**Exhibit 13.1**

 

 

 

# ANNUALINFORMATION FORM

#  

For the yearended December 31, 2008

 

 

March 30,2009

 

----

 

**Table of contents**

 

Annual Information Form forthe year ended December 31, 2008

 
| ** **                                                                       | **Page**   |
|----------------------------------------------------------------------------------|------------|
| ** **                                                                       | ** ** |
| Documents incorporated by  reference                                             |       |
| Forward Looking Statements                                                       |       |
|                                                                             |       |
| Item 1 - Date of the Annual  Information Form                                    | 1          |
|                                                                             |       |
| Item 2 - Corporate Structure                                                     | 1          |
| 2.1  Name and Incorporation of the Company                                       | 1          |
| 2.2  Intercorporate Relationships                                                | 1          |
|                                                                             |       |
| Item 3 - General Development  of the Business                                    | 1          |
| 3.1  Three Year History                                                          | 1          |
| 3.2  Significant Acquisitions                                                    | 3          |
| 3.3  Trends                                                                      | 3          |
|                                                                             |       |
| Item 4 - Description of the  Business                                            | 3          |
| 4.1  General                                                                     | 3          |
| 4.2  Industry sector information                                                 | 4          |
| 4.2.1 Packaging Products  Sector                                                 | 4          |
| 4.2.1.1  Boxboard Group                                                          | 4          |
| 4.2.1.2  Containerboard Group                                                    | 5          |
| 4.2.1.3  Specialty Products Group                                                | 6          |
| 4.2.2 Tissue Papers Sector                                                       | 9          |
| 4.3  Research and development                                                    | 11         |
| 4.4  Competitive conditions                                                      | 11         |
| 4.5  Cycle components                                                            | 12         |
| 4.6  Environment                                                                 | 12         |
| 4.6.1 Regulations                                                                | 12         |
| 4.6.2 Environmental Mission                                                      | 12         |
| 4.7  Reorganizations                                                             | 12         |
| 4.8  Social policies                                                             | 12         |
| 4.9  Business Risks                                                              | 12         |
|                                                                             |       |
| Item 5 - Dividends                                                               | 12         |
|                                                                             |       |
| Item 6 - Capital  Structure                                                      | 13         |
| 6.1  General description of capital structure                                    | 13         |
| 6.2  Ratings                                                                     | 13         |
|                                                                             |       |
| Item 7 - Market for Securities                                                   | 14         |
| 7.1  Trading price and volume                                                    | 14         |
|                                                                             |       |
| Item 8 - Directors and Officers                                                  |       | 14 |
| 8.1  Information concerning Directors                                            | 14         |
| 8.2  Cease trade orders, bankruptcies, penalties or sanctions                    | 16         |
| 8.3  Information concerning Executive Officers                                   | 17         |
|                                                                             |       |
| Item 9 - Legal Proceedings                                                       | 17         |
|                                                                             |       |
| Item 10 - Transfer Agent and  Registrar                                          | 18         |
|                                                                             |       |
| Item 11 - Material Contracts                                                     | 18         |
|                                                                             |       |
| Item 12 - Interests of Experts                                                   | 19         |
|                                                                             |       |
| Item 13 - Audit Committee                                                        | 19         |
| 13.1  Composition and mandate                                                    | 19         |
| 13.2  Relevant education and experience of the members                           | 19         |
| 13.3  External auditors fees                                                     | 20         |
| 13.4  Policies and procedures for the engagement of audit and non-audit services | 20         |
|                                                                             |       |
| Item 14 - Additional  Information                                                | 20         |
|                                                                             |       |
| Schedule A — Charter of the  Audit Committee                                |       |
|                                                                                  |            |  |

 

----

 

**In this Annual Information Form,the terms “We”, “Us”, “Our”, and “Cascades” refer to Cascades Inc., itssubsidiaries, divisions and its interests in joint ventures. Except asotherwise indicated, all dollar amounts are expressed in Canadian dollars. Theinformation in this Annual Information Form  is stated as at December 31,2008, except as otherwise indicated, and except for information in documentsincorporated by reference that have a different date.**

 

# **DOCUMENTS INCORPORATED BY REFERENCE**

#  

The documents in thetable below contain information that is incorporated by reference into thisannual information form.

 
| **Documents**                                                                                                                                                                                           | ** ** | **Where they are incorporated in this  Annual Information Form** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------|
|                                                                                                                                                                                                    |       |                                                             |
| Cascades  Inc.’s 2008 Annual Report — Management’s discussion and analysis of financial  position and operating results, NEAR-TERM OUTLOOK, page 46, RISK  MANAGEMENT, page 50 |       | Items 3.3, 4.6.1 and 4.9                                         |

 

**FORWARD-LOOKINGSTATEMENTS**

 

**Certain statementsin this Annual Information Form or in documents incorporated by referenceare forward-looking statements within the meaning of the “safe Harbour”provision of the United States Private Securities Litigation Reform Act of 1995based on current expectations. The accuracy of these statements is subject to anumber of risks, uncertainties and assumptions that may cause actual results todiffer materially from those projected, including, but not limited to, theeffect of general economic conditions, decreases in demand for the Company’sproducts, the prices and availability of raw materials, changes in the relativevalues of certain currencies, fluctuations in selling prices and adversechanges in general market and industry conditions (See heading Business Risks).**

 

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

# **ITEM 1 —DATE OF THE ANNUAL INFORMATION FORM**

#  

This Annual Information Form (“AIF”) isdated as at March 30, 2009.  Exceptas otherwise indicated, the information contained in this AIF is stated as at December 31,2008.

 

# **ITEM 2 -CORPORATE STRUCTURE**

#  

## **2.1**          NAME ANDINCORPORATION OF THE COMPANY

## ** **

Cascades Inc. (hereinafter referred to as “Cascades” or the “Company”)was incorporated under the name Paper Cascades Inc./Cascades Paper Inc. underthe laws of the Province of Québec by letters patent issued on March 26,1964.  Supplementary letters patent wereissued on March 11, 1968, July 4, 1979 and October 19, 1979 toamend the authorized capital stock and the restrictions and privileges attachedto certain classes of shares of the Company.

 

Cascades was continued under thename Cascades Inc. under Part 1A of the *CompaniesAct* (Quebec) by Certificate of Continuance dated October 26,1982.  Certificates of Amendment wereissued on July 5, 1984, September 16, 1985 and May 13, 1986 topermit the subdivision of the Company’s Common Shares, as well as on July 15,1992, July 24, 1992, December 17, 1992 and July 20, 1993 inorder to modify the authorized share-capital and the restrictions and privilegesof certain classes of shares of the Company.

 

On December 30, 2003, inaccordance with Article 123.129 of the *CompaniesAct*(Québec), Cascades, by simplified amalgamation, merged with9135-2591 Québec Inc., a wholly owned subsidiary of the Company.  The articles of amalgamation and schedules aswell as the composition of the Board of Directors of the new company followingthe amalgamation are exactly the same as those of Cascades Inc. prior to theamalgamation.

 

Thehead office and corporate offices of Cascades are located at 404 Marie-VictorinBlvd., Kingsey Falls, Québec, J0A 1B0. Cascades also has administrative offices located at 772 SherbrookeStreet West, Suite 100, Montréal, Québec, H3A 1G1.

## ** **

## **2.2**          INTERCORPORATERELATIONSHIPS

## ** **

The following list sets out the principal wholly-owned subsidiaries ofCascades and their respective jurisdiction of incorporation as at December 31,2008:

 
| ** **                                       | ** ** | **Jurisdiction  of** |
|--------------------------------------------------|------------|----------------------|
| **Corporate Name**                               | ** ** | **Incorporation**    |
|                                             |       |                 |
| Cascades Canada Inc.                             |       | Canada               |
| Cascades Europe S.A.S.                           |       | France               |
| Cascades S.A.S.                                  |       | France               |
| Cascades Tissue Group — North Carolina Inc. |       | North Carolina       |
| Cascades Tissue Group — Pennsylvania Inc.   |       | Delaware             |
| Cascades USA Inc.                                |       | Delaware             |
| Dopaco, Inc.                                |       | Pennsylvania         |
| Metro Waste Paper Recovery Inc.                  |       | Canada               |
| Norampac Holding US Inc.                         |       | Delaware             |
| Norampac Industries Inc.                         |       | New York             |

 

# **ITEM 3 -GENERAL DEVELOPMENT OF THE BUSINESS**

#  

**3.1****         ****THREE YEAR HISTORY**

 

On December 29, 2006, inconnection with the acquisition of the remaining outstanding shares (50%) fromDomtar Inc. (“Domtar”) in Norampac Inc. (“Norampac”), the Company completed therefinancing of its $550 million credit facility originally put in place in 2005to provide for new $875 million (including $325 million of Norampac) creditfacilities consisting of a $650 million five-year secured revolving creditfacility maturing in December 2011, a $100 million secured termfacility maturing in October 2012 and a six-month $100 million seniorunsecured revolving credit facility.  Thesix-year term facility can be reimbursed without penalty at theCompany’s option any time prior to maturity. Its obligations under this newrevolving credit facility are secured by all inventory and receivables of theCompany and its North American subsidiaries and by the property, plant, andequipment of four of its mills. On June 27, 2007, the Company amended itscredit agreement to add a new twelve month unsecured revolving credit facilityin the amount of $100 million said credit facility having been renewed on May 22,2008 for an another twelve month period. On February 13, 2009, Cascades announced that it had entered into an agreement to amend its existingbank credit agreement. Under the terms of the amendment the existing financialcovenants, namely the maximum funded debt to capitalization ratio of 65% andthe minimum interest coverage ratio of 2.25x, remain unchanged until maturityin October 2012.  In considerationof this covenant extension the variable interest rate applicable to borrowingsoutstanding is increased by 200 basis points. The amendment also cancels theunsecured revolving credit facility in the amount of $100 million that wasoriginally scheduled to terminate in June 2009.  The amounts of the Company’s secured revolvingcredit and term facilities ($750 million and $100 million respectively) andtheir maturity dates (December 2011 and October 2012 respectively)remain unchanged.

 

On December 5, 2006,Cascades announced that it had reached an agreement in principle with Domtar topurchase Domtar’s 50% interest in Norampac, for a cash consideration of $560million. The Company also announced that it had secured commitments for thefinancing necessary to complete the transaction, namely a renewed creditfacility the terms of which are described hereinabove. Concurrently, theCompany announced that it had launched a $150 million Subscription Receiptoffering through a syndicate of underwriters to be issued to the publicpursuant to a short form prospectus to be filed with securities regulators ineach province of Canada with closing to occur on or about December 20,2006. Each subscription receipt gives the right to its holder to receive oneCommon Share on closing of the transaction. The

 

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

aggregate gross proceeds of the public offering together with theproceeds from the $50 million private placement at the public issue price to beused to finance the acquisition.

 

On December 20,2006, Cascades closed it’s a public offering of 15,095,000Subscription Receipts at a unit price of $13.25, for a total consideration of$200,008,750 held in escrow pending closing of the acquisition of theoutstanding shares (50%) held by Domtar in Norampac.  The completion of this transaction occurredon December 29, 2006, following a satisfactory response from theCompetition Bureau on December 14, 2006. Concurrently, the Company alsoclosed a $50 million private placement of 3,773,585 Subscription Receipts at aprice of $13.25 each. Each Subscription Receipt was converted into anequivalent number of Common Shares of the Company, concurrently with theclosing of the acquisition of the remaining 50% interest in Norampac, on December 29,2006.

 

On June 20, 2007, Cascades together with Reno deMedici S.p.A. (“RdM”), a public company based in Milan (Italy), announced thesigning of a Letter of Intent for the negotiation of the terms and conditions pertainingto a potential  combination of RdM’s andCascades S.A.’s European recycled cartonboard businesses.  Concurrently with the proposed merger, CascadesS.A. and a group of current shareholders of RdM were expected to enter into athree - year shareholders’ agreement covering matters related to corporategovernance  where Cascades S.A., on the one hand, and agroup of current RdM shareholders on the other hand, would be equallyrepresented on the Board of Directors of RdM. The agreement also provided for an 18-monthlock-up, followed by reciprocal first - refusal and tag-along rights.

 

On September 14, 2007, Cascades announcedthat the definitive combinationagreement and shareholders’ agreement had been signed. The combinationagreement was subject to certain conditions, including approval by appropriateregulatory authorities as well as by RdM shareholders. On October 29,2007, the shareholders of RdM approved the proposed merger of Cascades S.A.’srecycled boxboard businesses with their recycled boxboard activities at anextraordinary general meeting of shareholders. On February 7, 2008, thecompetition authorities approved the merger which was signed on February 26,2008 to take effect on March 1, 2008. As a result of this transaction, the Company contributed its recycledboxboard manufacturing assets, located in Blendecques, France, and Arnsberg,Germany, as well as its sheeting centre in Wednesbury, U.K., which had a netbook value of $92 million (€62 million) in exchange for 115.6 millionshares or 30.6% of outstanding shares in RdM, representing a contribution of$81 million (€54 million) and a cash consideration adjustment of $3million (€2 million). The Company also acquired an additional 2.6% of RdMshares on the open market in 2008. Its investment in RdM is proportionallyconsolidated since that date, as the Company and a group of currentshareholders have joint control of RdM.

 

***BoxboardGroup***

 

On April 21, 2006, Cascades announced thatit had reached an agreement with Caraustar Industries, Inc., to acquirethe assets of its coated recycled board mill located in Sprague (Connecticut)for an amount of US$14.5 million, subject to the approval of the environmentalauthorities of the State of Connecticut.

 

On April 25, 2006, Cascades announced that it had acquired certainof the assets of the paperboard division of Simkins Industries located inRidgefield (New Jersey) and in New Haven (Connecticut), in an amount of$14 million (US$12.5 million). These two mills were shut down by Simkins Industries.

 

On June 29, 2006, Cascades announced the shut down of itsFjordCell pulp mill for an indefinite period of time. The mill, whichspecializes in the production of bleached softwood kraft pulp, is located inJonquière (Québec). The closure affected approximately 70 employees.  The mill produced annually 82,000 tons ofkraft pulp and sold all of its production to other Cascades facilities, namely,Cascades Boxboard Group — Jonquière (Québec), and the Rolland Division of theCascades Fine Papers Group Inc. (Québec).

 

On July 19 and August 7, 2006, Cascades completedthe acquisition of the assets of two Caraustar Industries, Inc.’s coatedrecycled boxboard mills located in Sprague (Connecticut) and in Rittman (Ohio),for a purchase price of $18 million (US$15 million). Since theacquisition, the Sprague mill operates under the name Cascades BoxboardGroup-Connecticut LLC, Versailles Mill. Caraustar closed the Rittman plant.

 

On October 6, 2006, Cascades announcedthe temporary shut down of the Scierie Lemay Inc. sawmill, including itsfacilities, in L’Ascension (Québec) as well as those of its subsidiary RabotageLemay Inc. in Saint-François-de-Sales (Québec). The shutdown affected 200workers. ****On September 15, 2008****, Cascades announcedthat it has completed the sale of the assets of Scierie Lemay Inc. to ProduitsForestiers Arbec S.E.N.C. for a counterpart of $6 million paid in cash anda contingent consideration  of$2 million, which resulted in no gain or loss.

 

On January 25, 2007, Cascades announced thesale of its 40% interest in GSD Packaging, LLC, a U.S. food pail manufacturingcompany to Rock-Tenn Company. This transaction, amounted to $38 million ($US 32 million).

 

****On July 2, 2008, Cascades, through itsContainerboard Group Division (Norampac),**** announcedthe closure of its Toronto boxboard mill for an indefinite period of time.Nearly 140 employees were affected by this closure.  The Toronto mill has an annual productioncapacity of coated recycled boxboard of approximately 180,000 short tons.  This decision was taken to mitigate thenegative impacts of several factors such as high labour costs, growing fibresupply costs and rising energy costs.

 

***Containerboard Group- Norampac***

 

On September 7, 2007, Norampac announced thesale of its linerboard mill located in Red Rock (Ontario) and agreed to pay anamount of $10 million to the purchaser, North American Logistic Services, Inc.,in order to encourage the start-up of a new line of production at the facility. The Red Rock mill had ceased itsoperations for an indefinite period of time on October 3, 2006, due tounfavorable economic factors.

**** ****

****On March 18, 2008, Cascades’**** managementannounced the reorganisation of its North American boxboard and containerboard operationsand its containerboard operations. This reorganisation will enhance the sharingof technology while creating a larger packaging group that will be better ableto respond to the needs of customers in Canada and in the United States.

 

2

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

***SpecialtyProducts Group***

 

On February 28, 2006, the Companysold its paper merchant division known as Cascades Resources, a Division ofCascades Fine Papers Group Inc., to Coast Paper Limited, now known as Spicers,a division of PaperlinX Canada Limited for an amount of $86 million.

 

On August 24, 2006, Cascades announcedthe definitive closure of one of its two mills, which produced backing forvinyl flooring located in Boissy le Châtel (France) at the end of October 2006.The mill, which operated under the name Cascades Ste-Marie S.A.S., was acquiredin 1999 and employed 34 people.

 

On August 2, 2007, Cascades announced thatit had entered into an agreement with Honeycomb Products of Michigan (HPM) toacquire certain assets of HPM’s honeycomb board mill located in Grand Rapids (Michigan)for a counterpart of $11 million ($US10.4 million).

 

On December 21, 2007,Cascades concluded the sale of the assets of the mill of Cascades Fine PapersGroup Inc., Thunder Bay Division (Ontario) and paid an amount of $4.5 millionto the purchaser, Thunder Bay Fine Papers Inc., in order to support thestart-up of the plant.  The mill hadceased operations on January 21, 2006.

 

On January 7, 2008, Cascades proceeded to thesale of its Greenfield S.A.S. French deinking mill to Argowiggins, a subsidiaryof Sequana Capital, for a counterpart of $41 million (€28 million).

 

***TissueGroup***

 

On March 9, 2006, as part of the ongoingrationalization process of its activities and in an effort to optimize itseffectiveness and profitability, Cascades decided to permanently close itstissue conversion plant in Pickering (Ontario). Approximately 66 employees wereaffected by this closure. The equipment was redeployed in different CascadesTissue Group plants and mills in the United States and Canada.

 

On February 22, 2007, Cascades announced aninvestment of 17.4 millions $ ($15 million US) to equip itstissue mill in Memphis (Tennessee) with a deinking unit. This deinking unitwill enable the plant to be highly competitive.

 

On July 2, 2008,Cascades announced a $15 million investment towards the acquisitionof a high-tech conversion line for its Lachute (Quebec) tissue paperplant.  This investment will contributeto stepping up the production capacity of the plant, improving product qualityand improving competitiveness which will enable the Company to better serve itsindustrial and institutional customers.

 

**3.2****         ****SIGNIFICANTACQUISITIONS**

 

On December 29, 2006,Cascades completed the purchase of the outstanding Common Shares of Norampacthat the Company did not already own, representing 50% of the outstandingCommon Shares, for a cash consideration of $560 million (excluding thetransaction costs of $1 million) (the “Acquisition”).  Norampac is among the top ten manufacturersof containerboard in North America and the largest in Canada. Norampac is alsoan industry leader in corrugated products in North America and one of thelargest producers of corrugated products in Canada in terms of capacity. At thetime of the Acquisition, Norampac had 34 production facilities in Canada, theUnited States and France. As part of the transactions undertaken in connectionwith the Acquisition, Cascades, as sole shareholder of Norampac, wound up Norampac,such that all of the assets and liabilities previously belonging to Norampac,including Norampac’s 6.75% senior notes, maturing in 2013 and its creditfacility are assumed by Cascades who will hold all of the shares of Norampac’ssubsidiaries directly. On December 29, 2006, the Company filed on SEDAR,form 51-102F4, namely, the Business Acquisition Report in accordance withNational Instrument 51-102 of the Canadian Securities Administrators.

 

**3.3****         ****TRENDS**

 

Reference is made toManagement’s Discussion and Analysis in the 2008 Annual Report, specifically onpage 46 under the heading “NEAR-TERM OUTLOOK”, which is incorporated byreference.

 

# **ITEM 4 -DESCRIPTION OF THE BUSINESS**

#  

## **4.1**          GENERAL

## ** **

Established in 1964, Cascades is the parentcompany of a North American and European group of companies involved in theproduction, conversion and marketing of packaging products and tissue papersprincipally composed of recycled fibre. Cascades conduct its businessprincipally through two operating sectors, namely:

 

1) The **PackagingProducts**sector which includes:

i) The *Boxboard Group*, a manufacturer of premiumcoated boxboard and folding cartons;

ii) The *Containerboard Group*, a manufacturer of containerboard andleading converter of corrugated products; and

iii) The *Specialty ProductsGroup*, which manufactures specialty papers, industrial packaging andconsumer product packaging and is also involved in recovery and recycling.

 

2) The **Tissue****Papers**sector operates units that manufacture and convert tissue paper forthe commercial and institutional, and retail markets.

 

These two sectors include over 100 operating unitslocated in Canada, the United States, France, England and Sweden, and employover 12,500 people. This structure decentralizes authority while allowingcontinuous exchanges between sectors and a better coordination of all of theoperations.  Cascades sets strategicguidelines and ensures that corporate policies concerning acquisition andfinancing strategies, legal affairs, human resources management andenvironmental protection are applied by the subsidiaries, divisions andaffiliated companies.

 

3

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

**4.2****         ****INDUSTRY SECTOR INFORMATION**

 

### **4.2.1**       PACKAGING PRODUCTS SECTOR

### ** **

The packaging products sector isdivided into three groups of activities: the Boxboard Group, the ContainerboardGroup and the Specialty Products Group.

 

#### **4.2.1.1**   BOXBOARD GROUP

#### ** **

The Boxboard Group operates six millsthat produce coated boxboard for conversion into folding cartons andmicro-flute packaging, with a total annual production capacity of 740,000metric tons.  Three of these mills arelocated in Canada, one in the United States, one in France and one in Sweden.

 

Approximately 47% of theBoxboard Group’s production of boxboard is made of entirely recycled fibre, and18% of its output is produced with a high content of recycled fibre and thebalance of virgin fibre. Vertically integrated upstream, the Boxboard Groupobtains its supply of wastepaper through its own recovery networks andaffiliates, as well as through long-term agreements with independentsuppliers.  It operated a chemical pulpmill in Jonquière (Québec), Cascades FjordCell, as well as a sawmill, ScierieLemay Inc., the operations of which ceased in 2006, for an indefinite period oftime.  The assets of Scierie Lemay Inc.were sold in 2008, as described in heading 3.1 “Three Year History”.

 

In North America, the BoxboardGroup is also vertically integrated downstream via its Folding Carton Division.The division’s five plants, one in Québec, two in Ontario, one in Manitoba andone in Kentucky in the United States annually convert some 92,000 metric tonsof boxboard or 2.5 billion boxes per year, supplied mainly by its Canadianboxboard mills. These plants design, develop and produce packaging solutionsthat meet the specific needs of companies operating mainly in the food, fastfood, cosmetics, pharmaceutical and distillation industries.

 

Dopaco, Inc. operates sixplants (two in Ontario and four in the United States) converting some 170,000tons of boxboard a year, which mostly comes from the Cascades boxboard mills,into folding cartons and cups.  It alsohas interests in a joint venture in the United States, Union Packaging, LLC, andhas sold its 40% interest in GSD Packaging, LLC at the beginning of the year2007, as described in the heading 3.1 “Three Year History”.

 

In 2008, the Boxboard Group hadsales of $1.323 billion, compared to $1.343 billion in 2007.  The sales of cartonboard geographically wereas follows: i) for the mills outside of North America : 93% in Europeancountries and 7% elsewhere; ii) for the North American mills: 36% in Canada and64% in the United States.  Globally in 2008,22%, 27%, 49% and 2% of the sales of this Group were generated in Europe,Canada, the United States and other countries.

 

As at December 31, 2008,the Boxboard Group employed more than 3,000 people in 15 facilities in NorthAmerica and two facilities in Europe.

 

The following table lists theplants owned by the Boxboard Group, the approximate annual production capacityof the facilities or shipments and the products manufactured or the operationscarried out therein, as the case may be, in 2008:

 
| ** **                                                                          | ** ** | ** **                                                    |   | **Annual capacity or******             | ** ** |
|-------------------------------------------------------------------------------------|------------|---------------------------------------------------------------|--------|----------------------------------------|------------|
| **Facilities**                                                                      | ** ** | **Products / Services**                                       |   | **Shipments**                          |       |
| **Manufacturing**                                                                   |       |                                                          |   | **Annual  capacity****In Metric tons** |       |
| Toronto (Ontario)                                                                   |       | 100% recycled coated boxboard                                 |   | 165,000(1)                             |       |
| Jonquière (Québec)                                                        |       | From 100% virgin to 100% recycled coated  boxboard            |   | 147,000                                |       |
| East Angus (Québec)                                                            |       | 100% recycled coated boxboard                                 |   | 67,000                                 |       |
| Versailles (Connecticut)                                                            |       | 100% recycled coated boxboard                                 |   | 140,000                                |       |
| LaRochette (France)                                                                 |       | Coated boxboard                                               |   | 160,000                                |       |
| Cascades Djupafors A.B. (Sweden)                                                    |       | Light-weight coated boxboard, virgin fibre                    |   | 61,000                                 |       |
| **Converting**                                                                      | ** ** |                                                          |   | **Shipments****In  Metric tons**       |       |
| Mississauga (Ontario)                                                               |       | Processing and printing of boxboard for  folding cartons      |   | 24,000                                 |       |
| Cobourg (Ontario)                                                                   |       | Processing and printing of boxboard for  folding cartons      |   | 21,000                                 |       |
| Winnipeg (Manitoba)                                                                 |       | Processing and printing of boxboard for  folding cartons      |   | 19,000                                 |       |
| Lachute (Québec)                                                               |       | Processing and printing of  boxboard for folding cartons      |   | 11,000                                 |       |
| Hebron (Kentucky)                                                                   |       | Processing and printing of  boxboard for folding cartons      |   | 17,000                                 |       |
| Dopaco, Inc.  (Pennsylvania, California, North Carolina, Illinois and Ontario) |       | Packaging products for the quick-service  restaurant industry |   | 170,000                                |       |

 

4

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

----

## **(1) **TheToronto boxboard mill was closed for an indefinite period of time in the thirdquarter of 2008.

## ** **

#### **4.2.1.2**   CONTAINERBOARD GROUP

#### ** **

The Containerboard Group, doingbusiness under the name Norampac, employs more than 4,400 people in its 33 containerboardmills and corrugated products converting plants in Canada, the United Statesand France.  Seven linerboard andcorrugated medium mills in Canada, the United States and France have a combinedannual production capacity of 1.27 million short tons, dedicated tospecialty papers such as white-top or colored-top linerboard. The productsmanufactured by the seven manufacturing mills consist of 35% linerboard and 65%corrugating medium. Approximately 65% of their North American output isconverted by Norampac’s 26 corrugated products plants, strategically locatedacross Canada and the United States.

 

In 2008, consolidated sales ofthis group amounted to $1.2 billion, compared to $1.193 billion in2007, mainly allocated as follows: 65% in Canada, 26% in the United States and 9%outside of North America. Its own sales force carries out the sales of thisgroup together with sales agents for export purposes.

 

The Containerboard Grouppurchases all of its needs in virgin fibre in Québec and Ontario, and purchasesits recycled fibre equally in the United States and in Canada.  The corrugated products group purchasesnearly all of its raw material needs directly from the Containerboard Group’smills.

 

The following table lists themills and converting plants of the Containerboard and Corrugated Products Groupand the approximate annual production capacity or shipments of each facility aswell as the products manufactured or, where applicable, their activities in 2008

 
| **Facilities**                                              | ** ** | **Products / Services**                                     | ** ** | **Annual capacity or****Shipments**   | ** ** |
|-------------------------------------------------------------|------------|-------------------------------------------------------------|------------|---------------------------------------|------------|
| **Containerboard**                                          | ** ** | ** **                                                  | ** ** | **Annual  Capacity****In Short tons** | ** ** |
| Norampac Industries Inc.,  NiagaraFalls Division (New York) |       | 100% recycled corrugating  medium                           |       | 275,000                               |       |
| Norampac Avot Vallée SAS  (France)                     |       | 100% recycled corrugating  medium and linerboard            |       | 155,000                               |       |
| Kingsey Falls (Québec)                                 |       | 100% recycled linerboard                                    |       | 103,000                               |       |
| Cabano (Québec)                                        |       | Corrugating medium                                          |       | 242,000                               |       |
| Trenton (Ontario)                                           |       | Corrugating medium in various  basis weights                |       | 194,000                               |       |
| Mississauga (Ontario)                                       |       | 100% recycled linerboard                                    |       | 173,000                               |       |
| Burnaby (British Columbia)                                  |       | 100% recycled corrugating  medium and gypsum paper          |       | 128,000                               |       |
| **Corrugated Products**                                     | ** ** |                                                        |       | **Shipments****In Square feet**       |       |
| Newfoundland (St. John’s)                              |       | Corrugated packaging                                        |       | 147,000,000                           |       |
| Moncton (New Brunswick)                                     |       | Corrugated packaging                                        |       | 370,000,000                           |       |
| Québec (Québec)                                   |       | Variety of  corrugated packaging containers                 |       | 502,000,000                           |       |
| Drummondville (Québec)                                 |       | Corrugated packaging  containers for medium or heavy volume |       | 776,000,000                           |       |
| Victoriaville (Québec)                                 |       | Corrugated packaging of all  sizes                          |       | 345,000,000                           |       |
| Vaudreuil (Québec)                                     |       | Variety of corrugated  packaging containers                 |       | 870,000,000                           |       |
| SPB - Dispac, Montréal  (Québec)                  |       | Variety of corrugated  packaging containers                 |       | 650,000,000                           |       |
| Le Gardeur (Québec)                                    |       | Corrugated sheets, packaging  and pallets                   |       | 85,000,000                            |       |
| Belleville (Ontario)                                        |       | Variety of corrugated  packaging containers                 |       | 308,000,000                           |       |
| Etobicoke (Ontario)                                         |       | Variety of corrugated  packaging containers                 |       | 529,000,000                           |       |
| Jellco, Barrie (Ontario)                                    |       | Variety of corrugated  packaging containers                 |       | 108,000,000                           |       |

 

5

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 
| Peterborough (Ontario)                                        |   | Corrugated sheets, packaging  and pallets                |   | 85,000,000              |   |
|---------------------------------------------------------------|--------|----------------------------------------------------------|--------|-------------------------|--------|
| St-Mary’s  (Ontario)                                     |   | Corrugated  packaging                                    |   | 905,000,000             |   |
| OCD, Mississauga (Ontario)                                    |   | Corrugated packaging                                     |   | 896,000,000             |   |
| Vaughan (Ontario)                                             |   | Corrugated sheets                                        |   | 1,946,000,000           |   |
| North York (Ontario)                                          |   | Single face sheets,  co-packaging and display operations |   | 37,000,000              |   |
| Lithotech, Scarborough  (Ontario)                             |   | Single face laminate                                     |   | 197,000,000             |   |
| Winnipeg (Manitoba)                                           |   | Waxed corrugated containers                              |   | 530,000,000             |   |
| Saskatoon (Saskatchewan)                                      |   | Corrugated product packaging                             |   | 22,000,000              |   |
| Calgary (Alberta)                                             |   | Die cut boxes                                            |   | 496,000,000             |   |
| Richmond (British Columbia)                                   |   | Corrugated packaging                                     |   | 459,000,000             |   |
| Norampac New York City Inc.(New  York)                        |   | Graphic packaging and  industrial box mix                |   | 899,000,000             |   |
| Norampac Leominster Inc.(Massachusetts)                       |   | Industrial box mix                                       |   | 601,000,000             |   |
| Norampac Schenectady Inc.(New  York)                          |   | Variety of corrugated  packaging containers              |   | 642,000,000             |   |
| Norampac  Industries, Inc., LancasterDivision (New York) |   | Variety of corrugated  packaging containers              |   | 379,000,000             |   |
| Norampac Thompson Inc.(Connecticut)                           |   | Variety of corrugated  packaging containers              |   | 212,000,000             |   |
| **Services**                                                  |   |                                                     |   |                    |   |
| Art & Die, Etobicoke  (Ontario)                      |   | Graphic art and printing  plates                         |   | 3,711,000 square inches |   |

 

#### **4.2.1.3**   SPECIALTY PRODUCTS GROUP

 

The Specialty Products Group operates in fourmain sectors of activity, namely : industrial packaging, consumer productpackaging, specialty papers, as well as in recovery and recycling.  This  group has 44 units located in North Americaand Europe and employs more than  2,500 people. In 2008, sales of this group amounted to$860 million, compared with $834 million in 2007.

 

##### ***a)****           **IndustrialPackaging Products*

##### ** **

 Cascades Conversion Inc.,Converdis Inc. and Cascades Sonoco Inc., joint venture companies, convertuncoated board, obtained in part within the Cascades network, into industrialpackaging materials for the pulp and paper industry, such as roll headers andpaperboard packaging from rolls of newspaper. Cascades Conversion Inc., manufactures as well a unique model of heatplate for sealing roll edges. This sector of the SpecialtyProducts Group is the leader in the North American market.  The sales for these mills are handled bytheir own sales force.  In 2008, onecustomer accounted for 26% of sales and the principal geographic market is theUnited States with 65%, followed by the province of Québec at 23% and by otherCanadian provinces at 12%.

 

CascadesRollpack S.A.S., a wholly owned subsidiary of the Company, operates two plantsin France at Saulcy-sur-Meurthe and Châtenois, which manufacture roll headersmade of linerboard and uncoated paperboard obtained from within European papermills.  The sales of these mills are madethrough their own sales perspectives.  In2008, one customer accounted for 9% of the products sold and the principalgeographic market is Europe with France at 36%, Germany at 27%, Sweden at 10%and other various countries at 27%.

 

CascadesMulti-Pro, located in Drummondville (Québec) manufactures laminated boards usedin many industrial sectors as well as honeycomb paperboard. The Cascades EnviropacBerthierville (Québec) and Toronto (Ontario) plants as well as CascadesEnviropac HPM LLC in Grand Rapids (Michigan) manufacture honeycomb paperboardused as industrial packaging in general. The sales for these mills are handled by internal and external sales representatives.  In 2008, their most important customeraccounted for 7% of sales and the principal geographic market is the provinceof Ontario with 32%, followed by the United States at 50%, Québec at 18%, andby other Canadian provinces with less than 1%. The supply of uncoated board isprincipally obtained within the Cascades network.

 

CascadesPapier Kingsey Falls (Québec) produces uncoated board using 100% recycledfibre. This board is used mainly by converters specializing in commercial andindustrial packaging such as headers and wrappers for the paper industry aswell as spacers and partitions used to package products. This division producesapproximately 92,000 metric tons of which 28% is sold to affiliated companieswhile the balance is sold to third parties of which three representrespectively 27%, 7% and 5% of sales. 63% of total sales are made to customers 

 

6

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

located inQuébec.  Raw material is sourced principallyin Québec (72%), as well as in Ontario (22%) and in the United States (6%).  Products are delivered principally by, inorder of importance: by truck, rail, and ships.

 

The followingtable lists the main mills of the industrial packaging products sector and theapproximate annual production capacity of each facility as well as the productsmanufactured or, where applicable, their activities in 2008:

 
| **Facilities**                                                            | ** ** | **Products**                                                         | ** ** | **Annual capacity********in metric tons or square feet** | ** ** |
|---------------------------------------------------------------------------|------------|----------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|
|                                                                      |       |                                                                 |       |                                                                                   |       |
| Cascades  Conversion Inc.Kingsey Falls (Québec)                      |       | Roll headers and packaging products                                  |       | 65,000                                                                                 |       |
| Converdis  inc.Berthierville (Québec)                                |       | Packaging products                                                   |       | 50,000                                                                                 |       |
| Cascades  Sonoco Inc., Birmingham (Alabama)                               |       | Roll headers and packaging products                                  |       | 50,000                                                                                 |       |
| Cascades  Sonoco Inc., Tacoma (Washington)                                |       | Roll headers and packaging products                                  |       | 30,000                                                                                 |       |
| Cascades  Rollpack S.A.S., Saucy-sur- Meurthe and Châtenois (France) |       | Roll headers and packaging reams                                     |       | 30,000                                                                                 |       |
| Cascades  Multi-ProDrummondville (Québec)                            |       | Sheeting, dividers, laminated board and honeycombpackaging  products |       | 25,600                                                                                 |       |
| Cascades  Enviropac, Berthierville(Québec)                           |       | Honeycomb packaging products                                         |       | 8,000                                                                                  |       |
| Cascades  Enviropac — Toronto(Ontario)                               |       | Honeycomb packaging products                                         |       | 6,000                                                                                  |       |
| Cascades  Enviropac HPM LLC, Grand Rapids (Michigan)                      |       | Honeycomb packaging products and other packaging products            |       | 12,000                                                                                 |       |
| Cascades  Papiers Kingsey Falls(Québec)                              |       | Uncoated board                                                       |       | 92,000                                                                                 |       |

 

##### ***b)****           **Consumerproduct packaging*

##### ** **

Three mills manufacture mouldedpulp products, Cascades Forma-Pak in Kingsey Falls (Québec), Cascades MouldedPulp, Inc., in North Carolina (United States) and Cascades MouldedPulp-Brantford (Ontario).  This latterceased operations in August 2009, due to unfavorableeconomic factors.  The manufactured moulded pulp products of 100%recycled material, are primarily destined for poultry farms and thequick-service restaurant business in Canada (42%) and the United States (58%).  This sector of the Specialty Products Groupproduces mainly filler flats designed for egg processors, trays and specialtypackaging products.  Salesrepresentatives and a network of sales agents serve customers; six of thempurchase 62% of sales.  Raw material forthese moulded pulp products is composed of 100% recycled material.  Competition comes principally from Canada andthe United States.

 

PlastiquesCascades, located in Kingsey Falls (Québec), and Cascades Plastics Inc.,located in Warrenton (Missouri), specialize in the food industry,notably, packaging for the quick-service restaurant business and specialized packagingfor the meat processing industry.  Theprincipal raw material used is polystyrene. Sales representatives and a network of sales agents serve Canada and theUnited States.

 

PlastiquesCascades - Re-Plast, located in Notre-Dame-Du-Bon-Conseil (Québec),recycles waste plastic generated by selective collection and industrial waste.The principal products are building constructionboards, 100% recycled plastic or wood-plastic composite commercialized under the name Perma-Deck®,manufactured from post-consumer and post-industrial recycled plastic and woodresidue.  A variety of outdoorfurnishings for outdoor use, commercialized under the name Urbain Design®,completes this list.  Products are soldthrough sales agents, manufacturing agents and distributors.  Competition comes mainly from the UnitedStates and Ontario.

 

Cascades Inopak located inDrummondville (Québec), specializes in the thermo moulding of rigid sheets ofplastic and moulding by injection. Its principle products are wrappers forpackaging coins sold under the trade name Plastichange® and a complete line ofmulti-use containers known under the trade marks BenpacTM and VuPackTM for theretail sale and packaging of food and industrial products such as productsunder the trade mark Frig-O-Seal®. Products are sold through distributors and agents.  The principal raw materials used are P.E.T.,polypropylene, clear polystyrene, PVC and the compostable plastic P.L.A.  Competitively, four principal players in theUnited States and Canada share in a highly consolidated market with  pressure being felt from Asia.

 

7

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

Sales for these plastic unitsare allocated as follows:

 
| **Territory**       | ** ** | **2007** | ** ** | **2008** | ** ** |
|---------------------|------------|----------|------------|----------|------------|
| Québec         |       | 42       | %          | 47       | %          |
| Ontario             |       | 19       | %          | 16       | %          |
| The rest of  Canada |       | 5        | %          | 1        | %          |
| United  States      |       | 34       | %          | 36       | %          |

 

The followingtable lists the mills in the consumer product packaging sector and theapproximate annual production capacity of each facility as well as the productsmanufactured or, where applicable, their activities in 2008:

 
| **Facilities**                                                              | ** ** | **Products**                                             | ** ** | **Annual capacity********in kilograms** | ** ** |
|-----------------------------------------------------------------------------|------------|----------------------------------------------------------|------------|---------------------------------------------------|------------|
|                                                                        |       |                                                     |       |                                              |       |
| Plastiques  CascadesKingsey Falls (Québec)                             |       | Polystyrene foam containers                              |       | 9,500,000                                         |       |
| Cascades  Plastics Inc.Warrenton (Missouri)                                 |       | Polystyrene foam containers                              |       | 5,000,000                                         |       |
| Plastiques  Cascades — Re-PlastNotre-Dame-du-Bon-Conseil (Québec) |       | Park furniture, patio and balcony planks, plastic lumber |       | 6,000,000                                         |       |
| Cascades  InopakDrummondville (Québec)                                 |       | Coin wrappers, multi-use packaging                       |       | 5,000,000                                         |       |
| Cascades  Forma-PakKingsey Falls, (Québec)                             |       | Filler flats, trays, specialty packaging products        |       | 11,000,000                                        |       |
| Cascades  Moulded Pulp, Inc.,Rockingham (North Carolina)               |       | Filler flats, trays and specialty packaging products     |       | 5,000,000                                         |       |
| Cascades  Moulded Pulp — Brantford(Ontario)                            |       | Trays                                                    |       | 2,500,000                                         |       |

##### ** **

##### ***c)****   **S**pecialty paper*

##### ** **

Cascades Lupel, located inTrois-Rivières (Québec) manufactures backing for vinyl flooring sold under thetrademarks EndorexTM, AbsorbakTM and GuardfloTM. Sales for these units are made primarily in the United States (53%), Canada(38%) and in Mexico and Europe (9 %). The products are delivered principally by truck and rail.  The mill’s annual production capacity is55,000 metric tons.  The raw materialsare easily available and the mill sources 83% of its needs from the UnitedStates, the remainder is sourced in Canada.

 

The CascadesEast Angus (Québec) mill manufactures many types of specialized kraft papersuch as butcher paper, paper for envelopes, paper for asphalt coating,antifungal paper and many others, such as paper, which withstands grease ormoisture.  These types of specialty paperallow the unit to maintain a competitive share within the kraft papermarket.  The annual capacity of this millis 100,000 metric tons.  The majority ofits sales are in the United States (62% in 2008). Products are deliveredprincipally by truck and rail. Its most important customer accounts for 10% ofsales. Its products may contain 0% to 100% of recycled fibre depending oncustomer requirements.  The supply oftreated and recycled fibres, which is stable, comes from Canada (22% with 86%in Québec) and the United States (78%). Most of the natural fibre comes from Québec’s private forests.  By increasing its bark steam production (53%),this mill substantially reduces its costs, compared to natural gas and oilproduction users.

 

Cascades AuburnFiber Inc. (Maine), with an annual capacity of 75,000 metric tons, manufacturesfrom waste paper material a high-gloss de-inked pulp used for the production oftissue and fine paper.  51% of sales aremade in the United States and 49% are made in Canada.  The three most important customers accountfor 17%, 13 %, and 11% of sales respectively.

 

Greenfield’splant, located at Château-Thierry, in France, manufactured from waste papermaterial a high gloss de-inked pulp used for the production of fine paper andtissue.  This plant with an annualcapacity of 130,000 metric tons was sold on January 7, 2008, as described in heading 3.1 “Three Year History”.

 

Cascades Fine Papers Group Inc.,Rolland Division operates a plant in Saint-Jérôme (Québec) and manufacturesover 100 types of uncoated fine paper. Aside from paper destined for copying, business forms and envelopes,this division is increasingly involved in the niche markets for high-endrecycled paper and specialty paper for commercial and security printing. TheRolland Division paper products are made from virgin fibre (47 %) andrecycled fibre (53 %). The products are sold under such names as RollandEnviro100TM, Rolland Opaque30TM,Rolland ST30TM, Rolland Hitech30TM,ReproPlusBrite®, Rockland®,Superfine Linen RecordTM and Colonial BondTM.  Through its sales representatives, theRolland Division sells 57% of its products in Canada, 40% in the Americannortheast and 3% in South America.

 

The Breakey Fibres Division,located in Sainte-Hélène-de-Breakey (Québec) operates a mill specializing inthe production of high-end de-inked kraft pulp, a product that meets anincreasing demand for uncoated fine papers containing recycled fibre. TheBreakey Fibres Division 

 

8

----

 
|  | ***Annual Information Form*** |
|--|-------------------------------|

 

is supplied with waste papercoming from Eastern Canada and from the United States.  In 2008, almost 70% of the output of thisfacility was used at the Rolland Division and 16% by operating units of theCascades Group. The remaining production is sold on the open market.

 

The ConvertingCentre Division, located in Saint-Jérôme (Québec), owns and operates a sheetingcentre with an annual capacity of 110,000 short tons.  The Centre offers warehousing services with acapacity of 7,000 short tons.  It offerssheeting, warehousing and distribution services to the other divisions of the finepapers sector as well as to outside customers.

 

The Canadian and American markets for finepapers products are very competitive and despite a decrease in demand of onemillion short tons in 2008, sales prices (in US$) remained clearly above thelast ten year average, considering that the  production capacity decrease was  equal to the demand decrease. In 2008, fibrerepresented approximately 49% of total operating costs in its plants.  The fine papers sector is fully integratedfor recycled pulp.  Its primary sourcefor softwood and hardwood kraft pulp needs is Canada.The pulpand paper industry is recognized for its cyclical character; the coated anduncoated fine papers segment is no exception.

 

The followingtable lists the mills of the specialized papers sector and the approximateannual production capacity of each facility as well as the productsmanufactured or, where applicable, their activities in 2008:

 
| **Facilities**                                                                                             | ** ** | **Products / Services**                    | ** ** | **Annual capacity****(MT : metric tons****ST : short tons)** |
|------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|--------------------------------------------------------------|
|                                                                                                       |       |                                       |       |                                                         |
| Cascades LupelTrois-Rivières  (Québec)                                                           |       | Manufacture of backing for  vinyl flooring |       | 55,000 MT                                                    |
| Cascades East Angus (Québec)                                                                          |       | Manufacture of kraft paper                 |       | 100,000 MT                                                   |
| Cascades Auburn Fiber Inc.  (Maine)                                                                        |       | Manufacture of de-inking pulp              |       | 75,000 MT                                                    |
| Cascades Fine Papers Group  Inc.,  Rolland DivisionSaint-Jérôme (Québec)                    |       | Manufacture of uncoated fine  paper        |       | 150,000 ST                                                   |
| Cascades Fine Papers Group  Inc.,  Breakey Fibres DivisionSainte-Hélène-de-Breakey (Québec) |       | Manufacture of de-inked kraft  pulp        |       | 75,000 MT                                                    |
| Cascades Fine Papers Group  Inc.,Converting  Center Division  Saint-Jérôme (Québec)         |       | Converting of fine papers                  |       | 110,000 ST                                                   |

 

### ***d)****           **Recovery and recycling*

 

Cascades Recovery, with its recovery centerslocated in Lachine, Sherbrooke and Chelsea (Québec) and its brokering activities handled in 2008 more than 180,000 metrictons of waste, of which 163,000 metric tons were fibers.  In August 2008, the division ceased theoperations of the Chelsea recovery center and transferred its related assets toVille de Gatineau (Quebec).  In this sameperiod, 94% of its sales were in Canada, with 6% in export, principally to theUnited States, Asia and Cuba.  Most ofits business is done within the Cascades Group or its partners.  Waste paper supply is obtained fromindustrial, commercial and institutional users as well as curbside collectionin municipalities.

 

Metro WastePaper Recovery Inc., held at 73% by Cascades, offers a complete line ofservices related to recovery and recycling of waste in the provinces ofOntario, Manitoba, Alberta and British Columbia (Canada), as well as in the UnitedStates (New York).  In 2008, these plantsrecovered more than 1,300,000 metric tons of paper and carton with 54% of salesmade in Canada, 40% in the United States and 6% in export.  Cascades’ majority holding in this company wasobtained following the acquisition of the shares of Norampac Inc. in December 2006,as described in heading 3.1 “ Three Year History ”.

 

### **4.2.2**       TISSUE PAPERS SECTOR

### ** **

The tissue papers units manufacture,convert and market a vast array of products mainly made with recycled fibre andintended for the commercial and industrial and retail markets.  Its lines of bathroom tissue, facial tissue,paper towels, paper hand towels, paper napkins and other related products aresold under the labels Decor®, Horizon® North River® and Wiping Solutions® inthe commercial and industrial Canadian and American markets.  In the retail market, products areprincipally marketed under private labels and under the label Cascades® inCanada and Nature’sChoice®, Pert® and Best Value® inthe United States.  In 2008, one clientaccounted for 19 % of sales. In addition, the Tissue Group also sellsparent rolls of bathroom tissue, paper towels, paper hand towels and specialtypapers to a large number of converters. One client accounted for 65% of parent roll sales.  In 2008, one client accounted for 19% ofoverall sales in the retail, commercial and industrial markets, and parentrolls.  Products are sold through sales representativesand trucks deliver the merchandise.

 

The TissueGroup sales for 2008 amounted to $787 million compared to $713 million in 2007.  In 2008, Tissue Group’s production was sold as follows: in the UnitedStates, 72% and in Canada, 28%. The Canadian mills generated 66% of the totalrevenue in Canada and 34% in the United States. The Americanmills generated 95% of the total revenue in the United States.  14  manufacturing, converting anddistribution plants employ more than 1,700 people.

 

The Candiac plant in Québecmanufactures tissue paper made from recycled fibres and converts it intobathroom tissue, paper towels and paper napkins.  These products are mainly sold in the retailmarket as well as the commercial and industrial markets, both in Canada and inthe United States.  The production notconverted at the Candiac mill is transferred to the Laval, Lachute (Québec) andWaterford (New York) plants or is sold in parent rolls to other converters.

 

9

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

The Lachute plant in Québec specializes inthe manufacturing and converting of industrial use paper hand towels andconverting of industrial use bathroom tissue. These products are mainly destined to the Canadian and Americancommercial and industrial markets.  Theproduction not converted is transferred to the Rockingham (North Carolina)plant.

 

The Laval plant in Québec specializes in theconverting of tissue paper into paper napkins for the Canadian and American foodand fast food industries.

 

The Kingsey Falls plant in Québecmanufactures tissue paper made from recycled fibres and converts it intobathroom tissue, paper towels, paper hand towels and facial tissue. Theseproducts are mainly sold in the retail market as well as the commercial andindustrial markets, both in Canada and the United States.  The production not converted is transferredto the Laval (Québec) and Waterford (New York) plants or is sold in parentrolls to other converters.

 

Cascades Tissue Group - NorthCarolina Inc., with its Rockingham plant, manufactures tissue paper made fromrecycled fibres and converts it into bathroom tissue, paper towels, paper handtowels, paper napkins and facial tissue. These products are mainly sold in the American commercial and industrialmarkets.   The production not converted issold in parent rolls to other converters.

 

Cascades Tissue Group - IFCDisposables Inc.’s plant is located in Brownsville (Tennessee) and specializesin the converting of tissue papers into industrial wiping products as well asthe distribution of bathroom tissue, paper towels and incontinenceproducts.  These products are sold in thecommercial and industrial markets in the United States.

 

Cascades Tissue Group - WisconsinInc.’s plant, in Eau-Claire, manufactures tissue paper made from recycledfibres and converts it into bathroom tissue, paper towels, facial tissue andpaper napkins.  These products are mainlysold in the retail market in the United States. The non-converted production is sold in parent rolls to otherconverters.

 

Cascades TissueGroup - Pennsylvania Inc., which has plants in Ransom and Pittston,manufactures tissue paper made from recycled fibres and converts it intobathroom tissue, paper towels, facial tissue and paper napkins.  These products are mainly sold in the retailmarket in the United States.  Thenon-converted production is transferred to the Waterford (New York) plant or issold in parent rolls to other converters.

 

Cascades Tissue Group - OregonInc., in St-Helens, produces parent rolls made of 100% virgin fibres.  The production is transferred to the Arizonaplant or is sold to other converters.

 

The Waterford Division of Cascades TissueGroup - New York Inc. specializes in the conversion of tissue paperinto bathroom tissue, paper towels, paper napkins and industrial use paper handtowels.  These products are mainly soldin the retail market as well as the commercial and industrial markets in theUnited States. The Mechanicville (New York) Division produces parent rolls madefrom recycled fibres. The production is transferred to the Waterford Division(New York) or is sold to other converters.

 

Cascades Tissue Group - ArizonaInc. operates a plant in Kingman, and specializes in the conversion of tissuepaper into bathroom tissue, paper towels, paper hand towels and papernapkins.  These products are mainly soldin the retail market in the United States.

 

The Memphis plant of Cascades TissueGroup - Tennessee Inc. produces parent rolls of tissue paper madefrom recycled fibres. The production is sold to other converters.

 

Best Diamond Packaging, LLC, a joint venture,operates a plant in Kingston, North Carolina, and specializes in the conversionof tissue paper into paper hand towels for the American food and quick-servicerestaurant markets.

 

The following table lists the plants andmills of the Tissue Group and the approximate annual production capacity ofeach facility as well as the products manufactured or, where applicable, theiractivities in 2008:

 
| **Facilities**                                                 | ** ** | **Products / Services**                                                         | ** ** | **Annual capacity in  short tons** | ** ** |
|----------------------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|------------------------------------|------------|
| **Manufacturing /**Converting                                  |       |                                                                            |       |                               |       |
| Candiac (Québec)                                          |       | Paper towels, bathroom tissue, paper  napkins                                   |       | 73,000                             |       |
| Lachute (Québec)                                          |       | Paper hand towels, bathroom  tissue                                             |       | 48,000                             |       |
| Kingsey Falls (Québec)                                    |       | Paper towels, facial tissue,  bathroom tissue, paper hand towels                |       | 104,000                            |       |
| Cascades Tissue Group –North  Carolina Inc.  (Rockingham) |       | Paper towels, facial tissue,  bathroom tissue, paper napkins, paper hand towels |       | 65,000                             |       |
| Cascades Tissue Group –  Wisconsin Inc.  (Eau Claire)     |       | Paper towels, bathroom tissue,  facial tissue and paper napkins                 |       | 56,000                             |       |

 

10

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 
| Cascades Tissue Group –  Pennsylvania Inc.  (Ransom and Pittston)      |   | Paper towels, bathroom tissue,  facial tissue and paper napkins                             |   | 67,000 |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|--------|--------|
| **Manufacturing**                                                           |   |                                                                                        |   |   |   |
| Cascades Tissue Group – Oregon  Inc.(St-Helens)                        |   | Parent rolls                                                                                |   | 71,000 |   |
| Cascades Tissue Group –  Tennessee Inc.  (Memphis)                     |   | Parent rolls, bathroom tissue                                                               |   | 40,000 |   |
| Cascades Tissue Group – New  York Inc.  (Mechanicville)                |   | Parent rolls                                                                                |   | 65,000 |   |
| **Converting**                                                              |   |                                                                                        |   |   |   |
| Laval (Québec)                                                         |   | Paper napkins                                                                               |   | N/A    |   |
| Cascades Tissue Group –  Arizona Inc.(Kingman)                         |   | Paper towels, bathroom tissue,  paper hand towels, paper napkins                            |   | N/A    |   |
| Cascades Tissue Group – New York  Inc.  (Waterford)                    |   | Paper towels, bathroom tissue,  paper hand towels, paper napkins                            |   | N/A    |   |
| Best Diamond Packaging, LLC(Kingston,  North Carolina)                      |   | Paper hand towels                                                                           |   | N/A    |   |
| **Converting****Distribution**                                              |   |                                                                                        |   |   |   |
| Cascades Tissue Group – IFCDisposables  Inc., Brownsville  (Tennessee) |   | Industrial wipes Distribution  bathroom tissue, paper hand towels and incontinence products |   | N/A    |   |

 

**4.3****                             ****RESEARCH ANDDEVELOPMENT**

Cascades has its own research and developmentcentre («the Centre») located in Kingsey Falls (Québec), with a staff of 40 people.  The Centre provides the Cascades group withproduct design and development of products and processes in addition toproviding technical support for solving production problems and improvingquality

 

The Information Technology Centre developssoftware in many spheres of activity for the Cascades group such as accounting,finance, human resources, warehousing logistic, transport management andproduction management.  It has a team of115 employees.

 

**4.4****                             ****COMPETITIVECONDITIONS**

The markets for Cascades’products are highly competitive.  In somebusinesses, such as in the containerboard and fine papers industries,competition tends to be global. In others, such as the tissue industry,competition tends to be regional.  In theCompany’s packaging products segment, it also faces competition fromalternative packaging materials, such as plastic and styrofoam, which can leadto excess capacity, decreased demand and pricing pressures.

 

The markets are generally moreconsolidated in regard of the manufacturing sector rather than in theconverting sector.  In the North Americanboxboard industry for folding cartons, the five most important manufacturers,namely Graphic Packaging Holding Company, MeadWestvaco Corporation,International Paper Company, Rock-Tenn Company and Clearwater Paper Corporation,represent more than 80% of the production capacity.  In the North American containerboard manufacturingindustry, five important manufacturers, namely International Paper Company,Smurfit-Stone Container Corporation, Georgia-Pacific LLC, Temple-Inland Inc. andPackaging Corporation of America, represent close to 70% of the productioncapacity.  Regarding the tissue papermarket, companies such as Georgia-Pacific LLC, Kimberly-Clark Corporation,Procter & Gamble Company, Svenska Cellulosa Aktiebolaget SCA andCascades represent more than 75% of the North-American manufacturing capacity.

 

Competition in Cascades’ marketsis primarily based upon price as well as customer service and the quality,breadth and performance characteristics of its products.  The Company’s ability to compete successfullydepends upon a variety of factors, including: 1) its ability to maintain highplant efficiencies and operating rates and lower manufacturing costs; 2) theavailability, quality and cost of raw materials, particularly recycled andvirgin fibre, and labor; and 3) the cost of energy.

 

Some of the Company’scompetitors may, at times, have lower fibre, energy and labour costs and lessrestrictive environmental and governmental regulations to comply with thanCascades does.  For example, fullyintegrated manufacturers, which are those manufacturers whose requirements forpulp or other fibre are met fully from their internal sources, may have somecompetitive advantages over manufacturers that are not fully integrated, suchas Cascades, in periods of relatively high prices for raw materials, in thatthe former are able to ensure a steady source of these raw materials at coststhat may be lower than prices in the prevailing market.  In contrast, competitors that are lessintegrated than Cascades may have cost advantages in periods of relatively lowpulp or fibre prices because they may be able to purchase pulp or fibre atprices lower than the costs the Company incurs in the production process.  Other competitors may be larger in

 

11

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

size or scope than Cascades is,which may allow them to achieve greater economies of scale on a global basis orallow them to better withstand periods of declining prices and adverseoperating conditions.

 

In addition, there has been anincreasing trend among the Company’s customers towards consolidation. Withfewer customers in the market for the Company’s products, the strength of itsnegotiating position with these customers could be weakened, which could havean adverse effect on pricing, margins and profitability.

 

**4.5****                             ****CYCLE COMPONENTS**

Cascadesis a diversified producer of packaging products, and tissue paper with operationsin Canada, the United States and Europe. The Company has leading marketpositions for many of its products in North America and is one of the foremostproducers of coated boxboard in Europe.

 

Although the Company believes that its product,integration level, market, and geographical diversification help to mitigatethe adverse effects of industry conditions, the markets for some of itsproducts, notably, containerboard and fine papers are highly cyclical. Thesemarkets are heavily influenced by changes in the North American and globaleconomies, industry capacity and inventory levels maintained by customers, allof which affect selling prices and profitability. The Company is also affectedby the variation of the Canadian dollar against the U.S. dollar and the Euro.

 

**4.6****                             ****ENVIRONMENT**

 

### **4.6.1**                    REGULATIONS

The Company’s activities are subject to environmental laws andregulations imposed by various governmental and regulatory authorities in allthe countries where it operates.  TheCompany is in compliance, in all material respects, with all applicableenvironmental legislation and regulations. However, ongoing capital and operating expenses are expected to beincurred to achieve and maintain compliance with applicable environmentalrequirements.  For more information, referenceis made to the item “RISK MANAGEMENT”, on page 50 of Management’sdiscussion and analysis of financial position and operating results in the 2008Annual Report, which item is incorporated by reference.

 

In 2008, environmentalprotection requirements and the application of Cascades’ environmental missionrequired capital expenditures and led to operating costs as follows :

 

| **Country**    | ** ** | **Capital Expenses** | ** ** | **Operating Costs** | ** ** |
|----------------|------------|---------------------------|------------|--------------------------|------------|
| Canada         |       | 7,500,000                 |       | 38,000,000               |       |
| United  States |       | 3,500,000                 |       | 28,000,000               |       |
| Europe         |       | 1,200,000                 |       | 6,500,000                |       |
| **Total**      |       | 12,200,000                |       | 72,500,000               |       |

 

Cascades consumes more than 2.2 millionshort tons of recycled fibre and its products are made of close to 73% ofrecycled fibre.

 

### **4.6.2**                    ENVIRONMENTAL MISSION

Since one of our deeply ingrained values at the Companyis protecting the environment, Cascades has adopted an Environmental Mission,which is available on the Company’s web site at www.cascades.com.

 

**4.7****                             ****REORGANIZATIONS**

On December 29, 2006, inthe context of the acquisition of the outstanding shares (50%) held by Domtarin Norampac, the Company proceeded, by way of transfer of assets, shares andthrough mergers, to a corporate reorganization whereby all of the Canadianactivities of Norampac., were consolidated under a division of Cascades CanadaInc.

 

**4.8****                             ****SOCIAL POLICIES**

The Company has adopted a Code of Ethics (the “Code”), which is meantto provide directors, officers, and employees with general guidelines foracceptable behaviour in all relationships with each other, customers,suppliers, partners, and the communities where the Company operates itsactivities.  A copy of the Code isavailable upon written request to the Corporate Secretary at the followingaddress:

 

**Cascadesinc.**

*Corporate Secretariat*

404, Marie-Victorin Blvd., P.O. Box30

Kingsey Falls (Québec) J0A 1B0

 

The Code and the corporatepolicies referred to in the document are also available on the Company’swebsite at www.cascades.com.

 

**4.9****                             ****BUSINESS RISKS**

We refer the reader toManagement’s discussion and analysis of financial position and operatingresults in the 2008 Annual Report, specifically on page 50, under theheading “RISK MANAGEMENT”, incorporated by reference herein.

 

# **ITEM 5 -DIVIDENDS**

#  

In 2006,2007 and 2008, Cascades paid dividends on its Common Shares at the current rateof $0.04 per Common Share per quarter. Other than pursuant to the Indentures, which govern its 7.25% seniornote indenture and Norampac’s 6.75% senior note indenture and the CreditFacilities, there are no material contractual restrictions on Cascades’ abilityto declare and pay dividends on its Common Shares.

 

The dividendamount is reviewed annually by the Board of Directors and is determined takinginto account Cascades’ financial situation, its results from operations, itscapital requirements and any other factor deemed pertinent by the Board.

 

12

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

# **ITEM 6 - CAPITAL STRUCTURE**

#  

**6.1****                             ****GENERAL DESCRIPTION OF CAPITALSTRUCTURE**

The share capital of the Company is composedof an unlimited number of Common Shares without par value, an unlimited numberof Class “A” Preferred Shares without par value which may be issued inseries and an unlimited number of Class “B” Preferred Shares without parvalue which may be issued in series.

 

The holders of common shares are entitled tothe right to vote on the basis of one vote per share at any meetings ofshareholders and the right to receive dividends and to share in the remainingassets in the event of a liquidation of the Company.  As at March 17, 2009, 98,344,251 CommonShares were issued and outstanding.

 

The Class “A” and “B” Preferred Sharesare issuable in series and rank equally within their respective classes as todividends and capital.  Registeredholders of any series of Class “A” or Class “B” are entitled toreceive, in each fiscal year of the Company or on any other basis, cumulativeor non-cumulative preferred dividends payable at the time, at the rates and forsuch amounts and at the place or places determined by the directors withrespect to each series prior to the issuance of any Class “A” or Class “B”Preferred Shares.  In the event of theliquidation, winding-up or dissolution of the Company or any other distributionof its assets to its shareholders, the holders of Class “A” and “B”preferred shares are entitled to receive, out of the assets of the Company, theamount paid in consideration of each share held by them.  The holders of Class “A” and “B”preferred shares are not entitled as such to receive notice of or to attend orto vote at any meetings of shareholders. None of the Class “A” or “B” Preferred Shares of the capital stockof the Company are, as of the date hereof, issued and outstanding.

 

**6.2****                             ****R****ATINGS**

Credit ratings are intended to provide investors withan independent measure of credit quality of an issue of securities. Rating fordebt instruments are presented in ranges by each of the rating agencies. Thehighest quality of securities are rated AAA in the case of Standard &Poor’s (“S&P”) or DBRS, or Aaa in the case of Moody’s Investors Service (“Moody’s”).The lowest quality of securities are rated D in the case of S&P and DBRS,or C in the case of Moody’s.

 

According to the S&P rating system, notes ratedBB, B, CCC, CC, and C are regarded as having from low to significantspeculative characteristics. A BB rating indicates the least degree ofspeculation and C the highest. While such notes will likely have some qualityand protective characteristics, these may be outweighed by large uncertaintiesor major exposures to adverse conditions. Notes rated BBB are less vulnerablefor non-payment than other speculative economic conditions, which could lead tothe obligor’s inadequate capacity to meet its financial commitment on theobligation. The ratings from AAA to B may be modified by the addition of a plus(+) or minus (-) to show relative standing within the major rating categories.

 

According to the Moody’s rating system, notes,which are rated Ba, are judged to have speculative elements; their future cannotbe considered as well assured. Often the protection of interest and principalpayments may be very moderate, and thereby not well safeguarded during bothgood and bad times over the future. Uncertainty of position characterizes bondsin this class. Moody’s applies numerical modifiers 1, 2, and 3 in each genericrating classification from Aa through Caa. The modifier 1 indicates that theobligation ranks in the higher end of its generic rating category; the modifier2 indicates a mid-range ranking and the modifier 3 indicates a ranking in thelower end of that generic rating category.

 

According to the DBRS rating system, long-termdebt rated BB is defined to be speculative and non-investment grade, where thedegree of protection afforded interest and principal is uncertain, particularlyduring periods of economic recession. Entities in the BB range typically havelimited access to capital markets and additional liquidity support. In manycases, deficiencies in critical mass, diversification, and competitive strengthare additional negative considerations. The absence of either a high or low designationindicates the rating is in the middle of the category.

** **

| **Credit Risk**                                      | **** **** | ****MOODY’S**** | **** **** | ****S & P**** | ** ** | **DBRS** |
|------------------------------------------------------|----------------|----------------------|----------------|------------------------|------------|----------|
| Highest quality                                      |           | Aaa                  |           | AAA                    |       | AAA      |
| High quality (very  strong)                          |           | Aa                   |           | AA                     |       | AA       |
| Upper medium grade  (strong)                         |           | A                    |           | A                      |       | A        |
| Medium grade                                         |           | Baa                  |           | BBB                    |       | BBB      |
| Lower medium grade  (somewhat speculative)           |           | Ba                   |           | BB                     |       | BB       |
| Low grade  (speculative)                             |           | B                    |           | B                      |       | B        |
| Poor quality (may  default)                          |           | Caa                  |           | CCC                    |       | CCC      |
| Most speculative                                     |           | Ca                   |           | CC                     |       | CC       |
| No interest being  paid or bankruptcy petition filed |           | C                    |           | C                      |       | C        |
| In default                                           |           | C                    |           | D                      |       | D        |

 

Source:  Securities Industry andFinancial Markets Association and “Dominion Bond Rating Services”

 

13

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

Cascades’ outstanding senior notes had received thefollowing ratings by S&P, Moody’s and DBRS respectively:

 

| **Rating agency** | ** ** | **Rating** | ** ** | **Qualitative**  | ** ** | **Most  recent update** |
|-------------------|------------|------------|------------|------------------|------------|-------------------------|
| S&P           |       | B+         |       | Negative outlook |       | August 2008        |
| Moody’s      |       | Ba3        |       | Negative outlook |       | October 2008       |
| DBRS              |       | BB high    |       | Stable outlook   |       | January 2008       |

 

It is to be noted that the credit ratings accordedto the notes by the rating agencies are not recommendations to purchase, holdor sell the notes as such, given these ratings do not comment as to marketprice or suitability for a particular investor. There is no assurance that anyrating will remain in effect for any given period of time or that any ratingwill not be revised or withdrawn entirely by a rating agency in the future ifin its judgement circumstances so warrant. The Company is not responsible forcredit ratings accorded by the rating agencies.

 

# **ITEM 7 -MARKET FOR SECURITIES**

#  

**7.1****                             ****TRADING PRICE AND VOLUME**

Cascades’ Common Shares are traded on theToronto Stock Exchange under the “CAS” symbol. The following table sets forth the market price range, in Canadiandollars, and trading volumes of the Company’s Common Shares on the TorontoStock Exchange for each month of the most recently completed financial year:

 

**Toronto Stock Exchange – Market price range – Year 2008**

 

| **Month** | ** ** | **High** | ** ** | **Low** | ** ** | **Closing Price** | ** ** | **Trading Volumes** | ** ** |
|-----------|------------|----------|------------|---------|------------|------------------------|------------|--------------------------|------------|
| January   |       | 8.90     |       | 6.96    |       | 7.90                   |       | 2,683,404                |       |
| February  |       | 8.79     |       | 7.55    |       | 8.32                   |       | 1,669,598                |       |
| March     |       | 8.57     |       | 7.21    |       | 7.86                   |       | 3,067,066                |       |
| April     |       | 8.45     |       | 7.30    |       | 7.49                   |       | 1,557,323                |       |
| May       |       | 7.62     |       | 6.70    |       | 6.87                   |       | 3,626,660                |       |
| June      |       | 7.40     |       | 6.59    |       | 6.67                   |       | 3,041,537                |       |
| July      |       | 6.89     |       | 5.16    |       | 5.29                   |       | 4,449,091                |       |
| August    |       | 7.05     |       | 5.35    |       | 6.99                   |       | 2,166,274                |       |
| September |       | 7.20     |       | 6.16    |       | 6.21                   |       | 4,150,910                |       |
| October   |       | 6.43     |       | 3.79    |       | 4.89                   |       | 4,441,617                |       |
| November  |       | 5.37     |       | 3.00    |       | 3.64                   |       | 3,205,027                |       |
| December  |       | 4.62     |       | 3.16    |       | 3.44                   |       | 5,781,540                |       |

 

In 2007, in the normal course of business,the Company renewed its redemption program. Purchases began on March 13, 2007 and continued until March 12,2008.  The notice enabled Cascades toacquire up to 4,970,094 Common Shares,representing approximately 5% of the issued and outstanding Common Shares as atMarch 8, 2007. At the end of this normal course issuer bid, the Company hadredeemed 502,200 Common Shares at an average cost of $9.01.

 

In 2008, in the normal course of business,the Company renewed its redemption program. Purchases began on March 13, 2008 and continued until March 12,2009.  The notice enabled Cascades toacquire up to 4,946,517 Common Shares,representing approximately 5% of the issued and outstanding Common Shares as atMarch 7, 2008. At the end of this normal course issuer bid, the Companyhad redeemed 828,800 Common Shares at an average cost of $4.13.

 

On March 11, 2009, Cascades announcedthat the Toronto Stock Exchange accepted its notice of intention to begin anormal course issuer bid in respect of its Common Shares.  Purchases pursuant to the normal courseissuer bid commenced on March 13, 2009 and will cease on March 12, 2010.  The Common Shares purchased shall becancelled.  The notice will enableCascades to acquire up to 4,917,212 Common Shares, which representsapproximately 5% of the 98,344,251 issued and outstanding Common Shares as at March 6,2009.

 

# **ITEM 8 –DIRECTORS AND OFFICERS**

#  

The Directors of the Company are elected annuallyto hold office until the next annual general meeting or until a successor iselected or appointed.

 

## **8.1**                              INFORMATIONCONCERNING DIRECTORS

***Mr. BernardLemaire***, KingseyFalls, Québec (Canada), one of the founders of Cascades, is the ExecutiveVice-Chairman of the Board of the Company and has been a Director since 1964. Hewas President of the Company from its creation to 1992 and Chairman of theBoard from 1992 to 2008. He serves as a member of the Administrative Committeeof both companies.  He is also Executive Chairman of the Boardof Directors of Boralex Inc., a producer of green and renewable energy, and sitson the Board of Trustees of Boralex Power Trust.  Mr. Lemaire holdsan Honorary Doctorate from the *École des Hautes ÉtudesCommerciales – Montréal* and an Honorary Doctorate in BusinessAdministration from the University of Sherbrooke. He is an Officer of the Orderof Canada and an Officer of the Ordre national of Québec as well as a Chevalierof the Ordre national of the Légion d’honneur of the French Republic.

 

14

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

***Mr. Laurent Lemaire***, Warwick, Québec(Canada), one of the founders of Cascades, is the Chairman of the Board of theCompany since May 2008 and has been a Director since 1964.  He was President and Chief Executive Officerof the Company from 1992 to 2004.  Heserves as a member of the Administrative Committee. He holds a Masters degree in Commerce and an Honorary Doctorate inBusiness Administration from the University of Sherbrooke. He is a member ofthe Board of Directors and of the Audit Committee of Junex Inc., a junior oiland gas exploration company.

 

***Mr. AlainLemaire***, KingseyFalls, Québec (Canada), one of the founders of Cascades, has been a Director ofthe Company since 1967 and is the President and Chief Executive Officer.  He was Executive Vice-President of theCompany from 1992 to 2004 and President and Chief Executive Officer of NorampacInc. from 1998 to 2004.  He serves as amember of the Administrative Committee. A former student of the *Institut des pâtes etpapiers* of Trois-Rivières (Québec), he holds an Honorary Doctoratefrom the University of Sherbrooke.

 

***Mr. Martin******P.Pelletier,****Eng., Ph. D*, Sillery, Québec (Canada), a chemical engineer, is a pulp and paper consultant.He has been a Director of the Company since 1982.  Mr. Pelletier was Vice-President andChief Operating Officer, Containerboard, Norampac Inc., from 1997 to 2000 and held theposition of President and Chief Executive Officer of Rolland Inc. (now known asCascades Fine Papers Group Inc.) from 2000 to 2002.  He serves as Chairman of the Environmental, Health and Safety Committee.He sits on the Board of Directors of CO2 Solution, a high-tech firminvolved in recycling carbon dioxide (C02).

 

***Mr. Paul R. Bannerman***, Montréal, Québec(Canada), has been a member of the Board of Directors of Cascades since1982.  He is the founder and the Chairmanof the Board of Directors of Etcan International Inc., a pulp and paper salesagency founded in 1978 which is active in the American, European and SouthAmerican markets. Mr. Bannerman sits on the Board of Directors of a numberof private companies and contributes personally and through his privatefoundation to the advancement of education, health, the arts and communitydevelopment. He is a graduate of McGill University in political science andeconomics and holds an M.B.A. from Harvard University.

 

***Mr. André Desaulniers***, Andorre (Europe), has been aDirector of Cascades since 1982.  Heserves as a member of the Audit Committee and is the Chair of the CorporateGovernance and Nominating Committee.  Hisprincipal occupation is director of Companies and he acquired his knowledge andexpertise while acting as Chairman of the Board of Directors of McNeil, Mantha, Inc.,an Investment dealer, for 17 years. He also was a member of several auditcommittees, such as, among others, Chairman of the Audit Committee of theMontréal Stock Exchange Inc.

 

***Mr. Louis Garneau***, St. Augustin-de-Desmaures, Québec (Canada), is President of LouisGarneau Sports Inc., a manufacturer and distributor of sports clothing andaccessories throughout the world.  He hasbeen a Director since 1996 and serves as member of the Human Resources Committee. A former international cycle racer, Mr. Garneauparticipated in the 1984 Olympic Games in Los Angeles. He is a Chevalier de l’OrdreNational of Québec and an Officer of the Order of Canada.  In June 2007, he was awarded an honorarydoctorate by the Faculty of Administration of the University of Ottawa.  In 2008, he received the “Gloirede l’Escolle” medal as a former graduate having honored *UniversitéLaval* due to the extent of his professional activities and hiscontribution to society.

 

***Ms. Sylvie Lemaire***, Otterburn Park, Québec (Canada), is a director of companies and hasbeen a Board member of Cascades since 1999. She sits on the board of directors of Fempro Inc., a manufacturer ofabsorbent products.  She has heldproduction, research and development and general management positions.  She has been co-owner of Dismed Inc., adistributor of medical products and Fempro Inc., where she was president until2007.  She serves as a member of the Environmental, Health and SafetyCommittee.  Ms. Lemaire holds thedegree of Bachelor in Industrial Engineering from the École polytechniqueMontréal.

 

***Mr. Michel Desbiens***, Beaconsfield, Québec (Canada), a consultant and director of companies,joined the Board of Directors of the Company in 2001.  He is the Chair of the Human ResourcesCommittee and serves as a member of the Environmental, Healthand Safety Committee. He held the positions of President and Chief ExecutiveOfficer of Donohue Inc., and Chairman of the Board of Directors ofAbitibi-Consolidated Inc.  He is Chairman of the Board of Catalyst PaperCorporation, a producer of paper for directories, uncoated specialty papers,coated paper and kraft pulp as well as a director and a member of the Audit andNominating and Governance Committees of Rogers Sugar Income Fund, an open-endedlimited purpose trust.

 

***Mr. Laurent Verreault***, Ile-des-Soeurs, Québec (Canada), is Chairman of the Board of Directors and Chief Executive Officer of GLV Inc., a manufacturer of engineeredequipment.  He has been a Director ofCascades since 2001 and serves as a member of the Audit and of the HumanResources Committees.  Mr. Verreaultsits on the Board of Directors and is a member of the Human ResourcesCommittee of TMX Group Inc.

 

***Mr. Robert******Chevrier***,Montréal, Québec (Canada), has been a Director of Cascades since 2003.  He is the Chairman of the Audit Committee andalso acts as lead Director.  He isPresident of Société de Gestion Roche Inc., a holding and investment company. He is a director and, member of the Audit Committeeof Bank of Montreal and Chair of the Pension Fund Society of Bank of Montreal,a director of Compagnie de Saint-Gobain, a company specializing in theproduction, processing and distribution of materials, a lead director andmember of the Audit and Human Resources Committees of CGI Group Inc., an IT andbusiness process services provider; Chairman of the Board of Directors ofQuincailleries Richelieu Ltée, a distributor, importer and manufacturer ofspecialty hardware. He has held the position of Chairman of the Board ofDirectors and President and Chief Executive Officer of Rexel Canada Inc. He isa graduate of the University of Concordia and a Fellow of the CanadianInstitute of Chartered Accountants.

 

***Mr. David McAusland***, Beaconsfield, Québec (Canada), has been a Director of the Company since2003.  He is a lawyer and director ofcompanies.  From 1999 to February 2008, he held among others, the position ofExecutive Vice-President, Corporate Development and Chief Legal Officer ofAlcan Inc., an aluminum and packaging products company. He is a member of theCorporate Governance and Nominating Committee. He also sits on the Boards ofDirectors of Cogeco Inc., a diversified communications company and Cogeco CableInc., a cable telecommunications company where he is Chair of the CorporateGovernance Committee and a member of the Strategic Opportunities Committee ofboth these issuers. He is a member of the Board of Directors of EquinoxMinerals Ltd., an international exploration and mine development company, and a memberof the compensation committee and Chair of the Corporate Governance andNominating Committee. He sits on the Board of Directors of Khan Resources Inc.,a uranium exploration and developmentcompany, and is a member of the Audit, Finance and Compensation Committees.

 

15

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

***Mr. James B.C. Doak***, Toronto, Ontario (Canada), was appointed a Director of Cascades in February 2005.  An economist andchartered financial analyst, Mr. Doak has held the position of Presidentand Managing Director of Megantic Asset Management Inc., a Toronto (Ontario)investment company, since 2002. Prior thereto, from 1997 to 2002, he held theposition of President of Enterprise Capital Management Inc. He is a member ofthe Audit Committee and of the Corporate Governance and Nominating Committee. Mr. Doakis Chairman of the Board of Directors and a member of the Corporate Governanceand Nominating Committee, and the Audit, Finance and Compensation Committees ofKhan Resources Inc., a uranium exploration and development company; a directorand member of the Audit Committee of Purepoint Uranium Group Inc., a uraniumexploration company, and a director of Advanced explorations Inc., a miningexploration company.  He holds a *Diplôme d’études collégiales* from McGill University and aB.A. in Economics from the University of Toronto.

 

**8.2****                             ****CEASETRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS**

Tothe Company’s knowledge, no director or executive officer of the Company and noshareholder holding a sufficient number of securities of the Company to affectmaterially the control of the Company:

 

a)                                     is or has been in thepast ten years before the date of this Annual Information Form a directoror executive officer of any other company that, while that person was acting inthat capacity,

i) was the subject of a cease trade or similar order, oran order that denied the other issuer access to any exemption under securitieslegislation for a period or more than 30 consecutive days;

ii) was subject to an event that resulted, after thedirector or executive officer ceased to be a director or executive officer, inthe company being the subject of a cease trade or similar order or an orderthat denied the other issuer access to any exemption under securitieslegislation for a period of more than 30 consecutive days; or

iii) within a year of that person ceasing to act in thatcapacity, became bankrupt, made a proposal under any legislation relating tobankruptcy or insolvency, or was subject to or instituted any proceedings, arrangementsor compromise with creditors, or had a receiver, receiver manager or trusteeappointed to hold its assets;

 

b)                                    was subject tocourt-imposed penalties or sanctions relating to securities legislation or by asecurities regulatory authority, or entered into a settlement agreement withsuch authority; or

 

c)                                     was subject to anyother penalties or sanctions imposed by a court or regulatory body that wouldlikely be considered important to a reasonable investor in making an investmentdecision.

 

Tothe Company’s knowledge, no director or officer of the Company and noshareholder holding a sufficient number of securities of the Company to affectmaterially the control of the Company, or a personal holding company of anysuch persons, has within the 10 years before the date of this AnnualInformation Form, become bankrupt, made a proposal under any legislationrelating to bankruptcy or insolvency, or been subject to or instituted anyproceedings, arrangement or compromise with creditors, or had a receiver,receiver manager or trustee appointed to hold his or its assets.

 

16

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

**8.3****                             ****INFORMATIONCONCERNING EXECUTIVE OFFICERS**

 
| **Executive  Officers**                               | ** ** | **Occupation in the Company**                                                        |
|-------------------------------------------------------|------------|--------------------------------------------------------------------------------------|
| Laurent LemaireWarwick  (Québec)                 |       | Chairman of the Board of  Directors                                                  |
|                                                  |       |                                                                                 |
| Bernard LemaireKingsey Falls  (Québec)           |       | Executive Vice-Chairman of the  Board of Directors                                   |
|                                                  |       |                                                                                 |
| Alain LemaireKingsey Falls  (Québec)             |       | President and Chief Executive  Officer                                               |
|                                                  |       |                                                                                 |
| Alain DucharmeKingsey Falls  (Québec)            |       | Corporate Vice-President                                                             |
|                                                  |       |                                                                                 |
| Christian DubéSutton  (Québec)              |       | Vice-President and Chief  Financial Officer                                          |
|                                                  |       |                                                                                 |
| Allan HoggKingsey Falls  (Québec)                |       | Vice-President, Finance and  Treasurer                                               |
|                                                  |       |                                                                                 |
| Maryse FernetKingsey Falls  (Québec)             |       | Vice-President, Human  Resources                                                     |
|                                                  |       |                                                                                 |
| Claude CossetteKingsey Falls  (Québec)           |       | Vice-President, Organizational  Development                                          |
|                                                  |       |                                                                                 |
| Norman Boisvert (*)Kingsey Falls  (Québec)       |       | Vice-President, Administration                                                       |
|                                                  |       |                                                                                 |
| Jean-Luc BellemareKingsey Falls  (Québec)        |       | Vice-President, Information  Technologies and Purchasing                             |
|                                                  |       |                                                                                 |
| Hubert BolducMontreal  (Québec)                  |       | Vice-President, Communications  and Public Affairs                                   |
|                                                  |       |                                                                                 |
| Léon MarineauKingsey Falls  (Québec)        |       | Vice-President, Environment                                                          |
|                                                  |       |                                                                                 |
| Robert F. HallSherbrooke  (Québec)               |       | Vice-President, Legal Affairs  and Corporate Secretary                               |
|                                                  |       |                                                                                 |
| Suzanne BlanchetCandiac  (Québec)                |       | President and Chief Executive  Officer, Tissue Group                                 |
|                                                  |       |                                                                                 |
| Mario PlourdeKingsey Falls  (Québec)             |       | President and Chief Operating  Officer, Specialty Products Group                     |
|                                                  |       |                                                                                 |
| Marc-André DépinBoucherville  (Québec) |       | President and Chief Executive  Officer, Containerboard and Boxboard Group (Norampac) |

 

----

(*) As of January 3,2009, Mr. Norman Boisvert is no longer an Executive Officer and acts as a consultantto the Company.

 

During the past five years, each of the Executive Officers of theCompany have been engaged in their present principal occupations or in otherexecutive capacities for the Company or with related or affiliated companiesindicated opposite their name, except for the following senior officers:

 

Mr. Christian Dubé is Vice-President and Chief Financial Officersince May 17, 2004.  He wasVice-President and Chief Financial Officer of Domtar inc. and a Director ofNorampac Inc.

 

Mr. Hubert Bolduc holds theposition opposite his name since October 25, 2004.  He was Press Secretary, Office of the DeputyMinister and Minister for State for the Economy and Finance and Press Secretaryfor the Premier of Québec.

 

As at December 31, 2008, the Directors and Executive Officers ofthe Company beneficially owned as a group, or exercised control or directionover, directly or indirectly, 31,171,782  Common Shares representing 31.62% of theCommon Shares issued and outstanding.

 

# **ITEM 9 –LEGAL PROCEEDINGS**

#  

In 2003, the Company was informed that one of its divisions, CascadesResources, was the subject of an inquiry by the Canadian Commissioner ofCompetition as to whether Cascades Resources and its competitors had colludedto unduly reduce market competition

 

17

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

between paper merchants in Canada. On January 9, 2006, the Company entered a guilty plea to twoinfractions (the “Infractions”) under the Competition Act in Ontario SuperiorCourt in relation to sales in Ontario and Québec of carbonless sheet paper byits paper merchant division, Cascades Resources.  Pursuant to the plea, the Company has agreedto pay a total of $12.5 million, payable in equal instalments over a period of sixand a half years, commencing in January 2008.

 

On January 10,2006, the Company was informed that a class action based on the Infractions hadbeen filed against Cascades Fine Papers Group Inc., Domtar Inc. and UnisourceCanada Inc. before the Québec Superior Court claiming damages totalling $10 million.  On January 12, 2006, the Company wasinformed that a second class action had been filed in Québec Superior Courtagainst the same defendants based on the Infractions claiming damages for anundetermined amount.  On February 6,2006, the Company was informed that a third class action based on theInfractions was filed against the same defendants as well as Coast Paper Ltd. inOntario Superior Court for damages totalling $25 million.  All claims were settled out of court, foramounts significantly below the amounts sought in the actions.

 

In the normal courseof operations, the Company is party to various legal actions and contingencies,mostly related to contracts disputes, environmental and product warrantyclaims, and labour issues.  While thefinal outcome with respect to legal actions outstanding or pending as at December 31,2008 cannot be predicted with certainty, it is management’s opinion that theoutcome will not have a material adverse effect on the Company’s consolidatedfinancial position, results of its operations or its cash flows.

 

# **ITEM 10 –TRANSFER AGENT AND REGISTRAR**

#  

Cascades’ transfer agent andregistrar is Computershare Investor Services Inc. (“Computershare”),having its place of business in Montréal, Québec, Canada at 1500 UniversityStreet, 7th Floor. The register of transfers of the Common Shares of the Company maintainedby Computershare is located in the same office in Montreal.

 

# **ITEM 11 –MATERIAL CONTRACTS**

#  

The only material contractsentered into during the year ended December 31, 2008 or in prior yearsthat are still in effect and filed on SEDAR are:

 

On December 29, 2006, in connection withthe acquisition of the remaining outstanding shares (50%) from Domtar inNorampac, the Company completed the refinancing of its $550 million creditfacility originally put in place in 2005 to provide for new $850 million creditfacilities (including $325 million of Norampac) consisting of a $650 millionfive year secured revolving credit facility maturing in December 2011, a$100 million secured term facility maturing in October 2012 and asix-month $100 million senior unsecured revolving credit. The six-year termfacility can be reimbursed without penalty at the Company’s option at any timeprior to maturity. Its obligations under this new revolving credit facility aresecured by all inventory and receivables of the Company and its North Americansubsidiaries and by the property, plant, and equipment of four of its mills.  On June 27, 2007, the Company amended itscredit agreement to add a new twelve month unsecured revolving credit facility in theamount of $100 million, said credit facility having been renewed on May 22,2008 for an another twelve month period. On February 13,2009, Cascades announced that it had entered into an agreement toamend its existing bank credit agreement. Under the terms of the amendment theexisting financial covenants, namely the maximum funded debt to capitalizationratio of 65% and the minimum interest coverage ratio of 2.25x, remain unchangeduntil maturity in October 2012.  Inconsideration of this covenant extension the variable interest rate applicableto borrowings outstanding is increased by 200 basis points. The amendment alsocancels the unsecured revolving credit facility in the amount of $100 millionwhich was originally scheduled to terminate in June 2009.

 

In addition, on February 5,2003, the Company issued new unsecured 7.25% senior notes, maturing in 2013,for an aggregate amount of US$450 million which were subsequentlyregistered with the Securities and Exchange Commission of the United States andredeemable as of February 2008, all or in part at the option of theCompany under certain conditions subject to payment of a premium. The aggregateproceeds of these two transactions, combined with its additional cash on hand,were used by the Company to repay substantially all of the existing creditfacilities.

 

On May 28, 2003, Norampacissued new unsecured 6.75% senior notes, maturing in 2013, for an aggregateamount of US$250 million which were subsequently registered with theSecurities and Exchange Commission of the United States and redeemable as of June 2008,all or in part at the option of the Company under certain conditions subject topayment of a premium. The proceeds of this transaction, combined with a newrevolving credit facility, were used to refinance substantially all of itsoutstanding credit facilities and credit lines as well as to redeem its thenoutstanding senior notes.

 

On July 8, 2003, theCompany completed a private placement of US$100 million 7.25% seniornotes, maturing in 2013, at a price of 104.50%, or an effective interest rateof 6.61%. These senior notes are treated as part of the same series of 7.25%senior notes issued in February 2003 and were subsequently registered withthe Securities and Exchange Commission of the United States. The proceeds ofthis financing were used to reduce indebtedness under the revolving creditfacility of the Company.

 

On December 2, 2004, the Company completed a private placement of US$125 millionof 7.25% senior notes due in 2013, which are treated as part of the same seriesof 7.25% senior notes due in 2013 that were issued in February 2003.  These senior notes were subsequently registeredwith the Securities and Exchange Commission of the United States.  The issuance of these senior notes was completed at a price of 105.50%,or an effective interest rate of 6.376%. The net proceeds of $156 million of this financing were used toreduce indebtedness under the Company’s revolving credit facility.

 

On December 28, 2006, the Company entered into a Share PurchaseAgreement with Domtar to acquire the outstanding CommonShares of Norampac that the Company did not already own, representing 50% ofthe outstanding Common Shares, for a cash consideration of $560 million.  The Company entered into a Cost SharingAgreement with respect to Norampac’s mill located in Red Rock (Ontario),pursuant to which, in the event that the Company decides to permanently shutdown the Red Rock mill within two years of the closing of the transaction, andthis closure results in environmental remediation costs, the parties haveagreed that the Company will be responsible for the first $10

 

18

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

millionof such costs, Domtar and the Company shall be equally responsible for any suchcosts in excess of $10 million but not greater than $40 million and the Companywill be responsible for any amount in excess of $40 million.  Domtar’s obligation to assume any such costswill apply only to costs engaged prior to the fifth anniversary of the date onwhich it is announced that the mill has been permanently shut down.

 

On May 8,2008, the shareholders of the Company ratified the adoption of general By-laws No. 2008-1.  On the effective date of general By-laws No. 2008-1, By-laws No. C-1hitherto in existence was repealed, which will not affect the past applicationthereof nor the validity of any measures taken, resolutions passed and rights,privileges or obligations created thereunder before their repeal, nor thevalidity of any contract or undertaking entered into thereunder.

 

# **ITEM 12 –INTERESTS OF EXPERTS**

#  

The Company’s auditors arePricewaterhouseCoopers LLP, Chartered Accountants (“PwC”), who have prepared anauditors’ report dated March 16, 2009 in respect of the Company’sconsolidated financial statements with accompanying notes as at and for theyears ended December 31, 2008 and 2007 and for each of the periods in thethree- year period ended December 31, 2008.  PwC has advised that they are independentwith respect to the Company within the meaning of the Code of Ethics of the *Ordre des comptables agréés du Québec.*

 

# **ITEM 13 –AUDIT COMMITTEE**

#  

**13.1****                      ****COMPOSITION ANDMANDATE**

The Company has an Audit Committee(the “Committee”), which is composed of Messrs. Robert Chevrier(Chairman), André Desaulniers, Laurent Verreault and James B.C. Doak.  The Committee is governed by a charter whichis attached to this AIF as Schedule A. The Company also adopted a Code of Ethics (the “Code”) that applies toall directors, officers and employees. The Code is posted on Cascades’ websiteat www.cascades.com.  All the members ofthe Committee are independent in accordance with the definition provided insection 1.4 of Multilateral Instrument 52-110 of the Canadian SecuritiesAdministrators and have financial expertise.

 

**13.2****                      ****RELEVANT EDUCATIONAND EXPERIENCE OF THE MEMBERS**

The following is a brief summaryof the education and experience of each member of the Audit Committee that isrelevant to the performance of their responsibilities, including any educationor experience that has provided the member with an understanding of theaccounting principles used by the Company to prepare its annual and interimfinancial statements.

 
| **Name of  Committee Member** | ** ** | **Relevant Experience and  Education**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Robert Chevrier               |       | Mr. Chevrier is a Fellow of the  Institute of Chartered Accountants. He sits on the Boards of other Canadian  listed companies and on other Audit Committees. His education and experience  allows him to have a good understanding of the accounting principles used by  the Company and he has the ability to read and understand a set of financial  statements that present a breadth and level of complexity of accounting  issues that are generally comparable to those issues that can reasonably be  expected to be raised by the Company’s financial statements.                                                               |
|                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Laurent Verreault             |       | As Chairman of the Board of Directors and  Chief Executive Officer of GLV Inc., a manufacturer of engineered equipment,  primarily focused on the production of equipment for the pulp and paper  industry, Mr.Verreault is both financially and operationally literate and  understands the breadth and complexity of accounting issues that can  reasonably be expected to be raised in the course of reviewing the Company’s  financial statements. He is a member of the Board of Directors and of the  Human Resources Committee of TMX Group Inc.                                                                                       |
|                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| André Desaulniers        |       | Mr. Desaulniers is a director of  companies and has acquired his knowledge and experience by acting as Chairman  of the Board of Directors of McNeil, Mantha, Inc., an investment dealer,  for 17 years. He also served on several audit committees, namely as Chairman  of the Audit Committee of the Montréal Stock Exchange Inc.                                                                                                                                                                                                                                                                                                 |
|                          |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| James B.C. Doak               |       | An economist, Mr. Doak is President and Managing Director of  Megantic Asset Management Inc., a Toronto (Ontario) investment company. He has more than 20 years of experience as a  chartered financial analyst and is a past President and Director of the  Toronto CFA Society. He has been a Board member of several public companies,  namely, PetroKazahstan Inc., Superior Propane Inc., and Spar Aerospace Inc.  He has held senior positions with ScotiaMcLeod Inc., First Marathon  Securities Ltd. and McLeod Young Weir Ltd., and was the founder of Enterprise  Capital Management Inc., where he served as President until 2002. |

 

19

----

 
|  |   | ***Annual  Information Form*** |
|--|--------|--------------------------------|

 

**13.3****                      ****EXTERNAL AUDITORSSERVICE FEES**

The following table sets out thefees incurred and paid to PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l.,chartered accountants, in Canadian dollars in the past two fiscal years forvarious services provided to the Company and its subsidiaries :

 
| ** **              | ** ** | **Fees**                        | ** ** |
|-------------------------|------------|---------------------------------|------------|
| **Services**            | ** ** | **December 31, 2007** | ** ** | **December 31, 2008** | ** ** |
|                    |       |                            |       |   |   |
| Audit Fees  (1)         |       | $                               | 1,990,418  |   | $ | 2,046,684 |   |
| Audit-Related  Fees (2) |       | $                               | 793,364    |   | $ | 379,539 |   |
| Tax Fees (3)            |       | $                               | 501,114    |   | $ | 734,173 |   |
| Other Fees  (4)         |       | N/A                             |       | N/A |   |
| Total                   |       | $                               | 3,284,896  |   | $ | 3,160,396 |   |

 

----

(1)       Professional services provided in connectionwith statutory and regulatory filings and audit of the annual financial statementsof the Company.

(2)       Professional services related toauditing as well as consultations on accounting and regulatory matters.

(3)       Professional services mainly for taxcompliance.

(4)       Various other services.

 

**13.4****                      ****POLICIES ANDPROCEDURES FOR THE ENGAGEMENT OF AUDIT AND NON-AUDIT SERVICES**

The Company’s Audit Committee(the “Committee”) has adopted a Pre-approval Policy and Procedures for servicesprovided by external auditors, (the “Policy”) which sets forth the proceduresand the conditions pursuant to which permissible services proposed to beperformed by external auditors are pre-approved.  Under the terms of the Policy, services,which involve annual fees of less than $35,000, are pre-approved.  The Committee has delegated to the Chairmanof the Committee pre-approval authority for any services not previouslyapproved by the Committee, which involve the payment of unbudgeted fees inexcess of $35,000 up to a maximum of $50,000. Services, which involve fees of more than $50,000, require pre-approvalof all the members of the Committee.

 

# **ITEM 14 -ADDITIONAL INFORMATION**

#  

Additional information,including Directors’ and Senior Officers’ remuneration and indebtedness,principal holders of the securities of Cascades and options to purchasesecurities, and interests of insiders in material transactions, if any, iscontained in the Management Proxy Circular dated March 17, 2009 for theannual general meeting of shareholders.

 

Also, additional financialinformation pertaining to the fiscal year ended December 31, 2008 includingManagement’s Discussion and Analysis is presented in the Company’s 2008**Annual Report.

 

In addition, the followingdocuments may be obtained, upon written request, from the Company’s CorporateSecretary:

 

(a)                                 When Cascades is in the course of adistribution of its securities pursuant to a short form prospectus or has fileda preliminary short form prospectus in respect of a proposed distribution ofits securities:

 

i) one copy of the latest AnnualInformation Form of the Company, together with one copy of any document,or the pertinent pages of any document, incorporated by reference in theAnnual Information Form;

ii) onecopy of the latest Annual Report of the Company, a copy of the comparativefinancial statements of the Company for its most recently completed financialyear for which financial statements have been filed together with theaccompanying Auditors’ report, and the Management’s Discussion and Analysis ofFinancial Position and Operating Results and one copy of any interim financialstatements of the Company that have been filed, if any, for any period afterthe end of its most recently completed financial year;

iii) onecopy of the Company’s Management Proxy Circular in respect of its most recentAnnual General Meeting of Shareholders that involved the election of Directors; and

iv) one copy of any other documentswhich are incorporated by reference into the preliminary short form prospectusor the short form prospectus; or

 

(b)                                at any other time, a copy of thedocuments referred to in a) i) to iii) above, may be obtained from theCorporate Secretary of the Company, at the address indicated below, providedthat the Company may require the payment of a reasonable fee if the request ismade by a person or company who is not a security holder of Cascades.

 

Most of the above-mentionedinformation relating to the Company may be found on SEDAR at www.sedar.com andon the Company’s website at www.cascades.com.

 

**CascadesInc.**

Corporate Secretary

404 Marie-Victorin Blvd., P.O. Box 30

Kingsey Falls, Québec  J0A 1B0

Telephone:  (819) 363-5100

Telecopier:  (819) 363-5127

 

20

----

 

SCHEDULE A

 

**CHARTER OF THE**

**AUDIT COMMITTEE**

 

**OF THE BOARD OF DIRECTORS OF CASCADES INC. ( ****the “ Company »)**

 

### **1.             PURPOSE**

 

The purpose of this charter is to describe the role of the AuditCommittee (the « Committee ») as well as its duties andresponsibilities delegated by the Board of Directors (« theBoard »).  The main duty of theCommittee is to assist the Board in fulfilling its oversight responsibilitieswith respect to the following issues: the quality and integrity of the Company’sfinancial statements;

 

·                  accounting and financial reportingprocess;

 

·                  systems of internal accounting andfinancial controls;

 

·                  external auditors qualifications,independence and performance;

 

·                  internal audit function and process;

 

·                  the Company’s compliance with legaland regulatory requirements;

 

·                  fulfill any other responsibilitiesassigned to it from time to time by the Board.

 

##### **2.             DIVISION OF RESPONSIBILITIES**

 

In carrying out the duties of the Committee described in this charter,the members of the Committee recognize that its function is to oversee theCompany’s financial reporting process on behalf of the Board as well as toreport its activities regularly to the Board. Management of the Company is responsible for the preparation, thepresentation and the integrity of the Company’s financial statements and forthe effectiveness of internal control over financial reporting.

 

Management and the internal audit service are responsible formaintaining appropriate accounting and financial reporting principles andpolicies as well as internal controls and procedures that provide forcompliance with accounting standards and applicable laws and regulations.  The auditors are responsible for planning andcarrying out audits of the Company’s annual and interim financial statementsand annually auditing management’s assessment of the effectiveness of internalcontrol over financial reporting and other auditing procedures.

 

In performing their duties, the members of the Committee must have openand free discussions with the Board, the external auditors, the internalauditor and management of the Company.

 

**3.             COMPOSITIONAND ORGANIZATION**

 

The Committee shall be composed of a minimum of three directors, asappointed by the Board at its first meeting following the annual shareholdersmeeting.  Each member must be anunrelated or independent director.

 

Each Committee member must be financially literate and at least onemember must have accounting or related financial management expertise, asdetermined by the Board.

 

The Committee will appoint one of its members as Chairman and theSecretary or Assistant-Secretary of the Company or the person designated asSecretary will be secretary for all meetings of the Committee and will keepminutes of the Committee’s deliberations.

 

**4.****                                     ****MEETINGS AND RESOURCES**

 

TheCommittee shall meet at least four times a year, or more frequently ifcircumstances so dictate. By virtue of its mandate to foster open relations,the Committee shall also meet separately and *incamera* for discussions with the internal auditor, management andwith the external auditors, as required.

 

The Committee shall establish its own rules and procedures (subjectto any specific guidelines from the Board) and shall meet at the place and inaccordance with the terms prescribed by its rules. A quorum shall not be lessthan a majority of the members of the Committee.

 

The Chairperson of the Committee determines the agenda for each meetingin consultation with the Vice-President and Chief Financial Officer, theSecretary and the Internal Auditor.  Theagenda and supporting documentation are distributed to the members of theCommittee within a reasonable timeframe prior to the meetings.

 

 

----

 

**CHARTER OF THE**

**AUDIT COMMITTEE**

 

The Chairman of the Committee shallreport quarterly and when required to the Board on the Committee’s activitiesand will make recommendations concerning all matters it deems necessary orappropriate.

 

The Committee shall at all times have direct access to management, tothe internal auditor and to the external auditors in order to seek explanationsor information on specific questions.

 

The Committee shall have the resources and the authority appropriate tocarry out its duties, including the authority to retain, as it deems necessary,counsel and other external consultants and to set and pay their compensation,without further Board approval.

 

Incarrying out its duties and to meet its responsibilities, the Committee shallexamine the books and relevant accounts of the Company, its divisions and itssubsidiaries.

 

**5.             DUTIESAND RESPONSIBILITIES**

 

Inaddition to, the above-mentioned responsibilities, the Committee shall addressthe following questions:

 

##### **5.1**                                 Financialreporting

 

·                  Monitor the quality and integrity ofthe Company’s accounting and financial reporting system through discussionswith management, the external auditors and the internal auditor;

 

·                  Review with management and theexternal auditors the annual audited financial statements of the Company,including the information contained in management’s discussion and analysis,related press releases and the external auditors report on the annual financialstatements prior to public disclosure and filing with the SecuritiesAdministrators;

 

·                  Review the unaudited interimfinancial statements, including management’s discussion and analysis for eachinterim period of the fiscal year and related press releases prior to publicdisclosure and filing with the Securities Administrators;

 

·                  Review the financial informationcontained in prospectuses, offering memoranda, the annual information form andother reports that include audited or unaudited financial information submittedfor approval by the Board;

 

·                  Review with the external auditorsand management, the quality, appropriateness and disclosure of the Company’saccounting principles and policies, the underlying assumptions and reportingpractices, and any proposed changes thereto;

 

·                  Review financial analyses and otherwritten communications prepared by management, the internal auditor or external auditors, setting forth significantfinancial reporting issues and judgments made in connection with thepreparation of the financial statements, including analyses of the effects ofalternative generally accepted accounting principles methods(« GAAP ») on the financial statements;

 

·                  Verify the compliance of managementcertification of financial reports with applicable legislation;

 

·                  Review important litigation and anyregulatory or accounting initiatives that could have a material effect upon theCompany’s financial situation or operating results and the appropriateness ofthe disclosure thereof in the documents reviewed by the Committee;

 

·                  Review the results of the externalaudit, and any significant problems encountered in the performance of theaudit, and management’s response or action plan related to any managementletter issued by the external auditors.

 

##### **5.2**                                 Riskmanagement and internal control

 

·                  Periodically receive management’sreport assessing the adequacy and effectiveness of the Company’s disclosurecontrols and procedures and systems of internal control;

 

·                  Review insurance coverage for theCompany annually and as may otherwise be appropriate;

 

·                  Review the Company’s risk assessmentand risk management policies, including the Company’s policies regardinghedging, investment and credit; review significant capital costs and othermajor expenditures, related party transactions and any other transactions whichcould alter the Company’s financial or corporate structure, 

 

 

2

----

** **

**CHARTER OF THE**

**AUDIT COMMITTEE**

 

including off-balance sheetitems;

 

·                  Assist the Board in carrying out itsresponsibility for ensuring that the Company is compliant with applicable legaland regulatory requirements;

 

·                  While ensuring confidentiality andanonymity, establish procedures for the receipt, retention and treatment ofcomplaints received by the Company regarding accounting, internal accountingcontrols or auditing matters, including employee concerns regarding accountingor auditing matters.

 

·                  Periodically review with the Board, theexternal and internal auditors, and members of management, the Company’santi-fraud program and practices.

 

##### **5.3**                                 InternalAudit Function

 

·                  Review with management, the internalaudit staff qualifications and experience and, if required, recommend theappointment or replacement of the internal auditor;

 

·                  Regularly assess the internal auditfunction’s performance, its responsibilities, its staffing, budget and thecompensation of its members;

 

·                  Annually review the internal auditplan;

 

·                  Undertake private discussions withthe internal auditor to establish internal audit independence, the level ofco-operation received from management, the degree of interaction with theexternal auditors, and any unresolved differences of opinion or disputes.

 

5.4           External Auditors

 

·                  Recommend to the Board, theappointment of the external auditors and, if appropriate, their removal (inboth cases, subject to shareholder approval), evaluate and compensate them andassess their qualifications, performance and independence;

 

·                  Ensure that as representatives ofthe shareholders, the external auditors report to the Committee and to theBoard;

 

·                  Approve all auditing servicesprovided by the external auditors and determine and approve in advance nonaudit services provided, in compliance with applicable legal and regulatoryrequirements;

 

·                  Discuss with the external auditors the quality and notjust the acceptability of the Company’s accounting principles but also thequality of those principles, including: i) all critical accounting policies andpractices used ; ii) any alternative treatments of financial information thathave been discussed with management, the ramification of their use as well as;iii) any other material written communications between the Company and theexternal auditors, including any disagreement or unresolved differences ofopinion between management and the external auditors that could have an impacton the financial statements;

 

·                  Review at least once a year theexternal auditors report stating all relationships the external auditors have withthe Company and confirming their independence, and holding discussions with theexternal auditors as to any relationship or services that may impact thequality of the audit services or their objectivity and independence;

 

·                  Review the Company’s hiring policiesfor employees or former employees of the external auditors.

 

5.5           Performance Evaluation of the Committee

 

·                  Prepare and review, with the Board,an annual performance evaluation of the Committee and its members and assessonce a year, the adequacy of its mandate and, if required, make recommendationsto the Board.

 

3

----