiscal year ended September 30, 2006.
99.2
Management's Discussion    and Analysis for the fiscal year ended September 30, 2006.
99.3
The Audited Consolidated    Financial Statements of Tembec Industries Inc. for the fiscal year ended    September 30, 2006, including report of independent chartered accountants    with respect thereto.
99.4
Reconciliation to United    States GAAP
99.5
Consent of KPMG, LLP
99.6
Certification of the    President and Chief Executive Officer pursuant to Section 302 of the    Sarbanes-Oxley Act of 2002 dated December 21, 2006.
99.7
Certification of the    Executive Vice-President, Finance and Chief Financial Officer pursuant to    Section 302 of the Sarbanes-Oxley Act of 2002 dated December 21, 2006.
99.8
Certification of the    President and Chief Executive Officer pursuant to section 906 of the    Sarbanes-Oxley Act of 2002 dated December 21, 2006.
99.9
Certification of the    Executive Vice-President, Finance and Chief Financial Officer pursuant to    section 906 of the Sarbanes-Oxley Act of 2002 dated December 21, 2006.
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