Index to Financial Statements

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

OR

For the fiscal year ended December 31, 20132015

OR

For the transition period fromto

OR

Date of event requiring this shell company report

For the transition period fromto                    

Commission file number: 1-10928

INTERTAPE POLYMER GROUP INC.

(Exact name of Registrant as specified in its charter)

Canada

(Jurisdiction of incorporation or organization)

9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Quebec, Canada H4M 2X5

(Address of principal executive offices)

Michael C. Jay,Jeffrey Crystal, (941) 739-7541, mjay@itape.com,739-7522, jcrystal@itape.com, 100 Paramount Drive, Suite 300, Sarasota, Florida 34232

(Name, Telephone, E-mail, and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

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

Not applicable

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Not applicable

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.As of December 31, 2013,2015, there were 60,776,64958,667,535 common shares outstandingoutstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    x  Yes    ¨  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ¨  Yes    x  No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ¨  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x                 Accelerated filer  ¨                 Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    ¨  Item 17    ¨  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    ¨  Yes    ¨  No

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TABLE OF CONTENTS

Page

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Cautionary Note Regarding Forward-Looking Statements

2

Certain statements and information included in this annual report on Form 20-F constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, (collectively, “forward-looking statements”) and, which are made in reliance upon the protections provided by such actslegislation for forward-looking statements. These forward-lookingAll statements are basedother than statements of historical facts included in this annual report on current expectations, estimates, forecasts and projections about the industries in which Intertape Polymer Group Inc. (“Intertape”, “Intertape Polymer Group”, or the “Company”) operates as well as current beliefs and assumptions ofForm 20-F, including statements regarding economic conditions, the Company’s management. Such statements include, in particular, statements about the Company’soutlook, plans, prospects, products, financial position, future sales and financial results, availability of credit, level of indebtedness, payment of dividends, fluctuations in raw material costs, competition, capital and other significant expenditures, manufacturing facility closures and other restructurings, liquidity, litigation and business strategies.strategies, may constitute forward-looking statements. These forward-looking statements are based on current beliefs, assumptions, expectations, estimates, forecasts and projections made by the management of Intertape Polymer Group Inc. (“Intertape,” “Intertape Polymer

Index to Financial Statements

Group,” or the “Company”). Words such as “may,” “will,” “should,” “expect,” “continue,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,“believe,” “believe”“future,” “likely,” or “seek” or the negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: business conditions and growth or declines in the Company’s industry itsand the Company’s customers’ industries; changes in general economic, political, social, fiscal or other conditions in any of the countries where the Company operates; the Company’s customers’ industries and the general economy; the anticipated benefits from the Company’s manufacturing facility closures and other restructuring efforts; the quality, and market reception, of the Company’s products; the Company’s anticipated business strategies; risks and costs inherent in litigation; the Company’s ability to maintain and improve quality and customer service; anticipated trends in the Company’s business; anticipated cash flows from the Company’s operations; availability of funds under the Company’s Asset-Based Loan facility; andRevolving Credit Facility; the Company’s ability to continue to control costs.costs; movements in the prices of key inputs such as raw material, energy and labor; government policies, including those specifically regarding the manufacturing industry, such as industrial licensing, environmental regulations, safety regulations, import restrictions and duties, excise duties, sales taxes, and value added taxes; accidents and natural disasters; changes to accounting rules and standards; and other factors beyond our control. The Company can give no assurance that these statements and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be material. Readers are cautioned not to place undue reliance on any forward-looking statement. For additional information regarding some important factors that could cause actual results to differ materially from those expressed in these forward-looking statements and other risks and uncertainties, and the assumptions underlying the forward-looking statements, you are encouraged to read “Item 3. Key Information—Information - Risk Factors,” “Item 5. Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” as well as statements located elsewhere in this annual report on Form 20-F and the other statements and factors contained in the Company’s filings with the Canadian securities regulators and the US Securities and Exchange Commission. Each of the forward-looking statements speaks only as of the date of this annual report on Form 20-F. The Company doeswill not undertake any obligation to publicly update these statements unless applicable securities laws require it to do so.

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3

PART I

Not applicable.

Not applicable.

The selected financial data presented below for the fourfive years ended December 31, 20132015 is presented in US dollars and is derived from the Company’s consolidated financial statements in US dollars and prepared in accordance with International Financial Reporting Standards (“IFRS”). The information set forth below was extracted from the consolidated financial statements and related notes included in this annual report and annual reports previously filed and should be read in conjunction with such consolidated financial statements. As required by the Canadian Accounting Standards Board, the Company adopted IFRS on January 1, 2011 and the Company’s financial information for 2010 has been restated to comply with IFRS. The selected financial data for the earliest year of the five-year period (2009) has not been restated. The Company represents that such information cannot be provided on a restated basis without unreasonable effort or expense.

On January 1, 2013 Amended IAS 19 -Employee Benefitsbecame effective and required retrospective application to operating results for fiscal years 2012 and 2011.

Amended IAS 19 –Employee Benefits: Amended for annual periods beginning on or after January 1, 2013 with retrospective application, introduced a measure of net interest income (expense) computed on the net pension asset (obligation) that replaced separate measurement of the expected return on plan assets and interest expense on the benefit obligation. The amended standard also required immediate recognition of past service costs associated with benefit plan changes, eliminating the requirement to recognize over the vesting period.

Upon retrospective application of the amended standard, the Company’s net earnings for 2012 and 2011 were lower than originally reported. The decrease arose primarily because net interest income (expense) was calculated using the discount rate used to value the benefit obligation, which is lower than the expected rate of return on assets previously used to measure interest attributable to plan assets.

For the years ended December 31, 2012 and 2011, the impact of adoption is a decrease to earnings before income tax benefit of $2.3 million and $1.7 million, respectively, and an income tax benefit of $0.2 million for each of these years. This impact also results in an equivalent net increase to other comprehensive income and deficit. As such, the retrospective application did not result in an impact to the Company’s balance sheets as of January 1, and December 31, 2012 and 2011.

See the Section entitled “Pension and Other Post-Retirement Benefit Plans” in Item 5 for a summary of the impact of the adoption of this guidance on the Company’s financial results for the years ended December 31, 2012 and 2011.

1

Not applicable.

Not applicable.

Index to Financial Statements

Current economic conditions and uncertain economic forecast could adversely affect the Company’s results of operations and financial conditions.

Unfavorable changes in the global economy have affected and may affect the demand for the Company’s products.products of the Company and its customers. Adverse economic conditions could also increase the likelihood of customer delinquencies. A prolonged period of economic decline would have a material adverse effect on the results of operations, gross margins, and the overall financial condition of the Company, as well as exacerbate the other risk factors set forth below.

Fluctuations in raw material costs or the amountunavailability of available funds underraw materials may adversely affect the Company’s Asset Based Loan could restrictprofitability.

Historically, the Company has not always been able to pass on significant raw material cost increases through price increases to its customers. The Company’s results of operations in prior years, at times, have been negatively impacted by raw material cost increases. These increases adversely affected the Company’s available creditprofitability. As a result of raw material cost increases, the Company may increase prices (which could result in reduced market share) or may choose to keep prices the same (which could result in decreased margins). The Company’s profitability in the future may be adversely affected due to continuing fluctuations in raw material prices. Additionally, the Company relies on its suppliers for deliveries of raw materials. If any of its suppliers are unable to deliver raw materials to the Company for an extended period of time, there is no assurance that the Company’s raw material requirements would be met by other suppliers on acceptable terms, or at all, which could have a material adverse effect on the Company’s results of operations.

The Company’s ability to achieve its growth objectives depends in part on the timing and could require unscheduled repayments.market acceptance of its new products.

The Company’s credit facility is an asset-backed loan. A reduction inbusiness plan includes the eligible assetsintroduction of new products, which are both developed internally and receivables included inobtained through acquisitions. The Company’s ability to introduce these products successfully depends on the borrowing basedemand for the products, as well as their price, quality, and related customer service. In the event the market does not fully accept these products or an increase incompetitors introduce similar or superior products (or products perceived by the required reserves will reducemarket to be similar or superior), the Company’s available credit under the Asset Based Loan (“ABL”). Such a reduction would reduce our available liquidityability to expand its markets and generate organic growth could be negatively impacted which could impact our ability to fund working capital, capital expenditures, research and development efforts and other general corporate purposes. A decline in the borrowing base could also requirehave an unscheduled repayment of funds already advanced in excess of the available credit amount.adverse effect on its operating results.

The Company’s Asset Based Loan contains a financial covenant which if not met, will result in an event of default.competition and customer preferences could impact the Company’s profitability.

The markets for the Company’s ABL contains a fixed charge ratio which becomes effective only when unused availability underproducts are highly competitive. Competition in its markets is primarily based upon the borrowing base drops below $25 million.quality, breadth and performance characteristics of its products, customer service and price. The Company’s failureability to compete successfully depends upon a variety of factors, including its ability to increase plant efficiencies and reduce manufacturing costs, as well as its access to quality, low-cost raw materials.

Some of the Company’s competitors, particularly certain of those located in Asia, may, at times, have lower costs (i.e. raw material, energy and labor) and/or less restrictive environmental and governmental regulations to comply with this covenant could result in an event of default, which, if not cured or waived, could result inthan the Company being required to repay these borrowings before their scheduled due date. Ifdoes. Other competitors may be larger in size or scope than the Company, were unablewhich may allow them to make this repaymentachieve greater economies of scale on a global basis or otherwise refinance these borrowings, the lenders under the ABL could electallow them to declare all amounts borrowed underbetter withstand periods of declining prices and adverse operating conditions.

Demand for the Company’s ABL, together with accrued interest, toproducts and, in turn, its revenue and profit margins, are affected by customer preferences and changes in customer ordering patterns which occur as a result of changes in inventory levels and timing of purchases which may be duetriggered by price changes and payable. The lenders could foreclose on the Company’s assets. If the Company were unable to refinance these borrowings on favorable terms, the Company’s results of operations and financial condition could be adversely impacted by increased costs and less favorable terms, including interest rates and covenants. Any future refinancing of the Company’s ABL is likely to contain similar or more restrictive covenants and financial tests.incentive programs.

2

The Company’s significant debtcustomer contracts contain termination provisions that could adversely affectdecrease the Company’s future revenues and earnings.

Most of the Company’s customer contracts can be terminated by the customer on short notice without penalty. The Company’s customers are, therefore, not contractually obligated to continue to do business with it in the future. This creates uncertainty with respect to the revenues and earnings the Company may recognize with respect to its financial conditioncustomer contracts.

The Company’s manufacturing plant rationalization initiatives, manufacturing cost reduction programs and prevent it from fulfilling its obligations under its ABL.capital expenditure projects may result in higher costs and less savings than anticipated.

The Company has implemented several manufacturing plant rationalization initiatives, manufacturing cost reduction programs and capital expenditure projects. Each may not be completed as planned and as a significant amount of indebtedness. As of December 31, 2013,result, the costs and capital expenditures incurred by the Company had outstandingmay substantially exceed projections. This could potentially result in additional debt incurred by the Company or reduced production and elimination. In addition, the reduction of $129.8 million, which represented 16% of its total capitalization. Of such total debt, approximately $129.7 million,anticipated manufacturing cost savings may be less than expected or all of the Company’s outstanding senior debt, was secured.may not materialize at all.

The Company’s significant indebtedness

Index to Financial Statements

Acquisitions could adversely affect its financial condition and make it more difficult forexpose the Company to satisfysignificant business risks.

The Company may make strategic acquisitions that could, among other goals, complement its obligations underexisting products, expand its ABL. The Company’s substantial indebtedness could also increasecustomer base and markets, improve distribution efficiencies and enhance its vulnerability to adverse general economic and industry conditions; requiretechnological capabilities. Financial risks from these acquisitions include the Company to dedicate a substantial portion of its cash flows from operations to payments on its indebtedness, thereby reducing the availabilityuse of the Company’s cash flows to fund working capital, capital expenditures, researchresources, paying a price that exceeds the future value realized from the acquisition, and development effortsincurring additional debt and other general corporate purposes; limitliabilities (including potentially unknown liabilities). Further, there are possible operational risks including difficulty assimilating and integrating the Company’s flexibility in planning for, or reacting to, changes in its businessoperations, products, technology, information systems and the industrypersonnel of acquired companies, losing key personnel of acquired entities, entry into markets in which it operates; place the Company at a competitive disadvantage comparedhas no or limited prior experience, failure to its competitors that have less debt;obtain or retain intellectual property rights for certain products and limitdifficulty honoring commitments made to customers of the Company’s abilityacquired companies prior to borrow additional funds on terms that are satisfactory to it or at all.

the acquisition. The Company may not be ableincur significant acquisition, administrative and other costs in connection with these transactions, including costs related to generate sufficient cash flow to meet its debt service obligations.

The Company’s ability to generate sufficient cash flows from operations to make scheduled payments on its debt obligations will depend on its future financial performance, which will be affected by a rangethe integration of economic, competitive, regulatory, legislative and business factors, many of which are outside of the Company’s control. Ifacquired businesses. These acquisitions could expose the Company does not generate sufficient cash flowsto significant integration risks and increased organizational complexity which may challenge management and may adversely impact the realization of an increased contribution from operationssaid acquisitions. The failure to satisfy its debt obligations, the Company may have to undertake alternative financing plans, such as refinancing or restructuring its debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. The Company cannot assure that any refinancing would be possible or that any assetsadequately address these risks could be sold on acceptable terms or otherwise. The Company’s inability to generate sufficient cash flows to satisfy its debt obligations, or to refinance its obligations on commercially reasonable terms, would have an adverse effect onadversely affect the Company’s business and financial condition and results of operations. In addition, any refinancingperformance.

Although the Company performs due diligence investigations of the Company’s debt couldbusinesses and assets that it acquires, and anticipates continuing to do so for future acquisitions, there may be at higher interest rates and may requireliabilities related to the acquired business or assets that the Company fails to, comply with more onerous covenants,or is unable to, uncover during its due diligence investigation and for which could further restrict its business operations.

Despite the Company’s level of indebtedness, it will be able to incur substantially more debt. Incurring such debt could further exacerbate the risks to the Company’s financial condition described above.

The Company will be able to incur substantial additional indebtedness in the future. Although the loan and security agreement governing the ABL contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and the indebtedness incurred in compliance with these restrictions could be substantial. The restrictions also do not prevent the Company, as a successor owner, may be responsible. When feasible, the Company seeks to minimize the impact of these types of potential liabilities by obtaining indemnities and warranties from incurring obligations that dothe seller, which may in some instances be supported by deferring payment of a portion of the purchase price. However, these indemnities and warranties, if obtained, may not constitute indebtedness. Tofully cover the extent new debt is added toliabilities because of their limited scope, amount or duration, the Company’s currently anticipated debt levels,financial resources of the substantial leverage risks described above would increase.indemnitor or warrantor, or other reasons.

The Company’s ABLRevolving Credit Facility contains covenants that limit its flexibility and preventsprevent the Company from taking certain actions.

The loan and security agreement governing the Company’s ABLRevolving Credit Facility includes a number of significant restrictive covenants. These covenants could adversely limit the Company’s ability to plan for or react to market conditions, meet its capital needs and execute its business strategy. These covenants, among other things, limit the Company’s ability and the ability of its subsidiaries to incur additional debt; prepay other debt; pay dividends and make other restricted payments; create or permit certain liens; issue or sell capital stock of restricted subsidiaries; use the proceeds from sales of assets; make certain investments; create or permit restrictions on the ability of the guarantors to pay dividends or to make other distributions to the Company; enter into certain types of transactions with affiliates; engage in unrelated businesses; enter into sale and leaseback transactions; and consolidate or merge or sell the Company’s assets substantially as an entirety.

The Company depends on its subsidiaries for cash to meet its obligations and pay any dividends.

The Company is a holding company. Its subsidiaries conduct all of its operations and own substantially all of its assets. Consequently, the Company’s cash flow and its ability to meet its obligations or pay dividends to its stockholders depend upon the cash flow of its subsidiaries and the payment of funds by its subsidiaries to the Company in the form of dividends, tax sharing payments or otherwise. The Company’s subsidiaries’ ability to provide funding will depend on, amongst others, their earnings, the terms of indebtedness from time to time, tax considerations and legal restrictions.

3

Payment of dividends may not continue in the future, and the payment of dividends is subject to restriction.

On August 14, 2013,12, 2015, the Board of Directors modifiedapproved a change in the Company’squarterly dividend policy by increasing the dividend from $0.12 to provide for the payment of quarterly cash dividends as opposed to semi-annual cash dividends.$0.13 per share. The future declaration and payment of dividends, if any, will be at the discretion of the Board of Directors and will depend on a number of factors, including the Company’s financial and operating results, financial position, legal requirements, and anticipated cash requirements. The Company can give no assurance that dividends will be declared and paid in the future or, if declared and paid in the future, at the same level as in the past. Additionally, the Company’s ABLRevolving Credit Facility restricts its ability to pay dividends if the Company does not maintain certain borrowing availability or if the Company is in default.

Fluctuations in raw material costs or the unavailability of raw materials mayThe Company’s significant debt could adversely affect its financial condition.

While the Company’s profitability.indebtedness has declined in recent years, it still has a significant amount of indebtedness. As of December 31, 2015, the Company had outstanding debt of $152.8 million, which represented 16.2% of its total capitalization. Of such total debt, approximately $152.8 million, or all of the Company’s outstanding senior debt, was secured.

Index to Financial Statements

The Company’s significant indebtedness could adversely affect its financial condition. The Company’s substantial indebtedness could also increase its vulnerability to adverse general economic and industry conditions; require the Company to dedicate a substantial portion of its cash flows from operating activities to payments on its indebtedness, thereby reducing the availability of the Company’s cash flows to fund working capital, capital expenditures, potential acquisitions, research and development efforts and other general corporate purposes; limit the Company’s flexibility in planning for, or reacting to, changes in its business and the industry in which it operates; place the Company at a competitive disadvantage compared to its competitors that have less debt; and limit the Company’s ability to borrow additional funds on terms that are satisfactory to it or at all.

The Company may not be able to generate sufficient cash flow to meet its debt service obligations.

Historically,The Company’s ability to generate sufficient cash flows from operating activities to make scheduled payments on its debt obligations will depend on its future financial performance, which will be affected by a range of economic, competitive, regulatory, legislative and business factors, many of which are outside of the Company’s control. If the Company hasdoes not always been ablegenerate sufficient cash flows from operating activities to pass on significant raw material cost increases through price increases tosatisfy its customers. The Company’s results of operations in prior years at times have been negatively impacted by raw material cost increases. These fluctuations adversely affected the Company’s profitability. As a result of raw material cost fluctuations,debt obligations, the Company may have to either hold prices firm, which results in a reduced market share,undertake alternative financing plans, such as refinancing or decrease prices which compresses the Company’s gross margins.restructuring its debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. The Company’s profitability in the future may be adversely affected due to continuing fluctuations in raw material prices. Additionally, the Company relies on its suppliers for deliveries of raw materials. Ifcannot assure that any of its suppliers are unable to deliver raw materials to the Company for an extended period of time, there is no assurance that the Company’s raw material requirementsrefinancing would be met by other supplierspossible or that any assets could be sold on acceptable terms or at all, which couldotherwise. The Company’s inability to generate sufficient cash flows to satisfy its debt obligations, or to refinance its obligations on commercially reasonable terms, would have a materialan adverse effect on the Company’s business, financial condition and results of operations. In addition, any refinancing of the Company’s debt could be at higher interest rates and may require the Company to comply with more onerous covenants, which could further restrict its business operations. Also, any additional issuances of equity would dilute the Company’s shareholders.

Despite the Company’s level of indebtedness, it will be able to incur substantially more debt. Incurring such debt could further exacerbate the risks to the Company’s financial condition described above.

The Company will be able to incur substantial additional indebtedness in the future. Although the loan and security agreement governing the Revolving Credit Facility contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and the indebtedness incurred in compliance with these restrictions could be substantial. The restrictions also do not prevent the Company from incurring obligations that do not constitute indebtedness. To the extent new debt is added to the Company’s currently anticipated debt levels, the substantial leverage risks described above would increase.

The failure to maintain effective internal control over financial reporting in accordance with applicable securities laws could cause the Company’s stock price to decline.

Section 404 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the US Securities and Exchange Commission (the “SEC”) as well as applicable rules and guidelines adopted by the Canadian securities lawsSecurities Administrators require annual management assessments of the effectiveness of the Company’s internal control over financial reporting and a report by the Company’s independent registered public accounting firm to express an opinion on these controls based on their audit. Due to inherent limitations, there can be no assurance that the Company’s system of internal control over financial reporting will be successful in preventing all errors, theft, and fraud, or in informing management of all material information in a timely manner. Also, if the Company cannot in the future favorably assess, or the Company’s independent registered public accounting firm is unable to provide an unqualified attestation report on the effectiveness of the Company’s internal control over financial reporting, investors may lose confidence in the reliability of the Company’s financial reports, which could cause the Company’s stock price to decline.

The Company’s pension and other post-retirement benefit plans are unfunded which could require Company contributions.

The Company’s pension and other post-retirement benefit plans currently have an unfunded deficit of $18.9$29.3 million as of December 31, 20132015 as compared to $39.3$31.7 million at the end of 2012.2014. For 20132015 and 2012,2014, the Company contributed $4.3$2.0 million and $5.6$2.3 million, respectively, to its funded pension plans and to beneficiaries for its unfunded other benefit plans. The Company may need to divert certain of its resources in the future in order to resolve this funding deficit. In addition, the Company cannot predict whether a change in factors such as pension asset performance or interest rates, will require the Company to make a contribution in excess of its current expectations. Also, the Company expects to contribute $1.5 million to satisfy its 2016 minimum funding requirement for its funded pension plans and to beneficiaries for its unfunded other benefit plans. Further, the Company may not have the funds necessary to meet future minimum pension funding requirements or be able to meet its pension benefit plan funding obligation through cash flows from operations.

The Company’s ability to achieve its growth objectives depends in part on the timing and market acceptance of its new products.

Intertape Polymer Group’s business plan involves the introduction of new products, which are both developed internally and obtained through acquisitions. The Company’s ability to introduce these products successfully depends on the demand for the products, as well as their price, quality, and related customer service. In the event the market does not accept these products or competitors introduce similar products, the Company’s ability to expand its markets and generate organic growth could be negatively impacted which could have an adverse effect on its operating results.activities.

4

The Company’s competition and customer preferences could impact the Company’s profitability.

The markets for Intertape Polymer Group’s products are highly competitive. Competition in its markets is primarily based upon the quality, breadth and performance characteristics of its products, customer service and price. The Company’s ability

Index to compete successfully depends upon a variety of factors, including its ability to increase plant efficiencies and reduce manufacturing costs, as well as its access to quality, low-cost raw materials.

Some of the Company’s competitors may, at times, have lower raw material, energy and labor costs and less restrictive environmental and governmental regulations to comply with than the Company does. Other competitors may be larger in size or scope than the Company, which may allow them to achieve greater economies of scale on a global basis or allow them to better withstand periods of declining prices and adverse operating conditions.

Demand for the Company’s products and, in turn, its revenue and profit margins, are affected by customer preferences and changes in customer ordering patterns which occur as a result of changes in inventory levels and timing of purchases which may be triggered by price changes and incentive programs.

The Company’s customer contracts contain termination provisions that could decrease the Company’s future revenues and earnings.

Most of the Company’s customer contracts can be terminated by the customer on short notice without penalty. The Company’s customers are, therefore, not contractually obligated to continue to do business with it in the future. This creates uncertainty with respect to the revenues and earnings the Company may recognize with respect to its customer contracts.

Financial Statements

The Company depends on the proper functioning of its information systems.

The Company is dependent on the proper functioning of information systems, some of which are owned and operated by third parties, to store, process and transmit confidential information, including financial reporting, inventory management, procurement, invoicing and electronic communications belonging to ourits customers, ourits suppliers, ourits employees and/or us.the Company itself. The Company’s information systems are vulnerable to natural disasters, fire, or casualty theft, technical failures, terrorist acts, cyber security breaches, power loss, telecommunications failures, physical or software intrusions, computer viruses, and similar events. If the Company’s critical information systems fail or are otherwise unavailable, ourits operations could be disrupted, causing a material adverse effect on ourits business. Also, any theft or misuse of information resulting from a security breach could result in, among other things, loss of significant and/or sensitive information, litigation by affected parties, financial obligations resulting from such theft or misuse, higher insurance premiums, governmental investigations, negative reactions from current and potential future customers (including potential negative financial ramifications under certain customer contract provisions) and poor publicitypublicity. Any of these consequences, in addition to the time and anyfunds spent on monitoring and mitigating the Company’s exposure and responding to breaches, including the training of employees, the purchase of protective technologies and the hiring of additional employees and consultants to assist in these efforts, could adversely affect ourits financial results.

Intertape Polymer GroupThe Company faces risks related to its international operations.

The Company has customers and operations located outside the United States and Canada. In 2013,2015, sales to customers located outside the United States and Canada represented approximately 10%7% of its sales. The Company’s international operations present it with a number of risks and challenges, including potential difficulties staffing and managing its foreign operations, potential difficulties managing a more extensive supply chain as compared to its sales efforts in the United States and Canada, potential adverse changes in tax regulations affecting tax rates and the way the United States and other countries tax multinational companies, the effective marketing of the Company’s products in other countries, tariffs and other trade barriers, less favorable intellectual property laws, longer customer payment cycles, exposure to economies that may be experiencing currency volatility or negative growth, exposure to political and economic instability and unsafe working conditions (including acts of terrorism, widespread criminal activities and outbreaks of war) and different regulatory schemes and political environments applicable to its operations in these areas, such as environmental and health and safety compliance.

In addition, the Company’s financial statements are reported in US dollars while a portion of its sales is made in other currencies, primarily the Canadian dollar and the Euro. As a result, fluctuations in exchange rates between the US dollar and foreign currencies can have a negative impact on the Company’s reported operating results and financial condition. Moreover, in some cases, the currency of the Company’s sales does not match the currency in which it incurs costs, which can negatively affect its profitability. Fluctuations in exchange rates can also affect the relative competitive position of a particular facility where the facility faces competition from non-local producers, as well as the Company’s ability to successfully market its products in export markets.

5

The Company’s operations are subject to comprehensive environmental regulation and involve expenditures which may be material in relation to its operating cash flow.

The Company’s operations are subject to extensive environmental regulation in each of the countries in which it maintains facilities. For example, United States (Federal,US (federal, state and local) and Canadian (Federal,(federal, provincial and local) environmental laws applicable to the Company include statutes and regulations intended to impose certain obligations with respect to site contamination and to allocate the cost of investigating, monitoring and remedying soil and groundwater contamination among specifically identified parties, as well as to prevent future soil and groundwater contamination; imposing ambient standards and, in some cases, emission standards, for air pollutants which present a risk to public health, welfare or the natural environment; governing the handling, management, treatment, storage and disposal of hazardous wastes and substances; and regulating the discharge of pollutants into waterways.

The Company’s use of hazardous substances in its manufacturing processes and the generation of hazardous wastes not only by the Company, but by prior occupants of its facilities, suggest that hazardous substances may be present at or near certain of the Company’s facilities or may come to be located there in the future. Consequently, the Company is required to closely monitor its compliance under all the various environmental laws and regulations applicable to it. In addition, the Company arranges for the off-site disposal of hazardous substances generated in the ordinary course of its business.

The Company obtains Phase I or similar environmental site assessments, and Phase II environmental site assessments, if necessary, for most of the manufacturing facilities it owns or leases at the time it either acquires or leases such facilities. These assessments typically include general inspections and may involve soil sampling and/or groundwater analysis. The assessments have not revealed any environmental liability other than, or in addition to, the $2.5 million liability accrued in provisions in the Company’s consolidated balance sheet, that, based on current information, the Company believes will have a material adverse effect

Index to Financial Statements

on it. Nevertheless, these assessments may not reveal all potential environmental liabilities and current assessments are not available for all facilities. Consequently, there may be material environmental liabilities that the Company is not aware of. In addition, ongoing cleanup and containment operations may not be adequate for purposes of future laws and regulations. The conditions of the Company’s properties could also be affected in the future by neighboring operations or the conditions of the land in the vicinity of its properties. These developments and others, such as increasingly stringent environmental laws and regulations, increasingly strict enforcement of environmental laws and regulations, or claims for damage to property or injury to persons resulting from the environmental, health or safety impact of its operations, may cause the Company to incur significant costs and liabilities that could have a material adverse effect on it.

Except as described in Item 4B(8) below, the Company believes that all of its facilities are in material compliance with applicable environmental laws and regulations and that it has obtained, and is in material compliance with, all material permits required under environmental laws and regulations. Although certain of the Company’s facilities emit toluene and other pollutants into the air, these emissions are within current permitted limits. The Company believes that these emissions from its US facilities will meet the applicable future federal Maximum Available Control Technology (“MACT”) requirements, although additional testing or modifications at the facilities may be required. The Company believes that the ultimate resolution of these matters should not have a material adverse effect on its financial condition or results of operations.

The Company’s facilities are required to maintain numerous environmental permits and governmental approvals for its operations. Some of the environmental permits and governmental approvals that have been issued to the Company or to its facilities contain conditions and restrictions, including restrictions or limits on emissions and discharges of pollutants and contaminants, or may have limited terms. If the Company fails to satisfy these conditions or to comply with these restrictions, it may become subject to enforcement actions and the operation of the relevant facilities could be adversely affected. The Company may also be subject to fines, penalties or additional costs. The Company may not be able to renew, maintain or obtain all environmental permits and governmental approvals required for the continued operation or further development of the facilities, as a result of which the operation of the facilities may be limited or suspended.

The Company may become involved in litigation relating to its intellectual property rights, which could have an adverse impact on its business.

Intertape Polymer GroupThe Company relies on patent protection, as well as a combination of copyright, trade secret and trademark laws, nondisclosure and confidentiality agreements and other contractual restrictions to protect its proprietary technology.

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Litigation may be necessary to enforce these rights, which could result in substantial costs to the Company and a substantial diversion of management attention. If the Company does not adequately protect its intellectual property, its competitors or other parties could use the intellectual property that the Company has developed to enhance their products or make products similar to the Company’s and compete more efficiently with it, which could result in a decrease in the Company’s market share.

While the Company has attempted to ensure that its products and the operations of its business do not infringe other parties’ patents and proprietary rights, its competitors or other parties may assert that the Company’s products and operations may infringe upon patents held by them. In addition, because patent applications can take many years to issue, the Company might have products that infringe upon pending patents of which it is unaware. If any of the Company’s products infringe a valid patent, it could be prevented from selling them unless the Company obtains a license or redesigns the products to avoid infringement. A license may not be available or may require the Company to pay substantial royalties. The Company may not be successful in attempts to redesign its products to avoid infringement. Infringement or other intellectual property claims, regardless of merit or ultimate outcome, can be expensive and time-consuming to resolve as well as divert management’s attention from the Company’s core business.

The Company may become involved in labor disputes or employees could form or join unions increasing the Company’s costs to do business.

Some of Intertape Polymer Group’sthe Company’s employees are subject to collective bargaining agreements. Other employees are not part of a union and there are no assurances that such employees will not form or join a union. Any attempt by employees to form or join a union could result in increased labor costs and adversely affect the Company’s business, its financial condition and/or results of operations.

Except for the strike which occurred at the Company’s Brantford, Ontario plant in 2008, which is now closed, the Company has never experienced any work stoppages due to employee related disputes. Management believes that it has a good relationship with its employees. There can be no assurance, however, that work stoppages or other labor disturbances will not occur in the future. Such occurrences could adversely affect Intertape Polymer Group’sthe Company’s business, financial condition and/or results of operations.

Index to Financial Statements

The Company may become involved in litigation which could have an adverse impact on its business.

Intertape Polymer Group,The Company, like other manufacturers and sellers, is subject to potential liabilities connected with its business operations, including potential liabilities and expenses associated with product defects, performance, reliability or delivery delays. Intertape Polymer GroupThe Company is threatened from time to time with, or is named as a defendant in, legal proceedings, including lawsuits based upon product liability, personal injury, breach of contract and lost profits or other consequential damages claims, in the ordinary course of conducting its business. A significant judgment against Intertape Polymer Group,the Company, or the imposition of a significant fine or penalty as a result ofresulting from a finding that the Company failed to comply with laws or regulations, or being named as a defendant on multiple claims could adversely affect the Company’s business, financial condition and/or results of operations. As discussed further in Item 5. Operating and Financial Review and Prospects (Management’s Discussion & Analysis), the Company’s former Chief Financial Officer filed a lawsuit in the United States District Court for the Middle District of Florida on November 5, 2015 alleging certain violations by the Company related to the terms of his employment and his termination. While the Company is aggressively contesting the allegations and is not currently able to predict the probability of a favourable or unfavourable outcome, or the amount of any possible loss in the event of an unfavourable outcome, such an unfavourable outcome could adversely affect the Company’s business, financial condition and/or results of operations.

Uninsured and underinsured losses and rising insurance costs could adversely affect the Company’s business.

Intertape Polymer GroupThe Company maintains property, business interruption, general liability, and business interruption insurance and directors and officersofficer’s liability and other ancillary insurance on such terms as it deems appropriate. This may result in insurance coverage that, in the event of a substantial loss, would not be sufficient to pay for the full current market value or current replacement cost of the Company’s lost investment. Not all risks are covered by insurance.

Intertape Polymer Group’sThe Company’s cost of maintaining property, general liability and business interruption insurance and director and officer liability insurance is significant. The Company could experience higher insurance premiums as a result of adverse claims experience or because of general increases in premiums by insurance carriers for reasons unrelated to its own claims experience. Generally, the Company’s insurance policies must be renewed annually. Intertape Polymer Group’sThe Company’s ability to continue to obtain insurance at affordable premiums also depends upon its ability to continue to operate with an acceptable claims record. A significant increase in the number of claims against the Company, the assertion of one or more claims in excess of its policy limits, or the inability to obtain adequate insurance coverage at acceptable rates, or any insurance coverage at all, could adversely affect the Company’s business, financial condition and/or results of operations.

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The Company’s success depends upon retaining the services of its management team and key employees.

The Company is dependent on its management team and expects that continued success will depend largely upon their efforts and abilities. The loss of the services of any key executive for any reason could have a material adverse effect uponon the Company. Success also depends upon ourthe Company’s ability to identify, develop, and retain qualified employees.

Product liability could adversely affect the Company’s business.

Difficulties in product design, performance and reliability could result in lost sales, delays in customer acceptance of Intertape Polymer Group’sthe Company’s products, customer complaints or lawsuits. Such difficulties could be detrimental to the Company’s market reputation. Intertape Polymer Group’sThe Company’s products and the products supplied by third parties on behalf of the Company may not be error free.error-free. Undetected errors or performance problems may be discovered in the future. The Company may not be able to successfully complete the development of planned or future products in a timely manner or adequately address product defects, which could harm the Company’s business and prospects. In addition, product defects may expose Intertape Polymer Groupthe Company to product liability claims, for which it may not have sufficient product liability insurance. Difficulties in product design, performance and reliability or product liability claims could adversely affect Intertape Polymer Group’sthe Company’s business, financial condition and/or results of operations.

Acquisitions could exposeBecause the Company to significant business risks.

The Company may make strategic acquisitions that could, among other goals, complement its existing products, expand its customer base and markets, improve distribution efficiencies and enhance its technological capabilities. Financial risks from these acquisitions include the use of the Company’s cash resources, paying a price that exceeds the future value realized from the acquisition, and incurring additional debt and liabilities (including potentially unknown liabilities). Further, there are possible operational risks including difficulty assimilating and integrating the operations, products, technology, information systems and personnel of acquired companies, losing key personnel of acquired entities, entry into markets in which the Company has no or limited prior experience and difficulty honoring commitments made to customers of the acquired companies prior to the acquisition. The failure to adequately address these risks could adversely affect the Company’s business.

Although the Company performs due diligence investigations of the businesses and assets that it acquires, and anticipates continuing to do so for future acquisitions, there may be liabilities related to the acquired business or assets that the Company fails to, or is unable to, uncover during its due diligence investigation and for which the Company, as a successor owner, may be responsible. When feasible, the Company seeks to minimize the impact of these types of potential liabilities by obtaining indemnities and warranties from the seller, which may in some instances be supported by deferring payment of a portion of the purchase price. However, these indemnities and warranties, if obtained, may not fully cover the liabilities because of their limited scope, amount or duration, the financial resources of the indemnitor or warrantor or other reasons.

The Company’s manufacturing plant rationalization initiatives may result in higher costs and less savings than anticipated.

The Company has implemented several manufacturing plant rationalization initiatives. Each initiative may not be completed as planned and as a result, the costs and capital expenditures incurred by the Company may substantially exceed projections. This could potentially result in additional debt incurred by the Company, reduced production and elimination or reduction of anticipated manufacturing cost savings.

Because Intertape Polymer Group is a Canadian company, it may be difficult to enforce rights under US bankruptcy laws.

Intertape Polymer GroupThe Company and certain of its subsidiaries are incorporated under the laws of Canada and a substantial amount of its assets are located outside of the United States. Under bankruptcy laws in the United States, courts typically assert jurisdiction over a debtor’s property, wherever located, including property situated in other countries. However, courts outside of the United States may not recognize the United States bankruptcy court’s jurisdiction over property located outside of the territorial limits of the United States. Accordingly, difficulties may arise in administering a United States bankruptcy case involving a Canadian debtor with property located outside of the United States, and any orders or judgments of a bankruptcy court in the United States may not be enforceable outside the territorial limits of the United States.

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Index to Financial Statements

It may be difficult for investors to enforce civil liabilities against Intertape Polymer Groupthe Company under US federal and state securities laws.

Intertape Polymer GroupThe Company and certain of its subsidiaries are incorporated under the laws of Canada. Certain of their directors are residents of Canada and a portion of directors’ and executive officers’ assets may be located outside of the United States. In addition, certain subsidiaries are located in other foreign jurisdictions. As a result, it may be difficult or impossible for US investors to effect service of process within the United States upon Intertape Polymer Group,the Company, its Canadian subsidiaries, or its other foreign subsidiaries, or those directors and officers, or to realize against them upon judgments of courts of the United States predicated upon the civil liability provisions of US federal securities laws or securities or blue sky laws of any state within the United States. The Company believes that a judgment of a US court predicated solely upon the civil liability provisions of the Securities Act of 1933, as amended and/or the Securities Exchange Act of 1934, as amended (“Exchange Act”) would likely be enforceable in Canada if the US court in which the judgment was obtained had a basis for jurisdiction in the matter that was recognized by a Canadian court for such purposes. The Company cannot assure that this will be the case. There is substantial doubt whether an action could be brought in Canada in the first instance on the basis of liability predicated solely upon such laws.

The Company has its registered office in the Province of Québec, Canada and, as a result, is subject to the securities laws of that province. In addition, the Company is a “reporting issuer” under the securities laws of each of the provinces of Canada and is therefore subject to the provisions thereof relating to, among other things, continuous disclosure and filing of insider reports by the Company’s “reporting insiders”, as applicable.

While ourthe Company’s shares trade on the Toronto Stock Exchange, they trade on the OTC Pink Marketplace in the US, which may result in the possible absence of a liquid trading market for securities of US investors.

The Company’s common shares are traded in the US on the OTC Pink Marketplace. Trading on this market can be thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with a company’s operations or business prospects. In addition, trading on this market is often sporadic, so shareholders may have some difficulty reselling any of their shares of common stock on this market.

Compliance with the SEC’s new conflict mineral disclosure requirements will createresults in additional compliance costcosts and may create reputational challenges.

Recently, theThe SEC adopted new rules pursuant to Section 1502 of the Dodd-Frank Act setting forth new disclosure requirements concerning the use or potential use of certain minerals and their derivatives, including tantalum, tin, gold and tungsten, that are mined from the Democratic Republic of Congo and adjoining countries, and deemed conflict minerals. These new requirements have necessitated, and will continue to necessitate, due diligence efforts by the Company to assess whether such minerals are used in ourthe Company’s products in order to make the relevant required disclosures beginning in May 2014.disclosures. There will beare certain costs associated with complying with these new disclosure requirements, including diligence to determine the sources of those minerals that may be used or necessary to the production of the Company’s products. If the Company determines that certain of its products contain minerals that are not conflict freeconflict-free or is unable to sufficiently verify the origins for all conflict minerals used in its products, the Company may face changes to its supply chain or challenges to its reputation, either of which could impact future sales.

The Company’s exemptions under the Securities Exchange Act of 1934, as amended, as a foreign private issuer, limitslimit the protections and information afforded investors.

Intertape Polymer GroupThe Company is a foreign private issuer within the meaning of the rules promulgated under the Exchange Act. As such, it is exempt from certain provisions applicable to United States companies with securities registered under the Exchange Act, including: the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission of quarterly reports on Form 10-Q or current reports on Form 8-K; the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction (i.e., a purchase and sale, or sale and purchase, of the issuers’ equity securities within a period of less than six months). Because of these exemptions, purchasers of Intertape Polymer Group’sthe Company’s securities are not afforded the same protections or information generally available to investors in public companies organized in the United States. Prior to December 31, 2000, the Company filed its annual reports on Form 20-F. Commencing with the year ended December 31, 2000 through December 31, 2007, and again for the year ended December 31, 2009, the Company filed its annual reports on Form 40-F. For the year ended December 31, 2008 and commencing for the year ended December 31, 2010 and going forward, the Company has elected to file its annual report on Form 20-F which also fulfills the requirements of the Annual Information Form required in Canada, thus necessitating only one report. Intertape Polymer GroupThe Company reports on Form 6-K with the United States Securities and Exchange Commission and publicly releases quarterly financial reports.

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Index to Financial Statements

The business of Intertape was established when Intertape Systems Inc., a predecessor of the Company, established a pressure sensitive tape manufacturing facility in Montreal, Canada. Intertape Polymer GroupThe Company was incorporated under theCanada Business Corporations Act on December 22, 1989 under the name “171695 Canada Inc.” On October 8, 1991, the Company filed a Certificate of Amendment changing its name to “Intertape Polymer Group Inc.” A Certificate of Amalgamation was filed by the Company on August 31, 1993, at which time the Company was amalgamated with EBAC Holdings Inc. The Shareholders, at the Company’s JuneOn November 11, 2003 annual and special meeting, voted on the replacement of the Company’s By-Law No. 1 with a new General By-Law 2003-1. The intent of the replacement by-law was to conform the Company’s general by-laws with amendments that were made to theCanada Business Corporations Act since the adoption of the general by-laws and to simplify certain aspects of the governance of the Company. On August 6, 2006, the Company filed a Certificate of Amendment to permit2015, the Board of Directors adopted a new By-Law 2015-1, requiring advance notice for the nomination of directors. Under the Company to appoint one or more additional Directors to hold office for a term expiring not later thanCanada Business Corporations Act, By-law 2015-1 is in force, but must be confirmed by the close ofCompany’s shareholders at the next annual meeting of the Company’s Shareholders, so long as the total number of Directors so appointed doesshareholders’ meeting. If By-law 2015-1 is not exceed one-third of the number of Directors electedconfirmed at the previous annualshareholders’ meeting, of the Shareholders of the Company.it will cease to have effect at that time.

Intertape Polymer Group’sThe Company’s corporate headquarters is located at 9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Quebec,Québec, Canada H4M 2X5 and the address and telephone number of its registered office is 800 Place Victoria, Suite 3700, Montréal, Québec H4Z 1E9, c/o Fasken Martineau Dumoulin LLP, (514) 397-7400.397-7400.

In the last five years, the Company has undertaken a number of significant manufacturing plant rationalization initiatives in an effort to achieve its goal of being a low-cost producer of its products along with having world class assets at its manufacturing facilities. The Company operates in various geographic locations and develops, manufactures and sells a variety of paper and film based pressure sensitive and water activated tapes, polyethylene and specialized polyolefin packaging films, woven coated fabrics and complementary packaging systems for industrial and retail use. Most of the Company’s products are made from similar processes. A vast majority of the Company’s products, while brought to market through various distribution channels, generally have similar economic characteristics.

Intertape Polymer Group closed its Brantford, Ontario, facility during the second quarter of 2011 and discontinued the manufacture of certain products that were produced solely at the Brantford, Ontario, plant. Intertape Polymer GroupThe Company sold the Brantford, Ontario, facility in January 2013. Intertape Polymer GroupThe Company sold its Hawkesbury, Ontario, plant in 2011. In the fourth quarter of 2012, the Company ceased manufacturing operations at its Richmond, Kentucky, manufacturing facility and transferred operations to its Carbondale, Illinois, facility during the first quarter of 2013. The Company sold the Richmond, Kentucky facility in the fourth quarter of 2014. In addition, the Company consolidated its North American shrink film production at its Tremonton, Utah, facility.facility in 2013.

As of the result of an internal restructuring, effective December 31, 2012, the Company liquidated and dissolved ECP L.P. and ECP GP II Inc., its Canadian operating companies, and all business, assets and liabilities were transferred to Intertape Polymer Inc., another Canadian subsidiary of the Company. Also effective December 31, 2012, the Company liquidated and dissolved Polymer International Corp., a Virginia corporation, and all of its assets and liabilities are with Intertape Polymer Corp., a Delaware corporation, a US subsidiary of the Company.

In February 2013, the Company announced plans to relocate and modernize its Columbia, South Carolina, manufacturing facility and in June 2013, acquired property in Blythewood, South Carolina, which is located in close proximity to the Columbia, South Carolina plant. ImprovementsAs of December 31, 2015, the Company had completed commissioning efforts in relation to the duct tape production line and began limited production and sales of the masking tape production line in Blythewood, property are underway to adapt it for use as aSouth Carolina with the full transfer of masking tape and stencil manufacturing facility. The Company anticipates the plantproduction still expected to be operational duringcompleted in the first half of 2015.2016. Capital expenditures for this project are expected to total $43.0 million to $46.0approximately $60 million, of which $2.7 million was spent in 2012, and $21.8 million in 2013.2013, $24.3 million in 2014, and $7.9 million in 2015.

Effective October 30, 2014, the Company completed an additional internal restructuring to reorganize the capital structure of several of its legal entities to more efficiently manage its intercompany debt. The results of this restructuring were (in addition to certain transfers of certain intercompany receivables, payables and notes): (a) IPG Holdings LP was dissolved; (b) all of the preferred shares in IPG (US) Holdings Inc. were redeemed and cancelled, with Intertape Polymer Group Inc. owning all of the common shares of IPG (US) Holdings Inc.; (c) Intertape Polymer Group Inc. formed IPG Luxembourg S.à r.l, a Luxembourg private limited liability company (société à responsabilité limitée) as a wholly owned subsidiary of Intertape Polymer Group Inc. and (d) Intertape Polymer Corp. transferred all of its preferred equity interests in Intertape Polymer Inc. to IPG (US) Inc.

On April 7, 2015, the Company purchased 100% of the issued and outstanding common stock of BP Acquisition Corporation (which wholly-owns a subsidiary, Better Packages, Inc.) (“Better Packages”), a leading supplier of water-activated tape dispensers. The Company expects the Better Packages acquisition to further extend the Company’s total capital expendituresproduct offering and global presence in connection with property, plant and equipment were $46.8the rapidly growing e-commerce market. The Company paid a purchase price of $15.9 million in cash. The Company expects that these acquired operations will generate annualized revenue of approximately $18 million and $21.6 million forEBITDA margin of over 15% in 2016.

Effective September 1, 2015, along with certain related transfers of certain intercompany receivables, payables and notes, on or about the years 2013same date, Intertape Polymer US Inc. was dissolved.

Index to Financial Statements

On October 4, 2015, the Columbia, South Carolina manufacturing facility was damaged by significant rainfall and 2012, respectively.subsequent severe flooding. The majoritydamages sustained were considerable and resulted in the facility being shut down permanently. The Company had planned to shut down this facility by the end of the expendituressecond quarter of 2016 so this represents a timeline of eight to nine months earlier.

On November 2, 2015, the Company purchased 100% of the issued and outstanding common shares of RJM Manufacturing, Inc. (d/b/a “TaraTape”), a manufacturer of filament and pressure sensitive tapes, IPC paid in cash, funded primarily from the Company’s Revolving Credit Facility, a purchase price of $11.0 million in cash. The Company expects that these acquired operations will generate annualized revenue of approximately $20 million and EBITDA margin of slightly below 10% before any synergies in 2016.

While the Company received a letter from two of its shareholders on November 9, 2015 urging the Company to take certain actions (such letter and the Company’s response were to update existing manufacturing equipment and to obtain new equipment.

Thereboth made publicly available), there has not been any indication of any public takeover offers by third parties in respect of the Company’s shares or by the Company in respect of other companies’ shares during the last and current fiscal year.

The Company’s total capital expenditures in connection with property, plant and equipment were $34.3 million, $40.6 million and $46.8 million for the years 2015, 2014 and 2013, respectively. The majority of the expenditures were to update existing manufacturing equipment and to obtain new equipment. Capital expenditures for the year ended December 31, 2015 were primarily for property, plant and equipment to support the following strategic and growth initiatives: the new facility in Blythewood, South Carolina ($7.9 million), the recently announced water-activated tape capacity expansion in Cabarrus County, North Carolina ($4.2 million spent in 2015 and applied to this project, which was announced in 2016), shrink film capacity expansion at the Portugal manufacturing facility ($3.9 million), and woven products capacity expansion ($3.2 million). The Company funded these 2015 capital expenditures through its cash flows from operations and funds available under the Revolving Credit Facility. On a related note, the Company typically relies upon cash flows from operations and funds available under the Revolving Credit Facility to fund capital expenditures. Additionally, in August the Company entered into a partially forgivable loan (“Partially Forgivable Loan”) with Agencia para Investmento Comercio Externo de Portugal, EPE (AICEP), the Portuguese agency for investment and external trade, as part of financing the capital expansion project in Portugal.

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Intertape Polymer GroupThe Company operates in the specialty packaging industry in North America. The Company develops, manufactures and sells a variety of paper and film basedfilm-based pressure sensitive and water activated tapes, polyethylene and specialized polyolefin packaging films, woven coated fabrics and complementary packaging systems for industrial and retail use. The Company’s products primarily consist of carton sealing tapes, including pressure sensitivepressure-sensitive and water activatedwater-activated tapes; packaging equipment; industrial and performance specialty tapes including masking, duct, electrical and reinforced filament tapes; shrink film; stretch wrap; lumberwrap, structure fabrics, geomembrane fabrics; and non-manufactured flexible intermediate bulk containers (“FIBCs”). Most of the Company’s products are made from similar processes. A vast majority of the Company’s products, while brought to market through various distribution channels, generally have similar economic characteristics.

The Company has approximately 1,8002,000 employees with operations in 1617 locations, including 1012 manufacturing facilities in North America and one1 in Europe.

Intertape Polymer GroupThe Company has assembled a broad range of products by leveraging its manufacturing technologies, its research and development capabilities, global sourcing expertise and its strategic acquisition program. Over the years, the Company has made a number of strategic acquisitions, including the 2015 TaraTape and Better Packages acquisitions, in order to offer a broader range of products to better serve its markets. The Company’s extensive product line permits Intertape Polymer Groupthe Company to offer tailored solutions to a wide range of end-markets including food processing, fulfillment, consumer, building and construction, oil and gas, transportation, agriculture, aerospace, appliance, general manufacturing, marine, composites and military applications.

Overview of Periods

2011

During 2011, the Company maintained its focus on its long term strategic plan of reducing debt and manufacturing costs and improving its product mix. Although the global economy continued to be sluggish during 2011, the Company’s selling prices increased more than both conversion costs and raw material costs; however, the spread between selling prices and raw material costs remained compressed when compared to periods prior to 2010.

As a result of the ongoing strike of its unionized employees at the Company’s Brantford, Ontario plant, operations at the plant remained unprofitable. The Company concluded that a turnaround was highly improbable and during the fourth quarter of 2010, decided to terminate operations. The plant closed in the second quarter of 2011. Some of the Brantford production was transferred to other facilities of Intertape Polymer Group, however, the majority of the activities at the Brantford plant were discontinued. In addition, during 2011 the Company selectively stopped selling certain low-margin products manufactured at its other locations and actively worked to increase sales of high-margin products.

Through December 31, 2010, the Company’s consolidated financial statements were prepared in accordance with Canadian generally accepted accounting principles. As required by the Canadian Accounting Standards Board, Intertape Polymer Group adopted the International Financial Reporting Standards (“IFRS”) on January 1, 2011. As required by the applicable standards, the Company restated its financial information for 2010 to comply with IFRS with the exception of statements prior to the transition date of January 1, 2010. The impact of the conversion to IFRS on the Company’s current and future key financial metrics is immaterial.

In 2009, the Company filed a complaint in the US District Court for the Middle District of Florida against Inspired Technologies, Inc. (“ITI”) alleging that ITI had breached its obligations under a supply agreement with the Company and ITI filed a counterclaim against the Company alleging that the Company had breached its obligations under the agreements. On April 13, 2011, after two trials on the issues, the Court entered a Judgment against the Company in the amount of approximately $1.0 million.

On May 19, 2011, the Company entered into a settlement agreement with ITI with respect to all outstanding litigation between the parties. Pursuant to the terms of the settlement, the Company paid approximately $1.0 million to ITI in full and complete settlement of all matters between them with respect to the litigation.

In July 2011, the Company entered into an Asset Purchase Agreement for total consideration of $0.9 million to acquire assets primarily consisting of equipment, a customer list, and intellectual property to supplement the Company’s existing water activated tape business.

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In August 2008, the Company acquired the exclusive North American rights to a pending patent with respect to an automatic wrapping system. The system is designed to automate the process of wrapping packages of up to 65 feet in length. The technology targets industries such as wood products, which are traditionally manually wrapped. Along with the distribution rights, the Company acquired wrapping machines and existing customer contracts for a total consideration of CDN$5.5 million. As part of acquiring the distribution rights, the Company also made future performance commitments, which required additional considerations or penalties if these commitments were not met. However, within the first two years of the purchase agreement, the automatic wrapping system had to achieve certain market acceptance parameters or the Company had the right to renegotiate the future performance commitments with the vendor and if such renegotiation was not concluded on terms satisfactory to the Company, then the future performance commitments would not be binding on the Company. Effective September 30, 2009 and due to the adverse economic conditions impacting the lumber wrap film market targeted under the Asset Purchase Agreement, the Company did not meet the performance criteria included in the first milestone of the Asset Purchase Agreement. In August 2011, the Company entered into a Contract Adjustment Agreement. Under the Agreement the Company and the vendor agreed all accrued and future penalties, film purchase minimums and machine placement thresholds were eliminated.

2012

During 2012, the Company continued to focus on developing and selling higher margin products, reducing variable manufacturing costs, executing on previously announced manufacturing plant initiatives and optimizing its debt structure. The Company took several steps during 2012 to accomplish these objectives.

The Company has a $200.0 million Asset Based Loan (“ABL”) entered into with a syndicate of financial institutions. The amount of borrowings available to the Company under the ABL is determined by its applicable borrowing base from time to time. The borrowing base is determined by calculating a percentage of eligible trade accounts receivable, inventories, and equipment. The ABL is priced at LIBOR plus a loan margin determined from a pricing grid. The loan margin declines as unused availability increases. The pricing grid of the ABL, prior to the February 1, 2012 amendment, ranged from 1.5% to 2.25%. Unencumbered real estate is subject to a negative pledge in favor of the ABL lenders. However the Company retained the ability to secure financing on all or a portion of its owned real estate up to $35.0 million and have the negative pledge in favor of the ABL lenders terminated. The ABL was scheduled to mature in March 2013. Effective February 1, 2012, the Company entered into a Third Amendment to Loan and Security Agreement among certain subsidiaries of the Company, the Lenders referred to therein, Bank of America, N.A., as agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Lead Arranger and Wells Fargo Capital Finance, LLC, as “right side” joint lead arranger. The Third Amendment extended the maturity date of the ABL to February 2017 from March 2013. Under the Third Amendment the interest rate will increase modestly while several other modifications in the terms provide the Company with greater flexibility. The pricing grid of the extended ABL ranges from 1.75% to 2.25%.

On June 26, 2012, the Company announced its intention to close its Richmond, Kentucky facility with the majority of production to be transferred to its Carbondale, Illinois, facility. The Company also announced the transfer of the shrink film production business from its Truro, Nova Scotia facility to its Tremonton, Utah plant. The Company believes this will allow it to further optimize its manufacturing footprint and generate significant annual savings. The Richmond, Kentucky plant is idle and being marketed for sale.

On August 14, 2012, the Company entered into an Equipment Finance Agreement with a lifetime and maximum funding amount of $24.0 million. The terms of the arrangements included multiple individual capital leases, each of which would have a term of sixty months and a fixed interest rate. The average of the fixed interest rates was expected to be less than 3%. If the Company did not finance the full amount of $4.0 million and $20.0 million by December 31, 2012 and December 31, 2013, respectively, then, subject to certain conditions, the Company would be required to pay a Reinvestment Premium (as defined in the Equipment Finance Agreement) on the difference between those amounts and the amounts actually funded in each of those years. In 2012, the Company financed the required amounts and was not subject to a Reinvestment Premium.

On October 10, 2012, the Company paid a dividend of CDN$0.08 per common share, to shareholders of record at the close of business on September 21, 2012. The aggregate amount of the dividend paid was USD$4.8 million.

During 2012, the Company redeemed $80.0 million of its Senior Subordinated Notes, $25.0 million on August 1, 2012 and $55.0 million on December 13, 2012, both at par value. The notional amount of Senior Subordinated Notes outstanding after the redemptions was $38.7 million.

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On October 16, 2012, the Company prepaid in full $1.9 million, the outstanding balance on its $3.0 million mortgage on its Danville, Virginia, facility which was originally due July 1, 2013.

On November 1, 2012, the Company entered into a Real Estate Loan of $16.6 million, amortized on a straight-line basis over the ten year term. The maturity of the loan may be accelerated if the ABL is not extended and if Bank of America, N.A. ceases to be the agent by reason of an action of the Company. A portion of the loan may be required to be repaid early if any mortgage properties are disposed of prior to October 31, 2022. Interest on the Real Estate Loan through December 31, 2012, was at a rate of 30-day LIBOR plus 250 basis points. Thereafter, the Real Estate Loan will bear interest at a rate of 30-day LIBOR plus a loan margin between 225 and 275 basis points based on a pricing grid as defined in the loan agreement. The Real Estate Loan contains two financial covenants, both of which are calculated at the end of each fiscal month. The Company has been in compliance with these covenants since entering into the Real Estate Loan. The loan is secured by certain of the Company’s real estate.

2013

In January 2013, the Company sold the Brantford, Ontario manufacturing facility and received net proceeds of $1.6million.$1.6 million. The Company recovered $0.2 million of the asset impairment charge previously recorded in 2011 and 2010.

Index to Financial Statements

On February 26, 2013, the Company announced plans to relocate and modernize its Columbia, South Carolina manufacturing operation. In June 2013, the Company acquired property located in Blythewood, South Carolina,Carolina. This property was financed by an $8.5 million mortgage with Wells Fargo National Association (the “South Carolina Mortgage”). In November 2014, the Company prepaid in connectionfull this loan with proceeds from the Revolving Credit Facility. As of December 31, 2015, the Company had completed commissioning efforts in relation to the duct tape production line and began limited production and sales of the masking tape production line in Blythewood, South Carolina with the relocation and modernizationfull transfer of its Columbia, South Carolina manufacturing facility. Improvements are underway to adapt the facility for use as amasking tape manufacturing facility and it isproduction still expected to be operational duringcompleted in the first half of 2015.2016.

In June 2013, the Company redeemed $20.0 million aggregate principal amount of its outstanding Senior Subordinated Notes bearing interest at 8.5%, and on August 30, 2013, the Company redeemed the remaining $18.7 million aggregate principal amount of its outstanding Senior Subordinated Notes due August 1, 2014, fully discharging and satisfying the Senior Subordinated Notes and Indenture.

During 2013, the Company completed certain initiatives regarding its facilities. Production ceased at the Company’s Richmond, Kentucky, plant in the fourth quarter of 2012, production of shrink film ceased at the Company’s Truro, Nova Scotia, plant in the first quarter of 2013, and the Company consolidated its shrink film operations at its Tremonton, Utah, manufacturing facility.

On August 14, 2013, the Board of Directors modified the Company’s dividend policy to provide for the payment of quarterly dividends as opposed to semi-annual dividends. During 2013, the Company paid dividends totaling USD$0.24$0.24 per share.

In August 2013, the Company relocated its leased US corporateexecutive headquarters to a leased facility at 100 Paramount Drive, Suite 300, Sarasota, Florida 34232. The prior facilityformer US executive headquarters located in Bradenton, Florida is idle and being marketed for sale.was sold in 2015.

As discussed above, theThe Company entered into an Equipment Finance Agreement in August 2012. During 2013, the Company was required to finance $20 million of equipment purchases. As of December 31, 2013, the Company financed $16.9 million, however,million. However, the Company was not required to pay a Reinvestment Premium on the shortfall inasmuch as the three-year SWAP rate at December 31, 2013 as set forth in the Federal Reserve H.15 report decreased to less than 0.5%. The average of the fixed interest rates of the capital leases isas of December 31, 2013 was 2.86%.

In assessing the recoverability of deferred tax assets, management determines, at each balance sheet date, whether it is more likely than not that a portion or all of its deferred tax assets will be realized. This determination is based on quantitative and qualitative assessments by management and the weighing of all available evidence, both positive and negative. Such evidence includes the scheduled reversal of deferred tax liabilities, projected future taxable income and the implementation of tax planning strategies.

As of December 31, 2013, management analyzed all available evidence including, in particular, the Company’s financial results for the year then ended (taxable income and earnings before income tax expense (benefit)), the 2013 budget

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variances, and the Company’s cumulative financial results for the prior three years. In addition, management took under significant consideration the Company’s 2014 budget, its long-term financial projections, market and industry conditions and certain available tax strategies. As a result of this detailed analysis, management determined at such time that it iswas more likely than not that substantially all of the Company’s deferred tax assets in the US willwould be realized and, accordingly, recognized $47.8 million of its US deferred tax assets, $41.9$43.0 million of which impacted the Company’s net earnings while the balance impacted its shareholders’ equity.

In addition, management determined at such time that it iswas more likely than not that a portion of its deferred tax assets related to the Company’s corporate (holding) entity (Intertape Polymer Group Inc. or the “Entity”) willwould not be realized due to insufficient taxable income in future periods. Previously, the Entity benefited from sufficient taxable income as a result of certain tax planning strategies implemented in 2011 (the “Planning”). The Company’s management continuescontinued to expect that, pursuant to the Planning, the Entity willwould continue to generate sufficient taxable income in order to fully utilize its net operating losses with expiration dates through 2015. However, in 2013, the benefit of the Planning iswas expected to diminish over such time. Accordingly, the Company derecognized $4.6 million of its Canadian deferred tax assets as of December 31, 2013. These

2014

In 2014, Intertape hired Jeffrey Crystal, who was appointed Chief Financial Officer effective May 9, 2014. Bernard J. Pitz’s tenure as chief financial officer ended on January 30, 2014. Michael C. Jay, Corporate Controller since 2011, assumed the duties of interim Chief Financial Officer from January 30, 2014 to May 9, 2014.

In March 2014, Intertape increased the amount available under the Equipment Finance Agreement dated August 14, 2012 from $24.0 million to $25.7 million and also entered into its final capital lease schedule under this agreement for $3.5 million. The average of the fixed interest rates of the capital leases as of December 31, 2014 was 2.87%.

Index to Financial Statements

On June 11, 2014, Intertape’s Board of Directors adopted: (a) the Performance Share Unit Plan (“PSU Plan”) and (b) the Deferred Share Unit Plan (“DSU Plan”). The PSU Plan is administered by the Compensation Committee of the Board of Directors of the Company and authorizes the Company to award PSUs to eligible persons. The DSU Plan is administered by the Compensation Committee of the Board of Directors of the Company and authorizes the Company to award DSUs to any member of the Board of Directors of the Company that is not an executive officer or employee of the Company. A maximum of 1,000,000 common shares may be issued from treasury under the PSU Plan. A maximum of 250,000 common shares may be issued from treasury under the DSU Plan.

On July 7, 2014, Intertape announced a normal course issuer bid (“NCIB”) effective on July 10, 2014. In connection with this NCIB, the Company was entitled to repurchase for cancellation up to 2,000,000 of Intertape’s common shares issued and outstanding. The NCIB was set to expire on July 9, 2015. As of December 31, 2014, the Company had repurchased 597,500 common shares at an average price of CDN$14.35 per share, including commissions, for a total purchase price of $7.8 million.

On July 7, 2014, Intertape’s Board of Directors modified Intertape’s dividend policy to increase the annualized dividend by 50% from $0.32 to $0.48 per common share.

On August 5, 2014, the Board of Directors appointed Mr. Frank Di Tomaso as a new board member of the Company.

Effective October 30, 2014, Intertape completed an internal restructuring to reorganize the capital structure of several of its legal entities to more efficiently manage its intercompany debt. The results of this restructuring were (in addition to certain transfers of certain intercompany receivables, payables and notes): (a) IPG Holdings LP was dissolved; (b) all of the preferred shares in IPG (US) Holdings Inc. were redeemed and cancelled, with Intertape Polymer Group Inc. owning all of the common shares of IPG (US) Holdings Inc.; (c) Intertape Polymer Group Inc. formed IPG Luxembourg Finance S.à r.l, a Luxembourg private limited liability company (société à responsabilité limitée) as a wholly owned subsidiary of Intertape Polymer Group Inc. and (d) Intertape Polymer Corp. transferred all of its preferred equity interests in Intertape Polymer Inc. to IPG (US) Inc.

On November 18, 2014, Intertape entered into a new Revolving Credit Facility Agreement which provides for a five-year US$300 million Revolving Credit Facility. The Revolving Credit Facility replaced the ABL Facility and prepaid in full the outstanding balances of the Real Estate Loan and South Carolina Mortgage. The Revolving Credit Facility Agreement includes an incremental accordion feature of US$150 million, which will enable the Company to increase the limit of this facility (subject to the Revolving Credit Facility Agreement’s terms and lender approval) if needed. The Revolving Credit Facility matures on November 18, 2019 and bears an interest rate based primarily on the LIBOR rate plus a spread varying between 100 and 225 basis points (125 basis points as of December 31, 2014) depending on the consolidated total leverage ratio.

In December 2014, the Company sold the Richmond, Kentucky manufacturing facility and received net proceeds of $2.3 million.

2015

On April 7, 2015, the Company purchased 100% of the issued and outstanding common stock of Better Packages, a leading supplier of water-activated tape dispensers.

The Company transferred production of duct tape to the new Blythewood facility in early April 2015. During the second and third quarters of 2015, commissioning of the duct tape production line was ongoing in order to work toward the attainment of target levels of product quality balanced with targeted production efficiency. Although the Company was able to meet customer demand for duct tape during the second and third quarters of 2015, there were production yield and operating inefficiencies related to the ramp-up of duct tape production that had a negative impact on results in these quarters and resulted in an extended timeline for the project. However, these inefficiencies improved throughout the year and production was close to reaching targeted performance levels in early 2016. In the fourth quarter of 2015, the Company began limited production and sales of masking tape from the Blythewood facility, with the full transfer of masking tape production still expected to be completed in the first half of 2016. The Company now considers that the commercialization of the masking tape products being produced in the Blythewood facility is complete, and therefore must continue to focus on the ramp-up in production efficiencies as well as the transfer of certain masking tape production from the Marysville, Michigan facility.

On June 4, 2015, the Board of Directors appointed Mr. George J. Bunze as the new Chairman of the Board following the retirement of the former Chairman, Mr. Eric E. Baker.

Index to Financial Statements

Effective July 10, 2015, the NCIB (effective on July 10, 2014 and scheduled to expire on July 9, 2015) was renewed. In connection with this NCIB, the Company was entitled to repurchase for cancellation up to 2,000,000 of the Company’s common shares issued and outstanding. This renewed NCIB expires on July 9, 2016. On November 11, 2015, the Toronto Stock Exchange approved an amendment to the Company’s NCIB, as a result of which the Company is entitled to repurchase for cancellation up to 4,000,000 common shares.

On August 12, 2015, the Company’s Board of Directors approved a change in the quarterly dividend policy by increasing the dividend from $0.12 to $0.13 per share.

In August 2015, one of the Company’s wholly-owned subsidiaries entered into a Partially Forgivable Loan. The loan was entered into with Agencia para Investmento Comercio Externo de Portugal, EPE (AICEP), the Portuguese agency for investment and external trade, as part of financing a capital expansion project. The loan totalled approximately $1.2 million at December 31, 2015 (€1.1 million). Based on the terms of the agreement, 50% of the loan will be forgiven in 2020 based on satisfying certain 2019 targets, including financial metrics and headcount additions. The partially forgivable loan is non-interest bearing and semi-annual installments of principal are due beginning in July 2018 through January 2024.

On October 4, 2015, the Columbia, South Carolina manufacturing facility was damaged by significant rainfall and subsequent severe flooding. The damages sustained were considerable and resulted in the facility being shut down permanently. The Company had planned to shut down this facility by the end of the second quarter of 2016 so this represents a timeline of eight to nine months earlier.

In October 2015, one of the Company’s wholly-owned subsidiaries entered into a long-term debt agreement containing a short-term credit line and a long-term loan for the purpose of financing a capital expansion project. No amounts were outstanding and approximately $2.3 million (€2.5 million) of the loan was available as of December 31, 2015. Both credit lines bear interest at the rate of 6 month EURIBOR (Euro Interbank Offered Rate) plus a premium (125 basis points as of December 31, 2015). The effective interest rate was 1.21% as of December 31, 2015. The short-term credit line matures in September 2016 and is renewable annually, with interest due quarterly and billed in arrears. The long-term loan has a period for capital use until October, 2017 and matures in April, 2022, with interest billed in arrears and due bi-annually beginning in April, 2018. The loans are secured by a comfort letter issued to the lender by the Company in favour of its wholly-owned subsidiary.

During 2015, the Company entered into interest swap agreements designated as cash flow hedges. The terms of the interest swap agreements are as follows:

On November 2, 2015, the Company purchased 100% of the issued and outstanding common shares of TaraTape, a manufacturer of filament and pressure sensitive tapes.

On November 11, 2015, the Company’s Board of Directors adopted a new By-Law 2015-1, requiring advance notice for the nomination of directors. Under the Canada Business Corporations Act, By-law 2015-1 is in force, but must be confirmed by the Company’s shareholders at the next shareholders’ meeting. If By-law 2015-1 is not confirmed at the shareholders’ meeting, it will cease to have effect at that time.

On November 30, 2015, the Board of Directors appointed Ms. Mary Pat Salomone as a new board member of the Company.

On December 14, 2015, the Company entered into a Shareholders Rights Plan Agreement (the “Rights Plan”) with CST Trust Company. The purpose of the Shareholder Rights Plan is to provide IPG’s Board of Directors with additional time, in the event

Index to Financial Statements

of an unsolicited takeover bid, to develop and propose alternatives to the bid and negotiate with the bidder, as well as to ensure equal treatment of shareholders in the context of an acquisition of control made other than by way of an offer to all shareholders, and lessen the pressure on shareholders to tender to a bid. Under the policies of the Toronto Stock Exchange (“TSX”), the Rights Plan must be ratified by the shareholders of the Corporation at a meeting held within six months following the adoption of the Rights Plan, failing which the Rights Plan must be immediately cancelled and any rights issued thereunder must be immediately redeemed or cancelled. Accordingly, on June 9, 2016, shareholders will be asked to approve a resolution ratifying and approving the Rights Plan. For further details on the Rights Plan, see Item 10(C) below.

As of December 31, 2015, management analyzed all available evidence and determined it is more likely than not that substantially all of the Company’s deferred tax assets in the US will be realized and, accordingly, continues to recognize the majority of its US deferred tax assets. Management also determined it is more likely than not that substantially all of the Company’s deferred tax assets in the Canadian operating entity will be realized based on available evidence such as the cumulative positive financial results for the prior three years, consistent utilization of deferred tax assets, consistent generation of taxable income, and positive financial projections. Accordingly, the Company recognized the majority of its Canadian operating entity’s deferred tax assets, including $3.8 million that were previously derecognized. With respect to the deferred tax assets at the Canadian corporate holding entity (the “Entity”), management determined it appropriate to maintain the same positions for the year ended December 31, 2015 as taken for the year ended December 31, 2014 in that the majority of the Entity’s deferred tax assets should continue to be derecognized as of December 31, 2015. The Canadian deferred tax assets remain available to the Company in order to reduce its taxable income in future periods.

The Company manufactures a variety of paper and film based tapes, including pressure sensitivepressure-sensitive and water activatedwater-activated carton sealing tapes; industrial and performance specialty tapes including paper, flatback, duct, double coated, foil, electrical, filament tapes and stencil products.

TheManagement believes the Company is the only packaging company that manufactures carton sealing tapes using all four adhesive technologies: hot melt, acrylic, natural rubber and water activated.water-activated. As a vertically integrated manufacturer, Intertape Polymer Groupthe Company believes it has uniquedistinctive capabilities, relative to its competitors, to produce its own film and adhesives used in the manufacture of its finished tape.

The Company’s tape products are manufactured and primarily sold under the Company’s brands including Intertape™, Central^®Central®, American^®American®, Anchor^®Anchor®, and Crowell^®Crowell® brands to industrial distributors and retailers, and are manufactured for sale to third parties under private brands.

Tape products launched in 2011, 20122013, 2014 and 20132015 include new transfer adhesive products, clean removal tensilized polypropylene and filament products, UL 723 rated aluminum foil and UL 181 rated HVAC tapes, and hot melt carton sealing tape manufactured with a proprietary Corru-Grip™ adhesive formulation for optimal closure of highly recycled corrugate. Further information regarding these new products can be found in the Research & Development section of this document.

In 2012, the Company redirected its focus to address specific solutions the Company is able to provide for the following targeted markets: fulfillment, general manufacturing, food processing and specialty (oil and gas, HVAC, aerospace, residential and commercial painting, building and construction, and mass transportation).

In 2013, the majority of the Company’s product launches were double coated,double-coated, carton sealing, HVAC, appliance packaging and masking tapes.

In 2014, the Company enhanced its offering of packaging solutions with the introductions of: ExlfilmPlus® GPL, a new high performance cross linked polyolefin shrink film; Ripcord™, a knife free solution to open packages; RG317, a filament tape for L-clip box closure applications; Auto H2O™ uniform semi-automatic water-activated case sealer and other complementary products.

In 2015, the Company focused on increasing its offering of specialty tape products including additional masking, foil, double-coated and ATA tapes.

For the years ending December 31, 2013,2015, December 31, 2012,2014, and December 31, 2011,2013, tapes accounted for 65%68%, 66%65%, and 66%65%, respectively, of the Company’s revenue.

The Company’s tape products consist of two main product groups, Carton Sealing Tapes and Industrial & Specialty Tapes.

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Index to Financial Statements

Carton Sealing Tapes

Carton sealing tapes are sold primarily under the Intertape™ and Central^®Central® brands to industrial distributors and leading retailers, as well as to third parties under private brands. Management believes Intertape Polymer Groupthe Company is the only company worldwide that produces carton sealing tapes using all four adhesive technologies: hot melt, acrylic, natural rubber and waterwater- activated. The Company also sells the application equipment required for the dispensing of its carton sealing tapes.

Hot Melt Tape

Hot melt carton sealing tape is a polypropylene film coated with a synthetic rubber adhesive which offers a wide range of application flexibility and is typically used in carton sealing applications. The Company’s primary competitors are 3M Co., Shurtape Technologies LLC and Vibac Group.

Acrylic Tape

Acrylic carton sealing tape is a polypropylene film coated with an aqueous, pressure sensitivepressure-sensitive acrylic adhesive which is best suited for applications where performance is required within a broad range of temperatures from less than 40°F (4°C) to greater than 120°F (49°C). The Company’s primary competitors are 3M Co., PitamasGTA, Powerband, Primetac (Pitamas) and Sekisui TA Industries Inc.other imported Asian products.

Natural Rubber Tape

Natural rubber carton sealing tape is a polypropylene film coated with natural rubber adhesive and is unique among the carton sealing tapes because of its aggressiverobust adhesion properties. This tape is ideally suited for conditions involving hot, dusty, humid or cold environments. Typical uses include moving and storage industry applications, as well as packaging and shipping. The Company’s primary competitor iscompetitors are Vibac Group.Group and imported products from Europe.

Water ActivatedWater-Activated Tape

Water activatedWater-activated carton sealing tape is typically manufactured using a filament reinforced kraft paper substrate and a starch based adhesive that is activated by water. Water activatedWater-activated tape is used primarily in applications where a strong mechanical bond or tamper evidence is required. Typical end-use markets include retail fulfillment centers, mail order operations,3PL’s (third-party logistics providers), furniture manufacturers and the apparel industry. The Company’s primary competitor is Holland Manufacturing Co. Inc.

Industrial & Specialty Tapes

The Company produces eight primary industrial and specialty products sold primarily under the Intertape™, American^®American® and Anchor^®Anchor® brands: paper tape, flatback tape, duct tape, double coateddouble-coated tape, foil tape, electrical tape, filament tape and stencil products.

Paper Tape

Paper tape is manufactured from a crepe paper substrate coated with a natural rubber or a synthetic rubber adhesive. Paper tape is used for a variety of performance and general purpose end-use applications. Product applications include paint masking (consumer, contractor, automotive, aerospace and marine), splicing, bundling/packaging, and general light duty applications. The Company’s primary competitors for this product are 3M Co., Shurtape Technologies, LLC, Cantech and tesa tape, inc.

Flatback Tape

Flatback tape is manufactured using a smooth kraft paper substrate coated with a natural rubber/SIS blended adhesive. Flatback tape is designed with low elongation and is widely used in applications such as splicing where the tape should not be distorted. Typical applications for flatback tape include splicing, printable identification tapes, label products and carton closure. The Company’s primary competitors for this product are 3M Co. and Shurtape Technologies, LLC.

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Duct Tape

Duct tape is manufactured from a polyethylene film that has been reinforced with scrim and coated with natural/synthetic rubber blend adhesive or specialty polymer adhesives. Duct tape is primarily used by general consumers for a wide range of

Index to Financial Statements

applications. Duct tapes are also used in maintenance, repair and operations, in the heating,HVAC (heating, ventilation and air conditioningconditioning) markets, construction and in the convention and entertainment industries. The Company’s primary competitors for this product are Berry Plastics Corp., 3M Co. and Shurtape Technologies, LLC.

Double CoatedDouble-Coated Tape

Double coatedDouble-coated tape is manufactured from a paper, foam, or film substrate and is coated on both sides with a variety of adhesive systems. Double coatedDouble-coated tape also uses a release liner made from paper or film that prevents the tape from sticking to itself. Double coatedDouble-coated tape is typically used to join two dissimilar surfaces. The Company’s double coateddouble-coated tape products are used across a range of markets that include aerospace, graphics, transportation, converting and nameplates. The Company’s primary competitors for this product are 3M Co., tesa tape, inc., and Scapa Group plc.

Foil Tape

Foil tape is manufactured using an aluminum substrate and a variety of adhesive systems. The tape is designed for applications that range from HVAC, building and construction, aerospace, transportation, industrial, and general purpose. The products are UV resistant, have reflective and flame retardant properties, and remain flexible to resist cracking and lifting around irregular or curved surfaces. The Company’s primary competitors for this product are 3M Co., Berry Plastics and Avery Dennison Corp.

Electrical and Electronic Tape

Electrical and electronic tape is manufactured from a number of different substrates, including paper, polyester, glass cloth and a variety of adhesive systems that include rubber, acrylic and silicone adhesives. Electrical and electronic tape is Underwriters Laboratories (UL) component listed andtapes are engineered to meet stringent application specifications.specifications and many electrical and electronic tapes are Underwriters Laboratories (UL) component listed. The Company’s primary competitors for this product are 3M Co., Nitto Denko, Saint Gobain, Bondtec, and H-Old.

Filament Tape

Filament tape is a film or paperpaper-backed adhesive tape with fiberglass, strands or polyester fiberspolyesterfibers embedded in the adhesive to provide high tensile strength. Primary applications for filament tape include temporary holding, bundling and unitizing, subsea umbilical cables (oil and gas), metal coil tubing,tabbing, and agricultural applications. The Company’s primary competitors for this product are 3M Co., TaraTape, Inc. and Shurtape Technologies, LLC.

Stencil Products

Stencil products sold under the Anchor^® brand, are manufactured from a calendaredcalendered natural/synthetic rubber blended substrate with an acrylic adhesive and specially formulated adhesives. Stencil products are used in applications within the sign and monument manufacturing markets to protect a surface where high pressure blasting is required. The Company’s primary competitor for this product is 3M Co.

Films

The Company also manufactures a variety of polyethylene and specialized polyolefin films, as well as complementary packaging systems, for industrial use and retail use, including shrink film, stretch wrap and air pillows. As a vertically integrated manufacturer, Intertape Polymer Group has unique capabilitiesthe Company uses internally manufactured films to produce tape products using internally manufactured films.products.

The Company’s film products are marketed under the Company’s brands including SuperFlex^®SuperFlex®, StretchFlex^®StretchFlex®, ExlfilmPlus^®ExlfilmPlus®, Exlfilm® and Exlfilm^®, and iCushion^®iCushion® to industrial distributors and retailers, and are manufactured for sale to third parties under private brands. Film products launched in 2011 and 2012 include a new high performance cross-linked polyolefin shrink film. Further information regarding this new product can be found in

For the Research & Development section of this document.

16

During eachyear ended December 31, 2015, films accounted for 16% of the last threeCompany’s revenue and for the years ending December 31, 2014, and December 31, 2013, films accounted for 19% of the Company’s revenue.

The Company’s film products consist of two main product groups, film and protective packaging.

The Company primarily produces two film product lines: SuperFlex^®SuperFlex® and StretchFlex^®StretchFlex® stretch wrap and ExlfilmPlus^®ExlfilmPlus® and Exlfilm^®Exlfilm® shrink film.

Index to Financial Statements

Stretch Wrap

Stretch wrap is a single or multi-layer plastic film that can be stretched without application of heat and which has the characteristic of trying to return to its original length thereby applying force on the wrapped load. It is used industrially to wrap pallets of various products ensuring a solid load for shipping. The Company uses technology that it believes is state-of-the-art technology for the manufacturing of its stretch film products.

SuperFlex^®SuperFlex® is a high performance, light gauge stretch film which offers customers good security for their loads but at a low cost per load. Genesys^® (introduced in 2006)Genesys®, Genesys^®Genesys®Ultra, (introduced in 2011)Fortress®, Fortress^® (introduced in 2008),ProLite® and ProLite^® (introduced in 2010)Orbit Air™B are SuperFlex^®SuperFlex® brand products. Since 2013, the Company has re-formulated its legacy Genesys®, Genesys®Ultra and ProLite® brand products to enhance their performance capabilities. AEP Industries, Inc., Amtopp, Berry Plastics Corp., Malpack (Canada), and Paragon Films produce competitive products.

StretchFlex^®StretchFlex® is the Company’s regular duty, typically a heavier gauge of stretch film which also provides the customer with secure loads at a low price per pound. SFI, SSC, SFIII, Hand Wrap II and Hand Wrap IV are StretchFlex^®StretchFlex® brand products. Since 2013, the Company has re-formulated its legacy SFI products and all were introduced prior to 2000.enhance performance capabilities. Competitors include AEP Industries Inc., Berry Plastics Corp., Sigma Plastics Group and Amtopp.

Shrink Film

ExlfilmPlus^®ExlfilmPlus® and Exlfilm^®Exlfilm® shrink film are specialty plastic films which shrink under controlled heat to conform to a package’s shape. The process permits the over-wrapping of a vast array of products of varying sizes and dimensions with a single packaging line. ExlfilmPlus^®ExlfilmPlus® and Exlfilm^®Exlfilm® are used to package paper products, food, toys, games, sporting goods, hardware and housewares and a variety of other products. In 2011,2014, the Company introduced ExlfilmPlus^® GPS,ExlfilmPlus® GPL, a new high performance cross linked polyolefin shrink film. The Company’s primary competitors for this product are Sealed Air Corp. and Bemis Co. Inc.Clysar LLC.

Intertape Polymer GroupThe Company entered the European shrink film market through its investment in Fibope in April 1995. The Company initially purchased a 50% equity interest in Fibope, acquiring the remaining 50% equity stake in July 2003 to serve as a platform to penetrate European and African markets with other products of the Company.2003. Fibope operates as an autonomous unit within Intertape Polymer Group.the Company.

Fibope produces a full range of shrink film products for sale in the European Community. Raw materials are primarily sourced within Europe, with multiple sources utilized to ensure stability of supply and a competitive price environment.

Protective Packaging

Air Pillows

Air pillows are manufactured from polyethylene film and are inflated at the point of use with an air pillow machine. Air pillows are used as packaging material for void fill and cushioning applications. Typical end-use markets for air pillows include 3PL’s retail fulfillment houses and contract packagers, and mail order pharmacies.packaging operations. The Company’s primary competitors for this product are Pregis Corp., Sealed Air Corp., Storopack, Inc., Free-Flow Packaging International Inc. and Polyair Inter Pack Inc.

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Complementary Packaging Systems

Machinery

IPG also provides complementary packaging systems under the InterpackInterpack™ and Better Packages^®(R) brand.brands. Machinery that makes up IPG’s Complementary Packaging Systems and include, but are not limited to, mechanical systems for case sealing applications with the use of long roll carton sealing tape, as well as water activatedwater-activated tape produced by IPG. They also include IPG’s void fill machines and bagging machines. These machines are used in production lines at the packaging level. They are also widely used in the fulfillment industries. These systems add value by providing efficient packaging linesprocesses to a hostvariety of industrial customers. The company’s primary competitors are 3M, Loveshaw, BestPack, Better Packages, Marsh and Phoenix.

The Company develops and manufactures innovative industrial packaging, protective covering, barrier and liner products utilizing engineered coated polyolefin fabrics, paper and other laminated materials. Its products are sold through multiple channels in a wide number of industries including lumber, construction and agriculture.

Index to Financial Statements

On October 5, 2005, Intertape Polymer Inc., a subsidiary of the Company, acquired all of the issued and outstanding shares of Flexia Corporation Ltd., which was the result of the amalgamation of Flexia Corporation and Fib-PakFib-pak Industries, Inc. The businesses of such companies were operated under wholly-owned Canadian entities, ECP L.P. and ECP GP II Inc. through December 31, 2012. ECP GP II Inc. was a producer of a wide range of engineered coated and laminated products with its facilities located in Langley, British Columbia and Truro, Nova Scotia. As a result of an internal restructuring of the Company’s subsidiaries, ECP L.P. and ECP GP II Inc., which were subsequently liquidated and dissolved on December 31, 2012 and as a result, all business, assets and liabilities were transferred to Intertape Polymer Inc.

The Company’s woven coated fabrics are categorized in four markets: (A) building and construction, (B) agro-environmental, (C) specialty fabrics, and (D) industrial packaging. For the three years ended December 31, 2013,2015, December 31, 2012,2014, and December 31, 20112013, woven coated fabric products accounted for 15%, 14%, and 15%, respectively, of the Company’s sales.revenue.

Building and Construction Products

The Company’s building and construction product group includes protective wrap for kiln dried lumber, membrane barrier products such as house wrap, window and door flashing, membrane structure fabrics used in clear span buildings, roof underlayment, and insulation facing, which are used directly in residential and commercial construction. The Company also supplies packaging over-wrap sleeves for unitizing multiple bags of fiberglass insulation. The Company’s primary competitors for these products include Interwrap,InterWrap, Inc., E.I. DuPont de Nemours and Company, Fiberweb Inc.,Polymer Group International, Alpha ProTech and various producers from India, China and Korea.

Lumberwrap

Intertape Polymer Group’sThe Company’s lumberwrap is used to package, unitize, protect and brand lumber during transportation and storage. The product is available in polyethylene or polypropylene coated fabrics and polyethylene films printed to customer specifications. The Company’s primary competitor is Interwrap.InterWrap.

Membrane Structure Fabrics

Nova-Shield^®Nova-Shield® is a lightweight, wide-width, and durable polyolefin fabric used as the outer skin layer for flexible membrane structures. The introduction and continuous improvement of the Nova-Shield^®Nova-Shield® fabric in the membrane structure market has enabled membrane structure manufacturers to expand the use of this product beyond agricultural applications. New applications such asinclude agriculture barns, into larger structures for human occupancy such as amphitheaters, recreational facilities, trade show pavilions, aircraft hangers, and casinos. Developments in the product line include the patented stacked weave, and AmorKote™ coatings. The Company sells the Nova-Shield^®Nova-Shield® fabrics to membrane structure manufacturers who design, fabricate, and install the structures. The Company’s primary competitors are Fabrene Inc. and a number of polyvinyl chloridePVC (polyvinyl chloride) producers. The Company produces these products primarily at its plant in Truro, Nova Scotia.

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Roof Underlayment

IPG’s roofing underlayment is a woven synthetic weather barrier installed on the roof before slate, tile or shingles are applied. The Company began commercial production of roofbelieves that IPG’s roofing underlayment at its Truro, Nova Scotia facility in August, 2008. It is a roof underlay that is lighter and easier to install than standard #30 building felt. In November 2010,To meet these market needs, the Company introduced new product names for its roof underlaymentcurrently has a three-tiered (“Good, Better, Best”) approach in an attempt to insure consistency across products and to help customers distinguish among levels of product performance so they may specify and use the best solution for their particular application.reach all market segments. The Company’s primary competitors in this market are Interwrap, W.R. Grace,InterWrap, Alpha ProTech, and a variety of #30 felt producers.producers and a number of competitors from India, China and Korea.

Agro-Environmental Products

The Company has developed a range of Agro-Environmental products, including bags for packaging fiber insulation, fabrics designed for conversion into hay covers, grain covers, landfill covers, oil field membranes, and canal and pond liners. These fabrics are intended to provide protection during transit and storage and to line waterways and ponds to prevent loss of water and other liquids.

Geomembrane Fabrics

The Company’s AquaMaster^®AquaMaster® line of geomembrane fabrics is used as irrigation canal liners, golf course and aquascape pond liners, oil pad liners, hydraulic fracturing ponds and in aquaculture operations. During 2014, the Company widened its product offering by manufacturing composite product composed of its traditional extrusion-coated substrates laminated to other materials such as non-woven textiles and polyethylene film. In order to help customers specify and use the best solution for their particular need, the Company re-branded its geomembrane product lines to clearly separate long-term, high-performance products from products used for shorter term applications during 2014. The Company’s primary competitors for similar products include Fabrene Inc., Mai Weave LLC, InterwrapInterWrap and Inland Tarp. Competitive products which may be used as substitutes are manufactured by GSE Environmental and Raven Industries Inc.

Index to Financial Statements

Hay Wrap

Hay cover products are specially designed fabrics designed to function as protective covers, haystack covers, pit and pond liners and pool covers. The proprietary coating is used to enhance abrasion resistance, flex resistance, seam strength, UV resistance and longevity. The Company’s primary competitors for this product include offshore imports, as well as InterWrap, Maiweave and Fabrene.

Poultry Fabrics

Woven coated polyolefin fabrics are used in the construction of poultry houses in the southern United States. Materials with high ultraviolet resistance are fabricated into side curtains that regulate ventilation and temperature in buildings. Other materials are used in ceiling construction. The Company’s primary competitors for this product are Fabrene Inc. and Mai Weave LLC. These products are primarily produced at the Company’s plant in Truro, Nova Scotia.

Specialty Fabrics

The Company’s specialty fabric product category is comprised of a variety of specialty materials custom designed for unique applications or specific customers. The Company’s ability to provide polyolefin fabrics in a variety of weights, widths, colors and styles, and to slit, print and perform various other conversion steps, allows it to provide an array of coated products designed to meet the specific needs of its customers.

Products and applications of specialty fabrics include fabrics designed for conversion into pool covers, field covers, disaster relief materials, protective covers and construction sheeting, brattice cloth for mine ventilation, underground marking tapes, salt pile covers and industrial packaging.

Primary competitors of the Company for this product include Fabrene Inc., Mai Weave LLC and producers from China and Korea. The Company primarily produces these products at its plant in Truro, Nova Scotia.

Industrial Packaging Products

The Company’s metalprinted wrap is used to brand and protect large coilsa variety of steel and aluminumproducts during transit and storage. For example, the Company’s product is used to cover small recreational vehicles (ATVs) during transportation from their manufacturing location to retail dealers. Primary competitors of the Company for this product include Interwrap Inc. and Covalence Specialty Materials Corp.

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The Company also earns revenues from the sale of FIBCs and from royalties.royalties from the sale of film wrap. FIBCs are flexible, intermediate bulk containers generally designed to carry and discharge 1,500 to 3,500 pounds of dry flowable fill products such as chemicals, minerals and dry food ingredients. The market for FIBCs is highly fragmented. The Company has established proven supply lines for FIBCs with integrated bag manufacturers in India, China and Mexico. Revenue from royalties is earned on the purchases of film wrap by end usersend-users from another supplier which is used in machines supplied by the Company. ForDuring each of the last three years, ending December 31, 2013, December 31, 2012, and December 31, 2011, other revenues accounted for 1%, 1%, and 0%, respectively, of the Company’s revenue.

As of December 31, 2013,2015, the Company had 196213 sales, customer service and marketing personnel, including manufacturer representatives. The Company participates in industry trade shows and uses trade advertising as part of its marketing efforts. The Company’s customer base is diverse, with no singlediverse; however, there was one customer accountingthat accounted for more than 5%approximately 7% of total sales in 2013.2015 and 2014. Sales of products to customers located in the United States and Canada accounted for approximately 82%86% and 7% of total sales, respectively, in 2015, 83% and 8% of total sales, respectively, in 2013, 81%2014, and 9%82% and 8%; in 2012; and 80% and 9% in 2011.2013.

Many tape and film products are sold to the market through a network of paper, packaging and industrial distributors throughout North America. In order to enhance sales of the Company’s pressure sensitive carton sealing tape, itThe Company also sells carton closing systems, including automatic and semi-automatic carton sealing equipment.equipment through this same network of distribution. The Company’s shrink and stretch film products are typically sold through an existing industrial distribution base primarily to manufacturers of packaged goodsdistributors. Electrical and printing and paper products which package their products internally. The industrial electricalelectronic tapes are primarily sold through specialty distribution.

Index to the electronics and electrical industries.

Financial Statements

The Company’s woven coated fabric productsfabrics are primarily sold directly to end-users. The Company offers a line of lumberwrap, structure and specialty fabrics manufactured from plastic resins. The Company’s woven coated fabric products are marketed throughout North America.

The Company also earns revenues from the sale of FIBCs and from royalties.royalties from the sale of film wrap. FIBCs are sold primarily to end usersend-users and are marketed throughout North America.

The Company experiences businessdoes not experience material seasonality or cyclicality that requires the management of working capital resources. Historically, a larger investment in working capital is required in the beginning of the year as accounts receivable increases due to higher first quarter sales compared to the prior fourth quarter while inventory increases due to higher anticipated seasonal second quarter sales. Furthermore, certain liabilities are accrued for throughout the year and are only paid during the first quarter. Normal seasonality would also typically reflect a slight sequential improvement in sales volumes in the third quarter. These sequential increases are usually driven by the same seasonal demand in anticipation of higher shipping volumes in line with the general economy during that time of the year. This normal increase in sales volume in the third quarter is typically followed by a slight decline in sales in the fourth quarter.its operations.

Intertape Polymer GroupThe Company purchases mostly custom designed manufacturing equipment, including extruders, coaters, finishing equipment, looms, printers, bag manufacturing machines and injection molds, from manufacturers located in the United States and Western Europe, and participates in the design and upgrading of such equipment. The Company is not dependent on any one manufacturer for its equipment.

The major raw materials purchased for the Company’s tape products are polypropylene resin, polyethylene resin, synthetic rubber, hydrocarbon resin, and paper (crepe and kraft). The resins and synthetic rubber are generated from petrochemicals which are by-products of crude oil and natural gas. Almost allA significant majority of these products are sourced from North American manufacturers. The majority of paper products are produced by North American paper manufacturers which are derived from the North American pulp and paper industry. Raw materials accounted for approximately 67%, 67% and 69%65% of reported cost of sales in 2013, 20122015, and 2011, respectively.67% for both 2014 and 2013.

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The major raw material used in ourthe Company’s film products is polyethylene resin. Polyethylene is a derivative of natural gas petrochemical by-products and/or crude oil.

The major raw materials used to produce the Company’s engineeredwoven coated productsfabrics are polyethylene and polypropylene resins. Both of these products are petrochemical based products derived from crude oil and/or natural gas. These products are predominantly sourced from North American petrochemical manufacturers.

During 2013,2015, selling prices (including the impact of product mix) increased moredeclined less than raw material costs, which also rosedeclined on average. During 2013,2015, resin-based raw material costs increaseddecreased by about 3%approximately 20%, adhesives decreased by approximately 12%, and paper costs were approximatelycomparable.

The prices of most of the same,major raw materials noted above can be subject to significant volatility, primarily influenced by commodity price fluctuations for crude oil and adhesives decreased about 2%.natural gas.

Intertape Polymer Group’sThe Company’s strategy is to create growth opportunities through enhancements of existing products and the introduction of new products. The Company’s research and development efforts continue to focus on new products, technology platform developments, new product processes and formulations. As described in the sections that follow, the Company introduced 42 new products in 2015, and 38 new products in 20132014 and introduced 35 new products in both 2012 and 2011.2013.

During 2011, Intertape Polymer Group launched its new transfer adhesives product line introducing four new products developed as part of the Company’s on-going product line development in double coated tapes. Intertape™ brand ATA200 and ATA400, a 2 mil and 4 mil acrylic transfer adhesive, was designed for use in general purpose applications such as core starting, paper/film splicing, arts and crafts bonding, picture framing and lamination. The Company also introduced ATA201 and ATA401 which are more suitable for more demanding and specialized applications requiring long term bonding and high temperature and solvent resistance. In 2013, IPG expanded its adhesive transfer tapes product line to include narrower widths, longer rolls, three adhesive thicknesses and a new ATG tape dispenser.

In 2012, Four masking products were launched into the Company enhanced its appliance grade clean removal portfolio with new tensilized polypropyleneautomotive refurbishing, marine, and filament products: APL145, TPP200, TPP350,architectural painting markets. Five double-coated products were released into a variety of splicing and TPP400. Each offers excellent adhesion and stain/residue free removal from painted metals, stainless steel, ABS plastic, fiberglass and various other surfaces used in the appliance, steel, composite, plastic extrusion, fulfillment and window and door industries.bonding markets.

In 2013, the Company expanded its stretch film product line to include smaller sized bundle wrap designed as convenient solutions for many home, office, workshop, yard and school applications.

During 2011, the Company introduced a new aluminum foil tape designed primarily for HVAC applications. In developing this product the Company focused on producing a finished product that supported both the rigid duct and flexible duct application requirements. The finished product received dual certifications which permit its use to support both flexible and rigid duct HVAC criteria for building codes throughout the United States. The Company also introduced Intertape™ brand ALF175L to meet the need of a UL723 rated multi-purpose foil tape. This product was designed to give exceptional performance where use of a thinner gauge foil base material is acceptable for this application.

In 2011, the Company launched ExlfilmPlus^® GPS, the Company’s newest high performance crosslinked polyolefin shrink film. This multilayered film is versatile enough to perform on all sealing systems and shrink tunnels. The premium resin formulation provides consistently strong seals and offers high shrink force, making it the ideal choice for multipacking and unitizing products.

In 2012, the Company introduced UL 181-rated AC50UL, a premium-grade HVAC duct tape for flexible air ducts and air connectors. This 14 mil high-strength polyethylene-coated cloth duct tape meets flexible duct criteria for HVAC systems required by many building codes throughout the US, including that recommended by the 2009 California Residential Compliance Manual. The Company also expanded its offering to contractors with the addition of a metalized version of this AC50UL product. Its reflective finish is especially suited for joining seams on flexible air duct with metallic jackets and duct board with exterior foil laminate vapor retarders.

With more than 90% of all corrugated boxes being recovered for recycling and the average percentage of recycled content in a corrugated box greater than 40%, the Company’s research and development recognized the need for a test that mirrors the effectiveness of carton sealing tapes when applied to boxes of varying recycled content. A new test apparatus was

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designed that accepts any box sample, duplicates the box sealing application and measures closure performance under a variety of controlled environmental conditions. In response to this market change, research and development also formulated a new Corru-Grip™ adhesive technology designed specifically for optimal closure of highly recycled corrugate, including 100% recycled boxes. In 2012, the Company introduced a new 1100 premium 3.0 mil hot melt carton sealing tape designed with this new proprietary adhesive formulation. The market responded favorably and the Company expanded its offering in 2013 to include 8100 (2.2 mil) and 9100 (2.5 mil).

In 2013, IPG introduced four new carton sealing tape (CST) products. Specifically, two, hot melt, pressure sensitivepressure-sensitive adhesive (HMPSA) products targeted for sealing cartons with a high, recycled content and two water activatedwater-activated tape (WAT) products. One WAT CST is an improved versionDuring 2014 the Company expanded its line of IPG’s legacy Red Alert Water Activatedcarton closure solutions with the addition of Ripcord™, a knife free solution to open packages and RG317, a filament tape Red Alert MD. Red Alert MD is designed to offer the same level of packaging security as the legacy product, while providing easier opening capabilities. The other is a high-strength, burst-resistant product specifically designed for a customer’s demanding application needs. Four masking products were launched into the automotive refurbishing, marine, and architectural painting markets. Five double coated products were released into a variety of splicing and bonding markets.L-clip box closure applications.

A new stainless steel uniform semi-automatic case sealer was added to IPG’s line of Interpack™ complementary packaging systems in 2013. Targeting food processing facilities, the USC 2020-SB SS is available in food grade 302-304 stainless steel and NEMA 4 electrics, making it ideal for non-caustic wash down applications. In 2014 the Company launched its new Auto H2O™ uniform semi-automatic water-activated case sealer. The Auto H2O™ case sealer’s patented technology provides a reliable and low maintenance automatic sealing system for reinforced water-activated tape to seal corrugated containers.

Index to Financial Statements

In 2014, the Company expanded its offering of specialty tape products with the introduction of AC778, a metalized BOPP tape and ALF301, an aluminum foil tape with superior UV, chemical and temperature resistant properties.

In 2014, the Company introduced ExlfilmPlus® GPL, the Company’s newest performance shrink film. This film is a cost savings alternative to standard, heavier gauge films. The premium resin formulation exhibits exceptional machinability and high speed processing capabilities.

In 2015, the Company continued to focus significant R&D resources on the transition of duct and masking tape products from the old Columbia, South Carolina facility to the new Blythewood, South Carolina facility. This transition involved significant product modifications with the most notable being producing products with environmentally-friendly solventless technology in the new facility.

In 2015, the Company expanded its product offering to include a range of masking tapes designed for multiple surfaces as well as technically demanding applications. During 2015, the Company also introduced a direct printable hot melt carton sealing tape, which is key product for the fulfillment industry.

In 2015, the Company bolstered its Protective Packaging offering with product additions in both its air pillows and tandem bagging product lines.

The Company’s research expenses in 2015, 2014, and 2013 2012, and 2011 totaled $6.9$9.5 million, $6.2$7.9 million, and $6.2$6.9 million, respectively.

Intertape Polymer Group embarked on a new corporate branding strategy during 2009 to create and communicate overall consistency and simplicity to its markets. The Company adopted a new look to its corporate logo and redesigned its sub-brand logos which the Company believes are clearer and also have helped to identify the individual product lines.

Intertape Polymer Group markets its tape products under the trademarks Intertape™, Central^®Central®, Crowell^®Crowell®, American^®American®, TaraTape & Design®, and TARA TAPE® and various private labels. The Company’s shrink wrap is sold under the registered trademark ExlfilmPlus™ExlfilmPlus® and Exlfilm^®Exlfilm®. Its stretch films are sold under the trademark SuperFlex™SuperFlex® and StretchFlex^®StretchFlex®.

The Company markets its open mouth bags under the registered trademark NovaPac^®NovaPac®. The otherOther key engineered coated products, are sold under the registered trademarks NovaThene^®, NovaShield^®, NovaSeal^®, NovaWrap™, and NovaFlash^®. Its engineered fabricincluding polyolefin fabrics are sold under the registered trademark NovaThene^®trademarks NovaThene®, NovaShield®, NovaSeal®, NovaWrap™, and NovaFlash®.

The Company has approximately 151157 active registered trademarks, 7885 in the United States, 2230 in Canada, 119 in Mexico, and 4033 foreign, which include trademarks acquired from American Tape, Anchor, Rexford Paper Company, Central Products Company, The Crowell Corporation, Flexia, Better Packages, TaraTape & Design®, and Flexia.TARA TAPE® The Company currently has one16 pending trademark applicationapplications in the United States, and 121 in foreign jurisdictions.

Intertape Polymer Group has a US and PCT pending patent application directed to a carton sealing tape and a US, Taiwan, and PCT pending patent application to an improved tape dispenser for carton sealing tapes. Also, theThe Company has pursued US and foreign patents in select areas where it believes that unique products offer a competitive advantage in profitable markets, primarily inmarkets. The Company’s 87 granted patents and 40 pending patent applications include engineered coated products and film for which the Company has 819 patents and 1 patent4 pending film for which it has 8 patents and 1 patent pending,applications, tape products for which it has 1435 patents and 1623 pending applications, adhesive products and manufacture for which it has 24 patents and 5 pending adhesiveapplications, other products for which it has 159 patents and 8 patents pending container products for which it has 2 patents and 1 patent pending, and retail for which it has 5 patents and no patents pending.applications.

The Company competes with other manufacturers of plastic packaging and pressure sensitivepressure-sensitive adhesive products as well as manufacturers of alternative packaging products, such as paper, cardboard and paper-plastic combinations. Some of these competitors are larger companies with greater financial resources than the Company. Management believes that competition, while primarily based on price and quality, is also based on other factors, including product performance characteristics and service. No statistics, however, on the packaging market as a whole are currently publicly available. Please refer to Section B(1) above for a discussion of the Company’s main competitors by product.

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The Company believes that significant barriers to entry exist in the packagingits addressable market. Management considers the principal barriers to be the high cost of vertical integration which it believes is necessary to operate competitively, the significant number of patents which already have been issuedtechnical expertise in respect ofto various processes and equipment operation, and the difficulties and expense of developing an adequate distribution network.

Index to Financial Statements

Intertape Polymer GroupThe Company has and continues to be focused on reducing waste and minimizing any harmful environmental impact throughout its manufacturing process, or footprint left behind by the line of products manufactured and marketed by the Company. Lili™ isLili® represents one aspect of the Company’s environmental stewardship program and stands for “low environmental“low-environmental impact line from IPG”, however it. The stewardship program is more than just the growing number of environmentally preferred products that the Company has and continues to develop, but is also a commitment by management and employees of the Company to continually look for opportunities to lower the Company’s environmental impact. Intertape Polymer GroupThe Company has implemented and continues to implement activities, changes and programs that are designed to reduce waste in the manufacturing process; reduce the footprint left behind by its products, processes and employees; increase the recycling of its products; provide an alternative solutionsolutions to a less environmentally friendly productproducts or application;applications; reduce consumption of raw materials, fuel and other energy sources; reduce pollutants released through air, water and waste; and improve the safety and health of employees.

The Company’s latest environmental initiative has beenCompany continues to focus on energy savings.its environmental initiative to save energy. In August 2009, the Company became an Energy Star^®ENERGY STAR® Industrial Partner, which is a voluntary partnership with the USU.S. Environmental Protection Agency (EPA) to improve energy efficiency and fight global warming. Intertape Polymer Group (IPG®) as an Energy Star^®ENERGY STAR® Industrial Partner joined the fight against global warming by improving the efficiency of its buildings and facilities. ProductsThe EPA recognized IPG as a 2014 and buildings2015 ENERGY STAR Partner of the Year for strategically managing and improving the energy efficiency in its operating locations. In addition, several IPG facilities have met the EPA’s ENERGY STAR Challenge for Industry, which is to reduce energy intensity by 10% within 5 years. IPG facilities that have earnedmet the Energy Star^® designation preventEPA’s ENERGY STAR Challenge for Industry have achieved an average energy intensity reduction of 24%. The reductions have cut greenhouse gas emissions at these IPG’s plants by meeting strict energy efficiency specifications set by36,000 metric tons over the government. In 2011 Intertape Polymer Group was recognized for meetingpast 5 years, which equals the US EPA Energy Star Challenge by improving energy efficiency at commercialemissions from the electricity use of 5,000 homes.

The transition of manufacturing operations from IPG’s Columbia, South Carolina facility to IPG’s new Blythewood, South Carolina facility has further enhanced IPG’s environmental stewardship. The Blythewood plant uses non-solvent technologies that do not utilize volatile organic compounds in the manufacturing process and industrial facilities by ten percent or more within five years. Onlydo not generate hazardous waste. Additionally, the effortstransition of 34 facilities operated by 14 companies were publicly acknowledged for successfully reducing emissions at their manufacturing sites. Intertape was cited for energy efficiency improvements of 29.1%operations to the Blythewood plant has resulted in Carbondale, Illinois, 23.4% in Richmond, Kentucky, and 18.3% in Menasha, Wisconsin.increased manufacturing efficiencies.

Intertape Polymer Group’sThe Company’s operations are subject to extensive environmental regulation in each of the countries in which it maintains facilities. For example, United States (federal, state and local) and Canadian (federal, provincial and municipal) environmental laws applicable to the Company include statutes and regulations intended toto: (i) impose certain obligations with respect to site contamination and to allocate the cost of investigating, monitoring and remedying soil and groundwater contamination among specifically identified parties,parties; (ii) prevent future soil and groundwater contamination; (iii) impose national ambient standards and, in some cases, emission standards, for air pollutants which present a risk to public health, welfare or the natural environment; (iv) govern the handling, management, treatment, storage and disposal of hazardous wastes and substances; and (v) regulate the discharge of pollutants into waterways.

The Company’s use of hazardous substances in its manufacturing processes and the generation of hazardous wastes not only by the Company, but by prior occupants of its facilities, suggest that hazardous substances may be present at or near certain of the Company’s facilities or may come to be located there in the future. Consequently, the Company is required to monitor closely its compliance under all the various environmental laws and regulations applicable to the Company. In addition, the Company arranges for the off-site disposal of hazardous substances generated in the ordinary course of its business.

Intertape Polymer GroupThe Company obtains Phase I or similar environmental site assessments, and Phase II environmental site assessments, if necessary, for most of the manufacturing facilities it owns or leases at the time the Company either acquires or leases such facilities. These assessments typically include general inspections and may involve soil sampling and/or ground water analysis. The assessments have not revealed any environmental liability that, based on current information,other than, or in addition to, the Company believes will have a material adverse effect on$2.5 million liability accrued in provisions in the Company.Company’s consolidated balance sheet. Nevertheless, these assessments may not reveal all potential

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environmental liabilities and current assessments are not available for all facilities. Consequently, there may be material environmental liabilities that the Company is not aware of. In addition, ongoing clean up and containment operations may not be adequate for purposes of future laws and regulations. The conditions of the Company’s properties could also be affected in the future by neighboring operations or the conditions of the land in the vicinity of the Company’s properties. These developments and others, such as increasingly stringent environmental laws and regulations, increasingly strict enforcement of environmental laws and regulations, or claims for damage to property or injury to persons resulting from the environmental, health or safety impact of the Company’s operations, may cause it to incur significant costs and liabilities that could have a material adverse effect on the Company.

Except as described below, the

Index to Financial Statements

The Company believes that all of its facilities are in material compliance with applicable environmental laws and regulations, and that the Company has obtained, and is in material compliance with, all material permits required under environmental laws and regulations.

The Company has purchased a new building in Blythewood South Carolina and is expected to closeplant uses low environmental impact technologies. After the existing Columbia, South Carolina plant by Mayrecent closure of 2015. This new plant will have technology with advanced environmental controls. Thethe Columbia, South Carolina Plant, its production will bewas relocated to this new plant and other existing Company plants. In preparation forThe reduced environmental impacts from Blythewood plant operations minimize applicability of environmental laws and permit requirements. Blythewood operations only require a minor EPA air emission permit and the facility is not classified as a large quantity generator of hazardous waste as opposed to the previous Columbia plant. The transition of manufacturing operations from the Columbia South Carolina plant closureto the Company will continue to monitorBlythewood plant has significantly reduced carbon emissions and limit environmental impacts, including certain contaminationhazardous air pollutants that has negatively impacted the value of this property.require EPA reporting and significantly reduced carbon emissions.

In addition, although certain of the Company’s facilities emit regulated pollutants into the air, the emissions are within current permitted limits, including applicable Maximum Achievable Control Technology (“MACT”) requirements.

Intertape Polymer GroupThe Company and its operating subsidiaries are required to maintain numerous environmental permits and governmental approvals for their operations. Some of the environmental permits and governmental approvals that have been issued to the Company or its operating subsidiaries contain conditions and restrictions, including restrictions or limits on emissions and discharges of pollutants and contaminants, or may have limited terms. If the Company or any of its operating subsidiaries fails to satisfy these conditions or to comply with these restrictions, it may become subject to enforcement actions and the operation of the relevant facilities could be adversely affected. The Company may also be subject to fines, penalties or additional costs. The Company or its operating subsidiaries may not be able to renew, maintain or obtain all environmental permits and governmental approvals required for the continued operation or further development of its facilities, as a result of which the operation of its facilities may be limited or suspended.

Intertape Polymer Group Inc. is a holding company which owns various operating companies in the United States, Canada and internationally. Intertape Polymer Inc., a Canadian corporation, is the principal operating company for the Company’s Canadian operations. Intertape Polymer Corp., a Delaware corporation, is the principal operating company for the Company’s United States and international operations.

The table below lists for each of the subsidiaries of the Company their respective place of incorporation or constitution, as the case may be, and the percentage of voting securities beneficially owned or over which control or direction is exercised directly or indirectly by Intertape Polymer Group Inc.

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Index to Financial Statements

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Index to Financial Statements

The Company also owns inventory that is temporarily located at facilities owned by various third-party logistics service providers. As these facilities are not owned or leased by the Company, they have been excluded from the summary table above.

The Company continued to move forward in 20132015 on several of its initiatives to improve manufacturing efficiencies.productivity, increase capacity, and manufacture new products. Capital expenditures for the replacement of machinery and equipment during 20122013, 2014, and 20132015 totaled $21.6$46.8 million, $40.6 million and $46.8$34.3 million, respectively,respectively. The Company typically relies upon cash flows from operations and funds available under the Revolving Credit Facility to fund capital expenditures. In 2013 and 2014, capital expenditures were also financed in part by an Equipment Finance Agreement, the terms of which are summarized in Item 4.B. above.

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The Company is also relocatinghas relocated and modernizingshut down permanently its Columbia, South Carolina manufacturing facility. In June 2013, the Company acquired property in Blythewood, South Carolina financed by an $8.5 million mortgage with Wells Fargo National Association. The new manufacturing facility will have state-of-the-art equipmentAssociation (in November 2014, the Company prepaid this loan in full with proceeds from the Revolving Credit Facility). As of December 31, 2015, the Company had completed commissioning efforts in relation to the duct tape production line and is anticipatedbegan limited production and sales of masking tape in Blythewood, South Carolina with the full transfer of masking tape production still expected to be operationalcompleted in the first half of 2015.2016. Capital expenditures for thethis project are expected to total $43.0 million to $46.0approximately $60 million, of which $2.7 million was spent in 2012, and $21.8 million in 2013.2013, $24.3 million in 2014, and $7.9 million in 2015. The Company anticipates that the new South Carolina facility will result in a total annual cash savings in excess of $13.0 million commencing in the first half of 2015 with the first full year effectseffect in 2016.2017.

Not Applicable.

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This Management’s Discussion and Analysis (“MD&A”) is intended to provide the reader with a better understanding of the business, business strategy and performance of the Company,Intertape Polymer Group Inc. (the “Company”), as well as how it manages certain risks and capital resources. This MD&A, which has been prepared as of March 9, 2016, should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of December 31, 20132015 and 20122014 and for the three-year period ended December 31, 2013.2015 (“Financial Statements”).

For the purposes of preparing this MD&A, the Company considers the materiality of information. Information is considered material if the Company believes at the time of preparing this MD&A: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the common shares of the Company; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; and/or (iii) it would significantly alter the total mix of information available to investors. The Company evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Except where otherwise indicated, all financial information presented in this MD&A, including tabular amounts, is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS” or “GAAP”) and is expressed in US dollars except as otherwise noted.dollars. Variance, ratio and percentage changes in this MD&A are based on unrounded numbers.

FINANCIAL HIGHLIGHTS

Index to Financial Statements

Financial Highlights

(In thousandsmillions of US dollars, except per share data,amounts, selected ratios, stock and trading volume information)

(Unaudited)

Index to Financial Statements

2015 Share Prices

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