MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

Intier Automotive Inc. management is responsible for the preparation and presentation of the consolidated financial statements and all the information in
this Annual Report. The consolidated financial statements were prepared by management in accordance with accounting principles generally accepted in Canada. Financial statements include certain
amounts based on estimates and judgements. Management has determined such amounts on a reasonable basis designed to ensure that the consolidated financial statements are presented fairly, in all
material respects. Financial information presented elsewhere in this Annual Report has been prepared by management to ensure consistency with that in the consolidated financial statements. The
consolidated financial statements have been reviewed by the Audit Committee and approved by the Board of Directors of Intier Automotive Inc.

Management
is responsible for the development and maintenance of systems of internal accounting and administrative cost controls of high quality, consistent with reasonable cost. Such
systems are designed to provide reasonable assurance that the financial information is accurate, relevant and reliable and that the Company's assets are appropriately accounted for and adequately
safeguarded.

The
Company's Audit Committee is appointed by its Board of Directors annually and is comprised solely of outside directors. The Committee meets periodically with management, as well as
the independent auditors, to satisfy itself that each is properly discharging its responsibilities, to review the consolidated financial statements and the independent auditors' report and to discuss
significant financial reporting issues and auditing matters. The Audit Committee reports its findings to the Board of Directors for consideration when approving the consolidated financial statements
for issuance to the shareholders.

The
consolidated financial statements have been audited by Ernst & Young LLP, the independent auditors, in accordance with auditing standards generally accepted in Canada
and the United States on behalf of the shareholders. The Auditors' Report outlines the nature of their examination and their opinion to the consolidated financial statements of the Company. The
independent auditors have full and unrestricted access to the Audit Committee.

|Michael E. McCarthy(Signature)                                         | Michael Baccellieri(Signature)
|---------------------------------------------------------------------- | ------------------------------
|                                                                       |                               
|MICHAEL E. MCCARTHY Executive Vice-President & Chief Financial Officer | MICHAEL BACCELLIERI Controller

Newmarket,
Canada February 8, 2002

1

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AUDITORS' REPORT

To
the Shareholders of Intier Automotive Inc.

We
have audited the consolidated balance sheets of Intier Automotive Inc. as at December 31, 2001 and 2000 and the consolidated statements of income, retained earnings and
Magna's net investment and cash flows for each of the years in the three year period ended December 31, 2001. These financial statements are the responsibility of Company's management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with Canadian generally accepted auditing standards and United States generally accepted auditing standards. Those standards require that we
plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation.

In
our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Intier Automotive Inc. as at December 31, 2001
and 2000 and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2001 in accordance with Canadian generally accepted accounting
principles.

Ernst &
Young LLP(Signature)

ERNST &
YOUNG LLP
Chartered Accountants

Toronto,
Canada February 8, 2002

2

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SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements have been prepared in U.S. dollars following Canadian generally accepted accounting principles ("Canadian GAAP"). These
policies are also in conformity, in all material respects, with United States generally accepted accounting principles ("U.S. GAAP") except as described in note 19 to the
consolidated financial statements.

PRINCIPLES OF CONSOLIDATION

The consolidated balance sheet as at December 31, 2001 gives effect to the corporate reorganization which was completed in August, 2001 whereby Intier
Automotive Inc. (the "Company") acquired from its parent company, Magna International Inc. ("Magna") certain operating divisions, subsidiaries, jointly controlled entities and
investments directly or indirectly under the control of Magna. In exchange for the above net assets, the Company issued 42,751,938 Class B Shares of the Company and 2,250,000 Convertible Series
Preferred Shares to Magna.

The
consolidated financial statements prior to August 1, 2001 present the historic combined financial position, results of operations and cash flows of the assets and liabilities
reorganized under the Company on a carve out basis from Magna. To give effect to the continuity of Magna's interest in the assets and liabilities of the Company, all the assets and liabilities have
been recorded in these consolidated financial statements at Magna's book values except for assets under capital leases related to the distribution of land and buildings by the Company to certain real
estate subsidiaries of Magna during the year ended December 31, 1998.

The
Company was formed to hold and operate the interiors and closures businesses owned by Magna and its subsidiaries. The assets and liabilities recognized under the Company include the
following businesses:



The
comparative information presented reflects financial statements which present the consolidated financial position, results of operations, changes in Magna's net investment and cash
flows of the Company as if it had operated as a stand-alone entity subject to Magna's control. Certain of the expenses presented in these consolidated financial statements represent intercompany
allocations and management estimates of the cost of services provided by Magna. These allocations and estimates are considered by management to be the best available approximation of the expenses that
the Company would have incurred had it operated on a stand-alone basis over the periods presented.

Interest
expense, as presented in these consolidated financial statements, includes interest on external debt and amounts due to Magna (included in Magna's net investment). Magna's net
investment, which includes both debt and equity components, comprises the accumulated earnings of the Company, contributions by Magna less distributions to Magna and the currency translation
adjustment.

Income
taxes for the Company in the comparative period have been recorded at statutory rates based on income before income taxes and minority interest as reported in the consolidated
statements of income as though the Company was a separate tax paying entity. Income taxes payable in respect of historically separate

3

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tax
paying legal entities have been presented as a current liability in the consolidated balance sheets in the comparable period. Income taxes payable in respect of the components which were not
historically separate tax paying legal entities have been included in Magna's net investment. Future income taxes have been presented in the consolidated balance sheets on the basis of temporary
differences between the financial reporting and tax bases of the assets and liabilities.

As
a result of the basis of presentation described above, the consolidated statements of income may not necessarily be indicative of the revenues and expenses that would have resulted
had the Company operated as a stand-alone entity.

The
Company's subsidiaries are included in these consolidated financial statements using the purchase method of accounting from the date they were acquired by Magna. All significant
intercompany balances and transactions have been eliminated.

The
Company proportionately consolidates its interests in jointly controlled operations.

FOREIGN EXCHANGE

Assets and liabilities of the Company's operations having a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange
rate in effect at the year end and revenues and expenses are translated at the average rate during the year. Exchange gains or losses on translation of the Company's net equity investment in these
operations are deferred as a separate component of shareholders' equity.

The
appropriate amounts of exchange gains or losses accumulated in the separate component of shareholders' equity are reflected in income when there is a reduction in the Company's net
investment in the operations that gave rise to such exchange gains and losses.

Foreign
exchange gains and losses on transactions occurring in a currency other than an operation's functional currency are reflected in income except for gains and losses on foreign
exchange contracts used to hedge specific future commitments in foreign currencies. Gains and losses on these contracts are accounted for as a component of the related hedged transaction. Gains and
losses on translation of foreign currency long-term monetary liabilities are deferred and amortized over the period to maturity. In addition, gains and losses from foreign denominated debt
designated as a hedge on the Company's net
investment in foreign operations are not included in income, but are shown in the currency translation account.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on account, demand deposits and short-term investments with remaining maturities of less than three months at
acquisition.

INVENTORIES

Inventories are valued at the lower of cost and net realizable value, with cost being determined substantially on a first-in, first-out
basis. Cost includes the cost of materials plus direct labour applied to the product and the applicable share of manufacturing overhead.

INVESTMENTS

Investments in which the Company has significant influence are accounted for on the equity basis.

4

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FIXED ASSETS

Fixed assets are recorded at historical cost, which includes acquisition and development costs less related investment tax credits. Development costs include
direct construction costs, interest capitalized on construction in progress and land under development and indirect costs wholly attributable to development.

Depreciation
is provided on a straight-line basis over the estimated useful lives of fixed assets at annual rates of 21/2% to 5% for buildings, 7% to 10% for
general purpose equipment and 10% to 30% for special purpose equipment. Assets under capital leases are amortized over the respective lease terms.

Costs
incurred to establish new facilities, which require substantial time to reach commercial production capability, are expensed as incurred.

GOODWILL

Goodwill represents the excess of the purchase price of the Company's interest in subsidiary companies over the fair value of the underlying net identifiable
assets arising on acquisitions. Goodwill is generally amortized over 20 years and in all cases amortization does not exceed 40 years. The Company reviews the valuation and amortization
period of goodwill whenever events or changes in circumstances warrant such a review. In doing so, the Company evaluates whether there has been a permanent impairment in the value of unamortized
goodwill based on the estimated undiscounted cash flows of each business to which the goodwill relates.

REVENUE RECOGNITION

Revenue from the sale of manufactured products is recognized when the price is fixed or determinable, collectibility is reasonably assured and upon shipment to
(or receipt by customers depending on contractual terms), and acceptance by, customers.

Revenue
from separately priced engineering service and tooling contracts are recognized on a percentage of completion basis.

Revenue
and cost of sales are presented on a gross basis in the consolidated statements of income where the Company is acting as principal and is subject to significant risks and rewards
in connection with the process of bringing the product to its final state and in the post sale dealings with its customers. Otherwise, components of revenues and related costs are presented on a net
basis.

PREPRODUCTION COSTS RELATED TO LONG-TERM SUPPLY AGREEMENTS

Costs incurred (net of customer subsidies) related to design and engineering, which are reimbursed as part of subsequent related parts production piece price
amounts, are expensed as incurred unless a contractual guarantee for reimbursement exists.

Costs
incurred (net of customer subsidies) related to design and development costs for moulds, dies and other tools that the Company does not own (and that will be used in, and
reimbursed as part of the piece price amounts for, subsequent related parts production) are expensed as incurred unless the supply agreement provides a contractual guarantee for reimbursement or the
non-cancelable right to use the moulds, dies and other tools during the supply agreement.

GOVERNMENT FINANCING

The Company makes periodic applications for financial assistance under available government assistance programs in the various jurisdictions in which the Company
operates. Grants relating to capital expenditures are reflected as a reduction of the cost of the related assets. Grants and tax credits relating to current operating expenditures are generally
recorded as a reduction of expense at the time the eligible expenses are incurred. In the case of certain foreign subsidiaries, the Company receives tax super allowances which are accounted for as a
reduction of income tax expense. The Company also receives loans which are recorded as liabilities in amounts equal to the cash received.

5

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RESEARCH AND DEVELOPMENT

The Company carries on various applied research and development programs, certain of which are partially or fully funded by governments or by customers of the
Company. Funding received is accounted for using the cost reduction approach. Research costs are expensed as incurred.

INCOME TAXES

The Company follows the liability method of tax allocation for accounting for income taxes. Under the liability method of tax allocation, future tax assets and
liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the substantively enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

EMPLOYEE BENEFIT PLANS

The Company accrues its obligations under employee benefit plans and the related costs, net of plan assets. The cost of pensions and other retirement benefits
earned by employees is actuarially determined using the projected benefit method pro rated on service and management's best estimate of expected plan investment performance, salary escalation,
retirement ages of employees and expected health care costs. For the purposes of calculating the expected return on plan assets, those assets are valued at fair value. Past service
costs from plan amendments are amortized on a straight-line basis over the average remaining service period of employees active at the date of amendment. The net actuarial gain (loss) is
amortized over the average remaining service period of active employees.

The
cost of providing benefits through defined contribution pension plans is charged to earnings in the period in respect of which contributions become payable.

STOCK-BASED COMPENSATION

No compensation expense is recognized for stock options granted under the Company's Incentive Stock Option Plan. Consideration paid on the exercise of stock
options is credited to capital stock.

EARNINGS PER CLASS A SUBORDINATE VOTING OR CLASS B SHARE

Basic earnings per Class A Subordinate Voting or Class B Share are calculated on net income less financing charges on the Convertible Series
Preferred Shares using the weighted average number of Class A Subordinate Voting and Class B Shares outstanding during the year.

The
Company uses the treasury stock method in computing diluted earnings per share. Under the treasury stock method, diluted earnings per Class A Subordinate Voting or
Class B Share are calculated on the weighted average number of Class A Subordinate Voting and Class B Shares that would have been outstanding during the year had all the dilutive
options and Convertible Series Preferred Shares been exercised or converted into Class A Subordinate Voting Shares at the beginning of the year, or date of issuance, if later. The proceeds from
the exercise of options are assumed to be used to purchase Class A Subordinate Voting Shares at the average market price during the period. The incremental shares (the difference between the
number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation.

CONVERTIBLE SERIES PREFERRED SHARES

For the purposes of accounting for the Convertible Series Preferred Shares, three key attributes of these shares were valued as of their date of issuance and are
presented separately in the Company's consolidated financial statements. These three key attributes are:



6

---



The
retraction attribute is a liability of the Company and is presented as long-term debt because it is at the option of the holder. The non-cumulative nature of
the dividend means that it is dissimilar to an interest payment on debt and, therefore, the long-term debt is presented as the net present value of (i.e., at a discount to) the carrying
value which becomes payable, at the option of the holder, on the dates indicated above. The resultant discount is amortized to income systematically from the date of issuance until the date of
retraction for each series of the Convertible Series Preferred Shares.

The
non-cumulative dividend, for reasons indicated above, is not considered debt-related. However, because holders of the Convertible Series Preferred Shares
expect to receive dividends and it was the Company's expectation, at the date of issuance, to pay dividends, there is a value to the expected stream of dividend payments. The net present value of this
expected dividend stream has, therefore, been presented as equity. As dividends are declared, a systematically calculated portion of the dividend is shown as a return of capital and is deducted from
the amount presented as equity. The dividends on the Convertible Series Preferred Shares as presented in the consolidated statements of income and retained earnings and Magna's net investment reflect
the actual dividend declared net of the amount considered a return of capital.

The
third attribute, the conversion feature, is similar to a stock warrant in that it provides holders with the option to exchange their Convertible Series Preferred Shares for
Class A Subordinate Voting Shares at a fixed price. The residual approach was used to value this attribute and this amount is classified as equity.

7

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CONSOLIDATED BALANCE SHEETS

|                                                                |                                    |       |    | As at December 31,
|--------------------------------------------------------------- | ---------------------------------- | ----- | -- | ------------------
|
|
|ASSETS                                                          |                                    |       |    |                   
|Current assets:                                                 |                                    |       |    |                   
|                                                                | Cash and cash equivalents          |       |    |                   
|                                                                | Accounts receivable                |       | 17 |                   
|                                                                | Inventories                        |       | 5  |                   
|                                                                | Prepaid expenses and other         |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|Fixed assets, net                                               |                                    | 6     |    |                   
|                                                                |                                    |       |    |                   
|Goodwill, net                                                   |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|Future tax assets                                               |                                    | 7     |    |                   
|                                                                |                                    |       |    |                   
|Other assets                                                    |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    | $                 
|                                                                |                                    |       |    |                   
|LIABILITIES AND SHAREHOLDERS' EQUITY AND MAGNA'S NET INVESTMENT
|Current liabilities:                                            |                                    |       |    |                   
|                                                                | Bank indebtedness                  |       | 8  |                   
|                                                                | Accounts payable                   |       | 17 |                   
|                                                                | Accrued salaries and wages         |       |    |                   
|                                                                | Other accrued liabilities          |       |    |                   
|                                                                | Income taxes payable               |       | 7  |                   
|                                                                | Long-term debt due within one year |       | 8  |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|Long-term debt                                                  |                                    | 8, 17 |    |                   
|                                                                |                                    |       |    |                   
|Other long-term liabilities                                     |                                    | 9     |    |                   
|                                                                |                                    |       |    |                   
|Convertible Series Preferred Shares                             |                                    | 10    |    |                   
|                                                                |                                    |       |    |                   
|Future tax liabilities                                          |                                    | 7     |    |                   
|                                                                |                                    |       |    |                   
|Minority interest                                               |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|Shareholders' equity and Magna's net investment:                |                                    |       |    |                   
|Convertible Series Preferred Shares                             |                                    | 10    |    |                   
|Class A Subordinate Voting Shares                               |                                    | 11    |    |                   
|Class B Shares                                                  |                                    | 11    |    |                   
|Retained earnings                                               |                                    |       |    |                   
|Currency translation adjustment                                 |                                    | 13    |    |                   
|Magna's net investment                                          |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    |                   
|                                                                |                                    |       |    | $                 
|                                                                |                                    |       |    |                   

Commitments
and contingencies (notes 8 and 18)

On
behalf of the Board:

|Lawrence Worrall(Signature) | Neil G. Davis(Signature)
|--------------------------- | ------------------------
|LAWRENCE WORRALL Director   | NEIL G. DAVIS Director  

See accompanying notes

8

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CONSOLIDATED STATEMENTS OF INCOME,  RETAINED EARNINGS AND MAGNA'S NET INVESTMENT

|                                                                                          |         |        |  | Years ended December 31, |        
|----------------------------------------------------------------------------------------- | ------- | ------ |  | ------------------------ | -------
|
|
|Sales                                                                                     |         | 17     |  | $                        | 3,268.1
|                                                                                          |         |        |  |                          |        
|Cost of goods sold                                                                        |         | 17     |  |                          | 2,861.6
|Depreciation and amortization                                                             |         |        |  |                          | 88.0   
|Selling, general and administrative                                                       |         |        |  |                          | 163.4  
|Affiliation fees and other charges                                                        |         | 17     |  |                          | 53.5   
|                                                                                          |         |        |  |                          |        
|Operating income                                                                          |         |        |  |                          | 101.6  
|Interest expense, net                                                                     |         | 8, 17  |  |                          | 16.2   
|Amortization of discount on Convertible Series Preferred
Shares                           |         | 10, 17 |  |                          | 4.8    
|Equity loss                                                                               |         |        |  |                          | 0.4    
|                                                                                          |         |        |  |                          |        
|Income before income taxes and minority interest                                          |         |        |  |                          | 80.2   
|Income taxes                                                                              |         | 7      |  |                          | 40.7   
|Minority interest                                                                         |         |        |  |                          | (0.4   
|                                                                                          |         |        |  |                          |        
|Net income                                                                                |         |        |  | $                        | 39.9   
|                                                                                          |         |        |  |                          |        
|Financing charge on Convertible Series Preferred Shares                                   |         | 10, 17 |  |                          | 0.9    
|Net income attributable to Class A Subordinate
Voting and Class B Shares                  |         |        |  |                          | 39.0   
|Magna's net investment, beginning of year                                                 |         |        |  |                          | 850.2  
|Net (distribution to) contribution by Magna                                               |         |        |  |                          | (869.5 
|Dividends on Class A Subordinate Voting and Class B Shares                                |         |        |  |                          | (2.0   
|Change in currency translation adjustment                                                 |         | 13     |  |                          | (1.8   
|                                                                                          |         |        |  |                          |        
|Retained earnings and Magna's net investment, end of year                                 |         |        |  | $                        | 15.9   
|                                                                                          |         |        |  |                          |        
|Earnings per Class A Subordinate Voting or Class B Share                                  |         | 2      |  |                          |        
|                                                                                          | Basic   |        |  |                          | $      
|                                                                                          | Diluted |        |  |                          | $      
|Average number of Class A Subordinate Voting and Class B
Shares outstanding (in millions) |         | 2      |  |                          |        
|                                                                                          | Basic   |        |  |                          |        
|                                                                                          | Diluted |        |  |                          |        
|                                                                                          |         |        |  |                          |        
|Pro forma earnings per Class A Subordinate Voting or Class B Share                        |         | 3      |  |                          |        
|                                                                                          | Basic   |        |  |                          | $      
|                                                                                          | Diluted |        |  |                          | $      
|Average number of Class A Subordinate Voting and Class B
Shares outstanding (in millions) |         | 3      |  |                          |        
|                                                                                          | Basic   |        |  |                          |        
|                                                                                          | Diluted |        |  |                          |        
|                                                                                          |         |        |  |                          |        

See accompanying notes

9

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CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                     |  |        |  | Years ended December 31, |       
|-------------------------------------------------------------------- |  | ------ |  | ------------------------ | ------
|
|
|Cash provided from (used for):                                       |  |        |  |                          |       
|OPERATING ACTIVITIES                                                 |  |        |  |                          |       
|Net income                                                           |  |        |  | $                        | 39.9  
|Items not involving current cash flows                               |  | 15     |  |                          | 101.2 
|                                                                     |  |        |  |                          |       
|                                                                     |  |        |  |                          | 141.1 
|Change in non-cash working capital                                   |  | 15     |  |                          | 25.9  
|                                                                     |  |        |  |                          |       
|                                                                     |  |        |  |                          | 167.0 
|                                                                     |  |        |  |                          |       
|INVESTMENT ACTIVITIES                                                |  |        |  |                          |       
|Fixed asset additions                                                |  |        |  |                          | (87.6 
|Acquisition of subsidiaries, net of cash acquired                    |  | 4      |  |                          |      
|Increase in investments and other assets                             |  |        |  |                          | (5.0  
|Proceeds from disposition of fixed assets                            |  |        |  |                          | 2.6   
|                                                                     |  |        |  |                          |       
|                                                                     |  |        |  |                          | (90.0 
|                                                                     |  |        |  |                          |       
|FINANCING ACTIVITIES                                                 |  |        |  |                          |       
|Issue of Class A Subordinate Voting Shares, net                      |  | 11     |  |                          | 71.7  
|Increase (decrease) in bank indebtedness                             |  |        |  |                          | 34.5  
|Repayments of long-term debt                                         |  |        |  |                          | (8.1  
|Net (distribution to) contribution by Magna                          |  | 17     |  |                          | (144.4
|Dividends on Class A Subordinate Voting and Class B Shares           |  | 11     |  |                          | (2.0  
|Dividends on Convertible Series Preferred Shares                     |  | 10, 11 |  |                          | (1.9  
|                                                                     |  |        |  |                          |       
|                                                                     |  |        |  |                          | (50.2 
|                                                                     |  |        |  |                          |       
|Effect of exchange rate changes on cash and cash equivalents         |  |        |  |                          | (1.3  
|                                                                     |  |        |  |                          |       
|Net increase (decrease) in cash and cash equivalents during the year |  |        |  |                          | 25.5  
|Cash and cash equivalents, beginning of year                         |  |        |  |                          | 51.6  
|                                                                     |  |        |  |                          |       
|Cash and cash equivalents, end of year                               |  |        |  | $                        | 77.1  
|                                                                     |  |        |  |                          |       

See accompanying notes

10

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        (all amounts in millions of U.S. dollars unless otherwise noted except per share figures and number of shares)

1.     SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed by the Company are set out under "Significant Accounting Policies" preceding these consolidated financial statements.

2.     EARNINGS PER SHARE AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2001

As a result of the reorganization of the Company, as described under Principles of Consolidation in Significant Accounting Policies, earnings per share and
retained earnings for the year ended December 31, 2001 include net income for the five month period subsequent to July 31, 2001.

The
following table summarizes the calculation of earnings per share for the five months ended December 31, 2001:

|Basic earnings per Class A Subordinate Voting or Class B Share:                                    |                                                                 |   |     
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | - | ----
|Net income attributable to Class A Subordinate Voting and Class B Shares                           |                                                                 | $ | 17.9
|                                                                                                   |                                                                 |  
|Average number of Class A Subordinate Voting and Class B Shares outstanding during the five months |                                                                 |   | 47.9
|                                                                                                   |                                                                 |  
|Basic earnings per Class A Subordinate Voting or Class B Share                                     |                                                                 | $ | 0.37
|                                                                                                   |                                                                 |  
|Diluted earnings per Class A Subordinate Voting or Class B Share:                                  |                                                                 |   |     
|Net income attributable to Class A Subordinate Voting and Class B Shares                           |                                                                 | $ | 17.9
|Adjustments (net of related tax effects):                                                          |                                                                 |   |     
|                                                                                                   | Amortization of discount on Convertible Series Preferred Shares |   |     
|                                                                                                   | Financing charge on Convertible Series Preferred Shares         |   |     
|                                                                                                   |                                                                 |  
|                                                                                                   |                                                                 | $ | 17.9
|                                                                                                   |                                                                 |  
|Average number of Class A Subordinate Voting and Class B Shares outstanding during the five months |                                                                 |   | 47.9
|                                                                                                   | Convertible Series Preferred Shares                             |   |     
|                                                                                                   | Stock options                                                   |   |     
|                                                                                                   |                                                                 |  
|                                                                                                   |                                                                 |   | 47.9
|                                                                                                   |                                                                 |  
|Diluted earnings per Class A Subordinate Voting or Class B Share                                   |                                                                 | $ | 0.37
|                                                                                                   |                                                                 |  

At
December 31, 2001, the Company has outstanding 2,525,000 incentive stock options and 2,250,000 Convertible Series Preferred Shares, which are anti-dilutive and,
therefore, not included in the above earnings per share calculation.

3.     PRO FORMA EARNINGS PER SHARE

The following pro forma adjustments have been made to arrive at pro forma earnings per share for the years ended December 31, 2001, 2000 and
1999:



11

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Basic
and diluted pro forma earnings per Class A Subordinate Voting or Class B Share are based on the public offering of 5,476,191 Class A Subordinate Voting
Shares completed in August, 2001 and on the assumption that 42,751,938 Class B Shares and 2,250,000 Convertible Series Preferred Shares were issued and outstanding for the entire periods
presented.

The
following table summarizes the calculation of pro forma earnings per share:

|                                                                                            |                                                                 | Years ended December 31, |     
|------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ------------------------ | ----
|
|Basic earnings per Class A Subordinate Voting or Class B Share:                             |                                                                 |                          |     
|Net income attributable to Class A Subordinate Voting and Class B Shares                    |                                                                 | $                        | 39.0
|Pro forma adjustments (net of related tax effects):                                         |                                                                 |                          |     
|                                                                                            | Amortization of discount on Convertible Series Preferred Shares |                          |     
|                                                                                            | Interest on debt due to Magna                                   |                          |     
|                                                                                            | Net adjustment to affiliation fees and other corporate charges  |                          |     
|                                                                                            | Financing charge on Convertible Series Preferred Shares         |                          |     
|                                                                                            |                                                                 |                          |     
|Pro forma net income attributable to Class A Subordinate Voting and Class B Shares          |                                                                 | $                        | 41.0
|                                                                                            |                                                                 |                          |     
|Average number of Class A Subordinate Voting and Class B Shares outstanding during the year |                                                                 |                          | 44.9
|                                                                                            |                                                                 |                          |     
|Pro forma basic earnings per Class A Subordinate Voting or Class B Share                    |                                                                 | $                        | 0.91
|                                                                                            |                                                                 |                          |     
|Diluted earnings per Class A Subordinate Voting or Class B Share:                           |                                                                 |                          |     
|Pro forma net income attributable to Class A Subordinate Voting and Class B Shares          |                                                                 | $                        | 41.0
|Pro forma adjustments (net of related tax effects):                                         |                                                                 |                          |     
|                                                                                            | Amortization of discount on Convertible Series Preferred Shares |                          |     
|                                                                                            | Financing charge on Convertible Series Preferred Shares         |                          |     
|                                                                                            |                                                                 |                          |     
|                                                                                            |                                                                 | $                        | 53.6
|                                                                                            |                                                                 |                          |     
|Average number of Class A Subordinate Voting and Class B Shares outstanding during the year |                                                                 |                          | 44.9
|                                                                                            | Convertible Series Preferred Shares                             |                          |     
|                                                                                            | Stock options                                                   |                          |     
|                                                                                            |                                                                 |                          |     
|                                                                                            |                                                                 |                          | 59.8
|                                                                                            |                                                                 |                          |     
|Pro forma diluted earnings per Class A Subordinate Voting or Class B Share                  |                                                                 | $                        | 0.90
|                                                                                            |                                                                 |                          |     

4.     BUSINESS ACQUISITIONS

The following acquisitions were accounted for using the purchase method:

During
the year ended December 31, 1999, the Company acquired the remaining 50% interest in two of its joint ventures. The consideration paid consisted of cash of
$4.4 million. The net effect on the Company's balance sheet was a net increase in working capital of $0.9 million, an increase in fixed assets of $1.6 million, and an increase in
goodwill of $1.9 million.

12

---

At
December 31, 2001, the Company had a remaining provision of $2.0 million for severance and termination costs for the termination of 78 remaining employees as part of the
relocation of production programs from one facility to another. During the years ended December 31, 2001, 2000 and 1999, the Company utilized severance and termination accruals of
$0.6 million, $0.3 million and $0.2 million, respectively. Such amounts were included in the purchase price allocation of previous business acquisitions.

During
fiscal 2001, the Company recorded a restructuring charge for $2.7 million relating to the downsizing of one of the Company's under-performing divisions. At
December 31, 2001, the Company had a remaining provision of $1.9 million for severance, termination and premise costs for the termination of 11 remaining employees and the relocation of
production programs from one facility to another.

5.     INVENTORIES

Inventories consist of:

December 31,2001

2000Raw materials and supplies

$
63.1

$
71.4Work-in-process


17.0


18.1Finished goods


23.4


23.9Tooling and engineering


137.4


109.7$
240.9

$
223.1


Tooling
and engineering inventory represents cost incurred on separately priced tooling and engineering services contracts in excess of unbilled amounts included in accounts receivable.
Unbilled amounts included in accounts receivable at December 31, 2001 totalled $1.5 million (December 31, 2000 totalled $8.1 million).

6.     FIXED ASSETS

Fixed assets consist of:

December 31,2001

2000CostLand

$
8.3

$
7.7Buildings


38.4


31.2Leasehold improvements


20.6


18.8Machinery and equipment


717.1


655.1Assets under capital leases (i)


25.6


26.4810.0


739.2Less: accumulated depreciationBuildings


(10.3
)

(9.3
)Leasehold improvements


(10.5
)

(8.9
)Machinery and equipment


(359.5
)

(300.3
)Assets under capital leases (i)


(5.7
)

(4.1
)$
424.0

$
416.6


Notes:



13

---



7.     INCOME TAXES

(a) The provision for income taxes differs from the expense that would be obtained by applying Canadian statutory rates as a result of the following:

|                                                                |  | Years ended December 31, |     
|--------------------------------------------------------------- |  | ------------------------ | ----
|
|Canadian statutory income tax expense                           |  | $                        | 33.5
|Manufacturing and processing profits deduction                  |  |                          | (5.6
|Foreign rate differentials                                      |  |                          | (2.6
|Tax losses not benefited                                        |  |                          | 4.9 
|Amortization of discount on Convertible Series Preferred Shares |  |                          | 2.0 
|Other                                                           |  |                          | 8.5 
|                                                                |  |                          |     
|Effective income tax expense                                    |  | $                        | 40.7
|                                                                |  |                          |     

(b)
The details of income before income taxes and minority interest by jurisdiction are as follows:

|         |  | Years ended December 31, |     
|-------- |  | ------------------------ | ----
|
|Canadian |  | $                        | 70.5
|Foreign  |  |                          | 9.7 
|         |  |                          |     
|         |  | $                        | 80.2
|         |  |                          |     

(c)
The details of the income tax provision are as follows:

|                   |                        | Years ended December 31, |     
|------------------ | ---------------------- | ------------------------ | ----
|
|Current provision: |                        |                          |     
|                   | Canadian federal taxes |                          | $   
|                   | Provincial taxes       |                          |     
|                   | Foreign taxes          |                          |     
|                   |                        |                          |     
|                   |                        |                          | 31.9
|Future provision:  |                        |                          |     
|                   | Canadian federal taxes |                          |     
|                   | Provincial taxes       |                          |     
|                   | Foreign taxes          |                          |     
|                   |                        |                          |     
|                   |                        |                          | 8.8 
|                   |                        |                          |     
|                   |                        | $                        | 40.7
|                   |                        |                          |     

14

---

(d)
Future income taxes have been provided on temporary differences, which consist of the following:

|                                                                         |  | Years ended December 31, |    
|------------------------------------------------------------------------ |  | ------------------------ | ---
|
|Fixed assets tax depreciation greater than (less than) book depreciation |  | $                        | 1.5
|Other assets tax depreciation greater than (less than) book depreciation |  |                          | 3.5
|Net tax losses utilized (benefited)                                      |  |                          | 3.6
|Other                                                                    |  |                          | 0.2
|                                                                         |  |                          |    
|                                                                         |  | $                        | 8.8
|                                                                         |  |                          |    

(e)
Future tax assets and liabilities consist of the following temporary differences:

December 31,2001

2000Assets:Tax benefit of loss carryforwardsPre-acquisition

$
7.6

$
11.0Post-acquisition


99.6


103.2Other assets tax values in excess of book values


2.3


5.5Other


13.7


4.2123.2


123.9Valuation allowance against tax benefit of loss carryforwardsPre-acquisition


(7.6
)

(7.6
)Post-acquisition


(19.6
)

(14.2
)96.0


102.1Liabilities:Tax depreciation in excess of book depreciation


26.6


28.9Other


8.4


1.935.0


30.8Net future income taxes

$
61.0

$
71.3


(f)
Income taxes paid in cash for the year ended December 31, 2001 were $48.0 million (for the years ended December 31, 2000 and
1999  $50.7 million and $41.5 million, respectively).

(g)
At December 31, 2001, the Company had income tax loss carryforwards of approximately $83.1 million that relate to certain foreign subsidiaries, including approximately
$21.7 million of losses obtained on
acquisitions, the tax benefits of which have not been recognized in the consolidated financial statements. Of the total losses, $57.4 million expire between 2002 and 2011 and the remainder have
no expiry date.

(h)
At December 31, 2001, $34.1 million of undistributed earnings of foreign subsidiaries and jointly controlled entities may be subject to tax if remitted to Canada. No
provision has been made for such taxes as these earnings are considered to be reinvested for the foreseeable future.

15

---

8.     DEBT AND COMMITMENTS

(a) The Company's long-term debt, which is substantially unsecured, consists of the following:

|                                                                                                                |  | December 31,
|--------------------------------------------------------------------------------------------------------------- |  | ------------
|
|Loans from governments with a weighted average interest rate of approximately 2% denominated primarily in euros |  | $           
|Bank term debt at a weighted average interest rate of approximately 4% denominated primarily in euros           |  |             
|Obligations under capital leases (i)                                                                            |  |             
|Other                                                                                                           |  |             
|                                                                                                                |  |             
|                                                                                                                |  |             
|Less due within one year                                                                                        |  |             
|                                                                                                                |  |             
|                                                                                                                |  | $           
|                                                                                                                |  |             

(b)
At December 31, 2001, future principal repayments on long-term debt (excluding obligations under capital leases) are estimated to be as follows:

2002

$
5.82003


2.52004


1.62005


1.62006


1.1Thereafter


1.5$
14.1


(c)
On September 27, 2001, the Company established a $385.0 million three-year unsecured revolving term credit facility with customary commercial terms, bearing
interest at variable rates not exceeding the prime rate of interest. The credit facility contains negative and affirmative financial and operating covenants and events of default customary for credit
facilities of this nature, including the requirements that the Company maintain certain financial ratios and restrictions on its ability to incur or guarantee additional indebtedness or to dispose of
assets as well as the right of the lenders to declare all outstanding indebtedness to be immediately due and payable upon the occurrence of an event of default. The credit facility expires on
September 27, 2004.

At
December 31, 2001, the Company had operating lines of credit amounting to $54.1 million and term lines of credit amounting to $422.4 million. At
December 31, 2001, the Company had unused and available operating lines of credit and term lines of credit of $43.2 million and $346.9 million.

16

---

(d)
Net interest expense (income) includes:

|                      |                                        | Years ended December 31, |     
|--------------------- | -------------------------------------- | ------------------------ | ----
|
|Interest expense      |                                        |                          |     
|                      | Current                                |                          | $   
|                      | Long-term                              |                          |     
|                      | Intercompany to Magna and affiliates   |                          |     
|                      |                                        |                          |     
|                      |                                        |                          | 42.1
|Interest income       |                                        |                          |     
|                      | Current                                |                          |     
|                      | Intercompany from Magna and affiliates |                          |     
|                      |                                        |                          |     
|Interest expense, net |                                        | $                        | 16.2
|                      |                                        |                          |     

Interest
paid in cash for the year ended December 31, 2001 was $3.7 million (for the years ended December 31, 2000 and
1999  $3.3 million and $6.0 million, respectively).

(e)
At December 31, 2001, the Company had commitments under operating leases requiring annual rental payments to third parties and to Magna and its affiliates as follows:

Third parties

Magna and its affiliates2002

$
18.5

$
8.42003


15.9


7.52004


11.7


7.42005


9.8


7.52006


9.6


7.4Thereafter


33.8


28.7$
99.3

$
66.9


For
the year ended December 31, 2001, operating lease expense amounted to $24.4 million (for the years ended December 31, 2000 and
1999  $23.9 million and $23.8 million, respectively).

(f)
At December 31, 2001, the Company had commitments under capital leases requiring annual rental payments to Magna and its affiliates as follows:

2002

$
2.82003


2.92004


3.12005


3.12006


3.1Thereafter


22.837.8Less interest and other charges


14.5Obligations under capital leases


23.3Less current portion


1.0Long-term portion of obligations under capital leases

$
22.3


17

---

9.     EMPLOYEE BENEFIT PLANS

Prior to 2001, Magna's Corporate Constitution required that 10% of the employee pre-tax profits before profit sharing (defined in the Corporate
Constitution) for any fiscal period be allocated to an Employee Equity and Profit Participation Plan ("EPSP") consisting of the Magna deferred profit sharing plan and a cash distribution to eligible
employees of Magna. Eligible Canadian, United States and European employees participate in the EPSP. During 2001, Magna amended its Corporate Constitution to allow for the contribution of such
amounts to a defined benefit pension plan in addition to the EPSP. All employees that participate in the EPSP were, and all new employees are, given the option of continuing in the EPSP or receiving a
reduced entitlement under the EPSP plus a defined benefit pension. The defined benefit pension is payable to retirees age 65 or older and is based on years of service and compensation levels.
Participants may take early retirement after age 55 and receive a reduced pension package. Under its Corporate Constitution, the Company must adopt a similar profit sharing arrangement to Magna's not
later than 2003.

Pursuant
to labour laws and national labour agreements in certain European countries, the Company is obliged to provide lump sum termination payments to employees on retirement or
involuntary termination, and long service payments contingent upon persons reaching a predefined number of years of service.

In
addition, a limited number of the Company's European subsidiaries sponsor defined benefit pension and similar arrangements for their employees.

The
most significant defined benefit pension plan is fully funded; the assets of which are reflected in the table below. Substantially all other European defined benefit pension plans
and similar arrangements are unfunded. However, certain Austrian subsidiaries hold long-term government securities in connection with their unfunded obligations. Such assets amounted to
$0.9 million at December 31, 2001 and 2000.

The
cost of pensions and other retirement benefits earned by employees is actuarially determined using the projected benefit method pro rated on service and management's best estimate of
expected plan investment performance, salary escalation, retirement ages of employees and expected health care costs.

During
the year ended December 31, 2000, the Company introduced a post retirement medical benefits plan covering eligible employees and retirees. Retirees age 60 or older with ten
or more years of service will be eligible for benefits. In addition, existing retirees as at August 1, 2000 that meet the above criteria are also eligible for benefits. Benefits are capped
based on years of service. As the projected benefit obligation and benefit cost associated with the post retirement medical benefits plan is not material, a separate reconciliation of the projected
benefit obligation and benefit cost has not been provided in the tables below.

The
significant actuarial assumptions adopted in measuring the Company's projected benefit obligations are as follows:

Discount rate

5.0% to 7.5%Rate of compensation increase

3.0% to 4.0%Expected return on plan assets

7.5%


18

---

|                                                         |                                                               | Years ended December 31, |     
|-------------------------------------------------------- | ------------------------------------------------------------- | ------------------------ | ----
|
|Projected benefit obligations                            |                                                               |                          |     
|Beginning of year                                        |                                                               | $                        | 60.2
|                                                         | Past service obligation arising on plan introduction          |                          |     
|                                                         | Current service and interest costs                            |                          |     
|                                                         | Actuarial (gains) losses and changes in actuarial assumptions |                          |     
|                                                         | Benefits paid                                                 |                          |     
|                                                         | Currency translation                                          |                          |     
|                                                         |                                                               |                          |     
|End of year                                              |                                                               | $                        | 56.3
|                                                         |                                                               |                          |     
|Plan assets at fair value                                |                                                               |                          |     
|Beginning of year                                        |                                                               | $                        | 34.3
|                                                         | Return on plan assets                                         |                          |     
|                                                         | Employer contributions                                        |                          |     
|                                                         | Benefits paid                                                 |                          |     
|                                                         | Currency translation                                          |                          |     
|                                                         |                                                               |                          |     
|End of year                                              |                                                               | $                        | 28.5
|                                                         |                                                               |                          |     
|Unfunded amount                                          |                                                               | $                        | 27.8
|                                                         | Unrecognized past service obligation                          |                          |     
|                                                         | Unrecognized actuarial loss                                   |                          |     
|                                                         |                                                               |                          |     
|Net amount recognized in the consolidated balance sheets |                                                               | $                        | 22.1
|                                                         |                                                               |                          |     
|Net period benefit cost                                  |                                                               |                          |     
|                                                         | Current service and interest costs                            |                          | $   
|                                                         | Past service costs                                            |                          |     
|                                                         | Expected return on plan assets                                |                          |     
|                                                         | Actuarial losses                                              |                          |     
|                                                         |                                                               |                          |     
|                                                         |                                                               | $                        | 5.3 
|                                                         |                                                               |                          |     

During
the year ended December 31, 2001, the Company incurred $1.8 million (for the years ended December 31, 2000 and
1999  $1.9 million and $1.7 million, respectively) of defined contribution plan expense.

10.   CONVERTIBLE SERIES PREFERRED SHARES

The Company has issued the following Convertible Series Preferred Shares:

Number of sharesPreferred Shares, Series 1

1,125,000Preferred Shares, Series 2

1,125,000


The
Convertible Series Preferred Shares have the following attributes:



19

---



The
Convertible Preferred Shares, Series 1 and 2 were issued to Magna in August, 2001 in satisfaction of $225.0 million of the Company's indebtedness to Magna.

The
portion of the Convertible Series Preferred Shares classified as long-term debt and the amounts reflected as amortization of discount on Convertible Series Preferred
Shares are as follows:

|                           |  | Series 1 |      | Series 2 |   | Total
|-------------------------- |  | -------- | ---- | -------- | - | -----
|Issued on August 9, 2001   |  | $        | 94.9 |          | $ | 94.9 
|Amortization of discount   |  |          | 2.4  |          |   | 2.4  
|                           |  |          |      |          |   |      
|Balance, December 31, 2001 |  | $        | 97.3 |          | $ | 97.3 
|                           |  |          |      |          |   |      

The
liability amounts for the Convertible Series Preferred Shares are presented as long-term liabilities as Magna's retraction rights related to the shares are not
exercisable before December 31, 2003 and December 31, 2004, respectively.

The
portion of the Convertible Series Preferred Shares included in shareholders' equity is as follows:

December 31, 2001Warrant portion (relating to conversion feature)

$
6.7Dividend stream portion (relating to non-cumulative dividends)


24.7$
31.4


11.   CAPITAL STOCK

(a) Class A Subordinate Voting Shares and Class B Shares

Class A Subordinate Voting Shares without par value (unlimited amount authorized) are entitled to one vote per share at all meetings of shareholders and
shall participate equally as to cash dividends with each Class B Share.

Class B
Shares without par value (unlimited amount authorized) are entitled to 20 votes per share at all meetings of shareholders, shall participate equally as to cash dividends
with each Class A Subordinate Voting Share and may be converted at any time into fully-paid Class A Subordinate Voting Shares on a one-for-one basis.

In
the event that either the Class A Subordinate Voting Shares or the Class B Shares are subdivided or consolidated, the other class shall be similarly changed to preserve
the relative position of each class.

20

---

Outstanding Class A Subordinate Voting Shares and Class B Shares included in shareholders' equity as at December 31, 2001 consist of:

|                                                                    |  | Number of shares |  | Consideration
|------------------------------------------------------------------- |  | ---------------- |  | -------------
|Class B Shares (convertible into Class A Subordinate Voting Shares) |  | 42,751,938       |  | $            
|Class A Subordinate Voting Shares (i)                               |  | 5,476,191        |  |              
|                                                                    |  |                  |  |              
|Balance, December 31, 2001                                          |  | 48,228,129       |  | $            
|                                                                    |  |                  |  |              

Total proceeds on 5,476,191 shares

$
74.8Expenses of the issue, net of taxes


(3.1
)Net proceeds

$
71.7


(b) Incentive Stock Options

Under the 2001 Incentive Stock Option Plan adopted by the Company on August 9, 2001, the Company may grant options to purchase Class A Subordinate
Voting Shares to employees, officers, directors or consultants of the Company. The maximum number of shares reserved to be issued for options is 6.0 million shares. The number of reserved but
unoptioned shares at December 31, 2001 is 3,475,000.

All
options granted are for a term of no more than ten years from the date of grant. The options granted under Tranche 1 and Tranche 2 vest 1/5 on the grant date, and 1/5
on each subsequent July 31 thereafter, with the exception of 750,000 options that vest 1/3 on the grant date, and 1/6 on each subsequent July 31, thereafter. All options allow the holder
to purchase Class A Subordinate Voting Shares at a price equal to or greater than the market price on the trading day immediately prior to the date of grant.

The
following is a continuity schedule of options outstanding:

Canadian dollar options

|                                 |  | Number    |  | Weighted average exercise price |       | Options exercisable
|-------------------------------- |  | --------- |  | ------------------------------- | ----- | -------------------
|Granted                          |  | 1,400,000 |  | Cdn$                            | 21.00 |                    
|Vested                           |  |           |  |                                 |       |                    
|                                 |  |           |  |                                 |       |                    
|Outstanding at December 31, 2001 |  | 1,400,000 |  | Cdn$                            | 21.00 |                    
|                                 |  |           |  |                                 |       |                    

U.S. dollar options

|                                 |  | Number    |  | Weighted average exercise price |       | Options exercisable
|-------------------------------- |  | --------- |  | ------------------------------- | ----- | -------------------
|Granted                          |  | 1,125,000 |  | U.S.$                           | 13.72 |                    
|Vested                           |  |           |  |                                 |       |                    
|                                 |  |           |  |                                 |       |                    
|Outstanding at December 31, 2001 |  | 1,125,000 |  | U.S.$                           | 13.72 |                    
|                                 |  |           |  |                                 |       |                    

22

---

At
December 31, 2001, the outstanding options consist of the following:

Canadian dollar options outstanding

|                                |  | Exercise price |       | Number |           | Remaining contractual life (years) |     | Options exercisable
|------------------------------- |  | -------------- | ----- | ------ | --------- | ---------------------------------- | --- | -------------------
|Tranche 1                       |  | $              | 21.00 |        | 1,390,000 |                                    | 9.6 |                    
|Tranche 2                       |  | $              | 21.00 |        | 10,000    |                                    | 9.6 |                    
|                                |  |                |       |        |           |                                    |     |                    
|Weighted average exercise price |  | $              | 21.00 |        | 1,400,000 |                                    | 9.6 |                    
|                                |  |                |       |        |           |                                    |     |                    

U.S. dollar options outstanding

|                                |  | Exercise price |       | Number |           | Remaining contractual life (years) |     | Options exercisable
|------------------------------- |  | -------------- | ----- | ------ | --------- | ---------------------------------- | --- | -------------------
|Tranche 1                       |  | $              | 13.72 |        | 1,085,000 |                                    | 9.6 |                    
|Tranche 2                       |  | $              | 13.72 |        | 40,000    |                                    | 9.6 |                    
|                                |  |                |       |        |           |                                    |     |                    
|Weighted average exercise price |  | $              | 13.72 |        | 1,125,000 |                                    | 9.6 |                    
|                                |  |                |       |        |           |                                    |     |                    

(c) Maximum Number of Shares

The following table presents the maximum number of Class A Subordinate Voting and Class B Shares that would be outstanding if all the outstanding
options and Convertible Series Preferred Shares issued and outstanding at December 31, 2001 were exercised or converted.

|                                                                   |  | Number of shares
|------------------------------------------------------------------ |  | ----------------
|Class A Subordinate Voting Shares outstanding at December 31, 2001 |  | 5,476,191       
|Class B Shares outstanding at December 31, 2001                    |  | 42,751,938      
|Options to purchase Class A Subordinate Voting Shares              |  | 2,525,000       
|Preferred Shares, Series 1 and 2, convertible at $15.09 per share  |  | 14,910,537      
|                                                                   |  |                 
|                                                                   |  | 65,663,666      
|                                                                   |  |                 

(d) Dividends

Dividends declared and paid on outstanding Class A Subordinate Voting and Class B Shares aggregated to $2.0 million for the year ended
December 31, 2001.

Dividends
declared and paid on outstanding Series 1 and 2 Preferred Shares aggregated to $1.9 million for the year ended December 31, 2001.

12.   FINANCIAL INSTRUMENTS

(a) Foreign Exchange Risk

The Company operates globally, which gives rise to a risk that its earnings and cash flows may be adversely impacted by fluctuations in foreign exchange. The
Company uses foreign exchange contracts to manage foreign exchange risk from its underlying customer contracts. In particular, the Company uses foreign exchange forward contracts for the sole purpose
of hedging certain of the Company's future committed U.S. dollar, euro and British pound outflows and inflows. Gains and losses on these hedging instruments are recognized in the same period
as, and part of, the hedged transaction. The Company does not enter into foreign exchange contracts for speculative purposes.

23

---

The
Company had outstanding foreign exchange forward contracts representing commitments to buy and sell foreign currencies in exchange for Canadian dollars as follows:

|     |  | December 31, 2001
|---- |  | -----------------
|
|2002 |  | $                
|2002 |  |                  
|2003 |  |                  
|2003 |  |                  
|2004 |  |                  
|2004 |  |                  
|2005 |  |                  
|2005 |  |                  
|2006 |  |                  
|     |  |                  
|     |  | $                
|     |  |                  

At
December 31, 2001, the Company had other outstanding foreign exchange contracts to buy and sell various foreign currencies in exchange for either euros, U.S. dollars or British
pounds. The total amount of such contracts were to buy euros 14.8 million, sell U.S. dollars 4.4 million and sell British pounds 13.2 million.

Based
on forward exchange rates as at December 31, 2001 for contracts with similar remaining terms to maturity, the unrecognized net losses relating to the Company's foreign
exchange forward contracts are approximately $30.6 million. If the Company's forward exchange contracts ceased to be effective as hedges, for example if projected net foreign cash inflows
declined significantly, previously unrecognized gains or losses pertaining to the portion of the hedging transactions in excess of projected foreign denominated cash flows would be recognized in
income at the time this condition was identified.

(b) Fair Value

The Company has determined the estimated fair values of its financial instruments based on appropriate valuation methodologies, however considerable judgement is
required to develop these estimates. Accordingly, these estimated fair values are not necessarily indicative of the amounts the Company could realize in a current market exchange. The estimated fair
value amounts can be materially affected by the use
of different assumptions or methodologies. The methods and assumptions used to estimate the fair value of financial instruments are described below.

Cash and cash equivalents, accounts receivable, bank indebtedness, accounts payable and accrued liabilities

Due to the short period to maturity of the instruments, the carrying values as presented in the consolidated balance sheets are reasonable estimates of fair
value.

Long-term debt

The fair value of the Company's long-term debt (including the debt portion of the Convertible Series Preferred Shares), based on current rates for
debt with similar terms and maturities, is not materially different from its carrying value.

(c) Credit Risk

The Company's financial assets that are exposed to credit risk consist primarily of cash and cash equivalents, accounts receivable and forward exchange contracts
with positive values.

Cash
and cash equivalents, which consist of short-term investments, including commercial paper, are only invested in governments and corporations with an investment grade
credit rating. Credit risk is further reduced by limiting the amount that is invested in any one government or corporation.

24

---

The
Company, in the normal course of business, is exposed to credit risk from its customers, substantially all of which are in the automotive industry. These accounts receivable are
subject to normal industry credit risks.

The
Company is also exposed to credit risk from the potential default by any of its counterparties on its foreign exchange forward contracts. The Company mitigates this credit risk by
dealing with counterparties who are major financial institutions and who the Company anticipates will satisfy their obligations under the contracts.

(d) Interest Rate Risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities. In
addition, the Company's exposure to interest rate risk on fixed rate long-term instruments is also reduced given the minimum periods to redemption with respect to Convertible Series
Preferred Shares.

The
following table summarizes the Company's exposure to interest rate risk as at December 31, 2001:

|                                     |                                                                 | Floating rate |      | Fixed interest rate |   | Non-interest bearing |   | Total |      
|------------------------------------ | --------------------------------------------------------------- | ------------- | ---- | ------------------- | - | -------------------- | - | ----- | -----
|Financial Assets:                    |                                                                 |               |      |                     |   |                      |   |       |      
|                                     | Cash and cash equivalents                                       |               | $    | 77.1                |   | $                    |  |       | $    
|                                     | Accounts receivable                                             |               |      |                    |   |                      |  |       |      
|Financial liabilities:               |                                                                 |               |      |                     |   |                      |   |       |      
|                                     | Bank indebtedness                                               |               |      | (46.0               | ) |                      |  |       |      
|                                     | Accounts payable and all other accrued liabilities and payables |               |      |                    |   |                      |  |       |      
|Long-term debt due within one year   |                                                                 |               |     |                     |   | (6.8                 | ) |       |     
|Long-term debt                       |                                                                 |               |     |                     |   | (30.6                | ) |       |     
|Convertible Series Preferred Shares  |                                                                 |               |     |                     |   | (194.6               | ) |       |     
|                                     |                                                                 |               |      |                     |   |                      |   |       |      
|                                     |                                                                 | $             | 31.1 |                     | $ | (232.0               | ) | $     | (58.4
|                                     |                                                                 |               |      |                     |   |                      |   |       |      
|Average fixed rate of long-term debt |                                                                 |               |      |                     |   | 5.2%                 |   |       |      

13.   CURRENCY TRANSLATION ADJUSTMENT

Unrealized translation adjustments, which arise on the translation to U.S. dollars of assets and liabilities of the Company's operations with a functional
currency of other than the U.S. dollar, resulted in an unrealized currency translation loss of $4.9 million for the five month period subsequent to the Company's reorganization. The unrealized
losses resulted primarily from the weakening of the Canadian dollar against the U.S. dollar.

The
Company has designated the debt portion of the Convertible Series Preferred Shares (note 10) as a hedge of its net investment in its operations in the United States.
Gains and losses from this hedge are not included in the income statement, but are shown in the currency translation adjustment account. The Company recorded net foreign exchange losses of
$3.5 million in the currency translation account related to such shares.

14.   INTERESTS IN JOINTLY CONTROLLED ENTITIES

The following is the Company's proportionate share of the major components of the financial statements of the jointly controlled entities in which the Company has
an interest (before eliminations):

Balance sheets

December 31,2001

2000Current assets

$
39.9

$
30.6Long-term assets

$
34.5

$
19.7Current liabilities

$
33.2

$
26.7Long-term liabilities

$
15.9

$
0.2


25

---

Statements of income

|                                               |  | Years ended December 31,
|---------------------------------------------- |  | ------------------------
|
|Sales                                          |  | $                       
|Costs of goods sold, expenses and income taxes |  |                         
|                                               |  |                         
|Net income                                     |  | $                       
|                                               |  |                         

Statements of cash flows

|                               |  | Years ended December 31, |     
|------------------------------ |  | ------------------------ | ----
|
|Cash provided from (used for): |  |                          |     
|Operating activities           |  | $                        | 23.0
|                               |  |                          |     
|Investment activities          |  | $                        | (6.5
|                               |  |                          |     
|Financing activities           |  | $                        | 3.2 
|                               |  |                          |     

At
December 31, 2001, the Company's share of equity in jointly controlled entities includes undistributed earnings of $19.0 million (December 31,
2000  $14.7 million).

15.   DETAILS OF CASH FROM OPERATING ACTIVITIES

(a) Items not involving current cash flows:

|                                         |  | Years ended December 31, |      
|---------------------------------------- |  | ------------------------ | -----
|
|Depreciation and amortization            |  | $                        | 88.0 
|Future income taxes                      |  |                          | 8.8  
|Pension obligations                      |  |                          | 5.3  
|(Gain)/loss on disposals of fixed assets |  |                          | (1.1 
|Equity loss and other                    |  |                          | 0.2  
|                                         |  |                          |      
|                                         |  | $                        | 101.2
|                                         |  |                          |      

(b) Changes in non-cash working capital:

|                                         |  | Years ended December 31, |       
|---------------------------------------- |  | ------------------------ | ------
|
|Accounts receivable                      |  | $                        | (108.1
|Inventories                              |  |                          | (22.7 
|Prepaid expenses and other               |  |                          | 14.1  
|Accounts payable and accrued liabilities |  |                          | 142.6 
|                                         |  |                          |       
|                                         |  | $                        | 25.9  
|                                         |  |                          |       

16.   SEGMENTED INFORMATION

(a) The Company designs, manufactures and supplies automotive interior components, modules and systems primarily for OEM customers on a Tier One basis and
manufactures and supplies interior components on a Tier Two basis to other Tier One suppliers. At December 31, 2001 the Company had operations in 14 countries including 64 production facilities
and 19 product development and engineering facilities.

26

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The
Company is organized by two product groups: Interior Systems and Closure Systems. Each group includes the following products and services:



The
Company's internal financial reports provided to executive management segment results on a global basis by the aforementioned two main product groups. Furthermore, these results
segregate North America and Europe in recognition of each group's management structure and the different geographic business risks faced by the divisions that operate in these segments. Such risks
include vehicle production volumes, OEM customer mix, level of OEM outsourcing and the nature of such outsourced products and services, and currency risk. Vehicle production volumes have a significant
impact on divisional operating results, business plans and capital spending budgets. Vehicle production volumes in each of North America and Europe are affected by a multitude of factors such as
general economic conditions, interest rates, fuel supply and prices, legislative changes, environmental emission and safety issues and labour and/or trade relations.

As
a result of the above internal reporting structure, operating segments reported in these consolidated financial statements include:

Interior Systems with Europe and North America reported separately;

Closure Systems with Europe and North America reported separately.

|                                               |               | Year ended December 31, 2001
|---------------------------------------------- | ------------- | ----------------------------
|
|Interior Systems                               |               |                             
|                                               | North America |                             
|                                               | Europe        |                             
|Closure Systems                                |               |                             
|                                               | North America |                             
|                                               | Europe        |                             
|Corporate, other and intersegment eliminations |               |                             
|                                               |               |                             
|Total reportable segments                      |               | $                           
|                                               |               |                             
|Current assets                                 |               |                             
|Goodwill, future tax and other assets          |               |                             
|                                               |               |                             
|Total assets                                   |               |                             
|                                               |               |                             

27

---

|                                               |               | Year ended December 31, 2000
|---------------------------------------------- | ------------- | ----------------------------
|
|Interior Systems                               |               |                             
|                                               | North America |                             
|                                               | Europe        |                             
|Closure Systems                                |               |                             
|                                               | North America |                             
|                                               | Europe        |                             
|Corporate, other and intersegment eliminations |               |                             
|                                               |               |                             
|Total reportable segments                      |               | $                           
|                                               |               |                             
|Current assets                                 |               |                             
|Goodwill, future tax and other assets          |               |                             
|                                               |               |                             
|Total assets                                   |               |                             
|                                               |               |                             

|                                               |               | Year ended December 31, 1999
|---------------------------------------------- | ------------- | ----------------------------
|
|Interior Systems                               |               |                             
|                                               | North America |                             
|                                               | Europe        |                             
|Closure Systems                                |               |                             
|                                               | North America |                             
|                                               | Europe        |                             
|Corporate, other and intersegment eliminations |               |                             
|                                               |               |                             
|Total reportable segments                      |               | $                           
|                                               |               |                             
|Current assets                                 |               |                             
|Goodwill, future tax and other assets          |               |                             
|                                               |               |                             
|Total assets                                   |               |                             
|                                               |               |                             

28

---

(b) The following table shows certain information with respect to geographic segmentation:

|                  |  | Year ended December 31, 2001
|----------------- |  | ----------------------------
|
|Sales             |  | $                           
|                  |  |                             
|Fixed assets, net |  | $                           
|                  |  |                             
|Goodwill, net     |  | $                           
|                  |  |                             

|                  |  | Year ended December 31, 2000
|----------------- |  | ----------------------------
|
|Sales             |  | $                           
|                  |  |                             
|Fixed assets, net |  | $                           
|                  |  |                             
|Goodwill, net     |  | $                           
|                  |  |                             

|                  |  | Year ended December 31, 1999
|----------------- |  | ----------------------------
|
|Sales             |  | $                           
|                  |  |                             
|Fixed assets, net |  | $                           
|                  |  |                             
|Goodwill, net     |  | $                           
|                  |  |                             

(c)
For the year ended December 31, 2001, sales to the three largest customers amount to 36%, 20% and 15% (for the year ended December 31,
2000  34%, 20% and 15%; for the year ended December 31, 1999  35%, 18% and 13%) of total sales, respectively.

17.   TRANSACTIONS WITH RELATED PARTIES

|                                                                |  | Years ended December 31,
|--------------------------------------------------------------- |  | ------------------------
|
|Charges by Magna and affiliates                                 |  |                         
|Interest expense, net                                           |  | $                       
|                                                                |  |                         
|Amortization of discount on Convertible Series Preferred Shares |  |                         
|                                                                |  |                         
|Financing charge on Convertible Series Preferred Shares         |  |                         
|                                                                |  |                         
|Affiliation fees and other charges                              |  |                         
|                                                                |  |                         
|Rent                                                            |  |                         
|                                                                |  |                         
|Depreciation of assets under capital lease                      |  |                         
|                                                                |  |                         
|Sales of materials to Magna and affiliates                      |  |                         
|                                                                |  |                         
|Purchases of materials from Magna and affiliates                |  |                         
|                                                                |  |                         

At
December 31, 2001, the Company's accounts receivable include accounts receivable from Magna companies of $36.9 million (December 31,
2000  $1.7 million) and accounts payable include accounts payable to Magna companies of $43.9 million (December 31,
2000  $30.5 million).

Magna
provides certain management and administrative services to the Company, including legal, environmental, immigration, administrative, tax, internal audit, treasury, information
systems and employee relations services, in return for a specific amount negotiated between the Company and Magna. The cost of

29

---

management
and administrative services provided by Magna and included in affiliation fees and other charges totalled $4.7 million for the year ended December 31, 2001 (for the year ended
December 31, 2000 and 1999  $4.3 million and $2.1 million, respectively).

During
2001, the Company entered into new or amended existing affiliation agreements with Magna that were effective January 1, 2001. The affiliation agreements provide for the
payment by the Company to Magna of an affiliation fee. The affiliation agreements:



Pursuant
to the Company's affiliation agreements with Magna, the affiliation fees payable by the Company to Magna in respect of each fiscal year will be an aggregate amount equal to:



provided
that sales from acquired businesses will not be subject to a fee until January 1 of the year following the date of acquisition, and will be subject to a fee equal to 50% of the fee
with respect to the Company's other sales in the calendar year following the date of the acquisition, and to the full fee in the second calendar year following the date of the acquisition and
thereafter.

The
affiliation fee included in affiliation fees and other charges was $47.6 million for the year ended December 31, 2001 (for the years ended December 31, 2000 and
1999  $28.0 million and $25.6 million, respectively).

The
Company's Corporate Constitution provides that a maximum of 2% of its pre-tax profits in each fiscal year shall be allocated to the promotion of social objectives. Of
this maximum, the social commitment agreement the Company entered into with Magna during the year ended December 31, 2001, effective January 1, 2001, requires the Company to contribute
1.5% of its pre-tax profits in each fiscal year to social and charitable programs coordinated by Magna or other charitable or non-profit organizations on behalf of Magna and
its affiliates, including Intier.

The
social commitment fee included in affiliation fees and other charges was $1.2 million for the year ended December 31, 2001 (for the years ended December 31, 2000
and 1999  $1.7 million and $1.4 million, respectively).

Affiliation
and social fees in prior years were calculated on a different basis than the 2001 affiliation fee and social commitment fees and are therefore not comparable.

Pursuant
to Magna's Corporate Constitution, 10% of the Company's employee pre-tax profit before profit sharing of participating Magna divisions for any fiscal year is
required to be allocated to an employee equity participation and profit sharing program (the "Magna EPSP"). The Company's employees in Canada, the United States, the United Kingdom and
Austria participate in the Magna EPSP. The Company's portion of the

30

---

costs
associated with the Magna EPSP for the year ended December 31, 2001 was $28.0 million (for the years ended December 31, 2000 and
1999  $25.7 million and $21.0 million, respectively).

Various
land and buildings used in the Company's operations are leased from Magna and its affiliates under operating and capital lease agreements (see note 8).

Transactions
with Magna and affiliates are effected on normal commercial terms.

18.   CONTINGENCIES





31

---



19.   UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated financial statements are prepared using Canadian generally accepted accounting principles which conform with United States generally
accepted accounting principles except for the following:

(a)
The Company has certain interests in jointly controlled entities that have been proportionally consolidated in these consolidated financial statements. Under U.S. GAAP, these
interests would be accounted for by the equity method. Net income, earnings per share, shareholders' equity and Magna's net investment under U.S. GAAP are not impacted by the proportionate
consolidation of these interests in jointly controlled entities.

(b)
Under U.S. GAAP, the Company would not have accounted for the Convertible Series Preferred Shares as part equity and part debt as required under Canadian GAAP. Under U.S. GAAP, the
Convertible Series Preferred Shares would be shown at their face value outside of shareholders' equity and the entire non-cumulative dividend would be deducted from net income attributable
to Class A Subordinate Voting and Class B Shares.

(c)
In December 1999, the United States Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial
Statements. Effective January 1, 2000, the Company changed its method of accounting under U.S. GAAP for in-house engineering service and tooling contracts provided in
conjunction with subsequent assembly or production activities which are regarded as a single arrangement. Previously, the Company had recognized revenue from these engineering service and tooling
contracts on a percentage of completion basis. Under the new accounting method adopted effective January 1, 2000, for U.S. GAAP purposes, the Company recognizes revenue and related cost
of sales for these activities over the estimated life of the assembly or production arrangement. The effect of the change on the year ended December 31, 2000 was to decrease net income by
$0.9 million. The cumulative adjustment to net income as of January 1, 2000 was not significant.

For
the year ended December 31, 2001, revenues and expenses under U.S. GAAP are lower by $9.1 million
(2000  $9.3 million) and $8.7 million (2000  $8.4 million), respectively, as a result of this
difference between Canadian and U.S. GAAP. The net revenue reduction for the year ended December 31, 2001 includes $6.8 million
(2000  $8.2 million) in revenue that was included in the cumulative effect adjustment as of January 1, 2000.

(d)
The Company continues to measure compensation cost related to awards of stock options using the intrinsic value-based method of accounting as prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees" as permitted by Statement of Financial Accounting Standards Board No. 123 "Accounting for Stock-Based Compensation" ("Statement 123").
Under APB Opinion No. 25, when a stock option is repurchased by the Company for a cash payment, the Company must record compensation expense. Under Canadian GAAP, the payment is considered a
capital transaction and recorded in retained earnings. In addition, under EITF 96-18, when stock options are issued to non-employees other than directors acting in their
capacity as a director, the Company must record compensation expense in
accordance with Statement 123. Options issued to directors for services provided outside of their role as a director are recorded as compensation expense by the Company. For the year ended
December 31, 2001, the Company issued stock options to non-employees in return for services rendered. The total amount of this compensation expense for 2001 was $0.4 million.

(e)
The Company uses foreign exchange forward contracts to manage foreign exchange risk from its underlying customer contracts. In particular, the Company uses foreign exchange forward
contracts for the sole purpose of hedging certain of its future committed U.S. dollar, euro and British pound outflows and inflows. Under Canadian GAAP, gains and losses on these contracts are
accounted for as a component of the related hedged transaction. For periods up to and including December 31, 2000, gains and losses on these contracts were also accounted for as a component of
the related hedged transaction under U.S. GAAP.

32

---

Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards Board No. 133 ("Statement 133"), "Accounting for Derivative
Instruments and Hedging Activities", as amended, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts,
and for hedging activities. Statement 133 requires a company to recognize all of its derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting
for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship. Statement 133
establishes certain criteria to be met in order to designate a derivative instrument as a hedge and to deem a hedge as effective.

For
the year ended December 31, 2001 the Company's derivative portfolio is not eligible for hedge accounting despite the fact that management considers its portfolio to be an
effective foreign currency risk management tool and an economic hedge of its future committed U.S. dollar, euro and British pound outflows and inflows. Effective January 1, 2002, the
Company implemented a new treasury management system that complies with the document requirements for hedge accounting under Statement 133.

Accordingly,
the Company has recorded a charge to net income of $16.1 million in the year ended December 31, 2001 for purposes of reconciling to U.S. GAAP. For
periods prior to and including December 31, 2000, this amount would have been deferred and recorded as a component of the related hedged transaction under U.S. GAAP. In addition, the
Company recorded a cumulative adjustment to other comprehensive income of $8.2 million as of January 1, 2001 upon adoption of Statement 133.



|                                                                                             |                                                                                                                      | Years ended December 31, |      
|-------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------------------ | -----
|
|Net income attributable to Class A Subordinate Voting and Class B Shares under Canadian GAAP |                                                                                                                      | $                        | 39.0 
|Adjustments (net of related tax effects):                                                    |                                                                                                                      |                          |      
|                                                                                             | Amortization of discount on Convertible Series Preferred Shares                                                      |                          |      
|                                                                                             | Return of capital on Convertible Series Preferred Shares                                                             |                          |      
|                                                                                             | In-house tooling and engineering                                                                                     |                          |      
|                                                                                             | Derivative instruments                                                                                               |                          |      
|                                                                                             | Non-employee stock option compensation expense                                                                       |                          |      
|                                                                                             |                                                                                                                      |                          |      
|Net income attributable to Class A Subordinate Voting and Class B Shares under U.S. GAAP     |                                                                                                                      | $                        | 23.1 
|Other comprehensive income:                                                                  |                                                                                                                      |                          |      
|                                                                                             | Cumulative adjustment at January 1, 2001 for the change in derivative instrument accounting                          |                          |      
|                                                                                             | Adjustment for derivative instruments, matured during 2001, included in the cumulative adjustment at January 1, 2001 |                          |      
|Unrealized foreign exchange losses on translation of self-sustaining foreign entities        |                                                                                                                      |                          | (13.4
|                                                                                             |                                                                                                                      |                          |      
|Comprehensive income under U.S. GAAP                                                         |                                                                                                                      | $                        | 5.9  
|                                                                                             |                                                                                                                      |                          |      

(g)
As a result of the reorganization of the Company, as described under Principles of Consolidation in Significant Accounting Policies, earnings per share and retained earnings for the
year ended December 31, 2001 include net income for the five month period subsequent to July 31, 2001.

33

---

The
following table presents net income, comprehensive income and earnings per share information under U.S. GAAP for the five months ended December 31, 2001:

|Net income attributable to Class A Subordinate Voting and Class B Shares under Canadian GAAP                          |                                                                                       | $ | 17.9 |     
|--------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | - | ---- | ----
|Adjustments (net of related tax effects):                                                                             |                                                                                       |   |      |     
|                                                                                                                      | Amortization of discount on Convertible Series Preferred Shares                       |   |      | 4.8 
|                                                                                                                      | Return of capital on Convertible Series Preferred Shares                              |   |      | (3.8
|                                                                                                                      | In-house tooling and engineering                                                      |   |      | (0.3
|                                                                                                                      | Derivative instruments                                                                |   |      |    
|                                                                                                                      | Non-employee stock option compensation expense                                        |   |      | (0.4
|                                                                                                                      |                                                                                       |   |     
|Net income attributable to Class A Subordinate Voting and Class B Shares under U.S. GAAP                              |                                                                                       | $ | 18.2 |     
|Other comprehensive income:                                                                                           |                                                                                       |   |      |     
|                                                                                                                      | Unrealized foreign exchange losses on translation of self-sustaining foreign entities |   |      | (4.9
|                                                                                                                      |                                                                                       |   |     
|Comprehensive income under U.S. GAAP                                                                                  |                                                                                       | $ | 13.3 |     
|                                                                                                                      |                                                                                       |   |     
|Basic earnings per Class A Subordinate Voting or Class B Share:                                                       |                                                                                       |   |      |     
|Net income attributable to Class A Subordinate Voting and Class B Shares under U.S. GAAP                              |                                                                                       | $ | 18.2 |     
|                                                                                                                      |                                                                                       |   |     
|Average number of Class A Subordinate Voting and Class B Shares outstanding during the five months                    |                                                                                       |   | 47.9 |     
|                                                                                                                      |                                                                                       |   |     
|Basic earnings per Class A Subordinate Voting or Class B Share                                                        |                                                                                       | $ | 0.38 |     
|                                                                                                                      |                                                                                       |   |     
|Diluted earnings per Class A Subordinate Voting or Class B Share:                                                     |                                                                                       |   |      |     
|Net income attributable to Class A Subordinate Voting and Class B Shares under U.S. GAAP for basic earnings per share |                                                                                       | $ | 18.2 |     
|Adjustments (net of related tax effects):                                                                             |                                                                                       |   |      |     
|                                                                                                                      | Return of capital and financing charge on Convertible Series Preferred Shares         |   |      | 4.7 
|                                                                                                                      |                                                                                       |   |     
|                                                                                                                      |                                                                                       | $ | 22.9 |     
|                                                                                                                      |                                                                                       |   |     
|Average number of Class A Subordinate Voting and Class B Shares outstanding during the five months                    |                                                                                       |   | 47.9 |     
|Convertible Series Preferred Shares                                                                                   |                                                                                       |   | 14.9 |     
|Stock options                                                                                                         |                                                                                       |   |     |     
|                                                                                                                      |                                                                                       |   |     
|                                                                                                                      |                                                                                       |   | 62.8 |     
|                                                                                                                      |                                                                                       |   |     
|Diluted earnings per Class A Subordinate Voting or Class B Share                                                      |                                                                                       | $ | 0.36 |     
|                                                                                                                      |                                                                                       |   |     

34

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(h)
The following table indicates the significant items in the consolidated balance sheets that would have been affected had the consolidated financial statements been prepared under
U.S. GAAP:

|                                    |  | As at December 31, 2001
|----------------------------------- |  | -----------------------
|
|Future tax assets                   |  | 96.0                   
|Other accrued liabilities           |  | 49.6                   
|Convertible Series Preferred Shares |  | 194.6                  
|Shareholders' equity                |  | 609.9                  

|                          |  | As at December 31, 2000
|------------------------- |  | -----------------------
|
|Future tax assets         |  | 102.1                  
|Other accrued liabilities |  | 28.0                   
|Magna's net investment    |  | 850.2                  

(i)
The Company does not recognize compensation expense for its outstanding fixed price stock options. Under U.S. GAAP, the Company is required to disclose compensation expense
assuming compensation expense for the stock option plan had been determined based upon the fair market value at the grant date, consistent with the methodology prescribed under Statement 123.

The
fair value of stock options is estimated at the date of grant using the Black Scholes options pricing model with the following weighted average assumptions:

|Risk free interest rate      |  | 4.6%   
|---------------------------- |  | -------
|Expected dividend yield      |  | 0.9%   
|Expected volatility          |  | 28%    
|Expected time until exercise |  | 5 years

The
Black Scholes options valuation model used by the Company to determine fair values was developed for use in estimating the fair value of freely traded options which are fully
transferable and have no vesting restrictions. In addition, this model requires the input of highly subjective assumptions, including future stock price volatility and expected time until exercise.
Because the Company's outstanding stock options have characteristics which are significantly different from those of traded options, and because changes in any of the assumptions can materially affect
the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options.

The
weighted average grant date fair value of options granted during 2001 amounted to $4.18.

On
a pro forma basis, under Statement 123, the 2001 net income attributable to Class A Subordinate Voting and Class B Shares, and basic and diluted
earnings per Class A Subordinate Voting or Class B Share would have been $17.7 million and $0.37 and $0.36, respectively.

(j)
Under Staff Accounting Bulletin 74, the Company is required to disclose certain information related to new accounting standards which have not yet been adopted due to delayed
effective dates.

Canadian GAAP standards:

Effective January 1, 2002, the Company will adopt the Canadian Institute of Chartered Accountants' new recommendations under Handbook Section 3062,
"Goodwill and other Intangible Assets" (CICA 3062). CICA 3062 requires the application of the non-amortization and impairment rules for existing goodwill and intangible assets,
which meet the criteria for indefinite life. In accordance with CICA 3062, the Company will apply the recommendations prospectively, without restatement of any comparative periods.

35

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Upon
adoption of the new recommendations, the Company will cease to record amortization of existing goodwill. The amortization relating to goodwill charged to income in 2001 was
$8.3 million. The Company is currently reviewing the new CICA pronouncement and evaluating the specific goodwill attributable to reporting segments and evaluating that goodwill for impairment.

U.S. GAAP standards:

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statements of Financial Accounting Standards No. 141, "Business Combinations"
and No. 142, "Goodwill and Other Intangible Assets". These standards reflect the same accounting requirements as CICA 1581 and CICA 3062, respectively.

In
addition, during 2001, FASB issued Statements of Financial Accounting Standards No.143, "Accounting for Asset Retirement Obligations" ("FAS 143") and No. 144,
"Accounting for the Impairment of Disposal of Long-Lived Assets" ("FAS 144").

FAS 143
requires that legal obligations arising from the retirement of tangible long-lived assets, including obligations identified by a company upon acquisition and
construction and furthering the operating life of a long-lived asset, be recorded and amortized over the assets' useful life using a systematic and rational allocation method.
FAS 143 is effective for fiscal years starting after June 15, 2001. The Company has not determined the impact, if any, of this pronouncement on its consolidated financial statements.

FAS 144,
which supersedes FAS 121, is effective for fiscal years beginning after December 15, 2001. FAS 144 provides guidance on differentiating between
assets held for sale and held for disposal other than by sale. Consistent with FAS 121, FAS 144 continues to require the same approach for recognizing and measuring the impairment of
assets to be held and used. The Company has not determined the impact, if any, of this pronouncement on its consolidated financial statements.

36

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