<PAGE>
                                                                       Exhibit 6

COVER

2001

Annual Report

                                      LOGO

<PAGE>



INSIDE

IPG Corporate Profile

Intertape Polymer Group Inc. (IPG) is a recognized leader in the development and
manufacture of specialized polyolefin plastic & paper packaging products and
complementary packaging systems. Headquartered in Montreal, Quebec, and
Sarasota, Florida, the company has grown strategically to support operations in
23 locations including 17 manufacturing facilities, with approximately 2,900
employees.

IPG's advanced manufacturing technologies offer the flexibility to produce a
wide range of products that reflect the needs of our customers. Products sold
through IPG distributors include Intertape(TM) brand hot-melt, acrylic and
natural rubber pressure-sensitive carton sealing tapes, water-activated carton
sealing tape, masking tape, cloth duct tape, HVAC tape, electrical/electronic
tape, automotive high performance and a variety of specialty tapes. Other
products include Exlfilm(R) brand shrink film, StretchFlex(R) brand stretch
wrap, Interpack(TM) brand packaging equipment, carton sealers, case erectors,
shrink packaging, ink jet printers and labeling systems. Examples of products
directly to end users include a wide range of Nova(TM) brand woven polyolefin
fabrics and Intertape(TM) brand flexible intermediate bulk containers (FIBC).

Since its inception in 1981, IPG has become a major presence in North America by
focusing on large niche markets, continuing its momentum of successful rapid
growth and remaining a low cost producer. With this strategy, IPG's
competitively priced products are sold to both a broad range of
industrial/specialty distributors, retail stores, and large end-users in diverse
industries. These industries include the aeronautical, agricultural, automotive,
beverage, chemical, construction, food, forest, geotextile, mining,
pharmaceutical, paper, recreational, retail, sports and transportation
industries.

Intertape Polymer Group Inc. is a publicly traded company with its common shares
listed on the New York Stock Exchange and The Toronto Stock Exchange under the
Stock Symbol "ITP."


<PAGE>



Table of Contents

Financial Highlights ......................................................    2
Message to Shareholders ...................................................    4
Consolidated Quarterly Statements of Earnings .............................    5
Management's Discussion and Analysis ......................................    6
Management's Responsibility for Financial Statements ......................   17
Auditors' Report ..........................................................   18
Financial Statements
 Consolidated Earnings ....................................................   19
 Consolidated Retained Earnings ...........................................   19
 Consolidated Cash Flows ..................................................   20
 Consolidated Balance Sheets ..............................................   21
 Notes to Consolidated Financial
 Statements .........................................................   22 to 38
 Intertape Polymer Group - Locations ......................................   39
 Other Information ........................................................   40
 Notes ....................................................................   41

Corporate Headquarters

110 E  Montee de Liesse
Montreal, Quebec
Canada, H4T 1N4

Investor Relations Tel:  866-202-4713
Fax:    514-731-5477
Web:    www.intertapepolymer.com
E-mail: itp$info@intertapeipg.com

Safe Harbor Statement

Certain statements and information set forth in this Annual Report, as well as
other written or oral statements made from time to time by the Company or by its
authorized executive officers on its behalf, constitute "forward-looking
statements" within the meaning of the the Federal Securities laws including
statements regarding the Company's expectations, beliefs, intentions, or
strategies for the future. The Company intends for its forward-looking
statements to be covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.

The reader should note that the Company's forward-looking statements speak only
as of the date hereof or when made and the Company undertakes no duty or
obligation to update or revise its forward-looking statements. Although
management believes that the expectations, plans, intentions and projections
reflected in its forward-looking statements are reasonable, such statements are
subject to known and unknown risks, uncertainties and other factors that may
cause the Company's actual results, performance or achievements expressed or
implied by the forward-looking statements.

The risks, uncertainties and other factors that the Company's stockholders and
prospective investors should consider include, but are not limited to, the
following: risks associated with pricing, volume and continued strength of
markets where the Company's products are sold; delays and disruptions associated
with terrorist attacks and reprisals, political instability, heightened security
and war in countries of the world that affect the Company's business; the effect
of competition on the Company's ability to maintain margins on existing or
acquired operations; the continued acceptance of the Company's existing and new
products by its major customers; increases in costs; and other risk factors
listed from time to time in the Company's reports (including its Annual Report
on Form 40-F) filed with the U.S. Securities and Exchange Commission, especially
those discussed under the heading "Risk Factors."




                                       1
<PAGE>



Financial Highlights

<TABLE>
<CAPTION>
                                                               2001            2000          1999
                                                              --------       --------       --------
<S>                                                          <C>             <C>            <C>
OPERATIONS

Consolidated sales                                            $594,905       $653,915       $569,947
Net earnings (Loss) Cdn Gaap                                   (12,242)        33,422          8,098
Net earnings (Loss) US Gaap                                    (12,242)        33,422          8,098
Cash from operations before funding of changes in non-cash
  working capital items                                         13,874         57,932         36,130
                                                              --------       --------       --------
PER COMMON SHARE

Net earnings (Loss) Cdn Gaap                                     (0.43)          1.18           0.29
Net earnings (Loss) US Gaap                                      (0.43)          1.18           0.29
Cash from operations before funding of changes in non-cash
  working capital items                                           0.49           2.05           1.31
Book value Cdn Gaap                                              10.32          10.98           9.97
Book value US Gaap                                               10.32          10.98           9.97
                                                              --------       --------       --------
FINANCIAL POSITION

Working capital                                                 68,075          8,718         68,937
Total assets Cdn Gaap                                          801,989        845,040        815,006
Total assets US Gaap                                           801,989        845,040        815,006
Total debt                                                     362,973        286,216        338,094
Shareholders equity Cdn Gaap                                   294,090        309,642        282,003
Shareholders equity US Gaap                                    294,090        309,642        282,003
                                                              --------       --------       --------
SELECTED RATIOS

Working capital                                                   1.53           1.04           1.48
Debt/Capital Employed Cdn Gaap                                    0.55           0.48           0.55
Debt/Capital Employed US Gaap                                     0.55           0.48           0.55
Return on equity Cdn Gaap                                        -4.2%          10.8%           2.9%
Return on equity US Gaap                                         -4.2%          10.8%           2.9%
                                                              --------       --------       --------
</TABLE>


                                       2
<PAGE>

<TABLE>
<CAPTION>
                                            2001         2000         1999
                                           ------       ------       ------
<S>                                        <C>          <C>          <C>
STOCK INFORMATION

Weighted average shares o/s (Cdn Gaap)+    28,266       28,328       27,679
Weighted average shares o/s (US Gaap)+     28,266       28,328       27,679

TORONTO STOCK EXCHANGE (CDN $)

Market price at year end                    13.25        11.00        40.80
High : 52 weeks                             24.00        41.00        46.30
Low : 52 weeks                              10.50        10.90        35.50
Volume : 52 weeks+                         20,490       14,053       10,611

NEW YORK STOCK EXCHANGE
Market price at year end                     8.30         7.31        28.19
High : 52 weeks                             15.60        28.19        30.94
Low : 52 weeks                               7.00         7.19        24.06
Volume : 52 weeks+                         13,695        4,929        1,264
                                           ======        =====        =====
</TABLE>

TORONTO STOCK EXCHANGE (CDN $)

<TABLE>
<CAPTION>
                                            High          Low         Close       ADV*
                                            -----        -----        -----     -------
<S>                                         <C>          <C>          <C>       <C>
Q1                                          18.50        10.70        14.50     150,300
Q2                                          24.00        14.10        18.80      49,200
Q3                                          20.00        10.50        12.04      72,533
Q4                                          16.55        11.85        13.25      50,433
                                            -----        -----        -----     -------
</TABLE>

NEW YORK STOCK EXCHANGE

<TABLE>
<CAPTION>
                                             High         Low         Close       ADV*
                                            -----        -----        -----      -------
<S>                                         <C>          <C>          <C>        <C>

Q1**                                        12.03         7.25         9.02      81,100
Q2**                                        15.60         9.04        13.59      35,767
Q3**                                        13.57         7.00         7.60      47,167
Q4**                                        10.44         7.55         8.30      54,800
                                            =====         ====         ====      ======
</TABLE>

This data should be read in conjunction with the Consolidated Financial
Statements of the Company and the Notes thereto and Management's Disscussion and
Analysis of Financial Condition and Results of Operations.

    (In thousands of U.S. dollars except per share data, selected ratios and
    trading volume information.)

*   Average daily volume.

**  Prior to August 16, 1999 stock was traded on the American Stock Exchange
    (AMEX).

+   In thousands


                                       3
<PAGE>


Message to Shareholders

Dear Shareholders,

The year 2001 started well for the Company. Our first quarter was in line with
our projections. However, the deterioration in the overall economy caught up
with us and 2001 became a year of contrasts. In spite of the negative results,
it was a year of key achievements for Intertape. We effected a variety of
initiatives, all of which should have a direct and positive effect on IPG's
future growth and profitability.

Last year, Intertape:

o Opened five regional distribution centers

o Attained key information technology (I.T.) objectives

o Closed or reduced unprofitable operations

o Completed a refinancing of our credit facilities and senior notes

o Developed several new products

o Reorganized our marketing and sales structure into focused markets

From an operational standpoint, we made improvements aimed at realizing the
benefits from all of our recent acquisitions and optimizing our efficiency and
quality. While these programs are ongoing, a quantum leap was achieved during
the year, which should manifest itself in 2002. Raw material prices were
generally at an all-time low, which was reflected by considerably lower selling
prices in most products. We did, however, retain our historic value-added as a
percentage of sales and expect to maintain it as prices of raw material increase
with an improved economy. Historically, our gross margin dollars have increased
substantially as raw material prices rise and we believe this relationship will
continue.

The performance of our I.T. Division met expectations. The instantaneous
information that is available to our managers has provided the tools to react to
an ever-changing economy and markets. In addition, we can supply our customers
with cost effective transactions and inventory controls.
Measurement-to-performance criteria has been enhanced for every aspect of the
Company to ensure that we remain a low cost provider of products and services to
a diverse customer base.

The breadth of our product line and our supply chain strategy will provide our
customers with a value added beyond their standard margins by reducing their
overall inventory levels. During the latter part of the year, our sales and
marketing staffs were realigned and trained to leverage this unique position.

Research & Development continued to provide new products for new applications
and markets. Five new films were commercialized during the year. All are
designed to provide superior performance. New tape products designed for
specific industries such as automotive, aerospace, etc., were also developed.
The R&D focus of the company is in these performance products which provide
higher gross margins. Our Woven and FIBC fabrics division introduced improved
shelter fabrics during the year and entered the steel market with a patented
wrap for coils. There are a number of exciting new products in our pipeline for
all markets we are in.

We refinanced our borrowing facilities and our long-term debt during the year.
This was followed by an issue of 5.1 million shares early in 2002 that generated
approximately $47 million, which was used to lower our borrowings. I anticipate
a further $25-30 million reduction in borrowings during 2002 by cash generated
from operations. Capital expenditures are budgeted to be 50% of the 2001 level
as the Company now has the ability to produce over $800 million of products.

As 2002 begins, I am very excited about our prospects. Our cost
base is at an all-time low and should continue to decline as we optimize our
operations and realize the full benefits of our distribution centers. Our supply
chain strategy is designed to give us a competitive advantage and enable us to
grow existing product lines. New products in all sectors of our business will
provide potential for accelerated growth as the year progresses. New business
development efforts should offer future opportunities.

I want to thank our employees, customers, and shareholders for their unwavering
support and dedication. I am optimistic that their devoted efforts will be
rewarded as we close 2002.

    /s/ Melbourne F. Yull
-------------------------------
Melbourne F. Yull
Chairman & Chief Executive Officer
March 8, 2002



                                       4
<PAGE>



Consolidated Quarterly Statements of Earnings
(In thousands of US dollars, except per share amounts)

<TABLE>
<CAPTION>
                                1ST QUARTER              2ND QUARTER              3RD QUARTER                4TH QUARTER
                              2001        2000         2001         2000         2001         2000         2001         2000
                           ---------   ----------   ----------   ----------   ----------   ----------   ----------   ----------

<S>                        <C>         <C>          <C>          <C>         <C>          <C>          <C>          <C>
SALES                      $ 158,863   $  169,358   $  141,265   $  167,231   $  148,602   $  166,356   $  146,175   $  150,970
Cost of sales                120,089      131,117      114,549      126,513      122,544      121,612      118,906      121,305
                           ---------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
GROSS PROFIT                  38,774       38,241       26,716       40,718       26,058       44,744       27,269       29,665
Selling, general and
 administrative expenses      21,858       20,032       20,090       17,891       27,837       21,306       21,558       23,863
Amortization of goodwill       1,743        1,550        1,797        1,522        1,757        1,663        1,717        1,805
Research and development       1,168        1,325        1,198        1,409          884        1,073          932        1,302
Financial expenses             8,436        5,995        7,736        6,652       13,212        7,345        9,527        7,213
                           ---------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
                              33,205       28,902       30,821       27,474       43,690       31,387       33,734       34,183
Gain on sale of interest
 in joint venture                  0       (5,500)           0            0            0            0            0            0
                           ---------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
                              33,205       23,402       30,821       27,474       43,690       31,387       33,734       34,183
Earnings (losses)
 before income taxes           5,568       14,839       (4,105)      13,244      (17,632)      13,357       (6,465)      (4,518)
Income taxes (recovery)        1,392        4,155       (1,392)       3,707       (4,937)       3,741       (5,455)      (8,103)
Net earnings (losses)          4,176       10,684       (2,713)       9,537      (12,695)       9,616       (1,010)       3,585
                           ---------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
EARNINGS (LOSS) PER SHARE
Cdn GAAP - Basic - US $         0.15         0.38        (0.10)        0.34        (0.45)        0.34        (0.03)        0.13
Cdn GAAP - Diluted - US $       0.15         0.37        (0.10)        0.33        (0.45)        0.33        (0.03)        0.13
US GAAP - Basic - US $          0.15         0.38        (0.10)        0.34        (0.45)        0.34        (0.03)        0.13
US GAAP - Diluted - US $        0.15         0.37        (0.10)        0.33        (0.45)        0.33        (0.03)        0.13
                           ---------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
AVERAGE NUMBER OF SHARES OUTSTANDING
Cdn GAAP - Basic - US    $27,983,417   28,300,781   28,199,535   28,297,621   28,346,102   28,342,803   28,496,884   28,380,530
Cdn GAAP - Diluted - US  $28,675,701   28,879,770   27,304,725   28,716,590   28,346,102   28,763,582   28,496,884   28,565,564
US GAAP - Basic - US     $27,983,417   28,300,781   28,199,535   28,297,621   28,346,102   28,342,803   28,496,884   28,380,530
US GAAP - Diluted - US   $28,675,701   28,879,770   27,304,725   28,716,590   28,346,102   28,763,582   28,496,884   28,565,564
                         ===========   ==========   ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

Note: In the 4th quarter of 2000, Canadian GAAP adopted the US GAAP definition
of the diluted earnings per share retroactively.


                                       5
<PAGE>


Review of Operations

SALES

Intertape Polymer Group's consolidated sales decreased by 9.0%
to $594.9 million for the year 2001. In the year 2000 sales had increased by
14.7% to $653.9 million and increased by 50.8% to $569.9 million for the year
1999. All sales are derived from packaging products made from various
combinations of resins and papers which are then converted into high quality,
value-added products. Products are made from somewhat the same extrusion
processes and differ to some degree only in the final stages of manufacturing.
Furthermore, most of the Company's products, while brought into the market
through varying sales methods and channels, bear the same economic
characteristics in all respects. The two basic methods of bringing products to
market are either through selective distribution or by selling directly to
end-users. In both cases, the Company's highly trained sales force works closely
with either the distributors sales force or with the end-users.

Examples of products sold through distributors are Intertape(TM)
brand pressure-sensitive carton sealing tapes which include hot-melt (introduced
in 1981) acrylic (1995) and natural rubber adhesives (1998); water-activated
carton sealing tape (1996); paper tapes (1997); duct tapes (1998); Exlfilm(R)
brand shrink wrap (1992) and StretchFlex(R) brand stretch wrap (1996). Examples
of products sold directly to end-users include a wide range of Nova-Thene(R)
brand woven polyolefin products (1989); Intertape(TM) brand flexible
intermediate bulk containers (FIBC) (1994), and electrical specialty tapes
(1997).

[GRAPH: SALES]

The following are the highlights of factors that contributed to changes in sales
volume during 2001.

o   In a majority of the Company's product lines, selling prices declined during
    the year. These changes in unit selling prices are mostly in relation to
    steadily declining raw material prices. Overall, selling prices declined by
    2.2% or approximately $14.4 million from the 2000 selling price levels.

o   The North American economy started to slow down during the last half of 2000
    and continued to do so up to September 11, 2001. After the events of
    September, the economy slowed even more. While some of the strategically
    important product lines showed unit growth in spite of the economy, overall,
    unit growth declined by 6.8% or $44.6 million as compared to the year 2000.
    Significant contributions to the unit decline were:

    o   The combined effect of a world-wide slowing economy, increasing domestic
        capacity in Asia and a strong US currency led the Company to the
        decision to withdraw from commodity export markets. This decision
        lowered sales by approximately $12.0 million.

    o   The Company acquired the operating assets of Olympian Tape Sales, Inc.
        d/b/a United Tape Company (UTC) during the third quarter of 2000. As a
        result of this acquisition, the Company lost a major private label
        supply contract with a customer that had been a major competitor of UTC
        in the retail market. This resulted in a decline in sales of
        approximately $20.0 million.

    o   During 2001, the strong US currency provided an opportunity for
        importers of flexible intermediate bulk containers (FIBC) to increase
        their share of the North American market. Sales from this product line
        decreased $7.8 million during 2001.

    o   Sales volumes were impacted by substantial declines in the consumption
        of packaging materials used in certain industries including the
        textiles, furniture and appliance, electronics and computer, aviation
        and electrical industries.

The Company expects modest revenue growth during 2002 driven
by new products and the implementation of our supply chain cost reduction
programs. It is expected that increased economic activity in general will
contribute to further growth during the balance of 2002.




                                       6
<PAGE>


GROSS PROFIT AND GROSS MARGIN

The Company's gross profit excluding non-recurring amounts decreased 22.3%
during 2001 to $126.5 million. In the year 2000, the Company's gross profit
excluding non-recurring amounts had increased 13.0% to $162.9 million in 2000;
and in 1999, it had increased 35.8% from its 1998 level to $144.1 million. As a
percentage of sales, gross margins excluding non-recurring amounts decreased to
21.3% in 2001 from 24.9% for 2000 and from 25.3% for 1999. Throughout this
three-year period, the Company was able to maintain value-added percentages
within less than 0.75%. Value-added is the difference between material costs and
selling prices expressed as a percent of sales. Traditionally, the Company has
been able to maintain an extremely narrow value-added window despite changes in
raw material costs. This is one of the strengths of the Company.

For the year 2001, the following are highlights of key factors contributing to
the decline in margins as compared to 2000:

o   Value-added as a percent of sales did not materially change from 2000 to
    2001. However, the decline in sales of $59.0 million brought about a decline
    in value-added dollars with a direct impact on gross profit of approximately
    $30.0 million between these years.

o   Had the fiscal 2000 cost structures related to labour and manufacturing
    overhead remained at the same level for fiscal 2001, there would have been a
    further decline in gross profits of approximately $18.0 million. However,
    during the year Management took various actions to bring about cost
    reductions which resulted in cost savings being realized in the amount of
    approximately $18.7 million.

o   Several non-recurring charges were incurred during 2001, including $3.2
    million of finished goods inventory write downs, $2.3 million related to the
    cost of setting up the various regional distribution centers (RDC's), $1.2
    million for severance payments and $1.0 million related to the write down of
    certain assets. These amounts totaling $7.7 million are included in cost of
    sales and reduced gross profit.

Even though the Company was able to maintain value-added as a percent of sales
and was able to reduce its manufacturing costs, the effect of lower sales and
the non-recurring costs of $7.7 million brought about a decline in gross margins
excluding non-recurring amounts from 24.9% in 2000 to 21.3% in 2001.

For the year 2000, the following are highlights of contributing factors which
lead to lower gross margins in that year:

o   Lower selling prices particularly in stretch wrap and carton sealing tapes
    adversely affected gross margin.

o   Gross profits were negatively impacted by further charges of a net amount of
    $9.5 million which were recorded during the fourth quarter of 2000. These
    charges consisted of additional account receivable and inventory reserves of
    $15.0 million less the impact of the reversal against earnings of $5.5
    million of provisions which had been established in prior years related to
    environmental,

[GRAPH: GROSS PROFIT]

[GRAPH: GROSS MARGIN]




                                       7
<PAGE>


[GRAPH: SELLING, GENERAL & ADMINISTRATIVE]

[GRAPH: SELLING GENERAL & ADMINISTRATIVE]

transfer pricing and employee-related benefits. During the year ended December
2000, the Company completed its review of these provisions and decided to reduce
them to more appropriate levels based on third party studies. As the Company has
made a series of acquisitions over the past few years, Management contracted
with a third party consultant to have an extensive review conducted of its major
manufacturing equipment. The consultant's report supported the decision to
standardize the useful lives of major equipment to twenty (20) years.

Based on information available at the current time, Management anticipates that
both gross profits and gross margins should increase during 2002 due to the
realization of new product sales. Management's expectations in this regard are
based on the following assumptions being realized:

o   Available economic data regarding raw material prices indicates that the
    cost of many of the Company's raw material components should increase
    sometime during 2002. Historically, the Company has been able to maintain
    value-added as a percent of sales which should put pressure on the packaging
    industry to increase unit selling prices as raw material costs increase.
    This should bring about an expansion in the Company's gross margins and
    profits.

o   During 2001, the Company completed the implementation of its RDC strategy.
    The Company anticipates the RDC's will result in lower freight costs and
    will increase efficiencies through complete and on-time delivery of products
    to its customers.

o   Based on current volume, the Company has more than 30% capacity available as
    a result of various programs completed during 2001 which expanded plant
    outputs. The incremental cost of additional volume beyond that of 2001 is
    mostly in raw materials, freight, and energy cost. Should sales volume
    increase, this will also contribute to improvements in both gross profits
    and margins.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

During 2001, the Company recorded $10.8 million of non-recurring charges in
Selling, General and Administrative (SG&A) expenses. These charges are comprised
of $7.0 million of additional reserves for bad debts related primarily to
insufficient reserves related to the systems conversion of Central Products
Company (CPC), $3.0 million worth of expense for severance payments was taken
and a further amount of $0.8 million was related to the required reductions in
the value of certain assets.

During 1999, there were several unusual non-recurring charges included as SG&A
expenses. These charges were comprised of $8.5 million as a result of the MIS
difficulties which contributed to increases in the allowance for doubtful
accounts and a further $3.1 million related to several abandoned acquisitions as
well as the final costs of relocating more than twenty-five key managers to the
Company's new corporate office in Sarasota, Florida. For purposes of the graphs
above and the following detailed explanations, these non-recurring expenses have
been excluded.


                                       8
<PAGE>


SG&A expenses decreased by $2.6 million to an adjusted amount of $80.5 million
for 2001; increased $9.4 million to $83.1 million for 2000 from $73.7 million
excluding non-recurring items for 1999. As a percentage of sales, these expenses
were 13.5%, 12.7% and 12.9% for the years 2001 to 1999 respectively.

The year 2000 results:

SG&A costs increased as a result of the acquisitions of UTC during 2000 and CPC
during 1999. In both cases, the Company did not obtain the anticipated synergies
due to the decision to not integrate these operations' systems until the
Company's MIS systems were stabilized. CPC was integrated during April 2001 and
UTC is not scheduled for integration before the second quarter of 2002.

RESEARCH AND DEVELOPMENT

Research and Development (R&D) remains an important function within the Company.
Taken as a percentage of sales, R&D was 0.7%, 0.8% and 0.7% for the years 2001
to 1999 respectively. R&D continues to be focused on new products, new
technology developments, new product processes and formulations. Fiscal 2002
will see a steady rollout of significant new products into the Company's
markets.

OPERATING PROFIT

For purposes of this discussion, Operating Profit is defined as Gross Profit
less SG&A expenses.

When adjusted for all of the above highlighted effects on sales, cost of sales
and SG&A expenses incurred as a result of the MIS and plant integration
difficulties for the years from 2001 to 1999, adjusted operating profits are
$46.0 million (7.7%), $79.8 million (12.2%) and $70.4 million (12.4%) for the
years 2001 to 1999 respectively. The decline in operating profits is as a result
of several factors.

[GRAPH: RESEARCH AND DEVELOPMENT]

[GRAPH: OPERATING PROFIT]

[GRAPH: OPERATING MARGIN]




                                       9
<PAGE>

[GRAPH: EFFECTIVE INCOME TAX RATES]

For the year 2001:

The majority of the decline in operating profits was as a result of the effect
of the decrease in value-added dollars although the decline was lessened by
certain cost reduction programs both in manufacturing costs and SG&A expenses.
However, overall, the Company was not able to sustain this decline in
value-added dollars as the majority of its manufacturing costs and SG&A expenses
are somewhat fixed.

For the years 2000 and 1999:

Acquisitions consummated in 1999 and 2000 have brought products into the Company
which currently have gross margins below the Company's historic levels.
Furthermore, Stretch-Flex(R) stretch wrap margins were and continue to be under
intense pressure as a result of market conditions. MIS difficulties made certain
synergistic cost reductions unattainable during both 1999 and 2000. Ongoing
plant integration difficulties depressed both gross margins and operating
profits even further.

FINANCIAL EXPENSES

Included in financial expenses for 2001 is a non-recurring $6.7 million charge
consisting of the write-off of certain deferred costs related to the previous
financing arrangements that were refinanced at the end of 2001, together with to
the fees paid to both the Noteholders and the Banks in relation to the
refinancing.

INCOME TAX

The Company's statutory income tax rate was approximately 43.0% for the period
from 1999 to 2001. The impact of certain items for tax purposes discussed below
and the amortization of that part of the goodwill which is non-deductible for
income tax purposes will result in the Company's effective income tax rate
exceeding its statutory tax rate. The Company's effective tax rate was impacted
by two material events during recent years. First, the Company's foreign based
income is taxed at rates which are significantly lower than the rates that would
have applied on the income had it been earned in Canada. Secondly, the Company
entered into a series of transactions that resulted in permanent differences
greater than prior years. As such, pre-tax accounting income is less than $50.0
million, this will have the effect of reducing the effective tax rate lower than
the expected percent.

At December 31, 2001, the Company had accumulated $31.3 million of Canadian
operating loss carry-forwards expiring in 2007 and 2008 and $102.3 million of
U.S. federal and state operating losses expiring in 2017 through 2020.

In assessing the valuation of future income tax assets, Management considers
whether it is more likely than not that some portion or all of the future income
tax assets will not be realized. Management considers the scheduled reversal of
future income tax liabilities, projected future taxable income and tax planning
strategies in making this assessment. The Company expects the future income tax
assets, net of the valuation allowance at December 31, 2001, to be realized as a
result of the reversal of existing taxable temporary differences.

As part of the above analysis, a $15.5 million valuation allowance was
established during the year ended December 31, 2001.




                                       10
<PAGE>


NET EARNINGS - CANADIAN AND U.S. GAAP

For the purposes of the ten year graphical presentation, 1997 net earnings are
based on the earnings that would have been recorded if a restructuring charge
had not taken place in that year; 1999 net earnings are being presented before
the above highlighted negative effects on sales, gross profit and SG&A as a
result of the MIS and plant integration difficulties; 2000 net earnings are
being presented before the final effect on gross profit; and 2001 net earnings
have been presented before the effect of the non-recurring costs discussed in
the above text. The Company's net earnings adjusted as per the above for the
years 2001, 2000, and 1999 would have been $13.0 million, $42.9 million, and
$39.2 million respectively. Canadian GAAP net earnings conform in all material
respects to amounts that would have to be reported if the financial statements
would have been prepared under U.S. GAAP.

EARNINGS PER SHARE - CANADIAN AND U.S. GAAP

Basic EPS adjusted for non-recurring costs decreased to $0.46 for the year 2001
as compared to $1.48 for 2000 and $1.39 in 1999. The weighted-average number of
common shares outstanding for the purpose of the basic EPS calculation was 28.3
million shares for 2001, 28.3 million shares for 2000, and 27.7 million shares
for 1999.

Liquidity and Capital Resources

CASH FLOW

Cash flow from operations before changes in non-cash working capital items
decreased $44.0 million to $13.9 million for 2001, increased by $21.8 million to
$57.9 million for 2000, and decreased $21.8 million to $36.1 million in 1999.
The decrease for the year 2001 is directly related to the decline in sales which
negatively impacted earnings. In spite of the shortfall in sales, the Company's
management certain balance sheet items generated $34.2 million of additional
cash flow from working capital during 2001, during the year 2000, working
capital consumed $17.9 million of cash. This turnaround of $52.1 million in
working capital contribution to cash flow is a direct result of the Company
placing less emphasis on its acquisition strategy and more emphasis on the
completion of integrating its acquired business processes.

[GRAPH: NT EARNINGS - CDN GAAP]

[GRAPH: EPS - BASIC CDN GAAP]




                                       11
<PAGE>


[GRAPH: CASH FLOW BEFORE FUNDING WORKING CAPITAL]

[GRAPH: CASH FLOW AFTER FUNDING WORKING CAPITAL]

Cash flow from investing activities was also significantly different in 2001
than in recent years. For 2001, the Company acquired net capital assets of $17.9
million and increased other assets by $8.6 million, for a total use of cash of
$26.5 million. During 2000, $54.5 million of cash was used to acquire $43.9
million of net capital assets and in order to complete a small acquisition in
the amount of $28.2 million; less funds provided by a reduction of $17.6 million
in other assets. In 1999, cash flow was consumed in order to sustain investing
activities. $175.9 million was used to complete acquisitions of $108.1 million,
to increase capital assets in the amount of $57.2 million and to fund an
increase in other assets of $10.5 million.

Cash flow from financing activities was also significantly different than that
in previous years. 2001 was the first fiscal period since the Company embarked
on its acquisition strategy in 1995 in which cash flow from operations was used
to reduce debt. Short-term bank indebtedness was reduced by $12.9 million and
$86.4 million was transferred to long-term debt as a result of the refinancing
completed late in 2001. Long-term debt was reduced by $9.6 million. The Company
issued $3.4 million of common shares related to the exercise of employees' stock
options and the funding of the U.S. employee stock ownership and retirement
savings plan. It also used $0.9 million to purchase and cancel common shares.
There were no dividends paid during 2001. For the year 2000, the Company
increased short-term bank indebtedness by $26.5 million, repaid $2.2 million in
long-term debt and used $7.2 million to purchase common shares for cancellation
and to pay dividends. For the year 1999, the Company increased long-term debt by
$187.0 million in order to fund its investing activities, issued $78.6 million
of common shares, used $60.8 million to reduce other long-term debt, used $5.5
million to purchase common shares for cancellation and to pay dividends and
reduced bank indebtedness by $68.8 million.

Management is committed to further debt reductions. This will be accomplished by
a combination of the 2002 common share issue which should generate approximately
$47.4 million of net proceeds and will be used to reduce long-term debt;
maintain a policy of limited investing in capital assets; and further reductions
in working capital requirements.




                                       12
<PAGE>


CREDIT FACILITIES

The Company had various credit facilities that had expired during 2000 and that,
throughout 2001, were renewed on a short-term basis subject to being refinanced.
On December 20, 2001, the new financing was completed. The effect was a new
short-term line of credit committed for three years in the amount of $50.0
million. $39.0 million of which was utilized as at the year-end. A first charge
against trade receivables and inventories was granted to the banks to secure
this new facility.

Even though 2001 was a year of challenges, the Company was able to generate
positive cash flows both before and after funding of working capital needs. The
effect of the issuance of common shares in 2002, the planned reduction in 2002
capital expenditures and cash from operations and management of financial items
will further enhance the ability of the Company to reduce debt while meeting all
its short and long term funding commitments.

LONG-TERM DEBT

As part of the new financing, the balance of the then short-term debt was
cancelled and new facilities with two year and four year terms in the aggregate
amount of $95.0 million were entered into. $86.4 million was drawn against these
facilities as at December 31, 2001. A fixed charge against all assets and a
second lien against receivables and inventory was granted to both the long-term
bank debt and the Senior Noteholders. Interest rates applicable to the Senior
Noteholders was increased by 225 basis points for the duration of their Notes.

[GRAPH: BANK DEBT]

[GRAPH: LONG-TERM DEBT]

[GRAPH: LONG-TERM DEBT -- PROFORMA FOR NEW FINANCING]


                                       13
<PAGE>

[GRAPH: CAPITAL STOCK]

[GRAPH: CAPITAL STOCK - PROFORMA OF MARCH 1, 2002 OFFERING]

[GRAPH: CAPITAL EXPENDITURES]

CAPITAL STOCK

From time to time in 2001, 2000, and 1999, various employees exercised stock
options which contributed $1.1 million, $0.2 million, and $1.7 million during
2001, 2000, and 1999 respectively. Further, for the first time in 2001, $2.3
million worth of shares were issued in relation to funding the Company's U.S.
employee stock ownership retirement savings plan.

As part of the financing of the purchase of certain assets of UTC during the
third quarter of 2000, $4.0 million worth of shares were issued at a per share
price of $15.9625.

During the first quarter of 1999, the Company issued 3,000,000 additional common
shares at a price of CDN $40.25 per share (US $25.63 per share after issue
costs) for a total cash infusion of US $76.9 million after issue costs. Proceeds
were used to repay short-term and long-term debts.

During 1999, the Company announced that it had registered a Normal Course Issuer
Bid (NCIB) in Canada. The NCIB was extended for one-year terms during 2000 and
again during 2001. 128,100, 353,200 and 100,000 shares were purchased for
cancellation during 2001, 2000 and 1999 respectively. This resulted in a
reduction in the stated value of the Company's issued common shares in the
amounts of $0.8 million, $2.4 million and $0.7 million for the years 2001, 2000
and 1999 respectively.

As part of the purchase price for the acquisition of CPC, the Company issued
300,000 share purchase warrants. These warrants expire on August 9, 2004, and
permit the holder to purchase common shares of the Company at a price of $29.50
per share.

On March 1, 2002, the Company issued 5.1 million shares at a price of CDN $15.50
(US $9.71) per share under a "Bought Deal" as allowed under Canadian security
laws for a cash infusion of $. Proceeds have been used primarily to reduce
long-term debt.




                                       14
<PAGE>


CAPITAL EXPENDITURES

Total net capital expenditures were $17.9 million, $43.9 million, and $57.2
million for the years 2001 to 1999 respectively. There were a number of major
projects either ongoing or completed during this period as described below:

o   The expansion of our Truro, Nova Scotia, plant began in 1999 and was
    completed in 2001. This expansion added much needed capacity for production
    of both traditional and new woven products such as vinyl replacement
    products. As well, new printing capacity for woven products was brought on
    line in 2000.

o   The installation of a 6th BOPP extrusion line was commercialized at the
    Company's Danville, Virginia, facility during 2000 and 2001. This enabled
    the Company to be completely self-sufficient in the production of film for
    pressure sensitive tapes for both hot-melt and acrylic based adhesives
    tapes.

o   A 7th cast line for the production of Stretch Films was installed in the
    Danville, Virginia, location during 2000 to bring the Company's capacity in
    this product line to more than 100 million pounds.

o   Other expenditures were made in order to lower manufacturing costs and
    improve output of tape production facilities in Columbia, South Carolina,
    Marysville, Michigan, and Richmond, Kentucky, primarily in the areas of
    finishing and packaging.

o   Expenditures in the MIS area continued in 2001 as the Company completed the
    migration of most of its systems onto a new enterprise platform, which is
    essential to the "Basket-of-Products" programs. As well, the Company
    continued with the roll-out of Warehouse Management Systems (WMS). All of
    the Company's major manufacturing locations and RDC's will have a WMS by the
    end of 2002. During 2000, the Company also started to bring the entire
    payroll function in house. This was completed in the latter part of 2001.

Management is projecting that capital expenditures for the year 2002 should not
exceed $16.0 million and will be funded from available cash generated by
operations.

BUSINESS ACQUISITIONS

2001

There were no acquisitions in the year 2001. While acquisitions remain an
important component of the strategy to provide the Company with new products and
channels of distribution, there were no attractive opportunities presented to
the Company during the year which met Management's criteria.

2000

On September 1, 2000, the Company completed the acquisition of UTC, a
manufacturer and distributor of certain packaging products into the retail
market. With this acquisition, the Company established a presence in the North
American retail market. Prior to the acquisition, the Company was involved to a
lesser degree in this channel of distribution. The UTC acquisition has
accelerated the development of this important channel of distribution.

The purchase price was paid for with cash in the amount of
$28.2 million and $4.0 million worth of common shares of Intertape stock. The
purchase price allocation includes $20.4 million allocated to goodwill.

1999

On July 30 and August 9, 1999, respectively, the Company acquired from Spinnaker
Industries, Inc. (Amex: SKK) substantially all the assets of SETco and all of
the outstanding shares of Central Products Company, manufacturers of
pressure-sensitive, water-activated and electrical tapes. The total cash
consideration and transactions costs for these acquisitions was $108.1 million.
In addition, the Company issued 300,000 share purchase warrants valued at $3.2
million to the seller of these companies. The purchase price allocations reflect
$48.5 million allocated to goodwill.




                                       15
<PAGE>


[GRAPH: BOOK VALUE PER SHARE]

BOOK VALUE PER SHARE

The unadjusted book value per share for the years ended 2001, 2000, and 1999 are
$10.32, $10.98, and $9.97 respectively.

DIVIDEND ON COMMON SHARES

There were no dividends declared during 2001.

On May 15, 2000, the Company declared an annual dividend of $0.106 per share
(CDN $0.16) to shareholders of record as of May 30, 2000. The dividend was paid
on June 8, 2000, and amounted to approximately $3.0 million.

On March 9, 1999, the Company declared an annual dividend of $0.106 per share
(CDN $0.16) to shareholders of record as of March 19, 1999. The dividend was
paid on April 5, 1999, and amounted to approximately $3.0 million.

NEW ACCOUNTING REPORTING STANDARDS

Over the past several months, the Financial Accounting Standards Board approved
the issuance of SFAS No. 141, "Business Combinations", and SFAS 142, "Goodwill
and Other Intangible Assets". The new standards require that all business
acquisitions initiated after June 30, 2001, must be accounted for under the
purchase method. In addition, all intangible assets acquired that are obtained
through contractual or legal right, or are capable of being separately sold,
transferred, licensed, rented, or exchanged shall be recognized as an asset
apart from goodwill. Goodwill and intangibles with indefinite lives will no
longer be subject to amortization, but will be subject to at least an annual
assessment for impairment by applying a fair value based test.

The Company continued to amortize goodwill under its current method until
January 1, 2002. The Company will begin applying SFAS 142 beginning in the first
quarter of 2002. Application of the non-amortization provisions of SFAS 142 is
expected to result in an increase in net income of approximately $7.1 million in
2002. The Company will test for goodwill impairment using the two-step process
prescribed in SFAS 142. The first step is a screen for potential impairment,
while the second step measures the amount of the impairment, if any. The Company
expects to perform the first test of the required impairment tests of goodwill
and indefinite lived intangible assets as of January 1, 2002, in the first
quarter of 2002. Any impairment charge resulting from these transitional
impairment tests will be reflected as the cumulative effect of a change in
accounting principle in the first quarter of 2002. The Company has been able to
determine the effect of these tests; and does not anticipate that there will be
any material effect on the earnings and financial position of the Company for
2002.




                                       16
<PAGE>


To the Shareholders of Intertape Polymer Group Inc.

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The consolidated financial statements of Intertape Polymer Group Inc. and the
other financial information included in this annual report are the
responsibility of the Company's Management and have been examined and approved
by its Board of Directors. These consolidated financial statements have been
prepared by Management in accordance with Canadian generally accepted accounting
principles and include some amounts that are based on Management's best
estimates and judgements. The selection of accounting principles and methods is
Management's responsibility.

The Company maintains internal control systems designed to ensure that the
financial information produced is relevant and reliable.

Management recognizes its responsibility for conducting the Company's affairs in
a manner to comply with the requirements of applicable laws and established
financial standards and principles, and for maintaining proper standards of
conduct in its activities.

The Board of Directors assigns its responsibility for the financial statements
and other financial information to the audit committee, the majority of whom are
non-management directors.

The audit committee's role is to examine the financial statements and annual
report and recommend that the Board of Directors approve them, to examine the
internal control and information protection systems and all other matters
relating to the Company's accounting and finances. In order to do so, the audit
committee meets periodically with external auditors, to review their audit plans
and discuss the results of their examination. This committee is responsible for
recommending the appointment of the external auditors or the renewal of their
engagement.

The Company's external auditors, Raymond Chabot Grant Thornton, appointed by the
shareholders at the Annual and Special Meeting, have audited the Company's
financial statements and their report indicating the scope of their audit and
their opinion on the financial statements follows.

Sarasota, Florida and Montreal, Canada
March 8, 2002

   /s/ Melbourne F. Yull
-------------------------------
Melbourne F. Yull
Chairman and Chief Executive Officer

   /s/ Andrew M. Archibald
-------------------------------
Andrew M. Archibald
Chief Financial Officer, Secretary, Treasurer
Vice President, Administration



                                       17
<PAGE>

AUDITOR'S REPORT

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

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

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

   /s/ Raymond Chabot Grant Thornton
--------------------------------------------
General Partnership
Chartered Accountants

Montreal
March 8, 2002




                                       18
<PAGE>



Consolidated Earnings

(In thousands of US dollars, except per share amounts)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                  2001        2000       1999
------------------------                               ---------   ---------  ---------
<S>                                                    <C>         <C>        <C>
Sales                                                  $ 594,905   $ 653,915  $ 569,947
Cost of sales (Note 4)                                   476,089     500,547    445,322
                                                       ---------   ---------  ---------
GROSS PROFIT                                             118,816     153,368    124,625
Selling, general and administrative expenses (Note 4)     91,343      83,092     85,330
Amortization of goodwill                                   7,014       6,540      5,451
Research and development                                   4,182       5,109      3,901
Financial expenses (Note 5)                               38,911      27,205     22,149
Gain on sale of interest in joint venture (Note 4)                    (5,500)
                                                       ---------   ---------  ---------
                                                         141,450     116,446    116,831
                                                       ---------   ---------  ---------
Earnings (loss) before income taxes                      (22,634)     36,922      7,794
Income taxes (Note 6)                                    (10,392)      3,500       (304)
                                                       ---------   ---------  ---------
Net earnings (loss)                                    $ (12,242)  $  33,422  $   8,098
                                                       ---------   ---------  ---------
EARNINGS (LOSS) PER SHARE (NOTE 7)
Basic                                                  $   (0.43)  $    1.18  $    0.29
                                                       ---------   ---------  ---------
Diluted                                                $   (0.43)  $    1.16  $    0.29
                                                       =========   =========  =========
</TABLE>

Consolidated Retained Earnings

(In thousands of US dollars)
<TABLE>
<CAPTION>

Years Ended December 31,                                  2001       2000        1999
                                                       ---------   ---------  ---------
<S>                                                    <C>         <C>        <C>
Balance, beginning of year                             $ 116,966   $  88,422  $  85,184
Net earnings (loss)                                      (12,242)     33,422      8,098
                                                       ---------   ---------  ---------
                                                         104,724     121,844     93,282
Dividends                                                              3,006      2,993
Premium on purchase for cancellation of common shares        157       1,872      1,867
                                                       ---------   ---------  ---------
                                                             157       4,878      4,860
Balance, end of year                                   $ 104,567   $ 116,966  $  88,422
                                                       =========   =========  =========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.




                                       19
<PAGE>



Consolidated Cash Flows

(In thousands of US dollars)

<TABLE>
<CAPTION>

YEARS ENDED DECEMBER 31,                               2001         2000       1999
                                                    ---------    ---------   ---------
<S>                                                 <C>          <C>         <C>
OPERATING ACTIVITIES
Net earnings (loss)                                 $ (12,242)   $  33,422   $   8,098
Non-cash items
 Depreciation and amortization                         33,831       27,934      31,229
 Future income taxes                                   (9,165)         482      (3,197)
 Write-off of debt issue expenses                       2,165
 Write-off of capital assets                                         1,594
 Other non-cash items (Note 15)                          (715)      (5,500)
Cash from operations before changes
 in non-cash working capital items                  $  13,874    $  57,932   $  36,130
                                                    ---------    ---------   ---------
Changes in non-cash working capital items
 Trade receivables                                     10,337       (6,897)      2,274
 Other receivables                                     (1,287)       3,003      (5,595)
 Inventories                                           17,690        3,318      (4,393)
 Parts and supplies                                    (1,626)         175      (1,692)
 Prepaid expenses                                      (3,341)      (1,809)     (2,123)
 Accounts payable and accrued liabilities              12,431      (15,697)     21,903
                                                    ---------    ---------   ---------
                                                       34,204      (17,907)     10,374
Cash flows from operating activities                $  48,078    $  40,025   $  46,504
                                                    ---------    ---------   ---------
INVESTING ACTIVITIES

Acquisitions of businesses (Note 8)                                (28,195)   (108,172)
Capital assets, net of investment tax credits         (25,942)     (48,142)    (57,154)
Proceeds on sale of capital assets                      8,000        4,239
Other assets                                           (8,592)      17,637     (10,577)
Cash flows from investing activities                $ (26,534)   $ (54,461)  $(175,903)
                                                    ---------    ---------   ---------
FINANCING ACTIVITIES
Net change in bank indebtedness                       (99,261)      26,468     (68,835)
Issue of long-term debt                                86,400                  187,000
Repayment of long-term debt                            (9,634)      (2,249)    (60,767)
Issue of common shares                                  3,379          176      78,583
Common shares purchased for cancellation                 (922)      (4,194)     (2,542)
Dividends paid                                                      (3,006)     (2,993)
Cash flows from financing activities                $ (20,038)   $  17,195   $ 130,446
                                                    ---------    ---------   ---------
NET INCREASE IN CASH POSITION                           1,506        2,759       1,047
Effect of foreign currency translation adjustments     (1,506)      (2,759)     (1,047)
Cash position, beginning and end of year            $      --    $      --   $      --
                                                    ---------    ---------   ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Interest paid                                       $  32,791    $  29,319   $  22,065
Income taxes paid                                   $   1,234    $   3,118   $   3,153
                                                    =========    =========   =========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.




                                       20
<PAGE>



Consolidated Balance Sheets
(In thousands of US dollars)

<TABLE>
<CAPTION>
DECEMBER 31,                                                  2001      2000
                                                            --------  --------
<S>                                                         <C>       <C>
ASSETS
Current assets
 Trade receivables (net of allowance for doubtful accounts
   of $6,670; $10,300 in 2000)                              $ 86,529  $ 97,478
 Other receivables (Note 9)                                   13,654    11,659
 Inventories (Note 10)                                        70,688    89,264
 Parts and supplies                                           11,592    10,069
 Prepaid expenses                                              9,450     6,114
 Future income tax assets (Note 6)                             4,025    10,810
                                                            --------  --------
                                                             195,938   225,394
Capital assets (Note 11)                                     366,567   374,753
Other assets (Note 12)                                        11,680    10,636
Goodwill, at amortized cost                                  227,804   234,257
                                                            --------  --------
                                                             801,989   845,040
                                                            ========  ========
LIABILITIES
Current liabilities
 Bank indebtedness (Note 13)                                  28,046   127,333
 Accounts payable and accrued liabilities                     91,507    79,811
 Instalments on long-term debt                                 8,310     9,532
                                                            --------  --------
                                                             127,863   216,676
Future income taxes (Note 6)                                  21,588    37,538
Long-term debt (Note 14)                                     354,663   276,684
Other liabilities (Note 15)                                    3,785     4,500
                                                            --------  --------
                                                             507,899   535,398

SHAREHOLDERS' EQUITY
Capital stock and share purchase warrants (Note 16)          189,496   186,908
Retained earnings                                            104,567   116,966
Accumulated foreign currency translation adjustments              27     5,768
                                                            --------  --------
                                                             294,090   309,642
                                                            $801,989  $845,040
                                                            ========  ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

On behalf of the Board,


     /s/ Ben J. Davenport, Jr.            /s/ Gordon R. Cunningham
     ----------------------------         ----------------------------
     Ben J. Davenport, Jr.,               Gordon R. Cunningham,
     (signed) Director                    (signed) Director

                                       21
<PAGE>
Notes to Consolidated Financial Statements
December 31,

(In US dollars; tabular amounts in thousands, except per share amounts)

1 - GOVERNING STATUTES

The Company, incorporated under the Canada Business Corporations Act, is based
in Montreal, Canada and Sarasota, Florida.

The common shares of the Company are listed on the New York Stock Exchange in
the United States of America ("United States") and on The Toronto Stock Exchange
in Canada.

2 - ACCOUNTING POLICIES

The consolidated financial statements are expressed in US dollars and were
prepared in accordance with Canadian generally accepted accounting principles,
which, in certain respects, differ from the accounting principles generally
accepted in the United States, as shown in Note 21.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with Canadian generally
accepted accounting principles requires Management to make estimates and
assumptions that affect the recorded amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the recorded amounts of revenues and expenses during the
reporting period. Actual results may differ from those estimates.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned. All significant intercompany
accounts and transactions have been eliminated. Investments in joint ventures
have been proportionately consolidated based on the Company's ownership
interest.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of trade receivables, other receivables, bank indebtedness as
well as accounts payable and accrued liabilities is equivalent to carrying
amounts, given the short maturity period of such financial instruments.

The fair value of receivables from joint ventures approximates the carrying
amounts reported in the consolidated balance sheets.

The fair value of long-term debt was established as described in Note 14.

FOREIGN CURRENCY TRANSLATION

Reporting currency

The accounts of the Company's operations having a functional currency other than
the US dollar have been translated into the reporting currency using the current
rate method as follows: assets and liabilities have been translated at the
exchange rate in effect at year-end and revenues and expenses have been
translated at the average rate during the year. All translation gains or losses
of the Company's net equity investments in these operations have been included
in the accumulated foreign currency translation adjustments account in
shareholders' equity. Changes in this account for all periods presented result
solely from the application of this translation method.

Foreign currency translation

Transactions denominated in currencies other than the functional currency have
been translated into the functional currency as follows: monetary assets and
liabilities have been translated at the exchange rate in effect at the end of
each year and revenue and expenses have been translated at the average exchange
rate for each year, except for depreciation and amortization which are
translated at the historical rate; non-monetary assets and liabilities have been
translated at the rates prevailing at the transaction dates. Exchange gains and
losses arising from such transactions are included in earnings.

CASH AND CASH EQUIVALENTS

The Company's policy is to present cash and temporary investments having a term
of three months or less with cash and cash equivalents.

INVENTORIES AND PARTS AND SUPPLIES VALUATION

Raw materials are valued at the lower of cost and replacement cost. Work in
process and finished goods are valued at the lower of cost and net realizable
value. Cost is principally determined by the first in, first out method. The
cost of work in process and finished goods includes the cost of raw materials,
direct labour and manufacturing overhead.

Parts and supplies are valued at the lower of cost and replacement cost.


                                       22
<PAGE>

2 - ACCOUNTING POLICIES (CONTINUED)

CAPITAL ASSETS

Capital assets are stated at cost less applicable investment tax credits and
government grants earned and are depreciated over their estimated useful lives
principally as follows:

<TABLE>
<CAPTION>
                                                                                                     Rates and
                                                                                     Methods           periods
                                                                               -------------    --------------
<S>                                                                            <C>              <C>
Buildings                                                                        Diminishing
                                                                                     balance            5%
                                                                                          or
                                                                               straight-line    15 to 40 years
Buildings under capital leases                                                 Straight-line          20 years
Manufacturing equipment                                                        Straight-line       20 years(i)
Furniture, office and computer equipment, software and other                     Diminishing
                                                                                     balance               20%
                                                                                          or
                                                                               straight-line           7 years
                                                                               -------------    --------------
</TABLE>

(i) In 2000, as a result of an extensive review of the useful lives of the
    Company's principal manufacturing equipment, Management decided to extend to
    20 years the estimated useful lives of all manufacturing equipment. Prior to
    such revision, these assets were depreciated over periods of 12 to 20 years.
    This change in estimated useful life was applied prospectively commencing
    January 1, 2000 and has resulted in a decrease in depreciation expense and a
    corresponding increase in earnings before income taxes, net earnings, basic
    earnings per share and diluted earnings per share of approximately $11.6
    million, $7.3 million, $0.26 and $0.25 respectively for the year ended
    December 31, 2000.

The Company follows the policy of capitalizing interest during the construction
and preproduction periods as part of the cost of significant capital assets.
Normal repairs and maintenance are expensed as incurred. Expenditures which
materially increase values, change capacities or extend useful lives are
capitalized. Depreciation is not charged on new capital assets until they become
operative.

DEFERRED CHARGES

Debt issue expenses are deferred and amortized on a straight-line basis over the
term of the related obligation. Other deferred charges are amortized on a
straight-line basis over a five-year period.

GOODWILL

Goodwill represents the excess of the purchase price and related costs over the
value assigned to the net tangible assets of investments in subsidiaries and
joint ventures at the dates of acquisition. Goodwill is being amortized on a
straight-line basis over periods ranging from 20 to 40 years, the estimated life
of the underlying benefit. The value of goodwill is regularly evaluated by
reviewing the returns of the related business, taking into account the risk
associated with the investment. Any permanent impairment in the amortized value
of goodwill would be written off against earnings.

ENVIRONMENTAL COSTS

The Company expenses, on a current basis, recurring costs associated with
managing hazardous substances and pollution in ongoing operations. The Company
also accrues for costs associated with the remediation of environmental
pollution when it becomes probable that a liability has been incurred and its
share of the amount can be reasonably estimated.

PENSION PLANS AND OTHER RETIREMENT BENEFITS

The Company has defined benefit and defined contribution pension plans and other
retirement benefit plans for its Canadian and American employees.

In the year ended December 31, 2000, the Company adopted, without restating
prior period financial statements, the new recommendations of the Canadian
Institute of Chartered Accountants (CICA) with respect to accounting for the
cost of pension benefits and other employee future benefits. The new
recommendations require that the discount rate used to value pension obligations
and current costs be changed from an estimated long-term rate to a market
interest rate. The adoption of these new recommendations has not resulted in a
significant impact to the current or prior year's financial statements.

The following policies are used with respect to the accounting for the defined
benefit and other retirement benefit plans:

--  The cost of pensions and other retirement benefits earned by employees is
    actuarially determined using the projected benefit method prorated on
    service and is charged to earnings as services are provided by the
    employees. The calculations take into account Management's best estimate of
    expected plan investment performance, salary escalation, retirement ages of
    employees, participants' mortality rates and expected health care costs;


                                       23
<PAGE>

2 - ACCOUNTING POLICIES (CONTINUED)

--  For the purpose of calculating the expected return on plan assets, those
    assets are valued at the market-related value for certain plans and, for
    other plans, at fair value;

--  Past service costs from plan amendments are amortized on a straight-line
    basis over the average remaining service period of employees active at the
    date of amendment;

--  The excess of the net actuarial gains (losses) over 10% of the greater of
    the benefit obligation and the market-related value or the fair value of
    plan assets is amortized over the average remaining service period of active
    employees.

INCOME TAXES

The Company provides for income taxes using the liability method of tax
allocation. Under this method, future income tax assets and liabilities are
determined based on deductible or taxable temporary differences between the
financial statement values and tax values of assets and liabilities, using
substantially enacted income tax rates expected to be in effect for the year in
which the differences are expected to reverse.

STOCK OPTIONS

The Company has granted stock options as described in Note 16. No compensation
expense is recognized when stock options are granted. Any consideration paid by
employees on exercise of stock options is credited to capital stock.

REVENUE RECOGNITION

Revenue is recorded when products are shipped to customers.

EARNINGS PER SHARE

In the year ended December 31, 2000, the Company adopted, on a retroactive
basis, the new recommendations of the CICA with respect to Section 3500,
Earnings Per Share. Under the new recommendations, the treasury stock method is
used, instead of the current imputed earnings approach, for determining the
dilutive effect of warrants and options. Previously reported diluted earnings
per share amounts have been recalculated in accordance with the new
requirements. This change in accounting policy has not resulted in differences
in previously reported diluted earnings per share and has not impacted the
establishment of the current year's diluted earnings per share.

Basic earnings per share are calculated using the weighted average number of
common shares outstanding during the year.

NEW ACCOUNTING PRONOUNCEMENTS

In December 2001, the CICA issued Handbook Section 3870, Stock-based
Compensation and Other Stock-based Payments, effective for fiscal years
beginning on or after January 1, 2002. This standard establishes, among other
things, financial accounting and reporting standards for stock-based employee
compensation plans. It defines a fair value method of accounting for employee
stock options and encourages entities to adopt that method of accounting for its
stock-based compensation plans. Under this method, compensation cost would be
measured at the grant date based on the fair value of the award and would be
recognized over the related service period. An entity that does not adopt the
fair value method of accounting will be required to include in its financial
statements pro forma disclosures of net earnings and earnings per share as if
the fair value method of accounting had been applied. In adopting this new
standard in 2002, the Company plans to adopt the latter alternative treatment.
It does not expect adoption of the standard to have a material effect on the
Company's financial position or results of operations. Under US GAAP, the
Company already follows a similar method and presents similar pro forma
disclosures.

In 2001, the CICA approved new standards modifying the method of accounting for
business combinations entered into after June 30, 2001 and dealing with the
accounting for goodwill and other intangible assets. The new standard on
goodwill and other intangible assets should be applied for fiscal years
beginning on or after January 1, 2002. When these recommendations are adopted,
the Company will no longer amortize its goodwill but will however evaluate
goodwill for impairment annually. The Company will also be required to perform a
transitional goodwill impairment test as at January 1, 2002.

The transitional goodwill impairment test has to be completed by the end of the
current fiscal year. Any impairment loss recognized as a result of the
transitional goodwill impairment test would be recognized as the effect of a
change in accounting policy and charged to opening retained earnings for the
fiscal year ending December 31, 2002. The effect of implementation will be a
reduction of amortization of goodwill of approximately $7.1 million during
fiscal year 2002. Management does not anticipate any adjustments for impairment
of goodwill as a result of the change in accounting policy. These standards are
equivalent to the US standards.


                                       24
<PAGE>

3 - JOINT VENTURES

The Company's pro rata share of its joint ventures' operations included in the
consolidated financial statements is summarized as follows:

<TABLE>
<CAPTION>
                                             2001          2000          1999
                                           --------      --------      --------
<S>                                        <C>           <C>           <C>
Earnings
   Sales                                   $  3,572      $  2,671      $  4,467
   Gross profit                                 664           383         1,010
   Financial expenses (income)                   (7)         (320)          882
   Net earnings (loss)                          110           136          (767)
Cash flows
   From operating activities                  1,342           643        (1,331)
   From investing activities                     86        (2,232)        2,343
   From financing activities                   (956)          512         2,566
Balance sheets
 Assets
   Current assets                             1,307         1,483         3,091
   Long-term assets                           6,122         7,119        11,243
Liabilities
   Current liabilities                        2,925         2,885        10,817
   Long-term debt                               667         1,862         3,187
                                           ========      ========      ========
</TABLE>

During the year ended December 31, 2001, the Company had no sales to its joint
ventures ($2,790,000 in 2000 and $7,716,000 in 1999). Also, the Company had no
interest income from a joint venture for the year ended December 31, 2001
($58,000 in 2000 and $1,494,000 in 1999).

4 - INTEGRATION AND TRANSITION, ASSET WRITE-DOWNS AND OTHER NON-RECURRING ITEMS

For the year ended December 31, 2001, the Company recorded asset write-downs and
non-recurring costs as a result of recent integrations, the startup of its
Regional Distribution Centers, workforce reductions and debt refinancing. Cost
of sales includes $7.7 million, selling, general and administrative expenses
include $10.8 million and financial expenses include $6.7 million of such costs.

During the year ended December 31, 2000, the Company realized a gain of $5.5
million on the sale of its interest in a joint venture.

For the year ended December 31, 1999, the Company incurred substantial
integration and transition, asset write-downs and other non-recurring costs as a
result of recent business acquisitions and the implementation of a major
enterprise-wide Management Information System. Cost of sales includes $19.5
million and selling, general and administrative expenses include $11.6 million
of such costs.

5 - INFORMATION INCLUDED IN THE CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
                                                                    2001       2000        1999
                                                                  -------     -------    --------
<S>                                                              <C>          <C>        <C>
Depreciation of capital assets                                    $24,977     $20,334     $25,077
                                                                  -------     -------     -------
Amortization of debt issue expenses and other deferred charges      1,840       1,060         701
                                                                  =======     =======     =======
Financial expenses
   Interest on long-term debt                                      22,029      20,812      17,924
   Interest on credit facilities                                   11,064       8,747       6,519
   Refinancing costs                                                6,700
   Interest income, exchange gain and other                            18      (1,116)     (1,154)
   Interest capitalized to capital assets                            (900)     (1,238)     (1,140)
                                                                  -------     -------     -------
                                                                   38,911      27,205      22,149
                                                                  =======     =======     =======
</TABLE>


                                       25
<PAGE>

6 - INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                 2001        2000        1999
                                               --------    --------    --------
<S>                                            <C>         <C>         <C>
Current                                        $ (1,227)   $  3,018    $  2,893
Future                                           (9,165)        482      (3,197)
                                               --------    --------    --------
                                                (10,392)      3,500        (304)
                                               ========    ========    ========
</TABLE>

The reconciliation of the combined federal and provincial statutory income tax
rate to the Company's effective tax rate is detailed as follows:


<TABLE>
<CAPTION>
                                                                   2001     2000     1999
                                                                  ------   ------   ------
<S>                                                               <C>      <C>      <C>
Combined federal and provincial income tax rate                    42.7%    43.1%    42.7%
Manufacturing and processing                                       (8.6)     2.2     14.0
Foreign losses recovered (foreign income taxed) at lower rates     (6.4)    (5.1)     0.3
Impact of other differences                                        86.7    (30.7)   (60.9)
Change in valuation allowance                                     (68.5)
                                                                  ------   ------   ------
Effective income tax rate                                          45.9      9.5     (3.9)
                                                                  ======   ======   ======
</TABLE>


The net future income tax liabilities are detailed as follows:

<TABLE>
<CAPTION>
                                                2001        2000
                                              --------    --------
<S>                                           <C>         <C>
Future income tax assets
   Accounts payable and accrued liabilities   $  2,257    $  4,131
   Tax credits and loss carry-forwards          55,397      17,843
   Trade and other receivables                   2,318       5,561
   Inventories                                     296       1,761
   Valuation allowance                         (15,498)
                                              --------    --------
                                                44,770      29,296
                                              ========    ========
Future income tax liabilities
   Capital assets                               62,333      54,613
   Other                                            --       1,411
                                              --------    --------
                                                62,333      56,024
                                              --------    --------
Net future income tax liabilities               17,563      26,728
Net current future income tax assets             4,025      10,810
                                              --------    --------
Net long-term future income tax liabilities     21,588      37,538
                                              ========    ========
</TABLE>

At December 31, 2001, the Company has $31.3 million of Canadian operating loss
carry-forwards expiring in 2007 and 2008 and $102.3 million of US federal and
state operating losses expiring 2017 through 2020.

In assessing the realizability of future income tax assets, Management considers
whether it is more likely than not that some portion or all of the future income
tax assets will not be realized. Management considers the scheduled reversal of
future income tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment. The Company expects the future income tax
assets, net of the valuation allowance, at December 31, 2001 to be realized as a
result of the reversal of existing taxable temporary differences.

As part of the above analysis, a $15.5 million valuation allowance was
established during the year ended December 31, 2001.



                                       26
<PAGE>

7 - EARNINGS (LOSS) PER SHARE

The following table provides a reconciliation between basic and diluted earnings
(loss) per share:

<TABLE>
<CAPTION>
                                                                   2001            2000           1999
                                                               ------------    ------------   ------------
<S>                                                            <C>             <C>            <C>
Net earnings (loss)                                            $    (12,242)   $     33,422   $      8,098
Weighted average number of common shares outstanding             28,265,708      28,328,114     27,679,385
Effect of dilutive stock options and warrants(i)                                    387,738        915,423
                                                                 ----------      ----------     ----------
Weighted average number of diluted common shares outstanding     28,265,708      28,715,852     28,594,808
                                                                 ----------      ----------     ----------
Basic earnings (loss) per share                                       (0.43)           1.18           0.29
Diluted earnings (loss) per share                                     (0.43)           1.16           0.29
                                                                 ==========      ==========     ==========
</TABLE>

(i) Diluted earnings (loss) per share is calculated by adjusting outstanding
    shares, assuming any dilutive effects of stock options and warrants. For the
    year ended December 31, 2001, the effect of the stock options and warrants
    numbering 269,707 were not included as the effect would be anti-dilutive.

8 - ACQUISITIONS OF BUSINESSES

Business acquisitions have been accounted for using the purchase method of
accounting and, accordingly, the purchase price was allocated to the assets and
liabilities based on their estimated fair value as of the acquisition date.

The operating results of the acquired businesses have been included in the
consolidated financial statements from the effective dates of acquisition.

A)  YEAR ENDED DECEMBER 31, 2000

    Effective as of September 1, 2000, the Company acquired certain assets of
    Olympian Tape Sales, Inc. d/b/a United Tape Company ("UTC"). UTC was a
    manufacturer and distributor of certain packaging products into the retail
    market. UTC was a long-term customer of one particular product line of IPG.

    The purchase price was paid for in both cash in the amount of $28.2 million
    and $4.0 million worth of common shares of Intertape stock from treasury.

B)  YEAR ENDED DECEMBER 31, 1999

    On July 30, 1999 and August 9, 1999 respectively, the Company purchased
    certain assets of Spinnaker Electrical Tape Company (SETco) and 100% of the
    outstanding shares of Central Products Company (CPC), manufacturers of
    pressure-sensitive, water-activated and electrical tapes.

    The total cash consideration and estimated transaction costs for the
    acquisitions were approximately $108.1 million. In addition, the Company
    issued share purchase warrants valued at $3.2 million to the former owners.

<TABLE>
<CAPTION>
                                        2000         1999
                                      ---------    ---------
<S>                                   <C>          <C>
Current assets                        $  14,383    $  26,523
Capital assets                            1,316       66,541
Goodwill and other assets                20,963       49,763
                                      ---------    ---------
                                         36,662      142,827
Current liabilities assumed              (4,467)     (23,250)
Net future income tax liabilities                     (8,255)
                                      ---------    ---------
Net assets purchased                     32,195      111,322
                                      =========    =========
Consideration
   Cash                                  28,195      108,172
   Issue of common shares                 4,000
   Issue of share purchase warrants                    3,150
                                      ---------    ---------
                                         32,195      111,322
                                      =========    =========
</TABLE>


                                       27
<PAGE>

9 - OTHER RECEIVABLES

<TABLE>
<CAPTION>
                                                   2001      2000
                                                  -------   -------
<S>                                               <C>       <C>
Rebates receivable                                $ 3,088   $ 5,734
Income and other taxes                              4,903     1,046
Sales taxes                                           745     1,051
Other                                               4,918     3,828
                                                  -------   -------
                                                   13,654    11,659
                                                  =======   =======
</TABLE>

10 - INVENTORIES

<TABLE>
<CAPTION>
                                                   2001      2000
                                                  -------   -------
<S>                                               <C>       <C>
Raw materials                                     $15,520   $23,198
Work in process                                    11,815    14,483
Finished goods                                     43,353    51,583
                                                  -------   -------
                                                   70,688    89,264
                                                  =======   =======
</TABLE>

11 - CAPITAL ASSETS

<TABLE>
<CAPTION>
                                                                             2001
                                                               -----------------------------------
                                                                          Accumulated
                                                                 Cost     amortization       Net
                                                               --------   -------------   --------
<S>                                                            <C>          <C>           <C>
Land                                                           $  3,317     $             $  3,317
Buildings and related capital leases                             59,425       15,241        44,184
Manufacturing equipment                                         370,195      101,609       268,586
Furniture, office and computer equipment, software and other     30,969       15,279        15,690
Manufacturing equipment under construction and
 software projects under development                             34,790                     34,790
                                                               --------     --------      --------
                                                                498,696      132,129       366,567
                                                               ========     ========      ========
</TABLE>

<TABLE>
<CAPTION>
                                                                             2000
                                                               -----------------------------------
                                                                          Accumulated
                                                                 Cost     amortization       Net
                                                               --------   -------------   --------
<S>                                                            <C>          <C>           <C>
Land                                                           $  3,329     $             $  3,329
Buildings and related capital leases                             57,024       10,573        46,451
Manufacturing equipment                                         359,883       88,540       271,343
Furniture, office and computer equipment, software and other     33,629        7,351        26,278
Manufacturing equipment under construction and
 software projects under development                             27,352                     27,352
                                                               --------     --------      --------
                                                                481,217      106,464       374,753
                                                               ========     ========      ========
</TABLE>

12 - OTHER ASSETS

<TABLE>
<CAPTION>
                                                                            2001     2000
                                                                          -------   -------
<S>                                                                       <C>       <C>
Debt issue expenses and other deferred charges, at amortized cost         $ 8,879   $ 5,773
Loans to officers and directors, including loans regarding the exercise
 of stock options, without interest, various repayment terms                1,059     1,675
Receivables from joint ventures                                                         648
Other receivables                                                             430        65
Other, at cost                                                              1,312     2,475
                                                                          -------   -------
                                                                           11,680    10,636
                                                                          =======   =======
</TABLE>


                                       28
<PAGE>

13 - BANK INDEBTEDNESS AND CREDIT FACILITIES

In December 2001, the Company completed a refinancing agreement which provides
revolving credit facilities of up to US$145.0 million (short-term US$50.0
million, long-term US$35.0 million and US$60.0 million - see Note 14). The
credit facilities are secured by certain assets of the Company and contain
certain financial covenants, including limitations on debt as a percentage of
tangible net worth, maintenance of tangible net worth above predefined levels
and fixed charge coverage ratios.

The bank indebtedness consists of the utilized portion of the short-term
revolving bank credit facilities and cheques issued which have not been drawn
from the facilities and is reduced by any cash and cash equivalent balances.

As at December 31, 2001, the Company had:

--  Bank loans under a US$50.0 million revolving credit facility (Facility A),
    extendible annually at the option of the lenders, converting to a two-year
    term loan if not extended by the lenders. The loan is secured by a first
    ranking charge on the Company's accounts receivable and inventories. The
    loan bears interest at various interest rates including US prime rate plus a
    premium varying between 0 and 275 basis points and LIBOR plus a premium
    varying between 75 and 350 basis points. As at December 31, 2001, the
    effective rate was approximately 7.95% and US$39.0 million was utilized.

    An amount of $5.5 million of this credit facility is used for letters of
    credit.

As at December 31, 2000, the Company had:

--  A senior unsecured bank loan under a US$80.0 million revolving credit
    facility which matured June 30, 2001. This loan bears interest at US prime
    rate plus a premium bearing between 0 and 125 basis points or at LIBOR plus
    a premium varying between 40 and 225 basis points. As at December 31, 2000,
    the effective rate was approximately 7.4% and the facility was fully
    utilized;

--  A senior unsecured bank loan under a US$50.0 million revolving credit
    facility which matured June 30, 2001. This loan bears interest at US prime
    rate or at LIBOR plus a premium varying between 125 and 150 basis points. As
    at December 31, 2000, the effective interest rate was approximately 8.7% and
    US$40.0 million was utilized;

--  A senior unsecured bank loan under a US$15.0 million revolving credit
    facility which matured June 30, 2001. This loans bears interest at US prime
    rate. As at December 31, 2000, the effective rate was approximately 9.5% and
    US$14.8 million was utilized;

--  A senior unsecured US$10.0 million demand bank loan, bearing interest at US
    prime rate. As at December 31, 2000, the effective interest rate was
    approximately 9.5% and US$7.7 million was utilized;

--  A senior unsecured CAN$5.0 million demand bank loan, bearing interest at
    Canadian prime rate. As at December 31, 2000, the effective rate was
    approximately 7.5% and CAN$2.6 million was utilized.

14 - LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                    2001          2000
                                                  --------      --------
<S>                                               <C>           <C>
a) US$137,000,000 Series A and B Senior Notes     $137,000(i)   $137,000
b) US$137,000,000 Senior Notes                     137,000(i)    137,000
c) US$8,000,000 Series 3 Notes                                     8,000
d) Bank loans under revolving credit facilities     86,400
e) Other debt                                        2,573         4,216
                                                  --------      --------
                                                   362,973       286,216
Less
   Current portion of long-term debt                 8,310         9,532
                                                  --------      --------
                                                   354,663       276,684
                                                  ========      ========
</TABLE>

(i) In December 2001, the senior note agreements for the US$137.0 million Series
    A and B Senior Notes and the US$137.0 million Senior Notes were amended
    resulting in the notes being secured by a first ranking charge on all of the
    tangible and intangible assets of the Company and a second ranking charge on
    the accounts receivable and inventories and an increase in the interest
    rates. The Senior Notes contain the same financial covenants as the credit
    facilities.


                                       29

<PAGE>

14 - LONG-TERM DEBT (CONTINUED)

      A) SERIES A AND B SENIOR NOTES

         Senior Notes bearing interest at an average rate of 10.03% (7.8% in
         2000) payable semi-annually.The Series A US$25.0 million Notes mature
         on May 31, 2005. The Series B US$112.0 million Notes are repayable in
         semi-annual instalments of $13,440,000 starting in November 2005 and
         mature on May 31, 2009.

      B) SENIOR NOTES

         Senior Notes bearing interest at 9.07% (6.82% in 2000) payable
         semi-annually, repayable in semi-annual instalments of $16,500,000
         starting in September 2004 and maturing on March 31, 2008.

      C) SERIES 3 NOTES

         Senior unsecured Notes, bearing interest at a rate of 8.08%, payable
         semi-annually. These notes matured on June 1, 2001.

      D) BANK LOANS UNDER REVOLVING CREDIT FACILITIES

         Revolving reducing facility (Facility B) in the amount of up to US$35.0
         million, reducing by US$3.5 million on the last day of each quarter
         beginning September 30, 2002, maturing on December 31, 2003, secured by
         a first ranking charge on all of the tangible and intangible assets of
         the Company and a second ranking charge on the accounts receivable and
         inventories. This loan bears interest at various rates including US
         prime rate plus a premium varying between 75 and 320 basis points and
         LIBOR plus a premium varying between 150 and 395 basis points. As at
         December 31, 2001, the effective interest rate was approximately 7.95%
         and US$26.4 million was utilized.

         Revolving reducing term loan (Facility C) in the amount of up to
         US$60.0 million, reducing by US$5.0 million on the last day of each
         quarter beginning the earlier of March 31, 2004 or the last day of the
         quarter following the repayment of Facility B, maturing on December 31,
         2005, secured by a first ranking charge on all of the tangible and
         intangible assets of the Company and a second ranking charge on all the
         accounts receivable and inventories. This loan bears interest at US
         prime rate plus a premium varying between 75 and 320 basis points or
         LIBOR plus a premium varying between 150 and 395 basis points. As at
         December 31, 2001, the effective interest rate was approximately 7.95%
         and US$60.0 million was utilized.

      E) OTHER DEBT

         Other debt consisting of government loans, mortgage loans in a joint
         venture, obligations related to capitalized leases and other loans at
         fixed and variable interest rates ranging from interest-free to 8.25%
         and requiring periodic principal repayments through 2008.

         The Company has complied with the maintenance of financial ratios and
         with other conditions that are stipulated in the covenants pertaining
         to the various loan agreements.

Long-term debt repayments are due as follows:

<TABLE>
<S>                                          <C>
      2002                                   $  8,310
      2003                                     20,012
      2004                                     36,922
      2005                                    111,440
      2006                                     60,259
      Thereafter                              126,030
                                             --------
      Total                                   362,973
                                             ========
</TABLE>

FAIR VALUE

For all debts with fixed interest rates, the fair value has been determined
based on the discounted value of cash flows under the existing contracts using
rates representing those which the Company could currently obtain for loans with
similar terms, conditions and maturity dates. For the debts with floating
interest rates, the fair value is closely equivalent to their carrying amounts.
The carrying amounts and fair values of the Company's long-term debt as at
December 31, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>
                                          2001                         2000
                               -------------------------      ------------------------
                                                Carrying                      Carrying
                               Fair value        amount       Fair value       amount
                               ----------       --------      ----------     ---------
<S>                             <C>             <C>           <C>            <C>
Long-term debt                  $334,054        $362,973      $ 264,680      $ 286,216
                                ========        ========      =========      =========
</TABLE>


                                       30
<PAGE>

15 - OTHER LIABILITIES

<TABLE>
<CAPTION>
                                                     2001        2000
                                                    ------      ------
<S>                                                 <C>         <C>
Provision for future site rehabilitation costs      $  785      $1,500
Other                                                3,000       3,000
                                                    ------      ------
                                                     3,785       4,500
                                                    ======      ======
</TABLE>

During the years ended December 31, 2001 and 2000, the Company reviewed certain
provisions, which it had previously established in accounting for prior years'
business acquisitions. This process included the obtaining from third parties
environmental, transfer pricing and employee related benefit studies.
Furthermore, the Company holds letters of guarantee provided by the vendors
against certain future related claims.

As a result of the above, the Company reversed against earnings $715,000 of
provisions in 2001 and $5,500,000 in 2000, which had been recorded in prior
years.

16 - CAPITAL STOCK AND SHARE PURCHASE WARRANTS

      A) CAPITAL STOCK -- AUTHORIZED

         Unlimited number of shares without par value

         Common shares, voting and participating

         Class "A" preferred shares, issuable in series, ranking in priority to
         the common shares with respect to dividends and return of capital on
         dissolution. The Board of Directors is authorized to fix, before
         issuance, the designation, rights, privileges, restrictions and
         conditions attached to the shares of each series

      B) CAPITAL STOCK - ISSUED AND FULLY PAID

         Subsequent to year-end, on February 19, 2002, the Company filed a final
         prospectus in Canada for the registration and sale of 5,100,000 common
         shares at CAN$15.50 (US$9.71) per share. The closing of the transaction
         is expected to take place on or before March 1, 2002. The net proceeds
         of approximately CAN$75,700,000 (US$47,441,000) will be used to
         partially repay indebtedness to the Company's banking syndicate and
         indebtedness to holders of its Senior Notes.

         The changes in the number of outstanding common shares and their
         aggregate stated value from January 1, 1999 to December 31, 2001 were
         as follows:

<TABLE>
<CAPTION>
                                               2001                          2000                          1999
                                     -------------------------     -------------------------     -------------------------
                                      Number         Stated         Number         Stated         Number         Stated
                                     of shares        value        of shares        value        of shares        value
                                     ----------    -----------     ----------    -----------     ----------    -----------
<S>                                  <C>           <C>             <C>           <C>             <C>           <C>
Balance, beginning of year           28,211,179    $   183,758     28,296,392    $   181,941     25,194,333    $   104,033
Shares issued for cash in
 public offering                                                                                  3,000,000         76,887
Shares issued for business
 acquisitions                                                         250,587          4,000
Shares issued to the USA
 Employees' Stock
Ownership and Retirement

 Savings Plan                           248,906          2,240
Shares purchased for cancellation      (128,100)          (765)      (353,200)        (2,359)      (100,000)          (675)

Shares issued for cash upon
 exercise of stock options              174,125          1,113         17,400            176        202,059          1,696
                                     ----------    -----------     ----------    -----------     ----------    -----------
Balance, end of year                 28,506,110        186,346     28,211,179        183,758     28,296,392        181,941
                                     ==========    ===========     ==========    ===========     ==========    ===========
</TABLE>


                                       31
<PAGE>

16 - CAPITAL STOCK AND SHARE PURCHASE WARRANTS (CONTINUED)

     C) SHARE PURCHASE WARRANTS

<TABLE>
<CAPTION>
                                                        2001         2000
                                                       -------      ------
<S>                                                    <C>          <C>
        300,000 share purchase warrants                $ 3,150      $3,150
                                                       =======      ======
</TABLE>

        The warrants, which expire on August 9, 2004, permit holders to purchase
        common shares of the Company at a price of $29.50 per share.

     D) SHAREHOLDERS' PROTECTION RIGHTS PLAN

        On May 21, 1998, the shareholders approved the extension to September
        2003 of a shareholders' protection rights plan originally established in
        1993. The effect of the rights plan is to require anyone who seeks to
        acquire 20% or more of the Company's voting shares to make a bid
        complying with specific provisions.

     E) STOCK OPTIONS

        Under the Company's amended executive stock option plan, options may be
        granted to the Company's executives and directors. Options expire no
        later than 10 years after the date of granting. The plan provides that
        such options will vest and may be exercisable 25% per year over four
        years.

        All options were granted at a price equal to the average closing market
        values on the day immediately preceding the date the options were
        granted.

The changes in number of options outstanding were as follows:



<TABLE>
<CAPTION>
                                               2001                       2000                        1999
                                             ---------                   ---------                  ---------
                                Weighted                   Weighted                   Weighted
                                 Average                    average                    average
                                exercise     Number of     exercise      Number of    exercise      Number of
                                   price       options        price        options       price        options
                                --------     ---------     --------      ---------    --------      ---------
<S>                              <C>         <C>             <C>         <C>            <C>         <C>
Balance, beginning of year       $ 12.89     2,797,036       $15.76      2,217,224      $14.30      2,406,067
Granted                             9.79       386,000        10.37      1,183,000       27.88         14,000
Exercised                           6.39      (174,125)        8.23        (17,400)       8.18       (202,059)
Cancelled                          16.56      (601,661)       16.84       (585,788)      19.30           (784)
                                             ---------                   ---------                  ---------
Balance, end of year               10.06     2,407,250        12.89      2,797,036       15.76      2,217,224
                                ========     =========     ========      =========    ========      =========
Options exercisable at the end
 of the year                                 1,022,214                   1,267,019                  1,286,790
                                             =========                   =========                  =========
</TABLE>

The following table summarizes information about options outstanding and
exercisable at December 31, 2001:

<TABLE>
<CAPTION>
                                 Options outstanding                         Options exercisable
                           -------------------------                    ------------------------
                                            Weighted
                                             Average        Weighted                    Weighted
                                         Contractual         average                     average
                                                Life        exercise                    exercise
                              Number       (in years)          price       Number          price
                           ---------     ------------       --------    ---------       --------
Range of exercise prices
<S>                        <C>                 <C>            <C>       <C>               <C>
   $4.25 to $8.14            672,900             6.2            7.48      365,400           6.93
   $8.31 to $19.09         1,707,350             7.4           10.74      648,064          10.41
   $22.13 to $27.88           27,000             6.8           25.10        8,750          25.41
                           ---------                                    ---------
                           2,407,250                                    1,022,214
                           =========                                    =========
</TABLE>

On January 10, 2001, the Company repriced 474,163 of unexercised stock options
held by employees, other than directors and executive officers. The repriced
options had exercise prices ranging from US$16.30 to US$23.26 (CAN$26.01 to
CAN$37.11) and expire in 2003 and 2006. The revised exercise price was set at
US$8.28 (CAN$13.21), being the average of the closing price on The Toronto Stock
Exchange and the New York Stock Exchange on January 9, 2001. All other terms and
conditions of the respective options, including the percentage vesting and the
vesting and expiry dates, remain unchanged.


                                       32
<PAGE>
17 - COMMITMENTS AND CONTINGENCIES

     A)   COMMITMENTS

          As at December 31, 2001, the Company had commitments aggregating
          approximately $35,506,000 up to 2010 for the rental of offices,
          warehouse space, manufacturing equipment, automobiles and other.
          Minimum payments for the next five years are $10,752,000 in 2002,
          $10,212,000 in 2003, $4,688,000 in 2004, $2,352,000 in 2005 and
          $1,646,000 in 2006.

     B)   CONTINGENCIES

          The Company is party to various claims and lawsuits which are being
          contested. In the opinion of Management, the outcome of such claims
          and lawsuits will not have a material adverse effect on the Company.

18 - PENSION AND POST-RETIREMENT BENEFIT PLANS

The Company has several defined contribution plans and defined benefit plans for
substantially all its employees in both Canada and the United States. These
plans are generally contributory in Canada and non-contributory in the United
States.

DEFINED CONTRIBUTIONS PLANS

In the United States, the Company maintains a savings retirement plan (401[k]
Plan) for the benefit of certain employees who have been employed for at least
90 days. Contribution to these plans is at the discretion of the Company.

The Company contributes as well to a multi-employer plan for employees covered
by collective bargaining agreements.

In Canada, the Company maintains a defined contribution plan for its salaried
employees. The Company contributes to the plan amounts equal to 4% of each
participant's eligible salary.

The Company has expensed $2,295,000 for these plans for the year ended December
31, 2001 ($2,013,000 and $1,896,000 for 2000 and 1999 respectively).

DEFINED BENEFIT PLANS

The Company has, in the United States, two defined benefit plans (hourly and
salaried). Benefits for employees are based on compensation and years of service
for salaried employees and fixed benefits per month for each year of service for
hourly employees. The funding policy is consistent with the funding requirements
of federal laws and regulations. Plan assets consist primarily of equity
securities and fixed income investments.

In Canada, certain non-union hourly employees of the Company are covered by a
plan which provides a fixed benefit of $10.65 ($9.95 and $10.33 in 2000 and 1999
respectively) per month for each year of service.

In the United States, the Company provides group health care and life insurance
benefits to certain retirees.



                                       33
<PAGE>

18 - PENSION AND POST-RETIREMENT BENEFIT PLANS (CONTINUED)

Information relating to the various plans is as follows:

<TABLE>
<CAPTION>
                                                     Pension plans             Other plans
                                                 -------------------     -------------------
                                                   2001        2000        2001        2000
                                                 --------    --------    --------    --------
<S>                                              <C>         <C>         <C>         <C>
Accrued benefit obligations
   Balance, beginning of year                    $ 18,866    $ 16,690    $    785    $    712
   Current service cost                               398         393          10           9
   Interest cost                                    1,363       1,309          56          53
   Benefits paid                                     (754)       (686)        (73)        (54)
   Plan amendments                                    340
   Actuarial losses                                   420       1,203           4          65
   Foreign exchange rate adjustment                   (61)        (43)
                                                  -------     -------     -------     -------
   Balance, end of year                            20,572      18,866         782         785
                                                  -------     -------     -------     -------
Plan assets
   Balance, beginning of year                      16,931      16,706
   Actual return on plan assets                    (1,742)     (1,260)
   Employer contributions                           1,075       2,206
   Benefits paid                                     (754)       (686)
   Foreign exchange rate adjustment                   (60)        (35)
                                                  -------     -------     -------     -------
   Balance, end of year                            15,450      16,931        --          --
                                                  -------     -------     -------     -------
Funded status - deficit                             5,122       1,935         782         785
   Unamortized past service costs                    (912)       (633)
   Unamortized net actuarial gain (loss)           (5,573)     (1,772)        118         128
   Unamortized transition assets (obligation)          90         100         (41)        (45)
                                                  -------     -------     -------     -------
   Accrued benefit liability (prepaid benefit)     (1,273)       (370)        859         868
                                                  =======     =======     =======     =======
</TABLE>

                                       34
<PAGE>

18 - PENSION AND POST-RETIREMENT BENEFIT PLANS (CONTINUED)

ACCRUED BENEFIT EXPENSE

<TABLE>
<CAPTION>
                                                    Pension plans                      Other plans
                                     ----------------------------     ----------------------------
                                      2001       2000        1999       2001      2000       1999
                                     -------    -------    -------    -------    -------    -------
<S>                                 <C>        <C>        <C>        <C>        <C>        <C>
Current service cost                 $   398    $   393    $   420    $    10    $     9    $    21
Interest cost                          1,363      1,309        804         56         53         58
Expected return on plan assets        (1,652)    (1,459)      (846)
Amortization of past service costs        52         53         52
Amortization of transition
 obligation (asset)                       (4)        (4)        (4)         4          4         32
Amortization of unrecognized
 loss (gain)                              18        (21)         7         (6)       (14)        (2)
                                     -------    -------    -------    -------    -------    -------
Pension expense for the year             175        271        433         64         52        109
                                     =======    =======    =======    =======    =======    =======
</TABLE>

The significant assumptions which Management considers to be the most likely and
which were used to measure its accrued benefit obligations are as follows
(weighted average assumptions as at December 31) :

<TABLE>
<CAPTION>
                                                    Pension plans                          Other plans
                                      ---------------------------       ------------------------------
                                      2001       2000        1999       2001         2000        1999
                                     ------     ------      ------     ------       ------      ------
<S>                                  <C>        <C>         <C>       <C>          <C>          <C>
Canadian plans
   Discount rate                      7.25%      7.50%       6.50%       --           --           --
   Expected rate of return
    on plan assets                    9.25%      9.00%       9.00%       --           --           --
US plans
   Discount rate                      7.25%      7.50%       7.50%      7.25%        7.50%        8.25%
   Expected rate of return
    on plan assets                    9.25%      8.60%       8.60%       --            --           --
   Rate of compensation increase
     (only for one plan)               --          --        4.00%       --            --           --
                                     =====      =====       =====      =====        =====        =====
</TABLE>

For measurement purposes, a 5.5% annual rate of increase in the per capita cost
of covered health care benefits was assumed for 2001 (5% in 2000 and 8% in 1999)
and deemed to remain constant through 2005.



                                       35
<PAGE>

19 - SEGMENT DISCLOSURES

The Company manufactures and sells an extensive range of specialized polyolefin
plastic packaging products primarily in Canada and in the United States. All
products have to be considered part of one reportable segment as they are made
from similar extrusion processes and differ only in the final stages of
manufacturing. A vast majority of the Company's products, while brought to
market through various distribution channels, generally have similar economic
characteristics.

The following table presents sales by country based on the location of the
manufacturing facilities:

<TABLE>
<CAPTION>
                                               2001         2000          1999
                                            ---------    ---------     ---------
<S>                                         <C>          <C>          <C>
Canada                                      $ 127,878    $ 117,799     $ 107,072
United States                                 500,028      581,723       487,640
Other                                           3,563        2,443         3,333
Transfers between geographic areas            (36,564)     (48,050)      (28,098)
                                            ---------    ---------     ---------
Total sales                                   594,905      653,915       569,947
                                            =========    =========     =========
</TABLE>

The following table presents capital assets and goodwill by country based on the
locations of assets:

<TABLE>
<CAPTION>
                                               2001         2000          1999
                                             --------     --------      --------
<S>                                          <C>          <C>           <C>
Capital assets, net
   Canada                                    $ 48,693     $ 51,388      $ 48,016
   United States                              312,501      316,900       296,326
   Other                                        5,373        6,465         7,380
                                             --------     --------      --------
Total capital assets                          366,567      374,753       351,722
                                             ========     ========      ========
Goodwill, net
   Canada                                    $ 16,202       17,955        19,053
   United States                              211,602      216,302       198,833
                                             --------     --------      --------
Total goodwill                                227,804      234,257       217,886
                                             ========     ========      ========
</TABLE>

No customer accounted for 10% or more of revenues in 2001, 2000 and 1999.

20 - COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform with the
presentation adopted in the current year.

21 - DIFFERENCES IN ACCOUNTING BETWEEN THE UNITED STATES OF AMERICA AND CANADA

     A)   NET EARNINGS AND EARNINGS PER SHARE

          Net earnings of the Company and earnings per share established under
          Canadian GAAP conform in all material respects to the amounts that
          would be reported if the financial statements would have been prepared
          under US GAAP.

     B)   CONSOLIDATED BALANCE SHEETS

          Under Canadian GAAP, the financial statements are prepared using the
          proportionate consolidation method of accounting for joint ventures.
          Under US GAAP, these investments would be accounted for using the
          equity method. Note 3 to the consolidated financial statements
          provides details of the impact of proportionate consolidation on the
          Company's consolidated financial statements for 2001, 2000 and 1999,
          including the impact on the consolidated balance sheets.

          The other differences in presentation that would be required under US
          GAAP to the consolidated balance sheets are not viewed as significant
          enough to require further disclosure.

     C)   CONSOLIDATED CASH FLOWS

          Canadian GAAP permits the disclosure of a subtotal of the amount of
          funds provided by operations before changes in non-cash working
          capital items to be included in the consolidated statements of cash
          flows. US GAAP does not permit this subtotal to be presented.


                                       36
<PAGE>

21 - DIFFERENCES IN ACCOUNTING BETWEEN THE UNITED STATES OF AMERICA AND CANADA
     (CONTINUED)

     D)   ACCOUNTING FOR COMPENSATION PROGRAMS

          The Company has chosen to continue to measure compensation costs
          related to awards of stock options using the intrinsic value based
          method of accounting. In March 2000, the Financial Accounting
          Standards Board issued FASB Interpretation No. 44 (FIN 44), which
          became effective on July 1, 2000, requiring that the cancellation of
          outstanding stock options by the Company and the granting of new
          options with a lower exercise price (the replacement options) be
          considered as an indirect reduction of the exercise price of the stock
          options. Under FIN 44, the replacement options and any repriced
          options are subject to variable accounting from the cancellation date
          or date of grant, depending on which stock options were identified as
          the replacement options. Using variable accounting, the Company is
          required to recognize, at each reporting date, compensation expense
          for the excess of the quoted market price of the stock over the
          exercise prices of the replacement or repriced options until such time
          as the replacement options are exercised, forfeited or expire. The
          impact on the Company's financial results will depend on the
          fluctuations in the Company's stock price and the dates of the
          exercises, forfeitures or cancellations of the stock options.
          Depending on these factors, the Company could be required to record
          significant compensation expense during the life of the options which
          expire in 2006.

          In November 2000, 300,000 and 50,000 replacement options were issued
          at exercise prices of US$10.13 (CAN$15.50) and US$14.71 (CAN$21.94)
          respectively, and in May and August 2001, 40,000 and 54,000
          replacement options were issued for US$9.00 (CAN$13.80) and US$11.92
          (CAN$18.80) respectively. In addition, in January 2001, 474,163
          options were repriced at US$8.28 (CAN$12.40) (see note 16).

          As at December 31, 2001, the Company's quoted market stock price was
          US$8.30 (CAN$13.25) per share. For the options subject to variable
          accounting, the compensation expense would not materially impact net
          earnings (loss) reported in the consolidated statement of earnings for
          2001 under US GAAP.

          Under US GAAP, the Company is required to make pro forma disclosures
          of net earnings, basic earnings per share and diluted earnings per
          share as if the fair value based method of accounting had been
          applied. The fair value of options granted in 2001, 2000 and 1999 was
          estimated using the Black-Scholes option-pricing model, taking into
          account an expected life of five years, expected volatility of 50%
          (45% in 2000 and 25% in 1999), risk-free interest rates of 4.76%
          (5.96% in 2000 and 5.39% in 1999) and expected dividends ranging from
          $0.00 to $0.18 per share ($0.11 in 2000 and 1999). A compensation
          charge is amortized over the vesting periods.

          Accordingly, the Company's net loss, basic loss per share and diluted
          loss per share for the year ended December 31, 2001, would have been
          increased, on a pro forma basis, by $4,212,000, $0.15 and $0.15
          respectively, the net earnings, earnings per share and diluted
          earnings per share for the year ended December 31, 2000, on a pro
          forma basis, would have been decreased by $3,362,000, $0.12 and $0.12
          respectively, and for the year ended December 31, 1999, by $2,499,000,
          $0.09 and $0.09 respectively.

          The weighted average fair value of options granted in 2001 was $4.74
          ($4.42 in 2000 and $8.79 in 1999).

          The Black-Scholes option valuation model was developed for use in
          estimating the fair value of traded options which have no vesting
          restrictions and are fully transferable. In addition, option valuation
          models require the input of highly subjective assumptions including
          the expected stock price volatility. Because the Company's amended
          executive stock option plan has characteristics significantly
          different from those of traded options and because changes in the
          subjective input assumptions can materially affect the fair value
          estimate, in Management's opinion, the existing models do not
          necessarily provide a reliable single measure of the fair value of its
          employee stock options.

     E)   ACCUMULATED PENSION BENEFIT OBLIGATION

          Under US GAAP, if the accumulated pension benefit obligation exceeds
          the fair value of benefit plan assets, a liability must be recognized
          in the balance sheet that is at least equal to the unfunded
          accumulated benefit obligation. To the extent that the additional
          minimum liability is created by a plan improvement, an intangible
          asset can be established. Any additional minimum liability not covered
          by an intangible asset will cause a net of tax reduction in
          accumulated other comprehensive income.


                                       37
<PAGE>

21 - DIFFERENCES IN ACCOUNTING BETWEEN THE UNITED STATES OF AMERICA AND CANADA
     (CONTINUED)

The following sets out the adjustments required to the Company's consolidated
balance sheets to conform with US GAAP:

<TABLE>
<CAPTION>
                                                      2001       2000       1999
                                                    -------     ------     ------
<S>                                                 <C>         <C>      <C>
Future income tax assets would increase by         $  2,029    $   --     $   --
Other assets would increase by                          912        --         --
Accounts payable and accrued liabilities would
increase by                                           6,396        --         --
Shareholders' equity would decrease by               (3,455)       --         --
                                                   ========    ========   ========
</TABLE>

     F)   CONSOLIDATED COMPREHENSIVE INCOME

          As required under US GAAP, the Company would have reported the
          following consolidated comprehensive income:

<TABLE>
<CAPTION>
                                                      2001       2000       1999
                                                   --------    --------    -------
<S>                                                <C>         <C>         <C>
Net earnings (loss) in accordance with US GAAP     $(12,242)   $ 33,422   $  8,098
Foreign currency translation adjustments             (5,741)     (2,722)     3,458
Minimum pension liability adjustment, net of tax
(Note 21 e))                                         (3,455)
                                                   --------    --------   --------
Consolidated comprehensive income (loss)            (21,438)     30,700     11,556
                                                   ========    ========   ========
</TABLE>

22 - SIGNIFICANT NEW ACCOUNTING PRONOUNCEMENTS UNDER US GAAP

NEW ACCOUNTING PRONOUNCEMENTS

In 2001, the Financial Accounting Standards Board (FASB) approved the issuance
of SFAS No. 141, "Business Combinations", and SFAS 142, "Goodwill and Other
Intangible Assets". The new standards are equivalent to the Canadian standards
as disclosed in Accounting Policies - New accounting pronouncements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" effective for fiscal years beginning after
December 15, 2001. The Company does not expect any significant impact upon
adoption.


                                       38
<PAGE>

Intertape Polymer Group - Locations

CORPORATE OFFICES

<TABLE>
<CAPTION>
         MONTREAL, QUEBEC, CANADA
                  SARASOTA, FLORIDA, U.S.A.
-------------------------------------------------    ---------------------------------------------
<S>                                 <C> <C> <C> <C>  <C>                           <C> <C> <C> <C>
          Atlanta, Georgia, U.S.A.   o                Marysville, Michigan, U.S.A.      +   #   *
        Brighton, Colorado, U.S.A.           #  *       Menasha, Wisconsin, U.S.A.          #   *
      Carbondale, Illinois, U.S.A.           #  *      Ontario, California, U.S.A.          #   *
         Chicago, Illinois, U.S.A.   o                     Piedras Negras, Mexico               *
  Columbia, South Carolina, U.S.A.           #  *         Porto, Portugal                   #   *
          Cumming, Georgia, U.S.A.           #  *         Rayne, Louisiana, U.S.A.          #
        Danville, Virginia, U.S.A.   o   +   #  *       Richmond, Kentucky, U.S.A.          #   *
Edmundston, New Brunswick, Canada        +   #  *     St. Laurent, Quebec, Canada   o  +    #   *
      Green Bay, Wisconsin, U.S.A.           #  *          Tremonton, Utah, U.S.A.          #   *
          Lachine, Quebec, Canada               *      Truro, Nova Scotia, Canada      +    #   *
   Los Angeles, California, U.S.A.   o
-------------------------------------------------    ---------------------------------------------
</TABLE>




                                                       O REGIONAL DIST. CTR.
                                                       + ISO CERTIFIED
                                                       # DISTRIBUTION
                                                       * MANUFACTURING LOCATION

                                       39

<PAGE>

Other Information

<TABLE>
<CAPTION>
BOARD OF DIRECTORS                                                                 HONORARY DIRECTOR
-------------------------------------      --------------------------------------  -------------------------------------
<S>                                       <C>                                     <C>
Melbourne F. Yul                           Ben J. Davenport, Jr.                   James A. Motley, Sr.
Chairman and Chief Executive Officer       Chairman, First Piedmont Corporation    Director, American National Bank and
                                           Chairman and CEO, Chatham Oil Company   Trust Company American National Bancshares, inc.

L. Robbie Shaw (1)                         Gordon R. Cunningham (1)
Vice President                             President, Cumberland Asset Management
Nova Scotia Community College

Michael Richards (1)                       Irvine Mermelstein
Senior Partner, Stikeman Elliott           Managing Partner, Market-Tek

J. Spencer Lanthier (1)
Currently Serves as a Member of the Board
of Several Publicly Traded Companies
</TABLE>

(1) Member of Audit Committee

<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
-------------------------------------      --------------------------------------   -------------------------------------
<S>                                        <C>                                      <C>
Melbourne F. Yull                          Burgess H. Hildreth.                     Salvatore Vitale, C.A.
Chairman and Chief Executive Officer       Vice President, Human Resources          Vice President, Finance

Andrew M. Archibald, C.A.                  James A. Jackson                         Duncan R. Yull
Chief Financial Officer, Secretary,        Vice President, Chief Information        Vice President
Treasurer, Vice President, Administration  Officer                                  Sales, Distribution Products

Jim Bob Carpenter                          H. Dale McSween                          Gregory A. Yull
President, Woven Products, Procurement     President, Distribution Products         President, Film Products
</TABLE>

<TABLE>
<CAPTION>
TRANSFER AGENT AND REGISTRAR
-------------------------------------      --------------------------------------------
<S>                                        <C>
CANADA: CIBC Mellon Trust Company          U.S.A.: Mellon Investor Services L.L.C.
        2110 University Street, 16th floor         85 Challenger Road, 2nd Floor
        Montreal, Quebec, Canada H3A 4L8           Ridgefield Park, New Jersey, U.S.A.
                                                   07660
</TABLE>

<TABLE>
<CAPTION>
AUDITORS
-------------------------------------      --------------------------------------------
<S>                                        <C>
CANADA: Raymond Chabot Grant Thornton      U.S.A.: Grant Thornton International
        600 de la Gauchetiere West,                130 E. Randolph Street
        Suite 1900                                   Chicago, Illinois, U.S.A. 60601-6203
        Montreal, Quebec, Canada H3B 4L8
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INVESTOR INFORMATION

STOCK AND SHARE LISTING

Common shares are listed on the New York Stock Exchange and the Toronto Stock
Exchange, trading under the symbol ITP.

SHAREHOLDER AND INVESTOR RELATIONS

Shareholders and investors having inquiries or wishing to obtain copies of the
Company's Annual Report or other U.S. Securities Exchange Commission filings
should contact:

MR. ANDREW M. ARCHIBALD, C.A.

Chief Financial Officer
Intertape Polymer Group Inc.
110 E Montee de Liesse
St. Laurent, Quebec, Canada H4T 1N4
(866) 202-4713
E-mail: itp$info@intertapeipg.com

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

The Annual and Special Meeting of Shareholders will be held on Wednesday, May
22, 2002, at 4:00 p.m. at The Hilton Montreal Bonaventure Hotel, 1 Place
Bonaventure, Montreal, Quebec, Canada.



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                                                                           Notes



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                                      2001

                                  Annual Report