Rothmans declares 16% increase to regular quarterly dividend and reports strong results for second quarter of fiscal 2008



    Trading: TSX: ROC

    TORONTO, Oct. 26 /CNW/ - Rothmans Inc. today announced strong results for
the second quarter and first six months of fiscal 2008, which ended
September 30, 2007. The Company also announced a 16% increase in its regular
dividend to $1.40 on an annualized basis or $0.35 per quarter from the
previous $1.20 annualized rate.
    "This increase in our regular dividend reflects both the strength of the
Company's balance sheet and the strong financial performance that has been
generated by our 60%-owned subsidiary Rothmans, Benson & Hedges Inc. (RBH),"
said John Barnett, President and Chief Executive Officer of Rothmans Inc.
"Following our record first quarter, RBH continued to generate strong
performance this quarter resulting in the improvement of all significant
measures of financial performance including sales, earnings and cash flow when
compared with the prior year."
    Rothmans' earnings for the second quarter were $C33.3 million, or $0.49
basic earnings per share, compared with $28.3 million or $0.42 basic earnings
per share in the same quarter of fiscal 2007. For the first six months of this
fiscal year, Rothmans' earnings were $67.2 million or $0.99 per share,
compared with $57.6 million or $0.85 per share in the first half of the prior
year.
    Sales at RBH, net of excise duty and taxes, increased to $179.7 million
in the most recent quarter from $165.2 million in the second quarter of fiscal
2007. Sales for the first six months of this fiscal year were $357.1 million
compared with $328.1 million for the same period a year earlier.
    RBH's EBITDA margin for the second quarter was 53.3% compared with 50.6%
in the second quarter a year ago, primarily as a result of price increases
across all product categories. Price increases were partially offset by volume
shifts to the lower priced tier of the cigarette price category and higher
general and administrative costs including compensation related expenses. In
the first quarter ended June 30, 2007, RBH's EBITDA margin was 55.5%.
    RBH shipped a total of 2.8 billion equivalent sticks into the domestic
market during the second quarter of fiscal 2008, unchanged from the same
period in fiscal 2007. For the six months ended September 30, 2007, domestic
shipments were 0.6% higher than in the comparable period of the prior year.
Higher price category cigarette volumes continued to offset declines in
premium cigarette and fine cut volumes.

    Outlook

    "The recently released study by the Canadian Tobacco Manufacturers
Council detailing continued significant growth in illicit cigarettes within
the Canadian marketplace demonstrates that our often expressed concerns
relating to contraband product are justified," said Mr. Barnett. "While we
remain confident in the ability of RBH's strong product offerings to compete
within the tax paid industry, the growth in contraband continues to have a
negative effect on all legitimate industry participants including RBH."

    Increase to Regular Dividend

    The Board of Directors of Rothmans Inc. declared an increase to the
Company's regular quarterly dividend. Shareholders of record at the close of
business on December 4, 2007 will receive $0.35 per common share payable on
December 17, 2007. This represents an increase of 16% over the previous
quarterly dividend rate of $0.30 per share.

    Analyst Conference Call and Webcast

    Rothmans Inc. management will hold a conference call with analysts to
discuss the second quarter results at 8:30 a.m. Toronto time, Friday,
October 26, 2007. In order to listen to the conference call, shareholders are
invited to call 1-866-898-9626 or 416-340-2216.
    The call will also be webcast via the Company's investor website,
www.rothmansinc.ca. At the completion of the conference call, a recording will
be available until November 3, 2007 by calling (416) 695-5800 or
1-800-408-3053 and entering reservation number 3240219. The recording can also
be accessed through the investor website.
    Media are invited to listen to the call and to contact Karen Bodirsky at
(416) 442-3660 for further information.

    About Rothmans Inc.

    Rothmans Inc. is a widely held, publicly traded Canadian company that
participates in the Canadian tobacco industry through 60%-owned Rothmans,
Benson & Hedges Inc., Canada's second largest tobacco company. RBH currently
employs more than 750 people at its head office in Toronto, its sales offices
across Canada and its manufacturing facilities in Brampton, Ontario and Québec
City, Québec where it has been operating for over 100 years. Rothmans is
Canada's only publicly traded company with interests exclusively in the
tobacco industry and is listed on the Toronto Stock Exchange under the symbol
ROC.

    Management's Discussion and Analysis
    for the quarter and six months ended September 30, 2007
    -------------------------------------------------------
    Management's Discussion and Analysis of Financial Condition and Results
of Operations, or MD&A, provides shareholders with a review of significant
developments in the Company's financial performance in the fiscal quarter and
six months ended September 30, 2007 compared with the same periods in the
prior year. It also discusses factors that could affect future performance.
This MD&A should be read in conjunction with the attached unaudited
consolidated financial statements for the period ended September 30, 2007, the
annual MD&A contained in the 2007 Annual Report and the audited annual
consolidated financial statements of the Company for the year ended March 31,
2007. The results reported herein have been prepared in accordance with
Canadian Generally Accepted Accounting Principles (GAAP) and are presented in
Canadian dollars. This MD&A is current as of October 25, 2007.

    Responsibility of Management and the Board of Directors

    Management is responsible for the information disclosed in this MD&A and
has in place the appropriate information systems, procedures and controls to
ensure that information used internally by management and disclosed externally
is materially complete and reliable. In addition, the Company's Audit
Committee and Board of Directors provide an oversight role with respect to all
public financial disclosures by the Company, and have reviewed and approved
this MD&A and the accompanying unaudited consolidated financial statements.

    Disclosure Controls and Procedures and Internal Controls over Financial
    Reporting

    The Chief Executive Officer and Chief Financial Officer have designed
disclosure controls and procedures, or caused them to be designed under their
supervision, to provide reasonable assurance that material information
relating to the Company and its consolidated subsidiaries would be made known
to them by others within those entities.
    With respect to internal controls over financial reporting, the Chief
Executive Officer and Chief Financial Officer have designed them, or caused
them to be designed under their supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with
Canadian Generally Accepted Accounting Principles.
    During the Company's most recent interim period, there were no changes in
the Company's internal controls over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company's
internal controls over financial reporting.

    Forward-Looking Statements

    Certain statements contained in this MD&A and other sections of this
document (in particular the sections entitled "Industry Overview" and
"Outlook") constitute "forward-looking statements" and express views as to
future events, circumstances and trends relating to RBH's business and the
Company. Words such as "plans," "intends," "outlook," "expects,"
"anticipates," "estimates," "believes," "should" and similar expressions may
identify forward-looking statements. Forward-looking statements are based on
management's current expectations and assumptions and entail various risks and
uncertainties. There is no assurance that any forward-looking statement will
materialize. Actual results may differ materially from these expectations and
forward-looking statements, if known and unknown risks or uncertainties affect
RBH's business or the Company, or if management's expectations or assumptions
prove to be inaccurate. Unless otherwise indicated, forward-looking statements
describe expectations as of October 25, 2007.
    Factors that could cause the Company's actual results to differ
materially from the forward-looking statements contained herein include, but
are not limited to: government claims and potential claims, including the
results of ongoing investigations; product liability claims; increases in the
levels of contraband product in the market; increased competition and
competitor initiatives; a lower rate of growth in the cigarette price
category; continued declines in consumption of tobacco products; RBH's ability
to continue to implement price increases; fluctuating wholesaler and consumer
purchasing patterns; changes in government taxation policy; changes in
government legislation and regulation including legislation banning the
display of tobacco products in retail stores; new product standards; and
dependence on the domestic tobacco market.
    The Company disclaims any obligation or intention to update or revise any
forward-looking statement, whether the result of new information, future
events or otherwise. Additional information concerning risks and uncertainties
affecting RBH's business and the Company and other factors that could cause
financial results to fluctuate is set forth below under "Risks and
Uncertainties" and "Outlook" and is contained in the Company's filings with
Canadian securities regulatory authorities, including the Company's Annual
Information Form (in particular under "Legal Proceedings" and "Risk Factors")
available on SEDAR at www.sedar.com or on the Company's website at
www.rothmansinc.ca.

    Terminology used in this MD&A

    Throughout this MD&A, "GAAP" refers to Canadian Generally Accepted
Accounting Principles, "Rothmans" and "the Company" refer to Rothmans Inc.,
"RBH" refers to Rothmans, Benson & Hedges Inc., which is 60%-owned by Rothmans
Inc., and "EBITDA margin," a key measure of RBH's operating performance,
refers to RBH's "earnings before interest, taxes, depreciation and
amortization" as a percentage of "sales, net of excise duty and taxes."
    EBITDA margin provides a metric allowing period-to-period comparisons of
the core RBH operating performance before the impact of changes in capital
structure, interest, taxes and capital spending and does not include income
from investments earned by the Company or the expenses related to operating
Rothmans Inc. as a public company. EBITDA margin is a non-GAAP financial
measure that does not have any standardized meaning prescribed by GAAP. It is
therefore unlikely to be comparable to similar measures presented by other
companies.
    The "recent quarter" refers to the three months ended September 30, 2007,
and "prior quarter" refers to the three months ended June 30, 2007. "Fiscal
2008" or "recent fiscal year" refers to the fiscal year ending March 31, 2008
and other similar references to a fiscal year (e.g., fiscal 2007) refer to the
fiscal year then ended on March 31 (e.g., March 31, 2007).
    "The three major suppliers of tobacco products" or "three majors" refers
to RBH, Imperial Tobacco Canada Limited (ITL) and JTI-MacDonald Corp. (JTI).
"Premium cigarettes" refers to tailor-made cigarettes sold at premium retail
prices, "cigarette price category" refers to cigarettes sold at
less-than-premium prices and "price category" refers to the combination of the
cigarette price category and the fine cut category (loose tobacco and
pre-portioned tobacco sticks). "Domestic composite market" refers to all fully
tax-paid cigarettes and fine cut tobacco products sold into the Canadian
market. "Direct-to-Store Distribution" or "DSD" refers to a distribution model
where a tobacco supplier ships directly to retail accounts instead of through
a wholesale network. "CTMC" refers to the Canadian Tobacco Manufacturers
Council.

    New Accounting Pronouncements

    As required by The Canadian Institute of Chartered Accountants ("CICA"),
on April 1, 2007, the Company adopted CICA Handbook Section 3855 "Financial
Instruments - Recognition and Measurement", Section 3861 "Financial
Instruments - Disclosure and Presentation" and Section 1530 "Comprehensive
Income".
    Section 3855 and 3861 prescribe when a financial asset, financial
liability, or non-financial derivative is to be recognized on the balance
sheet, and at what amount. It also specifies how financial instrument gains
and losses are to be presented. The prospective adoption of this new standard
resulted in changes in the accounting and presentation for financial
instruments as well as the recognition of certain transitional adjustments
that have been recorded in opening retained earnings as described in note 2.
As required by the implementation of the new standard, the comparative Interim
Consolidated Financial Statements have not been restated.
    CICA Handbook Section 1530, "Comprehensive Income," introduces a new
requirement to temporarily present certain gains and losses outside net income
in other comprehensive income or loss. Refer to note 2 for more details.
    The implementation of these Handbook requirements did not have a material
impact on the financial results of the Company.
    The following are the new accounting standards the Company plans to adopt
effective fiscal year ending March 31, 2009. Management is evaluating the
standards and their impact on the Company's consolidated financial statements.
    The CICA Handbook Section 3031 "Inventories" prescribes the accounting
treatment for inventories. Specifically, the section provides guidance on the
determination of cost and its subsequent recognition as an expense. Section
3031 applies to interim and annual financial statements for fiscal years
beginning on or after January 1, 2008.
    CICA Handbook Section 1535 "Capital Disclosures" establishes standards
for disclosing information about an entity's capital and how it is managed.
This section applies to interim and annual financial statements relating to
fiscal years beginning on or after October 1, 2007.
    CICA Handbook Section 3862 "Financial Instruments Disclosures" deals with
additional required disclosures related to financial instruments. The section
provides guidance on what disclosure should be included in the financial
statements related to items such as significance of financial instruments to
the financial position and performance of the Company and the nature and
extent of risks associated with financial instruments. Section 3862 applies to
interim and annual financial statements for fiscal years beginning on or after
October 1, 2007.

    Industry Overview

    Although it is not possible to provide an accurate estimate of the recent
quarter and fiscal year-to-date tax paid industry volumes, RBH management
believes that a number of factors continue to affect overall industry
shipments, including:

    
    -   Contraband - During the recent quarter the CTMC released a study on
        the illicit usage of cigarettes in the Canadian marketplace. This
        study indicated that 22% of the national cigarette volume being
        purchased was contraband product, up from 16.5% found in a similar
        study conducted a year earlier.

    -   Taxes - High taxes reflected in the selling price to the consumer
        contribute to probable increases in the presence of contraband
        product in the domestic market.

    -   Seasonal trends in consumer purchasing patterns - The period between
        April and September has demonstrated stronger shipments than the
        period between October and March. RBH management believes that
        smoking restrictions are causing consumer consumption variations
        between the summer and winter seasons.

    -   Fluctuations in wholesaler buying patterns - Swings in wholesaler
        purchasing patterns motivated by the timing of tax increases, price
        increases, manufacturer trade programs, manufacturer trade terms and
        other factors are anticipated to have a significant effect on
        quarter-to-quarter sales volumes.

    -   Continued declines in consumer consumption of tobacco products.
    

    During the first quarter, the Province of Alberta raised its Provincial
Tobacco Tax on cigarettes and fine cut products by $5.00 per carton, or
equivalent stick basis.

    Results at Rothmans, Benson & Hedges Inc.

    In the quarter ended September 30, 2007, RBH shipped a total of
2.8 billion equivalent sticks into the domestic market, unchanged from the
same period of the prior year and the prior quarter. Fiscal year to date
shipments were 0.6% higher than the comparable period of the prior year.
Higher price category cigarette volumes continue to offset lower volumes in
premium cigarettes and fine cut.
    As previously disclosed, the industry no longer shares industry
volumetric data through the CTMC. Therefore, RBH no longer has access to
information on total tax paid industry volumes and is unable to accurately
estimate RBH's market share.
    RBH's recent quarter EBITDA margin was 53.3% compared with 50.6% in the
quarter ended September 30, 2006 and 55.5% in the quarter ended June 30, 2007.
The recent quarter increase in EBITDA margin over the comparable period of the
prior year is predominantly due to price increases across all product
categories, partially offset by volume shifts to the lower priced tier of the
cigarette price category and higher general and administrative costs including
compensation related expenses. The recent quarter decrease in EBITDA margin
compared with the prior quarter is predominantly due to higher general and
administrative costs, including compensation related expenses, partially
offset by price increases during the recent quarter and the timing of price
increases taken in the prior quarter.
    During the recent quarter, RBH increased the price on Mark Ten and
Canadian Classics price category brands by $1.00 per carton in Quebec and
Ontario, respectively. During the prior quarter, RBH increased the prices
charged to wholesalers by $1.00 per carton for the Carreras, Davidoff and
ROOFTOP premium brands, $1.50 per carton for all other premium brands and
$1.00 per carton for all price category cigarettes other than the Accord
brand. Prices on fine cut products, cigars and pipe tobacco were increased by
varying amounts depending on format.
    Effective July 30 2007, RBH implemented changes to its wholesale
distribution terms, moving from a 2% prompt payment discount to a
fee-for-service model nationally with the exception of Newfoundland and
Labrador where terms remain unchanged.

    Rothmans Inc. Financial Results

    Basic earnings per share were $0.49 in the recent quarter and $0.99 for
the six months ended September 30, 2007 compared with $0.42 and $0.85 in the
comparable periods of the prior year.
    RBH's sales, net of excise duty and taxes, were $179.7 million in the
recent quarter and $357.1 million for the six months ended September 30, 2007
representing an increase of $14.4 million and $29.0 million compared to
comparable periods of the prior year. Volume declines in premium cigarettes
and fine cut were more than offset by the impact of price increases and price
category cigarette volume increases.
    Investment income increased to $3.1 million in the recent quarter and
$5.8 million in the fiscal year-to-date from $2.3 million and $4.3 million in
the comparable periods of the prior year mainly due to the higher average cash
and cash equivalents balances held during the quarter and six months ended
September 30, 2007.
    Operating costs increased to $85.2 million in the recent quarter and
$165.2 million in the fiscal year-to-date from $82.6 million and
$160.8 million in the comparable periods of the prior year. This is mainly
attributable to higher general and administrative costs including compensation
related expenses.
    Income tax expense was $37.0 million in the recent quarter, resulting in
an effective tax rate for the quarter and fiscal year-to-date of 40.0%. The
Company expects its effective tax rate for fiscal 2008 to be 40.0%.

    Capability to Deliver Results

    Cash Flow

    RBH's operations generate significant cash resources. These cash
resources are currently sufficient to fund interest payments on RBH's
long-term debt, capital expenditures and dividends to its shareholders. Based
on RBH's historical earnings levels, the dividends received by Rothmans from
RBH are expected to be sufficient to fund its operations, pay dividends to its
public shareholders and continue to accumulate cash reserves.
    RBH's cash flow from operations before changes in working capital was
$64.8 million in the recent quarter and $120.3 million for the fiscal
year-to-date compared to $52.3 million and $102.8 million in the same periods
of the prior fiscal year. RBH's ability to generate cash from operations is
generally sufficient to fund the day-to-day financing needs of RBH's business.
It is anticipated that additional funds, should they be required, would be
obtained through short-term bank borrowings.
    During the recent quarter, the Company paid dividends of $20.4 million,
representing a dividend of $0.30 per share.

    Cash Resources

    Cash and short-term investments of $215.0 million at September 30, 2007
represented the consolidated cash resources of the Company versus
$172.2 million at March 31, 2007. The increase in cash and short-term
investments is predominantly due to earnings from RBH's operations and normal
quarterly fluctuations in RBH's working capital requirements. On a
non-consolidated basis, Rothmans held cash and cash equivalents of $150.9
million at September 30, 2007, an increase from $120.8 million at March 31,
2007. This increase results from dividends received by the Company from RBH,
partially offset by dividends paid by the Company.

    Critical Accounting Estimates

    The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the amounts reported
in the unaudited consolidated financial statements and accompanying notes.
Although these estimates are based on management's best knowledge of current
events and actions that the Company and RBH may undertake in the future,
actual results could differ from these estimates. Other than as discussed
below, there are no critical accounting estimates that require disclosure or
discussion in this report.

    Employee Future Benefits

    The actuarial assumptions used to determine the benefit obligation and
associated expense of RBH's various defined benefit pension plans and other
benefits were not adjusted in the recent quarter. Therefore, the discount
rate, the expected return on plan assets and other assumptions remain as
described in the annual MD&A for the year ended March 31, 2007.

    Litigation Contingent Liabilities

    As discussed in the annual MD&A for the year ended March 31, 2007, the
Company and RBH have been the subjects of various legal actions, proceedings,
investigations and claims. Based on the stage of those proceedings, management
is unable to meaningfully estimate the liability, if any, that might result
from claims or investigations and neither the Company nor RBH has accrued for
potential liabilities. However, the outcome of any claims, proceedings or
investigations is uncertain. If successful, these claims, potential claims or
outcome of investigations either individually or in the aggregate, could
involve significant damages, which would have a significant adverse effect on
the financial condition of the Company, and the Company and RBH may not have
the resources to satisfy such claims.

    Risks and Uncertainties

    Various legal actions, proceedings and claims arising out of the sale,
distribution, manufacture, development, advertising and marketing of tobacco
products are pending, have been threatened or may be instituted against the
Company and RBH. These actions, claims and proceedings, both pending and
threatened, are described in note 14 to the audited annual consolidated
financial statements of the Company for the year ended March 31, 2007 and in
note 9 to the interim unaudited consolidated financial statements for the six
months ended September 30, 2007. Other than as described below, there have
been no developments of a material nature during the fiscal year-to-date
concerning these matters.
    As previously disclosed, RBH is currently the subject of an ongoing
investigation by the RCMP relating to RBH's sales of products exported from
Canada in the period 1989 - 1996. This investigation, of which RBH was
notified in January 2002, is related to allegations that tobacco products
manufactured and exported by RBH were illegally smuggled back into Canada
during this period without payment of applicable excise and tobacco taxes and
duties. In February 2003, the RCMP filed criminal charges against another
Canadian tobacco products supplier and its related parties alleging violations
of the Criminal Code (Canada) in connection with the sale and export of
tobacco products during the early 1990s. The preliminary hearing concluded in
2006. In May 2007, the Ontario Court of Justice ordered that company and its
former chief executive officer to stand trial. Charges against six other
executives were dismissed. All parties are seeking judicial review of the
judge's decision. Although no action has been commenced and no charges laid
against the Company or RBH or any of their present or former employees,
officers or directors, the Company and RBH believe that the RCMP and federal
and provincial governments are contemplating laying charges or commencing
other legal proceedings involving the Company or RBH and certain of their
employees, officers and directors relating to or arising from these
allegations.
    As previously disclosed, in January 2001 the Province of British Columbia
initiated a lawsuit in the Supreme Court of British Columbia against RBH, the
Company and numerous other Canadian and international tobacco companies and
various tobacco trade associations seeking unspecified damages in an amount to
cover the costs that allegedly have been, or will be, incurred by the
Government of British Columbia in providing health care benefits to British
Columbia residents who have allegedly suffered smoking-related illnesses. The
action was brought pursuant to the Tobacco Damages and Health Care Costs
Recovery Act (British Columbia). The Company was advised in September 2007
that the trial is currently scheduled for the fall of 2010.
    As previously disclosed, in June 2006 the Province of New Brunswick
passed the Tobacco Damages and Health Care Costs Recovery Act. In September
2007, this Province announced that it had retained a consortium of lawyers on
a contingency fee basis to act for it in a proposed action against tobacco
product manufacturers to recover health care costs that allegedly have been,
or will be, incurred by the Province in respect of alleged smoking-related
illnesses.
    As previously disclosed, the three majors challenged the
constitutionality of the Tobacco Act (Canada), which was enacted by the
federal government in 1997. In June 2007, the Supreme Court of Canada issued
its decision on the constitutionality of the Tobacco Act (Canada), allowing
the appeals of the federal government and dismissing the cross appeals of the
three major suppliers of tobacco products. Essentially, the Supreme Court of
Canada ruled that the legislative and regulatory provisions at issue, when
properly interpreted, were constitutionally valid.
    It is not possible to predict the outcome of legal claims or
investigations, pending and future, against the Company or RBH. Legal
proceedings and investigations are subject to many uncertainties, and it is
possible that there will be adverse developments in the claims and
investigations pending against the Company and RBH or that these claims and
investigations, and any potential future claims and investigations, could be
decided unfavourably or settled. An unfavourable outcome or settlement could
involve significant damages or significant monetary payments which could have
a significant adverse effect on the financial condition of the Company, and
the Company and RBH may not have the resources to satisfy such claims.
    Additional information concerning legal matters affecting the Company and
RBH are contained in the Company's filings with securities regulatory
authorities including the Company's 2007 Annual Report and 2007 Annual
Information Form (in particular under "Legal Proceedings") which can be
accessed at www.sedar.com or on the Company's website at www.rothmansinc.ca.

    Outlook

    It is believed that the presence of contraband remains a key factor in
affecting both RBH and total tax-paid industry volumes. Continued availability
of contraband product in the domestic market as a result of high tobacco tax
rates across the country may cause further declines in tax-paid industry
volumes in the future resulting in a negative impact on RBH's sales volumes.
    Competition by each of the three major suppliers of tobacco products in
the cigarette price category has led to substantial growth of that category in
recent years, and there continues to be a significant degree of variability in
the underlying business trends, making it difficult to accurately estimate the
impact on consumer purchasing patterns.
    Looking ahead, Rothmans expects that a number of factors could affect its
financial performance including:

    
    -   the success of efforts by the Company, RBH and the industry to defend
        themselves against product liability litigation, government and other
        claims and charges;

    -   increased levels of counterfeit and other contraband product that may
        occur due to the high tax environment;

    -   the impact of ITL's direct-to-store distribution program and RBH's
        ability to compete based on changes that RBH has made in its
        wholesale distribution arrangements;

    -   a lower rate of growth in the cigarette price category and RBH's
        ability to successfully compete in that segment;

    -   the impact of continued high levels of taxation on consumer
        purchasing patterns;

    -   continued declines in the consumption of tobacco products;

    -   RBH's ability to continue to implement price increases for its
        products;

    -   RBH's ability to compete successfully in the premium cigarette
        category;

    -   the continued volatility in the cigarette market as a result of the
        evolution of the Canadian cigarette price category, varying
        wholesaler purchasing patterns and seasonal fluctuations in smoker
        consumption;

    -   the impact of continued restrictive legislation and regulations over
        the sale of tobacco products including legislation banning the
        display of tobacco products in retail stores;

    -   RBH's ability to maintain its leading position in the fine cut
        segment;

    -   government tax policy regarding the differentiation in tax rates
        applicable to fine cut products in comparison to tailor-made
        cigarettes;

    -   RBH's continued success at maintaining or reducing costs, especially
        in view of the potential for regulated changes to product
        specifications; and

    -   the impact of seasonal trends on consumer purchasing patterns, where
        the period between April and September demonstrates stronger
        shipments than the period between October and March.



    Interim Consolidated Statements of Earnings and Retained Earnings


                                    Three months ended     Six months ended
    (In thousands of dollars,          September 30          September 30
     except per share amounts)        2007       2006       2007       2006
    -------------------------------------------------------------------------
    EARNINGS
    Revenues:
    Sales, net of excise duty
     and taxes                      179,672    165,237    357,103    328,123
    Investment income                 3,098      2,320      5,775      4,273
                                   ------------------------------------------
    Total revenues                  182,770    167,557    362,878    332,396

    Costs:
    Operating costs excluding
     amortization                    85,157     82,643    165,236    160,764
                                   ------------------------------------------
    Earnings before interest,
     income taxes, amortization
     and minority interest           97,613     84,914    197,642    171,632

    Amortization                      2,834      2,967      6,763      5,832
    Interest expense (income)
      - Long-term debt                2,094      2,095      4,174      4,175
      - Other                           303        (30)       545        (27)
                                   ------------------------------------------

    Earnings before income taxes
     and minority interest           92,382     79,882    186,160    161,652

    Income taxes
      - Current                      36,766     32,422     73,762     64,614
      - Future                          196        343        694      1,118
                                   ------------------------------------------
    Total income taxes               36,962     32,765     74,456     65,732
                                   ------------------------------------------
    Earnings before minority
     interest                        55,420     47,117    111,704     95,920

    Minority interest                22,074     18,800     44,530     38,332
                                   ------------------------------------------
    Earnings for the period          33,346     28,317     67,174     57,588
                                   ------------------------------------------
                                   ------------------------------------------
    Earnings per common share
     (note 3)
      - Basic                          0.49       0.42       0.99       0.85
                                   ------------------------------------------
                                   ------------------------------------------
      - Diluted                        0.49       0.41       0.98       0.84
                                   ------------------------------------------
                                   ------------------------------------------

    RETAINED EARNINGS
    Balance at beginning of
     period                         100,398     77,379     86,645     68,513
    Transitional adjustment on
     adoption of new accounting
     policies (note 2)                    -          -        344          -
                                   ------------------------------------------
    Balance at beginning of
     period as restated             100,398     77,379     86,989     68,513
    Earnings for the period          33,346     28,317     67,174     57,588
                                   ------------------------------------------
                                    133,744    105,696    154,163    126,101
    Dividends paid:
      Common Shares -               (20,419)   (20,404)   (40,838)   (40,809)
      (Q2 2007 - $0.30 per share)
      (Q2 2008 - $0.30 per share)
                                   ------------------------------------------
    Balance at end of period        113,325     85,292    113,325     85,292
                                   ------------------------------------------
                                   ------------------------------------------

    Rothmans Inc. and subsidiary companies (unaudited)



    Interim Consolidated Balance Sheets

                                                            As at      As at
                                                     September 30   March 31
    (In thousands of dollars)                                2007       2007
    -------------------------------------------------------------------------

    ASSETS
    Current Assets
    Cash and cash equivalents                             215,018     75,228
    Short-term investments                                      -     96,987
    Accounts receivable                                     5,475      8,851
    Inventories                                           187,984    201,637
    Prepaid expenses                                        2,601      1,969
    Future income taxes                                     8,171      3,418
                                                         --------------------
    Total current assets                                  419,249    388,090

    Property, plant and equipment                          68,587     71,023
    Future income taxes                                     5,540     11,339
    Prepaid pension benefit cost                           20,384     12,958
    Long-term debt deferred financing charges                   -      1,102
    Other assets                                            1,429      1,415
                                                         --------------------
                                                          515,189    485,927
                                                         --------------------
                                                         --------------------
    LIABILITIES
    Current Liabilities
    Accounts payable and accrued liabilities               55,240     38,067
    Excise and other taxes payable                         71,410     69,471
    Income taxes payable                                   26,776     31,939
                                                         --------------------
    Total current liabilities                             153,426    139,477

    Other long-term liabilities                             7,596     17,735
    Other employee future benefits                         36,497     35,915
    Long-term debt                                        148,829    149,794
    Minority interest in subsidiary company                 7,788      8,828
                                                         --------------------
                                                          354,136    351,749
                                                         --------------------

    SHAREHOLDERS' EQUITY
    Capital stock (note 5)                                 47,728     47,533
    Retained earnings (note 2)                            113,325     86,645
                                                         --------------------
    Total shareholders' equity                            161,053    134,178
                                                         --------------------
                                                          515,189    485,927
                                                         --------------------
                                                         --------------------

    Rothmans Inc. and subsidiary companies (unaudited)



    Interim Consolidated Statements of Cash Flows


                                    Three months ended     Six months ended
                                       September 30          September 30
    (In thousands of dollars)         2007       2006       2007       2006
    -------------------------------------------------------------------------
    Cash provided by (used in):

    OPERATING ACTIVITIES
    Earnings for the period          33,346     28,317     67,174     57,588
    Adjusted for non-cash items:
    Amortization of property,
     plant and equipment              2,834      2,900      6,763      5,696
    Amortization of financing
     charges and bond discount            -         67          -        136
    Non-cash interest                   298          -        535          -
    Minority interest                22,074     18,800     44,530     38,332
    Future income taxes                 196        343        694      1,118
    Loss on disposal of property,
     plant & equipment                    2          -         19          2
    Defined & other employee
     future benefits expense          1,909      1,570      3,600      2,842
    Defined & other employee
     future benefits funding           (548)      (659)   (10,444)    (4,879)
    Long-term incentive plan          5,295      1,321      7,998      2,442
                                   ------------------------------------------
                                     65,406     52,659    120,869    103,277

    Change in non-cash operating
     working capital (note 4)        27,578     38,772     10,703     42,324
                                   ------------------------------------------
                                     92,984     91,431    131,572    145,601
                                   ------------------------------------------

    INVESTING ACTIVITIES
    Additions to property,
     plant & equipment, net          (3,429)    (4,126)    (4,346)    (5,454)
    Proceeds on disposal of
     short-term investments             168          -     98,782     81,867
                                   ------------------------------------------
                                     (3,261)    (4,126)    94,436     76,413
                                   ------------------------------------------

    FINANCING ACTIVITIES
    Dividends paid -
      By the Company                (20,419)   (20,404)   (40,838)   (40,809)
      By a subsidiary company
       to minority shareholder      (23,600)   (19,360)   (45,800)   (49,001)
    Proceeds on issuance of
     common shares                        -         58        195      2,013
                                   ------------------------------------------
                                    (44,019)   (39,706)   (86,443)   (87,797)
                                   ------------------------------------------

    Increase in cash and cash
     equivalents during the period   45,704     47,599    139,565    134,217
    Cash and cash equivalents
     at beginning of period,
     after adjustment (note 2)      169,314    134,982     75,453     48,364
                                   ------------------------------------------
    Cash and cash equivalents
     at end of period               215,018    182,581    215,018    182,581
                                   ------------------------------------------
                                   ------------------------------------------

    Supplementary Disclosures (note 4)

    Rothmans Inc. and subsidiary companies (unaudited)



    Notes to the Interim Consolidated Financial Statements (Unaudited)
    (Tabular amounts are in thousands of dollars, except for share and per
    share data or as otherwise indicated)

    1.  Summary of Significant Accounting Policies

        The interim unaudited consolidated financial statements of Rothmans
        Inc. (the "Company") have been prepared in accordance with Canadian
        generally accepted accounting principles. The note disclosure in
        these interim consolidated financial statements includes only
        material changes from the disclosure found in the Company's annual
        consolidated financial statements for the year ended March 31, 2007.
        Therefore, these interim unaudited consolidated financial statements
        and notes should be read in conjunction with those statements. These
        interim consolidated financial statements follow the same accounting
        policies as the Company's audited annual consolidated financial
        statements, except as described in note 2.

    2.  Change in Accounting Policies

        Effective April 1, 2007, the Company adopted The Canadian Institute
        of Chartered Accountants (CICA) Handbook Section 1530, "Comprehensive
        Income;" Section 3855 "Financial Instruments - Recognition and
        Measurement" and Section 3861 "Financial Instruments - Disclosure and
        Presentation." The prospective adoption of these new standards
        resulted in changes in the accounting and presentation for financial
        instruments and the recognition of certain transitional adjustments
        that have been recorded in opening retained earnings as described
        below. There was no change resulting from the adoption of these
        standards that required the Company to record other comprehensive
        income. The principal changes in the accounting for financial
        instruments due to the adoption of these accounting standards are
        described below. As required by the standards, the comparative
        Interim Consolidated Financial Statements (unaudited) have not been
        restated.

        (a)  Section 3855 "Financial Instruments - Recognition and
             Measurement"
             Section 3861 "Financial Instruments - Disclosure and
             Presentation"

        Under the new standards, financial assets and financial liabilities
        are initially recognized at fair value and their subsequent
        measurements are dependent on their classification as described
        below. Their classification depends on the purpose, for which the
        financial instruments were acquired or issued, their characteristics
        and the Company's designation of such instruments. The standards
        require that all financial assets be classified either as held-for-
        trading (HFT), available-for-sale (AFS), held-to-maturity (HTM) or as
        loans and receivables. The standards require that all financial
        assets, including all derivatives be measured at fair value with the
        exception of loans and receivables, assets classified as HTM and AFS
        financial assets that do not have quoted market prices in an active
        market.

        Classification of financial instruments

        The following is a summary of the assets and liabilities the Company
        evaluated and the accounting policy elected to apply to its
        significant categories of financial instruments outstanding as of
        April 1, 2007:

        Cash                                   Designated as held-for-trading
        Cash equivalents and short-term        Designated as held-to-maturity
         investments                            or held-for-trading
        Accounts receivable                    Loans and receivables
        Accounts payable and accrued           Other liabilities
         liabilities
        Excise tax and other taxes payable     Other liabilities
        Other long-term liabilities            Designated as held-to-maturity
        Long-term debt                         Designated as held-to-maturity

        Held-for-trading

        HFT financial assets are financial assets typically acquired for
        resale prior to maturity. They are measured at fair value at the
        balance sheet date. Interest earned and accrued is included in
        investment income. The Company designated cash as HFT and it is
        measured at fair value as at the balance sheet date. Short term
        investments are classified as held-to-maturity or held-for-trading
        depending on their nature and Company's intent. Portfolio equity
        instruments that are quoted in an active market are designated as
        held-for-trading and are accounted for at fair value. There was no
        adjustment resulting from this designation.

        Held-to-maturity

        HTM financial assets are non-derivative financial assets with fixed
        or determinable payments and a fixed maturity when the Company has
        the intention and the ability to hold these financial assets to
        maturity. These financial assets are measured at amortized cost.
        Short-term investments are classified as held-to-maturity or
        held-for-trading depending on their nature and the Company's intent.
        Short-term investments in debt securities are designated as held-to-
        maturity and are accounted for at amortized cost. As at the balance
        sheet date, interest income receivable of $0.7 million was included
        in cash equivalents.

        Other long-term liabilities are designated as held-to-maturity and
        accounted for at amortized cost. These liabilities are initially
        recognized at fair value and subsequently accounted for at amortized
        cost. The transitional adjustment reducing other long-term
        liabilities amounted to $0.9 million at the date of adoption and this
        was reduced by $0.4 million during the period ended September 30,
        2007.

        Available-for-sale

        AFS financial assets are those non-derivative financial assets that
        are designated as AFS financial assets, or that are not classified as
        loans and receivables, HTM investments or HFT financial assets. AFS
        financial assets are carried at fair value with unrealized gains and
        losses to be included in other comprehensive income until realized
        when the cumulative gain or loss is recognized in earnings. The
        Company has not designated any financial assets as AFS.

        Loans and receivables

        Loans and receivables are accounted for at amortized cost.

        Other liabilities

        Other liabilities are recorded at amortized cost.

        Transaction costs

        Transaction costs related to HTM financial assets and liabilities are
        netted against the carrying value of the liability and then amortized
        over the expected life of the instrument using the effective interest
        method. The deferred financing charges relating to the Company's
        long-term debt issue were reclassified to the carrying value of the
        long-term debt at the date of adoption.

        Embedded derivatives

        Derivatives embedded in other financial instruments or contracts are
        separated from their host contracts and accounted for as derivatives
        when their economic characteristics and risks are not closely related
        to those of the host contract. Embedded derivatives are measured at
        fair value with changes in fair value recognized in earnings. The
        Company does not currently have any outstanding contracts with
        embedded derivatives.

        Determination of fair value

        The fair value of a financial instrument is the amount of
        consideration that would be agreed between parties. The fair value of
        a financial instrument on initial recognition is the transaction
        amount given or received. Subsequent to initial recognition, the fair
        values of financial instruments that are quoted in active markets are
        based on bid prices for financial assets held and offer prices for
        financial liabilities. When independent prices are not available, the
        fair values are determined using valuation techniques using
        observable market data of similar instruments, discounted cash flow
        analysis and other valuation techniques commonly used by market
        participants. A number of factors such as bid-offer spread and credit
        profile are taken into account, as appropriate, when values are
        calculated using valuation techniques.

        (b) Section 1530 "Comprehensive Income"

        The Company determined that as at the date of adoption and for the
        year-to-date ended September 30, 2007 there were no material gains or
        losses that would be recorded in other comprehensive income or loss.

        Transitional adjustments

        The impact of adopting these standards as at April 1, 2007 is as
        follows:

                                             As at                     As at
                                          March 31,                  April 1,
                                              2007   Adjustment         2007
        ---------------------------------------------------------------------
        Assets
        Cash and cash equivalents           75,228          225       75,453
        Short-term investments              96,987        1,795       98,782
        Accounts receivable                  8,851       (2,020)       6,831
        Long-term debt deferred
         financing charges                   1,102       (1,102)           -
        Future income taxes - long-term     11,339         (352)      10,987

        Liabilities
        Other long-term liabilities         17,735         (926)      16,809
        Long-term debt                     149,794       (1,102)     148,692
        Minority interest                    8,828          230        9,058

        Shareholders' Equity
        Retained earnings                   86,645          344       86,989


        The following are the new accounting standards the Company plans to
        adopt effective fiscal year ending March 31, 2009. Management is
        evaluating the standards and their impact on the Company's
        consolidated financial statements.

        The CICA Handbook Section 3031 "Inventories" prescribes the
        accounting treatment for inventories. Specifically, the section
        provides guidance on the determination of cost and its subsequent
        recognition as an expense. Section 3031 applies to interim and annual
        financial statements for fiscal years beginning on or after
        January 1, 2008.

        CICA Handbook Section 1535 "Capital Disclosures" establishes
        standards for disclosing information about an entity's capital and
        how it is managed. This section applies to interim and annual
        financial statements relating to fiscal years beginning on or after
        October 1, 2007.

        CICA Handbook Section 3862 "Financial Instruments Disclosures" deals
        with additional required disclosures related to financial
        instruments. The section provides guidance on what disclosure should
        be included in the financial statements related to items such as
        significance of financial instruments to the financial position and
        performance of the Company and the nature and extent of risks
        associated with financial instruments. Section 3862 applies to
        interim and annual financial statements for fiscal years beginning on
        or after October 1, 2007.

    3.  Earnings per Common Share

        Earnings per common share are calculated based on the weighted
        average number of common shares outstanding, the dilution being due
        to issued common share options.

                                                         Basic       Diluted
        ---------------------------------------------------------------------
        Six months ended:
         September 30, 2007                         68,056,067    68,481,886
         September 30, 2006                         67,972,277    68,363,645

        Three months ended:
         September 30, 2007                         68,063,808    68,489,090
         September 30, 2006                         68,016,782    68,390,853


    4.  Supplementary Cash Flow Disclosures

        (a) Changes in non-cash operating working capital:

                                    Three months ended     Six months ended
                                       September 30          September 30
        ---------------------------------------------------------------------
                                      2007       2006       2007       2006
        ---------------------------------------------------------------------
        Accounts receivable             800      1,776      1,356      1,170
        Prepaid expenses                742        938       (632)      (922)
        Inventories                  29,749     28,963     13,653     24,858
        Other assets                    (26)        64        (14)       110
        Accounts payable and
         accrued liabilities         12,234      9,920       (436)    (2,942)
        Excise and other taxes
         payable                    (26,714)   (11,997)     1,939     18,844
        Income taxes payable         10,793      9,108     (5,163)     1,206
        ---------------------------------------------------------------------
                                     27,578     38,772     10,703     42,324
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        (b) Other

                                    Three months ended     Six months ended
                                       September 30          September 30
        ---------------------------------------------------------------------
                                      2007       2006       2007       2006
        ---------------------------------------------------------------------
        Income taxes paid            25,974     23,481     78,925     63,576
        Interest paid:
        - Long-term debt                  -          -      4,164      4,164
        - Other                          24         21         45         41


    5.  Capital Stock

        Authorized:  An unlimited number of common shares
        Issued:      68,063,808 (March 31, 2007 - 68,038,008) common shares

                                                     September 30   March 31
        (in thousands of dollars)                            2007       2007
        ---------------------------------------------------------------------
        Balance at beginning of period, April 1            47,533     45,347
        Issuance of shares                                    195      2,186
        ---------------------------------------------------------------------
        Balance at end of period                           47,728     47,533
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        In the second quarter of fiscal 2008, no shares (2007 - 5,400) were
        issued due to the exercise of stock options.

    6.  Share Option Plan

        A summary of the status of the Company's employee stock option plan
        as at the periods ended September 30, 2007 and September 30, 2006 and
        changes during the periods ended on those dates are presented below:

        ---------------------------------------------------------------------
                                        Three months ended September 30
        ---------------------------------------------------------------------
                                          2007                   2006
        ---------------------------------------------------------------------
                                             Weighted               Weighted
                                              average                average
                                             exercise               exercise
        Options                      Shares     price       Shares     price
        ---------------------------------------------------------------------
        Outstanding at beginning
         of period                1,282,600    14.359    1,330,800    14.270
        Exercised                         -         -       (5,400)   12.320
        ---------------------------------------------------------------------
        Outstanding at end
         of period                1,282,600    14.359    1,325,400    14.278
        ---------------------------------------------------------------------
        Options exercisable at
         period end               1,282,600    14.359    1,325,400    14.278
        ---------------------------------------------------------------------


        ---------------------------------------------------------------------
                                         Six months ended September 30
        ---------------------------------------------------------------------
                                          2007                   2006
        ---------------------------------------------------------------------
                                             Weighted               Weighted
                                              average                average
                                             exercise               exercise
        Options                      Shares     price       Shares     price
        ---------------------------------------------------------------------
        Outstanding at beginning
         of period                1,308,400    14.291    1,490,800    14.325
        Exercised                   (25,800)   10.878     (165,400)   14.488
        ---------------------------------------------------------------------
        Outstanding at end
         of period                1,282,600    14.359    1,325,400    14.278
        ---------------------------------------------------------------------
        Options exercisable at
         period end               1,282,600    14.359    1,325,400    14.278
        ---------------------------------------------------------------------

        Under the current share option plan as at September 30, 2007, a total
        of 181,800 (2007 - 181,800) common shares were issuable. Given the
        limited number of common shares available for issuance under the
        Option Plan, the annual grant of options was discontinued effective
        fiscal 2006. No options were forfeited during the period.

        The following table summarizes information about stock options
        outstanding as at September 30, 2007:

                                               Weighted average
                                       Number         remaining       Number
        Range of exercise price   outstanding  contractual life  exercisable
        ---------------------------------------------------------------------
        $8.825(1)                       3,000               3.3        3,000
        $11.500(1)                    143,000               4.1      143,000
        $12.320(2)                    315,600               6.1      315,600
        $14.080(1)                    261,400               4.6      261,400
        $16.125(1)                    248,000               5.2      248,000
        $16.620(2)                    311,600               7.1      311,600
        ---------------------------------------------------------------------
                                    1,282,600                      1,282,600
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        (1) Entitled upon exercise to a payment of $4.00 per share (amount
            equal to special dividends paid since date of option grant).
        (2) Entitled upon exercise to a payment of $1.50 per share (amount
            equal to special dividends paid since date of option grant).


    7.  Employee Future Benefit Expenses

        The Company's defined benefit pension plan and other benefits
        expenses are as follows:

                                       Three months ended   Six months ended
                                          September 30        September 30
        (in thousands of dollars)        2007      2006      2007      2006
        ---------------------------------------------------------------------
        Defined benefit plan expenses
          Pension benefit plans          1,028       730     1,839     1,163
          Other benefits                   881       840     1,761     1,679
        ---------------------------------------------------------------------
                                         1,909     1,570     3,600     2,842
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Company's defined contribution pension plan expenses in the
        quarter and year-to-date for fiscal year 2008 were $0.8 million and
        $1.8 million, consistent with the same periods of the prior fiscal
        year.

    8.  Seasonality

        The period between April and September has demonstrated stronger
        industry shipments than the period between October and March. This
        seasonality is likely due to smoking restrictions that are causing
        consumption variations between summer and winter seasons.

    9.  Litigation, Claims and Contingencies

        The Company and RBH are subject to a number of claims and potential
        claims, investigations and legislation, the nature and extent of
        which has been described in note 14 of the annual consolidated
        financial statements of the Company for the year ended March 31,
        2007. Other than as described below, there have been no developments
        of a material nature during the fiscal year-to-date concerning these
        matters.

        As previously disclosed, RBH is currently the subject of an ongoing
        investigation by the RCMP relating to RBH's sales of products
        exported from Canada in the period 1989 - 1996. This investigation,
        of which RBH was notified in January 2002, is related to allegations
        that tobacco products manufactured and exported by RBH were illegally
        smuggled back into Canada during this period without payment of
        applicable excise and tobacco taxes and duties. In February 2003, the
        RCMP filed criminal charges against another Canadian tobacco products
        supplier and certain related parties alleging violations of the
        Criminal Code (Canada) in connection with the sale and export of
        tobacco products during the early 1990s. The preliminary hearing
        concluded in 2006. In May 2007, the Ontario Court of Justice ordered
        that company and its former chief executive officer to stand trial.
        Charges against six other executives were dismissed. All parties are
        seeking judicial review of the judge's decision. Although no action
        has been commenced and no charges laid against the Company or RBH or
        any of their present or former employees, officers or directors, the
        Company and RBH believe that the RCMP and federal and provincial
        governments are contemplating laying charges or commencing other
        legal proceedings involving the Company or RBH and certain of their
        employees, officers and directors relating to or arising from these
        allegations.

        As previously disclosed, in January 2001, the Province of British
        Columbia initiated a lawsuit in the Supreme Court of British Columbia
        against RBH, the Company and numerous other Canadian and
        international tobacco companies and various tobacco trade
        associations seeking unspecified damages in an amount to cover the
        costs that allegedly have been, or will be, incurred by the
        Government of British Columbia in providing health care benefits to
        British Columbia residents who have allegedly suffered smoking-
        related illnesses. The action was brought pursuant to the Tobacco
        Damages and Health Care Costs Recovery Act (British Columbia). The
        Company was advised in September 2007 that the trial is currently
        scheduled for the fall of 2010.

        As previously disclosed, in June 2006 the Province of New Brunswick
        passed the Tobacco Damages and Health Care Costs Recovery Act. In
        September 2007, this Province announced that it had retained a
        consortium of lawyers on a contingency fee basis to act for it in a
        proposed action against tobacco product manufacturers to recover
        health care costs that allegedly have been, or will be, incurred by
        the Province in respect of alleged smoking-related illnesses.

        It is not possible to predict the outcome of legal claims or
        investigations, pending and future, against the Company or RBH. Legal
        proceedings and investigations are subject to many uncertainties, and
        it is possible that there will be adverse developments in the claims
        and investigations pending against the Company and RBH or that these
        claims and investigations, and any potential future claims and
        investigations, could be decided unfavourably or settled. An
        unfavourable outcome or settlement could involve significant damages
        or significant monetary payments which could have a significant
        adverse effect on the financial condition of the Company, and the
        Company and RBH may not have the resources to satisfy such claims.

        Additional information concerning legal matters affecting the Company
        and RBH are contained in the Company's filings with securities
        regulatory authorities including the Company's 2007 Annual Report and
        2007 Annual Information Form (in particular under "Legal
        Proceedings") which can be accessed at www.sedar.com or on the
        Company's website at www.rothmansinc.ca.

    10. Comparative Figures

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





For further information:

For further information: Investor contact: Mike Frater, Vice President
Finance & CFO, (416) 442-3659; Media contact: Karen Bodirsky, Director,
Corporate and Public Affairs, (416) 442-3660

Organization Profile

ROTHMANS INC.

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