Andrew Peller Limited (ADW) 2022年年度報告「TSX」.pdf

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1、OPERATIONAL HIGHLIGHTS FOR THE YEARS ENDED MARCH 31(in thousands of Canadian dollars,except per share amounts)2022 2021 Net sales 373,944 393,036 EBITA 39,188 63,046 Adjusted earnings*5,143 26,986 FINANCIAL POSITION Working capital 181,832 170,684 Total assets 558,071 542,521 Shareholders equity 265

2、,401 265,574 PER SHARE Net earnings per Class A Share-basic and diluted 0.29 0.65 DIVIDENDS Class A Shares,non-voting 0.246 0.218 Class B Shares,voting 0.214 0.190 MARKET VALUE Class A-HIGH 11.09 11.68 Class A-LOW 6.97 7.02 Class B-HIGH 13.96 14.68 Class B-LOW 8.75 7.40 ANALYTICAL INFORMATION Return

3、 on average shareholders equity 4.7%10.9%Return on average capital employed 3.8%10.1%Ratio of current assets to current liabilities 4.34:1 4.13:1 *Adjusted earnings is defined as net earnings excluding restructuring costs,gains(losses)on derivative financial instruments,other expenses(income),non-re

4、curring,non-operating(gains)and losses and the related income tax effect.CONTENTS REPORT TO SHAREHOLDERS 1 THE YEARS TOP AWARDS 3 MANAGEMENTS DISCUSSION&ANALYSIS 8 INDEPENDENT AUDITORS REPORT 21 CONSOLIDATED FINANCIAL STATEMENTS 25 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 TEN-YEAR SUMMARY 6

5、1 DIRECTORS&OFFICERS 63 SHAREHOLDER INFORMATION 64 EXCLUSIVE WINE OFFER FOR SHAREHOLDERS 65 1|ANDREW PELLER LIMITED 2022 Report to Shareholders We performed relatively well in fiscal 2022 despite the many challenges created by the COVID-19 pandemic.Certain trade channels were closed for parts of the

6、 year while supply chain disruptions and inflationary cost increases temporarily impacted our profitability.Despite these issues we generated solid growth in our open trade channels and continued to invest in our facilities,our technologies,and our people.As our markets gradually stabilize and we ca

7、pitalize on the investments and operating efficiencies implemented over the last year,we are confident we will emerge stronger and more resilient than ever before and return to our track record of growth.A Challenging Year Sales for the year ended March 31,2022 were impacted by the temporary closure

8、 of certain high margin trade channels,including restaurant,estate winery and export markets.And while we performed well in our markets that remained open during the pandemic,consolidated sales for the year were down 4.9%compared to fiscal 2021.It is important to highlight that fiscal 2021 was buoye

9、d by consumers increased purchases of our products over concern and uncertainty about whether alcohol beverage trade channels would remain open during the early months of the pandemic and that LCBO stores in Ontario were closed on Mondays through much of fiscal 2021,driving consumers to our higher m

10、argin retail outlets.These factors resulted in higher sales in fiscal 2021 that were not repeated in fiscal 2022.Profitability in fiscal 2022 was negatively affected by a number of factors,the majority of which we believe are short term in nature.Inflationary increases in the cost of labour and most

11、 production inputs,including imported wine,glass bottles,packaging and other materials,reduced our gross margin for the year.In addition,supply chain disruptions caused by the pandemic caused international freight and associated shipping costs to increase significantly while also creating challenges

12、 in sourcing product,packaging and raw materials.Overhead costs also increased as our staffing and marketing expenses returned to more normal levels after significant pandemic-related overhead reductions in fiscal 2021 implemented to conserve cash.Despite these factors,our balance sheet and financia

13、l position remained strong at year end.Long-term debt increased due to reduced cash from operations and increased investment in our facilities and operations.During fiscal 2022 we also invested in repurchasing and cancelling outstanding common shares under our Normal Course Issuer Bid,buying 598,600

14、 Class A shares for$5.2 million.At year end we had capacity on our revolving credit facility of approximately$158 million.High Value Assets Since the founding of the Company more than sixty-two years ago,the Company has acquired and developed a high-value and strategic portfolio of assets including

15、production facilities,estate wineries,and vineyards well-located in key wine producing regions across Canada.In keeping with our focus to capitalize on the highest and best use for our high-value asset base,in September 2021 we completed the sale of our Port Coquitlam,British Columbia property for n

16、et cash proceeds of$8.8 million,generating a realized gain of$7.5 million or$0.21 per Class A share.The property became available for sale in fiscal 2020 as a result of the consolidation of production facilities related to our personal winemaking business.In a similar strategy,in 2006,our Port Moody

17、 British Columbia facility,established in 1961,was closed and production was consolidated in our Kelowna British Columbia operation.We continue to evaluate the best strategy to unlock the value of this site in Port Moody.ANDREW PELLER LIMITED 2022|2 Looking Ahead Despite the challenges and issues fa

18、ced over the last two fiscal years,we look ahead more confident than ever before in our future.To mitigate inflationary pressures on operating costs,imported wine,raw material and packaging expenses,during the first quarter of fiscal 2023,we implemented certain price increases across our product lin

19、es.In addition,we have been executing numerous production efficiency and cost savings programs aimed at enhancing our operating margins.These programs include consolidating certain warehouses and distribution to increase efficiency,rationalizing stock keeping units(SKUs)and evaluating alternate sour

20、cing for glass bottles,while also capitalizing on our recently implemented Enterprise Resource Planning(ERP)system to improve inventory utilization,production scheduling,and logistics.Importantly,over the last five years we have invested more than$100 million in our facilities,technologies,and peopl

21、e,investments that have built a much stronger,scalable,and more resilient business platform for the future.To build sales and market share,we continue to plan and launch new products and product categories through our well-established trade channels.Our value-priced wine portfolio is being strengthe

22、ned with the introduction of new imported products from Australia,Italy and Chile,all packaged in the highly popular four-liter box.Four new Gretzky Cream liqueurs have been introduced,as well as a craft vodka and new premium whiskeys.The Companys direct-to-consumer wine clubs are leveraging the inc

23、rease in visits to the Companys estate wineries as the pandemic eases,generating strong sales growth for the Companys higher-margin premium and ultra-premium brands.Our results in the first quarter of the new fiscal year indicate that we are on the right track.Sales increased 5.7%in the quarter as w

24、e generated solid growth across the majority of our trade channels,including in markets that were partially closed in last years first quarter due to the pandemic-our ten estate wineries,sales to restaurants and the hospitality sector,and through our export business now that international travel has

25、 resumed.If we had been able to source product and materials restricted by the supply chain issues created by the pandemic,based on open orders in the quarter we believe our sales growth would have been even higher.We were also pleased to see our margins stabilize in the period and expect them to gr

26、adually improve going forward.In closing,the last two years operating under the COVID-19 pandemic have presented many unexpected and unique challenges to both our industry and the Company.The fact that we generated relatively strong performance in both years is a testament to our decades of experien

27、ce and our proven culture of innovation and performance.As the pandemic eases we are confident we will emerge stronger than ever before as we return to more normal business conditions.On behalf of the Board of Directors and all shareholders,I want to thank everyone at the Company for their extraordi

28、nary efforts and hard work over the last two years,contributions that enabled us to successfully work through the pandemic.We also thank our customers and consumers for their patience and loyalty.We remain committed to what we do best providing the best products at the best price.This commitment has

29、 driven our growth and success for over six decades and will continue to build value for our shareholders in the years ahead.John E.Peller,O.C.President and Chief Executive Officer 2021 TOP AWARDSBlack CellarBeverage Testing Institute World Value Wine Challenge Silver Medal 89 points Highly Recommen

30、ded,Best Buy,Top 5 in Category Shiraz Cabernet Blend No.5 Whisky Oak Aged Bronze Medal 84 points Recommended Shiraz Cabernet Blend No.19 Bronze Medal 84 points Recommended Malbec Blend No.3 Bronze Medal 81 points Recommended Malbec Merlot Blend No.13Good NaturedBeverage Testing Institute World Value

31、 Wine Challenge Silver Medal 87 points Highly Recommended,BestBuy,Top 5 in Category 2020 Crisp Chardonnay Silver Medal 85 points Highly Recommended 2020 Merlot Gamay Noir Bronze Medal 84 points Recommended 2020 Fresh WhiteNo Boats On SundayBeverage Testing Institute(BTI)Chicago,USA Silver Medal 89 p

32、oints Highly Recommended Best Buy 100%Ontario Hopped Cider Silver Medal 87 points Highly Recommended Best Buy 100%NS CiderAll Canadian Wine Championships Gold Medal-100%Ontario Hopped CiderPeller Estates WineryInternational Wine Challenge UK Shortlisted Sweet Wine Producer of the Year(results announ

33、ced June 30)Trophy Canadian Icewine 2019 AP Signature Series Riesling Icewine Gold Medal 96 points 2019 AP Signature Series Riesling Icewine Silver Medal 93 points 2019 AP Signature Series Riesling Bronze Medal 87 points 2018 AP Signature Series Cabernet Franc IcewineExperience Ros,California USA Go

34、ld Medal 91 points 2020 Peller Private Reserve Rose Gold Medal 90 points 2020 Peller Family Reserve RoseInternational Wine&Spirit Competition UK Gold Medal 97 points 2019 AP Signature Series Riesling Icewine Silver Medal 91 points 2018 AP Signature Series Cabernet Franc Icewine Bronze Medal 87 point

35、s 2019 AP Signature Series RieslingSunset International Wine Competition,California USA Best of Class Double Gold Medal 97 points 2019 Family Vineyards VQA Riesling Silver Medal 2019 Family Reserve VQA Chardonnay Silver Medal 2019 Family Reserve VQA Baco Noir Silver Medal 2019 Family Reserve VQA Mer

36、lot Silver Medal 2019 Family Reserve VQA Cabernet Franc Silver Medal 2019 Family Reserve VQA Cabernet Merlot Silver Medal 2019 Family Reserve VQA Winemakers RedDecanter World Wine Awards UK Platinum Medal 97 points 2019 Andrew Peller Signature Series Riesling Gold Medal 95 points 2019 Andrew Peller

37、Signature Series Riesling Icewine Bronze Medal 89 points 2018 Andrew Peller Signature Series Cabernet Franc IcewineAll Canadian Wine Championships Trophy Best Dessert Wine Double Gold Medal 2019 Andrew Peller Signature Series Riesling Icewine Double Gold Medal 2018 Private Reserve Cabernet Franc Gol

38、d Medal 2020 Private Reserve Sauvignon Blanc Bronze Medal 2019 Andrew Peller Signature Series Sauvignon BlancBeverage Testing Institute World Value Wine Challenge Silver Medal 89 points Highly Recommended,Best Buy,Top 5 in Category 2020 Family Reserve Sauvignon Blanc VQA Silver Medal 89 points Highl

39、y Recommended,Best Buy 2020 Family Reserve Rose Light VQA Silver Medal 87 points Highly Recommended,Best Buy,Top 5 in Category 2020 Family Reserve Chardonnay VQA Silver Medal 87 points Highly Recommended,Best Buy 2020 Family Reserve Riesling VQA Silver Medal 86 points Highly Recommended,Best Buy 202

40、0 Family Reserve Winemakers White VQA Silver Medal 86 points Highly Recommended,Best Buy 2020 Family Reserve Baco Noir VQA Silver Medal 85 points Highly Recommended 2020 Family Reserve Cabernet Sauvignon VQA Bronze Medal 84 points Recommended 2020 Family Reserve Rose VQAWineAlign National Wine Award

41、s of Canada#3 Top 10 Ontario Wineries#5 Top 25 Canadian Wineries Platinum Medal 94 points 2019 Private Reserve Cabernet Franc Platinum Medal 94 points 2019 Signature Series Riesling Gold Medal 92 points 2019 Signature Series Sauvignon Blanc Gold Medal 92 points 2018 Cabernet Franc Icewine Silver Med

42、al 90 points 2019 Private Reserve Gamay Noir Silver Medal 90 points 2019 Signature Series Cabernet Franc Silver Medal 90 points 2019 Riesling Icewine Silver Medal 90 points 2018 Signature Series Vidal Blanc Icewine Bronze Medal 88 points Ice Cuvee Rose Bronze Medal 88 points 2020 Private Reserve Sau

43、vignon Blanc Bronze Medal 88 points 2020 Private Reserve RoseEffervescents du Monde Best Sparkling Wines in the World,France Silver Medal Ice Cuvee RoseThe Global Riesling Masters UK Master 2019 Riesling Icewine Silver Medal 2019 Andrew Peller Signature Series RieslingSmall MercyBeverage Testing Ins

44、titute World Value Wine Challenge Silver Medal 89 points Highly Recommended,Best Buy,Top 10 in Category Upbeat White Bronze Medal 83 points Recommended Easy Going RedThirty Bench Wine MakersInternational Wine Challenge UK Silver Medal 91 points 2018 Small Lot Riesling Wild Cask Silver Medal 90 point

45、s 2018 Small Lot Riesling Wood Post Vineyard Bronze Medal 89 points 2018 Small Lot Riesling Triangle Vineyard Bronze Medal 88 points 2019 Winemakers Blend RieslingExperience Ros,California USA Silver Medal 2020 Thirty Bench RoseInternational Wine&Spirit Competition UK Bronze Medal 88 points 2017 Sma

46、ll Lot Cabernet Franc Bronze Medal 88 points 2018 Small Lot Riesling Wild Cask Bronze Medal 86 points 2018 Small Lot Riesling Wood Post Vineyard Bronze Medal 85 points 2019 Winemakers Blend RieslingDecanter World Wine Awards UK Silver Medal 92 points 2018 Small Lot Riesling Triangle Vineyard Silver

47、Medal 91 points 2019 Winemakers Blend Riesling Silver Medal 91 points 2018 Small Lot Riesling Wood Post Vineyard Silver Medal 90 points 2017 Small Lot Cabernet Franc Bronze Medal 88 points 2018 Small Lot Riesling Wild CaskAll Canadian Wine Championships Gold Medal 2019 Winemakers Blend Riesling Gold

48、 Medal 2018 Small Lot Riesling Triangle Vineyard Gold Medal 2019 Small Lot Pinot Noir Bronze Medal 2018 Small Lot Riesling Wood Post VineyardWineAlign National Wine Awards of Canada#4 Top 10 Ontario Wineries#9 Top 25 Canadian Wineries Gold Medal 92 points 2019 Small Lot Gewurztraminer Gold Medal 92

49、points 2019 Small Lot Riesling Steel Post Vineyard Gold Medal 92 points 2018 Small Lot Riesling Wild Cask Gold Medal 92 points 2018 Small Lot Riesling Wood Post Vineyard Gold Medal 92 points 2017 Small Lot Cabernet Franc Silver Medal 90 points 2019 Winemakers Blend Riesling Silver Medal 90 points 20

50、18 Small Lot Riesling Triangle Vineyard Silver Medal 90 points 2019 Small Lot Riesling Wild cask Silver Medal 90 points 2019 Small Lot Riesling Wood Post Vineyard Silver Medal 90 points 2019 Small Lot Pinot Noir Silver Medal 90 points 2017 Small Lot Cabernet Sauvignon Bronze Medal 88 points 2019 Sma

51、ll Lot Riesling Triangle Vineyard Bronze Medal 88 points 2019 Winemakers Blend Red Bronze Medal 88 points 2018 Effervescent RieslingONTARIO&N.S.The Global Riesling Masters UK Gold Medal 2019 Small Lot Riesling Wild Cask Silver Medal 2019 Small Lot Riesling Wood Post Vineyard Silver Medal 2019 Small

52、Lot Riesling Triangle Vineyard Bronze Medal 2019 Small Lot Riesling Steel Post VineyardGlobal Fine Wine Challenge(formerly Six Nations Wine Challenge)Australia Gold Medal 2019 Thirty Bench Winemakers Blend RieslingTrius WineryInternational Wine Challenge UK Bronze Medal 88 points 2019 Showcase Riesl

53、ing Ghost Creek Vineyard Bronze Medal 86 points 2019 Showcase Cabernet Franc Icewine Bronze Medal 85 points 2018 Showcase Riesling IcewineExperience Ros,California USA Silver Medal 2020 Trius RoseInternational Wine&Spirit Competition UK Gold Medal 95 points 2018 Showcase Riesling Icewine Silver Meda

54、l 90 points Trius Brut Bronze Medal 88 points Showcase Brut Nature Bronze Medal 88 points 2019 Showcase Cabernet Franc Icewine Bronze Medal 86 points 2018 Red The Icon Bronze Medal 85 points 2019 Showcase Riesling Ghost Creek VineyardDecanter World Wine Awards UK Gold Medal 95 points 2019 Showcase R

55、iesling Ghost Creek Vineyard Silver Medal 92 points 2018 Showcase Riesling Icewine Silver Medal 91 points 2019 Showcase Cabernet Franc Icewine Bronze Medal 89 points Brut Rose Bronze Medal 89 points Showcase Brut Nature Bronze Medal 87 points 2018 Red The IconAll Canadian Wine Championships Gold Med

56、al 2019 Showcase Late Harvest Vidal Silver Medal 2019 Distinction Chardonnay Barrel Fermented Silver Medal Brut Bronze Medal Showcase Brut Nature Bronze Medal 2019 Showcase Riesling Ghost CreekBeverage Testing Institute World Value Wine Challenge Silver Medal 89 points Highly Recommended,Best Buy 20

57、20 Rose Silver Medal 88 points Highly Recommended,Best Buy,Top 5 in Category 2020 Late Autumn Off Dry Riesling Silver Medal 87 points Highly Recommended,Best Buy 2020 Pinot Grigio Silver Medal 87 points Highly Recommended,Best Buy 2020 Riesling Silver Medal 85 points Highly Recommended 2020 Sauvigno

58、n Blanc Silver Medal 85 points Highly Recommended 2020 Cabernet FrancWineAlign National Wine Awards of Canada#2 Top 10 Ontario Wineries#4 Top 25 Canadian Wineries Platinum Medal 94 points 2019 Showcase Late Harvest Vidal Platinum Medal 94 points Trius Brut Rose Gold Medal 92 points 2019 Showcase Rie

59、sling Ghost Creek Vineyard Silver Medal 90 points Trius Brut Silver Medal 90 points Showcase Brut Nature Silver Medal 90 points 2020 Distinction Sauvignon Blanc Silver Medal 90 points 2019 Distinction Gamay Noir Silver Medal 90 points 2019 Red The Icon Silver Medal 90 points 2019 Reserve Syrah Silve

60、r Medal 90 points 2019 Showcase Cabernet Franc Red Shale Bronze Medal 88 points 2020 Rose Bronze Medal 88 points 2019 Distinction Divine White Bronze Medal 88 points 2020 Distinction Cabernet Sauvignon Bronze Medal 88 points 2019 Reserve Viognier Bronze Medal 88 points 2019 Showcase Pinot Noir Clark

61、 FarmEffervescents du Monde Best Sparkling Wines in the World,France Gold Medal Top 10 Brut RoseThe Global Riesling Masters UK Silver Medal 2019 Showcase Riesling Ghost Creek VineyardWayne Gretzky Brewery Beverage Testing Institute(BTI)Chicago,USA Gold Medal 94 points Exceptional Hazy IPA Gold Medal

62、 90 points Exceptional Premium Lager,Ontario Silver Medal 89 points Highly Recommended Hazy Pilsner Silver Medal 87 points Highly Recommended Pale Ale,Ontario Silver Medal 86 points Highly Recommended Session AleWayne Gretzky DistilleryCanadian Whisky Awards Victoria,BC Best Cream Whisky Gold Medal

63、No.99 Salted Caramel Canadian Cream Whisky Silver Medal No.99 Red Cask Whisky Silver Medal No.99 Ice Cask Whisky Silver Medal No.99 Maple Whisky Silver Medal No.99 Ninety Nine Proof Whisky Bronze Medal No.99 Canadian Cream WhiskySan Francisco World Spirits Competition Double Gold Medal Wayne Gretzky

64、 No.99 Red Cask Whisky Gold Medal Wayne Gretzky No.99 Ice Cask Whisky Gold Medal Wayne Gretzky No.99 Canadian Cream Whisky Gold Medal Wayne Gretzky No.99 Canadian Cream Salted Caramel Whisky Silver Medal Wayne Gretzky No.99 Maple Cask Whisky Bronze Medal Wayne Gretzky Ninety Nine Proof Small Batch C

65、anadian WhiskyAlberta Beverage Awards Judges Selection Red Cask WhiskyWayne Gretzky Estates NiagaraInternational Wine Challenge UK Gold Medal 95 points 2019 No.99 Vidal Icewine Gold Medal 95 points 2019 No.99 Cabernet Franc IcewineExperience Ros,California USA Bronze Medal 2020 Wayne Gretzky Estate

66、RoseInternational Wine&Spirit Competition UK Gold Medal 96 points 2019 No.99 Vidal Icewine Silver Medal 90 points 2019 No.99 Cabernet Franc IcewineSunset International Wine Competition,California USA Silver Medal 2019 Founders Series Sauvignon BlancDecanter World Wine Awards UK Platinum Medal 97 poi

67、nts 2019 Vidal Icewine Silver Medal 90 points 2019 Cabernet Franc IcewineAll Canadian Wine Championships Silver Medal 2020 Rose Bronze Medal 2019 Cabernet Franc IcewineBeverage Testing Institute World Value Wine Challenge Silver Medal 89 points Highly Recommended,Best Buy,Top 5 in Category 2020 Foun

68、ders Series Riesling Silver Medal 88 points Highly Recommended,Best Buy 2020 Founders Series Baco Noir Silver Medal 87 points Highly Recommended,Best Buy 2020 Founders Series Cabernet Merlot Silver Medal 86 points Highly Recommended,Best Buy 2020 Founders Series Pinot Grigio Silver Medal 86 points H

69、ighly Recommended,Best Buy 2020 Rose Bronze Medal 84 points Recommended 2020 Founders Series Chardonnay Bronze Medal 84 points Recommended 2020 Founders Series Sauvignon BlancWineAlign National Wine Awards of Canada Gold Medal 92 points 2019 Cabernet Franc Icewine Silver Medal 90 points 2019 Vidal I

70、cewine Silver Medal 90 points 2017 Signature Series Shiraz Cabernet Bronze Medal 88 points 2020 Signature Series White Bronze Medal 88 points 2020 Signature Series Baco NoirXOXOBeverage Testing Institute(BTI)Chicago,USA Silver Medal-86 points-XOXO Botanical Raspberry Rhubarb Silver Medal-85 points-X

71、OXO Botanical Peach Orange Blossom Silver Medal-85 points-XOXO Botanical Strawberry Hibiscus+370AWARDS NATIONALLY27%OVER LAST YEAR2021 TOP AWARDSBlack CellarBeverage Testing Institute World Value Wine Challenge Silver Medal 89 points Highly Recommended,Best Buy,Top 5 in Category Shiraz Cabernet Blen

72、d No.5 Whisky Oak Aged Bronze Medal 84 points Recommended Shiraz Cabernet Blend No.19 Bronze Medal 84 points Recommended Malbec Blend No.3 Bronze Medal 81 points Recommended Malbec Merlot Blend No.13Black Hills Estate WineryInternational Wine&Spirit Competition UK Silver Medal 91 points 2019 Chardon

73、nay Bronze Medal 87 points 2018 Per Se Bronze Medal 86 points 2018 AddendumDecanter World Wine Awards,UK Gold Medal 95 points 2018 Carmenere Silver Medal 93 points 2018 Addendum Silver Medal 92 points 2018 Syrah Bronze Medal 89 points 2018 Per Se Bronze Medal 87 points 2019 ChardonnayAlberta Beverag

74、e Awards Culinaire magazine Judges Selection 2018 Syrah Judges Selection 2019 ChardonnayBritish Columbia Lieutenant Governors Wine Awards Gold Medal 2020 Alibi Silver Medal 2019 Per SeWineAlign National Wine Awards of Canada#24 Top 25 Canadian Wineries Gold Medal 92 points 2018 Ipso Facto Gold Medal

75、 92 points 2019 Syrah Gold Medal 92 points 2019 Carmenere Silver Medal 90 points 2019 Per Se Silver Medal 90 points 2019 Chardonnay Bronze Medal 88 points 2020 Alibi Bronze Medal 88 points 2020 Roussanne Bronze Medal 88 points 2020 RoseGood Natured OkanaganSip Magazine,Best of the Northwest Double G

76、old Medal 2020 Crisp ChardonnayWineAlign National Wine Awards of Canada Gold Medal 92 points 2020 Petit Verdot Merlot Silver Medal 90 points 2020 Balanced Red Bronze Medal 88 points 2020 Crisp ChardonnayGray Monk Estate WineryExperience Ros,California USA Gold Medal 92 points Gray Monk Rose Gold Med

77、al 91 points Gray Monk Latitude 50 RoseInternational Wine&Spirit Competition UK Silver Medal 91 points 2018 Odyssey White Brut Bronze Medal 88 points 2018 Odyssey Pinot Noir Bronze Medal 88 points 2018 Odyssey Cabernet Franc Bronze Medal 88 points 2017 Odyssey Cabernet Sauvignon Bronze Medal 87 poin

78、ts 2019 Odyssey Pinot Gris Bronze Medal 87 points 2019 Chardonnay Unwooded Bronze Medal 87 points 2018 Odyssey Merlot Bronze Medal 86 points 2018 Odyssey Rose BrutSunset International Wine Competition,California USA Double Gold Medal 96 points 2019 Chardonnay Unwooded Gold Medal 93 points 2019 Siege

79、rrebe Silver Medal 2019 Monks Blend Silver Medal 2019 Kerner Silver Medal 2019 Pinot Blanc Silver Medal 2019 Pinot Auxerrois Silver Medal 2019 Riesling Silver Medal 2019 Gewurztraminer Silver Medal 2019 Cabernet Merlot Silver Medal 2019 Latitude 50 WhiteDecanter World Wine Awards,UK Bronze Medal 89

80、points 2018 Odyssey Meritage Bronze Medal 88 points 2018 Odyssey Cabernet Sauvignon Bronze Medal 88 points 2018 Odyssey Cabernet Franc Bronze Medal 88 points 2018 Odyssey Merlot Bronze Medal 88 points 2018 Odyssey Pinot Noir Bronze Medal 88 points 2018 Odyssey Rose Brut Bronze Medal 87 points 2018 O

81、dyssey White Brut Bronze Medal 87 points 2019 Odyssey Pinot Gris Bronze Medal 86 points 2019 Chardonnay UnwoodedAll Canadian Wine Championships Trophy Best Sparkling Wine Double Gold Medal 2018 Odyssey Rose Brut Gold Medal 2019 Merlot Gold Medal 2018 Odyssey Meritage Silver Medal 2020 Ehrenfelser Si

82、lver Medal 2019 Odyssey Pinot Gris Silver Medal 2020 Rose Bronze Medal 2020 GewurztraminerAlberta Beverage Awards Culinaire magazine Judges Selection 2020 Chardonnay Unwooded Judges Selection 2020 Pinot Auxerrois Judges Selection 2018 Merlot Judges Selection 2019 Monks BlendBritish Columbia Lieutena

83、nt Governors Wine Awards Gold Medal 2018 Odyssey Cabernet Sauvignon Silver Medal 2018 Odyssey Merlot Silver Medal 2018 Odyssey Rose BrutSip Magazine,Best of the Northwest Platinum Medal 2019 Monks Blend Platinum Medal 2020 Chardonnay Unwooded Silver Medal 2020 Pinot GrisWineAlign National Wine Award

84、s of Canada Silver Medal 90 points 2018 Odyssey White Brut Silver Medal 90 points 2018 Odyssey Rose Brut Silver Medal 90 points 2018 Odyssey Traditional Brut Silver Medal 90 points 2018 Odyssey Merlot Silver Medal 90 points 2018 Odyssey Cabernet Franc Bronze Medal 88 points 2018 Odyssey Cabernet Sau

85、vignon Bronze Medal 88 points 2020 Chardonnay Unwooded Bronze Medal 88 points 2020 Rose Bronze Medal 88 points 2020 Odyssey Pinot Gris Bronze Medal 2020 EhrenfelserNo Boats On SundayBeverage Testing Institute(BTI)Chicago,USA Gold Medal 90 points Exceptional Best Buy 100%BC CiderAlberta Beverage Awar

86、ds Culinaire magazine Judges Selection 100%BC Original CiderPeller Estates Winery OkanaganSunset International Wine Competition,California USA Gold Medal 91 points 2019 Family Reserve VQA Sauvignon Blanc Silver Medal 2019 Family Reserve VQA Cabernet Merlot Silver Medal 2019 Family Reserve VQA Winema

87、kers Red Silver Medal 2019 Family Reserve VQA ChardonnayAll Canadian Wine Championships Double Gold Medal 2019 Family Reserve VQA Chardonnay Gold Medal 2020 Family Reserve VQA Winemakers WhiteAlberta Beverage Awards Culinaire magazine Top Value 2018 Family Vineyards VQA Cabernet MerlotBritish Columb

88、ia Lieutenant Governors Wine Awards Silver Medal 2020 Family Reserve Sauvignon BlancSip Magazine,Best of the Northwest Gold Medal 2019 Family Reserve Winemakers RedWineAlign National Wine Awards of Canada Silver Medal 90 points 2020 Family Reserve Winemakers Red Bronze Medal 88 points 2020 Family Re

89、serve Winemakers White Bronze Medal 88 points 2020 Family Reserve Cabernet MerlotRed RoosterExperience Ros,California USA Silver Medal 2020 Red Rooster Rose Silver Medal Red Rooster Rose(sparkling)Decanter World Wine Awards,UK Gold Medal 95 points 2018 Rare Bird Series Syrah Silver Medal 92 points 2

90、017 Golden Egg Silver Medal 91 points 2018 Rare Bird Series Malbec Bronze Medal 87 points Brut RoseBRITISH COLUMBIABritish Columbia Lieutenant Governors Wine Awards Silver Medal 2020 Viognier Sip Magazine,Best of the Northwest Gold Medal 2020 Sauvignon Blanc Gold Medal 2020 Pinot GrisWineAlign Natio

91、nal Wine Awards of Canada Gold Medal 92 points 2018 Golden Egg Silver Medal 90 points Sparkling Brut Silver Medal 90 points 2020 Sauvignon Blanc Silver Medal 90 points 2020 Viognier Silver Medal 90 points 2020 Sur Lie Chardonnay Silver Medal 90 points 2020 Carbonic Merlot Malbec Bronze Medal 88 poin

92、ts 2020 Pinot Gris Bronze Medal 88 points 2020 Rose Bronze Medal 88 points 2018 Rare Bird Series Pinot Noir Bronze Medal 88 points 2019 Malbec Bronze Medal 88 points 2020 Pinot 3SandhillExperience Ros,California USA Silver Medal 2020 Sandhill Rose Terroir Driven WineDecanter World Wine Awards,UK Sil

93、ver Medal 91 points 2018 Single Vineyard Petit Verdot Silver Medal 91 points 2018 Single Vineyard TWO Bronze Medal 89 points 2018 Single Vineyard Syrah Bronze Medal 88 points 2018 Single Vineyard THREE Bronze Medal 88 points 2018 Single Vineyard Sangiovese Bronze Medal 88 points Sauvignon Blanc Terr

94、oir Driven WineAll Canadian Wine Championships Silver Medal 2020 Sangiovese Rose Single Block Bronze Medal 2020 Sovereign Opal Bronze Medal 2020 Pinot Gris Bronze Medal 2020 Rose Bronze Medal 2018 Single Vineyard SangioveseAlberta Beverage Awards Culinaire magazine Judges Selection 2020 Rose Terroir

95、 Driven Wine Judges Selection 2018 Cabernet Merlot Terroir Driven Wine Judges Selection 2019 Chardonnay Terroir Driven WineBritish Columbia Lieutenant Governors Wine Awards Silver Medal 2020 Pinot Gris Terroir Driven Wine Silver Medal 2020 Sovereign Opal Terroir Driven Wine Silver Medal 2019 Syrah T

96、erroir Driven Wine Silver Medal 2019 Cabernet Merlot Terroir Driven Wine Silver Medal 2020 Sangiovese Rose Single Block C9Sip Magazine,Best of the Northwest Silver Medal 2020 Rose Terroir Driven WineWineAlign National Wine Awards of Canada Silver Medal 90 points 2019 Cabernet Merlot Terroir Driven W

97、ine Bronze Medal 88 points 2020 Pinot Gris Terroir Driven Wine Bronze Medal 88 points 2020 Sovereign Opal Terroir Driven Wine Bronze Medal 88 points 2020 Sauvignon Blanc Terroir Driven Wine Bronze Medal 88 points 2019 Cabernet Franc Terroir Driven Wine Bronze Medal 88 points 2019 Harvest Series Char

98、donnay Bronze Medal 88 points 2020 Single Vineyard Sangiovese Rose Bronze Medal 88 points 2018 Single Vineyard Sangiovese Bronze Medal 88 points 2018 Single Vineyard TWO Bronze Medal 88 points 2018 Single Vineyard Petit Verdot Bronze Medal 88 points 2018 Single Vineyard MalbecSmall MercyBeverage Tes

99、ting Institute World Value Wine Challenge Silver Medal 89 points Highly Recommended,Best Buy,Top 10 in Category Upbeat White Bronze Medal 83 points Recommended Easy Going RedStone Road VineyardsSunset International Wine Competition,California USA Silver Medal 2019 Cabernet MerlotTinhorn Creek Vineya

100、rdsInternational Wine&Spirit Competition UK Silver Medal 91 points 2019 Oldfield Reserve Sauvignon Blanc Bronze Medal 88 points 2017 Oldfield Reserve MerlotDecanter World Wine Awards,UK Silver Medal 92 points 2019 Oldfield Reserve Viognier Silver Medal 90 points 2019 Oldfield Reserve Sauvignon Blanc

101、 Silver Medal 90 points 2017 Oldfield Reserve Merlot Silver Medal 90 points 2018 Oldfield Reserve Cabernet Franc Bronze Medal 88 points 2018 Oldfield Reserve SyrahAlberta Beverage Awards Culinaire magazine Best in Class 2019 Merlot Judges Selection 2019 GewurztraminerBritish Columbia Lieutenant Gove

102、rnors Wine Awards Silver Medal 2020 Pinot Gris Silver Medal 2020 Oldfield Reserve Sauvignon Blanc Silver Medal 2018 Oldfield Reserve Merlot Sip Magazine,Best of the Northwest Double Gold Medal 2020 Pinot Gris Silver Medal 2018 Oldfield Reserve Cabernet FrancWineAlign National Wine Awards of Canada G

103、old Medal 92 points 2019 Oldfield Reserve Chardonnay Gold Medal 92 points 2018 Oldfield Reserve Merlot Silver Medal 90 points 2018 Oldfield Reserve Syrah Silver Medal 90 points 2019 Chardonnay Bronze Medal 88 points 2020 Pinot Gris Bronze Medal 88 points 2020 Gewurztraminer Bronze Medal 88 points 20

104、19 Merlot Bronze Medal 88 points 2018 Oldfield Reserve Cabernet FrancWayne Gretzky Brewery Beverage Testing Institute(BTI)Chicago,USA Gold Medal 92 points Exceptional Pale Ale,British Columbia Silver Medal 89 points Highly Recommended Premium Lager,British ColumbiaWayne Gretzky Estates OkanaganExper

105、ience Ros,California USA Double Gold Best of Class 95 points 2020 Wayne Gretzky Okanagan Rose Best International Dry Rose 2020 Wayne Gretzky Okanagan RoseSunset International Wine Competition,California USA Silver Medal 2019 Pinot GrigioAll Canadian Wine Championships Bronze Medal 2020 RoseAlberta B

106、everage Awards Culinaire magazine Judges Selection Red Cask Whisky Judges Selection Session Ale BeerBritish Columbia Lieutenant Governors Wine Awards Gold Medal 2020 RoseWineAlign National Wine Awards of Canada Silver Medal 90 points 2020 Rose Bronze Medal 88 points 2020 Pinot Grigio Bronze Medal 88

107、 points 2019 Signature Series Cabernet Merlot Bronze Medal 88 points 2020 Founders Series The Great RedAll Canadian Wine ChampionshipsBEST SPARKLING WINE DOUBLE GOLDGray Monk Estate Winery 2018 Odyssey Rose BrutANDREW PELLER LIMITED 2022|8 MANAGEMENTS DISCUSSION&ANALYSIS FOR THE THREE MONTHS AND YEA

108、R ENDED MARCH 31,2022 The following managements discussion and analysis(“MD&A”)provides a review of corporate developments,results of operations,and financial position for the three months and year ended March 31,2022,in comparison with those for the three months and year ended March 31,2021,for And

109、rew Peller Limited(the“Company”or“APL”).This discussion is prepared as of June 15,2022 and should be read in conjunction with the audited consolidated financial statements and accompanying notes contained therein for the years ended March 31,2022 and 2021.Additional information relating to the Compa

110、ny,including the audited annual consolidated financial statements and Annual Information Form for the years ended March 31,2022,and March 31,2021,is available on .The financial years ending March 31,2023,March 31,2022,and March 31,2021 are referred to as“fiscal 2023,“fiscal 2022”and“fiscal 2021”resp

111、ectively.All dollar amounts are expressed in Canadian dollars unless otherwise indicated.Forward-Looking Information Certain statements in this MD&A may contain“forward-looking statements”within the meaning of applicable securities laws including the“safe harbour provisions”of the Securities Act(Ont

112、ario)with respect to APL and its subsidiaries.Such statements include,but are not limited to,statements about the growth of the business;its launch of new premium wines and craft beverage alcohol products;sales trends in foreign markets;its supply of domestically grown grapes;and current economic co

113、nditions.These statements are subject to certain risks,assumptions,and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements.The words“believe”,“plan”,“intend”,“estimate”,“expect”,or“anticipate”,and similar expressions,as well as fut

114、ure or conditional verbs such as“will”,“should”,“would”,“could”,and similar verbs often identify forward-looking statements.We have based these forward-looking statements on our current views with respect to future events and financial performance.With respect to forward-looking statements contained

115、 in this MD&A,the Company has made assumptions and applied certain factors regarding,among other things:future grape,glass bottle,and wine and spirit prices;its ability to obtain grapes,imported wine,glass,and other raw materials;fluctuations in foreign currency exchange rates;its ability to market

116、products successfully to its anticipated customers;the trade balance within the domestic Canadian and international wine markets;market trends;reliance on key personnel;protection of its intellectual property rights;the economic environment;the regulatory requirements regarding producing,marketing,a

117、dvertising,and labelling of its products;the regulation of liquor distribution and retailing in Ontario;the application of federal and provincial environmental laws;and the impact of increasing competition.These forward-looking statements are also subject to the risks and uncertainties discussed in

118、the“Risks and Uncertainties”section and elsewhere in this MD&A and other risks detailed from time to time in the publicly filed disclosure documents of the Company which are available at .Forward-looking statements are not guarantees of future performance and involve risks,uncertainties,and assumpti

119、ons which could cause actual results to differ materially from the conclusions,forecasts,or projections anticipated in these forward-looking statements.Because of these risks,uncertainties,and assumptions,you should not place undue reliance on these forward-looking statements.The Companys forward-lo

120、oking statements are made only as of the date of this MD&A,and except as required by applicable law,Andrew Peller Limited undertakes no obligation to update or revise these forward-looking statements to reflect new information,future events,or circumstances.Overview The Company is a leading producer

121、 and marketer of quality wines and craft beverage alcohol products in Canada.With wineries in British Columbia,Ontario,and Nova Scotia,the Company markets wines produced from grapes grown in Ontarios Niagara Peninsula,British Columbias Okanagan and Similkameen Valleys,and from vineyards around the w

122、orld.The Companys award-winning premium and ultra-premium Vintners Quality Alliance(“VQA”)brands include Peller Estates,Trius,Thirty Bench,Wayne Gretzky,Sandhill,Red Rooster,Black Hills Estate Winery,Tinhorn Creek Vineyards,Gray Monk Estate Winery,Raven Conspiracy and Conviction.Complementing these

123、premium brands are a number of popularly priced varietal brands including Peller Family Vineyards,Copper Moon,Black Cellar and XOXO.Hochtaler,Domaine DOr,Schloss Laderheim,Royal,and Sommet are the Companys key value priced brands.The Company imports wines from major wine regions around the world to

124、blend with domestic wine to craft these quality and value priced brands.The Company also produces craft beverage alcohol products,including No Boats on Sunday ciders and seltzers,and various beer,spirits and cream whisky products under the Wayne Gretzky No.99 brand.With a focus on serving the needs

125、of all wine consumers,the Company produces and markets premium personal winemaking products through its wholly-owned subsidiary,Global Vintners Inc.(“GVI”),the recognized leader in personal winemaking products.GVI distributes products through over 200 authorized retailers and more than 400 independe

126、nt retailers across Canada,with additional distributors in 9|ANDREW PELLER LIMITED 2022 the United States,the United Kingdom,New Zealand,Australia,and China.GVIs award-winning premium and ultra-premium winemaking brands include Winexpert,Vine Co.,Apres,LE,Passport Series,On the House,Wild Grapes,DIY

127、 My Wine Co.,Island Mist and Niagara Mist.The Company owns and operates 101 well-positioned independent retail locations in Ontario under The Wine Shop,Wine Country Vintners,and Wine Country Merchants store names.The Company also operates Andrew Peller Import Agency and The Small Winemakers Collecti

128、on Inc.,importers and marketing agents for premium wines from around the world.The Companys vision is to Pour Extraordinary into Everyday Life.The Company believes it achieves this objective by delivering to its customers and consumers the highest quality branded wines,spirits,refreshments,beer and

129、experiences at the best possible value.To meet this goal,the Company invests in improvements in the quality of grapes,wines,and other raw materials,its winemaking and distillation capabilities,sales and marketing initiatives,tourism and hospitality experiences,and its quality management programs.The

130、 Company is focused on initiatives to reduce costs and enhance its production efficiencies through a continual review of its operations and cost structure with a view to enhancing profitability.The Company continues to expand and strengthen its distribution to all customers and consumers through its

131、 extensive distribution network,which is supported by enhanced sales,marketing,and promotional programs.From time to time the Company also evaluates the potential for acquisitions and partnerships,both in Canada and internationally,to further complement its product portfolio and market presence.Rece

132、nt Events On June 15,2022,the Companys Board of Directors approved a common share dividend with no increase from fiscal 2022.The annual dividend on Class A Shares is$0.246 per share and the dividend on Class B Shares is$0.214.The Company has consistently paid common share dividends since 1979.APL cu

133、rrently designates all dividends paid as“eligible dividends”for purposes of the Income Tax Act(Canada)unless indicated otherwise.On June 8,2022,the Company announced the appointment of Paul Dubkowski as Chief Financial Officer and Executive Vice-President of Information Services effective July 11,20

134、22.Steve Attridge,current CFO and EVP,IT,will remain with the Company to transition with Paul and continue to lead the Companys digital and business process transformation.On September 28,2021,the Company completed the sale of its Port Coquitlam,British Columbia property and related assets for total

135、 proceeds of approximately$8.8 million,net of transaction costs,and generated a realized gain on sale of$7.5 million or$0.21 per Class A share.On March 4,2021,the Company announced its notice of intention to make a normal course issuer bid had been approved by the Toronto Stock Exchange.Under the is

136、suer bid the Company can purchase for cancellation up to 1,773,896 of its outstanding Class A non-voting shares,representing 5%of the Class A shares outstanding at the time,during the 12-month period from March 8,2021 to March 7,2022.As of March 7,2022,the Company had purchased 598,600 Class A non-v

137、oting common shares,at a weighted average price of$8.70 per Class A non-voting common share,for a total cash consideration of$5.2 million.ANDREW PELLER LIMITED 2022|10 Results of Operations For the years ended March 31,(in$000,except per share amounts)2022 2021 2020 Sales 373,944 393,036 382,306 Gro

138、ss margin(1)138,992 156,518 166,250 Gross margin(%of sales)37.2%39.8%43.5%Selling and administrative expenses 99,804 93,472 104,749 EBITA(1)39,188 63,046 61,501 Interest 9,337 8,108 8,107 Net unrealized(gain)loss on derivative financial instruments(2,269)(135)1,406 Gain on sale of assets held for sa

139、le(7,518)-Gain on debt modification and financing fees-(2,312)-Other expenses 1,210 1,770 1,769 Adjusted earnings(1)5,143 26,986 27,575 Net earnings 12,468 27,786 23,494 Earnings per share basic and diluted-Class A 0.29 0.65 0.55 Earnings per share basic and diluted-Class B 0.26 0.57 0.48 Dividend p

140、er share Class A(annual)0.246 0.218 0.215 Dividend per share Class B(annual)0.214 0.190 0.187(1)See“Non-IFRS Measures”section of this MD&A Sales for the year ended March 31,2022 were$374.0 million,down 4.9%from the prior year.When the pandemic was announced in March 2020 the Company saw an increase

141、in sales in fiscal 2021 as a result of changes in consumer purchasing patterns and uncertainty around trade channels for alcoholic beverages remaining open.Additionally,provincial liquor stores in Ontario were closed on Mondays for the majority of fiscal 2021,resulting in an increase in sales at the

142、 Companys retail locations.As pandemic restrictions ease,sales in these channels have normalized when compared to prior year.Government-mandated closures of restaurants and hospitality businesses were lifted in June 2021,however restrictions on capacity remained in place throughout fiscal 2022.As a

143、result,the recovery in the restaurant and hospitality industries lagged during the first half of fiscal 2022 when compared to the retail industry.Sales in restaurants,estate wineries and hospitality locations have begun to increase as the pandemic eases and consumers return to pre-pandemic activitie

144、s,and management expects this to continue.The Company defines gross margin(see“Non-IFRS Measures”section of this MD&A)as gross profit excluding amortization.Gross margin as a percentage of sales was 37.2%for the year ended March 31,2022 compared to 39.8%in the prior year.Gross margin has declined th

145、roughout fiscal 2022 due to higher imported wine and raw material costs and increased co-packing costs related to the Companys refreshment beverage categories.The cost of raw materials such as import wine,glass bottles and other packaging materials have increased due to inflationary pressures.Gross

146、margin is also being suppressed due to an increase in global supply chain costs such as international freight and associated shipping charges.Selling and administrative expenses increased in fiscal 2022 as the Company increased staffing and marketing expenses in preparation for more normal markets r

147、eturning as the impact of the COVID-19 pandemic eases.During the first six months of fiscal 2021,the Company laid off a significant part of its workforce due to government-mandated closures and reduced advertising and promotional spending to conserve cash in response to the pandemic.In addition,cert

148、ain start-up costs were incurred in fiscal 2022 related to the acquisition of the Riverbend Inn and Vineyard,which opened on June 19,2021.As a percentage of sales,selling and administrative expenses were 26.7%in fiscal 2022 compared to 23.8%in the prior year.As activity in the hospitality,licensee a

149、nd export channels increases,the Company expects selling and administrative expenses will trend to pre-pandemic levels as a percentage of sales.Earnings before interest,amortization,gain on sale of assets held for sale,net unrealized gains and losses on derivative financial instruments,other(income)

150、expenses,gain on debt modification net of financing fees,and income taxes(“EBITA”)(see“Non-IFRS Measures”section of this MD&A)were$39.2 million for the year ended March 31,2022 11|ANDREW PELLER LIMITED 2022 compared to$63.0 million in the prior year.The decline in EBITA in fiscal 2022 is due to lowe

151、r sales,higher cost of goods sold and higher selling and administrative expenses compared to the prior year.Interest expense in fiscal 2022 increased compared to the prior year due higher debt levels resulting primarily from capital investments in the Companys operations and properties and higher ov

152、erall interest rates.The Company recorded a net unrealized non-cash gain in fiscal 2022 of$2.3 million related to mark-to-market adjustments on interest rate swaps and foreign exchange contracts compared to an unrealized gain of$0.1 million in the prior year.The change is largely due to a gain on th

153、e interest rate swap as Canadian interest rates increase.The Company has elected not to apply hedge accounting and accordingly the change in fair value of these financial instruments is reflected in the Companys consolidated statement of earnings each reporting period.These instruments are considere

154、d to be effective economic hedges and are expected to mitigate the short-term volatility of changing foreign exchange and interest rates.On September 28,2021 the Company recorded a realized gain of$7.5 million on the sale of its Port Coquitlam,British Columbia property and related assets.The Company

155、 amended and restated its debt facilities on December 8,2020.Management assessed the amendments and determined that these amendments constituted a modification of long-term debt resulting in a gain on modification of$2.9 million for the year ended March 31,2021,offset by financing costs of$0.6 milli

156、on.Net earnings for the year ended March 31,2022 were$12.5 million or$0.29 per Class A Share compared to$27.8 million or$0.65 per Class A Share in the prior year.Quarterly Performance The following table outlines key quarterly highlights.(in$000,except per share amounts)Q4 22 Q3 22 Q2 22 Q1 22 Q4 21

157、 Q3 21 Q2 21 Q1 21 Sales 78,838 103,485 99,224 92,397 79,126 111,060 104,410 98,440 Gross margin(1)23,029 36,294 42,408 37,261 28,089 41,537 44,165 42,727 Gross margin(%of sales)29.2%35.1%42.7%40.3%35.5%37.4%42.3%43.4%EBITA(1)(630)12,084 15,821 11,913 1,815 16,223 22,438 22,570 Interest 2,162 2,424

158、2,478 2,273 2,619 1,637 1,813 2,039 Gain on debt modification and financing fees -(2,312)-Net unrealized(gain)loss on financial instruments (485)(359)(1,037)(388)(495)170 (540)730 Gain on sale of assets held for sale-(7,518)-Other expenses(income)946(103)26 341 742 148 195 685 Adjusted earnings(loss

159、)(1)(6,678)2,765 5,801 3,255(6,145)8,159 12,419 12,553 Net earnings(loss)(7,019)3,107 13,090 3,290(6,328)10,236 12,674 11,204 E.P.S.Class A basic and diluted$(0.17)$0.07$0.31$0.08$(0.15)$0.24$0.30$0.26 E.P.S.Class B basic and diluted$(0.14)$0.06$0.27$0.07$(0.13)$0.21$0.26$0.23(1)See“Non-IFRS Measure

160、s”section of this MD&A The second and third quarters of the Companys fiscal year are historically the largest due to increased activity at the Companys estate properties and increased consumer purchasing of the Companys products during the holiday season.However,the COVID-19 pandemic has,and may con

161、tinue to cause fluctuations in the Companys results and consequently,quarterly results may not follow historical trends.Sales for the three months ended March 31,2022 were consistent with the prior years fourth quarter.The recovery in restaurant,estate winery and hospitality sales has offset the nor

162、malization of retail sales.Gross margin(see“Non-IFRS Measures”section of this MD&A)was 29.2%in the fourth quarter of fiscal 2022,compared to 35.5%for the fourth quarter ANDREW PELLER LIMITED 2022|12 of fiscal 2021 as raw material and supply chain costs have increased significantly when compared to p

163、rior year as described above.Selling and administrative expenses decreased as a percentage of sales for the three months ended March 31,2022 compared to the prior years fourth quarter as activity in the restaurant and hospitality channels has increased as the pandemic eases.The Company incurred a ne

164、t loss for the three months ended March 31,2022 of$7.0 million or a loss of$0.17 per Class A Share compared to a net loss of$6.3 million or$0.15 per Class A Share in the fourth quarter of fiscal 2021.The Company incurred an adjusted loss(see“Non-IFRS Measures”section of this MD&A)of$6.7 million for

165、the three months ended March 31,2022 compared to an adjusted loss of$6.1 million in the prior year.Liquidity and Capital Resources As at (in$000)March 31,2022 March 31,2021 March 31,2020 Current assets 236,213 225,302 214,114 Property,plant,and equipment 209,015 206,920 203,549 Right-of-use assets 1

166、5,215 17,011 17,551 Intangible assets 43,990 39,650 25,067 Goodwill 53,638 53,638 53,638 Total assets 558,071 542,521 513,919 Current liabilities 54,381 54,618 130,460 Long-term debt 192,065 174,544 95,515 Long-term derivative financial instruments -717 1,932 Lease obligations 12,193 13,987 14,802 P

167、ost-employment benefit obligations 1,605 3,316 3,649 Deferred income taxes 32,426 29,765 22,038 Shareholders equity 265,401 265,574 245,523 Total liabilities and shareholders equity 558,071 542,521 513,919 The change in current assets as at March 31,2022 compared to March 31,2021 reflects a decrease

168、 in accounts receivable due offset by higher levels of inventory due to lower sales in the fourth quarter of fiscal 2022 compared to fiscal 2021.Inventory is dependent on domestically grown grapes that are used in the sale of premium and ultra-premium wines that are held for a longer period than imp

169、orted wine.These wines are typically aged for one to three years before they are sold.The cost of producing wine from domestically grown grapes is also significantly higher than wine purchased on international markets.Accounts receivable are predominantly with provincial liquor boards and,to a lesse

170、r extent,licensed establishments and independent retailers of personal winemaking products.The Company had$15.3 million of accounts receivable with provincial liquor boards at March 31,2022,all of which is expected to be collectible.The balance represents amounts due from licensees,export customers,

171、and independent retailers of personal winemaking products.The amount of accounts receivable that was 30 days past due was$1.4 million at March 31,2022.Against these amounts an expected credit loss of$0.3 million has been provided which the Company has determined based on a reasonable estimate of lif

172、etime expected credit losses for trade receivable.Property,plant and equipment at March 31,2022 increased by$2.1 million compared to March 31,2021.This is due to$15.6 million of additions in the Companys properties and operations,offset by$13.5 million in depreciation.Intangible assets at March 31,2

173、022 increased by$4.3 million,attributed to$7.8 million of software additions,offset by$3.5 million of amortization.Right-of-use assets decreased from$17.0 million as at March 31,2021 to$15.2 million as at March 31,2022.The decrease of$1.8 million was primarily due to lease additions and modification

174、s of$2.6 million,offset by depreciation of$4.4 million.13|ANDREW PELLER LIMITED 2022 Current liabilities were$54.4 million as at March 31,2022,consistent with March 31,2021.Accounts payable and accrued liabilities increased by$0.9 million due to the timing of payments at year-end.This increase was o

175、ffset by a decrease of$1.6 million in derivative financial instruments as a result of fair value changes.Long-term debt increased to$192.1 million at March 31,2022 from$174.5 million at March 31,2021,due to a reduction in cash from operations and increased investment in the Companys properties and o

176、perations.The Companys debt to equity ratio was 0.72:1 at March 31,2022 compared to 0.66:1 at March 31,2021.At March 31,2022,the Company had unutilized debt capacity in the amount of$157.6 million on its credit facility.On November 10,2021,the Company amended and restated its debt facility to revise

177、 its interest charge coverage ratio financial covenant for the three-month period ended December 31,2021.On December 22,2021,the Company obtained a waiver from its lenders in connection with the financial covenants of its credit agreement for the fiscal quarter ended December 31,2021.Furthermore,on

178、February 9,2022,the Company amended its credit agreement to amend financial covenants for reporting periods from March 31,2022 to the end of the term of the credit facility.The financial covenants for the reporting periods from June 30,2022 to the end of the term of the credit facility were further

179、amended on June 15,2022.This amendment also contains post-closing covenants which require the Company to provide additional first ranking security in favour of the lenders on real property with a certain fair market value by a specified date.Management expects to generate sufficient cash flow from o

180、perations to meet its debt servicing and working capital requirements over the short-term through strong management of working capital and prioritization of capital expenditures.The Company regularly reviews all of its assets to ensure appropriate returns on investment are being achieved and that th

181、ey fit with the Companys long-term strategic objectives.For the year ended March 31,2022,the Company generated cash from operating activities,after changes in non-cash working capital items,of$15.6 million compared to$41.1 million in the prior year.The reduction in cash provided by operating activit

182、ies is primarily due to impact of COVID-19 on the operations of the Company during 2021 compared to 2022,compounded by higher raw materials costs and global supply chain costs due to inflationary pressures.Cash used in investing activities decreased by$22.4 million.This is primarily due to the sale

183、of the Port Coquitlam property resulting in net proceeds of$8.8 million,as well as a reduction in additions for both property,plant and equipment and intangible assets.Financing activities for the year ended March 31,2022 include the payment of dividends,principal repayment of lease obligations and

184、the purchase of Class A shares under the Companys approved issuer bid.Working capital at March 31,2022 was$181.8 million compared to$170.7 million at March 31,2021.Shareholders equity at March 31,2022 was$265.4 million or$6.15 per common share compared to$265.6 million or$6.08 per common share at Ma

185、rch 31,2021.The following table outlines the Companys contractual obligations as at March 31,2022:The Companys obligations under its interest rate swaps and foreign exchange forward contracts are stated above on a gross basis rather than net of the corresponding contractual benefits.(in$000)5 Years

186、Total Long-term debt-192,132-192,132Leases and royalties 6,0278,4515,07418,96038,512Service agreements 2,2932,281260-4,834Grape,bulk wine and whisky purchase contracts 101,40795,82463,74576,456337,432Packaging purchase contracts 41,09415,485-56,579 150,821314,17369,07995,416629,489Interest rate swap

187、 904-904Foreign exchange forwards 22,948-22,948Total contractual obligations 174,673314,17369,07995,416653,341ANDREW PELLER LIMITED 2022|14 Common Shares Outstanding The Company is authorized to issue an unlimited number of Class A and Class B Shares.Class A Shares are non-voting and are entitled to

188、 a dividend in an amount equal to 115%of any dividend paid or declared on Class B Shares.Class B Shares are voting and convertible into Class A Shares on a one-for-one basis.Shares outstanding March 31,2022 March 31,2021 March 31,2020 Class A Shares 34,978,011 35,525,639 35,403,767 Class B Shares 8,

189、144,183 8,144,183 8,191,883 Total 43,122,194 43,669,822 43,595,650 On March 4,2021 the Company announced its notice of intention to make a normal course issuer bid had been approved by the Toronto Stock Exchange.Under the bid the Company can purchase for cancellation up to 1,773,896 of its outstandi

190、ng Class A non-voting shares,representing 5%of the Class A shares outstanding,during the 12-month period from March 8,2021 to March 7,2022.As of March 7,2022,the Company had purchased 598,600 Class A shares at a weighted average price of$8.70 per share for a total of$5.2 million.Strategic Outlook an

191、d Direction Andrew Peller Limited is committed to a strategy of growth that focuses on the expansion of its core business as a producer and marketer of quality wines and wine related products through concentrating on and developing leading brands that meet the needs of consumers and customers.Over t

192、he long term the Company believes higher-priced premium wine and spirits sales will continue to grow in Canada,generating higher margins and increased profitability compared to its lower-priced products.The Company has also entered the spirits and craft beer categories,through its strategic alliance

193、 with Wayne Gretzky,and has introduced ciders and seltzers through its own brand labels.The Company has focused its product development and sales and marketing initiatives by capitalizing on alcohol consumption trends and expects to see continuing sales growth as markets continue to normalize after

194、COVID-19.The Company will continue to closely monitor its costs and will react to changes to risks and opportunities in the marketplace.The Company will continue to expand product offerings outside the traditional table wine segment into other alcoholic beverages where it is able to leverage its det

195、ailed knowledge of growth opportunities and operational advantages in the Canadian market.The Company will also make packaging design changes that are more appealing to its target markets and are consistent with its initiative to be more environmentally friendly.Increased focus will be made on coord

196、ination between the Companys business-to-consumer trade channels to provide customers with a more intimate awareness of its broad product portfolio.New product launches and key brands through all of the Companys distribution channels will continue to receive increased marketing and sales support.Fro

197、m time to time the Company evaluates investment opportunities,including acquisitions,which support its strategic direction.The Company believes that sales will grow over the long term due to strong positioning of key brands,the continued launch of new and innovative products in both its core wine bu

198、siness and in new product categories,as well as overall growth in the Canadian beverage alcohol market.The Company expects to continue to invest in capital expenditures to improve efficiencies,increase capacity,support its ongoing commitment to producing the highest-quality wines and spirits,and imp

199、rove productivity.Risks and Uncertainties The Companys sales of wine and craft beverage alcohol products are affected by general economic conditions and social trends such as changes in discretionary consumer spending and consumer confidence,future economic conditions,changes to inter-provincial tra

200、de laws,tax laws,the prices of its products and health trends.For the year ended March 31,2022,the COVID-19 pandemic continued to impact consumer purchasing patterns resulting in fluctuations in the Companys results,however,the Company continues to generate operating cash flows to meet short-term wo

201、rking capital needs.The Company is also experiencing uncertainty with respect to raw materials and import wine costs due to inflation,and component shortages because of the global supply chain crisis.The impact on the financial results of the Company will depend on managements ability to successfull

202、y mitigate against these risks.In the first quarter of fiscal 2023,the Company has implemented price increases that are expected to partially offset inflationary pressures on margin and is also exploring opportunities to implement further increases should inflation continue to rise.The Company is al

203、so executing cost savings 15|ANDREW PELLER LIMITED 2022 initiatives to mitigate against increasing supply chain costs and supply constraints through alternative sourcing arrangements for components and the negotiation of lower outbound freight costs.The Government of Ontario has announced its intent

204、ion to modernize the rules for selling beverage alcohol in Ontario by expanding retail distribution in the province.This could represent a significant change to the retail landscape in Ontario with the goal of providing more convenience and choice to consumers.While there has not been a proposal by

205、the Government of Ontario regarding implementation,the Company is working closely with its industry partners to mitigate the risks that this transition may have on its financial results.The Canadian wine market continues to be the target of low-priced imported wines from regions and countries that s

206、ubsidize wine production and grape growing as well as providing sizeable export incentives on subsidies.Many of these countries and regions prohibit or restrict the sale of imported wine in their own domestic markets.The Company,along with other members of the Canadian wine industry,are working with

207、 the Canadian government to improve support for the domestic industry.The Company operates in a highly competitive industry and the dollar amount and unit volume of sales could be negatively impacted by its inability to maintain or increase prices,changes in geographic or product mix,a general decli

208、ne in beverage alcohol consumption,or the decision of retailers or consumers to purchase competitors products.Retailer and consumer purchasing decisions are influenced by,among other things,the perceived absolute or relative overall value of the Companys products including their quality or pricing c

209、ompared to competitive products.Unit volume and dollar sales could also be affected by purchasing,financing,operational,advertising,or promotional decisions made by provincial agencies and retailers which could affect supply of or consumer demand for the Companys products.APL could also experience h

210、igher than expected selling and administrative expenses if it finds it necessary to increase the number of its personnel,advertising,or promotional expenditures to maintain its competitive position.APL expects to increase sales in Canada principally through the sale of VQA wines,and as a result,is d

211、ependent on the quality and supply of domestically grown premium quality grapes.If any of the Companys vineyards or the vineyards of our grape suppliers experience adverse weather variations,natural disasters,pestilence,other severe environmental problems,or other occurrences,APL may not be able to

212、secure a sufficient supply of grapes,a situation which could result in a decrease in production of certain products from those regions and/or result in an increase in costs.The inability to secure premium quality grapes could impair the ability of the Company to supply certain wines to its customers

213、.When environmental risks such as wildfires occur,the Companys viticultural teams have internal processes to ensure the Companys vineyards are protected.This may include the use of technology and fire suppression activities.The Companys winemaking teams are also able to monitor the quality of the gr

214、apes and use enhanced processing technology to minimize the risk of smoke taint.APL has also developed programs to maintain access to a consistent supply of premium quality grapes and wine.The price of grapes is determined through negotiations with the Ontario Grape Growers Marketing Board in Ontari

215、o and with independent growers in British Columbia.Foreign exchange risk exists on the purchases of bulk wine and concentrate that are primarily made in United States dollars,Euros,and Australian dollars.Fluctuating foreign currencies may have a positive or negative impact on gross margins(see“Non-I

216、FRS Measures”section of this MD&A),however,the Company believes the impact on gross margin will be largely offset by its continued ability to leverage scale and successful cost control initiatives to reduce other cost of goods sold.The Companys strategy is to hedge approximately 50%-80%of its foreig

217、n exchange requirements throughout the fiscal year and to regularly review its on-going requirements.The Company does not enter into foreign exchange contracts for trading or speculative purposes and contracts are reviewed periodically.As at March 31,2022,the Company has forward foreign currency con

218、tracts to buy$15.0 million US at rates averaging$1.26,EUR1.4 million at rates averaging$1.41 and$2.4 million AUD at a rate of$0.91.These contracts mature at various dates to September 2022.Based on the Companys forecasts for foreign currency purchases and the amount of foreign exchange forward contr

219、acts outstanding at March 31,2022,each one percent change in the respective foreign currency exchange rates would not result in a material impact on the Companys net earnings.The Company purchases glass,bag in box,tetra paks,and other components used for bottling and packaging.The largest component

220、of packaging is glass,of which there are few domestic or international suppliers.There is currently only one commercial supplier of glass in Canada that is able to supply glass to APLs specifications.Any interruption in supply could have an adverse impact on the Companys ability to supply its market

221、s.APL has taken steps to reduce its dependence on domestic suppliers through the development of relationships with several international producers of glass and through carrying increased inventory of selected bottles.ANDREW PELLER LIMITED 2022|16 The Company operates in a highly regulated industry w

222、ith requirements regarding the production,distribution,marketing,advertising,and labelling of wine and spirits.These regulatory requirements may inhibit or restrict the Companys ability to maintain or increase strong consumer support for and recognition of its brands and may adversely affect APLs bu

223、siness strategies and results of operations.Privatization of liquor distribution and retailing has been implemented in varying degrees across the country.The recent regulatory changes relating to privatization in Ontario and sales through grocery outlets remains a risk to the Company through its imp

224、act on the Companys retail operations.The wine industry and the domestic and international markets in which the Company operates are consolidating.This has resulted in fewer,but larger,competitors who have increased their resources and scale.The increased competition from these larger market partici

225、pants may affect the Companys pricing strategies and create margin pressures resulting in potentially lower revenues.Competition also exerts pressure on existing customer relationships which may affect APLs ability to retain existing customers and increase the number of new customers.The Company has

226、 worked to improve production efficiencies,selectively increase pricing to increase gross margin(see“Non-IFRS Measures”section of this MD&A)and implement a higher level of promotion and advertising activity to remain competitive.APL and other wine industry participants also generally compete with ot

227、her alcoholic beverages for consumer acceptance,loyalty,and shelf space.No assurance can be given that consumer demand for wine and premium wine products will continue at current levels in the future.Federal and provincial governments impose excise,other taxes,and mark-ups on beverage alcohol produc

228、ts which have been subject to change.Significant increases in excise and other taxes on beverage alcohol products could materially and adversely affect the Companys financial condition or results of operations.Federal and provincial governmental agencies extensively regulate the beverage alcohol pro

229、ducts industry concerning such matters as licensing,trade practices,permitted and required labelling,advertising,and relations with consumers and retailers.Certain federal and provincial regulations also require warning labels and signage.New or revised regulations,increased licensing fees,requireme

230、nts,taxes,or mark-ups could also have a material adverse effect on the Companys financial condition or results of operations.The Companys future operating results also depend on the ability of its officers and other key employees to continue to implement and improve its operating and financial syste

231、ms and manage the Companys significant relationships with its suppliers and customers.The Company is also dependent upon the performance of its key senior management personnel.The Companys success is linked to its ability to identify,hire,train,motivate,promote,and retain highly qualified management

232、.Competition for such employees is intense and there can be no assurances that the Company will be able to retain current key employees or attract new key employees.The Company has certain defined benefit pension plans.The expense and cash contributions related to these plans depend on the discount

233、rate used to measure the liability to pay future benefits and the market performance of the plan assets set aside to pay these benefits.The Companys Pension Committee reviews the performance of plan assets on a regular basis and has a policy to hold diversified investments.Nevertheless,a decline in

234、long-term interest rates or in asset values could increase the Companys costs related to funding the deficit in these plans.The competitive nature of the wine industry internationally has resulted in the discounting of retail prices of wine in key markets such as the United States and the United Kin

235、gdom.Although significant price discounting may occur in Canada beyond current levels,the Company believes that its product quality,advertising,and promotional support along with its competitive pricing strategies will effectively mitigate the impact on the Company.The Company considers its trademar

236、ks,particularly certain brand names and product packaging,advertising and promotion design,and artwork to be of significant importance to its business and ascribes a significant value to these intangible assets.APL relies on trademark laws and other arrangements to protect its proprietary rights.The

237、re can be no assurance that the steps taken by APL to protect its intellectual property rights will preclude competitors from developing confusingly similar brand names or promotional materials.The Company believes that its proprietary rights do not infringe upon the proprietary rights of fourth par

238、ties,but there can be no assurance in this regard.As an owner and lessee of property the Company is subject to various federal and provincial laws relating to environmental matters.Such laws provide that the Company could be held liable for the cost of removal and remediation of hazardous substances

239、 on its properties.The failure to remedy any situation that might arise could lead to claims against the Company.A perceived failure to maintain high ethical,social,and environmental standards could have an adverse effect on the Companys reputation.17|ANDREW PELLER LIMITED 2022 The success of the Co

240、mpanys brands depends upon the positive image that consumers have of those brands.Contamination of APLs products,whether arising accidentally or through deliberate fourth-party action,or other events that harm the integrity or consumer support for those brands could adversely affect their sales.Cont

241、aminants in raw materials purchased from fourth parties and used in the production of the Companys products or defects in the fermentation process could lead to low product quality as well as illness among,or injury to,consumers of the products and may result in reduced sales of the affected brand o

242、r all of the Companys brands.Non-IFRS Measures The Company utilizes EBITA(defined as earnings before interest,amortization,gain on sale of assets held for sale,net unrealized gains and losses on derivative financial instruments,other(income)expenses,gain on debt modification net of financing fees,an

243、d income taxes)to measure its financial performance.EBITA is not a recognized measure under IFRS;however,management believes that EBITA is a useful supplemental measure to net earnings as it provides readers with an indication of earnings available for investment prior to debt service,capital expend

244、itures,and income taxes,as well as providing an indication of recurring earnings compared to prior periods.The Company calculates EBITA as follows.For the three months and year ended March 31,Three Months Year(in$000)2022 2021 2022 2021 Net earnings(loss)(7,019)(6,328)12,468 27,786 Add:Interest 2,16

245、2 2,619 9,337 8,108 Income taxes(1,773)153 4,607 9,667 Amortization of plant and equipment used in production 2,223 2,265 9,116 10,138 Amortization of equipment and intangibles used in selling and administration 3,316 2,859 12,237 8,024 Net unrealized gains on derivative financial instruments(485)(4

246、95)(2,269)(135)Gain on debt modification-(2,312)Gain on sale of assets held for sale-(7,518)-Other expenses 946 742 1,210 1,770 EBITA(630)1,815 39,188 63,046 Readers are cautioned that EBITA should not be construed as an alternative to net earnings determined in accordance with IFRS as an indicator

247、of the Companys performance or to cash flows from operating,investing,and financing activities as a measure of liquidity and cash flows.The Company utilizes gross margin(defined as sales less cost of goods sold,excluding amortization)as calculated below.For the three months and year ended March 31,T

248、hree Months Year(in$000)2022 2021 2022 2021 Sales 78,838 79,126 373,944 393,036 Less:Cost of goods sold,excluding amortization 55,809 51,037 234,952 236,518 Gross margin 23,029 28,089 138,992 156,518 Gross margin(%of sales)29.2%35.5%37.2%39.8%ANDREW PELLER LIMITED 2022|18 The Company calculates adju

249、sted earnings(loss)as follows:The Companys method of calculating EBITA,gross margin,and adjusted earnings(loss)may differ from the methods used by other companies and accordingly,may not be comparable to the corresponding measures used by other companies.Transactions with Related Parties The Company

250、 is controlled by Peller Family Enterprises Inc.(formerly,Jalger Limited),which owns 61.3%of the Companys Class B voting shares.No individual has sole voting power or control in respect of the shares of the Company owned by Peller Family Enterprises Inc.The compensation expense recorded for director

251、s and members of the Executive Management Team of the Company is shown below:For the years ended March 31(in$000)20222021Compensation and short-term benefits 3,8674,421Post-employment benefits 323265Stock based compensation expense 1,132823 5,3225,509 The compensation and short-term benefits expense

252、 consist of amounts that will primarily be settled within twelve months.Financial Statements and Accounting Policies The Companys consolidated financial statements have been prepared in accordance with IFRS,as issued by the International Accounting Standards Board(“IFRS”).Critical Accounting Estimat

253、es The preparation of consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements,the reported amounts of revenues and expenses during

254、the reporting periods and the extent of and the reported amounts in disclosures.Actual results may vary from current estimates.These estimates are reviewed periodically and,as adjustments become necessary,they are recorded in the period in which they change.Specific areas of uncertainty include but

255、are not limited to:Impairment of goodwill and indefinite life intangible assets Testing goodwill for impairment at least annually involves judgement in estimating the recoverable amount of the CGUs to which goodwill is allocated.This requires making assumptions about future cash flows,growth rates a

256、nd discount rates.Testing indefinite life intangible assets for impairment at least annually involves estimating the fair value using the relief of royalty method.This requires making assumptions about royalty rates,growth rates and discount rates.These assumptions are inherently uncertain and as su

257、ch,actual amounts may vary from these assumptions and cause significant adjustments.For the three months and year ended March 31,Three Months Year(in$000)2022 2021 2022 2021 Net earnings(loss)(7,019)(6,328)12,468 27,786 Net unrealized gains on derivative financial instruments(485)(495)(2,269)(135)Ot

258、her expenses 946 742 1,210 1,770 Gain on debt modification-(2,312)Gain on sale of assets held for sale-(7,518)-Fair value adjustment for acquired inventory sold during the period-302 Income tax effect of the above(120)(64)1,252(425)Adjusted earnings(loss)(6,678)(6,145)5,143 26,986 19|ANDREW PELLER L

259、IMITED 2022 Post-employment benefits Measuring the liability for post employment benefits requires assumptions for the discount rates,increases in compensation,increases in medical costs and the timing of the payment of benefits.Actual amounts may vary from these assumptions and cause significant ad

260、justments.Leases Critical accounting estimates were made in determining the lease term and incremental borrowing rate.In determining the lease term,management considers all facts and circumstances that create an economic incentive to exercise an extension option,or not exercise a termination option.

261、Extension options(or periods after termination options)are only included in the lease term if the lease is reasonably certain to be extended(or not terminated).The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is

262、within the control of the lessee.In determining the carrying amount of right of use assets and lease liabilities,the Company is required to estimate the incremental borrowing rate specific to each leased asset or portfolio of leased assets if the interest rate implicit in the lease is not readily de

263、termined.Management determines the incremental borrowing rate of each leased asset or portfolio of leased assets by using the Companys specific risk portfolio,the security,term and value of the underlying leased asset and the economic environment in which the leased asset operates.The incremental bo

264、rrowing rates are subject to change mainly due to macroeconomic changes in the environment.Recently adopted accounting pronouncements IFRS 16,Leases This standard has been amended to provide lessees with an optional exemption from assessing whether a rent concession related to COVID 19 is a lease mo

265、dification.This amendment is effective for annual periods beginning on or after June 1,2020.At this time,the Company has not received rent concessions related to COVID 19 and therefore,this amendment has not had an impact on the consolidated financial statements.London Inter-bank Offered Rate(LIBOR)

266、reform with amendments to IFRS 9,IFRS 7,Financial Instruments:Disclosures and IFRS 16.In August 2020,the IASB issued Interest Rate Benchmark Reform Phase 2(the Reform Phase 2),which complemented the Reform Phase 1 and amended various standards requiring interest rates or interest rate calculations.T

267、he Reform Phase 2 provides guidance on the impacts on the financial statements after the LIBOR reform and its replacement with alternative benchmark rates.The amendments are effective for annual periods beginning on or after January 1,2021.The adoption of these amendments did not have a significant

268、impact on the consolidated financial statements.Recently issued accounting pronouncements IAS 16,Property,Plant and Equipment This standard has been amended to prohibit an entity from deducting from the cost of an item of property,plant and equipment any proceeds received from selling items produced

269、 while the entity is preparing the asset for its intended use,clarify that an entity is“testing whether the asset is functioning properly”when it assesses the technical and physical performance of the asset and require certain related disclosures.The amendments are effective for annual periods begin

270、ning on or after January 1,2022.The Company has not yet assessed the impact of the amendments on the consolidated financial statements.IAS 37,Provisions This standard has been amended to clarify that,before a separate provision for an onerous contract is established,an entity recognizes an impairmen

271、t loss that has occurred on assets used in fulfilling the contract,rather than on assets dedicated to that contract and to clarify the meaning of costs to fulfill a contract.The amendments are effective for annual periods beginning on or after January 1,2022.The Company has not yet assessed the impa

272、ct of the amendments on the consolidated financial statements.IFRS 9,Financial Instruments This standard has been amended to address which fees should be included in the 10%test for derecognition of financial liabilities.This amendment is effective for annual periods beginning on or after January 1,

273、2022.The Company has not yet assessed the impact of the amendment on the consolidated financial statements.ANDREW PELLER LIMITED 2022|20 IAS 1,Presentation of Financial Statements This standard has been amended to clarify that liabilities are classified as either current or non current depending on

274、the rights that exist at the end of the reporting period.Classification is unaffected by the expectations of the entity or events after the reporting date.The amendment also clarifies the meaning of settlement of a liability.This amendment is effective for annual periods beginning on or after Januar

275、y 1,2023.The Company has not yet assessed the impact of the amendment on the consolidated financial statements.IAS 12,Income Taxes This standard has been amended to require companies to recognize deferred tax on transactions that,on initial recognition,give rise to equal amounts of taxable and deduc

276、tible temporary differences.The amendments are effective for annual reporting periods beginning on or after January 1,2023.The Company has not yet assessed the impact of the amendments on the consolidated financial statements.Evaluation of Disclosure Controls and Procedures and Internal Control over

277、 Financial Reporting Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information required to be disclosed by the Company in reports filed with or submitted to various securities regulators are recorded,processed,summarized and reported within the tim

278、e periods specified.This information is gathered and reported to the Companys management,including the Chief Executive Officer(“CEO”)and Chief Financial Officer(“CFO”)on a timely basis so that decisions can be made regarding the Companys disclosures to the public.The Companys management,under the su

279、pervision of,and with the participation of,the CEO and CFO,have designed and maintained the Companys disclosure controls and procedures as required in Canada by“National Instrument 52-109 Certification of Disclosure in Issuers Annual and Interim Filings”.As at June 15,2022,the CEO and CFO of the Com

280、pany have evaluated the effectiveness of the disclosure controls and procedures.Based on these evaluations,the CEO and CFO have concluded that the controls and procedures were operating effectively.Internal Controls over Financial Reporting Internal controls over financial reporting are procedures d

281、esigned to provide reasonable assurance that transactions are properly authorized,assets are safeguarded against unauthorized or improper use,and transactions are properly recorded and reported.A control system,no matter how well designed and operated,can provide only reasonable,not absolute,assuran

282、ce with respect to reliability of financial reporting and financial statement preparation.Designing,establishing and maintaining adequate internal controls over financial reporting is the responsibility of management.Internal controls over financial reporting is a process designed by,or under the su

283、pervision of,senior management and effected by the Board of Directors to provide reasonable assurance regarding the reliability of financial reporting and preparation of the Companys financial statements in accordance with IFRS.For the year ended March 31,2022,there have been no material changes in

284、the Companys internal controls over financial reporting or changes to disclosure controls and procedures that materially affected or were likely to affect,the Companys internal control systems.As at June 15,2022,the CEO and CFO of the Company have evaluated the effectiveness of the Companys internal

285、 controls over financial reporting.Based on these evaluations,the CEO and CFO have concluded that the controls and procedures were operating effectively.21|ANDREW PELLER LIMITED 2022 Independent auditors report To the Shareholders of Andrew Peller Limited and its subsidiaries Our opinion In our opin

286、ion,the accompanying consolidated financial statements present fairly,in all material respects,the financial position of Andrew Peller Limited and its subsidiaries(together,the Company)as at March 31,2022 and 2021,and its financial performance and its cash flows for the years then ended in accordanc

287、e with International Financial Reporting Standards as issued by the International Accounting Standards Board(IFRS).What we have audited The Companys consolidated financial statements comprise:the consolidated balance sheets as at March 31,2022 and 2021;the consolidated statements of earnings for the

288、 years then ended;the consolidated statements of comprehensive income for the years then ended;the consolidated statements of changes in equity for the years then ended;the consolidated statements of cash flows for the years then ended;and the notes to the consolidated financial statements,which inc

289、lude significant accounting policies and other explanatory information.Basis for opinion We conducted our audit in accordance with Canadian generally accepted auditing standards.Our responsibilities under those standards are further described in the Auditors responsibilities for the audit of the con

290、solidated financial statements section of our report.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the c

291、onsolidated financial statements in Canada.We have fulfilled our other ethical responsibilities in accordance with these requirements.Key audit matters Key audit matters are those matters that,in our professional judgment,were of most significance in our audit of the consolidated financial statement

292、s for the year ended March 31,2022.These matters were addressed in the context of our audit of the consolidated financial statements as a whole,and in forming our opinion thereon,and we do not provide a separate opinion on these matters.ANDREW PELLER LIMITED 2022|22 Key audit matter How our audit ad

293、dressed the key audit matter Costing of bulk wine and spirits inventories Refer to note 2 Summary of significant accounting policies and note 4 Inventories to the consolidated financial statements.The total value of bulk wine and spirits inventories amounted to$94.3 million as at March 31,2022.The C

294、ompany carries bulk wine and spirits inventories on an average cost basis.The weighted average costs are determined separately for import bulk wine,domestic bulk wine and spirits for each varietal and vintage year.We considered this a key audit matter due to the magnitude of the bulk wine and spirit

295、s inventories balance and the high degree of audit effort in performing procedures related to evaluating managements calculation of average costs.Our approach to addressing the matter involved the following procedures,amongst others:Tested the operating effectiveness of controls relating to manageme

296、nts bulk wine and spirits inventories costing process,including controls over the review of the inputs in the calculation of average costing and approval of bulk wine and spirit inventories costs.On a sample basis of bulk wine and spirits inventory items,tested the underlying inputs in the calculati

297、on of weighted average cost against supporting third party support,evidence of payment and the allocation of internal overhead costs.Performed a reconciliation of total domestic bulk wine purchases made during the year to the carrying value of domestic bulk wine inventory and performed testing over

298、any significant reconciling items.On a sample basis of inventory items,tested the mathematical accuracy of the weighted average cost calculation.Attended and performed inventory test counts for a sample of locations or obtained third party confirmations at certain locations to test the existence and

299、 accuracy of the quantity of bulk wine and spirits inventories as an input to the weighted average costs calculations.Goodwill impairment assessment for the Western Canadian wine cash generating unit(CGU)Refer to note 2 Summary of significant accounting policies,note 3 Critical accounting estimates

300、and judgments and note 8 Goodwill to the consolidated financial statements.The Company had goodwill of$26.7 million as at March 31,2022 related to its Western Canadian wine CGU.Management performs an impairment test on an annual basis,or more frequently if events or circumstances indicate that the c

301、arrying value may be impaired.An impairment loss is recognized if the carrying amount of a CGU to which the goodwill relates exceeds its recoverable amount.The recoverable amount of the Western Canadian wine CGU was based on a value in use method using a discounted cash flow model.Key assumptions us

302、ed by management in the discounted cash flow model included the average revenue growth rate during the period of projected cash flows,gross profit percentage,selling and administration margin,terminal growth rate,and the discount rate.No impairment was recognized as a result of the 2022 impairment t

303、est.We considered this a key audit matter due to the judgment by management in determining the recoverable amount of the Western Canadian wine CGU,including the use of key assumptions.This has resulted in a high degree of Our approach to addressing the matter included the following procedures,among

304、others:Evaluated how management determined the recoverable amount of the Western Canadian wine CGU,which included the following:Tested the appropriateness of the method used and the mathematical accuracy of the discounted cash flow model.Tested the underlying data used in the discounted cash flow mo

305、del.Tested the reasonableness of the average revenue growth rate during the period of projected cash flows,gross profit percentage,selling and administration margin,and terminal growth rate applied by management in the discounted cash flow model by comparing them to the budget,managements strategic

306、plans approved by the Board of Directors,current and past performance,or available third party published industry and economic data,as applicable.Professionals with specialized skill and knowledge in the field of valuation assisted in testing the reasonableness of the discount rate applied by manage

307、ment based on available data of comparable companies.23|ANDREW PELLER LIMITED 2022 subjectivity and audit effort in performing procedures to test the key assumptions.Professionals with specialized skill and knowledge in the field of valuation assisted us in performing our procedures.Tested the discl

308、osures made in the consolidated financial statements,including the sensitivity of the key assumptions used by management.Other information Management is responsible for the other information.The other information comprises the Managements Discussion and Analysis,which we obtained prior to the date o

309、f this auditors report and the information,other than the consolidated financial statements and our auditors report thereon,included in the annual report,which is expected to be made available to us after that date.Our opinion on the consolidated financial statements does not cover the other informa

310、tion and we do not and will not express an opinion or any form of assurance conclusion thereon.In connection with our audit of the consolidated financial statements,our responsibility is to read the other information identified above and,in doing so,consider whether the other information is material

311、ly inconsistent with the consolidated financial statements or our knowledge obtained in the audit,or otherwise appears to be materially misstated.If,based on the work we have performed on the other information that we obtained prior to the date of this auditors report,we conclude that there is a mat

312、erial misstatement of this other information,we are required to report that fact.We have nothing to report in this regard.When we read the information,other than the consolidated financial statements and our auditors report thereon,included in the annual report,if we conclude that there is a materia

313、l misstatement therein,we are required to communicate the matter to those charged with governance.Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financi

314、al statements in accordance with IFRS,and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,whether due to fraud or error.In preparing the consolidated financial statements,managemen

315、t is responsible for assessing the Companys ability to continue as a going concern,disclosing,as applicable,matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations,or has no realistic alternativ

316、e but to do so.Those charged with governance are responsible for overseeing the Companys financial reporting process.Auditors responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements

317、as a whole are free from material misstatement,whether due to fraud or error,and to issue an auditors report that includes our opinion.Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards wi

318、ll always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statem

319、ents.As part of an audit in accordance with Canadian generally accepted auditing standards,we exercise professional judgment and maintain professional skepticism throughout the audit.We also:Identify and assess the risks of material misstatement of the consolidated financial statements,whether due t

320、o fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,as fraud m

321、ay involve collusion,forgery,intentional omissions,misrepresentations,or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion o

322、n the effectiveness of the Companys internal control.ANDREW PELLER LIMITED 2022|24 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.Conclude on the appropriateness of managements use of the going concer

323、n basis of accounting and,based on the audit evidence obtained,whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern.If we conclude that a material uncertainty exists,we are required to draw attent

324、ion in our auditors report to the related disclosures in the consolidated financial statements or,if such disclosures are inadequate,to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors report.However,future events or conditions may cause the

325、Company to cease to continue as a going concern.Evaluate the overall presentation,structure and content of the consolidated financial statements,including the disclosures,and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair

326、 presentation.Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements.We are responsible for the direction,supervision and performance of the group audit.

327、We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding,among other matters,the planned scope and timing of the audit and significant audit findings,including any significant deficiencies in internal control that we identify during our audit.We

328、also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,and where applicable,related safegua

329、rds.From the matters communicated with those charged with governance,we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.We describe these matters in our auditors report unless l

330、aw or regulation precludes public disclosure about the matter or when,in extremely rare circumstances,we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communi

331、cation.The engagement partner on the audit resulting in this independent auditors report is Peter Dalziel.Chartered Professional Accountants,Licensed Public Accountants Oakville,Ontario June 15,2022 25|ANDREW PELLER LIMITED 2022 Consolidated Balance Sheets As at March 31,2022 and 2021(in thousands o

332、f Canadian dollars)2022$2021$Assets Current assets Cash 1,297 2,737 Accounts receivable(note 20)27,376 28,896 Inventories(note 4)197,042 178,727 Biological assets(note 6)2,045 2,815 Prepaid expenses and other assets 5,893 4,879 Income taxes receivable 2,560 5,973 Assets held for sale(note 5)-1,275 2

333、36,213 225,302 Property,plant and equipment(note 5)209,015 206,920 Right-of-use assets(note 10)15,215 17,011 Intangible assets(note 7)43,990 39,650 Goodwill(note 8)53,638 53,638 558,071 542,521 Liabilities Current liabilities Accounts payable and accrued liabilities(note 9)47,375 46,487 Dividends payable 2,587 2,404 Lease obligations(note 10)4,070 3,826 Derivative financial instruments(note 20)349