Digitized by the Internet Archive in 2023 with funding from University of Alberta Library
https://archive.org/details/Roll0550_ 1972
table of contents
Page Directors and Officers 2and3 Highlights 4 Directors’ Report 6 Financial Statements 14 Notes to Financial Statements 19 Ten-Year Comparative Statistics 22 Auditors’ Report 24
The Annual General Meeting of Shareholders will be held at the Head Office of the Company, 800 Victoria Square, Suite 3620, Montreal, Quebec at 11:00 A.M., March 29, 1973.
Si vous préférez recevoir votre rapport annuel en francais, priére d’écrire au Secrétaire, Compagnie de Papier Rolland, Limitée, 800, Place Victoria, Suite 3620, Montréal 115, Québec.
45th annual report
Rolland Paper Company, Limited Papermaking Specialists
Head Office: 800 Victoria Square, Suite 3620 Montreal 115, Quebec
Sales Offices: Montreal and Toronto
Paper Mills: St. Jerome and Mont Rolland, Quebec and Scarborough, Ontario
directors
Hon. John B. Aird, Q.C. *Lucien G. Rolland, B.A., B.AsSeGaiGre: Partner, Edison, Aird & Berlis, President and General Manager Barristers and Solicitors Rolland Paper Company, Limited Toronto Montreal *G. Drummond Birks, B.Comm. Marc Rolland
President, Henry Birks Retired Executive
& Sons Limited St. Jerome
Montreal
Olivier Rolland
Paul Chapdelaine, C.A. Retired Executive
Retired Executive Montreal
Montreal
*Joseph A. Weldon, C.A., M.B.E.
E. Jacques Courtois, Q.C. Vice-President and Financial Partner, Laing, Weldon, Courtois, Consultant
Clarkson, Parsons, Gonthier & Tétrault, | Rolland Paper Company, Limited Barristers and Solicitors Montreal
Montreal
Richard A. Irwin
Chairman of the Board Consolidated-Bathurst, Limited Montreal
Herménégilde A. LeBlanc, C.A. Secretary, Rolland Paper Company, Limited
Montreal
*Gérard Plourde, M.Comm. Chairman of the Board, UAP Inc. Montreal
*Albert Rolland Vice-President and Marketing Consultant Rolland Paper Company, Limited Laval *Member of the Executive Committee.
officers
Lucien G. Rolland
President and General Manager
Joseph A. Weldon
Vice-President and Financial
Consultant
Albert Rolland
Vice-President and Marketing
Consultant
Jean-Louis Chollet, Eng. Executive Vice-President,
Book and Fine Papers Division
Hugh M. Craig, B.Sc., Ph.D.
Executive Vice-President, Coated Papers Division
Bruno Julien, B.A., M.A., M.B.A. Vice-President — Personnel
Alphonse St. Jacques, M.Comm., C.A. Vice-President and Treasurer
Herménégilde A. LeBlanc
Secretary
Michel Gagnon, M.Comm., C.A.
Controller
Transfer Agents Montreal Trust Company Royal Trust Company
Registrars Canadian Trust Company Bankers Trust Company
Shares Listing Montreal Stock Exchange Toronto Stock Exchange
Auditors Touche, Ross & Co.
highlights
Net sales Net earnings Per class ‘“‘A’’ share Per class ‘‘B”’ share Dividends on class ‘‘A’”’ and “‘B”’ shares Per class ‘‘A’’ share Per class ‘‘B”’ share Cash Flow Per class ‘‘A’’ share Per class ‘‘B”’ share Book Value per class ‘‘A”’ and ‘‘B”’ shares Working Capital Long-term Debt Capital Expenditures
Voie $46,437,380 1,388,650 0.73
0.68
160,002 0.10 0.05
2,955,419 1.37 ie32
9.53 9,649,119 7,393,000
635,950
Voie $41,555,060 1S0s7a 0.05
0.05
1,088,887 0.56 0.56
8.90 8,385,167 7,900,500
297,388
tors ‘report to the sharcholdess
irec
d
ees
directors report to the sharcholders
Sales and Earnings
Consolidated net sales of $46.4 million were substantially up from $41.6 million in 1971 and reached a new record level in the Company’s history. The 11.5% increase in sales revenue was mostly due to a sizeable increase in our shipments to the domestic market and was in line with the experience of other Canadian
fine paper mills.
Consolidated net earnings of $1,389,000 for the year 1972 showed a considerable improvement over earnings of $150,000 last year. They represented $0.73 per class ‘‘A’’ share and $0.68 per class ‘‘B”’ share, compared with $0.05 per class ‘‘A”’ and “‘B”’ shares in 1971.
Economic Environment
1972 has been an encouraging year. The Canadian economy recovered from its depressed state of the preceding two years, allowing for
a stronger demand for Canadian fine papers and more stable market conditions.
The fine paper industry, much like the rest of the pulp & paper industry, is cyclical and demand for its products varies with the economic environment. A buoyant economy generates more disposable income, heavier consumer spending and a stronger demand for
advertising and printing materials. Throughout 1972, consumption of writing and printing papers, including such converting grades as envelope and register papers, grew 11%.
It is only towards the end of the year that the stronger demand in the domestic as well as in the American fine paper markets resulted in a more stable price situation.
During 1970 and 1971 Canadian fine paper manufacturers were faced with a large inflow of American products. Some of these were available at prices substantially below those of Canadian mills, resulting in a disruption of the domestic price structure and severe price competition.
This situation had arisen following
a weakening of the North American demand for fine papers and an excess capacity of American mills at a time when the Canadian market was static. In 1969, the Canadian government had fully implemented the 44% tariff reductions agreed to under the General Agreement on Tariffs and Trade, and unpegged the Canadian Dollar in 1970, making our market more accessible to foreign manufacturers.
The recovery of the American economy in 1972 generated a stronger demand within the United States and reduced the availability of products for export to the Canadian market. Furthermore, longer delivery dates, together with higher American prices and the near parity between the Currencies of both countries, all contributed to make American manu- factured goods less attractive at this particular time in Canada.
These developments occurred gradually throughout 1972 benefiting all of our divisions, especially during the last quarter.
Book and Fine Papers Division
This division made a strong recovery. Following a general improvement and a higher penetration of the Ontario market, domestic sales increased by 13%. The marketing team was strengthened; new grades were introduced to broaden its product line in offset papers and selective price increases were announced. Its in- volvement in the U.S. market was reduced by 50%.
New contracts were negotiated with our pulp suppliers and important savings over the prices paid in 1971 were effected. Higher productivity was achieved through improvements to our Nos. 7 and 8 paper machines and
an extension of our on-line control systems through the use of the process computer. Furthermore, we benefited from the aggressive cost reduction programme effected in
1971 and 1972. The mills in St. Jerome and Mont Rolland, however, only operated at an average of 78.3% of capacity. These factors were respon- sible for a return on capital employed which, although still unsatisfactory,
far exceeded that of the two previous years.
Coated Papers Division Improvements in manufacturing, warehousing and marketing accounted for a turnaround in this division.
Pursuant to the reorganization of the Company in January 1972, a separate sales force was established for the marketing of coated products. This approach generated moves to improve the grade mix and increased the sale of more profitable grades. New products were launched and old ones modified to make our Imperial Offset the first complete line of No. 1 coated products in Canada. New inventory
management procedures and a reorganization of our warehouse facilities contributed to an improve- ment in service to our customers. Programmes to increase productivity and improve production flow were implemented.
Wholesale Distributors Division
This division operates two Companies: Fine Papers, Limited and The Wilson- Munroe Company Limited in Toronto, Montreal and Sudbury. It specializes in the distribution of fine paper and related products. The overall per- formance for 1972 was good. Their sales increased at a rate which improved their market share.
Fine Papers, Limited is now a profitable operation and provides tax savings resulting from a loss carry-forward.
Financial
During the past year, a combination of higher earnings and continued restraint in cash outlays for capital expenditures and dividend disburse- ments greatly enhanced the financial position of the Company, which had deteriorated in the two previous years.
The cash flow of $2,555,000 was $1,467,000 higher than in 1971 and represented $1.37 per class ‘‘A’’ share mainly as a result of the improvement in net earnings. It enabled us to add $1,264,000 to working capital which stood at $9,649,000 at December 31, 1972. Short-term investment increased by $906,000 to $1,106,000 while accounts receivable and accounts payable increased appreciably with the larger volume of sales in 1972.
During the recession years of 1970 and 1971, capital expenditures were drastically reduced. During 1972, the net amount spent on capital improve- ments was $564,000, compared with $270,000 in 1971.
An amount of $434,000 was disbursed to purchase, for cancellation, $209,500 of the 4%2 % Sinking Fund bonds and $275,000 of the 534% Sinking Fund debentures, at a saving of $51,000.
At December 31, 1972, our long-term debt stood at $7,393,000.
Our investment in 125,000 shares of Consolidated-Bathurst Limited pro- duced no income in 1972, but since last year, prospects of this company are brighter. After substantial write- offs, the profits for 1972 showed a marked improvement. Dividends on the preferred shares have been resumed and a reduction of arrears on these dividends has been initiated.
The market value of this investment has more than doubled during the year and stood at $2.1 million at December 31st. While this is con- siderably lower than the purchase price of $5.9 million, no provision has been taken in our financial statements to cover the difference between the purchase price and the market value. Although nothing precludes the Company from disposing of this asset, it has not been regarded as a short- term investment and accordingly was never included in current assets.
Your Company’s overall return on capital employed, defined as the sum of working capital, investment and net fixed assets, was 4.7% in 1972. This rate of return is much improved when compared to the two previous years, but it is still well below the 9% level reached in the early sixties. Therefore, the increased earnings in 1972 do not mean full financial recovery and satisfactory levels of profitability.
Dividends
Payment of dividends on our common shares, omitted since the previous payment on September 1, 1970, was resumed in 1972 with payments of interim dividends of $0.05 per class ‘A’ shares on August 15th and December 15th, and of $0.05 per class ‘‘B”’ shares on December 15th. Total common and preferred dividend disbursements amounted to $220,000 in 1972. Rates of dividends will be reviewed from time to time in the light of the progress in our profit recovery. The payment of reasonable dividends to our shareholders is considered very important. However, the resources necessary to a steady expansion of Our Operations and of our earnings must be retained in the Company.
10
Personnel ;
This past year was the first under the new corporate structure which recognized our coated papers division, our book and fine papers operation and our distribution companies as three independent profit centres. Such an approach provided your Company with a much better control of its investments through a close coordination of marketing and production. It also favoured long-term programmes, research and product development and manpower planning. The per- sonnel of each of these divisions, with the support of the head office group, tackled their new objectives with initiative and efficiency.
A new labour agreement with the em- ployees of our book and fine papers division was negotiated for a two-year period ending April 30, 1974. This met the needs of the Company for a longer contract than the rest of the fine paper industry and reflected the fact that our employees and their representatives were fully aware of this necessity.
An unresolved problem is that the wage rates and fringe benefits paid in the Canadian fine paper industry are materially higher than those paid for corresponding jobs in the U.S. fine paper mills. This seriously restricts our ability to compete with
American producers in our own market as well as in the U.S.A., and our ability to reinvest larger amounts in the business.
At date of writing, negotiations with the hourly-paid employees of our coated papers division are in progress. Everything is being done so that a
new satisfactory collective agreement will be signed shortly.
Environment
Pollution abatement continued to be One of Our prime concerns. Since 1968, your Company has been actively involved ina programme of effluent control at our St. Jerome and Mont Rolland mills. Substantial improve- ments have been achieved. The amount of suspended solids in our waste water now stands at 1.8% of production for our St. Jerome opera- tions and 1.6% for Mont Rolland, as against the 2% standard established by the Quebec Water Board. This is but a first step in our programme.
In anticipation of more stringent standards, we are now considering further treatment systems to reduce the amount of suspended solids. Estimated costs are $1.2 million which will bring our total investments to reduce pollution to more than
$1.7 million.
Such investments for pollution control will represent increased operating charges for your Company of more than $135,000 per year. These are required at a time when vital expen- ditures must be incurred to assure our competitiveness and profitability within the new situation brought about by the 1969 tariff reductions. In assessing these additional operating expenses, it must be remembered that the unsatisfactory profit experience of the past two years made it impossible to justify the financing of new projects.
This underlines the need for more comprehensive fiscal and financial aid programmes to help companies achieve the desired standards. In this respect, the industry has made recommendations to the Government in order to permit an increased capital cost allowance for capital expenditures on pollution abatement. The time schedule defined by governments
to attain new standards is also of prime importance.
Outlook
Economic expansion is expected to continue in 1973. The prospects are for a buoyant level of retail sales, a reduction in personal income tax and sustained real growth. All these factors have a direct positive correlation on the increased consumption levels of fine and printing papers. Industry sales should reflect this growth and our mills should operate at higher levels of capacity. In view of the depressed conditions of past years, very few new installations have been planned and operating ratios should improve over the next two years. The possible reduction of the tax rate for Canadian manufacturing companies should contribute to improve the competitiveness of Canadian manu- facturers. However, the Federal Government's plan to stimulate employment through tax reductions on personal income, and increased spending could bring a resurgence of inflationary pressures which might upset this bright outlook. Cost increases could outpace our pro- ductivity and our ability to secure prices for our products which would reflect past and future cost increases. A final but most important factor will be the policies adopted by the Federal authorities vis-a-vis our industry.
The relationship between the Canadian and the American fine paper markets remains a source of concern for the long-term profitability of our industry. This problem having been reported and discussed at length on several occasions, it will suffice to underline that Canadian manufacturers remain at a disadvantage with their American competitors whether in the domestic or in the American market.
11
Canadian production costs are pro- portionately higher because of higher wages and shorter runs than those in corresponding American fine paper mills. The American manufacturers enjoy much more effective protection against imports; they benefit from special export arrangements such
as D.I.S.C. and their overall tax rate is lower than the Canadian rate.
It is urgent that we protect more adequately the domestic Canadian fine paper industry whether it be against imports of basic fine paper or, especially, of printed material, while maintaining export opportunities. American authorities are definitely taking a more rigid stand vis-a-vis Canadian fine paper imports.
All employees worked in an excep- tional fashion throughout the year. Your Directors wish to underline their record of accomplishment and to thank them sincerely for the role they played in moving from the problems of the last two years to the healthier position of 1972.
1972 has marked the 90th anniversary of this Company and its predecessor in the production and marketing of fine papers in Canada. Such a long experience has taught us that only
the best is good enough for our Customers, Our Suppliers, our em- ployees and all those who come in contact with our organization. It is with that spirit that we are continuing to tackle the interesting challenges in our future.
On behalf of the Board of Directors,
ee) een
Lucien G. Rolland, President and General Manager
Montreal, January 31, 1973
12
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rolland paper company, limited
Statement of Consolidated Income and Expense
Year ended December 31
1972 1971
Net Sales $46,437,380 $41,555,060
Cost of sales 37,728,997 35,787,099
Gross profit 8,708,383 5,767,961
Selling and administrative expenses 4,647,102 3,941,339 Depreciation 1,313,141 1,292,146 ©
Bond interest 435,905 458,691
6,396,148 5,692,176
2,312,235 (oes
Interest and other income 170,571 194,380
Earnings before income taxes 2,482,806 270,165
Income taxes 1,094,156 119,994
Net earnings for the year $ 1,388,650 > °S saa
oo ———— ee
Net earnings per share — Note 9 Per Class ‘‘A”’ share $ \ OER SNe 0.05 Per Class ‘‘B’”’ share 0.68 0.05
14
4 .
tolland paper company, limited
Statement of Consolidated Source and Application of Funds
Source of Funds Cash flow from operations Net earnings Depreciation Deferred income taxes
Application of Funds Capital expenditures — net Long-term debt reduction Dividends
Increase in Working Capital
Working Capital
Year ended December 31
1972
$ 1,388,650 1,313,141 (146,372)
$ 2,555,419
$ 563,530 507,500 220,437
1,291,467 1,263,952 $ 2,555,419
$ 9,649,119
1971
Di 1501 74 1,292,146
(353,430)
> 1,088,887
& 270,267 124,000 60,435
454,702
___ 834,185 $ 1,088,887
$ 8,385,167
rolland paper company, limited
Consolidated Balance Sheet
assets At December 31 1972 1971 Current Cash $ 175,009 $ 241,048 Short-term investments at cost, which is equivalent to market value 1,106,267 200,022 Accounts receivable 6,250,337 4,994,638 Inventories — Note 2 6,986,375 6,716,093 Prepaid expenses 167,854 157,619 14,685,842 12,309,420 Investment at Cost — Note 3 5,862,651 5,862,651
$n OE eee Fixed
Property, plant and equipment — Note 4 14,008,831 14,758,442
Excess of consideration for acquisition of shares of subsidiaries over their book value 588,647 588,647
$35,145,971 $33,519,160
On behalf of the Board: Lucien G. Rolland, Director J. A. Weldon, Director
liabilities
At December 31
1972 1971 Current Bank indebtedness, secured $ 403,918 $ 433,206 Accounts payable and accrued liabilities 3,919,146 3,105,601 Income taxes payable 690,659 385,446 Long-term debt instalment due within one year 23,000 oe 5,036,723 3,924,253 Long-Term Debt — Note 5 7,393,000 7,900,500 Deferred Income Taxes 3,696,119 3,842,491 Shareholders’ Equity Capital — Note 6 Authorized 24,800 Preferred shares of $100 each issuable in one or more series 2,400,000 Class “‘A’”’ and 800,000 Class ‘‘B” shares without nominal or par value Issued 14,220 4% % Cumulative redeemable preferred shares $ 1,422,000 1,360,016 Class ‘‘A” and 480,008 Class ‘'B’’ shares 7,162,683 8,584,683 Retained Earnings — For use in the business — Note 7 10,435,446 19,020,129 17,851,916
$35,145,971 $33,519,160
ig
rolland paper company, limited
Statement of Consolidated Retained Earnings
Tee
Year ended December 31
1972 Retained Earnings at Beginning of Year $ 9,267,233 Net earnings for the year 1,388,650 10,655,883
Dividends Preferred shares 60,435 Class ‘‘A’’ shares 136,002 Class “‘B’’ shares 24,000 220,437
hoa $ 9,177,497
190,174
9,327,668
60,435
60,435
OT EEE eee
Retained Earnings at End of Year $10,435,446
18
$ 9,267,233
j
tolland paper company, limited
Notes to Consolidated Financial Statements, December 31, 1972
note | Principles of Consolidation
The consolidated financial statements include the accounts of Rolland Paper Company, Limited and its wholly owned subsidiaries, Canada Glazed Papers Limited, Fine Papers, Limited and The Wilson-Munroe Company Limited. The 1971 comparative figures in the Consolidated statement of income
and expense were reclassified to conform with the 1972 presentation.
note 2 Inventories, at the lower of cost and net realizable value
Finished paper and paper in process Raw materials, wires, felts and supplies Repair parts and maintenance materials
note b Investment at Cost
This investment consisting of 125,000 common shares of Consolidated-Bathurst Limited is not considered by the Company to be of a current nature. Market quotations of $16.75 per share at December 31, 1972 and of $7.875 at December 31, 1971 indicated values at those dates of $2,093,750 and
$984,375.
Accumulated note 4 Property, Plant and Equipment Cost Depreciation Machinery and equipment $25,444,048 $15,606,894 Buildings 6,563,607 3,194,441 Leasehold improvements 202,168 154,262 Water power 300,000 15,000 Land 3 419,605 Ue
$32,979,428 $18,970,597
Depreciation is provided using the straight-line method in the manufacturing companies and the diminishing balance method in the wholesale distributor
companies.
1972 1971
$ 4,997,437 $ 4,516,047 1,467,527 1,731,141 521,411 468,905
$ 6,986,375. $ 6,716,093 Net Net
1972 1971
$ 9,837,154 $10,400,848 3,369,166 3,520,318 97,906 105,324 285,000 300,000 419,605 431,955 $14,008,831 $14,758,442
SS,
a eee
note § Long-Term Debt
Rolland Paper Company, Limited
First Mortgage Bonds 4V2% Sinking Fund Bonds due January 2, 1975
Deduct
Bonds redeemed and cancelled including $507,000 in anticipation of future Sinking Fund Requirements.
Sinking Fund Debentures 5% % due July 2, 1984 Deduct
Debentures redeemed and cancelled including $277,000 in anticipation of future Sinking Fund Requirements
Deduct
Instalment due within one year included in current liabilities
$
1974 294,500
300,000
$ 4,000,000
3,507,000
7,500,000
577,000
1975 $ 198,500
300,000
19%2
$ 493,000
6,923,000
7,416,000
23,000
$ 7,393,000
\ \ \
After 1975 $ Aisa
aa ara TN Bs tse UNE Yt Ree ee
Future Sinking Fund Requirements 1973 472% First Mortgage Bonds $ —
5% % Sinking Fund Debentures 23,000 5 23,000
The declaration of dividends and the redemption of preferred shares of Rolland Paper Company, Limited are restricted if such declaration or redemption result in a reduction of the working capital of the Company
to an amount less than $2,000,000.
20
i Ee ae
17a
$ 702,500
7,198,000
7,900,500
—
$ 7,900,500
Total $ 493,000
6,923,000
ee
$ 7,416,000
——_—_—_—— SESS EE SSS
note © capita
The preferred shares of the 4% % series are redeemable at $104 per share and are non-voting unless four quarterly dividends are in arrears. Class ‘‘A’’ shares are non-voting unless the Company shall fail, for a period of two consecutive years, to pay any dividend on such shares.
Class “A’’ shares are entitled to a non-cumulative dividend at the rate of 10 cents per share per annum before payment of any dividend on Class ‘‘B”’ shares. If in any fiscal year dividends at the rate of 5 cents per share per annum are paid on Class ‘‘B”’ shares, any further distribution in respect of that fiscal year shall be made equally, share for share, upon all outstanding Class “‘A”’ and Class ‘‘B”’ shares.
note 7 retained Earnings
An amount of $258,000 of retained earnings is restricted under Section 62 of the Canada Corporations Act as a result of the redemption of 2,580 preferred shares in past years.
mote 8 directors’ and Officers’ Remuneration
Aggregate remuneration to persons who served as Directors and as Officers of Rolland Paper Company, Limited at any time during the year was as follows:
1972 1971
Remuneration paid by: 12 Directors/9 Officers 12 Directors/9 Officers
Rolland Paper Company, Limited $ 32,100 $ 258,800 $ 30,800°s 232) -222)700 Subsidiary Company
Canada Glazed Papers Limited 2,200 — 2,700 a
| S684: 300. 1) $11'\258,800 Si ess SOU cre Gn 2227700
Four Officers were also Directors of the Company in 1972 and 1971.
note 9 net Earnings per Share
The net earnings per share in 1972 was calculated after taking into account the differential in the dividends paid during the year to the Class “A” and Class ‘‘B” shares. No dividends were paid on these shares in 1971.
note iO Long-Term Leases
The Company’s commitments under lease agreements of various terms for property and equipment aggregate $2,288,000 at December 31, 1972. The annual rentals in 1973 under these leases will be $420,000.
21
ten-year comparative statistics
———__ See
1972 Sales and Earnings Net sales $46,437,380 Dividend income rig Depreciation 1,313,141 Bond interest 435,905 Earnings (loss) before income taxes ; 2,482,806 Income taxes 1,094,156 Net earnings (loss) 1,388,650 Cash flow 2,555,419 Percentage of net earnings (loss) to net sales 3.0% Percentage of net earnings (loss) to capital employed 4.6% Distribution of Earnings Dividend on preferred shares $ 60,435 Dividend on class ‘‘A’’ and ‘‘B”’ shares 160,002 Retained in the business 1,168,213 a ea eS ee Per Share* Net earnings (loss) per class ‘‘A’’ share $ 0.73 Dividend per class ‘‘A’’ share 0.10 Cash flow per class ‘‘A’”’ share 1.37 Book value per class ‘‘A” and ‘‘B”’ shares 9.53 Financial Net assets: Working capital $ 9,649,119 Investment in securities 5,862,651 Fixed assets, net 7 14,008,831 Other assets 588,647 Capital employed 30,109,248 Financed by: Long-term debt 7,393,000 Deferred income taxes 3,696,119 Preferred shareholders’ equity 1,422,000 Class ‘‘A” and “‘B”’ shareholders’ equity 17,598,129 Total capitalization 30,109,248 Ratio of current assets to current liabilities 2.9:1 Capital expenditures $ 635,950
ae a IR a TTA EIST er iniciiciremrer en re e ia eB EE
Other Statistics
Number of shareholders 2,256 Number of employees 1,294 TED crim eae ee wwe NOTE:
Results of Canada Glazed Papers Limited are included from February 24, 1964, results of Fine Papers, Limited from January 1, 1970 and results of The Wilson-Munroe Company Limited from January 1, 1971.
22
ROTA
458,691
$ 8,385,167
5,862,651 5,862,651 14,758,442 | 15,780,321 588,647 588,647
29,594,907 | 29,982,604
$41,555,060 | $34,084,751 |$35,647,256 ws 125,000 1,292,146 1,206,907
520,189
270,165 2.9195 VF 119,994 1,443,743 LoOy1 7 1,536,074 1,088,887 2,665,881 0.4% 4.3% 0.5% 4.8%
$ 60,435/$ 60,435 534,007 712,009 (1,016,313) 763,630
9 /, 100,985 4% 9'901,323 5,862,651 15,934,251
207,319
31,955,540
1969 |
1968
$34,903,154 125,000 1,216,595 544,214 2,645,318 1,238,949 1,406,369 2,486,965 4.0% 44%
$ 60,435 712,009
633,925
1967
$32,880,771 250,000 1,148,587 569,739 3,612,328 1,723,463 1,888,865 3,061,031 1 Yo 5.9%
61,513 712,009 1,115,343
7,900,500 8,024,500
8,751,000
3,842,491 4,195,921 4,426,044 1,422,000 1,422,000 1,422,000 16,429,916 | 16,340,183 | 17,356,496
29,594,907 Sale|
29,982,604 Pa
3: 297,388'13 693,710 2,320 2,377 1,285 289
31,955,540
$ 841,311
Sos]
2,330 1,288
$ 9,734,780 | $ 9,680,578 5,862,651| 5,862,651 16,176,079} 16,136,194 — 88,662 31,773,510 | 31,768,085 9,255,500| 9,748,000 4,503,144} 4,639,144 1,422,000} 1,422,000 mIB G2 .008 S008 Se! 31,773,510 | 31,768,085 4.2:1 2.9:1 $ 1,261,104 |$ 1,639,203
2,330
1,325
*Net earnings, dividend and cash flow per class ‘‘B”’ share are 5 cents less than per class ‘‘A’’ share except in 1970 when the differential is 4 cents
and in 1971 when there is no differential.
1966
$29,935,187 262,500 1,072,238 597,001 2,994 320 1,265,915 1,728,405 3,993,637 5.8% 5500
$ 64,993 712,009
951,403
> 9,522,411 5,862,651 1,69 19253 118,848
31,155,163
10,217,000 4,615,565 1,479,000
14,843,598
Sioa, 10S
SN Stile los4co
1965 1964
$28,290,544 | $26,032,008 184,375
817,640 698,358 638,021 372,386 3,297,750 2,759,939 15312424 1,420,628 1,766,326, Tesgots 4,115,390 2,397,169 6.2% 5.1% 5.8% 6.1%
71,400 71,400
490,507 408,007
1,204,419 859,904
1.00} $ 0.90
0.30 0.30
2.36 1.63
8.02 4.69
$ 8,408,378 | $ 5,542,112 5,862,651 ae
15,500,429; 11,211,744
490,308 5,153,000
30,261,766 | 21,906,856
11,267,000} 11,879,500
3,422,571 1,522,231
1,680,000 1,680,000
13,892,195 6825.02
30,261,766 | 21,906,856
3.6:1 2:37
$ 5,154,185 | $ 3,011,934
2,331
1,121
1965 per share calculated on average number of shares for the year.
1963
$20,633,530 559,077 144,654 2,586,179 1,310,063 1,276,116 1,948,293 6.2%
9.7%
$ 71,400 408,007 796,709
$ 5,066,795 8,128,535
13,195,330
3,077,000 1,117,600 1,680,000 7,320,730
13,195,330
2.9:1 $ 591,885
1,889 877
23
auditors report to the sharcholdess
The Shareholders, Rolland Paper Company, Limited, Montreal, Que.
We have examined the consolidated balance sheet of Rolland Paper Company, Limited and its subsidiaries as at December 31, 1972 and the consolidated statements of income and expense, retained earnings and source and application of funds for the year then ended. Our examination included a general review of the accounting procedures and such tests of accounting records and other supporting evidence as we considered necessary in the circumstances.
In Our opinion these consolidated financial statements present fairly the financial position of the companies as at December 31, 1972 and the results of their operations and the source and application of their funds for the year then ended, in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
TOUCHE, ROSS & GO. Chartered Accountants
haut Alera ‘ bo.
Montreal, Que. January 29, 1973.
24
tolland and its products
100.4
26
its products
Paper is as old as civilization — as new as the latest product of 20th Century research. During this long span of years, thousands of products and commodities, once familiar and essential, have vanished — but paper remains, its demand increasing
every year.
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It is precisely this survival in the face of centuries of social and economic change that poses the greatest challenge to a fine paper manu- facturer. It is easier, and more compelling, to respond to radical changes in technology than it is to sense the more subtle changes in customer requirements for a product that everyone takes for granted, and to react accordingly.
Rolland has met this challenge in two basic ways: by being in the forefront in the technology of production; and by ensuring, through research, that the products we manufacture are those that not only satisfy our customers’ technical requirements, but meet, and even anticipate, changes in demand for specific grades of paper.
In 1968, Rolland installed the first on-line production control system by computer in the Canadian fine paper industry. This enabled us to turn out paper of uniform quality, with respect to such variables as thickness, weight and moisture content — problems which have long plagued the printer.
Backing up this technological leadership is strong emphasis on customer requirements, and sensitivity to shifts in the demand for various
28
grades of paper. Some of these changes are brought about by the printing industry itself, others by the influence of designers.
For example, in recent years, printers have swung over from letterpress to offset printing. Sensing this change, Rolland undertook a firm commitment providing products required for the offset process. This has found expression in a number of new brands — Rolland Offset, Rolland Opaque, New Imperial Offset Enamel and, most recently, Rolland Tints. In some instances, these brands were inno- vations in their field. The Rolland family of offset papers now satisfies the requirements of offset printing.
The recent introduction of Rolland Tints is an example of response to designer-initiated change. More and more, designers are turning to coloured stock as the nucleus of new, even startling, innovations in the graphic arts. To meet their needs, and to stay in the forefront of this expanding market, we introduced this wide new range of coloured offset papers.
But dedication to the offset market has inno way made us lose sight of the more specialized needs of groups of people within the total fine paper
market. Superfine Linen Record, our 100% rag content bond paper, is still unquestionably the finest letterhead paper on the Canadian market. Rockland Bond, the all-purpose sulphite bond, satisfies dozens of basic needs for business and industry. Dactypost, Canada’s leading posting ledger paper, is an essential part of thousands of accounting systems. Zephyr Antique Book, makes for the restful reading of novels and textbooks. Duocoat Label identifies packages and containers of all kinds. There is also a wide variety of fancy- coated and specialty papers of many kinds — gift-wrap papers for special occasions and seasons, box-top papers for packaging merchandise, and a host of others.
These are just a few of the many brands that make up Rolland’s full line of fine papers, coated and uncoated — our response to a demand which is over a thousand years old, and still growing. So long as the demand for paper endures, we will continue to meet its require- ments. In fact, should paper ever be Superseded by another substance, we will meet that demand, too — our real dedication is to serving the needs of the market.
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their uses
A world without paper would be a world unable to function.
If the statement seems an exaggera- tion, consider just that situation. Paper has suddenly, inexplicably, vanished from the earth. No books
to peruse for pleasure, or study for self-betterment. No letterhead for communication. No labels to identify products. No forms or cards to activate computers. Think of the computer in particular. Its technology is one of the most sophisticated ever devised by man; yet, deprived of paper, it would be virtually useless
in its present form.
To appreciate the importance of paper in your day-to-day life, imagine yourself, fora moment, as head of
a typical family going about its business on any typical day.
In the morning, your wife opens up
a can of tomato juice, which is attractively identified by a colourful label printed on Duocoat. As she does so, she is conscious that she has opened the last can, and reaches
for her shopping memo pad, printed on Rockland Bond.
Off to work — and you shove a novel, printed on Belvedere
Opaque Litho, into your pocket for reading on the commuter train. Arrived at the office, you go through the morning mail, which includes several letters from customers; three letterheads are on Colonial Bond and one on Rolland Parchment. You dictate the replies, and your secretary types them on your company's letterhead, which is printed on Superfine Linen Record.
Turning to a pile of orders, detailed on inter-office forms printed on Rockland Bond, you pass them for processing through the accounting department, where they are machine posted on Dactypost. Later, at lunch, you choose from a menu printed on Rolland Offset.
31
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Meanwhile, let’s look at your son who is an art director in an advertising agency. One of the agency’s clients has called for a sharp, ultra-modern design for its annual report; and he experiments, to his own satisfaction, with Imperial Cover Stipple for the cover, Rolland Opaque for the non-financial section, and Rolland Tints for the financial section.
Another son has even closer contact with Rolland papers. As press foreman in a printing shop, he uses a variety
of them daily in many kinds of
printing jobs — from sales brochures, to annual reports and product labels, among others.
Your daughter in her last year of high school constantly refers during the day to her history, math and science textbooks, printed on Belvedere Opaque Litho, and Cashmere Book. After classes she helps print the itinerary for the ski weekend on a spirit duplicator, using Rolland Duplicating.
Once the family had all left, your wife could turn her attention to wrapping your daughter's birthday presents, using some attractive gift-wrap made by Rolland’s Coated Papers Division. The mail brought two advertising circulars, printed on Rolland Offset; the new fire insurance policy, printed on Colonial Bond; and a message
33
34
from one of the candidates for mayor in the next election, run off on an electrostatic copier, using Rolox Copy paper.
In the evening, after dinner, you and your wife spend an hour poring over travel folders. You find it hard to make a choice — the full-colour pictures
all look so inviting printed on Imperial Offset Enamel.
Before calling it a day, you get in another hour reading your pocket book, while your wife gets started on a new Canadian novel — a hard-back edition printed on Cashmere Book, borrowed from the local lending library.
During this single day, you and each member of your family were in direct or indirect contact with Rolland papers up to half a dozen times.
Yet only your sons, because their jobs required it, were in any way conscious of that fact.
It is this ubiquity of our products, and the wide variety of essential functions they make possible while remaining anonymous, that makes our business such a satisfying one to be in. It is also — in a sense — a responsibility that we assumed when we first began making paper. Those who use our papers can, and do, take their quality for granted. We cannot — and never will.
35
The cover of the Report is printed on Imperial Litho, White, Basis 420M, and the inside sections, on Imperial Offset Enamel, White, Basis 160M and Rolland Tints, African Tan, Basis 140M.
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